Investment. The very word sometimes sends shivers down your spine, especially if you are a student trying to select a subject of specialization. For the brokers and commission agents – this word merely has a bread and butter connotation. For the real hard-core professionals, Finance is life. And for the rest, it doesn’t matter at all. And that is exactly where Investment myopia sets in.

Why do people refuse to save and invest? There are a variety of reasons. Some do not see the need to do so. Others are confident that their income will rise in proportion to their expenditure. Still others believe that a rupee spent today is worth more than a rupee saved. Nothing could be farther from the truth. Here are some of the common mistakes that we make and end up losing in the process, sometimes without even realizing it. Check out how many have happened to you!

Not planning – The most fundamental mistake that one can make. How many of us really think twice before we make a purchase decision. Being impulsive may be fine for a time or twice, but the habit may cost you lots. You might end up paying higher taxes, save less for retirement and still worse, may have to compromise on your life style.

Ignoring Retirement – I have my whole life to think about it. Why bother from now? Well, the time will come even before you realize it. How many of you have taken up insurance policies or invested in secured long-term funds that will keep your money intact? No matter what your age, set aside a part of your money towards adding to your long-term funds.

Overspending – We all want to invest and make money. But we are never earning surplus so as to save! That is the most common excuse. But just try to avoiding overspending! Start off with not placing an order for that one item which usually goes waste when you go out for dinner with your family. By the end of many such silly efforts, you might start feeling that you have actually got a raise.

Buying on credit – More of a fancy in India. Why buy something on credit today when you can wait for tomorrow to pay in cash. By not doing so, you are not only paying more for what you bought but you will also end up paying for not having repaid your credit. Are you aware that you are charged nearly 3% per month on your credit? And that the effective costs of any asset finance is more than twice the quoted rate of interest. Surprised! But that is exactly where people to forget to read between the lines.

Emergencies – Nobody has seen tomorrow. Always have ready and easily accessible cash to meet accidents or any unforeseen expenditure. No matter how little it is, liquidity in your investment is extremely important.

Consult Experts – By experts I do not mean those glib talking sales guys. Approach a professional financial consultant You don’t have to be a finance expert to talk to one. They know how to deliver their message in the way you can understand. Understand your long term and short term investment requirements and design a portfolio accordingly.

No Free lunch – All of us love high returns with low risk. Beware, in economics and finance there is nothing like a free lunch. If somebody promises high returns, be assured it entails high risk. Forgot what happened to NBFCs and Nidhis? Learn to strike a balance between what risk you can take and the returns you want. Don’t fall into the greed syndrome. Have a portfolio of investments with an ideal combination and don’t forget the liquidity part.

Last but not the least – Don’t repeat the mistakes what our elders have committed. Teach your kids to manage their money from the very first ten-rupee note they get. Remember the old adage, "Take care of the pennies and the pounds will take care of themselves."

Well, sounds really silly reading such stuff, doesn’t it? But that’s what most of us do. Doesn’t matter if you have been silly all these days. Time to get the simple things right. You do not need to reinvent the wheel by learning from the same mistakes. There are more myopic investors who have already paid your tuition fees.

Tanuja R. Nemivant