Browse Month: July 2017

Importance of Education in LIFE

Importance of Education in LIFE

Today’s post is about an important topic – “Education”. We at WS strongly believe that education can bring about drastic change in one’s life. Education is one of the most important aspect of life. The post is by my dear friend SG.

“Real education enhances the dignity of a human being and increases his or her self-respect. If only the real sense of education could be realized by each individual and carried forward in every field of human activity, the world will be so much a better place to live in ” A. P. J. Abdul Kalam



Such a trivial topic, right?

Does someone really need to write something on this topic? Maybe not. But again, throughout our LIFE we keep missing all that is trivial and natural and keep running after complicated and artificial.

When you are hungry you should eat.
When you are thirsty you should drink.
When you are tired you should rest.

Aren’t these trivial things. But in our day-to-day LIFE do we do this?
Are you eating when you are hungry?
Are you eating only when you are hungry?
Are you sleeping when you are tired at night or you gulp a cup of hot coffee?

Our lifestyle today is full of contradictions. We believe that trivial things will lead to a trivial LIFE, and I don’t wanna live my LIFE trivially. I want to live my LIFE on my own terms, a full-fledged fulfilling LIFE and what we end up doing is breaking many rules of nature. Trying to take control of our LIFE and when we reach to middle age we are already out of LIFE, ridden with life threatening diseases, LIFE energy all squeezed out and hence living on medication trying to extend our stay here. We had paid the cost of going away from trivia and becoming a robot in laboratory.

You may be thinking already, what is this got to do with the topic, but there is a connection. To learn\know is a natural instinct. As soon as we are born, our learning process starts and it ends when one dies. Learning is a continuous process also it is an individualistic process. It does not necessarily need a teacher. When we reach to school age we face our teachers, very important people in life and from there our education starts. I know we say mother is first teacher however there is a important difference. In English we do not have exact word for Guru and mother is first Guru of every child. She is our eyes and ears until we come to senses in this world. Parents are whom we look up to for every doubt and problem until we face school.

Although education is a general term, it is mainly used for academic education. In last 50 years the speed of science and technology inventions has increased geometrically. It has triggered many things to be automated, i.e. handled by machines and devices. This has caused reduced human dialogue and increased need of technical literacy. We are no more in the era where a person who can do signature or write his\her name can be called educated. Education today has got many aspects to it and is not limited to earning a living. One needs to be aware of things like banking, operating ATMs, operating smart phones, communicate with customer care guys. Apart from this one also needs to be aware of the dangers like fishing, vishing, smishing etc. Even the educated urban people are falling for these malicious things one way or other. That means level of education and awareness is far behind what is required.

Hence the necessity and importance of all-round education has increased significantly in last 20 years I would say. If you can not write 10 sentences i.e. fine however you should be able to use know and provide your Aadhar No, PAN No, bank account number accurately wherever required. So not being educated is not an option any more. That’s why we have started considering education as a basic need for survival in today’s world.


With internet revolution, world has become smaller and also smarter. With ocean of knowledge available at a mouse click, internet has power to educate anyone on any topic, only prerequisite is motivation. With companies like Google contributing hugely in linguistic R & D, websites have now been made available in local languages. You can now do banking in local languages. This has opened the doors and opportunities for people who do not know English. Still education remains the basis and key to your success.

Success is a contextual thing and hence definitions would vary however, to put it simply, if you have goals in LIFE, to achieve most of them you will need some sort of education. Level of education may vary. To put it in one sentence:

Even if you hate education you won’t be able to live without it.

An interesting relationship isn’t it?



Seven Baby steps towards financial freedom

Seven Baby steps towards financial freedom

Do you know how marathon runners are trained?

If someone thinks he should run a marathon, and goes for the run very next morning what will happen? It will be a disaster for him. Right?

baby steps to financial freedom


A marathon runner must start small initially with 1 kilometer, 2 kilometers run and so on. He has to gradually attain the 42 kilometers mark. He has to gradually build stamina, develop endurance, have many practice sessions before he hits any competitive race.

All this happens over a period of time. This can not happen overnight. Hope you all agree with me on this. A runner has to set small milestones first like a 5 kilometer run, 10 kilometer run, a 25 kilometer run and so on. Once all small milestones are reached, a runner can confidently go for a full length 42 kilometer marathon.

Same is with financial planning. If you are at ZERO level or you have just started journey towards setting finances in order, thinking about financial freedom will look impossible to you. Journey towards financial freedom is a long journey. You have to create numerous milestones which will make the journey also interesting and you will always be motivated throughout the journey. Achieving these small milestones will also give you a sense of accomplishment in the course of the journey. Not to forget, these milestones will also keep you away from backtracking.

Below are some important milestones you can create in order to stay focused and not to lose interest while journeying towards financial freedom. The order is important as you can not run a full marathon without conditioning yourself for a half marathon. Isn’t it?


climb to financial success

Step 1
Start making a budget. Write down all expenses month on month. It is important. It will help you in knowing your spending  pattern.This will also give you an idea about your investable surplus – the money which you can utilize for investments moving forward. (How to make a simple budget)

Step 2
Save about 6 months of expenses in cash or liquid funds. This amount should be easily accessible to you. This is your emergency fund. This is meant only for emergencies like some medical attention or in case you lose your job. This will keep you afloat when you do not have any income to take care of expenses and will help you in not falling in debt trap during any personal emergency.

Step 3
Gradually but steadily pay off all your consumer debt. Consumer debt is considered as a bad debt for an individual. Debt for TV, appliances, vehicles, furniture etc falls under consumer debt. One these debts are tackled, you free up a large monthly investable surplus.

Step 4
Start saving for retirement. Most of us will not receive any pension or annuity. Keep somewhere around 25%-30% of your monthly salary as your investment for retirement. Make a good balanced folio and start investing. Your folio can be a combo of Debt, mutual funds, PPF etc.

Step 5
Start investing for your kid’s education. You can dedicate an equity linked mutual fund for this. Also you can open a PPF account when your kid is born and maximize investment into it every year. A combo of PPF and an equity linked mutual funds can do wonders for your kid’s future.

Step 6
Pay off your mortgage/home loan. This will remove a big burden from your head. It is good to feel debt free. But this is little tough as usually the amount is quite high. But I strongly recommend you to do this as paying off mortgage will free up a huge chunk of money for you as an investable surplus.

Step 7
Keep re-adjusting your portfolio once in a couple of years and enjoy life. Keep reading, pursue your hobby, keep traveling but remember that your money has to outlive you.

These are small steps. You can start any time, at any age. Important is you make a START.

Happy investing !!!

Wealth Mantra: Buy assets and avoid liabilities

Wealth Mantra: Buy assets and avoid liabilities


Is there any formula which can make me or someone like me wealthy?

Keep on accumulating assets and keep on avoiding liabilities – This is a fool proof mantra to become wealthy.


Asset and liability

OK, but can you elaborate as I can not understand this? The terms liabilities and assets are too technical for me.

Don’t go into too much technical details about ASSETS and LIABILITIES. To keep things simple and easy to understand let’s consider asset as something that generates a positive cash flow regularly. This is something that was explained by Robert Kiyoski in his famous book Rich Dad & Poor Dad. Also, we will consider anything that takes money out of your pocket as liability.

The above assumptions are quite simple as you have a very clear demarcation between assets and liabilities. Let’s scan through some of the common items and check if they add up as your ASSET or qualify as LIABILITY to you.

I am sure like everyone you also must be having a strong belief that your house is your biggest asset.

Yes, I have a big house with a big monthly payment going out against the home loan/ mortgage I took out to purchase it. It is indeed the biggest asset I have till date.

Keep our initial definition of ASSET and LIABILITY in mind. Let’s go through the expenses associated with a house.

  • You take out home loan/mortgage to buy a house. You pay processing fees, lawyers fee and several other charges while purchasing
  • You pay monthly maintenance charges to Association/Society for the upkeep of the common area and housekeeping charges for the common area
  • You pay sinking fund
  • You pay annual property taxes
  • You dole out money to keep the house in proper shape – maintaining cleanliness inside the house, make sure all taps, fittings, fixtures etc are in proper working condition.
  • You pay money for the repainting job every couple of years

The list can be pretty long. If you see, every single head mentioned above results in money going out of your pocket. Now if we go back to our original definition – it says anything that gives you regular return or puts money back into your pocket qualifies as an ASSET.

Now here we have our house which is not fitting in the definition of ASSET.

Sure, you can say that house price will appreciate in due course. But the appreciation can not match the kind of money that goes out of your pocket month on month to maintain the house.

So the house is a kind of liability. To counter the liability factor, one must buy the house which is of right size. The house which fits your need in terms of space and pricing. The moment you buy a bigger house than you need, money starts going into drain. Here I would like to add that if you have a rental property, then it is your ASSET not LIABILITY.

Oh, I was under the impression that I have a big house and it’s a big asset for me. Your arguments seems to be logical.

Let’s take CAR now:

It is said that the moment a car comes out of a showroom, it loses about 15% of its value.

On top of this, your car consumes money in

  • Fuel
  • Regular maintenance, oil changes, servicing etc.
  • Car depreciate with the passage of time
  • Wear and tear of tyres, other parts
  • Annual insurance premiums
  • Road tax

Here again we see that the car is consuming your money regularly. Hence your Car is also your LIABILITY. The takeaway here is unless you are super rich, don’t buy a bigger, expensive car. Remember a car is a mere tool to take you from point A to point B. So here again buy what you need, not what your neighbor drives. More details can be found here – Your car is not your asset


Hmmm sounds right. What about the items I owe like my belongings etc?

Now list down all your belongings. They are your LIABILITIES as they lose value over time. Be it your furniture, appliances, gadgets, books, DVDs, gaming devices etc. All depreciate. We have seen it earlier too here 

liability is bad

You have listed down almost all my possessions under LIABILITY column. I am now curious to know what qualifies as ASSET?

  • Your assets include your investments (FD/RD/ULIPs/Mutual funds, shares, ETF, Bonds)
  • Any commodity (Gold/ ornaments)
  • Collectible items
  • Art (paintings etc)
  • Rental properties
  • Cash you are holding

All the line items listed above generate income over a period of time. They put money into your pocket regularly so they all classify as your ASSET

The key here in accumulating assets is to make financial goals, stay focused and never crib about your income but keep investing regularly.

Now, let’s see something interesting based on the classification of ASSET and LIABILITIES. Let’s see what poor, middle class and wealthy people do.

Poor: They mostly own liabilities and keep spending on feeding their liabilities.

Middle class: They have some assets but they keep on buying liabilities and spend their chunk of income in feeding their liabilities. They avoid investments and usually spend money to buy and maintain things they don’t need.

Wealthy:They generate a lot of income from investments and keep reinvesting. They accumulate good amount of wealth which can be passed to their next generation.

Now financially independent class: This particular class has plenty of good assets and income from investments is enough to take care of all their expenses. They constantly look for investment opportunities and never averse of buying good assets.

Bottom-line is one must keep buying good income generating ASSETS and avoid LIABILITIES like plague. If you stick to this, none can stop you from becoming WEALTHY. As you go on accumulating good assets, you get more freedom to take calculated risk in order to go for higher gains.


Happy investing !!!