Insights

Don’t make resolutions; make habits

December 30, 2014 . Vidya Bala
new-years-resolutions

‘Resolution’ – I don’t particularly savour the term. It gives me a sense of requiring some steely determination to do something forcibly, and often, it makes me feel like it is not sustainable. This is why I prefer the idea of ‘making habits.’

Habits, on the other hand, can be simple, engaging, sustainable and could, over time, become almost automated and self-sustaining! And most importantly, habits are known to reduce the paradox of choice as they allow you to develop routines that automatically limit all your other choices.

Solve the paradox of choice

Take the case of the most popular new year resolution – to exercise and stay fit. There are hundreds of different options that you can choose to stay fit. But when you are not in the habit of exercising, you find it excruciatingly difficult to make a choice from the plethora of options and hence, you never start.

However, for people who regularly walk or jog, there is no question of choice. They have seen the pay offs from their long-term habits, and they probably don’t even think about the other available choices.

Now try relating this to financial habits. The hundreds of choices out there simply prevent many of you from making a start with your investments.

What if you had a habit? What if you built a financial habit that puts you on the path to achieving goals that might otherwise seem too big to achieve?

Of course, by no stretch of imagination is it easy to ‘make habits’ that are sustainable. That’s a LOT of hard work. But, what if you could get the pay off without all the hard work? What if you could outsource or automate your habits? If this does not already ring a bell, of course I am talking of a Systematic Investment Plan or an SIP.

I cannot think of a simpler or more sensible means of an investing habit that is automated, taking all the required hard work off your radar. It makes investing – that is investing regularly, investing a fixed sum, and investing over long-periods of time – seem like the easiest and most sensible thing to do. And along the way, it helps you take the best advantage of market see-saws, averaging your costs all the way.

If you have not developed this habit already, outsource the tough part of getting started by talking to your advisor today. Make a start, stay the course and you will see the difference it makes to your health, and of course, your wealth!

Have a splendid year ahead!

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