Dussehra is a symbol of the victory of good over evil. The grey areas within us are characterised by unhealthy habits which don’t make us as we ought to be. Unhealthy financial habits show up in different ways in our lives i.e. in the form of a letter from the Bank on nonpayment of EMI, lack of a sound financial foundation or sometimes the body gives signs of sleeplessness which happens on account of lack of proper attention to financial issues.

Let us examine what are the issues and how do we reduce their impact on our lives. Ravana is nothing but an aspect of our consciousness and will go away only by attention to the ultimate goal i.e. financial independence at all phases in one’s lives while one is around and planned transmission of assets when one has left this world for the next.

Also read: 6 limiting financial beliefs that prevent SMEs from achieving business success

1. Not saving enough

In the current digital age, all of us get notifications first thing in the morning from Amazon. This acts as a trigger to buy more. It helps the platform, however, it causes debt in one’s saving. This shows up not immediately but towards the end of life when one is going through transitions and finances are not adequately organised. In the current world paradigm, we are likely to live a life closer to 100 years; savings are the first step to begin the foundation.

2. Not building your vitality assets

In the coming world our health, mindset, and knowledge are productive assets. However, we do not invest time in communities, professional or organisational or social, which are vitality assets. This is critical to lifting one’s game to the next level. This can be done through volunteering at your industry association. Generally, a proven principle is to dig a well before needing the water.

3. Excessive leverage

Many good friends we come across use leverage in their investments. A broader principle is “It benefits the lender more than the borrower”. This, when it goes towards the downside, is a huge risk and on the upside is marginal gain. As an investment policy, our team does not recommend leverage without being prepared for margin calls.

4. Treating advice relationships as transactional

Many advice relationships are seen as transactional in today's commercial world. However one needs to distinguish between long term partners and transactional relationships. The advantage is stronger longer-term advice on the key issues at hand and in the future. This helps to build a life which is more of a shock absorber should such an event happen in any arena of your business, profession or life.

5. Not maintaining financial records

Maintaining financial records is a good discipline. This becomes even more important if you are the crusader type as your finances can be questioned by authorities. Even in general it is prudent to maintain key records as a working professional, independent professional or an entrepreneur.

6. Not looking enough at the future

The CFO I knew from a previous organisation was very prompt when it came to business issues at hand. However, the same diligence was not exercised to see if the portfolio was not future-ready. This led to sub-optimal returns, though he did get investment returns aligned to inflation.

7. Getting carried away by market sentiment

The wise man from Omaha has always maintained the relevance of buying on fear and selling on greed. Unfortunately, many of us do the reverse as we get blinded by our own lens of greed and pride at times in knowledge. The secret is to learn every day and not to add to the ego. Based on an investment decision, this implies defining whether the portfolio is moving or not and if it is future resilient.

8. Hoping that the loss will be recovered

Generally in our investment position, we tend to attach ourselves to our decisions even if markets do not work in our favour. If something structural has changed then it is important to change. In these situations external input is useful.

Ravana has ten heads, I am discussing eight. First, let us begin with the humility to accept that there are chinks in our armour.

Wishing you a happy festive season.

Also read: 4 proven ways to unlock the genie in your business this Diwali

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