Articles

By: Mr Vishal Baxi, NJ Wealth Partner, Surat Ring-Road Branch.

In a world that believes in manifestation, higher power and superstitions and puts trust in gurus, gems and gimmicks, there are still a sane few who have managed to keep themselves away from these. Practicing simple things and preaching about even simpler things is what I believe in.

The power that I have a certain inclination for is the faith that I have in myself and the practicality that my experiences have offered me so far. Everything has to work, even money. Branching out your income sources happens when you allow your money to work. Put it in places where it can continuously offer you a chance to change with the dynamism of the market while ensuring that the risk is according to your risk profile.

Starting with term plans and smart investing, personal finance is no rocket science. It is mere

judgment, strategizing and the ability to take a little bit of risk.

As a part of the financial education services we teach our clients good money habits and the thumb rules of investing and talk about the untangling of investing strategies. These are all the things that we have tried and tested.

I start with practicing and then preaching. My life journey is a testimony of this very thing. I started with a small amount of SIP and kept increasing it (which has now grown substantially) believing that one does not necessarily have to be wealthy to begin investing but has to have an

intention and plan that investing will make them wealthy.

Here is a list of things I undertook and still operating on:

• I tend to keep 9 months' expenses as a contingency fund in Liquid and Arbitrage funds.

• I have kept a provision of 15 lakhs Family floater Health insurance for my family.

• I invested over 15 times my annual Income by Term plan.

• I have been successfully investing for my goals like Financial Freedom, Child Education etc.

• I started a SIP when my daughter was born and started investing for her recurring annual educational expenses as well as making provisions for her higher education.

• I also started a SIP equal to the EMI of my previous car. When I paid off the car loan in 2017, I had enough to buy an automatic top-notch, high-end car from it in 2021.

• I also started a SIP for foreign travel that enables me to see beautiful places around the world every 2 years.

Fortunately, I could formulate a strategic plan to provide Health Insurance to my team and have cultivated a habit of having a contingency plan for them. A well chalked out goal based investing from all the members of my team.

Things I practise before I preach:

• Created a monthly budget which my family and I follow stringently.

• We are following the mantra:

Income (-) Savings = Expenses and not Income (-) Expenses = Savings

• Buy things only when I need them and use a credit card to earn points. My usage of credit cards is not need-based but rather advantage based.

• Invest a lump sum when I have a surplus for the long term.

Earlier as I mentioned that I practise simple things and preach even simpler things. The sole reason is to show everyone that life is as complicated as you make it or as easy as you make it. What a PPF can do, a SIP can do the same thing and so can be trading in stocks. The art here lies in understanding that you cannot expect a fish to climb trees or a bird to live in water.

Investing is not only about getting what you need but also creating enough space to accommodate what you might need in the future and making provisions for the same. For me, wealth building is one goal that I don’t want to reach. Yes! You read it correctly. I want to continue chasing this goal in order to keep my money working. Eventually, wealth will be produced as a by-product of this constant chase.

To understand that investing is a fruit of smart work and not just hard work, let’s talk about the simple concept of ‘Pain is Gain’. The least you have to do while investing is to perform research, and get adequate knowledge before you even begin to think of planning your portfolio structure.

The very idea, thought and understanding is considered as the pain you take to make gains.

Personal finance like its name is a customisable approach to saving. Every profile is different and needs to be treated accordingly. Some trends in the market may work for some people and some may not. This is exactly when strategy comes into play.

The most important strategy and thumb rule - is to be involved in your investments. Just handing over your assets to an advisor to invest in, is not going to help you make the cut. When you as an individual take responsibility for your profile and in a collaborative manner contemplate your next move is when you shall truly reap fruitful results of your planning.