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Gandhiji on Trusteeship

February 26, 2011 9 Comments

Following are some of Gandhiji’s favourite quotes from the Gita:

Na twaham kamep rajyam na swarnam na puparbhavam
Kamaye dukh taptanam praninamarti nashwam

Neither I desire a Kingdom nor do I crave for heaven or salvation, I simply desire the end of miseries of all creatures who are afflicted with grief.

Javata Priyate Dehuh Tavatsatva Hidehinam
Adhikam yo bhibhanayat sa stano Dand marhati

As much as is necessary for one’s own living only that much is one entitled to have. One who has excess of this is a thief and deserves punishment.

Ishtan bhogan hi wo deva dasyante yagna bhavitah
Tairdattan pradaryabhyo yo bhangyakte sten aiv sah

Fostered by sacrifice (hard work) you will get all enjoyments. He who enjoys it without sacrifice and giving in return is undoubtedly a thief.

These words from the Gita shaped Gandhiji’s thoughts on his concept of trusteeship of wealth.Following is an explanation of the concept in his own words:

‘Suppose I have earned a fair amount of wealth either by way of legacy or by means of trade and industry. I must know that all that belongs to me is the right to an honorable livelihood no better than what is enjoyed by million of others, the rest of my wealth belongs to the community and is to be used for the welfare of the community.’ Read more of this post

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Learn Wealth Building From The Millionaire Next Door

February 14, 2011 35 Comments

Do you want to be a millionaire? Then perhaps you should start by studying the habits of millionaires….. And this book is just the right place to start.

If you check lists of the best financial books of all time, you’re bound to find several that include The Millionaire Next Door: Surprising Secrets of America’s Wealthy. Written in 1996 by professors William Danko and Thomas Stanley, its main premise is that people who look rich may not be wealthy; they overspend — often on symbols of wealth — but actually have modest portfolios and, sometimes, big debts. On the other hand, many actual millionaires tend to live in middle-income neighbourhoods, drive economical cars, wear inexpensive watches, and buy suits off the rack.

Following are some of the gems of wisdom found in the book that the authors Danko and Stanley have gleaned from their thousands of surveys of millionaires.

#1: Income Does Not Equal Wealth
Yes, higher-income households tend to have more wealth than lower- and middle-income households. But the size of a paycheck explains only approximately 30% of the variation of wealth among households. What really matters is how much of the income is invested. On average, millionaires invest nearly 20% of their income.

Danko and Stanley even offer a “simple rule of thumb” formula for determining whether you have a net worth that is commensurate with your income:

Multiply your age times your realized pretax annual household income from all sources except inheritances. Divide by 10. This, less any inherited wealth, is what your net worth should be.

Those in the top quartile of wealth accumulation are prodigious accumulators of wealth (PAWs), according to Danko and Stanley. Those in the bottom quartile are under accumulators of wealth (UAWs).This formula also helps in sorting out the millionaires/millionaires-to-be(PAWs) and the millionaire-lookalikes(UAWs).Here is a calculator to do this calculation easily:https://wealthymatters.com/2011/01/17/am-i-wealthy-calculator/

#2: Work That Budget Read more of this post