Author: Aman Soni

The lessons learnt from the 2020 pandemic.

This was a time when every country was facing its own challenges, be it in the field of economics or politics. For all generations who were witnessing a pandemic for the first time, it was a new culture of  ‘work from home’ that they were thrust into. The world was at a pause and that was your time to get a headstart.

The underlying message here is that we should make the most out of this new working culture as it gives us the advantage of a certain level of flexibility. We should also be more empathetic to other business providers as we realise various bottlenecks they are facing right now.

Personal finance and its management is a crucial skill one should possess in these challenging times. Do you want to invest long term? Or do you want to be a trader? Or do you want to manage portfolios?

A professional trader will be essentially glued to a screen from 9 to 3:30 and track the markets as they move.

But long term investment works in a different way. Our methods of investing will vary significantly from a portfolio manager. He will value the stocks and research about the company’s management. He will further make his financial projections on this company.

What are the different instruments we can put our money on?

• Equity shares- Putting your money in companies. There are 3 types of shares –  large cap, mid cap and small cap. Large cap companies have a huge market share and valuation. Similarly, mid cap companies have a smaller market share and small cap companies have the smallest type of valuation.
• Large cap companies are often less riskier than small cap companies as they may have more corporate governance, better reporting and higher bargaining power.
• Equity has 3 ways of investment- mutual funds, direct stocks and ETFs. Mutual funds houses collect money from multiple people and then invest in stocks with the help of portfolio managers. Exchange Traded Funds have lower administrative expenses compared to mutual funds and allow stocks to be invested in a bundle.
• Fixed income security are the investments that give you a standard, regular amount of interest. Provident Funds give you tax benefits. Term insurance has lesser premiums and better cover.
• Liquid funds will be unaffected by changes in market interest rates whereas long term funds block your money for a longer time and are likely to be affected more. Before investing in these funds, be careful to check if they are government or corporate because that defines their riskiness.
• Holding too much of cash doesn’t make sense as the economy faces inflation.
• Gold is a better investment if kept in a demat form as it reduces the storage costs. Treating jewellery as investments is not a good option.
• Talking about real estate, having your own house saves you a rental expense and can be considered an yield of a kind. Having your own home will also give you a sense of security.
• Hedge funds and private equity companies are for high net worth individuals. Hedge funds are for risky investments and private equity firms are ones where the common public cannot invest.

We must remember that it is important to diversify our portfolio – do not put all your eggs in one basket.

Thumb rules while making a portfolio:

• If my age is 29 years, 100-29= 71% of my money should be invested in equity and the remaining should go to fixed income. Plan your investment according to your expected expenses.
• Do SIPs and bulk payments in small and mid cap funds.

In conclusion, one should do his/her own research as their financial situation is at stake here. It is important to grasp the reality of these concepts and make your decision based on them.

“You’re the sum total of the books you read and the people you surround yourself with.”

This is the era where we are susceptible to an outstanding amount of news material – and fighting fake news is a challenge. People are influenced easily by the attractive prospects circulated on social media and try to extrapolate outliers.

Sharing my thoughts on how to not buy the wrong dream:

1. Do not take advice from the wrong set of people.
2. Do not buy anything and everything that is being sold to you on an EMI. Only two kinds of borrowings that are acceptable are education and home loans. Do not fall for the concept of luxury that people hype up on the internet.
3. Try to follow those people who push you to work harder, who push you to work more, who push you to do better. This is going to make you confident and avoid slipping into depression. Our emotional quotient should be very, very strong. Say NO to people who are pulling you down.
4. Do I have the right reasons to start my own start-up? Do I have the idea? Do I have the talent and skills that I can capitalize on to become an entrepreneur? Ask yourself these questions.
5. Do not try to impress people on social media.
6. Don’t fall for people who sell you shortcuts and false dreams.

For a detailed description please find the video below!

Sharing my thoughts addressing a panel discussion at Mithibai College

Q- We’ve always heard that failures are stepping stones to success. But how do you deal with failures?

A- After I got a rank in CA inter, I couldn’t get an interview with any of the Big 4 auditing firms. That was my first taste of failure. It was not my fault and I was angry.  But I did not stop there and moved forward with my college and teaching job. I was later not shortlisted for the CA campus placements as well. But I eventually got into Cairn India and learnt amazing new things that played an important role in my career. This helped me build my confidence and it included an exceptional level of hard work. The problem with failure is that there is a severe lack of patience. Secondly, students receive too much misguidance these days.  Thirdly, there is a problematic culture of online comparison. Fourthly, there are too many distractions for them.

There should be a certain amount of seriousness and discipline instilled in students in order for them to succeed. The first step in doing that is reading the Bhagavad Gita. We can only be happy if we are competent because we have a certain level of confidence and security in ourselves. Labour is not equal to sorrow. Hard work is the only way to be fully satisfied with oneself.

Which is why, you should always Invest in Yourself. 

For a detailed description please find the video below!

During the pandemic, fear and stress had seized our minds. While we are still reeling under the repercussions, staying calm and positive is what will get us through this time.

Here are a few ways in which you can do that:

• Reading the Gita: It gives insights, knowledge and also provides enormous life lessons which are useful in today’s tough times.
• Try to live a simpler life and find available alternatives for things on your wish list.
• Create a good margin of safety financially; it is better than living on the edge. The fear of losing more will reduce drastically.
• Having a strong sense of self-confidence is the key to everything- this could be achieved by holistically developing your skills.
• Having a strong value system and a disciplined life will help you stay calm and focused during these times which are still quite uncertain
• Keep moving and keep growing. Sitting in one place for the whole day will end up creating more stress, instead, keep the work on, stay busy and keep learning. Get some movement in. The adrenaline rush is known to alleviate stress.

OVERVIEW:

Sitting and binge-watching your favourite shows and still feeling stressed and depressed?

The main reason is movement, be it in physical terms or in terms of developing yourself.

Continuous growth and self-discipline are the two main factors to deal with COVID-19 stress and anxiety issues.

“We don’t have to be smarter than the rest; we have to be more disciplined than the rest.” -Warren Buffett

Finding it difficult to focus while studying or doing a particular task? Easily distracted by your phone and/or social media?

Well, you are not alone; it is an issue with almost every student.

Focus and self-discipline go hand in hand, without one, the other fails.

Self-discipline, like everything else, is a practice. Not every day will be perfect, but each day you inch closer to focussing on something just a little bit more. And before you know it, it becomes a habit. I have summarized a few theories and tips which will help you achieve the same.

How to focus amidst the distractions?

• Your brain is not meant for multitasking; do one thing first and then the next.
• Studying or working at a stretch will result in productivity. Think about how good sleep is when you sleep for a couple of hours at a stretch. Reward yourself with a 10 minute break to rest your brain and avoid brain fog.
• De-clutter the place you are studying in.
• Try removing as many social apps as you can from your phone- lesser the notifications, lesser the distractions.

How can you be more productive?

• Having a proper schedule of how to begin and end your day is a must. Being disciplined in what you do and maintaining a timely schedule will help to attain your goals.
• Try avoiding sugar. Have more water. Sugar crashes can lead to energy crashes which leads to a massive loss in productivity.
• Stay away from the screen in between the breaks to let your mind rest. Go for a walker take a 10 minute power nap instead.
• Everyone is physiologically a morning person, and hence makes your routine accordingly:

4) Everyone is physiologically a morning person, and hence makes your routine accordingly:

-push your readings at night, so you can stay away from your phone before sleeping.

-do the actual hard work like studying in the morning and then continue with work.

5) Making a schedule for yourself makes you feel like you have spent the day wisely and invested in yourself constructively.

6) It is important to surround yourself with people who help you focus more, rather than pulling you down.

7) Force yourself to focus and discipline, only you can bring a change in you, no one else can.

Remember: To achieve something, sacrifices are unavoidable.

“Cause I know how it feels, so yes, wait for your rewards” ~ Aswini Bajaj

As the pandemic continues to pose the near term challenges for the youth, expectations are most likely to meet the reality on the ground and there is more anxiety and nervousness among the students and even working professionals about placements, jobs and bonuses.

Aswini Bajaj, mentor and consultant, talks about his personal experiences and a journey through hardships that didn’t pay him early rewards.

“As a millennial myself, I understand that when you work so hard, you expect jobs and when you don’t get the return, you feel bad and discouraged. Even I expected my rewards after my CA final got over, but surely it didn’t turn out how I wanted it to be.”

It’s a hard time for every bread earner especially for those who’ve just begun their career and feel that there are a lot fewer opportunities. Things will take time before you reap the actual rewards.

“I would recommend all young people out there to just not give up. It took time for me to set up as well. You have to be firm on the ground and learn as much as you can. My learning curve is still steep and I still face cold responses to messages. But you have to remain patient and just keep going about it.”

“You will get your returns in peaks and valleys. How you prepare yourself in the valleys will determine when and how high a peak you are to achieve.”

Giving up in difficult times will not generate any new ray of hope, so it’s better that you build yourself during this phase and keep working hard for there is never a shortcut to real success.

Tune in to listen to this podcast to know those unexpected ups and downs in his life and what it requires to beat the initial days of wait, struggle, and rebuilding from scratch.

Worried or stressed about managing time between full-time work and studies? Don’t worry you are not alone.

Here are a few tips by Aswini Bajaj,trainer and consultant, who has been balancing both for X years:

Find your ‘Why?’ – You need to be sure and motivated enough to give that extra time to your studies and cutting down on social life. The mantra is: To achieve something, you need to compromise on something.

Keep the people around you on board- People around you should be aware of the fact that you will not be able to devote much time to them and they are supporting this decision of yours as they have your best interest in mind.

Value your time- When people around you will see that your time is valuable, they will start valuing it too.

The key to success is discipline. Not all days will be good days – you will have to handle stressful days positively as well.

To gain insights into how you can be more efficient and productive, tune into his latest podcast.

Introverted and scared of public speaking?

Wonder what skills you need to stand out from the crowd and use that to enhance your employability?

Aswini Bajaj, a trainer and a consultant, shares some important points to follow on his latest podcast.

First, read, read and read. It can range from fiction to blogs to non-fiction – anything that improves your knowledge and broadens your horizons.

Second, know your basics well – especially IT skills. Learn various tools which will help you with your work. Various shortcuts, being adept at MS Office and plethora of other optimisations tools will help you gain that edge.

Third, this is an era where you need to make your work talk and for that, develop your communication skills and your confidence by building up your knowledge base again with the help of reading.

Next, you need to be street smart to know what to do with the lemons thrown at you.

Lastly, it’s very important to have the right set of people and mentors around you.

To know more about which books or blogs to read to develop yourself, tune in to his podcasts.

Price

-The price we earn per hour is generally low in the initial years

-The initial price depends primarily on our education and basic skill set

-It increases over time as we gain experience, mature and also as and if we acquire skills while working

Quantity

-The number of productive hours is relatively fixed with a max 24 hours/day(impractical, of course)

-Declines as we grow older due to a drop in our energy levels and/or as we accumulate wealth we tend to spend more time on leisurely activities.

-In the beginning years to learn, experience, and to earn money (Since ‘P’ is low), we work more hours But sufficient hours are needed to learn in order to increase ‘P’.

-As ‘P’ increases, people become complacent – reduce the learning hours significantly – find frivolous ways to waste both time and money and therefore hit a plateau.

Total revenue

-Lower in the beginning years

-Increases over time if you can increase ‘P’ and ‘Returns’

-Hence manage your time and savings prudently

Expenses

Social media has taken consumerism to another level (Ironically, an influencer’s post about decluttering could be sponsored by some useless product). Be careful to spend on what makes you happy and spend on things you can use to optimize time and increase your productivity.

Savings

-Shall be very low in the beginning years

-The problem arises when people save the same proportion of the increase in their income. For example, if your current income is 100 and you save 20. When your income increases by 30, you do not save only 20% of 30 = 6, but probably 70-80% of 30. Increase your standard of living slowly so that you are able to grow sustainably.

Returns

– Many wannabe ‘stock traders’ and ‘investors’ start focusing on their investments instead of their core profession/business. One assumes that by superficial analysis one can outperform the markets or the managers and the job is anyways going to pay ‘P’. The problem is that you are much better off spending your time ‘Q’ in focusing and improving yourself to earn a higher ‘P’ than to enhance the returns on your investments. Even if you could hypothetically be able to generate an extra return of a couple of percent, it would be far more fruitful if you focus on your core work profile, excel in it, rise quickly, increase your total revenue and thereby total savings and investment. But quite a few end up exhibiting a lot of biases in their decision making.