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    10 financial learnings from Ravana’s life

    Synopsis

    If you invest in a particular stock or buy property, but it starts going downhill, do not hesitate to sell and make good your loss. As you celebrate Dussehra, follow these financial rules that stem from various aspects of Ravana’s life, says ET Wealth.

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    Always keep yourself updated about financial developments and rules.
    Just as the able king and learned scholar, Ravana, was felled by his flaws, your wealth can erode if you do not follow the tenets of financial management.

    As you celebrate Dussehra, follow these financial rules that stem from various aspects of Ravana’s life, says ET Wealth.

    1. Don’t let ego dictate your decisions
    Ravana’s big ego was the cause of his downfall.

    Financial learning
    Get out of loss-making investments at the right time.

    If you invest in a particular stock or buy property, but it starts going downhill, do not hesitate to sell and make good your loss. If you continue to hold on to the asset just because it will hurt your ego and wound your pride over a decision you took, your losses are likely to accrue.

    2. Knowledge is power
    Ravana was a powerhouse of Vedic knowledge.

    Financial learning
    Keep yourself updated about financial developments and rules.

    If you do not keep track of the domestic market or global events, you are likely to invest in assets that do not give optimum returns. For instance, investing in real estate when the realty market is unlikely to see an upswing in the near future is bound to erode your wealth. Similarly, if the latest rules tax your debt fund investments on early redemption, but you are unaware of it, you will end up losing your hard-earned money.

    3. One mistake can wash away years of reputation
    Kidnapping Sita eclipsed all of Ravana’s other accomplishments.

    Financial learning
    Untimely redemption can result in heavy losses.

    You may have been investing in equity funds for several years, but if a sudden downturn makes you panic and you end up redeeming all the units, you are bound to accrue losses, negating years of hard work. Remember, it is best to invest in equity funds for the long term without being affected by short-term noises.

    4. Don’t trust family blindly
    Ravana was betrayed by his own brother, Vibhishan.

    Financial learning
    Don’t always depend on family for financial advice.

    Your parents may be the most trustworthy source of financial advice, but it is not necessary that it will suit your lifestage or be in sync with changing times. So while you should listen to them, do conduct your own research or hire a financial planner to be able to keep tabs on the economy and global financial status, before taking a decision about your investments.

    5. Hard work is important for success
    He did tapasya for thousands of years to appease Lord Shiva.

    Financial learning
    Personal research about investing avenues and products is important.

    Do not expect your investments to grow magically with the help of tips from your friends, colleagues or TV channels. The amount you need to reach your goals will be decided by how much you earn and invest, the lifestage you are in, your risk appetite and the time horizon of goals. If you take advice from fi ve different sources who have no idea about your finances, do not expect to succeed. Conduct your own research and invest in assets that will help you reach your goals.

    6. Good lineage is not enough to succeed
    Ravana was the great grandson of Brahma, son of sage Vishrava and brother of Kuber, but his own actions ultimately defined him.

    Financial learning
    You may inherit wealth but how you invest and spend will define how rich you become.

    Inherited wealth may be the simplest way to acquire money, but sustaining it or making it grow is not easy. So you will either have to do your own research for investing in the right products or hire a wealth manager, who has the expertise, is sincere and not interested in stealing your wealth. Importantly, you will need to curb extravagance because if you keep spending without making money, you are likely to go bankrupt before you know it.

    7. Right application of knowledge is important
    Ravana was a great scholar, but his knowledge of Vedas did not help when he decided to kidnap Sita.

    Financial learning
    Investing knowledge is half-baked if you do not consider the tax implication.

    If you know that income from fixed deposits is fully taxed, while debt funds invite a lesser tax, but continue to invest in the former, the knowledge is futile because you have failed to optimie your investments . Similarly, if you know that automating bill payments will help you avoid any penalty for late payment, or that rolling over credit card payments will incur a high interest, but continue to roll over the bill every month, the knowledge is wasted on you.

    8. One must take care of one’s assets
    A proficient king, Lanka prospered under his rule.

    Financial learning
    Monitoring one’s portfolio is important.

    You may have made the right investments and have a perfect portfolio with correct asset allocation, buy if you do not monitor it periodically and take requisite action, you may end up with losses. It is not only important to prune out nonperforming assets and rebalance with the market changes, but also to alter the equity-debt ratio in keeping with your age and proximity to goals. If you invest and forget, forget about achieving your goals.

    9. One must have diversified interests
    Ravana was multifaceted, excelling in arts, music, diplomacy and politics.

    Financial learning
    Diversification is crucial to investing.

    Probably the best known rule of investing, diversification of assets is essential to keep your portfolio out of danger during market upheavals. An age-appropriate mix of equity, debt, gold, real estate and cash will help minimize the losses during volatility because if one asset performs poorly, it can be balanced by the good performance of other assets.

    10. Stick to ethics and rules
    Ravana was a true gentleman. He did not harm Sita, and even helped Lord Rama perform yagya to cross over to Lanka.

    Financial learning
    Don’t take short cuts while investing; make full disclosures while buying insurance.

    There is no get-rich-quick trick when it comes to investing. Nor does it pay to break rules, when it comes to calculating tax or profi ts. This is because you will end up paying a bigger penalty than the amount you were hoping to save by cutting corners. Also, if you do not declare your medical history correctly while buying insurance, your claim is likely to be rejected. So stick to rules and it will not only save you money but also humiliation.

    Illustrations by Anirban Bora.

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    Download The Economic Times News App to get Daily Market Updates & Live Business News.

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