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    Scoring a goal on your finances

    Standard Chartered Bank

    Recently Real Madrid overcame Liverpool to clinch record the 14th Champions League title.

    We think it is a good time to take some time off the pitch to relate the beautiful game of football to your finances.

    STRATEGISE YOUR GAME PLAN

    A good football coach will approach any game with a good strategy in mind, knowing his opponent’s strengths and weaknesses. Similarly for your finances and you being the coach of your own finances, you need to have a good game plan when it comes to how you save, spend and allocate your finances.

    Drawing up a good financial game plan involves looking at your finances in different time frames such as one year, five years, 10 years and if possible even 15 to 20 years’ time.

    Having goals and strategies set to these time frames can help stay on course for racking up goals.

    After all, championships were not won overnight!

    UNDERSTAND THE RULES OF THE GAME

    While rules can be simple, some rules may go unnoticed. Similarly, when you start to look into investments, understand the rules that come with it.

    Higher returns on investments typically carry higher risks; lower returns typically carry lower risks. By understanding these concepts and risks that different types of investments carry, you can then draw your game plan to suit your risk appetite and decide whether you want to play it safe with defence on your investments or play the game aggressively and attack on your investments.

    AVOID PLAYING OFFSIDE

    Practice discipline by staying the course. Don’t be tempted to go offside with luxury purchases that could throw you off your game plan and thus make you lose out on your goal. If you can afford the luxury then perhaps going offside would not be such an issue, but if the purchase is unplanned for and it will affect your level of savings or allocation, then reconsider and take a step back to be onside and avoid committing that foul.

    DON’T TAKE BETS

    Not only is it prohibited, betting is extremely high risk. Similarly, for your investments, don’t take bets on high risk products especially when you know you can’t afford it.

    Taking a bet on your investment and hoping to make quick bucks out of it is not recommended especially when you cannot afford the risk.

    Instead build on a sound game plan by creating and building your core investment portfolio before you even begin to explore higher risk investment products.

    AVOID YELLOW OR RED CARDS

    Avoid going off the deep end of your game with yellow or red cards which could cost you your entire game or having to sit out the next game and we’re referring to emergencies.

    Emergencies such as accidents, unforeseen circumstances, etc, that can be costly and throw you off your financial plans can be overcome by ensuring that you have sufficient emergency funds on standby.

    The rule of thumb for emergency funds is to build up at least four to six months of your monthly income in an emergency fund account which is easily accessible should the need arise.

    Avoid using this money set aside for anything other than a rainy day. Don’t let emergencies throw you off your game.

    TAKE A BREATHER DURING HALF-TIME

    Consider the first 45 minutes of the game as half a year.

    During half time, which is at the end of the first six months of the year, take a quick break to go through your financial performance so far and see if your tactics are holding up.

    If they’re not and you think you need to switch your style of play then this is a good time to do so, if not earlier. Take the much needed pause to look at some statistics, ie, your finance numbers, and see if they’re looking good. If not, you may want to consider substituting players, ie, changing your savings plans, etc.

    DON’T LOSE HOPE

    0-1 down? Don’t lose hope. A good team will continue playing with passion and fervour until the final whistle blows. Miracles can happen even during the last few minutes so don’t lose hope even if you’ve been red carded and all your players have lost track of their strategies such as lower interest rates, change of foreign exchange rates, etc. The great thing about having game plans is that these can be changed to suit the game and you should always learn from past mistakes. If one particular investment is not doing well and has pulled the rest of your portfolio down, revise your game plan or see if sticking with your strategies will pull up your financial game in the long run. Perseverance is key.

    SCORE A GOAL

    With great game strategies and tactics, followed by precision attacking and skill, you will eventually score a goal…or even more! Remember to stay calm during play and also enjoy the game while you’re at it!

    This article is for general information purposes only and while the information in it is believed to be reliable, it has not been independently verified by us. You are advised to exercise your own independent judgement with the contents in this article.

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