5 awesome ideas which can transform your financial life

POSTED BY manish ON January 13, 2014 COMMENTS (44)

2014 has already started and you must be feeling reinvigorated – just as you were when 2013 started :). How then do you expect 2014 to be different from 2013? Let me explain a bit. When we get on call with some of our clients, we ask them –

“Do you want your next 5 yrs of financial life, like your past 5 yrs ?”.

Naturally, We get an emphatic “NO” and horrified looks (though we cant see them). Now ask yourself the same question and I am confident, for most people the answer would be the same. If your financial life is all messed up, I am sure you must have thought to correct it in this New Year. Let me help you a bit and give you 5 suggestions that you can implement and improve your financial life by leaps and bounds. It will start small, but things will improve steadily.

Here are those 5 ideas, which you should look at. Trust me, these are proven to succeed for most people we work with and even ourselves.

improve financial life

Idea #1 – Help others in their financial life

I can proudly say today, that all my knowledge and understanding of personal finance has come from (and only from) solving other people’s queries on this blog and our Q&A forum. Of course, some part of my knowledge has also evolved by writing these articles. I write the articles and they elicit variety of questions in comments section. I then reply back to those who commented and try to solve their problem. It really takes a lot of time and effort from my side to do this, but in the process, I learn a lot. If I do not know the answer, I ensure I find it out by researching it on the Internet, or come up with an answer through disciplined thought and introspection.

This helps me learn new things and also it feels nice to be able to help someone – after all, I love bonding with people and I hunger to be able to “give” back to our community! Conversations in the comments section between me, and the person asking the question, allow both of us to come out with better knowledge of the topic. What’s more, it really feels amazing to realize that one’s help has contributed to someone’s decision-making process.

I occasionally get into face-to-face conversations with people who seek my help regarding personal finance, and I do my best in helping them. Over time, this has created a wealth of information and knowledge inside me. Heck – I wrote two books too on money just by helping others !

So if you want to learn about personal finance, I can tell you with 100% confidence, that there is no better way than helping someone else on personal finance and answering their queries. You might feel – “but I do not know much myself”. The truth is, even if you do not know the full answer, making an attempt to help someone and contributing a bit extra helps you realize that personal finance is more about common sense and less about expertise.

You can anytime go to our Jagoinvestor Q&A forum, where dozens of personal finance questions are asked each day and hundreds of investors just like you are helping out with all the knowledge they possess. So just pick a question and reply with an answer. You must have surely learnt a lot from this blog and other resources and I know you are 100% capable of giving suggestions to others. I know you might be scared at times, thinking how it would look if you do not give the right answers or best answers to someone. But do not try to give the “perfect answer” – just give an answer with a full commitment to help someone. You will find that not only is your effort genuinely appreciated, but you will also feel amazing yourself and will make a friend and learn in the process. Alternatively, you can also reply to the comments that are posted on the articles from time to time.

I strongly recommend reading this book this book called “Go-Giver”, which will truly transform your way of looking at life and help you in your professional life.

Idea #2 – Write all your financial details at one place

When someone wants to work with us on his/her financial life, One of the first things they have to do is, fill up a detailed datasheet we give to them to capture all their financial details. This is what most of the financial planners will do as initial steps. Now most people react by thinking – “Oh no, I am not filling up a lengthy excel spreadsheet” and some people ask us – “Do I really need to fill this up?”

We tell them very calmly – “Yes, in 2 days, and ONLY then do we move ahead”

4-5 days PASS and we remind them once again about it.

It is only then that we finally get a mail saying that the datasheet is filled and we also get from them something like this –

“Hi Manish & Nandish

Please find attached the datasheet in this mail. My Apologies for sending it late. But let me share with you something about filling up the datasheet. I never knew about my own financial life before I filled this datasheet (here is ZIP version). I mean, I always thought I know everything and all the things are inside my head, I know the details. But in reality, I was so much cut off from my financial life.

I had to find out so many things while filling up this datasheet. For the first time, I seriously looked at my policies, where are my mutual funds, what is their worth exactly. I have discovered how much is my EPF worth and had to discuss a lot with my spouse and few things from other family members. I discussed about my expenses with my spouse and we released so many tiny things we can change and improve. We never realize these things in daily life, because we are just not in touch with whats going on with our expenses. Money just comes in my account and goes off here and there.

We also for the first time, really talked about our long term goals, had to think about the numbers and discussed a bit about which one are more important the others. I felt a bit worried on how will I fill all this , but once I started it, me and wife got involved in it and really liked it. For the first time I feel I know where do I stand in my financial life and have some sense of what all we want from our financial life. This datasheet filling exercise was a short but amazing journey in itself. Thanks a lot Manish and Nandish”

Nandish and I often talk about this and we have now realized that just putting all your financial data in one place is a wonderful way to improve your financial life because you really get in touch with your finances and start thinking about them seriously. For almost 90% of people who do this, it’s their first time taking some time off to focus on their financial life. What was previously a fuzzy area for them suddenly becomes clear and obvious. Just noting down your financial data in one place solves so many queries you had earlier.

So next Sunday (or whenever you can take out some time), allocate 3-4 hours for your financial life and just open a blank excel sheet and put down all your income/expenses, policies details, mutual fund data, Fixed/recurring deposits data, loans details, long and short term goals and everything else you can imagine, and see the magic. You will thank us. Let me make your job easy and share with you this ready made excel datasheet (here is ZIP version) , you can download it and you can fill it up. This is the same datasheet we send to our clients.

Idea #3 – Slow down and make some strategy 

Most investors are just moving with the flow of life. They get up, go to work, they earn, they spend and if something is left, they spend it again. If after all this, if still some money remains, it stays in their saving bank account, and is usually consumed for some useless reason – which looks reasonable and important at that point of time, but makes no sense in long term.

Nandish had recorded this wonderful audio on “slowing down” which talks about why you should step back for a moment and not be hasty with your personal finances It explains why you should “Slow down” and lower your pace in financial life and ask yourself where you are headed.

Listen to the “Slow Down” Audio below

Most people do not even know which direction they are going in their financial life and where they want to be in the next 5 years. In our Investors’ boot camp (next batch starts 20th Jan), we do an awesome exercise for one week, just to make you think what you want in your financial life and to get you in touch with your financial life.

So your current task is to apply some brakes on your momentum and investigate your own financial life. Ponder over few things and find out what is important for you. It is all about getting clarity and coming out from a state of confusion!

Idea #4 – Write down your past 5 yrs history on Paper

Investors keep on doing random things in their financial life for years, sometime with a rational mind and sometimes without much thinking. It would be a good idea to capture for the last 5 years – the major decisions you took in your financial life and the reasoning behind it. For example, you may have bought some policy after meeting an agent, or bought a property, or broken a Fixed deposit, or added major expenses in your life etc. Make a list of all those decisions over the last 5 years, and write down in detail, the reasoning behind those decisions. What made you do take the steps you did?

Do you still feel you did it for the correct reason? Do you feel you were right? Looking back at it, was it the right decision?

When you do this, you will be clearer about your own thinking and how you feel about a lot of things. Maybe you realize that you did something just to look good in front of someone. Maybe you find out that you focus too much on the short term and do not look at things from a long-term perspective. Maybe you will find out that you compromise on your long-term wealth creation just to fund some short-term happiness.

To give you a flavor of how people feel after writing down their history and all they have done in their financial life in past, here is an experience of one of the members of our Investors bootcamp

“I felt many emotions while filling out these questions – pride, great joy, regret & sadness. I saw how I had grown from a child to an adult as an investor and kept coming back to document what I missed. As the picture emerged, it was so interesting to see the patterns emerge and to find blind spots that would probably be immediately evident to someone else. It took me a long time to answer the second question. I was worried, but to document exactly what was worrying me took time. Now that I have it on paper, it feels a lot less worrying! I’m excited to see what the boot camp holds and am looking forward for the next week.”

So start this exercise the moment you complete this article.

Idea #5 – Get accountable to someone in your financial life

In his book – “11 principles to achieve financial freedom” , Nandish talks about Level 1, Level 2 and Level 3 promises.

Level 1 promises are “professional promises”, which you fulfill and complete at any cost and ensure they are never left pending. You bring work home, stay up late, but complete those tasks. You are fully committed to your level 1 promise.

Level 2 promises are ones that are made to our families and we keep them sometimes and do not keep them sometimes. We are somewhat committed to those level 2 promises, but not fully.

Level 3 promises are those promises, which we make to ourselves.

We excel at not completing these Level 3 promises! We surpass others in forgetting those promises and on no occasion do we display the level of commitment we do with Level 1 and Level 2 promises. Waking up early to exercise falls in this level 3 promise. Starting a “SIP” also falls under level 3 promises. And, most importantly, all Personal Finance actions fall into Level 3.

 

Level One  Professional promises  You keep them always
Level Two  Promises made to family members  You keep them at times
Level Three  Promises made with self  You break them all the time

 

Ask yourself, how long has it been since you promised yourself to start that recurring deposit, write your budget, start your SIP or write a will? You will realize you are worse than you imagine :). This happens because you are not accountable to anyone. No one will complain, if you don’t do things and leave them incomplete. You can always rationalize your behavior and you will surely not “Punish” yourself – and that’s the weak point.

Your life goes on, and you give a clean-chit to yourself every time you break a promise made to yourself, citing reasons beyond your control. But this errant behavior is costing you your future. This small thing can jeopardize the happiness of your family some day, can make your retired life a nightmare and can mean your kids get a mediocre education because you were not able to accumulate enough wealth to pay their fees in the future.

This is more serious than you think, but you will realize it only later.

Be Accountable to Someone

The only way to improve it is to be accountable to someone about your promises and actions. Hire a professional Mentor who keeps track of your financial life and your promises, and to whom you report your actions.

A lot of people look at a financial planner as someone who will give “advice”, but not as someone who will help them track where they are headed, who will ask them – “Tell me, what did you achieve this month?” and someone who says things like – “Can you tell me, the reason you failed to change your bank account nomination which you promised to complete by this month? Didn’t you get 2 hours out of your schedule?”

The mentor can also be your family member or spouse if you want. Declare your actions and deadlines to your family. Do whatever it takes, but ensure you are answerable to someone, if only to some extent.

Importance of “Accountability” in your financial life

Let me also share with you, the “Accountability” feature of our Online Investors bootcamp. At the bootcamp, each week you declare your weekly action and what you are going to complete in coming 4-5 days and then you go back and do those things. You have to report things back on Friday and share with us your progress. If you do not complete it, you are asked questions and reasons for not doing your tasks.

Now someone will not shoot you or put you behind bars for not doing what you promised, but when you see others declaring proudly how they completed their tasks and see them feeling euphoric about it, you feel bad for not keeping your words and feel ‘left out’. These group dynamics work for participants and they complete things most of the times. We have seen it working in Batch 1 and Batch 2 of our bootcamp. A little work each week improves your financial life, and at the end of 6 weeks, you move to the next level and realize – “Wow! I have finally done so many things which I was only thinking about all this time”

Now it need not be only at the investors bootcamp – you can report to your spouse, your friend, your Facebook friends (if you are okay declaring your actions) or else, you can pay a professional financial planner and take his help. Anything that helps you is a “great” option. There are no rules.

So bring some accountability structure in your financial life and you will surely see the results.

Conclusion

You really need to design your financial life based on these 5 ideas . Do not just read them, but really practice them and see the effect.

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44 replies on this article “5 awesome ideas which can transform your financial life”

  1. Abhay Pagar says:

    Excellent article Mr. Manish. Thank you for that. I liked the idea of SLOWING DOWN..it is really an eye opener. I am happy for myself that I am practising some of the things you mentioned above knowingly or unknowingly.
    Thank you once again for sharing this information…

    Regards.

    Abhay Pagar

  2. Subir Mirdha says:

    Hi Manish,

    Thank you for your wonderful job for making people understand about personal finance. I am working in a public sector Bank, everyday processing lots of FDs and RDs but you know I have never thought of my personal finance, my savings, investment, future goals etc. I came across your website 2 days back and continuously I have been reading many of your articles which really changed my thought process,, now I am going to make difference. Thank you again.

    1. Wow .. thats a big compliment 🙂

  3. rajan says:

    Thank you. As always a delight to see the jagoinvestor website. There are some good personal accounting software like GnuCash (https://www.gnucash.org). Free and good for non-accountants too. Picks stock quotes and mutual fund quotes from the internet. There are many more such and one can choose the one most comfortable for them.

    1. Thanks for sharing that Rajan

  4. astrosunil says:

    Nice article Manish, After filling such an excel, one can prepare his own checklist of items for upcoming year like – plan & start investing for tax savers & keep monitoring it every month or so. Our spouse can keep a watch on us to ensure that all things are done. Also, one can maintain a small txt file which has lessons learnt -which may be forgotten. learn from mistakes of others & be careful not to commit same mistake in your financial life as well.

    1. Yea .. just filling up one sheet like that can really open up so many ideas . Are you done filling up fully ?

      manish

  5. Hello Manish,

    I have downloaded the file. but i am not able to open it.

    Pls help.

    Regards
    Mnish

    1. I hope you are on Windows and have the MS-Excel installed ?

  6. Narsing says:

    Hi Manish,

    Good site with lot of information on Financial aspect of Person. After reading these articles, I feel bit confident in dealing with agents/Financial consultants desperately trying to sell policies. I downloaded the jagoinvestor-datasheet-2014.zip file but it has multiple folders with only XMLs document. I did not find any spreadsheet. Can you please do the needful. I have been using Windows 7 as the OS on my laptop.

    thks,
    ..Narsing

    1. Hi Narsing

      It might be because it was a .xlsx file . Now I have converted it into .xls and also put a ZIP version of it . Kindly check the article back and click on those links . Hope fully you should get it now .

      Manish

  7. praveen says:

    Very good article. I have been a long time reader of your blogs and have purchased all the 3 books (my best educuation investment).
    I just have 1 question. I downloaded the jagoinvestor-datasheet-2014.zip file but it has multiple folders with only XMLs document. I really did not find any spreadsheet. Can you please upload the correct spreadsheet

    1. Hi Praveen .. Which OS are you using ? I have uploaded a .xls file . If you are on windows , you will get xls file only !

      1. Piyush says:

        Hi Manish,

        I’m using windows but still I ‘m getting all xml files. Kindly re-load the excel file.
        Thanks.
        Piyush

        1. Hi Piyush

          It might be because it was a .xlsx file . Now I have converted it into .xls and also put a ZIP version of it . Kindly check the article back and click on those links . Hope fully you should get it now .

          Manish

          1. Piyush says:

            Hi Manish,

            Thanks. Now I can download the spreadsheet.

            Piyush

  8. kamal says:

    Hi Manish,

    I’m a newbie (just 4 months old) to this forum.

    I’ve accidentally ended up to this blog few months back, and went through all your old articles and registered to this site. All the articles and comments, Q & A forum are thoughts provoking…Till this age (30 yrs), I’ve managed to find ways to meet the financial needs as i faced them.

    But, after reading your articles, I’ve started riding the below investment vehicles for the last 3 months…

    1. SIP on MFs (HDFC prudence, SBI emerging, Quantum LT equity, ICICI blue chip focused) – 6 K/month; planning to raise the SIP amount as I get increment on income.
    2. PPF – 3K/month
    3. Medical insurance to my parents
    4. Term insurance with LIC
    5. RD – 2k/Month to create emergency fund
    6. FD – 40 K for liquid fund

    **** Above all, I’ve helped 8 people (friends and colleagues) to start the PPF account and few SIPs on MF through FundsIndia which gave me immense pleasure and few answers which I’ve explored later.

    You are AWESOME MENTORS!

    Keep rocking Jagoinvestors!

    With thanks,
    Kamal

    1. Its great to read this Kamal 🙂 ! . You have taken so much actions in just 3-4 months which people are not able to take in 3-4 yrs 🙂

  9. Swaroop says:

    Hi Manish,

    Thanks for another good article.
    This is wonderful.

    I have downloaded the datasheet folder however its all xml files.

    Thanks,

    1. Swaroop says:

      Not able to see excel sheet.
      Please help.

    2. Hi Swaroop.

      It might be because it was a .xlsx file . Now I have converted it into .xls and also put a ZIP version of it . Kindly check the article back and click on those links . Hope fully you should get it now .

      Manish

  10. Aniket says:

    It is so simple to do stuff that you have mentioned in this post, Manish. Specially the slowdown audio by Nandish. Also as far as fulfilling the promises made to ones own self are actually equally important. Often the financial goals we set for our own self, are the ones we invariably neglect, rightly said. Thanks for the simple insights to finances.

  11. omshah18 says:

    Really remarkable it is for each one.

  12. Ram says:

    Great article Manish

  13. Jyoti says:

    Hi

    Very nice blog yet again. One question I have- will this sheet be included in bootcamp?

    1. You anyways have it now 🙂 . Why do you need it in bootcamp now ?

      1. Jyoti says:

        Yes I do have the sheet, what I meant was will u go through our details n advise us to update if required.

        1. Hi Jyoti

          In the 7 things which you have in OMG offer, In the bootcamp, there will be group exercises where you will yourself look at some data and insights which will help you plan out things. Note that its not financial planning where each person data is analysed personally. Its a group exercise. Once our bootcamp starts, you will get a better understanding.

          Manish

          1. Jyoti says:

            Ok. Thanks

  14. KRANTI says:

    Happy New Year to Manish & Nandish. Thank you for yet another “In-your-Face” article. I have taken & completed so many actions on my Personal Finance front.
    I enjoyed each and every thing: Buying a Term Plan, Surrendering all JUNK policies, Buying a proper mediclaim, RD. also i read your 1st book which i bought in FEB-2012, fully and followed lot of points.

    1. Great .. its most important thing to “enjoy” the process 🙂 . Good luck !

  15. Rajiv Ahuja says:

    Excellent piece of advice.

  16. Sushil Girdher says:

    Hello….This article was again excellent. I fully agree with you at point no 1 because i also try to help others regarding personal finances. Though i do not have much knowledge about so many things, but i am confident that after reading your blog ( and other personal finance blogs) i have gained much knowledge which i try to use in practical life.

    Regarding excel sheet that u have shared here, i am going to fill it in next 2 days . Much of the points i have already compiled about an year ago after reading your article regarding documents…

    I just want to ask one question—-if i send this filled excel sheet to you, how much is your charge for making a specific plan for me for next few years goals….Though i have planned many things, yet i want to know whether i am on right track? so i want professional guidance

    1. Sushil

      Thanks for sharing your views on this, You can opt for our financial planning service – https://www.jagoinvestor.com/services

  17. Mangesh says:

    Thank you so much Manish!
    I never though of writing my investments on paper/sheet before.
    My first job after posting this comment will be to fill up the sheet. 🙂

    1. Great! , I would love to hear back from you , how you felt after filling up the whole datasheet !

      Manish

  18. Bharat Jhala says:

    Dear Manish,

    Very nice article giving insightful and important resolutions at the beginning of the year 2014.

    As per Nandish’s suggestion, I am currently reading Go Giver – by Bob Burg. I can see that this book is taking me one step ahead in my thinking pattern and action behaviour.

    Great job you guys are doing ! Keep Going!!

    1. Yea .. Go Giver is a masterpiece . If you live by those principles, its bound to make huge difference to your life 🙂 .

      Manish

Comments are closed.

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