3) Keep your eye on the prize
“Always remember your ‘Why’”
Before we start investing or planning our financial future in Malaysia, we must know why do we want to invest. We should have the end in mind. This could be a financial goal that we want to achieve, for example, to accumulate a RM5,000,000 retirement fund by age 60 or to raise RM500,000 for a child’s tertiary education in 15 years. The goal has to be specific and measurable.
If we do not set a financial goal, it is as if we are boarding a plane without any idea where the plane is going to land!
Your investment journey is unlikely going to be smooth sailing all the time. There will be setbacks, crises, mistakes, and disappointments. Most of these are actually beyond your control. Additionally, the financial markets are full of “noises” in the form of overwhelming, and at times conflicting, news, and opinions that may distract you from your investment objectives.
Hence, we must regularly review and monitor our investment plan. Make adjustments when necessary, to ensure that our investments are on track to realise our financial goals. If an investment is doing badly and the fundamentals have deteriorated, we may want to exit the investment and redeploy the capital to a better performing investment. If the overall plan seems to be falling short, then we may need to increase our savings to make up for the shortfall. On the other hand, if the investment is doing very well, we may want to lock in the gains early.
While investing has its risks, the bigger risk lies in not achieving your financial goals.
Financial planning and investing to achieve your financial objectives are not rocket science but doing them well would take time and effort. When investing, remember the three principles above and you would have established the right foundation for greater success. Alternatively, if you wish, you can engage an independent financial planning firm that provides investment planning as part of its financial advisory services.