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Financial Planning Lessons from Indian Mythology

By Finserv MARKETS - Sep 4,2019
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Indian mythology is replete with lessons that offer you valuable insight into life, relationships and success. In a country with a multitude of cultures, these lessons not only guide you to fulfill your aspirations but also emphasize to follow the right path, despite mammoth obstacles. Indian mythology also provides an investor with insights on the right investment plan, besides explaining the right means of financial planning to achieve the just end of wealth creation. Indian epics like the Mahabharata touch upon a plethora of issues, ranging from politics and romance to legends and myths. It is up to you to understand the real meaning of mythological tales and interpret it for financial planning.

In the present era India, investment instruments and the manner of investing for achieving high returns have evolved over the years, depending on economic factors, market conditions, and people’s preferences. Now, Unit Linked Insurance Plans are emerging as the new investment vehicle of choice owing to their ability to act both as an insurance cover and an investment plan. You can choose your funds under a ULIP plan as per your long-term financial goals and allocate your money in equity and/or debt funds accordingly.

Here is a list of four key lessons from Indian mythology that can be applied to your financial planning.

1. Lakshmi follows Saraswati:

According to Hindu mythology, Lakshmi, the goddess of wealth always follows Saraswati, the goddess of learning. This simply means that if you have the right knowledge, wealth will follow you. For example, if you have the knowledge that a ULIP plan is a mix of insurance and investment that allows policyholders to earn market-linked returns along with the security of life insurance, then you can reap the benefits of this investment vehicle.

2. Avoid unnecessary risks:

In the epic, Mahabharata, Yudhishthira, the eldest of the Pandavas, had the weakness of taking unnecessary risks by his habit of gambling. Thus, he squandered away his kingdom and was exiled for 13 years. In today’s world of investments, gambling is somewhat akin to taking short-term risk through aggressive investment instruments. As an investor, you can avoid unnecessary risks by investing in ULIPs. An investment plan provides you with the option of investing in either debt or equity funds or a portfolio with a combination of both debt and equity funds. Within a plan, you can move your investments from one ULIP fund to another. You can transfer units fully or partially between ULIP funds, which include equity, debt or a combination of both. This cushions you from the risks involved in equity funds, which are sensitive to economic factors like inflation, tax rates, currency fluctuations, and bank policies.

3. Incomplete knowledge is dangerous:

The Mahabharata again narrates the tale of Arjuna son’s Abhimanyu who entered the Chakravyuha (a strategic military formation) without the knowledge of safe exit. This resulted in his death. In the parlance of investment, this imparts an important lesson in financial management—to understand the probable returns and associated risks before choosing an investment plan. If as an investor, you keep on investing in equity funds or other aggressive market instruments, it might provide you with high short-term returns, but can backfire in the case of any market volatility. Any ULIP plan diversifies fund allocation and is a safe and reliable means of investment.

4. Focus on your goals:

The Mahabharata tells the story when Dronacharya was training young princes in archery. He gave them the task to shoot at a bird’s eye on a tree, from a distance, and asked the princes to describe the target. All princes, except Arjuna, described the features of the bird instead of focusing on the bird’s eye. Only Arjuna said that he was able to see the bird’s eye. In today’s world of financial planning, this translates into focusing on your financial goals. Among the investment vehicles in the market, a ULIP investment plan is structured for goal-based planning. This means that you can systematically invest in a ULIP plan with the aim of fulfilling specific financial goals. The five year lock-in period ensures investor discipline, where you must make regular premium payments to keep the policy active, thus allowing for systematic creation of wealth for the desired financial goals.

Thus, lessons from Indian mythology can help you make the right investment. You can consider investing in robust plans like Bajaj Allianz Future Gain and Bajaj Allianz Goal Assure. These plans are a smart option; being insurance plans that double up as an investment product. With ULIP plans, one part of your money goes into a life cover, and the remaining is invested in debt and/or equity instruments that earn returns over time. According to Morningstar, an investment research firm, ULIP plans available at Finserv MARKETS enjoy good ratings with approximate tax-free returns as high as 25% over a five-year investment period. Not just tax benefits, high ulip returns is another reason why you should consider investing in such a plan.

To know more on ULIP investments in depth, you can check out these blogs:

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