Integrated personality and success in your financial life

I met a young investor several months back wanting to make a start and he decided to invest in an ELSS scheme. He took the KYC forms and promised to get back in 2 days. Months passed and even after reminders, there was no information, till last week he called and lamented that a huge amount of TDS had been cut from his annual bonus received in the end of Jan!! (He has delayed in making the investing and did not submit proof to his HR)

Now, another investor: A young lady, at her first job discussed a plan for savings and investment last year and started with an SIP of Rs 2000.00, promising to increase SIP by Rs 10000.00 after a year. She has just come and actually made the NEW investment even though her increment was not as expected. Was truly impressed when she said that she would not let anything get in the way of the plan and would cut unnecessary expenses.

You can already guess who has a greater chance of achieving total financial freedom!! The difference in the two investors is the heading of this post – Integration of one's personality!! - Integration of the various layers of personality is a very very important factor in achieving success in ANY field let’s see how this works. First, what are the layers of personality referred to here?

Layers of personality

Intellectual layer: All of us individuals have an intellect (brain!!) which receives information, processes it, learns new facts, discriminates between right and not right and makes a decision. Planning, analysis, deciding processes etc are the functions of the intellect which makes decisions. So deciding on how you invest, how much to invest, planning our budgets etc. etc. are a process of the intellectual layer of our personality. (Alas, many do not fully use their intellectual abilities and just amber along, which is the subject of another post)

Now, this decision made by the intellect needs to be implemented!! In between the decision and the implementation come two more layers of our personality – our MIND (mental layer) and our BODY (physical layer of our personality). The mind is a fickle thing, has strong likes and dislikes, needs, desires, wants the easy way out (jugaad), is pulled by the various things of beauty and novelty in the world around! It is very strong and PULLS the body along with it. It is often working at a tangent different from the intellect.

To give an example, you have decided to take an early morning walk and set the alarm for 5.30 AM. The alarm goes off. Invariably the fickle, pleasure loving mind will want another 10 minutes more of sleep!! This snooze thing is a real killer and you never get up. But note what has happened. Your mind and body are opposing the decision of your intellectual layer!! Let this happen a few times and you will NEVER get up early. The same is the story with all new year resolutions!

Integration of our personality – when the intellect, mind and body are aligned

It’s easy now to see what we need to do but most difficult to implement. Integration of our personality is the complete alignment of our decisive intellects, our minds and the body. If the intellect works out a plan or even decides something small, the MIND SHOULD agree to implement without excuses and the body should be in alignment working towards our objectives, goals.  If not done, it will weaken your personality as you consistently negate yourself.

When investing, we often decide an asset allocation. If the market is shooting up wildly, see how our minds go crazy with dizzy excitement and does not implement the decision, justifying it instead - giving or making excuses!!! Looking objectively, you know this can be harmful. Many such examples can be given.

Exercises to practise: Simple methods have been given to practise integration of personality. Just make a start by being on time – ALWAYS. Being punctual is a proof of integration. Another good exercise to follow, is to positively give up some favorite food for a month and ensure that the craving mind and body follow!!

Successful living: The bottom line is to ensure that the discriminating, thinking intellect, the mind and body are in perfect alignment and harmony. Look around and see all instances of success. They did not happen purely by luck. The individuals have been decisive and with the different layers of their personality completely aligned towards their objectives. The adage – united we stand, divided we fall applies to layers of our personality. Ultimately it is we ourselves who are our own friends and our own enemies.

If you wish to invest in mutual funds through me, write to me . You can also message me on twitter @Invest_mutual

Mutual Fund investments are subject to market risk. Please read all scheme related documents carefully before investing.

Empower Yourself - SM, a great tool you can use

The IFA Galaxy 2017 Annual Summit concluded yesterday and the theme was LEAP - Learn, Evolve, Adapt and Prosper.  The below is my piece published in the Annual Souvenir.

Empower yourself

(Social Media - a great tool you can use)

Many years ago, (maybe 20 years) as I was driving down Mount Road in Chennai, I saw a huge hoarding with an advertisement for the Economic Times that has I remember and recollect often. It had a picture of a ferocious canine looking down menacingly at a little cat that was sitting surprisingly calm, unafraid, staring right back! The caption of the advertisement read – THE POWER OF KNOWLEDGE. The picture made me stop driving and look again. The dog was chained to a post and could not move and the little cat was aware of it. This knowledge gave her the power to sit calmly and stare back!! Made me laugh then, but this has stayed with me.

The simple message from this – Knowledge IS power! Empower yourself through knowledge. In whatever field we are and whatever profession we follow, we can grow, evolve and adapt only if we have a continuous learning process in place.

Social media – a means to empower ourselves

As professionals, it is imperative to read, stay in touch, get information and in depth knowledge about every aspect of our business. I need not mention the various sources of getting information and means of knowledge, but wish to emphasize here on using social media as a wonderful means to empower oneself. I was surprised that someone suggested to advisors not to spend time on social media! We have five sense organs to gather knowledge from the world outside. I consider social media as a sixth sense organ we can use to get access to information. Those who do not use this great tool to learn and get ideas are simply shutting out one means of knowledge.

Bloggers today write on a range of topics - from personal finance basics to in depth analysis of securities, from detailing products and methods of investing to behavioral finance. These will give you far more knowledge than anything you read in the financial papers. Twenty odd years ago, the above advertisement pulled me to the paper, but in general, mainstream media often does not measure up these days with shallow and biased analysis. These are shared on various media.

Many on social media often mine data and give in depth commentary of major events like the budget which is often lifted by print and TV media. Media now-a-days lifts tweets of leaders etc. and presents this as news! In fact, the world gets to know future US Policy from the US President’s tweets only!    Unbelievable is the fact that information is available absolutely FREE to us when one pink paper is charging to read its stuff online.

In additions to the blogs we follow, twitter and facebook are simply a must to get a pulse of what is happening in your profession. Conversations of investors, commentators and analysts give a great insight on events and on regulatory developments. Unlike mails, you will almost certainly get a response on social media to a query you put to an expert. And, it is instant. I mean, imagine getting almost instant responses from a Professor of Finance at a Management Institute or from a fund manager! I have learnt more seeing the approach of fellow professionals on social media than from any relationship manager.

Are we clued on to the thoughts, needs of investors and clients? If you aren’t using SM well, you are simply missing out. Responses to a simple post on FB will give you more information that you think.

We are in a situation where the mutual fund industry is growing much faster than we thought it would. Investors are maturing in their outlook and there are big changes coming in the way the advice is given. Products are manifold. My simple message – among the various sources of knowledge, learn to use SM well. It will serve you well in the years ahead!

Budget speech - some highlights

Some highlights from the Budget Speech

1. Total expenditure 21.47 Lakhs crores 

2. Increase in Direct Tax collection by 34% after demonetisation.

3. Holding period for LTCG for Land & Building reduced to 2 years.

4. Carried forward of MAT Credit for 15 years instead of 10 years.

5. 5% tax exemption for companies having turnover below Rs 50 crores.

6. No cash transaction above Rs. 3 Lakhs will be permitted.

7. Maximum Donation receivable from unknown source by pol party will be Rs 2000.00

8. Change in period of limitation for scrutiny assessment.

9. The tax rate for the slae between Rs 2.5 lakhs and Rs. 5 Lakhs has been reduced to              5% 

10. 10% surcharge for assesse income between Rs 50 Lakhs toRs 1 crores.

11. Simple One page Income Tax return proposed.

12.  IRCTC to be listed

13.  Corporate tax for small corporates - MSME with turnover upto Rs 50 crores will be 25%

14.  People not filing taxes for the first time will not be subject to scrutiny

15.  Huge focus on infrastructure spending and poverty alleviation

16   Base Year for indexation now 2001 instead of 1981 for long term capital gains

17.  Capital gains period for real estate reduced to 2 years

18.  Fiscal deficit contained - at 3.2% of GDP