By their very nature, Indians are a race of "savers". Very early in life, we are encouraged by our parents about the importance of saving. Remember the piggy bank you owned and the joy of listening to the jingle of the coins in it? It was wonderful, wasn't it?

But with the escalating cost of living today, savings alone won't help us achieve our financial goals.. You ought to make money work for you so that goals - such as buying a dream home, a car, children's education, their marriage, travelling abroad, your retirement, etc. - can be achieved within the time frame you have in mind.

In the rat race we are part of today, we need to pay extra attention to our financial health. While maintaining a ‘piggy bank' worked earlier, now it's time to venture out and invest that money, because the inflation bug can erode the purchasing power of your hard-earned money.

Did you know the principles of healthy living can also enable you to maintain your finances in pink of health? Here are some pointers that lend you a holistic perspective:
 

• Start Early: Richard Whatley, an English rhetorician, logician, economist, and a theologian said, "Lose an hour in the morning, and you will be all day hunting for it."
  
  If you've noticed, getting up early not only rejuvenates you but leaves you with ample time in hand to complete the daily tasks as well. Likewise with investing, starting early gives you a longer time horizon to comfortably achieve your financial goals.
    An early bird gets a bigger piece of the pie

  Current Age	Annual Contribution (Rs)	Investment Return	Retirement Age	Years left for retirement	Retirement Corpus (Rs)
  20	100,000	10%	60	40	44,259,255
  21	100,000	10%	60	39	40,144,777
  22	100,000	10%	60	38	36,404,343
  23	100,000	10%	60	37	33,003,948
  24	100,000	10%	60	36	29,912,680
  25	100,000	10%	60	35	27,102,436
  26	100,000	10%	60	34	24,547,669
  27	100,000	10%	60	33	22,225,154
  28	100,000	10%	60	32	20,113,776
  29	100,000	10%	60	31	18,194,342
  30	100,000	10%	60	30	16,449,402
  31	100,000	10%	60	29	14,863,092
  32	100,000	10%	60	28	13,420,993
  33	100,000	10%	60	27	12,109,994
  34	100,000	10%	60	26	10,918,176
  35	100,000	10%	60	25	9,834,705
  36	100,000	10%	60	24	8,849,732
  37	100,000	10%	60	23	7,954,302
  38	100,000	10%	60	22	7,140,274
  39	100,000	10%	60	21	6,400,249
  40	100,000	10%	60	20	5,727,499

  
  The table above highlights the benefits of starting a retirement plan early in life. A 20-year old investing Rs 100,000 per annum will accumulate Rs 4.43 crore, vis-à-vis a 40-year old who will accumulate Rs 57.3 lakh within the same time frame. This is because the time horizon a younger investor enjoys effectively facilitates better compounding for his investments. So, remember, an early bird gets a bigger piece of the pie.
   
• Exercise Regularly: There is no substitute for exercising. In order to maintain and see positive results in health, one has to exercise regularly.
  
  Similarly, if one wants to see positive results in wealth, invest regularly.
    Slow and steady wins the race

  Years	SIP of Rs. 1,000 per month accumulated to
  	5%	10%	15%
  5 years	68,006	77,437	88,574
  10 years	155,282	204,844	275,217
  15 years	267,288	414,470	668,506
  20 years	411,033	759,368	1,497,239

  
  Investing regularly increases your wealth through the power of compounding. Albert Einstein has said, "Compound Interest is the eighth wonder of the world. He, who understands it, earns it… He, who doesn't, pays it". Investing regularly also helps combat inflation, because it's always the rolling stone that gathers no moss.
  
  Consequently, higher the rate of interest and longer the number of years you invest, greater the wealth you accumulate.
   
• Have a balanced diet: An ancient proverb in Ayurveda has succinctly put the importance of a balanced diet to our overall wellbeing, "When a diet is wrong, medicine is of no use. When the diet is correct, medicine is of no need".
  
  While investing as well, a balance diet is vital and connotes diversification. Diversification helps mitigate the risk to an investment portfolio emanating from a respective asset class. It is one of the basic tenets of investment planning. Nevertheless, this needs to be done prudently to accrue the benefits. Ideally, factors such as age, income & expenses, assets & liabilities, risk appetite, financial goals, nearness to financial goals, and investment time horizon should be considered before diversifying your portfolio into various asset classes such as equity, debt, and gold.
  
  As per the table above, if you have a goal to achieve that is three years away, there's no point having exposure to equity since it's highly risky for short terms. Only for goals that are 3 - 5 years away or more, equity can be considered along with some allocation to other asset classes such as debt and equity. If the financial goal is just 5 years away, your asset allocation can be 55% into equity, 35% into debt, and 10% into gold.
  
  Depending on how skewed your portfolio is towards equity, a portfolio is classified as: aggressive, moderate, and/or conservative. A greater composition of equity makes the portfolio aggressive, while least or none of that asset class makes it conservative.
   

  Particulars	Goal = 3 years	Goal > 5 years	Goal > 10 years
  Equity	0	55%	75%
  Debt	100%	35%	10%
  Gold	0	10%	15%

  
  As far as gold is concerned, it commands a place in any portfolio, be it aggressive, moderate, and/or conservative. It is an asset class that has shown a secular uptrend and has an inverse relationship to equity thus providing stability to your portfolio. During times of economic uncertainty, gold is looked upon as a safe haven or a hedge.
   
• Avoid Anger: ‘Anger is one alphabet short of danger' goes the famous axiom. Anger is a very powerful emotion and if it's not managed appropriately, it can have destructive results on you and those closest to you. Doctors and health experts advocate being calm and exercising patience.
  
  Patience is a virtue to be practice in the world of investments too. Avoid seeking immediate return on investments; else you could lose sight of your financial goals. Warren Buffett puts it beautifully, "The stock market is the device for transferring money from the impatient to the patient."
   
• Have enough liquids: Joan Koelemay, a dietician for the Beverage Institute, an industry group says that, "Think of water as a nutrient your body needs that is present in liquids, plain water, and foods. All of these are essential daily to replace the large amounts of water lost each day".
  
  On the investment front too, having enough liquidity is vital to address any unforeseen emergency. It is advisable and a prudent practice to keep aside 6 - 24 months of regular expenses (including EMI payments) to handle any contingencies.
   
• Get adequate sleep: Most of us ignore the importance of catching on sleep. Some believe that sleeping for more than 5 - 6 hours is a sign of laziness. However, Dr. Eric J. Olson, M.D. of Mayo Clinic, USA states that a person's immune system can be drastically affected by the lack of sleep. He goes on to add that, "People who don't get quality sleep or enough sleep are more likely to get sick after being exposed to a virus, such as a common cold virus. Lack of sleep can also affect how fast you recover if you do get sick".
  
  Similarly, most of us ignore the importance of having the right risk cover. Having an optimal insurance cover is an integral part of one's financial planning, as life is surrounded by uncertainties and untoward events occur when we least expect them. While many buy a life insurance cover recognising its importance, the schemes they opt for and/or the Sum Assured that they are covered under are sub-optimal most times. Our experience reveals that most people hold insurance-cum-investment plans in the endeavour of killing two birds with one shot; but what they fail to understand is that they are sub-optimally insuring themselves. Ideally, you should determine the optimal sum assured based on "Human Life Value (HLV)" and purchase the right term insurance policy that takes care of your family financial needs once you've passed away.
   
• Seek professional help: It goes without saying that we take the advice of a professional whenever we need help in specific areas, whether it is the stock market, buying a property, or a medical emergency.
  
  Similarly, one should consult a practicing financial planner who can help with formulating an asset allocation strategy based on your financial goals, the time frame, and the risk taking appetite.
   
• Review: We've heard, ‘Prevention is better than cure', and it's vital to get a health check-up regularly. This helps us arrest diseases and illnesses at an early stage, which may be a cause for concern going forward.
  
  Similarly, on the investment front, we have to regularly review the portfolio to assess if investments are aligned with our financial goals. Any deviations should be taken into consideration immediately and quick changes have to be implemented.
   

Follow these simple steps and be assured that by healthy living and wise investing, you can build up your health and wealth.

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