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We are constantly bombarded by reports and analysis of various events and happenings. The season of mega-events is back, what with the general elections around the corner. In these high decibel moments citing different permutations and combinations, it makes sense to be focused on our goals, our responsibilities, our dreams, and our needs and not be swayed by various sets of the news and views floating around us. and news is back. It’s pertinent to imbibe this quote from Jim Rohn, it goes as, “It is the set of sails, not the direction of the wind that determines which way we will go.”

What is eventually going to impact the portfolio that you are nurturing for your family’s financial well-being are the answers to these questions:

Goals and asset allocation – Ask yourself whether you have planned for your goals, are you investing as per the plan, what is the amount to be invested, what is the the asset allocation to be followed (equity most often has to be a part of the portfolio), which investment product has to be bought and which is the the process to be adopted for investing (lump sum or systematic). Also make an effort to understand the volatility and therefore asymmetry of returns on your portfolio. Most importantly, budget your expenses and prioritise your goals.

Insurance and protection – After asset allocation the next step is to check if you are adequately insured. Check if you have subscribed for the appropriate insurance product and if have you allocated money for an emergency fund.

Maintaining records – This should be followed by getting your records in place. Ensure that your stakeholders know bank account details like account numbers, current balances, and passwords for online transactions. Also ensure that all your financial products have nominees in place and there is a registered will for your assets and wealth.

Insulation from inflation – Then start looking at wealth creation. The first step is to check if the return from your investment portfolio is ahead of inflation and taxes. Are you taking a low risk or too much risk on your investment portfolio? Retirement planning (maybe till 95 years of age) and adequate medical cover for you and your dependents (taking into account future needs) are essential. Your investment portfolio should be sufficiently liquid and your past assets and future cash flows should be tagged to the impending goals.

Do it yourself or take professional help – You also need to compare and weigh the merits between consulting a professional for planning your personal finances and doing it yourself. Doing it yourself could lead to biased and emotional decisions besides lacking the necessary skill-set to utilise.

Often, we get carried away with the noise around and start altering our investment portfolio by reacting to it in the short term. We need to ensure that money management and the dynamics of money emanate confidence and a feeling of being ‘in-control’. At the end of the day, money we manage or use has to provide us with the peace of mind and not be a source of needless anxiety. My experience in the field of personal finance has me swearing by this quote by Billy Graham, “If a person gets his attitude towards money straight, it will help straighten out almost every other area in his life.”

Ultimately, it’s all about managing what you can and not worrying about external forces on which we may have no or little control.

The writer founder partner of Srujan Financial Advisers

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