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Jugaad And Wealth


This ad from Exide Life got me thinking about Jugaad.

When you’re just starting out with next to nothing in hand, there is nothing like jugaad to take you ahead in the money game. With a bit of jugaad you can stretch the money you have to do more,save money to put together capital and use whatever resources you have at hand or lay hands on to get started on doing what you wish to be doing to start making money. Its sort of like Jugaadulal wearing his helmet to cut onions comfortably. Its pretty sensible, if soaking onions in water before cutting them doesn’t work.

But, soon the equation starts becoming more complicated. In the early years of the wealth building journey,long hours might be involved. But smart work too has its place. But both hard work and smarts have their limits. There’s probably always someone who is smarter and capable of working you to the ground. Then again a person doesn’t become wealthy merely by saving. You need to invest and acquire assets that help earn for you. In the process you have to learn to make sense of people and know your own strengths and weakness along with accepting the limits of your own knowledge. When you realize the limited nature of time, attention and energy, you realize the absolute stupidity of wasting time and energy in not getting a hot plate repaired or replaced in a timely manner or subjecting yourself to unnecessary bodily discomfort such as by not cooling a room adequately in summer. Or needlessly antagonizing family members who could be your best support system.And if a person with children,has still not got round to making full provision for their needs, and is trying to live by jugaad,I’d say #NoMoreShortCuts . There really are no shortcuts to achieving financial security. Every person who plans to be wealthy needs to build or put in place their own wealth pyramid.

Much of wealth is all about what exactly you choose to work on and whose company you choose to keep and of first putting in place the system to provide for your and your dependents needs, to ensure that you now have the leisure to really play the long shots that give the biggest returns. And the big difference between people of different levels of affluence lies in what they will give their time and attention to. If their schemes turn out nX times the value in a given time, they might not find much value in your X returns ideas. And if you haven’t put in place the “Cash Flow” investments level of your wealth pyramid, you simply won’t be able to wait as long as other better off investors to rake in the big gains.

ULIPs such as Exide Life Wealth Maxima, can help secure many security needs in lowest level of the wealth pyramid.The family and child variants ensure that as per the family situation of a person, the life cover can be increased to safeguard the various life-goals of dependents such as education and marriage of children as well as living expenses of the spouse, in case of one’s own demise. But better still, the survivors at the end of the policy term, which will be the majority of policy holders, would have enjoyed upto two decades of tax-free compounding of their long-term savings in equity and/or debt instruments, as per their choice, or as per predefined portfolio rebalancing options. And can then withdraw these savings tax-free, unlike in the case of pension funds.By opting for the systematic transfer option, a person can ensure rupee cost averaging. And the plan has numerous options to contain the risks while attempting to maximise the returns on investment. You can study the performance of various ULIP funds using the calculator here: Link .Also as Warren Buffett, very quaintly puts it:”When it’s raining gold, reach for a bucket, not a thimble.” And in the course of decades as prices of stocks or bonds drop, these new ULIPs allow policy holders to top-up with more money. Additionally, for those  committed to investing atleast Rs72,000 a year, there are loyalty additions to look forward to. So ULIPs ,selected and managed well can be good growth assets. So some  unnecessary and counter-productive jugaad can be avoided by opting for ULIPs or other investment vehicles to put in place one’s wealth pyramid.

 

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About Keerthika Singaravel
Engineer,Investor,Businessperson

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