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How To Become Your Own Financial Planner?

An exclusive Program To Develop The Skills To Manage Your Personal Finance

We believe by signing up for the initiative, you too endeavour to develop the skills needed to understand the nuances of personal finance and be money-wise.

Module VIII: Key Learning From Investment Gurus

We have touched upon all facets of Financial Planning to help you become your own financial planner. And we hope you've begun implementing many of the valuable lessons.

To conclude this programme, in this module, we'll share with you pearls of wisdom - quotes - of some prominent investment gurus / masters of personal finance. They'll serve as thumb rules for your financial wellbeing.

Session 24: Quotes And Thumb Rules On Financial Planning

Behavioural Finance:

"Personal Finance is 80% behaviour and only 20% head knowledge" -Dave Ramsey (a US based personal finance coach, motivator and author)

You see, irrespective of what you plan, if you aren't applying your mind in a prudent manner, in the right direction; achieving your financial goals can pose a challenge.


"A budget is telling your money where to go instead of wondering where it went"-Dave Ramsey (a US based personal finance coach, motivator and author)

This is why budgeting is a must! It facilitates you to be in control of your personal finances and curb impulsive expenses.

It encourages you to save more so you can achieve your long-term financial goals. A prudently drawn out budget can keep you debt-free, and/or if you currently aren't, it help you work a way out of debt.


"Do not save what is left after spending, but spend what is left after saving"-Warren Buffett

The thumb rule to follow is: income - savings = expenses.

This allows you to objectively save an 'x'% from your savings each month to achieve the vital financial goals of life, and then spend from the remaining following a strict budget.

Contingency Planning:

"Never invest emergency savings in the stock market"-Suze Orman (a US based financial advisor, motivational speaker and author)

The key point here is to have an Emergency fund (in case uncertainties strike you).

So, emergency savings should ideally be parked in short-term deposits and/or liquid funds, where safeguarding the 'principal' is the primary objective, and not capital appreciation (or return on investment).

Asset Allocation:

"Every portfolio need to change as they age, becoming more focused on avoiding risk in their investing than on higher growth."-John C Bogle (Founder of Vanguard Group)

The reason is: the older you get, the risk appetite reduces and thus a dominant portion of the fund in relatively safe securities as age progresses.

As a thumb rule you can use the formula: '100 - your age' to determine the proportion of equity and debt in your portfolio. In other words, the proportion of debt should be equal to your age.


"You should only buy low cost level term life insurance. Anything else is a rip-off or a gimmick"-Dave Ramsey (a US based personal finance coach, motivator, and author)

Indeed! When you buy insurance, the objective is indemnification of risk, and not investments.

Hence pure term insurance plans are by far the best.

But as you've learnt in the insurance module of the programme, insure yourself optimally based on a scientific approach - calculating the Human Life Value (HLV) - expense method.


"A man in debt is so far a slave"-Ralph Waldo Emerson ( an American essayist, lecturer and poet)

Stretch within your means. Borrowing isn't a financial faux pas, as long as you borrow only as much as you can comfortably repay, or this may turn into a potential debt-trap.

Borrowing to buy an appreciating asset such as a house, fine art, etc. is fine; but overindulgence may be imprudent.

Avoid borrowing for depreciating and luxury assets, such as expensive gadgets/cars,

Borrowing through credit cards should be a strict no-no.

As Dave Ramsey beautifully says... "Don't buy things you can't afford with money you don't have to impress people you don't like."

Investment Planning:

"Never depend on single income. Make investment to create a second source"-Warren Buffet

There are times when inflation can play spoilsport; exploring a second source of income can help you counter the inflation bug. This strategy can help you achieve your financial goals.

Retirement Planning:

"Planning for retirement is not something we can put off until a later date. The time to plan is now"-Bob Reid (Former Chairman of British Railways)

You got to start planning for your retirement from the first pay cheque. By starting to plan early, with a longer investment horizon, the power of compounding works to your benefit. It's a case of early bird getting a bigger worm.

If you procrastinate planning for your retirement, meeting expenses during the golden years can be a challenge.

Tax Planning:

"In this world nothing is certain but death and taxes"-Benjamin Graham (a British-born American investor, economist, and professor. He was popularly known as the father of value investing.)

Therefore, engaging in a prudent tax planning exercise right from the beginning of the financial year is a must.

And tax planning is not merely investing in tax saving instruments, and filing your tax returns on time, but a holistic exercise exploring a host of tax benefit Sections of the Income-tax Act, 1961.

Ideally, complement tax planning with your investment planning.

Estate Planning:

"The unfortunate thing is most people transfer assets too late"-Avery Neumark (a US based attorney, who is a partner in the tax group Marks Paneth LLP)

If you wish to pass your assets to your loved ones, engaging in estate planning right from the asset accumulation phase is a must.

As we briefed you earlier in the estate planning module, dying intestate can lead to various complications for your loved ones.

We recognise that there's a heavy cost involved in estate planning viz. lawyer's fees, court fees, etc., but what's warranted should be done in the interest of your family.

With this we conclude our programme, and hope you're now empowered enough to be your own financial planner.

Always remember to follow a sensible approach while handling your personal finances. Walk carefully on the path to financial freedom in the interest of your long-term financial wellbeing.

In case you need help, the downloadable transcripts will serve as meaningful literature for your financial future. Remember this famous quote: "The greater our knowledge increases the more our ignorance unfolds" -John F. Kennedy

Thank You For Participating!

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