Few Money Lessons from Lord Ganesha

In Hinduism, Lord Ganesha holds the unique distinction of being the “Prathama Pujaya”, meaning the first lord to be worshipped. Every occasion or religious ceremony starts with the worship of Lord Ganesha. In India, and especially in Maharashtra, the 10 days of Ganesh Chaturthi celebrations mark joy, fervour and optimism for the future. We will find almost every home/office/shops adorned with an idol of Ganesha because of the eternal lessons that Lord Ganesha offers. Let us learns some important Money Lessons from Lord Ganesha:

 1. Listen everything but be focussed in Mind 

When we plan our finances, there are two important points. Firstly we must get the bigger picture right and then move on the investment plan in an organized manner. In the financial markets, listening to different viewpoints is the best way to get the bigger picture before taking decision. Lord Ganesh’s large ears embody the willingness to listen while his small and keen eyes embody a mind that is absolutely focused on the goal. When it comes to financial planning, we need to thoroughly weigh all the options but once the decision is made, we must channelize all our energies to focus on the goal. That is what Lord Ganesha teaches us.

2. Flexibility & Adjustments

Ganesha is also known as Vakratunda- the one with a curved trunk. His trunk is very strong but is also very flexible and can pickup very small things also. Similarly as an investor if a new opportunity knocks on the door, we need to make adjustments to reap additional benefits. We should regularly review our portfolio and keep looking for better opportunities. We should be flexible in terms of asset diversification, timeline adjustments and the amount of investment based n circumstances.

3. Have thirst for knowledge

Lord Ganesha is believed to have documented Mahabharata with great speed and clarity  this represents the highest levels of intellectual curiosity. Similarly we should remember the biggest investment is in knowledge and self improvement. That is an important lesson in the dynamic world of financial markets. Many variables/indicators keep on changing which means that we need to keep on expanding our knowledge base and incorporating new ideas and techniques. That is only possible with a thirst for knowledge. It is this thirst for knowledge and intellectual curiosity that can empower us to manage your investments and finances in better way. Keep learning about new investment products, new investment ideas, new methods to achieve financial goals.

4. Take Calculated risk

Risk taking is a must because without risk there is no return. The sumptuous belly of Lord Ganesha represents the risk appetite. It also represents the need to know the difference between risk appetite and risk capacity. The particular instance when Lord Ganesha circum-ambulates his parents (Lord Shiva and Goddess Parvati) as representative of the universe is a classic instance of letting your head rule over your heart. Lord Ganesha teaches investors to measure their actions by their risk capacity and to be driven by clear analysis.

5. Be Humble

Despite being supreme power Ganesh have a little mouse as his vehicle. It is always at his feet. Here Ganesha tells us to keep our temptations and desires in control. When we manage to get a few investment ideas right the immediate response is to become supremely confident. Lord Ganesha constantly reminds us the lessons of humility. As it ever happens, if not kept in check, a tiny mouse can bring the house down.

Lord Ganesha’s Visarjan on tenth day (on Annant Chaturdashi) also teaches us an important lesson that all good things are ephemeral. The message is Good times don’t last forever but good ideas and strategies does.

This year as we celebrate the joys of Ganesh Chaturthi, Let us also spend a moment to reflect on the important Money and life lessons of Lord Ganesha.

 

 

This Raksha Bandhan Secure your Sister Financially

Raksha Bandhan the festival of brother and sister So have you already decided a gift your sister if not then what about making this Raksha Bandhan a special one with all the care and responsibilities, and gift her financial security to make her future safe and prosperous. Isn’t it a nice idea?

We all know that this festival is to protect our sister from all the difficulties hence financial independence could be the best thing to gift her. In this post we are giving some ideas which can be good for her to get rid of financial difficulties. In this Raksha Bandhan, Let’s surprise our sister with some healthy financial gifts and make a promise to secure her financially.

Here are some of the best ways to protect her financially:

1. Secure her Health : We all vow to protect our sister in the whole life, especially this is the promise of every Raksha Bandhan. So let’s gift her a health insurance by paying the insurance premium on her behalf? It would cover her from high medical expenses and provide her health and even life security. 

2. Invest in her Name : generally we give gift to our  sister on many occassins. Why not start a monthly investment as SIP rather than gift in her name in place of amount we  spent on buying a gift for her. We can add her as joint holder and start an SIP on her behalf to manage her finances at our own end. This investment shall further grow and help her achieve financial independence in the future. 

3. Plan for her Future: We all plan for our future financial dreams, this Rakhi let’s plan for the dreams of our sister. We can plan for her financial security to provide her real protection. If she is younger then we should plan for her higher studies, her marriage, etc. We know that our parents are there to plan all these, but if we can contribute even a little, it would definitely mean a lot to her. 

4. Buy her Gold : Females are crazy for jewellery. It brings so much happiness that it can be noticed on their faces when they receive any gold item as a gift. So, why not make your sister happy by buying her an investment in gold? But, physical gold is less secure than paper gold so we can invest in Gold bonds, ETFs and Gold Mutual Funds which are directly linked to the price of gold and  help her achieve prosperity in the future. 

5. Payoff her Liabilities: If your sister has some loans running, we can lessen down her financial burden by paying off her liabilities fully or partly. Buying her a gift, of course brings happiness and smile on her face. But, if we reduce even a small part of her financial liability, her happiness will be a lot more and also reduce her worries.

So let’s make promises to your sister to secure her from all possible financial hindrances in her life, and start protecting her financially. We can make this auspicious festival special by doing something differently.

 

Teaching Kids about Money and Finance

Kids are innocent and they learn very fast. If we make them understand about money and finance in their childhood and teach them about good money habits, they will do well as they grow and will have inherent good money habits. This will help them in their future life. Let’s understand how to teach them about money and finance.

1. Piggy Banks: By gifting them a piggy bank we can make them learn about importance of savings. They can buy toys or other things by first saving and then spending.

2. Games: there are various games like Monopoly, Game of Life, Vypaar etc, which we can play and make them understand how money works and how transactions take place.

3. Open An Account: We should open a saving account in our child’s name and let them deposit money in the account and understand about interest and how money grows and also other investment product.

4. Budgeting: Involve your kids in home budgeting exercise, so as to make them understand about income and expenses, essential and non-essential expenses etc.

5. Shopping: Take your kids for shopping. This will make them understand about bargaining, quality, and prices of the products. We can further explain them about wants, needs, comforts, and luxuries and how to maintain fair balance between them.

6. Discounts & Offers: When we are shopping online or offline we can explain them about various deals available at particular time and how to save money by using discounts/deals and offers.

7. Rewarding: We should reward our children to encourage them to save and also when they contribute (by controlling their expenses) in home budgets.

8. Inflation: We need to educate our grownup Childs about impact of inflation, purchasing power of Money and various investment products.

9. Contingencies: Telling them about various scenarios of life and how various situation requires money will help them to understand about uncertainties in life and how to tackle them.

10. Practice then Preach: What we teach them should also practice ourselves as practising the things makes much deeper impact then just teaching.

Small but good money habits can make a significant difference in the future life of a child, so teaching them in their starting will help them to get in there unconscious mind and use it when they need to take decisions about money in future.

Lessons and Life after COVID-19

Today the whole world is facing a unique challenge due to COVID19 virus. Just three months back If someone has told us that the whole world will stop and people will be afraid of meeting other persons, we would have been laughing on them, but today it is the truth. But every dark side has brighter side too, so let’s look at what we can learn from this crisis and how the life would be after we sail through this challenge.

1) Always act before it is too late. Starting the lockdown early is perhaps the biggest lesson for controlling the spread of the virus. Start your investment journey early to control poverty and create wealth.

2) Even if ‘Risk’ looms large (next to your home) don’t go out, just stay put. Even if market volatility troubles you, don’t sell Just stay put.

3) You may be Rich but if you are Careless, Complacent and over confident the Virus or the Market will smash your ego and leave you in tatters.

4) Self-control and Resolve (सय्यम और संकल्प) are the key to reach your goals of defeating the Virus as well as Poverty.

5) Doing nothing is an important strategy to keep the virus away and keep your healthy. Similarly in Investment also sometimes Doing nothing is the best strategy.

6) Nature does not discriminate, whether it is the battle of health or wealth. Every community and Religion has Equal Opportunities to create wealth as well as catch the virus.

7) Compounding is the 8th wonder of the world and provides huge gain in wealth creation but huge pain by virus spread/creation.

8) Breaking the Chain is the only way to stall the virus. In investing too breaking the chain of SIPs will stall wealth creation.

9) First worry about life, then the world (जान है तो जहान है). In Investment also first focus on Safety, Liquidity and then on Returns.

10) Politics is the biggest enemy during these times. Like wise Speculation is the biggest enemy of investing. Like Politics Keep Speculation at bay.

11) Hygenie and Social Distance are important points to fight virus similarly porfolio hygine(simple and clean portfolio) and keeping distance from risky instruments is good for wealth.

12) Our immune system is the best protection against the virus. In wealth creation immune system comprising of Habits, Actions, Perseverance, Patience and Yearning for your goals (HAPPY) is best for wealth creating and thereby protection against inflation.

And finally I end with a small story. Once an 80 year old man came out of ICU and doctors told him that he is alright now and this a bill of Rs. 10 lakhs for 10 days in hospital. The old man cried, seeing the old man crying doctor said don’t worry if you don’t have money we will waive it off. For this the man says No, I am not crying for the bill I can pay all dues. I am crying because I have been breathing God’s Air for 80 years and never paid for it and now it takes 1 lakh per day in a hospital to use ventilator, Do you know how much I owe to God. I never thanked God for that.

When we breathe air freely we never take it seriously but when we go to hospital breathing oxygen costs money.

When we change the way to look at the things, the things we look at CHANGE. Gratitude is a strong, powerful and empowering emotion, we should be more grateful for the things we get in life.

Gratitude improves our immune system and makes us strong on the other hand stress makes us weak.

WHEN WE ARE GRATEFUL FOR THE THINGS IN OUR LIFE, WE WILL HAVE MORE THINGS TO BE GRATEFUL FOR.
Be Healthy and Safe !!

Got Money Phobia? How should we deal with it !!

Money and personal finance matters are very important however many of us fear in dealing with them and are clueless at the time of emergency, so let’s discuss what are the common fear most of us have and how can we overcome from these fears.

1. Stock Market is very risky: I will lose my money

Many of us feel that stock market is a very speculative place and there are very high chances of losing money. Those who have lost money in past or have no knowledge/experience have very high feeling about losing money in the market.

So, How to deal with it:  If you don’t have much knowledge then it is better to invest via mutual funds not directly through stocks. Still if you want to invest in stocks, it is better to first gain knowledge of the subject or take the help of a financial adviser. Also remember not to follow tips from anyone blindly. It is always wise to invest for the long term and not be influenced by short-term flux or churning.

2. I don’t have enough money to face a Medical Emergency

Many of us fear that if there is some serious medical issue in family, they may have to spend all their money to deal with it. It is actually true to some extent looking at the high cost of hospitalisation and medical care and if someone have critical illnesses or accidental injuries.

So, How to deal with it: Health Insurance is the answer. We all should have a basic health plan of, say, ₹5 lakh and get a bigger top-up plan of, say, ₹20 lakh with a deductible of ₹5 lakh. This will be cheaper than a single cover of ₹25 lakh. We can also create an emergency fund along with the basic health plan to cover the other expenses. It’s also important to buy critical illness and accident disability insurance plans which comes at small premiums and cover only those cases.

3. I won’t be self-dependent after my Retirement

More than half of Indians fear they will not be able to support themselves after their retirement, with 70% people expecting their children to support them, says one study.

So, How to deal with it: Proper retirement planning is must for every person. We should start saving more of our income by cutting down on non-essential expenses. Further we should ensure to invest in the right avenues so that our corpus is growing and able to beat inflation over the longer duration. It is always wise to take the help of a financial adviser. Also, we can explore additional sources of income to supplement our existing income.

4. I am in a Debt trap

This is a world of EMI and Credit cards. We keep on buying things through EMIs, sometime even if that is not required. Upgrading to a new IPhone or going for an exotic foreign vacation so as to put the pictures on Facebook/Instagram is not very uncommon now days. This temptation to buy on credit often results in several loans and falling into a debt trap.

So, How to deal with it: Be a sensible buyer is the KEY. Everything in the market is for us only, but it does not means that we should be buying anything or everything. We need to ensure that total EMIs should not be more than 50% of our income. If we already have lot of loans, a proper plan should be prepared to repay them, starting with the most expensive ones like a credit card bills or personal loan, and moving to car and education loans. Few Loans like home loan and education loans have tax benefits so we can continue however if the rates are high or we have capacity we can prepay the same.

5. I will be fired from my Job

In the current competitive market fear of losing job is very common, technology is replacing humans and many people become outdated/redundant in this kind of environment. Economic recession, cost cutting are also other reasons for people fearing loss of job. So If you are worried it may be due to one or more of these indicators you may have witnessed.

So, How to deal with it: we should always have emergency corpus to meet our regular monthly expenses in case of loss of jobs. We can have that corpus for 3 months to 1 year depending upon which industry we are working with.  Further we should keep on updating our skills and have knowledge about what is going on in our industries and sector so as to be ready to face these eventualities.

Finally the simplest way to manage these kind of financial fears is to be organised and prepare well for events and eventualities. The help of experts is always better if we don’t have much understanding of the things.

Letter for Investors (Hindi)

Letter for Investors

Ten Financial Sins, and how to beat them

Everyone has some financial bad habits or we call them as sins which stops us to be wealthy and financial independent, let us find them out and also the way to comes out of it.

1. GREED

We all want to earn high returns, but understanding the risks is not everyone’s cup of tea. For example: Investing in stocks is risky but can be very rewarding if done carefully and in a disciplined manner. But dabbling in futures and options is usually ruinous for the small investor.

How to beat it

It is better that we should buy equities through mutual funds, if we don’t have much know. Futures and options are not for common investors.

2. FEAR

At one side greed makes investors overlook the risks involved and on the other side fear makes people blind to the opportunities. Fear of losing money makes investors shun the potential of equities and pushes them to buy instruments which offer assured but poor returns.

How to beat it

We should do proper asset allocation based on our financial goals and then stick to it. Historical data has confirmed that periodic rebalancing of the portfolio can yield better returns rather than just sticking to some fix return instruments.

3. ENVY

This is a very common human nature, we get enamoured when we come to know about our family & friends investments and the high returns they earned. And by this we start copying their investments so as to get same benefits.

How to beat it

We should always remember that every person is different so as their needs and investments, Following in somebody else’s footsteps may not always deliver the desired results. Past performance of an investment option is not an assurance of future returns .Investments should be customised to the needs and risk appetite of an individual. What worked for someone in a certain situation may not work for everyone.

4, WASTEFULNESS

In today’s consumerism wasteful spending is a common problem, especially for youngsters. Online shopping has further fuelled this malaise. Young people want to buy the latest gadgets and new apparel, without thinking about it’s the impact on their finances.

How to beat it

If we are earning then we would be spending also but it should be within limits. We can set a budget to ensure that we don’t overspend and stick to it. We can us budgeting apps which can send alerts if we spend beyond a limit on any head.

5. PRIDE

Some time we get emotional to certain investments with a feeling that selling an investment at a loss would make them appear stupid. And then we try to justify that it was a right decision and are willing to hold it till it recoups its losses.

How to beat it

We should never fall in love with our investments It is silly to let our ego define your financial choices. If a stock has no future, dump it and cut the losses. If we continue holding it, the losses will only grow bigger.

6. BLIND FAITH

Sometimes we get into the trap of a smart salesperson who miss-sells financial products for his own benefits/targets as we believe too much on some people and don’t try to find out the nitty-gritties of the products. .

How to beat it

We need to ask questions and do our own research and don’t take a decision in a hurry or because there is a deadline approaching. We should spend some time to compare its features, read up the terms and assess its utility in your portfolio.

7. LUST

The temptation to make easy money can make even smart people part with money or bank/credit card details. Now day’s online frauds are very common; fraudsters cheat people by promising them a huge share in their inheritance, stock tips or bargain offers on their credit cards/insurance policies etc.

How to beat it

Always remember that there are no free lunches in this world and if someone is offering most probably he is a cheat. We should never believe fraudsters who promise money for doing nothing.

8. IMPATIENCE

In today’s world we all want the results at the click of the button. However in the investments time is the key, impatience prevents us from earning high returns. Early withdrawals from the investment kitty cuts down the power of compounding. Selling off a stock or equity fund too soon will help book profits but give us a serious wealth. 

How to beat it

We should invest with a proper plan and time horizon. Don't sell as it has given some profits, Assess the real reasons for selling and Sell only if we need the money or have some better options to reinvest the proceedings.

9. LAZINESS

Procrastination is a common problem and many times we feel that things will get right on its own. However delaying investments can cost a lot. If our money idles in a savings bank account, it loses value. In five years, even a modest 5% inflation will reduce the value of ₹1 lakh to less than ₹78350.

How to beat it

We should start SIPs in mutual funds and sift the extra money from saving accounts to liquid/ultra-short term funds. Now days it’s very easy to invest through online platforms and we can do in automated way. This will ensure that the amount gets invested every month.

10. FORGETFULNESS

It is a very common problem that we forget paying our bills on time which leads to some delay penalty of ₹100-200 to serious penalties running into thousands of rupees. If we miss an EMI or a credit card bill, we will be slapped with interest, late payment charges and also the taxes. But if we miss the tax filing deadline or an insurance premium, it can be in serious issue.

How to beat it

If we can’t remember or disciplined to make payments on time, then we should opt for auto debit facilities offered by most of the billing/credit card companies. We can also put alerts for important dates like insurance premiums and GST/IT returns etc. Just as automating SIPs and recurring deposits ensures that we don’t miss investment targets, putting bills on auto payment mode means you don’t miss payment deadlines.

This Diwali Let’s do something different

Diwali is the festival of lights. We remember Diwali for the gifts, sweets, crackers, new clothes etc.

The five-day Diwali celebrations involves illuminating the household with decorative diyas (oil lamps) or candles, hanging up handmade kandils (lanterns), streamers of fairy lights, grand display of fireworks and crackers to signify the elimination of darkness and movement towards light; hope over despair; good over evil; and knowledge over ignorance.

Many of us look forward to a Diwali bonus normally given by companies besides a salary. This bonus helps in dealing with additional expenses like buying gifts and cooking feasts for loved ones, festive purchases, and meeting your regular. Although as compared earlier times now people keep on buying things regularly however still Diwali has its own importance for purchasing new things. However we should not get into impulsive buying just because there is a offer.

So what should we do to our bonus/extra money this time?

This time let’s invest this money to illuminate our future financial well-being.

However, while investing, we should keep in mind certain essentials:

1. Think and Plan properly before investing

2. Know your own Risk Appetite based on age, goals, income dependents etc.

3. Have Clear Objective and time horizon for investments

4. Understand the Tax Implications

5. Have proper Asset Allocation

6. Invest regularly to get the power of compounding

7. Have Discipline in investments

8. Take an Expert’s Assistance, It actually makes a different.

We should also follow certain don’t while making investments which are

1. Don’t Speculate, It’s dangerous

2. Invest own money, don’t leverage for investing except real estate

3. Don’t use Emergency funds for other purpose they are for emergency only

4. Don’t be emotional with your investment if it is not working then get out of it

5. Review and adjust your portfolio on regular basis

By taking these basic steps and investing surplus money in a prudent way can help us to get our future goals more easily and comfortable.

So this Diwali let's not just spend but also save to celebrate many more Diwalis in future.

Wishing everyonee Happy and Wealthy Diwali

After Body and Mind, Check your Financial Fitness Also

This week Our Prime Minister announced fit India Campaign “Body fit hai toh mind hit hai (If the body is fit, the mind is fit),” said Prime Minister Narendra Modi while launching ‘Fit India Campaign’ on National Sports Day celebrated every year on the birth anniversary of hockey wizard Dhyan Chand. 

In this day and age, tracking our health stats is very important and we all put efforts to make sure that our body is healthy. But what about our financial fitness?

Let us look at major parameters to know how healthy we are financially:

1. Spending Less then Income:

To be financial healthy it is very important that on cash flow basis we are in positive numbers. Means our monthly expenses should be less than our monthly income.

2. Paying all the Bills on time:

There are many utility/household bills like electricity, gas, phone, Credit card bills. Paying all the bills on time and in full is the good indicators of financial fitness.

3. Have Emergency Fund:

There are emergencies which comes without any prior announcements like medical emergency, job loss etc. In general, the more inconsistent our income is and the more dependents we have, the larger an emergency-fund cushion required. As a thumb rule we should have 3-6 months expenses as emergency fund in liquid mutual funds/savings accounts.

4. Have Sustainable EMIs:

Debt-to-income ratio (DTI) is a figure lenders use to gauge how well we manage our debt. To calculate DTI, add up monthly debt payments and then divide the sum by gross monthly income, the lower the DTI, the better it is. It should not be more than 40% in normal case.

5. Have a Good Credit Score:

Similar to a DTI, credit score is another way lenders measure how likely we will be able to repay our loan — and a lower score usually means higher interest rates on everything from mortgage to credit cards. Normally the credit score should be above 750+ in the scale of 900 to get loans easily at decent rates.

6. Have adequate Insurance:

Covering the risk is another important aspect to be healthy. Health Insurance, Life Insurance and Accidental coverage are important insurances. Having appropriate insurance allows individuals to be resilient in the face of unexpected expenses, such as the death of a loved one or a medical emergency. Every person should have appropriate insurance based on his age, income, number of dependents and risk exposure etc.

7. Have Sufficient Retirement Savings:

In today’s world when even government employees don’t have fixed benefits plan it is all more important to have Retirement savings looking at the socio economic structure and inflation. We all need to have sufficient retirement kitty as our longevity of age is also going up.

To keep our mind fit we need to be stress free. Financial wellness is the most important factor to remain stress free hence we all need to ensure that along with our body and mind we are financially fit also.