Monday, September 01, 2014

Financial Wisdom I got from my grandparents - II

This came to me from my grandparents. But I also found another parallel in Chanakya Sutra. Will cover both.

My grandparents version:

Keep one third of your earning for ur past, one third for your present and one third for ur future. Out of the 33 rs you have put aside for ur future, take 10 rs out and spend it on punya - on doing a good deed.

What this means in modern speak:
1/3rd for the parents: Even though we don't believe in providing financial security for our parents, cultures and families that do, its a very good equation to work out. 1/3rd of the income of the child ensures that there is a steady flow, and also not too much burden on the child, no ad hoc requests etc.

1/3rd for the present means to spend on living expenses et al (imagine what that will do to the McDonalds of the world)

1/3rd for the future, means investment. If we take out 10% for philanthropy, a 23% savings rate is awesome for most households.

Amazing advice, so nicely put!

The Chanakya Sutra advice was in a different way, but roughly amounting to the same things..let me look it up.


Gentle Breeze said...

Very nicely put..only problem is that the middle 1/3rd keeps expanding into the other two

How do we know said...

Hi GB: Yes... that it does. But imagine what it would do to the McDonald's and PnGs of the world if ppl reduced their discretionary spending and invested it...