Apart from the philosophical context, Diwali also marks the beginning of new ventures (signified by Chopda Pujan in Western India), especially for traders, stock brokers, and investors.
Let us look at four ways in which you can add glow to your financial future this Diwali.
Go easy on the debt
It is hard to stay away from debt these days when you have a credit card with high limits, and with personal loans easily available. Sometimes, these short-term obligations can become long-term traps if not managed properly. Ensure that you do not run up a huge debt this Diwali, especially if you are going to pay steep rates of interest on them. Remember, easy credit does not come easily and results in a huge cost over time. Take the pledge this Diwali that you will try and repay any old high-cost debt in your books and only borrow if completely necessary.
Put your Diwali bonus to good use
A Diwali bonus is not uncommon in India wherein employers pay a lumpsum amount to employees before the festive season. If you do not have an immediate requirement, it would be wise to use this amount to reduce your debt or even purchase insurance, make smart investments, put it in long-term savings, etc.
Started an SIP yet?
If not enrolled already, this Diwali is a great opportunity to begin a systematic investment plan (SIP). Even a small investment of Rs5,000 can grow substantially when you are doing an equity SIP. Equity SIPs over a longer time frame are amazingly effective wealth creators. Let us consider an example. A monthly SIP in an equity fund earning CAGR of just 14% can grow to Rs65.8 lakhs in 20 years, which is nearly 5.5 times the amount you invest. If you extend the same SIP at the same CAGR to 30 years instead of 20 years, you create a wealth of Rs2.78cr, which is 15 times the amount you invested. That is the power of compounding and there could be no better time to embark upon a bigger SIP outlay than this.
Diwali calls for new beginnings
Start thinking about your long-term financial goals and then work backward toward the investments required and the asset mix. The earlier you start with your financial plan exercise, the more time you have to plan your goals, and you have greater opportunities for taking corrective action where required. This Diwali, sit down with a financial advisor, craft a plan, and begin investing. In fact, this could be the best Diwali gift you can give yourself.