Recently when I was traveling on a train I heard an interesting conversation between two people about the importance of saving money and financial planning. They were from famous Gujarati communities called Patel and Vaniya. I thought to share this interesting discussion for the benefit of all. It was a Gujarati conversation I have translated it into English.
So, let’s take a look at a conversation between two Gujarati Patel and Vaniya (Baniya).
Financial Planning – Trader Mentality
Vaniya – Hi Mr.Patel How are you? I heard you are about to retire, so have you done financial planning for retirement or not?
Patel – No what is that? I have not done anything. I have two sons who will take care of me. Whatever money I will be receiving after retirement, I will be handing it over to my sons and they will manage everything.
Vaniya- Imagine if your sons refuse to take care of you in the future. What will you do?
Patel – Your question is valid. However, I have never thought about it. Let’s see what is written in my destiny.
Vaniya – It is not a matter of destiny. It is all about financial planning. See today my son and daughter-in-law take very good care of me. It is not because of destiny it is because of money management.
Patel – How?
Vaniya – Listen carefully. I got a job at the age of 18. I was appointed as an ordinary clerk in the health department of the government. My first salary was Rs.100.
I handed over my first salary to my father. My father asked me a simple question. Imagine instead of Rs.100 if Rs.90 was offered to you as a salary what you would have done?
I immediately responded I would have accepted a job with Rs.90.
My father was happy with my answer. He thought me a valuable lesson of saving on that day. He said now onwards you need to consider that for the lifetime your salary will remain 10% low.
You need to open an account at the post office. Once your account is opened you need to deposit 10% of your salary every month in this account. Make sure you never withdraw anything from this account.
Just deposit 10% money every month and forget that you have deposited anything in the post.
Patel – What difference it will make if you deposit this much amount in the account?
Vaniya – My brother this small saving will make a lot of difference. I started with a small saving of Rs.10. These savings have increased significantly with my salary. After 35 years of a job, I was able to accumulate a sum of 96 Lac along with interest in the post office account.
The saving of 96 Lac is generating an interest income of Rs.50000 every month. From this income, I am purchasing mutual funds of Rs.30000 every month in the name of my grandson. The remaining amount I am handing over to my daughter-in-law.
Patel – Wow! If you give this much amount to your daughter-in-law obviously they will keep you happy. However, please tell me in case you need money for your daily needs you will ask your daughter-in-law?
Vaniya – I never ask for any money from them as I am getting a pension of Rs.20000 every month. I generally withdraw Rs.5000 from my pension. I take my grandson to the play area and garden every Sunday.
I take FD in the name of my daughter from the remaining pension amount Rs.15000 every month. So, it makes my daughter also happy.
Patel – Wow! You are a true Vaniya Bhai with Vaniya Buddhi (Trader Mentality). 🙂
You have done very good financial planning and I learned a lot of things from you. Unfortunately, we could not meet early otherwise I could also have saved a lot of money like you 🙁
The conversation ends.
My dear blog reader, we have learned the following lessons from the above conversation.
Key Learning Financial Planning
- Never take retirement planning lightly.
- You should start investing money from the day you start earning money.
- You should maintain discipline and invest a certain percentage of money every month in a suitable financial instrument.
- Remember you can generate a big retirement corpus by investing money every month.
- Remember Financial Planning is a key to financial success.
- In order to live successful life Vaniya Buddhi (Intelligence like a trader) is a must.
This article is dedicated to all first-time Investors.
Note – The sole purpose of this article is to share knowledge and not to devalue any community.
If you like this conversation, do share it with your friends give them a chance to learn a valuable lesson about financial planning.