Introduction: –
Money plays a central role in our lives. We work hard every day to earn it, use it to cover our needs, achieve goals, and eventually build wealth. Every paycheck, saving, and investment is part of a bigger plan to secure our financial future.
Yet, despite all this effort, many people make mistakes that can undo years of hard work. Three of the most common pitfalls are: following thumb rules blindly, setting random financial targets, and trusting unverified advice from finfluencers. Let’s explore each of these and learn how to avoid them.
Following Thumb Rules Blindly
We often hear financial advice like:
“Save at least 10% of your income.”
“Your portfolio must earn at least 15% every year.”
“Invest in whatever is trending right now.”
While these tips may seem helpful, blindly following them can be harmful. Everyone’s financial situation is unique — your income, expenses, debts, risk tolerance, and goals all differ.
Why this is risky:
Generic thumb rules don’t consider personal circumstances, taxes, or lifestyle changes.
Chasing high returns may lead to frequent switching between investments, which can reduce long-term growth.
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Better approach:
Focus on patience, discipline, and long-term consistency.
Build a balanced portfolio that suits short-, medium-, and long-term goals.
Keep risky investments like stocks or equity funds only for the long-term portion of your portfolio.
Following a well-planned strategy reduces stress and increases the likelihood of achieving your financial goals, even if your portfolio does not hit arbitrary return targets every year.
Setting Random or Round-Number Targets
It’s common to pick big, round numbers as financial goals, such as “I need Rs 5 crore for retirement.” At first glance, this may seem like a solid target. But in reality, such numbers may not reflect what you truly need.
Why it can fail:
Your financial requirements depend on lifestyle, living expenses, health care, family support, pensions, and unforeseen costs.
Too low a target can leave you unprepared, while a target that is too high can limit spending on other important life goals.
Better approach:
Plan goals based on your actual needs and circumstances.
Break larger targets into smaller, actionable steps, such as yearly or monthly savings milestones.
Avoid relying entirely on online calculators, which may oversimplify the assumptions and ignore other important financial goals.
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Trusting Advice from Finfluencers
The internet is full of finfluencers giving financial advice, from investment tips to lifestyle hacks. While some content can be informative, many recommendations are risky or misleading.
Why it’s dangerous:
Most finfluencers are not certified financial advisors.
Their suggestions may not align with your financial goals or risk tolerance.
Blindly following their advice can lead to financial losses or bad investment decisions.
Better approach:
Treat online advice as educational only.
Consult a qualified financial advisor for personal guidance.
Verify any investment opportunity before committing your money.
Conclusion: –
Even with a stable income and disciplined savings, these mistakes can undo all your hard work:
Following thumb rules without adapting to your needs.
Setting arbitrary or round-number financial targets.
Acting on unverified advice from finfluencers.
The solution: Plan according to your own situation, set realistic goals, and seek guidance from trusted sources. By doing so, your money will work for you, helping you achieve your goals steadily and safely, while giving you the peace of mind that comes from sound financial planning.
