Financial security was never a matter of importance to many investors until they learned the harder way by the recent financial crisis that wrapped the entire globe. This has also reflected in the stock exchange market too. A large group of people gambled in the stock market, others went on borrowing to buy their second car, there were others who enjoyed foreign holidays and they all never thought that they were doing something wrong, until one day they had to face the music and they suddenly started to appreciate their parents way of life.
Financial advisors also agree to the fact that it is natural for people to get carried away by the high rise in the stock market. Many people get carried away by the feel good factor and many of them end up making the silliest mistake of putting their major savings in the stock market. One of my friend had been lavishly spending his entire saving plan, until he recently realized that he was no where. In fact, he now remember his father who had advised him in the past, to save for the rainy day. But he had not given much thought. Now, he realizes his fault, but its too late. Hence, we all should get into the habit of saving to face unforeseen situations.
I would now like to present some few simple rules that can ensure a smooth drive towards financial security. The rules are as follows:
1) Save while everything is going fine for you
You must have been familiar with that old saying “Make hay while the sunshine”. Well, while we are facing happy days, we might be in the delusion that good times will never stop. You may think in this way, especially when you have started getting your regular incentives in office. But you just can’t lavishly spend the extra cash. Mostly our professions are directly related to the stock market. Hence, when the stock market fails, you will realize your mistake. In short get into the habit of saving, while the going is good.
2) Do not get carried away by the good times of the stock market
I know a friend who was thrilled to see his money growing in the past two years. He decided to deploy more of his savings in the stock market. He even went down to the extent of breaking down his fixed deposits and got his money transferred in the stock market. Luckily, he did not make use of his provident fund account. Within a matter of time, everything was lost. So, be alert and wise, especially when the market is booming.
3) Choose advises rightly.
Listening to advice is a good thing, but listening to all could end up in a costliest mistake for any investor. Even the expert’s opinion is based on a particular hand. As a lay investor, you should never change your investment plan based on the advice that you get from a media expert. They are meant only for speculators. Even your friends might like to advice you. Friends or any people, whom you are close to you, would always like to boast of their killing that they made in the stock market. However, they will remain silent during the losses that they suffered. Be careful when you take financial advice from others.