So recently I have lost my wallet. It got vanished from my pocket just within a blink of an eye just like any other inevitable event that happens in our life keeping us perplexed. A risky event in our life comes like a thunder and keeps us stunned for a while. I lost my belongings, a good amount of money and tons of visiting cards. So, instead of whining about the fact, I thought about what I learnt from this experience, how can I apply the learning in other aspects of my life? Thus, lessons that I learnt from the mishap that can be linked with financial decisions of our life, I would like to share those learning with you guys.
So, instead of whining about the fact, I thought about what I learnt from this experience, how can I apply the learning in other aspects of my life? Thus, lessons that I learnt from the mishap that can be linked with financial decisions of our life, I would like to share those learning with you guys.
Lesson One: Always remain prepared for inevitable.
Inevitable events in life will occur, even if we cannot stop them, we can take measures to mitigate the aftermath of it. Losing the wallet I was left penniless. If I had been prepared I would have kept some money somewhere else other than the wallet or I could have kept an emergency fund. As I did not do so, I had to borrow fairs from my acquaintance. Similarly, when we are involved in a 9-5 job, running our own business, living out on the return on investment we simultaneously should prepare a fund that we will need in an emergency basis to combat the inevitable event in our life, let it be: health issues, accidents, robbery, digital fraud and so on. From our earning we can create an emergency fund that is left untouched, not in any investment or planned for anything just a preparation so that we will not left helpless in times of need.
Lesson Two: Do not put all the eggs in one basket.
It is a famous quote of Warren Buffet where he emphasizes not to put our whole inputs in one single unit. I thought after losing the bag that if I had put some money in my pocket or in my other bag, it would have been safe and sound, but the reality was different. It is like putting all of our money in the bank in deposit and suddenly the bank gets robbed or like we invest majority of our money on a business that results in failure, and we are left thinking what if I had done such and such. So do not put all your eggs in one basket. Diversify your sources; a trader of boats does not trade with one boat, but with many boats because if one boat sinks other boats can back it up.
Lesson Three: Assess the risk factors of decisions.
Assessing of the risk involved in the financial decisions can be done in numerous ways, depending on the nature and scope of the financial decision. How I could have assessed the risk factor? Answer: in no possible way! But now, as I have gone through the experience I will be more cautious in similar scenarios. Likewise, when an investor is going to make an investment he/she has to think about the worst case scenario and thus plan accordingly to if not mitigate at least minimize the risk factors.
Lesson Four: Know the priorities.
Along with losing my wallet I lost my voter ID, ATM card and other valuable documents. Where I went wrong in setting the priorities? I kept a valuable item like voter ID in the wallet, a valuable asset in the wrong place and that put me in jeopardy. As like that, in financial decision if we fail to set the priorities and know what sector to focus in and the intensity of focus we may lose something precious within a blink of an eye. Get knowledge, assess the scenario, and set priorities.
Lesson Five: Assess your resources.
I realize that I have lost my wallet the moment I was about to give my fair. I was taking action but my resource was long gone. Similarly, before we are about to involve in any financial decision we should conduct an internal audit of our resources. This will enable us to see the broader perspective of the decision and make the decision more precise. Assessing our resources will ensure better planned decisions that are effective and most importantly have the capability to sustain in the long run.
Lesson Six: Keep a positive mindset.
Every cloud has a silver lining. I got my wallet back. A random guy found the wallet lying on the roadside. He called my number which he got from my student ID and returned me the wallet. Obviously there was not any money left but I got my valuable papers back. So, in financial decision keep a positive mindset, thinking positive will draw in positive things for you. Not every investment will result less return, not every stock price will decline, and not every business will bite the dust, keep a positive mindset about your decisions, good things will come towards you and if any inevitable occurs, learn and move on.