1. Start early
T20 does not reward late starters—teams need to start scoring early in the innings. If you don’t have enough runs on the board, your batsmen will always be playing catch-up.
Similarly, you need to start investing and saving early. The sooner you begin, the more time you get to compound your capital. Also, all batting sides take advantage of the fielding restrictions early in the innings. In the same way, when you are young, there are many things you can afford to do as compared to when you grow older. One of these could be to start building your financial resources when you have few other financial obligations.
Illustration: Raajan / Mint
2. Risk and reward trade-off
T20 is all about taking risks and ensuring that the team gets rewarded for them—whether it is aggressive opening batsmen, field placements or trying out new bowlers.
Similarly, financial planning is all about risks and rewards. It is important to understand that taking risks equals high returns, just like a batsman faces the risk of being caught at the boundary if he is trying to hit a six. You should not be surprised if you get out trying to reach for extraordinarily high returns on investments because these would be of the most risky kind. Also, just like not every ball can be hit for a boundary, not every investment will turn out to be a goldmine. Sometimes, singles are equally important.
3. Be ready for the unexpected
The Duckworth-Lewis method, which is used to determine targets for rain or weather-affected matches, can at times adversely affect the chances of one team. It is, therefore, important to always have enough runs on the scoresheet.
Similarly, you must also always be ready to deal with unexpected situations. The margin of safety in your investments should be able to protect you against the proverbial rainy days.
4. Strategic break
Teams take a strategic break to review their progress after 10 overs and chalk out a strategy for the rest of the innings. Such strategy breaks are important for your financial road map as well. If you don’t regularly review progress and look at ways to address the problems and challenges, you may end up falling short of your financial targets.
Just like a team needs the right balance of big hitters, anchors and effective bowlers, your investment portfolio, too, needs the right balance of investments. Too much of growth or aggressive funds, without adequate support or backup, might make your portfolio shaky. You must recognize that your investments should be diversified across sectors and different assets, and not be concentrated in any one area.
6. One bad over
One bad over can change the direction of a game and can often make it difficult to recover if a team does not have enough runs on the board (if you are batting), or enough wickets already (if you are bowling). In life too, a “bad over”, in the shape of job loss or serious injury or illness, could throw plans out of gear. If you do not have an adequate safety net, it would become very difficult to recover from such mishaps.
7. Consistency gets rewarded
In T20, the top-scoring batsman and the largest wicket-taker are awarded the Purple and Orange caps respectively. You can win these caps only if you perform well consistently. When it comes to personal finance, you too must be conscious of staking a claim for these awards. What matters most is that you have consistent performance over a long period of time. There is no point in investing in a fund that is really hot the first year, but comes a cropper thereafter.
8. Coaching helps
Whether it is a specialist bowling or fielding coach, T20 has shown us that some guidance and direction, especially an objective view from the outside, can help improve a team’s performance. Your investments too can benefit from such guidance and expert view. This is important to avoid making silly mistakes that could cost you dearly later in life.
9. Distractions can be entertaining, but ultimately the score matters
T20 is highly entertaining not only on the pitch, but also because of all the music and dancing. But ultimately, a team wins or loses on the back of its performance. Similarly, while you are securing your finances, distractions such as the hottest investments or the flavours of the month will come and go, but what matters most is that your “investment scorecard” should show a healthy average. You must focus on what matters and ignore the distractions.
10. Winning attitude
The IPL has shown that even young players with less talent or resources can do well if they bring the right attitude to the pitch. Similarly, investing is not just about being rich or already having lots of money. You can start with meagre resources and little experience, but over time, make a fortune with a positive attitude and willingness to learn from mistakes. You should not get disheartened if one investment loses money. Just like a young cricketer who believes in himself, you should believe in what you have invested and stick it out. If you have put in the right kind of preparation, you will also come out the winner in the long run.
With schools and colleges closed for the summer holidays, these are the peak travel months for most Indian families. Whether you are travelling solo or with family, domestically or internationally, pack your travel insurance policy. It’s a very small price to pay for your peace of mind, knowing that someone will pay your expenses of something were to go wrong. Typical policies can cover a variety of emergencies such as medical, personal accident cover or even the total loss or delay of checked baggage.
Car tyres tend to lose air more quickly in the summer heat. Under-inflated tyres will burn more fuel and give you an uncomfortable ride as they grip the road poorly. Increase the fuel efficiency of your car by making sure the tyre pressure is always correct. It’s worth doing a weekly tyre pressure check when you visit a petrol station to refuel your car—you could save up to 5% just through optimal tyre pressure.
If you have assets and if you have family, friends or a preferred charitable organization to whom you want to leave your money, you must write a will. This way you can ensure that your successors or beneficiaries get the assets you want them to have. A written will, especially one that has been registered, can help your successors avoid needless complications and possible litigation in your absence. It’s easy to write a will—all you need to do is to list all your assets, identify your beneficiaries and the proportion in which these beneficiaries will inherit your assets and find two witnesses.
With the tax-filing season about to begin, this is the right time to organize the documents you might need to provide as support for your annual tax filing or that are needed to calculate your tax liability. If you have traded stocks or mutual funds, have interest income from a bank or fixed deposit, receive rental income or dividends or have a home loan, then the figures related to all these need to be made available to your tax preparer to ensure that you are paying the right amount of tax and that you are not being charged over and above what you ought to be paying.
Content provided by iTrust Financial Advisors
Write to us at email@example.com