IntroductionTough times never last. But tough people do. This is one core message that we all need to understand, in any given situation. We need to find out all alternatives and explore how we can get over this present position. This simply means a) Exploring possibilities/alternatives b) Scaling up over a period of time c) Cost cutting and d) planning for the future. Some dimensions based on all real world examples, is sought to be discussed in this article.
Exploring possibilities/alternativesChanging markets, demands, products, customers and every single aspect of "change" is all around us. This is so natural. For example the models of smart cell phones get changed every single year. Those who can afford to change their cell phones, do it. What happens if you get stuck with your cell phone, which does not have the new features. Common sense dictates that we get on with our lives. The second alternative is to look for some opportunities to save the kind of money needed to buy the advanced model. One possibility is the low cost EMI option offered by some dealers. Another option is a jewel loan. You can liquidate it within one year if you cut down on some unwanted or unnecessary expenses.
Consider this real life case study. One worker, who had a huge tummy once game to me, complaining that he was not able to meet both ends meet. He had his own house, given to him by this father. He did not have debts. Yet he complained. A little probing revealed that he and his family members had the habit of eating non-vegetarian food, at a minimum cost of Rs.1500 as they often invited some relatives too. Further probing revealed that all the four weeks cost the worker a minimum of Rs. 6500 as the spices were also very costly and more relatives came only for the special food!!
I counseled the worker to cut down this expenditure to have the actual amount. In other words, consumption only on two week-ends. Gradually this was reduced to one week-end. The company doctor was also called to counsel him on the health hazards of too much non-vegetarian food. This family members also understood this. The savings came to around Rs.4000/- per month. His wife also attended a stitching class, purchased a second hand sewing machine and became a good tailor over two years. The family was able to educate both their children in two different engineering colleges without any debts.
Another real world example. One Mr Ramanan had a horrible boss. He made his life miserable. Though designated as Manager (Accounts and Finance) of a famous auto component company, he was not given enough powers. He was made to do all work. His own subordinates had access to the big boss and carried juicy stories ( often made up and exaggerated). Luck came his way when he had a vital configuration experience of SAP implementation in Finance. This eighteen month exposure taught him new skills.
Mr Ramanan took a huge risk at the age of 52. He quit his job and migrated to the USA with the help of his sister. He found a job there as an SAP expert. Of course, he was basically a chartered accountant. So, everything boils down to our looking for alternatives/possibilities.
Scaling up over a period of timeWe always need to move from position A to B. If we do not have resources at the moment, it is fine to go for the best alternative. This is vital as resources in some areas like land keep multiplying over a period of time. What will you do if you have a chance to save Rs.1000 in a recurring deposit or invest the same in a no-interest EMI for a 1200 square foot plot, some seventy kilometers from the city? Yes, today the area is not developed. But the promoter has got all documents approved by the Government and the plot is also Government approved.
Common sense will dictate that you go for the plot, purchase it over a period of four years and keep it fenced. The scaling up can happen after five years when you would have saved some money through the yearly merit increases and increments. Assume you also get a promotion that comes your way. This is exactly how you should scale up. If you are shrewd and you live a big city, also do your week-end Executive MBA, which will increase your chances of being recognized and earn even more. Scaling up in resources over a period of time is a must. Tax saving instruments are also a wise option. For example, a small investment of Rs.500 in a systematic investment plan over a seven year period, can come in very much handy when the children start going to colleges for their education.
Cost cuttingEven in the best of times, we should always save on every single aspect of cost. For instance, we have ceiling fans put on for a huge number of hours, when they are really not needed. We eat out so often and the younger generation are also hooked to so many apps where they order for food to be served at home. This may be fine once in a way. However, doing this often is not advisable at all. We should hence aim to cut down such costs. Travel by bus or even a metro train is still cheaper than hiring a car or going around in your own car. Small sacrifices count so much. This is exactly what our fathers did to save money. Cost cutting can also come in some other ways.
For example, some seven years ago, the country's topper in the Chartered Accountancy final examination was a very poor family girl from Mumbai, who studied in a fairly unknown college. What required was the effort to pass the tough CA examination. This girl,who actually hailed from Tamil Nadu, achieved what she did from a 220 square foot tenement of her father, a mere auto driver. So it never makes sense to invest huge amounts chasing B Com courses by paying huge donations.
In each and every situation the secret is to always look for means to save money. Spinach for instance, is very cheap. Taking to this on three days in a week does not only cut down vegetable expenses, but also improves our health too.
Planning for the futureThough this is point number four, it is part of each of the aforesaid three points as well. Any taken now by exploring every single opportunity or possibility, is also planning for the future. Investing in a new skill is an investment for the future. This is also planning for the future. Scaling up is also planning for the future, as explained in the case of investment in a plot of land in the developing suburbs of any metro city.
However this planning should also have a very long term horizon, for as many as twenty five years. Today's youngsters who earn even one hundred thousand rupees a month, waste so much money on all wants. They never plan for the future. Even for the next five years. They ought to be counseled to do far better than what they are doing now. Any planning for the future is always a plan spread over a couple of decades or more. Our forefathers always had this wisdom to get this kind of a planning. We should learn from them.
Leveraging all our resources at a given point in time, is nothing but common sense. We do not even understand the basics. Once we become more clear, we can do wonders. The real world examples are our case studies for all constructive action in this regard.