This Christmas, you should aim to be a good shepherd of your money. Your money, just like Christmas, can usher in a sense of celebration every festive season so long as you save and invest it properly.
Here we share some key money lessons to follow which can help you become a good shepherd of your money this X-mas 2024.
6 Key money lessons one can learn
1. Each one matters: Just like a shepherd tends to a large number of sheep in an organised way without overlooking even a single sheep, an investor must also keep his entire portfolio intact without overlooking a single constituent.
2. Consistency in rebalancing: Just like a shepherd follows a routine while taking care of his sheep, it is indispensable for the investor to stick to consistency, while rebalancing the portfolio.
Ideally, once a year preferably at the start of the calendar or financial year, one should make sure to rebalance the portfolio in order to stick to the pre-decided ratios.
3. Financial goals: The main purpose of saving followed by planned investment is to achieve financial goals. The way a shepherd takes the entire flock of sheep in one direction for them to graze, the investor must keep his financial goal in mind while managing the portfolio seamlessly.
There would be times when one sheep or a bunch of them would likely stray, it is then the shepherd’s stick that nudges them into the right direction.
4. Pursuit of fertile land: A shepherd continues to walk until he reaches a fertile land. He would not stop just because he is tired or he has found a tiny patch of green area. He persists until he finds the place which suits him, his flock and has enough green area to feed his flock for a reasonable period.
The same way, an investor pursues good investing opportunities so that his portfolio can grow and prosper.
5. Duration of time: A shepherd allows his sheep to stay at the fertile land for a long enough period to graze. In order to return quickly, he doesn’t hurry through the journey back home.
The same way, an investor is supposed to stay invested for a long enough period so that his investment grows substantially. Premature redemption can wipe out all the gains and negate all the efforts which were invested to earn these gains.
6. View in totality: A shepherd views hundreds of sheep as one collective unit and not as hundreds of individual sheep. Sometimes, one may fall ill, or a couple of them face an injury. Neither he rues over it, nor does it discontinue the journey. Sometimes the flock may be reduced by one or two sheep but the shepherd continues his journey. It is vital to remember that the total is more than the sum of its parts.
The same way, an investor is supposed to view his flock in totality. In case of loss in one stock or mutual fund, he should not stop his investment or discontinue his investing journey.
The key lies in consistency. Never lose hope, never stop. And as they say – the show must go on.
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