“All within budgets… finally… hence approved!!! Good job done!!!” announces the regional manager. “Let’s now proceed with the recruitment”, says the Sales Manager to the HR Manager. After 3 days and about 20 gruelling man-hours of work, the recruitment plan was finalised for the launch of their new product. Everything appeared to be in order; assumptions regarding achievement of sales targets, revenue targets, payment schedules, production support, marketing incentives etc. etc. Both managers were ecstatic on their planning and strategy and decided to celebrate the future bonus which was now in sight and a couple of months away.
A typical story for most of us – Long hours, a lot of hard work and a great sense of achievement! But there is one perpetual agony that, at the end of each month, it’s the same amount that comes to the bank. It improves a bit every 12 months or so, but it is never enough.
‘I just hope I can buy “that thing” one day… I’d be so happy’. That’s a lifelong yearning. Can it be changed? Let’s investigate.
We have 2 fundamental choices to make;
1. Be driven by financial situation / Let the financial situation drive us
2. Drive our financial situation
The first is very easy because we have to do nothing. The second can be unbelievably complicated! Hence as human tendency is, we always choose to tread the easier track.
Let’s forget about all that planning…lets go out, go to the movies, buy that cool PDA & camera phone, have a drink, simply enjoy, and think about planning later. There is lot’s of time to plan in future but the current time is just to “work hard” and “party harder”. Smart people that we are, we forget that we have to “plan money hardest” because that is critical. But as I said, it’s far too complicated, so we tend to ignore. Let’s probe deeper…
We always do meticulous planning if it is work related, or a holiday or simply a party for friends. But we don’t we plan our money… why? There can be lots of answers to this but let’s first consider blasting some common lame excuses;
Business persons are in a slightly better situation than the salaried because they can relate to the concept of calculated risk. For them getting into business was itself a risk.
These days earning money is becoming easier but managing and making it grow is getting more and more difficult.
The first signals are felt at the time when spending each rupee becomes consequential. Time starts to run out by the time one reaches 40-45 years of age, and there is little time left … How would we maintain our current lifestyle once the income ceases? To make matters worse, we also want to retire early these days…credits to changing mindsets!
That’s the time the financial noose seems to be tightening and the call of the hour then is for drastic and immediate measures. If there is any mistake made at this time, the situation in later years can be grave.
We all have come across simple mathematical simulations…
Rs. 2500 invested each month for 25 years ….
At 9% it can yield more than 25 lacs,
At 12% it can yield more than 45 lacs and
At 15% it can yield more than 80 lacs.
Now it’s just a question of execution to get the above. A good financial plan can ensure that life is enriched, money is optimized, spending & lifestyle do not suffer and most importantly you now have control.
The easiest thing to do is to just start thinking about planning, then get a roadmap prepared and the rest will all fall in place.
So, start thinking!