Why you should track and monitor your investments
Source: Live Mint
Management consultant, educator, and author Peter Drucker famously said, “If you can’t measure it, you can’t improve it.”
This idea resonates strongly in finance and investments. With the rise of digital payments and investment platforms, making and spending money is easier than ever. However, this convenience brings challenges, especially the risk of overspending because digital transactions can feel detached from physical money, often leading to impulsive purchases.
This ease extends to investments as well. Quick-access platforms allow us to invest in stocks, cryptocurrencies, and even high-risk asset classes in just a few taps. However, the speed of digital investing can lead to unthoughtful decisions. Unlike in the past, when investment choices involved more paperwork and time to consider, today’s instant investing carries its own risks.
This brings us to an essential principle of financial management: The importance of regularly monitoring and tracking investments and spending. Fortunately, technology now provides tools that simplify the process of reviewing and adjusting our finances, which supports better long-term planning.
Benefits of using a single investment platform
A disciplined investment approach can be highly rewarding, especially when managed through a single, consolidated platform. Such a platform allows you to view all your investments and spending in one place, streamlining the process and making it easier to stay on top of your financial health. Here are several key benefits:
1. Time savings
In our fast-paced world, financial management often takes a backseat. A single platform that combines all investment and spending data saves time, reducing the chances of putting off these important activities. With one consolidated view, you can quickly check your finances without logging into multiple accounts, helping you stay organized and proactive.
2. Data consistency
Multiple platforms often lead to discrepancies in your financial data. Managing investments and spending through one platform ensures all information is consistent and synchronized. This reduces the risk of making decisions based on incomplete or incorrect data, which could otherwise lead to costly mistakes.
3. A clear overview
A “helicopter view” of your financial situation is invaluable. Having all investments and expenses in one place helps you make more agile and informed decisions. A consolidated view helps to assess overall financial health and make adjustments more quickly, whether it’s rebalancing your portfolio or adjusting your monthly spending targets.
4. Improved expense tracking
A single, categorized view of your expenses can reveal unknown or unnecessary costs. For example, you might notice miscellaneous fees from banks, credit cards, or loan companies that add up over time. Awareness of these hidden charges empowers you to take steps to minimize them, such as negotiating with providers or avoiding certain fees altogether. Additionally, by categorizing expenses, you can track which areas of your budget are overspent, helping you stay within limits and avoid wasteful expenditures.
5. Identification of underperforming investments
With all your investments visible on one platform, it’s easier to spot those that are not meeting expectations. Regularly reviewing this consolidated view allows you to take timely action on underperforming investments, especially if they are affected by structural issues. This setup also makes it easier to ask pointed questions to financial advisors, enabling more informed decisions.
6. Succession planning
In India alone, over ₹2 trillion remains unclaimed across banks, investments, and insurance policies. This often happens because family members are unaware of these assets. Keeping all investments in one place can simplify matters for loved ones, making it easier for them to access critical information when needed. Good succession planning involves documenting investments and sharing details with family members to avoid unclaimed assets and help them understand your investment philosophy. In times of need, your family will be better prepared to manage these assets.
Technology and financial discipline
Effective financial management isn’t only about picking the right investments; it’s about fostering disciplined habits. As Warren Buffett points out, our behaviours in small decisions shape our responses to larger ones. A consolidated investment platform fosters financial discipline by offering a structured approach to monitoring and managing wealth.
There are a few important points that one should be aware of while choosing such a platform:
- Data Privacy: Individuals should ensure that the platforms give enough importance to data security and privacy.
- Cross-selling: As these platforms gain access to all your data, they might exploit this to sell you products like insurance, etc., that might not necessarily be in your interests. You need to ensure that this does not happen.
- Interface: The platform should be technically advanced and should be able to integrate all data points and have an easy interface.
Investing in a unified financial platform is more than a convenience; it’s a foundation for building lasting financial success. As we embrace digital finance, a consolidated approach can support financial clarity, discipline, and control.
Views are personal. Vivek Banka is co-founder of GoalTeller.
