DOWNLOAD PDF
When you travel in a train that is comfortable
and will take you to
your destination at a good
speed. Of these two qualities,
which is more important? Being
comfortable, or taking you to
your destination?
It’s an interesting question,
and also useful, because the
answer will lead the way to
something important in personal
finance. Suppose the train were
comfortable but didn’t go anywhere.
It would be clearly useless.
Your primary goal would not
be satisfied. And yet, if you
know that the train will get you
to your destination, then comfort
also becomes important. So
the secondary goal has any value
only if the primary goal is met.
Doesn’t this sound like something
we should all be keeping in
mind while planning our personal
finance? And yet, many a time,
we do not. Sometimes, some of
us neglect the basics, like health
and term insurance or tax-saving
investments. Instead, we
first set off on some speculative
activity like day trading of stocks
or commodities. Or, we forget
about retirement savings, and
start doing some kind of a consumption
activity.
When we sit down and think
about these issues, it becomes
clear that not only do we need
to save, not only do we need to
invest, but we also need to have
a structure and a system by
which we can classify and prioritise
our financial goals.
As you will read in the cover
story of the issue, all the financial
needs of our lives can be classified
in a way that it can help us
give them the correct amount of
attention, and make the appropriate
investments for each.
When you travel in a train that is comfortable
and will take you to
your destination at a good
speed. Of these two qualities,
which is more important? Being
comfortable, or taking you to
your destination?
It’s an interesting question,
and also useful, because the
answer will lead the way to
something important in personal
finance. Suppose the train were
comfortable but didn’t go anywhere.
It would be clearly useless.
Your primary goal would not
be satisfied. And yet, if you
know that the train will get you
to your destination, then comfort
also becomes important. So
the secondary goal has any value
only if the primary goal is met.
Doesn’t this sound like something
we should all be keeping in
mind while planning our personal
finance? And yet, many a time,
we do not. Sometimes, some of
us neglect the basics, like health
and term insurance or tax-saving
investments. Instead, we
first set off on some speculative
activity like day trading of stocks
or commodities. Or, we forget
about retirement savings, and
start doing some kind of a consumption
activity.
When we sit down and think
about these issues, it becomes
clear that not only do we need
to save, not only do we need to
invest, but we also need to have
a structure and a system by
which we can classify and prioritise
our financial goals.
As you will read in the cover
story of the issue, all the financial
needs of our lives can be classified
in a way that it can help us
give them the correct amount of
attention, and make the appropriate
investments for each.