Friday, August 9, 2013

Realizing your dreams is not a dream!

Realizing your dreams is Not a dream!
We all have dreams. Dreams are our hopes of future! Dreams give us sense of purpose and keep us alive. They give us direction and keep us moving forward! Our dreams are very close to our hearts and we all wish if our dreams can come true!

Your dreams are the ‘Big goals’ which would mean ‘big changes’ in the way you think, the way you live and the way you work. But as any change would meet reluctance initially such big changes are daunting particularly if you are comfortable with your present. But isn’t it what you wished and aspired for…a change from your present? These changes are your journey towards realizing your dreams. And along this journey you may have already made few changes and must be making some of them even now and that’s exactly what you need to do…small changes that are aligned to the big changes you wish to make. Small changes are easier to make and higher the number of small goals or changes you have attained, greater will be your faith in the present reality and larger will be your hope to accomplish the big goal. But these changes, small or big, should be more than mere wishful thinking rather they should be well defined and thoroughly analyzed realistic action items

Besides doing all the changes you need to be realistic. Being realistic will help you have realistic expectations and set achievable goals. The reality checks may give you some realizations… some very interesting realizations at times! Like, May be you are closer to achieving your dreams than you actually thought! May be you have already achieved some of them and are now aspiring for new ones! May be you want to change the old ones as the times have changed including you! Whatever may be your realizations, you are close to realizing your dreams when you can define them, explain them and enjoy them.

Also, you may face several challenges during this journey and some of them can be very discouraging. But instead of giving up and abandoning your dreams, be hopeful and be persistent! Your dreams are your promises to yourself. They are the promises to keep faith in your abilities and work hard to accomplish and achieve all you want. You are very close to realizing your dreams by being realistically hopeful.

Therefore to realize your dreams you need all you need to do are…small, realistic and promising changes!

Let us examine some dreams to appreciate how starting small, being realistic and being hopeful can get you closer to realizing your dreams. Following are the three dreams which some one can have as a professional, as a parent or as an investor.

Dream: ‘I wish I could have my own company’!  

Hope: As a professional you may wish to turn into an entrepreneur and become an overnight success. Be hopeful and envisage your success story in business magazines and think of your company’s name and logo to start with. Nevertheless from finalizing a marketable idea to collecting funds and getting enviable number of customers is a long way to go.

Reality check: You have a realistic idea when you are sure of its being commercially viable. Also your idea would need funding and Investors would look for return on their investment. Along with a saleable idea and projections of growth they would look for people who are qualified as well as passionate about their idea. Besides having impact on your professional life this decision will also have impact on your personal and financial life. Your own venture will mean a shift from regular income from job to irregular income. It may also mean some waiting period before you start realizing any profits. It is advisable to get into something entirely new only when you have taken care of your financial liabilities like loans and personal responsibilities like child’s birth and education. You are realistically hopeful when you have got back up plan ready i.e. in case your venture does not take off, would you like to and be able to go back your previous job? Or are there other options available? Is there any alternative source of income in case your payback period delays?

Small steps at a time:  Big goals involve big time frame. Therefore once you have decided as to ‘When’ you want to start your venture you can start working backwards. The first step can be validation of your idea by conducting a market research. If the research results in about 20% positive sentiments then you may need to revise the idea. However if there are 70% positive sentiments then your idea is generally acceptable. Small steps like widening your network among the fellow professionals or joining online & offline forums both as a manufacturer and consumer will give you wider and deeper perspectives about the industry. Social media is gaining momentum day by day.  By establishing your identity on social media you can get potential investors interested in your activities. Also it will prepare grounds for future marketing initiatives. At the same time you should keep fortifying your finances by paying off your loans fully or partially, preparing the medical and nonmedical emergency funds and adjusting the expenses as per forthcoming monetary situation. Higher will be the level of preparation and planning, greater will be your confidence in achieving your dream.

Dream: ‘I want to give world class education to my child’! 

Hope: As a parent you may wish to send your child to the best college in the world. Be hopeful, your child can for sure become a Harvard graduate and start next Google and Facebook. However as you already know that possibilities and perspectives are not created in one day and it will need focused efforts to boost your child’s confidence and prepare him/her to take on world class challenges.

Reality check: You are realistic if you are aware of the fact that out of several thousands of applicants around the world less than 5% get selected in Harvard each year. The Ivy League colleges are very selective about the intellectual as well as emotional ability of students. Even fee, which is upwards of $150K (over 1 crore rupees) is high enough to discourage many from being able to afford it. It will be judicious to keep your child and yourself emotionally ready for the alternatives. Prepare your child to choose next best choice of college in case they don’t get into their dream college.  And you can consider taking education loan in case you could gather the required amount.

Small steps at a time:  Your child’s elementary and secondary education is the foundation step for college admission. You have taken a small step once you select a school that focuses on overall development of children and also provide them international and intercultural exposure. Along with grooming in school, grooming at home will play an important role. You can take various steps to increase your child’s intellectual and emotional intelligence at home. Activities like doing puzzles and brain teasers, playing games like chess, reading then explaining and debating on various topics will help in increasing their IQ. Internet surfing (under parental guidance) can also be useful. It will help your child connect globally and help them understand other’s perspective. And they will develop their own perspectives when put to various ‘what if’ situations. By spending time with your child and sharing anecdotes, you will help them understand the real world and there by prepare them to handle real situations.  Similarly activities like playing with other kids, participating in group discussions, meeting people of all age groups will increase their social and self awareness. Hobby like drawing, story writing or playing musical instrument will help them de-stress and channelize their emotions productively. In order to prepare finances you can start saving and investing small amounts regularly and as early as possible. If you are able to gather large sums, you should consider keeping it safe by investing in debt instruments. Since, you are the one providing for your child you must take adequate life insurance for yourself and not for your child. Such steps will gradually shape up a bright future for your child.

Dream: ‘I want to get high returns on my investments’! 

Hope:  As an investor you may wish to earn high returns with minimal risk. Be hopeful and imagine yourself taking all dream vacations and buying all dream cars! But as you know investments take time and need proper strategies to grow and give good returns.

Reality check: You have realistic expectations from your investments when you remind yourself that high gains come with high risk and high risk may even mean losing all your money. Very few investments can give guaranteed returns and the actual returns should be calculated after accounting for inflation and taxes. Besides aiming for good returns, your investments should be a result of careful deliberation of your financial landscape. Equally important are your emotional and intellectual outlook which will define your reactions to result of your investments.

Small steps at a time: In the series of action items your first step should be defining the investment objectives like preparing down payment for buying your dream thing i.e. a car or a house. Prioritizing your requirements will be the next step. This will decide the time horizon of your investments as well as the amount required. It will help you determine expected returns on your investments. On the basis of which you can prepare your investment strategy and finally choose the product. At same time you should explore ability then your willingness to absorb the outcome of your investments. For example,  if you have conservative growth expectations in your profession then maybe you should reconsider having aggressive expectations from market linked investments. Similarly if you have small amount that you cannot afford to lose and want to use as per your convenience then you should consider investing in safe instruments like fixed deposits without worrying about returns being taxable. The best investment strategy is the one which can make the right amount available at the right time. And the best product is the product which you can understand and use as an individual investor and not as a financial wizard.

Dream Big but start small and start today!

All these examples and their analysis assure that taking well defined and thoroughly analyzed small steps will get you closer to your dreams and help you realizing your dreams!

In personal finance:Comprehensive Financial Planning’ is the series of…‘small (sometimes big), realistic and promising changes’ which get you closer to your dreams and help you realize them. It comprises all the steps taken with respect to your financial landscape in the above situations.
During the exercise your dreams and aspiration are translated into meaningful goals with defined time horizons. You current financial landscape which comprises of your personal, professional, physical and financial situations is thoroughly analyzed to understand ‘where and how’ you are at present. It tells you the realistic distance of your present from your dreams of future. The exercise gives you specific action items aligned with your goals. Further, the continuous monitoring of the plan keeps you aware about the adjustments required in your actions or your aspirations.

Be a Dreamer…Be Realistic…Be Hopeful!

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