For financial well-being in 2013 and ahead
Though it has become customary that we take stock of what we have done in the year just ended and come out with plans for the New Year, such an exercise brings progress in physical, mental and financial well-being. Let us explore the ways to make progress in our financial well-being in 2013 and ahead.
Set goals: The first step in creating financial prosperity is to state the goal in financial terms. For instance, one can say that he would like to have R1 crore as his wealth by January 1, 2023. This statement has clarity in it compared to saying, “I would like to earn as much as possible”. As the management literature says that goal is obtainable only when it is specific, measurable, achievable, and relevant and time bound (SMART). The personal financial goal of accumulating R1 crore by January 1, 2023, through savings and investment is certainly a very specific, measurable, achievable, relevant and time-bound goal.
Write personal financial statements: Do we know the components of our financial statements? Do we understand why we borrowed R10,00,000 from a bank while our revenue had grown by 20% over the previous year? Do we have an understanding of our return on equity, profit margin, interest cover, liquidity and solvency position? Most often, our answer to these questions is a “no”. So, after setting the goal, we need to take stock of our present financial performance. Such an understanding enables one to maximise the surplus. In fact, the personal statement of a
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