Love them or hate them, we have all subjected ourselves to diets at some point in our lives. The more gung-ho among us may have even tried cutting out carbs completely, experimented with new-fangled diet programmes, bought slimming belts and even consumed fat-busting pills. But how many of these fat-fighting and weight loss methods actually work?
Successful weight loss requires sheer willpower, self-discipline and above all, proper planning. There are also no short cuts or quick fixes to losing weight and the best diet programmes usually combine a healthy low-fat diet with regular exercise.
Similarly, sound and successful investing to grow your wealth also operates on the same principles as a successful diet – consistency, planning and discipline are key. There are no short cuts or fast tracks to wealth.
On the other hand, listening to market noise, giving in to the lure of new trendy products and letting our emotions get the better of us can cloud our judgement and detract us from the plan – dieting or investing - we have set for ourselves.
Ditch the get-rich quick and lose weight fast schemes and base your investing behaviour, and weight loss regime, on these sound foundations instead.
Set goals and have a plan.
Just as you will never be able to shed the pounds immediately, wealth does not grow overnight. Setting goals, short, mid and long term, maintain our focus and remind us what we are working towards.
At the same time, it is necessary to put in place a structure, or plan to reach these goals at a steady progressive pace. While a dieting plan tells us what (or what not) to eat and when to exercise, an investment plan determines how hard our money has to work for us to reach our goals and appropriate investment strategies we need.
Discipline helps us stay on the right path, especially in the face of tempting high fat foods, or in the case of investing, extreme market conditions.
Make sure you get a well-balanced diet.
A healthy diet prescribes a balanced diet of carbohydrates, protein, vitamins and minerals.
Similarly, a healthy investment diet spreads risk across the main asset classes – cash, fixed income securities, property and equities - according to your goals, risk tolerance and investment horizon. In the same way a well-balanced diet keeps you healthy, diversification and a well-balanced portfolio exposes you to less volatility and is vital for your financial well-being.
Check your progress periodically.
How do we know if we are on track to reaching our goals?
A diet regime will require regular weigh-ins, while our investments require periodic reviews. Knowing that we are on track works as a powerful boost to stick to the plan, and keep up with our progress. On the other hand, being off-track does not mean the end of the world; it gives us an opportunity to learn from our mistakes and further refine our strategies.
Be disciplined.
The best laid plans can go awry if there is no conviction, discipline and willpower behind them. Exercise regimes require us to stick to certain set routines in the same way an investment plan requires us to adhere to a set spending or savings routine – a budget – that helps prevent excesses.
If you cannot resist munching on snacks while watching television, find alternative healthy snacks.
If you find it hard to stick to your budget because you cannot resist shopping come pay day, leave your credit cards at home.
The early stages are often the most challenging – a lot of effort with little or no apparent results. However, if you stick with the plan, you will be spurred to greater success when you start to see the kilos falling off and the money in your bank balance building up.
While they do require great effort, hard work, and plenty of discipline, neither a good diet program nor a sound investment plan should ever be restrictive.
Just as your diet program should not starve you, but get you to eat right, your savings and investment strategy too, may lead you to tighten your belt, but should not suffocate you.
About IPAC:
ipac is a fee-based international financial advice and investment group that has helped clients achieve their financial and lifestyle goals since 1983. With offices and partners in Australia, Hong Kong, Singapore, Taiwan, New Zealand and South Africa, ipac manages more than US$10 billion for over 20,000 individuals and institutions worldwide.
The contributor of this article is Janet Lim-Walsh. She is vice president at ipac financial planning. She is a Licensed Financial Adviser Representative with ipac financial planning Singapore private limited, which is licensed with the MAS, Financial Adviser's Licence No. FA100003-2.
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