MULLA NASEERDUDDIN and HIS FINANCIAL PLANNER FRIEND

April 8, 16

MULLA NASEERDUDDIN and HIS FINANCIAL PLANNER FRIEND

Greetings from Hitesh! In our last post we said “The nearest description I can share about me is “I am a FELLOW TRAVELLER”. Like you, I am also on my own journey of FINANCIAL FREEDOM.” This message has touched the readers and they have appreciated our attitude. Thanks for being my regular reader.

I was reading a book and I came across a beautiful story of Mulla Naseeruddin and his Financial Planner Friend. Just sharing with you.

Mulla was a heavy drinker. He used to during minimum 3 pegs every evening. His family was against it. His friends were also against the same. But, Mulla was a HARD NUT to CRACK.

So, his FINANCIAL PLANNER Friend took a CHALLENGE. He met the Mulla and here is their conversation.

Friend:- Mulla, How many pegs you take daily?

Mulla:- 3 pegs.

Friend:- How long you are taking this?

Mulla:- 20 years.

Friend:- What is the cost of 1 peg?

Mulla:- Rs.150.

Friend:- So you are spending Rs.450 per day. Do you know how much you have spent in last 20 years?

Mulla:- No. Please tell me.

Friend:- Every month you spend Rs.13500 / every year Rs.162000 and for last 20 years you have spent Rs.32.40 lakhs.

Mulla:- So, What does it mean?

Friend:- If you have kept this money in RECURRING DEPOSITS or in SIP – you would be DRIVING in Top MODEL of MERCEDES Today.

Mulla:- Oh. So, I missed it. But no problem, by the way where is your MERCEDES?

Friend:- Shocked by the sudden question – his friend got up and said Bye dear. We will discuss this matter some other time

LOGIC V/s. TRUTH:-

If you are a MODERN investor as per my post on TYPE of INVESTORS – you would appreciate the logic. You would BLAME Mulla for wasting his fortune in DRINKING.

Listening to this kind of Talks or presentation – they pick up the LOGIC – but they miss the TRUTH.

Let me share some probable TRUTH of MULLA.

1.   He might be earning Rs.5000 per day and saving Rs.3500. Spending Rs.1000 on household and Rs.500 on himself. Now what would happen to your attitude towards MULLA?

2.    Mulla might not be interested in DRIVING MERCEDES. For him his PEGS could be more than a MERCEDES.

3.    If at all the MULLA is interested in MERCEDES – what is the GAURANTEE that MULLA would have Lived 20 years!! (From the first day he started saving as per his FRIEND’S advise!!)

4.    If at all MULLA lived for 20 years and invested as per his FRIENDS advise – do you think he would have got the ASSUMED rate of interest for all the 20 years? Have you ever seen RATES remain the same for 20 long years?

5.    Assuming Mulla got the MERCEDES at 60 as per his friends planning – will he DRIVE it for next 20 years? Will he live for next 20 years? Would it not have been better that he enjoyed his pegs for last 20 years, instead?

Above was probable TRUTH of MULLA. Now, let us deal with THE TRUTH.

We all have been told about SAVING from the DAY One. Indians are the highest saver in the World even today in % terms. We are saving 29% of our income. This is a GOOD LANDMARK when you look at the MEAGRE income of our people when compared to income in more developed countries.

Most of these savings have gone into BANK DEPOSITS and GOLD in past 68 years. Our FD rates were to the tune of 12% -18% per annum in the past for quire some time. Many schemes were doubling our money in 5 years during 1980s. Now, how many MERCEDES we have in India? If our FRIENDS argument was right – we all should have MERCEDES by NOW. India should have been the BIGGEST Market of MERCEDES, Isn’t it?

How SMALL investors are taken for a RIDE by such LOGIC?

“Investment should only be done out of your SPARE MONEY which you are not going to NEED in IMMEDIATE FUTURE.”

SPARE MONEY is that MONEY which is LEFT after your CONSUMPTION.

But many financial experts are advocating SAVING FIRST and CONSUMPTION LATER. Now, this leads to DIETING SYNDROME.

What is DIETING SYNDROME?

To reduce there weight many guys go on fasting or they start taking very little food. After some days they find that there weight have reduced so they go back to their old food consumption pattern. The results – they land up with more weight than what it was before they started fasting!!

Same thing happens when you start saving by avoiding your basic needs. When you see that some good sum is accumulated you just splurge into something, which you do not need at all!! This leads to two issues – you stayed away from your genuine NEEDs and you wasted your money on something, which you don’t need at all!!

Looking at your MONEY, many times your friends/relatives takes this money on LOAN by promising to return it and it never comes. Sometimes they invest in chit funds or company like SAHARA and you know what happens after that.

I am in FAVOR of ENJOYING my money first. When you enjoy money first you are giving priority to yourself and not to MONEY. It proves that you love yourself more than your money. When you love yourself more than your money – believe me you will find out 1000s of moneymaking opportunities!!

Whether you like or not - Investment is only for these kind of investors only. First REACH to that level and come to the MARKET. In my experience, I have seen Half HUNGRY investors end up becoming WORST TRADERS or INVESTORS. They come fast and they go equally fast out of the market.

What about SMALL SAVINGS GUYS?

Saving is a compromise invented by middle class guys. They don’t have major source of Income and they don’t know science of investing. What’s more they are not interested in learning also.

Deep down this is an ANTI - LIFE attitude. I don’t know about you. But if you find that your past generations have lived a life of compromise like this – at least you TRY to come out. At least you take the first step to learn the art of investments.

Incidentally, today is GUDI PADVA – a NEW YEAR for many of INDIANS. Make a NEW BEGINNING from today and also REMEMBER – ALL LOGICS are Not TRUTHS. Truths NEVER needs a support of LOGIC. It is THERE. You just have to be aware about it.

Make your CHOICE.

Follow me on Twitter @hiteshmparikh /  WhatsApp - +91-9869425399 / www.hiteshmparikh.com

Live With Passion…Invest With Passion.

Hitesh Parikh.

www.hiteshmparikh.com