Back to Basics-The Building Blocks

Planning
Like everything else in life, nothing never gets started without a plan. So it is with financial security. Not only must you decide what your goals are : short term (6 months to a year),medium term(3 to 5 years), and long term(5years and more), but you must commit these to writing. This may sound like a trivial point, but just ask yourself how many great plans you formed in your mind that simply fizzled out because you did not clearly lay them out and commit yourself to follow through. Your future financial security is too important to leave as some ill defined ideas at the back of your mind, to be overtaken by every day pressures.

Action
Nothing ever gets achieved without action. As the saying goes: "Even if you are on the right track, you will get run over if you just sit there!" No matter how great your plans are, if there is no discipline to follow through, they will remain just that, great plans. And now is always the right time to take action!

Starting Early -The power of compound interest

Here is a demonstration of the power of compound interest!
Investor A invests $2000 per month for 10 years beginning at age 25 and then stops, but leaves his money invested . Investor B, same age, decides to wait for 10 years and then to invest $2000 per month for 20 years. Assume a 10% fixed rate of interest, compounded annually.

Work it out, at age 55, who is going to get the bigger payout? Strange, isn’t it? Investor A gets a bigger payout despite the fact that Investor B contributed more by virtue of the fact that he contributed for 20 years against Investor A’s 10 years. That’s the power of compound interest! Simply put if you re-invest your interest, in future you will earn interest on the initial amount and also on the interest already earned. This example gives you one piece of advice: Start early, and the right time is now!


Making The Right Choices

The investment markets are a jungle, overflowing with information, junk and
jargon. It is easy to be misled with high sounding, but empty promises. You have
worked hard for your money, why entrust it to someone you do not know or
do not trust. Shop around, yes, but ultimately you must choose a service
provider that you can trust and is committed to giving you honest information to
enable you to make informed decisions.