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Achieve Big Goals With Small Investments

November 05, 2018 1528
When we're children, it's the big goals that scare us. So, our parents generally break everything down into smaller goals, making it far easier for us to achieve. Instead of telling a child to straight away achieve 90% marks in an exam, most parents will first ask the child to do better in their ordinary weekly tests, before setting a goal for the exam. As adults, we tend to follow the same kind of policy. Rather than assigning ourselves 2 or 3 large tasks every day, our to-do lists will generally consist of small, achievable tasks. Similarly, instead of buying a car or a phone in one fell swoop, we're willing to look at EMI options. Because to us, paying a couple of thousand every month seems far more achievable than paying several thousands all at once.

Unfortunately, this practice generally leads to some fear of paying large amounts, and this tends to work against us when it comes to paying annual insurance premiums. Whether it's a health insurance policy, a retirement plan, or even a life insurance that we've purchased, the thought of paying a large sum once a year fills us with dread.

Thankfully, there's a way to work around this. Today, most insurance providers will allow you to choose whether you want to pay annually, quarterly, or even monthly. Of course, if you're unable to pick how and when you want to break up your premiums, you can come up with your own schemes by putting money away in a separate fund every month. For example, let's say you have to pay a premium of Rs. 60,000 every year. For one payment, 60,000 is a lot of money. But, what if you were to put away Rs. 5,000 every month in a secure savings account. At the end of the year, you'd have saved up the 60,000 you need as your premium, plus, you'd have earned some interest along the way as well.

This doesn't just work for insurance premiums. Let's take a look at other ways in which saving small amounts every month can be beneficial to you:

  1. Paying off debts: Inflation hits common man adversely, which leads them to taking loans. Sometimes these loans can prove to be the biggest roadblocks on your pathway to success. By making small but regular investments, you can easily repay even the biggest debts without compromising on your lifestyle.
  2. Following your dreams: If your dream is to own a big beautiful bungalow or send your kids abroad for higher education or travel the world with your spouse, you need to start planning now. Instead of saying you need to save up 20 lakhs to put your child through his or her MBA programme, think about how much you need to save per year or per month the goal will look far more achievable when you break it down.
  3. Shaping your future: It's never too late to pursue your passion. If you'd like to learn how to play an instrument or take up a hobby, investing a little time every day makes far more sense than trying to learn everything all at once over a weekend. By setting time aside for yourself every day, you'll be able to achieve more and follow your dreams.
  4. Making early retirement plans: When it comes to planning for your retirement, the earlier you start, the better. Of course, it's quite difficult to plan for a time that is 30 years in the future and for an undefined period of time, but we've all got to start somewhere. You can look at putting money away in recurring deposits, fixed deposits, or even ULIPs. A small amount every month and every year will really go a long way in helping you build up your retirement nest egg.

Investing small amounts of money regularly feels more viable as compared to depositing a large chunk at once. This will help you plan your savings and expenses in a better and more manageable way. Always remember that even when it comes to insurance, a little can go a long way. If you haven't protected yourself and your family yet because large premiums scare you, now is the right time to make a new beginning and get the financial security you need to lead a worry-free life.

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HDFC Life Insurance Company Limited. CIN: L65110MH2000PLC128245, IRDAI Reg. No. 101.

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