The Rules of Money

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Do you have enough Oxygen to breathe when you retire? 👇

Despite the fact that water is composed of Hydrogen and Oxygen, humans cannot breathe underwater.

We are unable to breathe liquid. Oxygen is useless to our lungs in this liquid form. 💧

📌️ Similarly, making money and managing money are two completely distinct forms. One can be great at making but terrible at managing.

Your money is entirely your responsibility. As a result, either learn and do it yourself (DIY) or outsource to financial planning professionals. 💎

Making money is treated as an active source of income. When you stop working, this will go away. After retirement, or perhaps in the case of early retirement, one must accumulate a sufficient corpus to generate passive income for the rest of one's life.

The absurdity is that we can't assess the need for passive income as long as our active income is adequate to cover our demands. The need arises only when active income dwindles and you are compelled to depend on other passive income sources.

After some time in life, one needs to be free of the pressures of money. This is only possible if you have achieved financial independence that generates a regular stream of cash flow.

⚡ How many people seriously consider obtaining financial independence, which is most critical during their golden years?

Do watch the movie Avtaar (1983, Rajesh Khanna) and Baghban (2003, Amitabh Bachchan) to get a sense of how life can be ruined if you are not financially secure and rely on the next generation.

The harsh reality of life is that if you are financially fit, you can get a bank loan while working and your children will take care of you after you retire. Expect none of these if you are not financially secure. 😒

What are your thoughts on financial stability in retirement?

Make arrangements to obtain pure Oxygen rather than liquid Oxygen! 🔔

USE it or LOSE it.👇

⚡ Most of us are unaware that KNOWLEDGE comes with an EXPIRY date.

Learning is an ongoing process. We live in an era where a plethora of data and information is readily available. We must learn how to transform information into knowledge.

📌️ And, before knowledge becomes obsolete, turn it into a skillset.

Prof. John B. Goodenough, now 100, who received a Nobel Prize for his work on lithium-ion batteries at the age of 97, once stated that just because one retires does not mean he should wait to die.

⚡ Downgrading occurs by default if we do not upgrade. We die the moment we stop growing.

If we are good at something, we will perform much better than others who do not have that skill. However, it is equally important to constantly sharpen and upgrade our skills.

There are numerous examples of celebrities, sportsmen, and public figures who excelled at the pinnacle of their careers. However, they went bankrupt or lived hand to mouth after that.

Their refusal to improve themselves was a major factor in their financial failure later in life. They grossly underestimated future costs. They didn't learn how to manage their money properly.

In fact, people spent 90% of their time thinking about how to earn money. However, not even 10% of their time is dedicated to managing their hard-earned money. This is equally important.

One day, our active earnings come to an end. At that point, we will rely on the corpus amassed throughout our lives to generate passive income.

Learn how to manage your money prudently in order to maintain your lifestyle and future expenses.

✅ Learning must continue from the Womb to the Tomb.

Have you ever heard the story of a woodcutter who used to sharpen his Axe several times before cutting a tree?

✅ Keep shaping your Axe on a daily basis!

💎 Live as if you were to die tomorrow. Learn as if you were to live forever - Mahatma Gandhi

🔔 When was the last time you sharpened your skills?

Can we survive if all of our bodily fluids are soaked up? 💧

If not, how do our finances function when there is no liquidity? ⚡

We frequently underestimate the significance of Liquid funds.

Liquid funds are an important component of any portfolio because they provide safety, liquidity, and diversification.

a) Emergency Requirements: 📌️

We always take safety precautions while driving, such as wearing a seat belt in a car or a helmet on a two-wheeler.

An exclusive contingency fund, upto 6 months of our monthly expenses should be built and maintained throughout the year.

b) Rebalancing the Portfolio: 📌️

By realigning all asset classes once a year. Liquid Fund helps manage risk and improve overall portfolio performance.

90% of investors overlook this critical element. They disregard the significance of rebalancing. 😒

c) Opportunity Calls: 📌️

We can temporarily keep our funds in liquid form to take advantage of any future opportunities.

It has been observed that whenever there is a substantial market correction, we all miss out on a big opportunity due to a lack of liquidity.

When other asset classes do not perform well, liquid funds are always available to support our portfolio and meet our needs.

d) The Umbrella Fund: 📌️

Creating an umbrella fund that can be used for a variety of purposes such as

- Social Activity
- Philanthropy
- Gifts
- Appliances & Gadgets
- Personal Development, Learnings & Skill Acquisition
- Long-term Medical Care - since insurance cannot cover all medical needs.

This can be used as and when needed depending on the situation.

e) Psychological Protection: 📌️

Liquidity provides us with financial peace of mind in the case of an unexpected incident.

As a result, having a Liquid asset in our portfolio is strongly recommended.

💎 The purpose of liquid funds is not to generate returns, but to have funds available 24x7.

Always keep your Body and Finances hydrated! 🔔

How many and what types of liquid funds do you maintain in your portfolio?

Should we be concerned about market volatility? 👇

✔️ Today, everyone is connected, and any news takes only a few seconds to spread.

Any broadcast, whether positive or negative, authentic or fake, has an immediate impact, and the market reacts to it before we can analyze it.

How many times have you witnessed a sensational WhatsApp message or breaking news being forwarded multiple times in a group?

People do not wait to see if it is genuine or from a reliable source. We just want to get it to the next person ASAP.

The market is made up of such people who react immediately to any information that comes their way.

After all, we are social animals who value sharing! 🙏

Sharing inaccurate information can often cause more harm than good. 🔥

Research news is new weapons that are far more dangerous than any missile. It is designed to precisely target any brand, individual, corporate, politician, religion, or even country. ⚡

As a result, we cannot avoid market volatility. It is their primary characteristic and nature.

Can we, however, make volatility our friend?

The answer is certainly yes! 🌷

Rather than reacting emotionally to the news flow, which we can never stop or avoid, we must respond and act on what is logically correct for us.

✔️ This is only possible if we are aware of our investment goals and practice asset allocation on a consistent basis.

📌️ Market experts have demonstrated that asset allocation is responsible for nearly 90% of portfolio returns and not stock picks, sector selections, schemes, or market timing.

However, the issue is that we always see future possible corrections as a risk and all previous corrections as a missed opportunity. 😒

Be aware and well-informed about what we do, always keeping a long-term perspective in mind as an investor.

💎 Are we prepared to seize the opportunity when it arises?

Republic Day and Basant Panchami: What They Mean!

Today marks the 74th Republic Day, the day the Indian Constitution went into effect in 1950, and the transition of India from a British colony to a republic.

India retains a strong sense of national identity and unity despite its diverse culture, languages, religions, history, landscape, and geography.

✔️ The country's national motto, "Unity in Diversity," reflects this.

Similarly, in order to meet our financial motto, we should believe and invest in India.

📌️ We need to diversify our investment portfolio. We frequently mistake clutter for diversity.

📌️ We need to have diversified asset classes that represent growth, stability, and liquidity, just as each color in Tiranga symbolizes its motto.

📌️ Another critical component is to rebalance the asset classes once a year so that it does not overlap with one another.

Coincidentally, today is Basant Panchami, a festival dedicated to Saraswati, the goddess of music, art, science, and learning.

This is a time for new beginnings and renewal, and may the goddess' blessings bring knowledge, wisdom, and good fortune to those who seek it. 💎

📌️ We must continue to learn and grow throughout our lives.

What steps are you taking to strengthen your portfolio, and what new things do you plan to learn in the next 15 days?

Happy Repulic Day, as well as Basant Panchami! 🌹🌷