Diwali is the most celebrated festival for Indians and we all light our homes with diyas. It symbolizes victory of Light over Darkness. We also do LAXMI PUJAN on this very auspicious day. But have you ever wondered at the time of performing puja that why Devi Saraswati Ji is always there along with Devi Laxmi?
In our view, Laxmi Ji – the Goddess of Wealth, stays with person who also worship Saraswati Ji – the Goddess of knowledge. Wealth may come to someone who does not have knowledge but it does not stay there. As they say a fool and his money are soon parted.
We are always of this belief that Investor’s knowledge is of first importance in being financially well off. Indian Investors save close to 30% of their income and financial instruments from 60% of their savings. It means that 15% of the income of Indian Household is saved through investments in Financial Instruments.
Indian’s Household saving pattern:
If we look at the break-up of investment pattern of Indian Household, it will clearly show that Indian Investors lack knowledge in the field of Financial Instruments which from the maximum part of their Financial Planning. Because of lack of knowledge, we either make wrong decisions by following path which everyone else are following or land up investing where we feel most comfortable. Mind you, the most comfortable position in life is not the most successful one. Our maximum savings are in Bank Deposit and that is because we are not Financial Literate. Now despite being one of the biggest savers in the world, we the Indians, are not richest and it proves the very fact that Goddess laxmi blesses only those who worship Godess Saraswati. Take a look at the graph below which gives you the breakup of our financial saving pattern:
Now if you analyze it closely, 76% of our investments are in the from of Bank Deposits, Life Insurance, Non – Banking Deposits and Cash. If you look at their returns net of inflation and taxes, you will be astonished that these investments make you poorer rather than richer. We must take Real Return in Consideration rather than the return on investment. In the last 20 years, the average rate at which prices of petrol & diesel has increases is well over 9% & 12%. The cascading effect of such rise increases the prices of almost everything that we buy and use. Just analyse your monthly budget or school fees that you used to pay and now that you are paying for your kids.
Because of lack of Financial Knowledge, we tend to make many mistakes, the list of few are mentioned below:
- Ignoring the impact of inflation
- Savings not equals to Investment
- Following what everyone is doing
- Not understanding RISK in right approach
- Ignoring the Power of Equity in Long run
- Mixing Insurance with Investment
Why Laxmi Ji Rides on an Owl Carrier?
Sir John Templeton said “If you want to have a better performance than the crowd, you must do things differently from the crowd.” what is peculiar about owls is that they can see more clearly at night than during the day – means doing opposite to others. So rule is being fearful when other are greedy, and being greedy when other are fearful. If you follow this simple rule of Owl, laxmi Ji will come & stay your place.
We are not trying to convey that you should invest everything into equity. We just want to convey that look at share or equities with different perspective. Don’t invest into shares directly unless you don’t have the knowledge to do so. As said earlier, first worship Goddess Saraswati and then Laxmi Ji will herself come to your doors. Investors who do not have the knowledge and experience in stock market are well advised to take route of Mutual Funds. (Read Benefits of Mutual Fund)
This article of ours got published in leading Personal Finance Magazine “Money Mantra” as their Cover Story(Diwali Issue 2010) Click here to read full article.