Would you like to be physically fit person or be rich? The above
question may appear to you as contradictory. You may feel that I am
putting yourself into a corner and asking you to make a choice between
remaining fit but not rich or vice versa. If you have got in this way,
you have got me wrong. You can be fit as well as be rich too.
Most of the people do not remain fit once they cross their thirties, as they have no control on their eating habits and do not follow an exercise regime. The result is an obese person in mid-thirties. The positive thing is that today more and more people are becoming conscious of their obesity and are now eating sensibly and also following an exercise regime.
Can we carry forward this analogy to personal finance?
We all want to become rich. However, only a miniscule of people make this dream a reality. What about the mango middle class? Can they become rich too, if not very rich? Here in lies the catch, to me, they too can become rich. If obese people can get physically fit by adapting sensible eating habits and following a regular exercise regime, then middle class can also get rich.
How are these two connected?
Well in a way they are, as they also like an unfit person do not spend even a little time on looking about their financial goals and income.
So to attain their goal, first thing people should do is to start increasing their savings and putting them in to long term savings cum investment financial instruments. What are these instruments? They are bank fixed deposits, SIPs in mutual funds, public provident funds, gold, equity shares of proven corporates, to mention a few.
What most people do is spend time in discussing and arguing (remember Dr. Amartya Sen's famous book titled, "The Argumentative Indian") on interest rates on bank fixed deposits, failure of certain mutual funds and corporate shares.
However, they do not decide which of these long term instruments will give them adequate return to develop corpus for taking care of long term fund requirements like education and marriage of children, certain exotic vacations and above all planning for retirement.
What they do instead?
They repeat the second sin of not remaining fit i.e. eat insensibly. They borrow to meet their above requirements of children education and marriage, exotic vacations and have little savings for retirement and have to keep on working. They even do not leave enough assets for the surviving spouse. They keep on paying interest and instalment all their life.
What people should actually do?
Like as to remain fit, a person has to do two things. One is to eat sensibly and two, to exercise regularly at least for 30 odd minutes. Similarly, to lead a peaceful and financially comfortable life one has to do two things. One, keep your unnecessary expenditure on check, and two, to save and invest by applying thirty minutes every day to look for good long term investment opportunities. Even the thirty minutes can be saved, if they consult a good personal financial consultant who will help them achieve all their financial goals including a happy retirement.
Is it asking for too much?
All of us know that eating sensibly and doing regular exercise keeps a man healthy, and wise. The wealthy part can be added by controlling unnecessary expenditures and planning their finances usefully to meet their immediate, mid-term and long-term goals.
Most of the people do not remain fit once they cross their thirties, as they have no control on their eating habits and do not follow an exercise regime. The result is an obese person in mid-thirties. The positive thing is that today more and more people are becoming conscious of their obesity and are now eating sensibly and also following an exercise regime.
Can we carry forward this analogy to personal finance?
We all want to become rich. However, only a miniscule of people make this dream a reality. What about the mango middle class? Can they become rich too, if not very rich? Here in lies the catch, to me, they too can become rich. If obese people can get physically fit by adapting sensible eating habits and following a regular exercise regime, then middle class can also get rich.
How are these two connected?
Well in a way they are, as they also like an unfit person do not spend even a little time on looking about their financial goals and income.
So to attain their goal, first thing people should do is to start increasing their savings and putting them in to long term savings cum investment financial instruments. What are these instruments? They are bank fixed deposits, SIPs in mutual funds, public provident funds, gold, equity shares of proven corporates, to mention a few.
What most people do is spend time in discussing and arguing (remember Dr. Amartya Sen's famous book titled, "The Argumentative Indian") on interest rates on bank fixed deposits, failure of certain mutual funds and corporate shares.
However, they do not decide which of these long term instruments will give them adequate return to develop corpus for taking care of long term fund requirements like education and marriage of children, certain exotic vacations and above all planning for retirement.
What they do instead?
They repeat the second sin of not remaining fit i.e. eat insensibly. They borrow to meet their above requirements of children education and marriage, exotic vacations and have little savings for retirement and have to keep on working. They even do not leave enough assets for the surviving spouse. They keep on paying interest and instalment all their life.
What people should actually do?
Like as to remain fit, a person has to do two things. One is to eat sensibly and two, to exercise regularly at least for 30 odd minutes. Similarly, to lead a peaceful and financially comfortable life one has to do two things. One, keep your unnecessary expenditure on check, and two, to save and invest by applying thirty minutes every day to look for good long term investment opportunities. Even the thirty minutes can be saved, if they consult a good personal financial consultant who will help them achieve all their financial goals including a happy retirement.
Is it asking for too much?
All of us know that eating sensibly and doing regular exercise keeps a man healthy, and wise. The wealthy part can be added by controlling unnecessary expenditures and planning their finances usefully to meet their immediate, mid-term and long-term goals.
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