Question

1. How can you achieve financial success? What aspects are you considering in order to achieve this situation?

Answer 1

WHY DO WE NEED FINANCIAL SUCCESS? WHAT ARE THE ASPECTS THAT COME UNDER THE MOTIVE OF BEING FINANCIALLY SUCCESSFUL? These two basic questions are probably the most important questions that must be asked to everyone who is earning or is going to earn in probable future. The answer is simple -

• Sense of Security. The desire to protect yourself and your loved ones from unknown possible future calamity is the best reason to achieve financial success.
• Physical Comfort. With money, comes comfort. Money may not buy you happiness directly, but it buys comfort and technology for you and your family members which ultimately gives them happiness.
• Peace of Mind. Knowing that you have prepared for the worst in the future, you become confident and satisfied. You need not spend your days worrying about your finances, at least!

Now, the major question arises, HOW TO ACHIEVE FINANCIAL SUCCESS?

These are the following few steps that will guide you better into the nitty-gritty of achieving financial success:

1. Earn More and Spend Less

Understand the difference between what you “need”?and what you “want”? Don’t be attracted to the false promises of advertisers and salesmen. Use your money for essentials and save the excess for the future – the time for extravagance is after you’ve reached your goals. Work hard and earn as much as you ca]n.

2. Trust Your Instincts

No one has your interests in mind to the same degree that you do. You and your family will be the ultimate beneficiaries or victims of your financial decisions or those made on your behalf. For that reason, you should never take or agree to any investment action that you do not fully understand and are in total agreement with.

3. Fulfill Responsibilities to Loved Ones

If something happens to you, such as the loss of your job, a serious illness, a disabling accident, or premature death, others close to you will be affected emotionally and financially. This crisis management is dealt with by the judicious purchase of three important forms of insurance:

• Health Insurance.
• Life Insurance.
• Disability Insurance.

4. Establish an Emergency Cash Fund

Things can go wrong anytime with anyone. So, to prepare for this bad and be ready to fight on an immediate basis needs financial might. You, at any point in time, must have an EMERGENCY CASH FUND where the amount of funds should be an amount equal to a minimum of six months’ income in a cash or savings account.

5. Make Time Your Friend

Financial success is the result of a lifetime of accumulation and not a sudden miracle. Time and consistent investment result in very large sums. So, keep calm, be patient, and invest right!

6. Diversify Your Investments to Balance Risk and Reward

When you have adequate insurance and an emergency fund balance, start looking for other investments. There is an array of possible investments out there, each of them with different characteristics like :

• Common Stocks - High risk, High return
• Government Securities - No risk, Less return
• Corporate Bonds - High risk, High return than Government Securities
• Equity Securities - High risk, High return
• Real Estate - difficult to convert it into cash quickly.

etc.

7. Risk Tolerance

The ability to accept the unknown and to cope with the unexpected (such as wide swings in stock prices) is known as risk tolerance. Everyone has a different level of risk tolerance. If you have any investment or might be considering an investment that will keep you up at night worrying about its outcome, avoid it or get rid of it as soon as you can. There are many alternate investment opportunities available that will meet your objectives for you to lose sleep or suffer undue concern. If anything bad happens, take a deep breath, and make the best decision you can based upon the facts available to you at the spot. There are few things that can’t be cured, including bad investment returns.