It is said that Financial Planning is a critical necessity for each one of us who seeks financial control of one’s affairs and wishes to create wealth. They why is it that most of us do not have a Financial Plan or have not even given this a thought? Why is it that we keep trudging along and feel that all will become right one day? Why is it that we always think of how to earn more but hardly give a thought to what our earned money is earning along with us? Most of us have not even thought of having a dual income stream – one from our work and the other from our investments.

Whether we accept or not each day or each time we think about creating wealth we are imprisoned by the 7 deadly sins.

Pride:

This is caused by excessive belief in one’s own abilities. This happens because in school we were taught to believe in ourselves, but that belief was with knowledge. The sin is committed when we believe in ourselves and choose to act without adequate knowledge. All we want have is just some idea of what is the best investment and believing it to be the best for us, we forever commit that sin under the pretext of “I know how this works.”

Envy:

Just because you have seen someone else has made a killing it is not enough reason for you to take the plunge as well! It might turn out that you took the plunge at the wrong time. We all know the old age wisdom, “Do not break your own hut by seeing someone’s palace.” Then why do we change our asset allocation and bet on something that has worked for another? The time and situation can be quite different.

Gluttony:

If you have credit card debt – for sure you are committing this sin each day. If you have taken a loan for a depreciating asset; again that’s and example of financial gluttony. However, if you are managing the instalments of such a depreciating asset from investment returns then that’s ok and you are being smart. Consuming beyond your means was never a smart idea in any age or generation. Just because you must have it and the fact that instalments can make it easier to obtain does not mean that you should compromise your position. By choosing to consume beyond means you have extinguished that money and have also compromised on the possibility of having that money as well as consuming that from profits of investments when you can actually afford it.

Lust:

Whatever you do you are driven by money only. Having and wanting to have money is fine being prepared to move from one job to another, no matter what the company and work may be for a 20% rise is far from being smart and prudent. You could have got stock options there, you always have the opportunity to create a niche for yourself no matter how large the organisation.

Anger:

This is widely seen when you are dealing with an agent to who comes to make a sales call and objects to your knowledge or when your broker did not sell when the markets were falling. In both the cases the decision was supposed to be taken by you and it was with anger and/or arrogance that you commanded that nothing be done without your consent. In financial management there are 2 choices – either you take all decisions yourself or let your advisor take that for you, ofcourse given that you trust his skills and knowledge.

Greed:

I hardly need to say anything here. Most people want to invest in the stock markets when they touch an all time high. Others think markets will go up forever. Surely you cannot time the market but when the goal is achieved why not sell? That is why the investment was made in the first place. Now if there is no goal and a plan to manage that goal quite likely that this sin will keep revisiting you from time to time.

Sloth:

This is the one that I love to talk about. The bible says “Whatever we do in life requires effort” so if we wish to ask for tips and then act it is a sure way to disaster. Either we must take the effort to do all the hardwork ourselves or take the effort to search for a trusted advisor and outsource our efforts. Finding a trusted, knowledgeable and skilled advisor is not a very easy to do.

Sins that were spoken of centuries ago are still so relevant and needless to say it is up to us how much we wish to cleanse.