Musing 1: What Makes me Qualified

One would expect a blog on financial wisdom containing great investment Mantras to be helmed by a rich business tycoon or a successful entrepreneur or a stock market wizard. I clearly fit none of these or any other such roles even remotely. Indeed, whatever I have achieved financially over last three decades is rather modest, verging on the side of below average. Why then am I bothering you to even read what I have to tell you about financial wisdom? If I had this wisdom wouldn’t I have done better financially myself?  Please read this blog to learn what I did not do towards my personal finance, or did it too late to give me a peace in life. I am not uneducated, in fact far from it. I hold triple Master Degrees-Master of Science, Master of Philosophy and Master of Management Studies, where one of the subjects was Financial Management. But I consider myself financially uneducated as I could not translate my theoretical knowledge into tangible personal financial outcomes. This blog thus, is my cry of anguish, a lament of what I could not achieve financially despite having the greatest weapon for financial freedom at my disposal-a steady paycheck, all these 30 years.

          It is also not my argument that money is the be all and end all of all things good in life-definitely not. A rich and fulfilling life can be enjoyed even without being rich so far one sets one’s life goals appropriately and enjoys a good family life and health. I have been singularly lucky to have an amazingly supportive family who have never faulted me for not being able to give them more, at least materially, than what I could. However, this guilt remains in me that I could have done more, much more for them as also for the society, if I was better off monetarily. Having a decent sum of money liberates oneself to pursue one’s profession and passions in life without bothering for the next meal (in extreme cases) or the next paycheck. I will recall Maslow’s hierarchy of needs Theory here- It is difficult to work at self esteem and self actualization without having one’s basic needs of Roti, Kapda aur Makaan (Home, food and clothing) having been met. My financial naiveté has to a great extent been my handicap which any decently educated person should endeavour to correct.

          The seeds of future victory are invariably found in past defeats, one just needs to analyze the root causes of defeat and try to chart a new course without reinforcing the trends and habits of the past defeat. I must confess that I was always careless about money. I lurched from one financial mistake to another without really learning any true lessons. The monthly pay used to come like clockwork- fruits of a Government job, and then go away as easily, without leaving a trace of any tangible asset that one created out of it. I had no idea about how and where it was being spent over the course of the month and the year. In a way, I was not managing my money; rather the money was managing me. The monetary crisis always used to start around middle of the month and then the struggle was to somehow get through to the next paycheck, which used to meet the same fate. It was not that we were indulging in luxury vacations, dining and shopping, far from it. We were living frugally, or we thought so, and yet running on a financial treadmill, which did not cover any real distance on ground. The pay used to rise every year, but so did the expenses and I found no way to arrest this vicious trend.

          It is not that I did not plan for my finances- I did, but not always very wisely or methodically and ended up making series of mistakes like choosing my financial advisors incorrectly, never following through with whatever half baked plan was at hand and jumping from one financial instrument to another. I wish to share these investing mistakes with you along with the blueprint or the path I would have followed if I were to live my life all over again. I hope and pray that the seeds of your financial victory will be found at the altars of my financial naiveté and mistakes.

          The greatest weapon in life is knowledge and its effective utilization. However, unfortunately in our country there is no institutionalized system of teaching a child the basics of financial matters in schools or colleges. At home, in most of the families, any discussion on finances in front of the children is forbidden. So how does a child learn about finances- The hard way like I did with hit and trial? The problem with this approach is that most of the times one gets the wrong kind of advice to act upon and secondly one loses precious time of investing in life, a commodity which can never be replaced whatever one tries subsequently. I will discuss this issue at length later.

Since the time I realized that I was in a financial soup and needed to change my attitude towards money and finances, I decided to arm myself with knowledge and wisdom. I read books by financial masters, gobbled up articles and magazines on finances, chatted at length with people who had done well financially and tried to evolve some basic fundamentals, which if followed scrupulously by a youngster or indeed anyone at any stage in life, would result in financial peace and freedom. The problem with all such literature, however was that it was written in a language which is difficult to be understood by a High School student-the correct stage in life to my mind, for a child to get educated on financial matters. 

I hence decided to simplify the financial jargon to a language which a 17-18 year old could understand and internalize. Of course I have included all the resources in the Bibliography for those who wish to go deeper into the concepts and arm themselves even better. However, even if one has to just read this blog without the additional resources mentioned, the benefits are still going to be significant. I have on purpose, kept the chapters Bite-Size so that they could be tackled one or two at a time and thus incrementally add to the financial wisdom of the reader. To that extent it is important that one goes through the entire material in sequence without trying to jump forward out of curiosity. The chapters are more in form of concepts which need to be understood and applied rather than the factual data which is liable to change over time.

The blog is in the form of musings which I wish to communicate to my children as a (Financially) illiterate father who embarked upon the journey of financial wisdom and knowledge and having acquired it, wishes to leave this as a legacy with them or indeed with any child. I am conscious that at my age I may not be able to financially recover adequately to leave them with huge financial assets. But then who knows?

I will begin by reiterating that whatever follows in this book is attributable to some financial master whose name I have mentioned in the footnotes/bibliography. If inadvertently, I have omitted to cite someone, it may be purely out of an oversight for which I apologize in advance. But since the book is meant for the benefit of society at large, I hope this small error of mine, if there, will be forgiven. So let us together embark on this journey of financial wisdom and peace.