Dussehra: the victory of good over evil brings new hope and energy to conquer all our weaknesses and come out strong ever than before.
In life too, we all need to constantly conquer our weaknesses and turn them into strengths to excel. Denying them or avoiding them causes many problems and holds you back.
Think of the financial weakness, the most common among us, if ignored, can push you into worse financial situations and the sure thing, you will stop enjoying your life.
Indeed, a huge price to pay for your ignorance and avoidance to conquer your financial weakness.
Conquer This Dusshera Your Financial Weaknesses
Therefore, in this Dussehra, take a vow to overcome the following five financial weaknesses and create a path for financial prosperity and success by reflecting on the following points:
#1. No Investments or Lack of Investments
Investing is the key to your financial security and lets your money work for you. It is the other way of growing your assets and creating wealth over time.
The key objective of investing is to generate a steady cash flow either in the form of capital gains, dividend income, interest income, or other forms of liquidity sources that could beat the inflation in the long term.
If you don’t invest your money and keep your money in low yielding deposit instruments like fixed deposits, your money will lose value due to inflation, thus decreasing your purchasing power.
This Dusshera, think to change this.
#2. Lack of Diversification
You must have heard the term, “don’t put all your eggs in one basket,” the same goes with investments.
Diversification is crucial in investing because it helps mitigate risks, reduce the impact of market volatility, keeps capital safe, and effectively achieve long-term financial objectives.
Therefore, diversifying your investment capital to different financial instruments, sectors, and verticals helps you reduce uncertainty and smoothen the return curve.
A perfect balance of low-risk options such as bank FDs, PPF, or debt securities and high-risk options like equities, cryptos, or equity-mutual funds will give you the right growth momentum while keeping risks at a minimum.
However, this is not investment advice but a sneak-peek for you to understand how the pros of investing actually invest.
#3. Ignoring Financial Literacy
In the last two decades, many new investment options have helped investors in the wealth creation process.
For example, the introduction of mutual fund SIP, ETFs, ELSS, and cryptocurrencies have changed the investing principles and dynamics.
Upgrading and updating your knowledge about different investment products and strategies will help you profit from different opportunities in the market and fetch a higher return than traditional investment options.
Conquering your weaknesses and fear is the biggest help you can do to yourself and become a successful person in life. Therefore, always find ways to turn your biggest weakness into a strength, and here is how you should do it.
- Recognize and accept your weakness.
- Seek guidance from an expert or someone you trust
- Upgrade and update your knowledge and skills
- Try to evolve from your older self
- Helps others with a similar problem
#4. High Dependence on Debt
Living paycheck to paycheck and high dependence on debt like credit cards and personal loans are considered sins in personal finance.
It often leads to a debt trap, and it isn’t easy to get out of this.
Reducing your dependence on the debt will first improve your overall finances and increase your investment allocation. The following are the five steps to reduce your dependence on debt:
- Identify the issues leading to the creation of more debt.
- Prioritize the needs
- Make behavioral changes in managing your finances.
- Go for debt consolidation.
- Create an emergency fund
A low level of personal debt enables more financial freedom leading to financial prosperity and future growth.
#5. Lack of Adequate Insurance Cover
Last but not least, the most crucial thing we tend to ignore; taking adequate insurance cover for yourself and your family.
Insurance plays a crucial role in your financial wellbeing and provides the much needed financial security when needed the most.
It is a contract that transfers your financial risks to the insurer in exchange for a premium to receive compensation in case of the occurrence of that particular event.
There are many types and forms of insurance available in the market, but the following two insurance types are most needed and important for financial security.
- Life Insurance: It protects your family’s financial interests and helps to rebound in life when you are not around to take care of and protect them.
- Health Insurance: Quality healthcare is essential and whenever required it comes at a huge cost. Health insurance ensures you and your family gets the best medical care without the worry about the cost.
Hope these suggestions help you curb your financial weaknesses this Dushhera and live a long, prosperous, and wealthy life !!
[su_note] KuberVerse is an educational initiative. Anything expressed here directly or indirectly is not investment advice. And we ask you to do your own research before investing. [/su_note]
Disclaimer : Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. The information provided in this post is not to be considered as investment/financial advice from CoinSwitch. Any action taken upon the information shall be at user's own risk.
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