From investing wisely to vowing to forgive all debt, the colors of Holi have a lot of messages for us

By Rina Nathanic

Many of us will be enjoying the festival of Holi this year after a two-year hiatus due to the pandemic-induced lockdowns and restrictions. While we let our hair down, let’s also learn some important financial lessons from this festival of colors.

Playing it safe (investing wisely)
Just as you take precautions by choosing organic colors to protect your skin and hair while playing Holi, taking a sensible approach is a must when managing your hard-earned cash. When investing, consider your age, personal risk profile, broader investment objective, the financial goals you pursue and the time available to achieve them. A needs-based and focused approach will prove to be in the best interest of your (financial) well-being, and like Holi, investing can be a fun and rewarding experience.

Vibrant Colors (Importance of Diversification)
When it comes to your investments, diversify across different asset classes: stocks, debt, gold, etc., so that it gives your portfolio vitality. Diversification is one of the fundamentals of investing that helps reduce the risk of loss from investing in a single asset class, optimizes risk-adjusted returns, and improves the liquidity of your investment portfolio.

Enjoying sweets (achieve your financial goals)
Besides the colors, during the festival, we also enjoy the delectable Gujiya, PuranPoli, etc. Likewise, when it comes to your investments, you need to work hard to save a meaningful amount, invest it diligently in productive investment opportunities and be patient enough with your investment (give enough time to grow) so that it turns out to be a fruitful experience and you achieve your intended financial goals. The sooner you start your investment journey, by devoting enough time to the power of compounding to work its magic, you can comfortably achieve many of these goals.

Bonfire (pay off debt)
Debts aren’t a big deal, as long as they stay within a manageable limit. The assimilated monthly installments on all your loans cannot exceed 35-40% of your monthly net salary. Diligently pay your outstanding loans and utility bills on time so they don’t affect your credit score. If you are in debt, this Holi, promise to pay off your debt before the sacred fire of Holika.

The writer is chief business officer, Quantum Mutual Fund

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