Building the financial muscle

It takes hard work to build a six pack. It takes even more hard work to build a six digit bank balance.

There are many websites,many magazines and lot of financial gurus to tell you the ways to build the wealth. This article is not about risk return ratios, asset allocations, or investment vehicles. Its about something different but important.

"I wish I should have saved more. I should have spent less this month. I should not have bought that latest mobile. I should not have partied that much".

These are some of the very common remarks that are made by most of the people at the end of the month. Surprisingly this was also the time where they tend to take some tough decisions to be implemented in the next month. But in the next month, when month end comes again the same situation arises.

In financial language people call it lack of financial discipline. After observing my own behavior apart from some of my friends behavior I tried to address this problem from a different perspective.

Every month in the beginning I also sit with a pen, paper and a calculator to do a simple budgeting activity for the month. I allocate money for various expenses. Together as family we decide to abide by the plan.

The first week the plan runs well. The second week it becomes weak. The third week it fades. The fourth week we don't require that plan any more as the budget that we allocated to most of the things has already overshot. Since we can't print currency notes like our central government does to fill the deficit, we do that with the help of a CC. You guessed it right it is Credit Card.

This cycle if continued for five to six months results into a big credit card debt. Then an article in a financial magazine approves the practice of taking a personal loan to pay off the credit card debt citing the interest rate difference and savings that you make by doing that, you promptly jump at that option and add a new loan to your portfolio.

Your strong determination not to use credit card will work until you find a beautiful combo offer of 81 inches LED TV with a home theatre with EMI option pops up in the front page of the news paper.

And the story goes on and on..

So what is going wrong with our finances?

Are we lacking discipline?

NO... my answer is we are trying to have too much of discipline which is injurious to our financial health.

Just imagine you decided to get a six packed body. You went to the gym the next day. Started working five hours a day from the day one. What would happen after two days of such rigorous exercise. Probably you may not be able to get up for a complete week.

It's rather impossible to hold the water in hands unless you practice so much.

Money is like water in your hands. The gaps in your grip are several.. a I Phones, I pads, LED TVs, eating out, tablets,  Make my trip.coms, partys, that woo you everyday to spend.

A determination in the beginning of the month to say NO to all these is like starving your mind and it will be looking for an opportunity to break your determination. With each day it only accumulates more energy to attack you.

Solution !!!. if you are getting Rs 100 and trying to allocate to discretionary expenses only 2% to 5%, (discretionary expenses are those eating out, shopping etc) then you are literally starving your mind of it's discretion to spend. ( in the end you end up spending more than 20% on the same)

Better practice to follow is to be a little liberal with these discretionary expenses.

Say allocate 10% to 15% of your net salary for them.

After two or three months you try to make it more leaner, bring it down to 10%

When your mind gets adjusted with this for another three months then you can bring it to less than 10% level.

Let us understand that financial planning is more psychological than mathematical. Once we have disposable income then only all the calculations will help us.

Happy saving.






 

Gadget Dreams

"Look at this person, he was born in a poor family. Worked hard. Studied well. Now he is a software engineer in USA. You know what he drives a brand new Lexus car. His salary is more than XX million dollars. This is how you should be successful...."

"Have you seen this photo in this magazine. This person worked so hard that he finished the XXXX professional course. Now he has got his own consultancy. Look at this, recently he constructed this big bungalow costing 5 crores...."

I was overhearing a mother coaching her young son during one of my recent train travel looking at the photos from the magazine that she borrowed from me.

We don't lose single opportunity to coach our children to be successful. No doubt we want them to be successful. But are we telling them the real meaning of success or trying to just give them the thought that success means acquiring so many gadgets in life whether big or small?

Great salary.. big bungalow... big position.. work at abroad..  big caaaars.. i phones.. dining at five star.. travel by flight.. designer suits.. exorbitantly priced perfumes..farm houses.. holidays in foreign destinations.. great bank balance... the list is endless.

The more one acquires the above the more successful he is.

When we read the rags to riches stories like Bill gates, Michael Dell, Richard Branson, Steve jobs, Ambanis, Narayana Murthy most of the time the focus is on the wealth they amassed. People are baffled at thousands of crores of wealth that these success icons accumulated.

To get there we have always a success formula written in stone..

Read well.. work hard.. don't waste even a minute.. make it to IIT, make it to IIM, then join a overseas conglomerate and you arrived in life.

Is it something like human life is meant for amassing wealth? Are we missing some vital link here?

Probably we are only looking at the glamorous side of the success icons. (excuse me for being partially judgemental)

The attitude that these success icons developed towards work and life, the discipline which they acquired, the vision with which they worked seem to be completely ignored.

Why not we concentrate on building character of children than just making them ready to be money machines?

Why don't we teach them life skills like being emotionally balanced, having clarity on what to do in life (I am not talking about IIM or IIT) ?

Why can't we concentrate on  making them the better human beings?

Then should we ignore the hunt for money concept?

NO.. but let not... the hunt for money become the only purpose of life.

If having so many gadgets and having lavish life style only are the success parameters then Dawood Ibrahim also should be considered as most successful person.

 

Are we having enough stress levels in our life?

I think it was late midnight. The room was completely dark. I don't know whether power is gone. I could not understand as to why I woke up in the middle of night.

I could hear a peculiar sound coming from some distance. It looked like sound of a thousand horses running feverishly. I concentrated. I could hear lot of commotion outside the room. I was totally confused.

Got up from the bed with a jerk and went out. I was shocked. I was not in my house. What I thought my bedroom was in fact a tent. It looked like I was in some military camp. Then came a much more rude shock.

There were people who were running helter skelter around. Most of them did not look like from modern times. They looked like artists from a movie on medieval times.My brain stopped taking notice of all these facts long ago with shock after shock it underwent.

I could sense an imminent danger racing towards the camp with the sounds of horses and the hoarse voices getting closer.

I started running away from the camp. Suddenly someone held my shoulder. It was a soldier. He looked astonished at my running away. Looking fiercely at me he handed over a big sword. I was not able to hold that with one hand, it looked pretty heavy. Though I could not understand his language, I could sense that he was ordering me to defend the camp not to flee.

The inevitable danger arrived in the form of some hundred odd soldiers. It looked like a huge army of soldiers.  All the people carried heavy swords. I looked at the people in our camp. They were trying very hard to defend the camp.

People were dying  around. It was a horrible and bloody war. I tried hiding behind a tent. I was sweating earlier. Now even that too dried up. I was face to face with death. It was only a matter of minutes before I would join the lifeless bodies that are scattered around. I lost the energy or desire to flee to save life. It seemed that I had prepared to die.

I don't know how much of time I lived that near death experience. I woke up again, this time in my bedroom. There were no more horses and soldiers. Death disappeared but it already sank into my mind. It took more than an hour to get the nerves back.

The book on Chengiz Khan I was reading before I went to sleep was still there staring at me.
It was not a biography of a person who successfully invaded vast part of the world in the medieval era, it is the description of life and death that played hide and seek on a daily basis. Whether one is alive or dead is decided by who wins in the game each day. It was a time where future came not in years, months or even days. It's about whether one will survive to take the next breath or not.

Work- life balancing, managing stress, de-stressing techniques, diet management, treadmills, entertainment, modern facilities... none were there.

We experience stress, they experienced physical and mental pain, the pain of death.

We experience fear of lack of comforts, they experienced fear of death

We feel about uncertainty in having good life style, they felt about a situation of lack of life.

Aren't we blessed...

Haven't we advanced in lives?

We may have problems.. but doesn't the severity of the problems came down?

Let us enjoy the life...

 Let us remember the fact that human race can sustain much more stress, much more uncertainty and fear..










 

TEN THOUSAND MISTAKES

There are historical places, historical cities, historical quotes too..

Thomas Alwa Edison made ten thousand mistakes before he could find electric bulb is an evergreen quotation that probably would have been repeated more than a million times in all the sales meetings world over.

Each time one sees the thought provoking quote on the screen with the picture of Edison with a bulb in hand, it re energizes us for a fresh round of work.

Recently one of my senior colleague has been transferred to a different location. He was trying to contact some of his old teammates of that location over phone. Since we both worked in the same location earlier I also was a overhearing the conversation.

None of the people who worked in that location three years earlier were there in the organisation. All of them moved into different companies and some of them into different career paths also.

The last call went to a person who struggled to be successful but was not able to succeed in those days.

This guy worked hard. Never cheated. Used all his energy. But always used to end up long, short of the targets for promotion or increments. Two years of hard work brought him nothing but frustration at the end. None of his managers were able to fix his problems. At last people started saying that his stars are bad.

After me moving from that location, I heard that he resigned and went off.

The remaining story unfolded in front of us from the phone's speaker.

Contrary to our expectation of a dull voice full of pain, we heard a very vibrant voice beaming with confidence. I became temporarily blind as only my ears worked.

After leaving this company he joined one local real estate company. He could witness a phenomenal success and with each sale bringing a fortune for him, he himself started real estate venture within a short time. The stars that were blamed for his failure in insurance seemed to have joined hands together to help him this time. Now he got into construction of apartments. Just two years made huge difference in his life.

"I am successful today because I was not able to understand or sell insurance policies that time sir" He ended the conversation with these words.

I could not imagine this guy who never was able to sell insurance policies, joining yet another insurance company to try his luck and continuing that gruesome journey and losing all his confidence.

We get only one life. Just ask yourself is it worth making ten thousand mistakes in life unless it is for something as big as Edison's invention.

For most of us the definition of success is not such a great invention. It's being independent, comfortable, wealthy, satisfying job or profession.

If X profession doesn't work then let us look for something different. If X company is not the right place to work then let us not shoulder the herculean task of making the company a better place to work unless you are the CEO.

Life is short, Working life is even short, then why should we keep doing what we don't like or what doesn't reward us for LOOOOOONG.

Think for yourself....

India can't become America !

Clean roads, lush gardens, sky scrappers, honest govt employees.. the list is endless when you compare US with India.

This article is not about being patriotic or not patriotic, this is about why we are the way we are at present.

What was the reason behind our behavior. But this is based on my simple commonsense, not on any historical data or anthropological data.

Something for you to enjoy reading and think over...

"Four hundred gold coins and huge amount of gold and diamond ornaments were found while digging the foundation for a new house"
                                                        - Claims a local news paper

"My grand father gave 100 acres land to my father, and I got 200 acres from him. Now I have to give my children at least 400 acres"

                                                     - Vision of a father

"My son who studies MBA in the foreign university is going to be the next managing director of my company"

                                                    - MD of a professionally managed big company

When the CM/PM/MLA/Minister/corporator dies his son/daughter/wife will be the person chosen for replacement.

I tried searching for such kind of incidents in US web space for the last four days, but the google search failed to find.

From the days unknown we Indians earn not just for us. We earn for our next two generations at least. I am not talking about spending for education or marriage of our children. But it is beyond that.

We want to inherit a rich legacy to our children. House, land, jewellery, business, bank balance every thing that has got a value need to be handed over to our children when we leave.

Here is a simple calculation: if Rs 1,00,000 per month in current days is enough to have a good lifestyle, then Rs 5,18,66,353 (five crores and 18 lakhs) are enough to live for the next 100 years even factoring the inflation.

But we find people in govt/private services trying to amass wealth through unethical means. Anything that we need has got a price. Be it a ration card or driving license. Anything that is built be it a small gutter or big project has an element of corruption.

There is an undelying desire to be safe and settled that has been present for centuries together.

I was astonished to see that the term "getting settled in life" is used mostly in Asian countries, particularly in India than in west.

Getting married
Having a house
Having a stable job
Having children
Having good bank balance
Having enough name in the society

These are the common characteristics that are associated with the so called "getting settled".

We need to settle first in life. Then we need to ensure that each of our son/daughter/son-in-law should settle down.
If the god allows us to stay some more time here, then even our grand children should settle down in  life.

Just imagine when somebody is trying hard to create this settlement, how trivial it appears for him the ideals of morality, ethics etc?

Which takes over the other.. settlement or ethics ?

Our great ancestors behaved in the same way. That is why you find tonnes of gold ornaments dumped in temples, houses, foundations.

Our grand fathers tried to build a legacy.

We are in the process of building the same.

Do we need clean roads, lush gardens, skyscrappers, ethical officials OR SETTLEMENT ?

Working hard to build a legacy for our children is not a mistake. But searching for wrong ways to build right legacy for children is crime.

Let us think... And I dont want to sound as if this is the only reason for our behavior. There could be several more too..

IIT to LKG !

Nitin, Murugan, Deepa, Vel, Haneef..... my son handed me a long list of friends who need to be invited to his birthday party. But there is a challenge. All of them are from different areas in the city and too young to come on their own.

But he wanted all of them to be there when he blew the candles on the cake. I had to think of a serious strategy that facilitated this. He even suggested me picking up each of them from their house and dropping them home. But unware of these kind of plans I bought only a car rather than a bus.

At last we decided to shift the party to the school itself where all his friends can be present at one place.

Thirty little angels sang the birthday song and wished my son when he celebrated his birthday at school.

We had invited the school principal and other teachers too. After the party is over I got a few minutes time to speak to the director of the school.

This person belongs to north India. He went to IIT. Had corporate experience.He had a passion for teaching. Once he was comfortable with his finances he tried his hand in teaching. It is not being a professor at a college, but he wanted to impact the young generation at an early stage which he believed will serve a much better purpose of serving the country. ( I was inspired too)

As he liked the philosophy of this school, he joined recently and started experimenting with his ideals.
He not only manages the school, but ensures that he practically teaches in the class room at least for two to three hours a day.

I had a doubt. An M.Tech graduate teaching a LKG class, could be pretty easy task. What satisfaction he gets in teaching such lower classes ?

His answer opened a new dimension in my trainer's brain.

He said and I quote:

" Teaching lower classes is more difficult than teaching higher classes. Teaching means breaking the complex issues into "simple most form" that can be eaten and digested by the pupils. Teaching is not display of knowledge but teaching is imparting of knowledge"

I think this is a lessorn worth learning for many of the people in learning and development function.

Many a times we see the people using lot of jargons, phrases, making the subject more complicated. This way of communicating in a training session serves only one purpose. It is to show the participants how knowledgeble the trainer is.

The purpose of traing or coaching is not to show our knowledge. It is to make the participants understand the subject.

The trainer who can break down the complexity of the subject and deliver in small pallatable pieces to the learners is the trainer with true purpose.

Training programs are meant for transfer of knowledge. They are not fashion shows where the trainer tries to showcase his personal capabilities.

Identity syndrome

Dr ABCDE.  Bsc, MBBS, FSINS, FAMS, AFST, NIME (Ukrain), NAMIS, ARMIS, FSNST.

My colleague was shocked to see this board when we went to meet a doctor who gave us appointment to listen to our insurance plans. Though I was not able to reproduce all the degrees that the board listed, I still remember eight to nine degrees that were written on the board which probably contained all the alphabets the English has got.

When we entered the clinic it looked like a museum. The walls in the huge hall bore all the certificates that were awarded to the doctor. There were several patients who were patiently trying to understand what kind of person they are going to consult. 

Most of the certificates were from less famous countries like Ukraine, Czechoslovakia etc. This was not an end. There were several photographs in costly frames that adorn the walls. The doctor took photographs with every possible person in the world who was in a white coat.

My colleague was shocked. He never thought that anybody can get these many degrees and so called diplomas. When he patiently counted they exceeded the life span of a person, around 80 in all.

Before I could explain him how one gets these kind of cheap diplomas and fellowships by just passing some online tests the doctor called us inside.

Though I could not see any great number of patients waiting outside, the doctor acted very busy. He displayed his wisdom. He tried to look familiar with anything that is under the son. It was an hour of time waste where the doctor spent most of the time proving that he is not less than a noble laureate. He was not there to listen to our product. He only had one clear agenda, enacting his own advertisement show. He had one album full of his certificates and photographs which he kept inside as his walls were not sufficient to put them upon.

It made me to remember one incident that taught me a lot as to how a human being should be because one is called  HUMAN BEING.

When I was in Dr Reddys labs I had been to one of the famous hospitals in Andhrapradesh. It was Satyasai Institute of medical sciences in a place called Puttaparthy.

Built by the famous Satyasaibaba trust this hospital is meant for providing super specialty services to poor patients who can't afford such expensive treatment outside.

When myself and my colleague entered the hospital for the first time, it did not look like yet another hospital rather it looked like a temple that provides peace of mind too.

We went to meet one of the doctors. There was a person in white clothes and a badge of Satyasaibaba outside the doctor's chamber. These are the people who come to do voluntary service. I just asked the person if the doctor was inside. He was extra polite and was very cordial too. He went inside and informed the doctor about us. While waiting to get inside the doctor's chamber we started chatting with the old person who looked very ordinary.

He did not look like south Indian. After a small probe about the person's background we were more than shocked. He was an old IIT graduate who further went and continued his studies in MIT, USA. He worked as professor and dean in many universities where people love to get admission world wide. He was invited by the government to head some of the important committees that made policy decisions. At last he served his alumnus IIT as director and retired. He still is in advisory role for Govt of India. All this he told as a matter of fact. To my dismay I could not find even a small trace of ego. He devotes one month of his time every year to serve the people and  that is how he ended up in this hospital as an attendant for patients. I asked him if he could ask for a better job. His answer is a lesson of a life time.  

"God chose me to do the service. Whether it was as a professor or as an attendant. The choice was of god. I am here to deliver his wishes."

It left a deep impact on me. As Swamy Vivekananda says, accumulation of knowledge is good but unused knowledge is like food undigested, it does more harm than good.

Degrees and diplomas don't make us human beings. Wisdom makes us. Craving for recognition up to a certain age is normal. But with the age if the chronic craving continues then it is called IDENTITY SYNDROME.

Somebody who failed to develop solid attitude and character always tries to depend on external means to derive value. 

Let us strive for achieving something worthwhile rather than spending whole life to prove that we are great to others. It.s waste of LIFE.