Prashant Jainmoneycontrol.com
The world savings day is here, right in the middle of soaring financial markets and festive celebrations. While we attach feeling for happiness & joy with spending, saving is often viewed as sacrifice. The psychological urge for instant gratification is often very strong. This article is a tribute to some of the greatest billionaires of our times who have shared their wisdom inspiring others.
Bill Gates ($81.3 B) : Set a clear Goal
Want to build your family a nice Spanish villa? The difference between a dream and a goal is that of clarity and affordability. Your goal should have a financial value and timeline. Once you see your goals clearly, setting a path to achieve it becomes much easier. However, one should be mindful of short-term to long-term goals. Also, some of your goals might require recurring financial commitment (retirement) vs. one-time gift (daughter's marriage). If all of your goals are not achievable, then you need to prioritize.
Carlos Slim Helu ($ 79.6 B) : Start investing as early as possible
"Well, when I was very young, maybe 12 years, I began to make investments".
Influenced by his businessman father, Carlos also learned early about tracking his savings and expenses on a savings note book, a simple yet very powerful habit he still recommends. Fortunately in the digital age, we can practice this habit using online trackers. Products like moneycontrol portfolio keep you up to date about how your investments are creating wealth for you.
Warren Buffet ($ 65.8 B) : Think long-term and be patient
"No matter how great the talent or efforts, some things just take time. You can't produce a baby in one month by getting nine women pregnant."
India is poised to become an economic super power in next 10-20 years. If you want to profit from the India story you need to stay invested for the long term. If you dance-in and dance-out frequently (of stock markets), you may miss out on this opportunity. Be patient, money doesn't grow overnight. Always remember the power of compounding. It bears fruit with time.
George Soros ($24 B) : Know your risk
"It's not whether you're right or wrong that's important, but how much money you make when you're right and how much you lose when you're wrong."
Once you decide to start saving, the next important question is where to park these funds. Spending time in understanding your risk appetite after carefully thinking through life goals and current financial state will determine your investment decisions. This is an important area where people shy away from taking professional help and take financial decisions on 'gut' feel not realising the downside (risk). Your saving habit should be accompanied by basics of personal finance such as creating an emergency fund and proper insurance cover (life & health).
Setting a clear goal, starting early, knowing the risk and staying invested for long term are ageless advice which if followed like a habit can make a big difference in our lives.
Happy Savings day! Tweet to @moneycontrolcom your savings mantra using #HowISave
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