International Dance Day: Investing lessons that we learn on the dance floor

Think of life, sans the comfort of music and dance! Life would be so monotonous and dreary without sound and moves. Dance is an expression that allows you to express with your feet. Your dreams are reflected with flair as you assume a style meant to both impress and express. When you dance, you take the first step towards falling in love, be it self-love. Dance requires devotion, which is why April 29 is observed as “International Dance Day” globally.

Dance is not merely synchronized movement of your limbs. It’s an experience that lends important investing lessons for life too. As in dance, so in investing, flexibility is most important. The rigid idea of staying put even when macroeconomic factors signal otherwise will spell nothing but doom. Dancing is inspired by learning; in investing too, you learn about various investment options before deciding in which proportion to allocate your earnings to them.

Unbiased of the type of dance you prefer, there are important investing lessons you can learn only if you are willing to appreciate the fluidity inherent in both.

Variation

How many of you have heard the saying, “Variety is the spice of life”? Since most of us know what it means, it’s high time to adhere to it. You cannot stick to doing the same steps over and over again while dancing; in investing too, you must be willing to change with time. In every dance form, you will root for some basic steps before you move on to several broad, linking steps that can be executed in any direction. Be willing to experiment the same while investing too.

If you are new to investing, start with the fundamentals of putting your money in index funds, thus, allowing you access to a basket of stocks with varying market capitalizations. This is just like stressing about learning the basic dance moves which you must master before you proceed to the next step. Once you have learned the nuances of dancing, it is time to focus on the gyrations that add oomph and glitz to your style.

This is true of investing too, wherein you decide between investment options including equities, debt funds, government-sponsored schemes, gold, real estate, etc. depending on how you define your financial goals.

Flexibility

Flexibility is an essential aspect of being a great dancer. Whether it is the classical moves of a traditional dance form or the seductive art of suggestive lap dance moves, artists add moves to make dance forms look seamless. The rigidity of not being able to stretch or bend only adds to the stiffness and soreness that many new dancers tend to display.

In the investing world too, you must be willing to stretch your imagination and choice beyond what just people say. True that the stock market has delivered extremely good results in the past three decades; so much so, that it forced personal financial analysts to compare yields from various investment options. However, one cannot help but ignore the risk factor involved, which is why considering other instruments too becomes necessary.

Investment tenure also matters, which is why you must be willing to differentiate between short-term and long-term goals. Liquid funds and debt fund instruments finance emergency and short-term money needs. Equities, real estate, and gold serve best when you are willing to wait for at least 20 years and more.

Learning early

Learning dance in early childhood helps youngsters; the reason is that they realize the story behind the various types of movements that elicit the desired emotions in various dance forms. For example, the circular movement in most dance forms is used to express peace and inclusivity. The sudden, choppy, and rapid hip movements are perceived as romantic bordering on intensity, strikingly ludicrous, and graphically salacious. However, learning these moves early means that you make no mistakes later when venturing into professional dance forms.

Investing early means that you learn about various ways and options to invest early in your life. Apart, deciding to allocate a part of your earnings to investments early allows more time for your investments to earn returns. Long-term investments when made for 20 years or more yield more returns owing to the cumulative or compounding effect of returns on them. Do not underestimate the magic of compounding which is not much different from the magic of dance that comes alive with the love for movement and music.

Inquisitiveness

Don’t you ask about some particular dance move that catches your attention? Don’t you inquire and then introspect about an unusual dance step created as a piece of art in itself? Don’t you do some soul-searching while rehearsing your steps? For example, why do you find some signature steps in a particular dance style only? Can you incorporate the popular hook steps of Bollywood movies in Western concerts? Does theatrical dance hold any relevance in today’s fast-paced times?

Questions like these and more force you to consider and reconsider all your dance steps as you balance yourself on your feet to emote for the audience or camera.

This level of inquisitiveness will certainly open up opportunities in investing too.

For example, you may ask yourself which mutual funds are the best and why? Or why do experts label some funds as more volatile compared to their peers? Is it worth investing in stocks or should one rely on professional fund management? Should all money be put into equities or if you put a portion of it in debt funds too? How does it help to invest in liquid funds? What is the amount you must set aside in emergency corpus? Should the entire emergency fund be held in cash or could it be invested in fixed deposits, recurring deposits, and liquid funds?

Does allocating money to gold funds help? Which investment option is better among sovereign gold bonds (SGBs), gold mutual funds, and gold exchange-traded funds (ETFs)? Are you willing to take a loan and invest in real estate? Will the liability of repaying my debt decimate the effect of my earnings? How do I decide my investment tenure? Is it possible to retire early? Is financially independent; retire early (FIRE) really possible or is it a mere concept relegated to books and human imagination?

Partnership

You cannot always plan a solo performance. You must be willing to partner with someone who has a better grip on the dance moves and is willing to cover for your faults. The partnership must be on a visceral level that grows into an intellectual level with time.

You may be new to finance or may not be adept at the nuances of investing. Partnering with a personal financial services expert lends you the benefit of partnering with someone who knows and understands the market more than you do. An experienced advisor will guide you not only in investing your money but also in telling you if your earnings are enough, and what you must do to elevate your savings and investments so as not to be hit by penury during old age.

The golden years of your life must not be wasted trying to be overtly miserly with your savings but must be spent on deciding how to optimize earnings from your savings and investments so that there is no paucity of money in case you outlive the average human life expectancy.

It’s okay if you forget your steps or falter while performing on stage. No one will remember your mistakes long enough to point out your folly. Most will say “Que Sera Sera”, hinting at “Whatever Will Be, Will Be” when it comes to displaying such subtle art forms.

However, you cannot afford to lend the same treatment to your investments. Remember that your financial future depends on how you view and treat your finances today. Innovation, adaptability, care, and fortitude are intrinsic to investing behaviour. You have to treat your earnings like you learn how to dance.

A step here … and a step there … a subtle smile mixed with charm … are relevant to every dance form.

Investing here … and investing there … but investing with care backed by advice … are the hallmarks of successful investing.