Tag: personal finance

Why we are obsessed with money

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

What a way to exist!

For most of us, practically the whole day all we are thinking is about money and more specifically how to have more money!

As if money was the only thing in life. Unfortunately for most of us, circumstances just do not permit any other thought!

We are running behind money most of the time which is almost akin to have become obsessed with money. Everything that we are doing in life is centred around money.

Unfortunately, this is because we need money for anything and everything that we do. There’s nothing wrong and what are you doing, however the problem is that over time, it becomes a compulsive habit to keep earning more.

That’s where the danger is. The problem is that there is a point where from we chase money as an addiction, we chase money because we like to do so. If we did not chase money we would not know what to chase now because we get out identity from money and the amount of money we have.

Another thing is that right from childhood we are always taught and our minds are conditioned that everything that we are doing is going to be for the sake of earning money.

There is no one who told you that money is just a means, and then there is something greater in life to achieve. Some examples are legacy; building something, charity; to giving something / helping someone, passion; pursuing something and living; simply to enjoy life and your money

We have got addicted to this and how!

There are three reasons for this:

First, we are what we do. It is the human behaviour. I know I should exercise and I don’t. I know I should eat healthy and I don’t. I know I should spend time with my kids and I don’t. I know that, yes, money isn’t going to make me happy and I still keep trying to make money.

We live by the laws of inertia, in a pattern which is hard to break. But we have to break it. For ourselves and for the sake of people and reasons for which we are chasing money.

Secondly, we need signals of progress. Money is a measure of how far you have progressed in life. The more the money you have the more you can make sure your progress. It’s simply the logic of evolution. People need validation of their success. Bigger house, bigger car, branded goods and list goes on.

Thirdly, it’s the easy way out. It’s only human to avoid difficult things. Important things are very difficult to measure.  Have I been a good father or husband? Have I groomed my child well?  Such things take years to measure and we still don’t have answers.

So, should we not be focused on creating money for ourselves?

I’m not saying that. Definitely create. Take care of yourself for sure!! Use it to the maximum to make yourself happy!!! You need a certain amount and beyond that is extra.

The definition of their certain amount is naturally different from one person to another. If that extra is going to happen easily, without stress and without your involvement, then its fine. Basically don’t kill yourself for that extra. Be Smart.

Kartik Jhaveri is an expert at planning money, life and aspirations. He is a certified financial planner, wealth manager and financial freedom coach.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Five new financial goals for you this summer

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

I am going to try and explain to you why the summer holidays of April and May are great months to get a lot of things started, financially speaking.

This time period in a way resets the financial clock. You also have the option to hit the reset button on everything you have done so far; financially speaking of course and hope to do better things better than you did last year.

Let’s look at some of the new and unusual things to do in April.

• Make a learning budget

Learn something about money or anything you like. The best way to make money is to learn something about money. Just like if you wanted to learn cooking you will get into the cooking class. If you wanted to learn swimming you would enrol in the swimming class. If you find learning about money is too daunting task than learn something which is close at to your heart or related to your work. If you learn something new, there’s a possibility that you will use your new ideas to generate new income and in turn that will generate new wealth for you.  So make a budget, enrol somewhere and spend that budget. How about a % of your annual income? Spend it for sure!

• Plan a unique holiday 

When you’re by yourself and without your mobile phone you will have the opportunity to think! When you have time to think, suddenly good ideas will come to your mind.  You may think this is silly but you can be sure that you will be amazed if your drivers experiment just once. So it might be a good idea to go for a holiday just by yourself. If you find that too intimidating, join a group of strangers. You can combine that with the adventures experience if you like.  Be extra careful if you’re going with your special buddies. Do this only if they are going to be in a position to help you discuss your idea and make it bigger. They must play the role of complimenting your thoughts. So make a schedule to do this holiday and obviously make a budget to make it happen. Think & create new ways of making wealth.

• Make a prediction and make it happen

Be brave. Let’s aim to grow and multiply net worth by 50% by the time you come to the end of this financial year. This is not a joke and it is easier than you can imagine.  I’m speaking about NETWORTH and I’m not talking about return on investment. If your networth is Rs. 100 today, all I’m saying is that let’s aim to make this a 150 by the end of this year. This networth comprises of all your savings till date. This can be achieved by simply saving aggressively every month for the next twelve months. Just put this into a recurring deposit or liquid fund so you don’t spend it.  We just have to prove to ourselves that this is possible. Where and how we will invest this money will think about that later.

• Eliminate a negative belief 

I want to give you an exercise here. Write down all your negative beliefs you have about money and wealth. Most people are not able to achieve the desired level of wealth because they think about wealth negatively. So even if you are earning a good amount of income you will never see yourself becoming wealthy. Examples are money causes problems, money causes a fight, managing money is complicated etc. Then for each negative thought, you have written down the positives i.e. the opposite for a few months. Soon negatively biased feelings will evaporate.

• Make a new investment; something you have not done before

Again here you do not have to be a financial expert. The idea is to learn something new. There are hundreds of investment options. Our objective here is to learn something new. Talk to your advisor and seek his or her guidance. Just a word of caution here; don’t do anything which is speculative or is something that you just can’t understand. Do what do find easy you understand and do that then.

Kartik Jhaveri is an expert at planning money, life and aspirations. He is a Certified Financial Planner, Wealth Manager & Financial Freedom Coach.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

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Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

How to identify your real financial goals

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Ever wondered what’s the purpose of life? We must all have wondered about this some time or other. While this is deep stuff and one can spend a lifetime figuring this out, there is another that is more proximate and needs our attention. We need to figure out we want to do in life. This looks less daunting, but daunting nevertheless.

We need some goals to pursue. Most find setting goals to be difficult; many say they have never really thought about it. Most eventually come up with the typical stuff – like acquiring a home, car, vacation, children’s education, retirement etc. These could be important goals. But, are these the goals that would add to one’s satisfaction with life? This really needs to be pondered.

Many of the goals that people rattle out are off the top of their heads and hence not properly thought through. If one were to subject these goals to careful scrutiny, they may just wither away, as they have not come from deep within.

Goals like a second car are there as friends and colleagues have one and it becomes a must-have. Goals like a second home, third home etc may be investment goals. Retirement funding is a universal goal that’s very important for all of us, but none of us seems to give an adequate thought about. Most want to reach a certain corpus with which to retire – like say, Rs3 crore. Whether it would be possible to achieve this figure or whether this amount is good enough to fund one’s entire retirement phase is unknown.

Pursuit of Empowerment

The more important question is whether these are the real goals, whether these goals look like something worth pursuing and one is excited about. Let’s tackle the second part of the question first … many people I have talked to, consider their goals burdensome that are exerting too much pressure on them. Hence, these people are not able to enjoy life while pursuing these goals. Life seems to be dragging along and they feel stressed trying to keep pace with the demands needed to achieve these goals.

If many of these goals are not empowering, are these real goals? This is the question we need to ask ourselves. Do we really need the second & third houses? Does it make sense to take on multiple EMIs, be worried sick about how much loans one has & what will happen if one loses the job? Many of these goals do not add any quality to life; in fact, it detracts one from living a fulfilling life.

So, what is a fulfilling life and what could be those goals which will help us live a life of meaning, go from one day to the next in joyous anticipation, live the life one always wanted & achieve their highest potential. That could differ from person to person. But most often, they are not going to be goals like buying a second/third home. For most people such goals add to loans, brings on stress.

When the goal is achieved, it does not bring delight – it rather just brings a huge sense of relief. Why pursue such goals in the first place?

The goals or what we ardently pursue should be invigorating. We need to ponder deeply and ask ourselves as to what is truly important for us in life, what would bring us delight, vigour and vitality; what would help us experience freedom and empowerment, what is that we would truly want to achieve, whom do we want to become … Answers to this would decide what we truly want in life.

Separating The Important and Unimportant  

Sometimes the answers may even surprise us. We may truly want to do something entirely different from what we are doing today. Many of our so called goals from the past may not hold any meaning and may melt away, once we find out what is truly important for us.

Once we identify what’s truly important for us in life and work towards fulfilling them, life will acquire a fine quality and become scintillating. The financial goals will be there and there is nothing wrong about that. They are no longer going to be a drag like they were before. Life would then become meaningful and enjoyable.

Identifying the true goals are so important. If your destination is wrong, the direction is going to be wrong & our efforts would take us away from the goal. It would make sense to ponder over what one wants to do in life, isn’t it?

Suresh Sadagopan is a Certified Financial Planner and runs Ladder7 Financial Advisories, a fee-only financial planning firm

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Don’t follow Trump’s example, said Buffett to students back in 1991

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Don’t follow the example of Donald Trump when it comes to financial planning, business magnate Warren Buffett had once told students, as per a CNBC report.

The old comment by Warren Buffet about Donald Trump is now raising eyebrows of many across the globe.

Buffett made the comments back in 1991 at Notre Dame while talking to students about the perils of borrowing money. “I’ve seen more people fail because of liquor and leverage – leverage being borrowed money. Donald Trump failed because of leverage. He simply got infatuated with how much money he could borrow, and he did not give enough thought to how much money he could pay back,” Buffett was quoted as saying in the report.

As per the report, Buffett was pointing towards Trump’s investment in the Taj Mahal casino in Atlanta city. And true to Buffet’s assessment, the casino would file for protection against bankruptcy in matter of months, the report stated.

According to Buffet, Trump “never went right.” The present President of the US overpaid for properties using borrowed money, he said, as per report.

The example by Buffet comes at a time when Trump’s trade policies have created global concerns and fear of trade war.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Seeking financial freedom? The time is NOW!

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

John Lewis famously remarked, “If not now, then when? If not us, then who?” This is so appropriate in the current financial world that we live in.

That statement will leave to rest every other argument that is conservative and against the idea of wealth creation. We are often faced with the situation where there is no option but to create wealth. Read on to know why!

Interest rates are painfully low. For all those diehard fans of guaranteed investment returns, there’s hardly any place to go to. Thinking of fixed deposits? Feeling happy with 7%? And fully taxable? That period is over. Period.

That doctrine of investing into pure fixed deposits and similar instruments is unfortunately standing challenged. There is no option but to sprinkle it with a combination of a little something that will add to the returns earned from fixed income type of securities. In fact this category of investors are in a way, best placed in terms of the current tax laws.

They can earn about 9-10% with minimal or near zero tax over about five years and more. Starting to generate rate of return above the inflation level of 7% is starting to create wealth. So there it is; there is no option but to move in the direction of creating wealth.

For more evolved investors, who invest in equities and who and still sitting on the sidelines tend to run out of patience every now and then. They are sometimes waiting for the right time, sometimes waiting for correction, sometimes waiting for valuation and sometimes waiting for just nothing. Sometimes, just too busy to take action!

I totally understand not wanting to lose hard-earned money. But if the money does not move it will stagnate. That’s the problem with money.

Hit the Ground Running

Inaction and inactivity kills it. Makes it costly to hold. Makes us lose opportunities, sometimes small and sometimes significant. I know of many people including my dad, who just kept investing into equities and holding forever. No doubt they were hugely (big HUGELY) better off then the people in the same time zone. I think they could have done far better with some smart lessons on asset allocation. This is because if they compare the growth rate of their holding over a period of 20 or maybe 30 years the compounded rate of return earned is often not impressive.

It is just marginally better or a few percentage points above the fixed deposit rate. Hence the need for asset allocation, which simply put is not to have all eggs in one basket at any given point in time. These sections of investors anyways create wealth, and, asset allocation is the tool that ensures that the process of wealth creation continues uninterrupted. So again there it is; even for this section there is not option but to start enhancing their wealth creation activities, else returns will continue to remain forever mediocre.

Then there are skeptics and there is nothing much for skeptics of everything, except that they need a serious dose of financial education. Perhaps what if needed is a proof of concept and for that, which better country to live in other than India where financial transparency in investments is so high that I sometimes feel, it comes from another planet.

 Your Money Needs Action

Today, there is a whole lot of variety to choose from and we have never been more spoilt for choice. But the most important thing in all this is to understand that your money needs action. It needs activity and for that the time is now!

And furthermore, if you asked me this question 10 years ago; I would have said that, the Time is NOW. If you ask this question 10 years hence, I will still say the Time is NOW. Any time is the right time to start the process of creating wealth. All that is important is that you take your first step; then continue it all the way with zeal and determination… till you have the level of wealth that you desire. And if you accumulate more than you need, still do it and share it with the world.

If you want your financial freedom; then the Time is NOW!

Kartik Jhaveri is an expert at planning money, life and aspirations. He is a Certified Financial Planner, Wealth Manager and Financial Freedom Coach.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow