MONEY LESSONS FROM THE FOOTBALL PLAYBOOK
There is a lot you
can learn about financial planning from football, says Preeti Kulkarni
ADOPT A GOAL-ORIENTED APPROACH
Ultimately, it is the goals that
decide the winner.
MONEY LESSON
Linking your investments to financial goals is
fundamental to financial planning.
SMART TIP
List out goals and their time periods and invest
accordingly. Experts suggest investing primarily in equities for long-term
goals and in debt for short-term targets.
MID-FIELDERS
Mid-fielders can both attack and
defend, depending on the match situation.
MONEY LESSON
Investing in all-rounders like balanced funds brings
stability. They create scoring opportunities by investing in both equities and
debt depending on market situation.
SMART TIP
Decide exposure to balanced funds based on your asset
allocation to large-cap, midcap and debt investments.
AVOIDING CARDS
While a yellow card by the
referee denotes warning, a red card can send the player off the field for
violating the rules.
MONEY LESSON
Do not hide your capital gains from tax authorities,
you may end up paying more.
SMART TIP
If you find it difficult to calculate your capital
gains and the resulting tax liability, take the help of a tax expert.
TOO MUCH FOCUS ON BEING A FORWARD
Forward players have to be
aggressive and score goals. But forwards alone can’t win matches.
MONEY LESSON
A mid-cap-focussed aggressive investment strategy can
be rewarding in a bull run, but beware of their equally quick meltdown when the
market falls.
SMART TIP
Rely on asset allocation-based strategy. The thumb
rule is that equity exposure should be 100 minus the investor’s age. Within
equity, exposure to mid-caps should not be more than 10-15% of one’s portfolio.
TAKE STOCK AT HALF-TIME
The break after 45 minutes
allows teams to refresh and re-strategise.
MONEY LESSON
Review your portfolio regularly.
SMART TIP
Review and rebalance your portfolio every six months.
If the equity portion has risen in value, make incremental investments in debt
and vice-versa.
MAKE THE MOST OF PENALTY SHOOT-OUTS
Penalty kick is an easy scoring
opportunity for the team to which it is awarded.
MONEY LESSON
If you are the beneficiary of a joining or a
performance bonus, channel it towards achieving your goals. Don’t fritter it
away.
SMART TIP
Use lump-sum windfall gains to create an emergency
fund, pay-off loans or enhance term and health insurance covers.
BEEF UP YOUR DEFENCE
Defenders are responsible for
not allowing the ball go past them. They prevent losses.
MONEY LESSON
Boosting your defence against sharp market
corrections is as important as creating scoring opportunities.
SMART TIP
As fixed income instruments offer greater protection,
so experts advise investing up to 20-25% in debt and 5-10% in gold for younger
investors. Allocation should be higher for older individuals.
BE WATCHFUL OF MARKET FEINTS
Feints are deceptive movements
of a player meant to confound opponents.
SMART TIP
Reading market movements during volatile phases can
be tricky and is fraught with risk.
SMART TIP
Instead of looking to play or time the markets and
get impacted by market feints, stick to disciplined investing via SIPs.
DO NOT COMMIT FOULS WHILE INVESTING
Breaking the rules of the game
is termed as foul, and invites punishment.
MONEY LESSON
Resist the temptation to stray away from your
financial plan. Deviating from rules-based investing can compromise your goals.
SMART TIP
Do not liquidate your investments made for specific
goals to finance short-term needs. For instance, don’t dip into your retirement
kitty to buy a car.
ACT AS A REFEREE FOR YOUR
INVESTMENTS
A neutral official on the field,
the referee enforces rules and hands out punishment to players, if required.
MONEY LESSON
Arrive at decisions dispassionately, instead of
letting emotions take over, particularly in a volatile market.
SMART TIP
Don’t exit investments out of fear. Study the
performance of your schemes and weed out the non-performers.
TOI 9JUL18
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