Know the 10 Evils in your Financial Life and make an effort towards beheading it this Dussehra

When we talk about festivals in India, the few things that come to our mind is vibrancy, colors, lights, sweets and above all, it is us – PEOPLE. The unity in diversity among us is celebrated and seen evidently in our Indian culture since ages, even now with Millennials irrespective of their thoughts towards change. One such festival that we enjoy the most is Dusshera. The celebration of Truth over lies, happiness over sorrow and most importantly Good over evil. You might be thinking amidst it, how writing about financial life is relevant?

In today’s world it is difficult to be able to relate to the stories of Dussehra where Lord Rama defeated Ravana, hence to understand it with ease, it is a celebration of victory over the ten qualities, which are represented by 10 heads of Ravana as follows: Lust, Anger, Greed, Attraction, Ego, Injustice, Cruelty, Selfishness, Jealousy, Pride. Now me being a financial planner I could not stop myself to think and throw light on the 10 evils in our financial life which one needs to overcome to have a happy and successful life.

1. Evil of Debt: This is the most convenient way for most of us to fulfill our dreams and wishes in today’s date, I hope you know what I am talking about – it’s EMI.  There is nothing wrong in it but it is considered to be one of the worst evil in ones financial life. We will take a loan to buy a home which is considered as Investment, we will buy all our luxuries and lifestyle enhancements through EMI, Extensively use Credit cards, personal loans etc. without considering the fact that it is a high amounted debt and above it one is ignoring the major point that you need to pay exorbitant rate of interest on the same. If by chance you miss even one of the EMI’s it will also knock your credit score too. So I strongly suggest focusing your priorities in repaying the debts you have and overcome this evil.
2. Evil of Ignorance: The other evil I feel is ignoring the need to be protected. We hardly think about appropriate insurance cover required. How many of us give a thought on “ If god forbid some uncalled incident happens to me or my family member and there is a need for hospitalization do I have enough or will I have to break my savings or investment towards the end. It is imperative to know the importance of Health insurance / Term insurance / Critical Illness and Personal Accident in one’s life and accordingly take an appropriate amount of coverage.
3. Evil of Inflation: We always sulk on the fact that “Salary is not increasing but prices of things we buy are soaring high” because we all are aware that irrespective of whatever we buy or invest, Inflation is not going to decrease, with time it will only increase. It is one major thing that needs to be taken into consideration when we invest in things in terms of financial security. We cannot turn blind eye to this evil saying that the solution to this problem is not in our hands but look at it this way if the problem is ours then we need to find a solution to it.
4. Evil of Confusion: The staple food of India which is loved by most of us has been Khichdi. But don’t you think mixing our goals and making Khichdi of it will bring out the evil to cast upon our finances? Think about it, buying insurances in the name of investment and then regretting on that decision. Instead, we should always keep the investment and insurance separate and not mix it together. As we always need to remember that the goal of insurance is to manage your risk whereas the goal of the investment is to create wealth for you and enhance your financial life.
5. Evil of Attraction: Our evil inside of Attraction makes us ignore our risk appetite or risk tolerance. The grass seems greener always the other side. Most of us get caught in the mundane and end up doing what others are doing rather than checking our risk of doing it compared to them for eg: If someone has bought a new I-Phone and you urge to buy that too, the point we are missing is the risk tolerance of our budget and the time horizon to buy that. I am not at all saying that don’t buy it, I am just saying to consider these factors and set a goal time to execute the plan in retrospect to your wishes and dreams of buying things.
6. Evil of Pressure: How many of you have done a wrong investment due to last moment decision? We usually tend to rush at the time when our company HR runs behind us for the tax proof at the end of the financial year. This pressure makes us fall prey to wrong techniques of saving tax and we finally invest in something not wise or suitable for us.
7. Evil of Fear: Most Indians are always called good saver but not good investors. There is a reason for it, fear of losing. We tend to hold on to certain things so rigidly that we cannot see we are suffocating its growth. Similarly, we stick to Debt products for a long-term so strongly which yields us lower returns and doesn’t suffice the increasing inflation rise. But then what is the point of crying over spilled milk is my question! I have heard many of them saying, “Missed the opportunity!! If I would have invested earlier I would have got better returns” These regrets are far worse than having the money invested.
8. Evil of Negativity: We tend to hear a lot once we started our investment. The negatives fall into our ears easily than the positives. In today’s day many of us understand the need of doing good investment but as mentioned earlier fear of losing it in the volatility of the conditions makes us skeptical towards the opportunity of increasing our returns. We don’t stick to the plan, we miss the consistency towards the investment we have done and are unable to enjoy compounding of our money. Here, we need to ignore the outside noise of speculations and keep discipline the way we keep for our diet to be healthy and fit.
9. Evil of Procrastination: Attraction can be good initially but when it goes out of control can flip into a monster. I am saying this because we as humans tend to procrastinate our goals and focus more on temporary arrangements in life. Like most of the today’s young minds are often heard saying, “ I have just started working and enjoying my life, I have ample of time to think about investments and safety” My question is Are you prepared for any circumstantial change that can happen tomorrow?
10. Golden Rule: The Rule which most of us follow is Income – Expenses = Savings. But what we actually need to follow is Income – Savings = Expenses.  We cannot Crunch our need but we can works towards little by little to crunch our wants. It is essential to understand the difference between needs and wants and act in your financial life accordingly.

So let us all try this Dusshera to defeat the 10 evils of our financial life and bring the good and growing nature of finance back into our life. Happy Dusshera to each one of you.

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