inscriptions 8
TRANSCRIPT
INSCRIPTIONS 8WALL 2 PANEL 4
HIGHLIGHTS OF THIS ISSUE:1) FUNDAMENTAL PRINCIPLES OF FINANCIAL PLANNING2) THE DIFFERENCE IN DREAMING AND DAY DREAMING
AND THE SCULPTOR INSCRIBES TALKS ABOUT HOW TO RESPOND TO CHANGES IN HIS ARTICLE ENTITLED “WE ARE BIGGER THAN OUR CIRCUMSTANCE”
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TITLES SPACE FOR P.NO
Sculptor Inscribes RG 2
Gurus speak Faculty Members’ space 12
Caterpillar Space Students and Trainees 19
News Channel Happenings at Gopast 22
Inscriptions 8
WE ARE BIGGER THAN OUR CIRCUMSTANCES
WE ARE BIGGER THAN OUR CIRCUMSTANCES
WE ARE BIGGER THAN OUR
CIRCUMSTANCES
R.GOPINATH
A change disturbs us. A changed regulation, changed tax rules, withdrawal of products which we used to sell and so on… upsets us.
We know changes are inevitable, they keep happening all the while, yet we get disturbed when some changes happen. We feel dislo-cated, sometimes inadequate to face the new situation. We fervently hope that this change will disappear and the old situations will re-turn back, the regulation will be defeated by the council, the new tax laws will be stuck down by courts. As a result of this, we wait
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for the “good times” and keep loosing the good time available now.
Let us say, while going on a week-end trip our car gets punctured say just 15 kms be-fore our picnic spot, we curse the car, the road, the Govt or may be ourselves. This could be an opportunity to learn replacing tyres, may be the family can work as a team and get this done faster, it might get people closer, it could be fun also. But then it is not how majority of the people react. Most of them would get into blaming act.
Why do we get disturbed when changes take place, in professional arena, or in personal, or family spectrum? Because, we found comfort in our earlier situation and this new situation
is dragging us out of our comfort zone. It is demanding more skills, equipments and edu-cation to be dealt with. But let us remember, our earlier situation was also a new one com-pared to the one immediately previous to that. We resisted the new one initially, but when we came to know that this situation is going to remain, then we got equipped to face that and gradually mastered the art of negotiating through that.
The recent changes in the insurance industry in India has disturbed lot many agents and managers. The year 2014 has been a challeng-ing year in many ways. In India our friends in the Insurance industry have had a uphill movement, reducing the speed of their pro-gress.
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The change in the product structures at the beginning of the year as instructed by IRDA (The insurance regulator in India), The roll out of products took considerable time and even towards end of this year, not able to match the range of products we had earlier, The imposition of Service tax on the life in-surance premiums by the Finance ministry. Bringing insurance claims of certain policies in the Income tax net, which has been so far exempted for the tax on receipt. Following this action with instructions of TDS deduc-tion by the insurance companies. The benefit illustrations to the prospects giving a 4% and a 6% scenario for insurance products with savings element (which no other savings or investment product supplier need to do in In-dia). The interest scenario in the country
firming up to show a better yield on savings products like PPF, Post office savings, Bank term deposits. The Capital market indexes showing a bullish trend, attracting retail inves-tors to invest in MFs, PMSs and other equity based products.
For the first few months, many market play-ers where hoping, that these changes may not be implemented at all and some interven-tion from the Government or other bodies can roll back things to status quo positions. As time passed by, when things did not work the way many of us wanted, then and only then, people started looking at how to now cope up with this new conditions.
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Even before i suggest 10 ways to respond to the present situation, let me invite you to read the following paragraphs and in the end the suggested 10 responses too.
Let us first look at some facts of life. We are much bigger than our circumstances
Yes, we are much bigger than our circum-stances. Even in epics you would have read stories of men overcoming extreme situa-tions, fighting against all odds and accomplish-ing what they wanted. The story of a small boy David fighting against a giant Goliath as mentioned in Bible, The small boy Baktha Pra-halad resisting the demon father Hiranyaka-shibu and securing release for his country-
men as mentioned in Bagwath are just a few examples.
Not just that even in the modern history you find such instances. One person Ma-hatma Gandhi leading a whole country to freedom, following Ahimsa (Non-violence) and Satyagraha (Civil disobedience) route to achieve the objective, is a profound example that we are bigger than our circumstances. People like Nelson Mandela. Mother Teresa have proved it again. There are stories of peo-ple single handedly fighting mighty draconian
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systems, cleansing corrupt practices and es-tablishing new societies. The recent winners of Noble peace prize are testimonies to this.
Even on a personal front, we have seen ath-letes fighting injuries and bounce back to their tracks and winning championships.We have seen a number of people fighting deadly diseases like cancer, meningitis, polio attacks, loss of limbs in accidents but fought back to glory in their respective fields. Financial bank-ruptcies, hostile takeovers, Crippling strikes of some unions have not stopped some peo-ple from rising up and establishing new busi-ness empires in many geographies.
All these prove that we as hu-man beings are individu- ally bigger than our circumstances.
We are not just men and women, but we are in fact Supermen and Super women. Where do we get this authority to be supermen? It emanates from 4 endowments vested in us:
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1) Creativity
2) Judgement
3) Energy and
4) Ability to learn.
These four endowments make us supermen and superwomen. Creativity gives us the ca-pacity to invent solutions. All the things we see today on planet Earth, other than the five elements given to us by God have been cre-ated by us. Electric bulbs, Airplanes, Ships, Computers all of those other than the five basic elements of this planet Earth, Sky, Air, Water and Fire have been invented or cre-ated by Human beings.
We are Supermen and Superwomen. We are bigger than our circumstances. Therefore to submit to circumstances and accepting defeat meekly is not our nature at all, it is an artifi-cial behaviour created by us.
The endowment of Judgement gives us the wisdom to differentiate between the wrong and the correct. It helps us to make choices. We are able to expect, estimate and get pre-pared in advance for any impediments.
Energy is flowing all through our body. It is unending and boundless. It is available as long as we are alive. We run, jump, work, lift weights, cross distances all with this energy that flows inside us.
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Ability to learn is the best of all the endow-ments. It is the source of our growth. We have learnt so many things since our birth. We can learn any subject, any art, any lan-guage using our cognitive mind. So even if there is a wide gap between the present day champion and us in terms of knowledge or skills, we can bridge the gap by learning those skills. We can learn to adapt to our new cir-cumstances and we can also learn to master them.
All the four endowments make us superman and superwomen.
95% of what is happening to us is created by us. 95% of what is happening to me is cre-ated by me. By doing certain things or by not doing certain things, we have landed here to-day. We are the cause and we are the effect too. Out the balance 5%, a small percentage can be attributed to the Regulator, some to the Government, some to the market condi-tions, some to factors like my birth-star etc. But mind you 95% of what is happening to us is created by us. That means by changing the cause, we can change the effect.
We can therefore overcome any circum-stances. We need not be scared in any situa-tion. Some people keep asking me, how long this slow-down will continue?, When will an-other boom return to our insurance market? All the questions or any similar ones, have
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only one answer, “I don't know when, but i know for sure that fertile days will come”.
Changes make us more able. They compel us to learn. These abilities acquired and learning acquired are going to remain with our for-ever. They increase our market value. But for such changes we would not have known newer techniques.
Ten ways to respond to the present slow-down in the market?
1) Accept that the rules of the game have changed, rather than hoping a rollback in the new rules.
2) Believe that as much as you have mas-tered the earlier changes, you will overcome this as well.
3) Focus on prospecting activities to get more and more first appointments.
4) More than adequate preparations be-fore making phone calls, before meeting in person.
5) Shift from a Mass market approach to Target marketing approach.
6) Shift from a commodity sale approach to comprehensive solution approach.
7) Defocus on subsidiary businesses and focus sharply on the core business.
8) Schedule thinking time and learning time in the calendar, and never miss out on that schedule.
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9) Build a compelling brand for yourself by using PR and Publicity means
10) Conduct seminars for the clients to explain the impact of the changes and on the necessity to anchor themselves to fundamen-tal principles of Finance rather than get car-ried away by the short-term trends that get easily highlighted in the media. Meet people eye to eye and pour out our conviction on our systems, products and companies that we work for, and bring about transformation in them.
We have seen tsunamis, earthquakes, volcano eruptions, tornadoes, floods, epidemics, wars, civil commotions and we have survived them all. Because we are supermen and superwo-men. We are bigger than our circumstances.
Let us bring that giant out of us through our convictions. We are not rabbits in the wood looking for hiding, but we are the unstoppa-ble lions on the prowl. We are not hapless small agents selling a few products for our liv-ing, but we are the change agents who drive the economies of our countries.
Let us bring back the glorious times. Let the year 2015 be a great year for us, and may this beginning provide us breakthrough into hith-erto untapped potential areas.
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CHAPTER 2
GURUS SPEAK
WEALTH THAT LASTS FOREVERPART 3
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8 Governing principles:
1) If a person adopts the formula “Income - Expenses = Savings” then he can never become wealthy. The correct formula is “Income - Savings = Expenses.
2) Regularity is the key to wealth. (The key to wealth is not the ROI, IRR, CAGR etc)3) Start early and reach safely.4) Gold and greed can never stay together.5) Purpose must decide the choice.6) Financial Pyramid7) Draw the map before you start the journey.8) Professional support helps.
START EARLY; REACH SAFELY
PRINCIPLE NO 3
At traffic signal posts and traffic islands you will get to see this board, “ Start early; Reach safely.” This to say that if we leave our place even 5 minutes early then we can reach our desti-nation calmly and if we leave even 5 minutes later, then we have to take unnecessary risks of road, like speeding over limits, jumping lanes, overtaking rashly etc to make good the time lost.
The same is true in the area of finance. Starting our savings plan a few years early gives us ade-quate money to meet our goals and starting the same put us under the strain of looking for high yielding instruments to match up adequacy of the money available then. In the process these high yielding instruments come with varying degree of risk on the capital often resulting in the erosion of capital, the hard earned money.
Let me demonstrate this through an example:
SCENARIO 1
Mr Prakash and Mr Atul of friends working the same company drawing same levels of income. They are identical in their ages and even the family size. Mr Atul started saving `10,000 per month from his age 25 and he kept saving the same amount every month till his age 35 expect-
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ing the plan to provide his a retirement fund when he becomes 60 years of age. From age 35 up he had family responsibilities and had to spend on their requirements.
Mr Prakash started saving `10,000 from his age 50 once his children had settled down in their lives and his target was to have fund providing him a decent retired life. If both Mr Atul and Mr Prakash had invested in a plan which yielded 8% IRR then Mr Atul will be having `1,26,12,000 and Mr Prakash will be having `18,41,000. Even though the contribution from both have been the same.
If Mr Prakash wants to equal the fund available with Mr Atul then he must contribute `68,500 every month from his age 50, against the `10,000 every month invested by Mr Atul.
If Mr Prakash wants to keep the contribution at `10,000 level then he has to invest in an instru-ment that yields 37.5% IRR compounding monthly against the 8% yielding investment that Mr Atul had done for himself.
SCENARIO 2
Mr Atul starts saving `10,000 per month at age 25 and continues till his age 60 @8%, he would have got a fund of `2,31,00,000 at his age of retirement. Mr Prakash starts at age 35 the same plan contributing `10,000 per month, he will be left with `95,00,000.
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If he wants to match up with Mr Atul in the fund size at retirement then he has to contribute `24,100 every month instead of `10,000 every month.
If Mr Prakash wants to keep the contribution at `10,000 level then he has to invest in an instru-ment that yields 13.2% IRR compounding monthly against the 8% yielding investment that Mr Atul had done for himself.
SCENARIO 3
Mr Prakash starts at age 40 with monthly contribution of `10,000 @ 8% he will get `59,00,000. If he wants to match Mr Atul’s Fund then he must contribute monthly `39,000 in-stead of `10,000 done by Mr Atul
If Mr Prakash wants to keep the contribution at `10,000 per month then he has to invest in an instrument that yields 18% IRR compounding monthly as against the 8% yielding investment that Mr Atul had done for himself.
putting into a tabular form:
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There is more to follow on this topic, like the story of 4 people nearing retirement and the proportion of the risk related to the duration of postponement, so stay connected for the next issue.
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CHAPTER 3
CATERPILLAR SPACE
THIS SPACE IS MEANT FOR THE STUDENTS OF GOPAST
Difference between Dreaming and Daydreaming & financial Goals
BY
DHIREN GALA CA
The dream is not what we see in sleep; dream is that which does not let us sleep. By dreaming, we let people know that we are alive.
If we want our dreams to come true, don't sleep..." In reality most of us dream big and then go to sleep. We dream of creating wealth, luxuries in life, and lots of riches but unfortunately we do not stay awake to plan for those dreams and make them reality - we just daydream about them.
Someone who dreams has desires, aspirations, ambitions etc. On the other hand a daydreamer only builds cas-tles in the air.
Dreams are wishes and dreams when written down into quantitative, qualitative, specific terms, time are goals. Once goals are written down, calculate how much money is required today to achieve them and how much we have to increase it every year. Also calculate with keeping in mind the INFLATION FACTORS. Review It regu-lary.
First step to realize any dream/goal is to crystallize it. It is not good enough to say I want luxury apartment. It is important to be specific - I need luxury apartment with 3 bedroom, guestroom, garden, Gym, in specific loca-tion, specific floor, worth Rs 100 lakh (Rs 10 million) after 6 years. Similarly, do not have it in the 'back of your mind' to save money for your angel - daughter’s marriage. List it down. Clearly state how much funds we wish to spend on her marriage. If time cannot be decided now, approx years left should be calculated
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Be prepared for events that can upset our plans to reach those goals. Events like job loss, business recession, etc. if they occur then they will deplete funds, which have been created for our dreams. Therefore set aside contin-gency reserve
After creating contingency reserve, we should evaluate our existing insurance both health & Life. Check out whether sufficient health insurance is taken because in case of ignored or reduced health insurance and sud-denly someone from the family falls ill, we will erode our savings, which was initially being set for our goals. Lastly, protect our property - our house, car, jewelry etc. by buying relevant insurance.
Who stops us from this beautiful planning & execution of goals? "WE-OURSELVES." Our habits of procrastinat-ing and spending for something not required for are, stops us from reaching our goals.
Sooner we start walking on our path to reach goals destination, by regularly saving and investing, faster we will reach, with less pain. Stop procrastinates. Focused on goals. If we loose focus, we will start utilizing our hard earned money into other unnecessary expenses and not realize our dreams.
Don't just dream about future, plan for it. Remember famous saying "If you fail to plan, you plan to fail."
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CHAPTER 4
NEWS CHANNEL
PALM LEAF PORTAL WAS LAUNCHED ON 14TH APRIL 2014
Competition for the users of Palm Leaf -
“KNOWLEDGE TREASURE HUNT
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MARKETING MANAGERS, BRANCH MANAGERS AND SALES MANAGERS OF AMANA TAKAFUL LIFE SRILANKA
WRITING THEIR EVALUATION EXAM ON COMPLETION OF TWO DAYS WORKSHOP ON PROFESSIONAL EXCELLENCE
CONDUCTED BY GOPAST AT COLOMBO
PARTICIPANTS OF MISSION MDRT 25TH BATCH AT CHENNAI
PARTICIPANTS OF ADVANCE LEVEL MDRT SESSION AT THANE