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Good Financial Habits be a Disciplined Investor

The Good Financial Habits
Be a Disciplined Investor 6 Financial Habits you must Inculcate

the-good-financial-habits

The Good Financial Habits

The Good Financial Habits



While some habits can pave the way to wealth and prosperity, others can lead to financial ruin. ET provides a guide.

review-your-portfolio

Review your Portfolio

Review your Portfolio



Keep track of your investments. To keep the portfolio healthy, get rid of underperformers and rebalance the asset mix. A 5-10% deviation from original asset allocation should be the tolerance limit.

maintain-a-budget

Maintain a Budget

Maintain a Budget



To know how much you can keep aside for discretionary spends after taking care of essentials, create a monthly budget. Follow the 50-20-30 rule to break up the total budget into fixed costs, investments and flexible spending.

create-an-emergency-fund

Create an Emergency Fund

Create an Emergency Fund



A contingency fund will provide a buffer against unplanned expenses in the event of a sudden illness, job loss or accident. Keep this money in a liquid or ultra short-term debt fund. Ideally, 6 months' worth of income should be kept aside in a contingency fund.

have-an-exit-strategy

Have an Exit Strategy

Have an Exit Strategy



You will either end up riding your winners for too long only to see them sour or get stuck with duds if you don't have exit strategies for your investments. For your equity investments, 20-30% should be the stop-loss trigger.

pay-your-bills-on-time

Pay your Bills on Time

Pay your Bills on Time



As soon as your salary gets credited into your bank account, pay off bills. Try and pay off bills 10 days before the due date. Remember, if you regularly let payments run past the due date, you will not only rack up hefty late payment fees, but worse, your credit score will also take a big hit.

be-a-disciplined-investor

Be a Disciplined Investor

Be a Disciplined Investor



Opt for automatic transfer of funds to your preferred saving instruments the minute your salary hits your account. Ideally, 30-40% of your monthly income should be directed towards investments. This way you can't spend what you do not have access to.