All of us need to manage our finances wisely. While some aspects of financial management change with age, the basic principles of good financial habits and planning remain the same throughout one's life. Here are a few things that should be kept in mind at all times before investing:
THE GOAL
If you have a goal that you are trying to achieve, then it becomes easier for you to track your progress and analyse whether your investment strategy makes sense or not. It is very important to be well aware of targets before planning to invest
THE TIME
Once you have identified your goals, understand over what time period you want to achieve your goals. This will not only keep you focussed and motivated, but will also keep you alert of the risks involved
THE RISK
Every investment has risks associated with it. Every individual should take risk according to his or her capacity. Some investments are risky than others. Before investing, it is good to know your capacity to take risks so that there are no jolts later
THE INFLATION
In a fast-growing economy, inflation is a fact of life. Manage your investments accordingly. For instance, stocks would offer better protection than fixed deposits against inflation
THE LIMITATIONS
It is always good to stay within your means. Stay away from 'bad debt' — debt you take for consumption purposes, otherwise you could risk falling into the debt trap where you have to borrow more to pay off your previous debts
