If you are in Facebook Group Asan Ideas for Wealth (AIFW), chances are you would have encountered the acronym MDBSC* many times. Newcomers wonder what it stands for and wonder why there is a *. At a time when every news channel, financial services portal and blogger with an eye on Google Adsense earnings are churning out article after article on budget expectations to exploit reader sentiment, I think it would be a good time to discuss about what the acronym really stands for.
AIFW is run by Ashal Jauhari, an extraordinary champion of financial literacy (read his interview here). He would often state, My Dull and Boring SIPs will Continue. This became so frequent that Capt. A. K. Anand created the acronym, MDBSC. It soon became MDBSC* to indicate that the context matters.
MDBSC refers to more than a SIP investment. It is a way of life.
It means, ignore the noise and focus on your goals, focus on your investments and their growth.
OMG! The market tanked 500 points today! What do I do? --> MDBSC*
Markets are at al all time high! Should I book profits? --> MDBSC*
Markets are at an all time high! Can I start a SIP now? --> MDBSC*
How will falling oil prices affect Indian markets? --> MDBSC*
How will an unstable dollar affect markets? --> MDBSC*
What are your expectations from the Budget? --> MDBSC*
OMG! There is talk that LTCG from Equity will also be made 3 years!! --> MDBSC*
There is talk that arbitrage funds would be treated as debt funds? --> MDBSC*
Should I accumulate cash so that I invest on dips? --> MDBSC*
Should I invest in gilt funds now that the rate cut cycle has started? --> MDBSC*
Should my SIP date be at the start of the month or the end of the month? --> MDBSC* (Ashal got bored of saying this and suggested that the ideal SIP date should the 32nd of each month!).
I could go on and on.
The * in MDBSC* stands for goal-planning. I cannot continue my SIPs forever. I will need to evaluate my portfolio, rebalance periodically, decrease exposure to volatile asset classes as certain goals near etc.
Will I the common man benefit from the budget? We will have to wait for the finance minister to announce. Both good or bad news are perceptions. We will rejoice for a couple of days and then it is business as usual. We will crib for a couple of days (MDBSC: Most Dull Budget Since ..C for?) and it is business as usual. Not much else can be done.
If there is no tax-free instrument for short-term goals or if all instruments are taxed alike, then we simply will have to resign ourselves to the circumstances and adapt. If instruments for long-term goals are taxed, then we will have to grin and bear it. If there is no change in tax slabs then that it is the way it is.
Such developments are independent of the common man's goals and aspirations. We do what we can. The 'suitable' path will become clear when the dust settles.
Speculation is waste of time. How many of these budget speculators have taken simple steps to fortify their financial life?Planned for their goals? Invested accordingly?
It wont kill us to pay some tax. Speculation, disappoint and regret leads to stress and might kill you.
When it comes to noise, there is always a better thing to do. Shakespeare said it beautifully in Julius Caesar.
New Delhi Investor Workshop on financial planning and goal-based investing
Register with the screen below or from the registration page
If you have friends or relatives in Delhi who you think could benefit from this workshop, please forward this link to them.