You have to have a big vision and take very small steps to get there.
– Jason Calacanis

An Evolving Relationship With Money – Then & Now

Let’s rewind time by fifty years. Back then, taking on debt was an absolute no-no. The concept of leverage was risky and was frequently associated with financial ruin. It slowly became acceptable to finance assets (such as a house or a car) with debt. Leverage allowed us to reach aspirations faster. Today, it would be hard to find a twenty-five-year-old without a credit card.

In most households, the focus then was on saving diligently and consumption was often looked down upon. Investments were always made into conservative avenues. This is not the case anymore. Now, discretionary spending is second nature to most earning members. And investment options are plenty.

As our relationship with money evolves, it’s important to adopt appropriate strategies.

Your Aspirations

What did you do with your last salary raise or bonus? Did you impulsively buy a car? Or did you go away on that much-needed vacation? Did you treat yourself to something special? Did you stash away money for a rainy day? Or did you repay your credit card bill? Do you know what your next big expense is? More importantly, do you know how you are going to finance it? Do you dream of retiring early? Have you started any long-term investments for your early retirement?

What we want from our money is different now. Prioritization is key. It’s not easy to make trade-offs and there may be no compelling incentives. Taking care of your financial health has invisible benefits. But if you don’t do it you might find yourself between a rock and a hard place.

Making Sensible Choices

It boils down to being sensible. But if you get a few things right early on, you’ve got a headstart. Remember that temptation is here to stay, and it’s often far easier to spend than to save. So it’s important to save first. Financial security is about being at peace. If it worries you that you can’t take a few months off to look for another job or that you don’t know how you’ll manage a sudden expense, you need to address your anxieties. Insurance is a way of protecting your loved ones, your assets, and even yourself at a nominal cost.

Planning

Where does planning fit into this? Financial planning forces you to take a hard look at your priorities. A plan makes you accountable for your aspirations. It also empowers you to act in a manner that is consistent with your priorities. All your actions have consequences, it’s up to you to decide how those consequences will play out.

Happy to help!

Do you have a financial plan? Would you like to follow an organized approach to reach your targets? Are you worried about taking the next step? Talk to our financial planners today, drop an email to
info@longitude.co.in 

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