Making Money V/s Managing Money

Money with same value and same denomination handed over to two different individuals will get different treatment, in terms of saving and spending, only because two individuals would have different outlook for the same value and same denomination If we take a close understanding about our outlook for money, we would realize that as a child, most of us understood money as a factor, that has only one option i.e. spending. We were never exposed to other option i.e. savings, nor do we expose our children towards the same.

Truly speaking there are only 2 options with money that one can exercise

1) SAVE 2) SPEND

However hard we try, it is difficult to find the 3^rd option. Once we complete our academical carrier and start to earn we get exposed to the other option of money i.e. savings. I would here use a different word which is managing. In-fact saving and spending gives every individual a very satisfactory feeling, but what happens in actual terms is the order changes. People spend first and try to save with the left over. It should be vice-versa.

It’s a known fact that making money after certain stage in your life cycle is easier than managing money. Majority of the Indian population a decade before had a myth that if Tax saving is done you are done with your investments and hence there was no need to look for any investment options which would be available. This thinking pattern has changed a bit over last few years, one really looks for option beyond saving taxes but is clueless with the kind of options that he or she should go ahead with. As you are in the process of making money there is a graving need to MANAGE that money, where you have put your sweat and blood to MAKE it.

Saving money or Investing money is a process and has to be followed and done on regular basis and with great discipline, the working is very simple, we earn every month, we spend every month, hence we have to save every month. I am amazed how even today people run during the last quarter of the financial year to complete their investments for Tax saving purpose and happily think that the moment they have saved the tax their investment is done for the year. The rush only results in saving tax and not selecting a proper investment instrument.

Not defining your destination while travelling will make it more complicated to you as well as for the person who is assisting you to travel. Most of the time I get client’s who wants to invest money to get good handsome return (what is good and handsome return is never defined and understood). I have also come across people who really wants to make a beginning but are confused with the kind of options that are available and hence end up doing nothing but parking the funds in bank savings account.

Here are few points that I would recommend to keep in mind while managing money.

1. Have your financial Goals set very clearly – choosing a financial instrument without understanding your financial goal, is like travelling in a vehicle without knowing the destination, the journey is surely, not going to be memorable.

2. Define your risk taking capacity with the investments and thoroughly understand what is the maximum risk involved, while investing in any instrument.

3. Have your asset allocation done as per your financial goals and risk taking capacity, and keep on re-visiting your financial goals and asset allocation plan, once in a year.

4. Replace your non performing investment tools. Investment decisions are tough and you need to replace if they are not performing or meeting your financial goals.

5. Plan for your contingencies, always have a back up plan. Re-visit your Insurance needs with change in your life style and your income structure. Protect yourself and your family from loss of income.

6. Do not go over board in your borrowings. Borrow only for basic needs and not for luxuries.

7. Start Investing your money and not saving your money, there is a huge difference in saving and investing. Savings would just safe guard your capital while investing would multiply your capital.

While selecting a Financial instrument, have a clear understanding as to how does it meet your financial goal, understand the type of markets the instrument would invest your money i.e. Debt or Equity. Also look at the percentage returns that the instrument would fetch you during your period of investments. Invest in equities for your long term financial goals and use debt funds to address your short term investment needs and always keep on reviewing your asset allocation plan. Always remember invest in financial instrument for your financial GOALS & TARGETS and not to meet someone elses TARGET.

YOU CAN BECOME RICH BY EARNING MONEY BUT YOU CAN BE WEALTHY BY MANAGING THAT MONEY.

HAPPY EARNING AND MANAGING !!!!

ONE MAN ARMY

India witnessed people hitting the streets back to back in two weeks, but for different reasons, first it was for celebrating India's victory after 28 years in WC, and the same people hit the streets the following week in anger and frustration against the in-competence of the government to curb corruption. One can truly call Anna Hazare a one man army, an ex-army man who fought Indo-Pak war showed the nation what it means by peaceful agitation, not many knew what this agitation is all about when it started on 05-04-11, when Anna with his handful of supporter walked in Jantar Mantar for his mission, not even the ruling government could have imagined that this agitation would gather such momentum in 3 days. It is just unbelievable that a 72 year old 5'2'' social activist showed everyone the power of 'Truth'. No violence, no rasta-roko, no forceful 'BANDH' but still managed the government to succumb to all his demands, it was some magnetic power that he was radiating and the entire nation got attracted towards it, be it the youth, the old or a child, everyone was just getting attracted towards this great social activist and only had one goal- Fight against corruption. This agitation is a big slap on the face of all political parties who for so many years have been in power but could not strike a chord with common man, which Anna could do in just 3 days. Again a lesson to be learnt by all the political parties, who for their selfish motive conducts the so called spontaneous 'BANDH' causing trouble to lakhs and lakhs of citizen, Anna did not force anyone to go on hunger strike along with him, but people just took it as their moral responsibility and joined him. I believe, we have now entered in new era where if from here the energy that has been generated from this agitation directed in right direction would take this country to different level on the world map. It’s just a beginning of a long battle against the people who are instrumental for keeping India under the tag of developing country, when we could have been way ahead where we are today. Not many, actually understand what Lokpal bill is all about, but had joined the agitation only and only because they were just fed up with the kind of scams that were rocking our nation. We need to understand at this point, passing the Lokpal bill will not remove the corruption from our system it will act only as check point on all those people who are responsible for spreading this virus. Also as responsible citizen we will have to play our role to control this disease that has spread like cancer in our country. Let’s all support the cause in the best way we could, as we have just seen what “POWER OF PEOPLE CAN DO TO PEOPLE IN POWER”.

FIGHT AGAINST CORRUPTION

While the entire nation was refusing to come out of the Cricket fever and were basking in the glory of MSD and his boys, here comes a breeze called Anna Hazare mentioning strongly, something about the LOKPAL bill which was not known to many of the citizens of this country, the breeze soon turned into gusty wind and now threatens to turn into storm. While the Government is still busy finding out the ways and means to mellow down the entire agitation, but has not found any success . What is interesting here is why the government is so reluctant to pass the Lokpal bill which puts the Indian citizens rights , right in front and gives him access to crack down the corrupt politicians and bureaucrats, or again these corrupt politicians and bureaucrats are way important than all the Indian citizens, who in fact have voted them to power ? We have probably seen the worst of the scams hitting our faces in last 6 months or so, be it the CWG, 2-G, the governments inefficiency to control the rising food and essential commodities price rise. Its more than 50 hours a 72 year old social activist is fighting for the cause and the authorities are just refusing to move a bit from there stand. The entire nation is today supporting the agitation, today as a growing economy we are fortunate that we are not facing problem on the economic front, unlike our neighbouring countries. India is looked upon as promising Asian economy. While we are doing well on these fronts but the corruption issue has always been a hanging sword on our neck ( thanks to the politicians who has an unbelievable and unending hunger for money). All these politicians or their aide are held for some scam or other and the trial begins, what happens after that no one knows about it, no single official who has been named in the scam has been punished, what happens to all the money that he has pocketed, is it not the country's money which has gone to wrong pocket in wrong way. The only option today in front of the Sonia Government ( am forced to write Sonia government, as all the decisions are taken by her) is to accept the demands keeping it's false ego aside and set an example. It also needs to book all those who has symphonised the public fund and punish them at the earliest ( which means within 3-4 months and not in 5-6 years). We need more Anna Hazare today who still has the nations interest well above personal interest. Salute to the civil society protestor, the entire nation is definitely with you