Festival of Diwali is known for making new beginnings as it is considered auspicious. On this occasion, people clean their homes to remove impurities to welcome the arrival of Goddess Lakshmi, and celebrate the festival in a colourful way. Similarly, investors also utilise this occasion to get the blessings of the deities. Some also clean their portfolios to make it free of clutter or 'financial pollution' and to start new investments. Zee Business Money Guru show along with Brijesh Parnami of Coretree Wealth Advisory Services provide tips for investors on how to go about this task in a fruitful manner so as to create more wealth. Also under spotlight is how to create an eco-friendly portfolio.

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According to Parnami, for maintaining an eco-friendly Diwali portfolio we should treat our financial life like a tree having four branches including income, expenditure, investment and debt. And a fine balance needs to be maintained between them, he added.

1. Income

In our financial life, income is the source of everything, and if we are salaried person, we mainly put our income in Bank savings account or those who are traders put the same in current account. We should avoid having multiple bank accounts as it will create clutter during the ITR filing. If you forget to take statement update from even one account, you may land in trouble.

Even in case of housewife, they generally keep cash in house, and the money is kept idle and in such cases, the money de-grows. Yes, you face a loss of money! Keeping cash at home is a financial mistake and you must keep it in a bank account because "every rupee saved is every rupee earned". There are several options including FDs and liquid funds from where we can easily withdraw the money if an emergency arises.

There are other ways, including ultra short duration deposits, or liquid funds in Mutual Funds from where you can withdraw your money in a short interval, said  Parnami, while also providing a tip to invest in liquid funds for better returns even in shorter periods of investment.

2. Expenditure

This branch of financial life is the most important because we generally find it difficult to check our expenditure habits. We need to have self-discipline and control our impulse buying tendency. This happens because of having ATM, debit card, multiple credit cards, and lack of making budget prior to any expenditure. With increasing purchasing power, we are prone to impulsive buying habits that put a pressure on deficit of our financial life. It ultimately affects out Cibil rating and we fail to get loan in future, therefore, budget making is very important.

3.  Investment

The third aspect of our financial life is debt/loan. This generally happens because we commit mistake of making investment without taking any expert advice, therefore it is very important to set our goal first. If we divide our life into Individual life, family life of man/woman and retirement life, then we need to make plan accordingly. Such plans include your expenditures related to higher education, setting up business, buying a vehicle, construction of house, holiday plan, children's education and then retirement planning.

We need to make our investment according to Investment goal and some related to protection or security of life that includes insurance or health plans.  

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4. Loan/debt

We every day receive phone call to get personal loan, home loans and other sort of financial offers, we should remain very careful while opting for such options. First, we should think of our need and then of our ability for repayment. With many loans, we unnecessarily add pollution or clutter in our mind that needs to be cleaned. While taking any loan, we must look at processing fee, pre-payment charges, interest rate etc. and then only decide.

On the occasion of Diwali, we should take these aspects into consideration to make our portfolio clutter free and thereby enjoy a better financial life, Parnami concluded.