Your situation is unique
- Crafting a Personalized Financial Plan
- Avoiding Unhealthy Comparisons
FOMO Trap: “Your situation is unique. A financial plan needs to be crafted as per your specific situation,” says Arijit Sen, a SEBI-registered investment advisor, and co-founder of Merry Mind, a financial advisory firm.
While you might be paying EMI for a house, someone else may be living in their parent’s house or paying a lower rent. So naturally, the other person will have a higher investible surplus even for a similar salary.
Similarly, it is easy to feel inadequate when you figure out that your friend could send his son abroad but you’re not in a position to do so. Hence, it is important to acknowledge your own financial position without FOMO Trap. Here, you do not know what sort of situation your friend may be in or how far he has taken a hit in the retirement kitty in order to send his son abroad.
Do not fall into the FOMO trap
- Understanding FOMO in Financial Planning
- The Perils of Impulsive Investing
Fear of missing out (FOMO) is real when it comes to financial planning, especially investing. FOMO in investing refers to making impulsive investment decisions driven by the fear of missing out on a potentially profitable opportunity.
This often leads to poor investment choices and can result in financial losses as individuals act hastily without proper research or consideration of their long-term financial goals.
Retirement plans may differ
- Tailoring Retirement Goals
- Diversity in Retirement Planning
Just like your kid’s education, your retirement plan may differ. Where the objective varies, the process to achieve the required corpus is expected to be different too.
Someone may like to start his/her own business after retirement. On the other hand, a couple may desire to move back to their hometown and lead a relaxed life.
“How you want to lead your retired life is your choice. The retirement corpus required for the above stated retirees will definitely vary,” says Sen.
Social media is all about winners
- The Deceptive World of Social Media
- The Reality Behind Investment Success
We live in an era of social media. One might feel bad that their friend is vacationing in the Maldives while they are spending their holiday in Goa. Similar comparisons can occur when it comes to investments.
People tend to put only the good part of their lives on social media. Similarly, when it comes to investments, people take to social media to talk about their successes.
“As an investor, you should be aware of the fact that people generally don’t like to talk about their mistakes or bad decisions on their financial path,” says Gagrani.
Some thumb rules to follow
- Fundamental Guidelines for Financial Planning
- Building a Solid Financial Foundation
While it is important to understand that your situation is different, there are still some basic rules of thumb you should follow to get started on your financial planning. These rules are of course not set in stone, but nevertheless are widely recognised as a method to help you start off on the right note. We look at a few such thumb rules.
The final word
- Embracing the Diversity of Financial Planning
- Customizing Strategies for Your Financial Success
The journey of financial planning is as unique as the individual embarking on it. Attempting to compare your financial path to another’s is akin to comparing apples to oranges. Recognising this individuality is paramount in achieving financial success and well-being.
Understanding that there is no one-size-fits-all solution enables us to tailor financial strategies to our own needs, aspirations, and life circumstances.
Whether it’s saving for education, retirement, or simply building wealth, embracing the diversity of financial planning allows us to make informed decisions that align with our personal goals.