Last Updated on December 27, 2023 at 3:56 pm
Recently, I attended a gathering where the discussion turned to personal finance. Someone inquired about the best place to begin. Predictably, responses such as “security analysis” and “intelligent investor” punctuated the conversation. Many also pointed to blogs that repeat phrases Buffett and Munger popularised, with “investor” as a common theme in their titles, paired with descriptors from unsuccessful to successful; unstable to stable; irrelevant to relevant; neurotic to paranoid. Another attendee noted the lack of formal education on this topic in Indian schools. This sparked some thoughts in my mind.
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India held the position of the wealthiest nation in the world for nearly 7000 years, a stark contrast to its current state over the last three centuries. It’s a brief period in the grand scheme of things, suggesting that our ancestors were doing something right.
The Tirukkural, a text deeply ingrained in the education of all schools in Tamil Nadu (TN), is an intrinsic part of the culture, regardless of political affiliations, type of school, or whether the location is urban Chennai or rural Thuckanaikkanpalayam. The influence of this text is omnipresent in TN, found everywhere, from public transport to TV game shows, and even as the logo of a famous film production house founded by a well-known director.
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In typical Indian fashion, we often seek Western inspiration before turning inwards. It is said that Tolstoy first read the German translation of Tirukkural and recommended it to Gandhi, urging him to adopt its teachings in his fight for India’s independence.
But how are the teachings of the Tirukkural, known by every 5th-grade student in TN, still relevant today, specifically in terms of personal finance? What lessons from this ancient text do these students seldom consider in their adult lives?
I will quote the Tamil script, English translation, the kural number and my take on each.
1 The basics
கற்க கசடறக் கற்பவை கற்றபின் நிற்க அதற்குத் தக. (391)
Learn, what is to be learnt, with no flaws; once learnt,
stand by what you learned.
எப்பொருள் யார்யார்வாய்க் கேட்பினும் அப்பொருள் மெய்ப்பொருள் காண்ப தறிவு. (423)
Whatever whoever may say, listen to it,
and wisdom is to comprehend the true meaning of it.
In this age of information bombardment, personalised ads, and sponsored content, you must be careful about what you read and where. More importantly, you must ask yourselves who posts the content and why and what their agenda is. (including this article). Do not blindly trust; trust – but verify.
செயற்கை அறிந்தக் கடைத்தும் உலகத்து இயற்கை அறிந்து செயல். (637)
Even if you know well how to do a task, do it knowing the nature of your world.
The first step is to choose your sources/masters wisely, learn, and learn thoroughly. The hardest part is applying it practically per your context and following it. Easier said than done! Everyone “knows”, and No one “does”.
சொல்லுதல் யார்க்கும் எளிய அரியவாம் சொல்லிய வண்ணம் செயல். (667)
Easy it is, to say; rare it is, the ability to do what one says.
மனந்தூய்மை செய்வினை தூய்மை இரண்டும் இனந்தூய்மை தூவா வரும். (455)
The purity of mind, and deeds, depends on the quality of one’s associations.
While personal finance is a highly “personal” endeavour, DIY and doing it alone can only develop you to some extent. As with career, life, and so many other things, you are the average of 5 people you spend your time with. The saying, “Tell me who your friends are, and I will tell you who you are”, has a lot of merits. Choose similar yet different people (a paradox!); choose wisely.
2 Investment Philosophy
ஆக்கம் கருதி முதலிழக்கும் செய்வினை ஊக்கார் அறிவுடை யார். (463)
Losing the capital in pursuit of profit is not a task the wise will undertake.
How many times have we bought a stock, “averaged it down,” and did not let it go? For a vast majority, investment decisions are based on tax breaks, right? Including buying a home loan? How about that complicated insurance product with a promise of the return of premiums?
This is a concept of “affordable risk” that entrepreneurs’ mental models excel and typical middle-class salaried people falter. A savvy businessperson will not bet the bank if there is a severe threat to the capital, even if there are promises of significant gains in the future.
3 Golden rule
ஆகாறு அளவிட்டி தாயினுங் கேடில்லை போகாறு அகலாக் கடை. (478)
Though revenues are limited, no harm – if you don’t let expenses exceed them.
Whether you earn INR 1000 p.m or 1M USD p.a. Dus kamaatha, Bees udatha is not the way to go. List of bankrupt lottery winners, famous movie stars and athletes seem to be never-ending. Recognise these names? Maradona, Mike Tyson, Evander Holyfield, Scottie Pippen, Boris Becker??
4 Setting and Executing Goals
பொருள்கருவி காலம் வினையிடனொடு ஐந்தும் இருள்தீர எண்ணிச் செயல். (675)
Resources, tools, time, place and the task – analyze these beyond doubt, and then act.
This is essentially the SMART goals concept. Take retirement planning, for example. You figure out that you currently have $$ xx (resources), you need $$ yy, in another 25-30 years’ time, to live in a home in city z (place), you can invest in say a,b,c asset classes and funds (tools). The catch is the term – “beyond doubt”. Notice how all the five factors are interlinked? Change one – everything changes!
5 Asset allocation
குணம்நாடிக் குற்றமும் நாடி அவற்றுள் மிகைநாடி மிக்க கொளல். (504)
Weigh the virtues (merits) and vices (demerits), discern which is more,
and thus decide.
Be it choosing a person or an asset class, the above applies. Critically evaluate the pluses and minuses of equity, debt, cash, gold and RE for all your goals and choose appropriately.
6 Insurance planning
எதிரதாக் காக்கும் அறிவினார்க் கில்லை அதிர வருவதோர் நோய். (429)
The wise who are perceptive and take preventive measures, will not be staggered by any harm (shocks).
The entire concept of personal finance is to sleep well! There should be no anxiety or stress in facing future problems, diseases or calamities. Ergo – Life insurance and Health insurance.
7 Choosing an Advisor
இதனை இதனால் இவன்முடிக்கும் என்றாய்ந்து அதனை அவன்கண் விடல். (517)
This task – he can do, using these resources: once you reason it out thus, leave the task to him.
This is the essence of delegation. Identifying a competent advisor is only one part of the story. Letting him/her do a professional job for you is another story! You do not go to your surgeon and show off your anatomical knowledge gleaned from Wikipedia. Do you? Bury that ego and listen to what they say!
That does not mean you abdicate completely!
எனைவகையான் தேறியக் கண்ணும் வினைவகையான்
வேறாகும் மாந்தர் பலர். (514)Many pass all tests and yet, Change in office
This is more critical in selecting a spouse, employee and advisor in that order!
How often have we hired someone who looked great on paper and looked pedestrian at best on the job? How many married people get unpleasantly surprised post-marriage despite ticking all the compatibility scores?
So, caveat emptor!
8 Marry wisely
This is a critical and often overlooked aspect of personal finance and can make or break you. Both spouses must be on the page on several aspects, including the investing philosophy, goals and behaviours. Remember the five people quote? Your spouse is one of them!
இல்லதென் இல்லவள் மாண்பானால் உள்ளதென்
இல்லவள் மாணாக் கடை? (53)If your spouse has the qualities suited for family life,
what is it that you don’t have? If not, what is it that you have?
9 Behavioural issues
அழுக்காறு அவாவெகுளி இன்னாச்சொல் நான்கும்
இழுக்கா இயன்றது அறம். (35)Righteousness is all about removing the four flaws –
envy, desire, anger and harsh words.
Trying to “keep up with the Joneses” is the biggest reason for most personal finance disasters. Honestly, question your internal motivation for that need/want. Act accordingly.
10 Final thoughts
கான முயலெய்த அம்பினில் யானை பிழைத்தவேல் ஏந்தல் இனிது.(772)
Better to bear the spear that missed the tusker
than the arrow that got the rabbit.
முயற்சி திருவினை ஆக்கும் முயற்றின்மை
இன்மை புகுத்தி விடும். (616)Effort creates wealth; lack of it induces poverty.
சூழ்ச்சி முடிவு துணிவெய்தல் அத்துணிவு
தாழ்ச்சியுள் தங்குதல் தீது. (671)The end of strategizing is gaining the confidence to execute;
t is wasteful to cede that confidence in delays.
Yes – the number thrown out by that Excel retirement calculator is scary; It is a long, arduous, dull, tedious journey with the light seemingly far from the tunnel. There are many things beyond our control.
It doesn’t matter. Start now; keep working on it, and keep going. Even if you fall short of the Excel number, you will still be much better off when the moment of reckoning arrives!
References
- https://thirukkural133.wordpress.com/contents/
- http://www.ytamizh.com/thirukural-search/
- Thiruvalluvar on functional management, Pulavar Ramalingam, Kavikkuyil press, 1998
- Thirukkural, a management treasure, Dr R. Krishnamurthi, Notion Press, 2018
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