It is always good to go to the root of a word and try and understand the underlying true meaning of the word. So I decided to check Wikipedia for the meaning of the term “New Year’s resolution” and here is how Wikipedia defines the term.

A New Year Resolution is a secular tradition, most common in the West but found around the world, in which a person makes a promise to do an act of self-improvement starting on  New Year’s day.


Now, if we you think that New Year Resolution is a modern phenomenon made popular by modern social media, then you are wrong.

The ancient Babylonians made promises to their gods at the start of each year that they would return borrowed objects and pay their debts.

The Romans began each year by making promises to the god Janus, for whom the month of January is named.

In the Medieval era, the knights took the peacock vow at the end of the Christmas season each year to re-affirm their commitment to chivalry.

Hindus, take New Year resolutions on the eve of Diwali to start afresh with renowned vigour the forthcoming year and so on. So do Muslims in the month of Ramadan.

So, just like our forefathers, for us the modern human race, January is the month of taking New Year resolutions. Resolutions for better health, better relations & more prosperity & so on & so forth.

Well my domain is the last one; “PROSPERITY”. Being a financial coach & planner, let me dare to suggest a few Investing resolutions for the common man. If the Investor sticks to the below mentioned resolutions, he will soon create WEALTH for himself and his family.

And let me assure you that these are times-tested principles….

So, without much ado, let me mention some New Year investing resolutions for one and all.

10 Investing resolutions for 2014

1.I shall buy a decent Term Insurance Plan for myself and other earning members of my family

The first & the only necessary Insurance plan that every earning member should buy is a basic, TERM Insurance Plan that insures ones family against untimely death of the bread winner which can cause immense loss to the family. This is the CHEAPEST form of insurance money can buy but protects your family against the sudden and untimely death of the main bread earner of the family.

2.I shall buy a decent Mediclaim cover for each member of my family

Anybody can fall ill or meet with an accident in our family. Whereas Life Insurance is to be taken only for the earning member of the family, medical insurance is to be taken for all the members of the family. Medical costs are increasing by the day and if you are not covered by a proper medical plan, sudden sickness or accident in the family has the potential to eat your life’s savings.

3.I shall buy a decent Critical Illness cover for each member of my family

Just like Mediclaim, Critical Illness cover is equally important. Normal Mediclaim plans do not cover critical diseases that requires you to take a separate critical illness plan. It does not cost much but can save you a lot of cost in case of an unforeseen eventuality.

4.I shall start Systematic Investment Plan (SIP) in professionally chosen Equity Diversified Mutual Funds

One of best invention in the world of finance is SIP or Systematic Investment Plans. The only fool proof way of talking equity exposure via the Mutual Fund route.

After the abolition of entry loads on Mutual Funds from Aug 1, 2009, Mutual Funds have become the best, most economical form of Investment vehicle available to a retail investor.  Consider this. Over the last decade, well chosen mutual fund schemes have given a compounded average return of 20 to 24% per annum. And that to tax free. How many businesses give this kind of return? Just one caveat, consult a Mutual Fund expert and let him create a dedicated mutual fund portfolio for you after understanding your needs.

5.I shall pay off my personal loan & credit card out standing’s (asap) at the earliest

Personal loan & credit cards are the costliest form of loans that banks and NBFC’s give to unsuspecting layman. One pays a whopping interest rate of 18% to 24% per annum on personal loans & 36% to 50% per annum on credit cards. Avoid these two at all cost.

6.I shall not trade in shares & I shall avoid speculation in equity, commodities or F&O

Most people approach the stock market as a place to make fast money in shortest possible time. They buy stocks on tips but make mistake on when to sell and eventually lose money unless you are lucky enough to exit at the right time. But one cannot be lucky all the time. So invest in stocks but only after thorough research. Avoid trading or speculation & always be an Investor.

7.I shall not invest in Insurance plans

No matter how much one emphasizes this point, one can never overemphasize it. Insurance is not investment. There are basically 2 types of Insurance plans viz; Traditional Plans like Money Back & Endowment & market-linked plans like ULIPs. The later (ULIPs) are already notorious for being largely miss-sold while the former (traditional plans) give returns that hardly beat inflation. Invest in equity diversified Mutual Funds instead.

8.I shall consult a Financial Planner to help me plan my financial affairs

We are living in a world of plenty. We now have a problem of CHOICE. 22 + life insurance companies, 44 odd Mutual Fund companies, 7,000+ listed shares and other traditional Savings & investment avenues. How can one expect a lay investor to choose which are the best investment avenues for him/her.

When one falls ill, one consults a doctor who then writes a prescription and then one goes to the medicine shop and buys the medicine prescribed by the doctor. Why not follow the same path while taking your financial decisions.  Go to the financial planner who after understanding your specific needs, your financial goals & risk profile, helps you create a dedicated investment portfolio. It is worth paying fees to a financial planner & buy peace of mind then paying very high commissions to the commission agents and have sleepless nights.

9.I shall invest with a GOAL in mind

Now why is this important! Look, investing just to make money seems like a rational thing to do but it is anything but that. If you invest without a Goal, you will never know what action to take when faced with tough choices. So let’s say you have invested for your child’s higher education which is 10 years down the line. In the 4th year of investment, the market tanks. What will you do? Since your goal is 6 years away, you should be happy that the market has tanked and buy as if there is no tomorrow. If you didn’t have a goal in mind, you would probably have panicked and sold in distress thus losing a wonderful opportunity to buy.

10.I shall not forget the above resolutions

Most important. The above resolutions are not rules. They are principles. And principles are time tested rules that hold their ground through thick & thin.

So do not commit the mistake of forgetting them…

Here’s wishing all my blog readers a very prosperous & wealthy New Year.

Invest wisely, read a lot, read this Blog & keep commenting. I look forward to your constructive criticism.

You have supported me over the last few years of my blogging career at my previous blog

For want of a better blogging environment, I have moved to wordpress here. Looking forward to your continued patronage.

HAPPY Investing in 2014…

8 thoughts on “Investing Resolutions 2014”


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