Mathi visited that financial advisory firm, at the suggestion of his friend Kittu.While explaining to Mathi, the services provided by that firm, Kittu said, "They will ask for information like the number of people in your family, their age, gender etc. Then they will ask you to specify what education you plan to give your children, at what age they are likely to get married and at what age you will be retiring from your job etc. After that they will work out what sums of money you will need at various points of time in the future for your children's education and marriage etc. and the sum of money you will need on your retirement for generating the income you and your wife will need till your hundredth year."
"How is it possible? How can they predict the expenses for education, marriage etc. after 10,15 or 20 years from now? And how can they arrive at the monthly expenses of my family during the years after my retirement?" asked Mathi.
"They will workout the figures assuming an inflation rate of 8% per annum. They have done this exercise for me."
"Ok. What is the use of having this information now?"
"Knowing what sum of money we need at various points of time in future, we can plan how much money we should start saving from now, what return we can expect from various investment options etc."
"Fine. They tell me what sum of money I should start saving every month. What if I cannot save that much out of my income?" asked Mathi.
"That is where I got stuck!" said Kittu, with a sigh.
"How much do you charge for this report?" asked Mathi.
"This is a free service. We have spent several lakhs of rupees to develop this software. But we are offering this service free of cost for the benefit of the public" said the executive at the financial advisory company.
"But, what benefit do you get out of this service?"
"As I said, we are doing this as a service. We will recommend some schemes for investment. If you want, you can invest in those schemes or in other avenues of your choice. If you invest in the schemes recommended by us, we will get half a percent as commission from the companies offering the schemes. This is the only benefit we will get, if at all someone chooses to invest in the schemes recommended by us. You see, we are being transparent about it!" said the executive.
Mathi then asked the same question that he asked his friend Kittu: "What if I my income is not sufficient to make me save the amount I am required to save?"
"There are only two options. One way is to scale down your plans. For example, you may decide that your children won't pursue professional education, which is expensive, but will pursuer less expensive degrees."
"The other way?"
"The other way is to increase your income, by taking up a job that pays better or by starting a business!"
Mathi filled in his details in the form provided by the executive.
The executive typed in the details given by Mathi in the computer. Within a couple of minutes, the computer printed out a report.
After going through the report, Mathi said, "Amazing! I am now saving nearly the same amount of money recommended in this report?"
"How come?" asked the executive, showing his surprise.
"Five years before, I got married. Soon after our marriage, my wife discussed with me the state of our finances and did an exercise similar to the one you did by asking me to fill in certain details. She even took into account the possible addition of two children to our family in the next few years! Of course, she didn't use a computer. She just used a pen, paper and a calculator. After making some approximate calculations, she said, 'We can't do what we plan to do at your present level of income. You should try to get a better job. With your education and intelligence, you will definitely get one!' As advised by her, I began to search for a better job. In course of time, I succeeded in my attempts. Now I have been saving the amount of money you say I should, to achieve my financial goals. Since I started a couple of years earlier, I may even have some cushion! Thank you for your report. If I decide to make any new investments, I will do them through you."
Mathi left, leaving the executive stunned.
Thirukkural
Section 2
Materialism
Chapter 39
The Might of a Ruler
Verse 385 (in Tamil):
iyaRRalum Ittalum kAththalum kAththavaguththalum valladhu arasu.
Meaning:
A king is one who has the competence to devise strategies to create revenue sources, earn revenue, preserve what is earned and allocate what is preserved in appropriate ways.
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