As India celebrates Harvest Season across the country under different names be it Lohri, Makar Sankranti, Magh Bihu, Pongal, Uttarayan and the wishes for the same across the social media platforms come to an end, I was trying to understand the connection between these festivals and Financial Planning.
For a good harvest, a farmer has to plan and do a lot of activities. It starts with preparing the soil, selecting the crop to be planted, sowing the seeds, constant watering and fertilisation, use of crop protection measures, scare crows, pesticides, constant weeding etc. After all this the crops are ready for harvest at a certain age of crop, and then comes storage and sale.
Let's compare this to the process of investing.
This too starts with preparing the groundwork for investing- doing KYC, Knowing once risk tolerance, risk profile, risk appetite, setting up online investing systems (preparing soil), Selecting the investment instrument, the share or mutual fund, bond, to be invested based on studies such as alpha, Beta, standard deviation, sharpe ratio etc to select the instrument (selecting the crop). Once the instrument is selected the actual process of investing, i.e. deploying funds into action via lumpsum or SIP investments (sowing the seeds), Once the investment starts it needs to be cared for, just like crop needs irrigation, fertilisation, pesticides, weeding, investments too need monitoring, advice guidance, corrective action depending on the market situation.
Above all like a crop takes time to grow so do investments, the benefits of compounding kicks in only with time. Let's look at what we call the 15 x15x15 rule of investing which means if you invest Rs 15,000/- per month for 15 years at 15% rate of return your corpus will hit Rs 1,00,00,000 (Rs 1 Crore), but here if you just increase the time from 15 years to 20 years your corpus doubles to Rs 2,00,00,000 (Rs 2 crores) . This is the real harvest that one can enjoy for his future.
Just as the farmer gets his harvest as a result of his consistent effort across the tenure of the crop, so does the investor, he too reaps the benefits of investing if he stays invested over a long period of time. So when investing all investors should think like a farmer and give time to the portfolio to grow.
Just to add, I would highly recommend that you sow some seeds today, Make some investments today so that you may be able to reap the benefits of the same over the next 5-10-15 years as per your investment goals and time horizon. I can help you select the seeds, sow the seeds, take care of the seeds and remove the weeds i.e. select the funds, help you invest and monitor your investments and take corrective actions in case of need.
At this juncture I would like to add the fact that you always have two choices
The first choice is that you can go through the above process on your own, now that you know the similarities between farming and Investing and that you know how patient and caring the farmer needs to be towards his crop, you can exibit the same towards your portfolio and grow your wealth
OR
The second choice is that you can have me by your side as your personal CFO, your personal caretaker for the crop and benefit from my vast experience of almost 27 years in the Banking and Financial services industry. At Bright Wealth Ideas, we have been helping investors create long term wealth for themselves and we would be glad to have you with us in this journey and also be a part of your wealth creation journey.
Connect with me to make a farm that suits your needs the best.
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