Almost all of us have been victims of financial excesses during the boom times. Some of us got that third, or fourth, credit card and used all of them to the maximum limit. A few decided to buy that second, or third, house purely for speculative reasons. We purchased mutual funds, Ulips and insurance products without thinking whether we needed them or whether they fitted into our portfolios. Many of us over-leveraged ourselves by taking a second and third loan. Today, as India stares at the prospect of lower growth, we are facing the adverse consequences of our actions.
The credit squeeze and fears of higher non-performing assets have forced banks to slash cash and credit limits on credit cards, not to pass on the lower interest rates to existing borrowers, and refuse loans even after they have been cleared earlier. In the case of real estate, the cash-strapped property firms are delaying projects by 6-18 months, or are reluctant to refund buyers who want out. Most investors are unable to do anything with the mutual funds and life insurance that they are saddled with. The times, they are bad. And there are no clear solutions in sight.
This is why you should read this cover package carefully. It provides a step-by-step approach to deal with such crises. It will help you correct several wrongs that you have committed in the past few years. More importantly, it will tell you how to avoid them in the future. This crisis is the right time to get your financial life back in order. Think of it as an opportunity, rather than as a problem period. Someone once said that the best way to convert a stumbling block into a stepping stone is to simply step over it.
Once the clean-up act is over, you will be able to chalk out a long-term financial strategy that will enable you to achieve both short- and long-term goals. You will replace all the redundant products in your portfolio with those that will boost your earnings or provide for your retirement. Whatever your age, profession or gender, consider this to be the best time to rethink all your financial goals objectively and intelligently. This is the time when you are unlikely to be swayed by the hype or influenced by your friends. So, just do it now.
