Where does money come from?

I have not been writing the blog for a while, as I have got busy into doing something quite different which I will explain later. It has been great to be contacted by many readers who have expressed their wishes to see my write more. Let me start off by writing something which has intrigued me for long.

All of us are interested in making money to varying degrees, some more some less. It is a basic reality that we need money to do a myriad of things that we either need or want to do. One obvious question that often pops up is this – where does money come from? Now one may give answers such as work, business, jobs, services etc that does not really cover the intrinsic answer. Understanding of this is central to earning money, yet many of us are unable to get this basic concept right. So without much ado, and giving credit to all the people who have thought of this prior to me, let me state this profound concept – Money comes from other people.

Now many of you may be thinking as to why this is profound and whether this works at all? Let us test this out by looking at different ways in which we can earn some money:-

  • I made some money recently when I managed to sell Yes Bank stocks after waiting for a long time. Not that I made a killing or something, but the little money I made was only because there were some people willing to buy the stock at my asking price. 
  • At present I am a Management consultant and do workshops for different companies in the areas of Strategy formulation, Leadership, Effectiveness in Sales etc. The money I earn from these workshops essentially come from the companies that are run by other people – Executives, Management etc
  • For most people who are in a regular job, as I was for 27 years, the source of income is the Salary at the end of the month. This again comes from the company or, if you really want to stretch it, from the customers of the company.
  • Look at any service provider, big or small and you will be able to conclude that they earn money which comes from other people. If I buy 2 packets of milk every morning then the milk supplier gets money from me. Same is the case with anything else that I and countless other people buy  every day.

Now that we have established the basic principle that money indeed comes from other people, let us see why this is important for us to understand. As all of us know, there is a big brouhaha in our country today about jobs or the lack of it. However, the reality of India is that the informal sector has always been much greater in numbers as well as revenues as compared to the formal sector. In reality the informal sector understands very well that money comes from other people and they design and sell products and services that other people will be willing to pay for. If you are part of the startup ecosystem, you will know the fixation with revenue models where you want to ask what and how much will the consumers pay for. If you have something of value to other people then they will pay money to get it from you. At the end of the day, money is simply an exchange mechanism. 

The other reason this is important is the helplessness many educated and capable people feel when they are not in a regular corporate job for whatever reason. I have seen some friends search desperately for a job and taking up ones which are well below their own capacities just so they can be earning some money. Several women who are home makers go through their entire life without doing something productive as they are not clear as to what they can do. The situation is definitely changing a little today with work from home options and possibility of several small scale entrepreneurial options but there is a lot more that can be done.

So, if you are in a situation that you are wondering what to do in order to earn some money, whether to get started or to supplement your current income, think of the following :-

  • Look at options around you where the opportunities are there for providing your services in an already existing framework. Examples can be many, but a few are :-
    • Buy a car and make it available to Uber/Ola either by driving yourself or through a driver.
    • If you are financially knowledgeable then associate with companies as an adviser to help sell their offerings.
    • If you can provide services such as Graphic designing, Software development, Website development etc get connected to some networks and offer your services as a freelancer.
  • Create opportunities for any small business based on what value you can offer to people which they will be able to pay for. This can be in the area of knowledge such as Tuition, Consultancy and Advisory services in a variety of areas. It can also be in the areas of small home based businesses. I know of many people who are cooking dishes and selling these in their building complex.
  • If you are thinking that you do not have much value to contribute as all you have done is a job for a long time, that is simply not true. Use your imagination a little to think of how you can be of value to others. It will not be difficult to figure out at least 5 ways for each person. Yes, all the 5 may not be practically feasible from a point of making money but a few of these will be.

I hope a lot of readers will find this useful and will venture out to look at new avenues of utilizing their latent capabilities and therefore making money from other people in a positive way. For those still not convinced, I will be sharing some personal experiences in the next post which, I hope, will be an eye opener for many of you.

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The transience of life

When I was in class X at St Xavier’s School, Durgapur we were taught the Shakespearean play Julius Caesar as part of our ICSE curriculum. I consider it the best work of the Bard and it is full of memorable quotes that had made an indelible impression in my formative mind. The part I best liked was the one where Caesar’s wife, Calphurnia, is beseeching Caesar to avoid venturing out that day, citing the several omens that had occurred. Caesar’s response to it is an all time classic :-

Of all the wonders that I yet have heard, 

It seems to me most strange that men should fear,

Seeing that death, a necessary end,

Will come when it will come.

I do not wish to be morbid but it is a given that all of us will die, some earlier than others and some later. Given that this is an essential truth, it will seem logical that all of us should try to add value to our own lives and that of others while we do live. However, it is really not so for most people. Many of us are obsessed with some facets of life and hold ourselves back from enjoying life fully. Once common fallacy is that we need to be focused on financial responsibility and therefore cannot indulge in some of the things that will greatly add value to our lives. The sad part is that life, as you know it, may well be over tomorrow morning. Let me give you some examples, which brought home this truth to me powerfully over the last one year :-

  • In a get together of our school friends, I was shocked to learn that many of their parents, who I knew very well while in school, have passed away. I felt rather fortunate that my parents are still there and in reasonably good health.
  • When I shifted from Delhi to Chennai a Recruitment consultant had helped me find the job in Sify. Got to know last November that he had passed away, he was only 55.
  • In our school we were a batch of 70 and this has already seen 4 deaths.
  • Look around yourself and you will see examples of people passing away suddenly and unexpectedly.

Death and taxes, it is said, are the only certainties in life and in the Indian context the former is the unique certainty. Therefore, it makes a lot of sense to do worthwhile things in life in an early part, give yourself time and money in the end and finally find time for things you genuinely enjoy. I have tried to do this to a large extent in my own life, though I do not claim to have all the answers. A suggested blue print could be this :-

  • Focus on building your knowledge and skills through education in the early part of your life. However, if you enjoy sports or any other hobbies and are reasonably good at it then you must take it up. Find time for it, can always be done.
  • While making a living is important, do not get into believing that work is your life as that will be a very sad way to view it. Strike a balance – you work to earn money so that you are able to do things you genuinely enjoy doing. It could be reading books, watching plays, acting in group theater or traveling.
  • Children do need to focus on education but do not make them one track people, there is a lot more to life than school marks and college grades. Spend time with them to understand  their potential and try to develop the same. As parents our responsibilities should be to enjoy our time with the children when they are young, they do grow up very fast and will go away long before you want them to.
  • Unless you have a venture of your own or are really passionate about a profession, try to organize your finances in such a manner that you are financially independent by 45 or 50. This will give you enough time to do the things you love and enjoy while you are still physically fit. If you do a job till you are 60 then you will have very little energy to do other things in the rest of your life.
  • While it is impossible to get a general blueprint for everyone, for most in modern India who want to get professional qualifications and work thereafter, follow this :-
    • Focus on Education, sports and hobbies till you are 22 or 24 depending on what qualifications you go for. This is the time to build skills and value to yourself.
    • Focus on your career for at least 4-6 years before you think of marriage.
    • Between 28 and 48-52 focus on your career and your family life simultaneously, making sure you have a rich life as a professional and as a person.
    • If you do things right then by this time your children will be in college and you will be financially independent. Once this happens, you can figure out how you want to spend your next few years.
    • At this time arrange your finances in such a manner that you can live comfortably without having to depend on any active income.

Living life well is important as it is the only one we have. Making it useful for others will make it worthwhile, but we first need to take care of ourselves and our families before we can think of others. As such the earlier we can get to financial independence the more chances we will have of being of use to others.

You may want to read several other posts in this blog to understand how you can achieve the above.

 

Investing for your children? Invest in them instead

I often get asked about how I was able to positively influence my children into focusing at the right areas as far as their academic careers go. In reality much of it has been done by themselves, though I have been a constant presence. More importantly, I think many parents try to emphasise on the financial part of the education by investing for their children, so that they can pursue a course of higher learning, when the time comes. While this is definitely very important, a much more important aspect, often neglected, is what are you doing to invest in your children?

Whether we like it or not, parents remain the single most important source of influence for their children, till pretty much the teen years, when their peer groups and friends take over the role. If you are able to guide them properly and instil the right values in them during the pre-teen period then you would have done something really good for them. The mind of a child is akin to a blank canvas in the first 6 years after birth and this is really the right time to influence them in the right manner.

So how does one go about doing it? Well, for starters, even without any effort on your side, you have already played a role by just being their biological parents. The genes you have passed onto them will determine to a degree, how they turn out to be in future. In many ways, they will inherit your good qualities and unfortunately, most of your poor ones too. While this is something, you cannot do much about, how you come across to them is going to play a large part in the creation of their value system.

It is important to understand here that children learn the most from observing things. If there is a contradiction between what a parent is saying and doing, the child will pick up the second. Therefore, it is pointless to pontificate on the virtues of punctuality if you do not go to office on time yourself or are unable to keep some appointment you have fixed with your family. Yet, this is precisely what I have seen many parents do, time and time again. One of the key areas for you to look at as a parent is to achieve consistency between what you say and what you do. This will instil a core value in your child – words are important to honour, and your credibility as a parent will also be on a good footing.

So, in very simple terms, be a living example for your child. Whatever attributes you want him to pick up such as good manners, usage of proper language, honouring your commitments etc, must be things he sees and observes in you with unfailing regularity. Falling short of the standards ourselves and then complaining that our children have not grown up to be like how we wanted them to is really meaningless. 

How can you play a role in personality development of your child? The problem is most parents try to focus on what career they want their children to have, rather than what kind of individual persons they should grow up to be. Focus on the process and the outcome will take care of itself. Give confidence to the child that he/she can attempt all that they want, it is all right to fail at times. Our role as parents is to guide, provide for and facilitate – leave the acting to themselves. Building the self esteem of the child is really the most critical aspect of their growing up and we must never forget this. So, be it in studies, sports, music, reading or any other activities, encourage the child to try out the best possible and do not be worried about the results.

Specific to academics many parents get very agitated if their children are not doing well in school in terms of the marks that they get. It is important to be ambitious for your children but, here again, focus on the process and not the outcome. Try to guide them into being interested in what they are learning, once they are keen on that their efforts will be automatic and the results will follow. For example, if they develop an interest in Maths they will do well in it at whichever level they study it. Unfortunately, way too often we focus on short cuts, not realising that even if this brings in some short term results, the effects of these are not going to be lasting.

At the end though, you also need to steer them in the right direction when they falter. This will inevitably occur in their teens, when they are confused and a little insecure about how fast their world is changing. As a parent, you need to help them focus on the important stuff. I keep reminding my children that while college life must be fun and they need to have their fair share of it, it is also a crucial stepping stone to their future careers – one that needs to be on a firm footing. I think I recognise the potential and capability of my children, it is important for me to point it out to them.

Of course, in terms of directly being involved in their academic careers, I have been so from their early school days and continue to do so to the extent possible even today. I have been able to do it as they have chosen streams where I have a great deal of knowledge. However, even if they had studied Medicine or Commerce, the basic principles would have remained the same.

To summarise, help your children to become better human beings and they will be successful in whatever they choose to do. Even if you have not got their college fees covered, they can always get an Education loan. The question really is whether they can secure admission to a good college – that is something you can play a role in.

Is a B school education worth it?

March is that time of the year when B school fever is at it’s peak. Most of them have had their placement season’s, leaving some outgoing students ecstatic and others rather forlorn with the job options they have landed. Throughout the country, a lot of activities are going on with the new admissions. Finally, the first year students are looking forward to the summer internships – their first exposure to significant money in corporate world.

To several students and their parents, B school education is like a holy grail that promises a lucrative career like nothing else does. The type of admission seekers we have to the B schools can be roughly divided into the following categories:-

  1. Students just graduating from college who are looking forward to earning more qualifications that will lead to better job options.
  2. Young people in the first 1-2 years of their careers and not liking it much.
  3. People in their careers for 4 plus years who are not able to see much career growth in the future – this is especially true for IT professionals.

If we simply go by available data then there is no doubt that an MBA degree from a B school of pedigree will definitely help in terms of getting the kind of initial breaks like no other alternative. People in all 3 categories listed above will see significant benefits to their careers and exceptions are rarely there. However, there are a few caveats which these people will need to keep in mind:-

  1. Selection of the right set of B schools and your ability to get into one of these are important considerations. Remember, the top 20-30 B schools will give wings to your career, the rest may not be so hot.
  2. Irrespective of which B school you get admitted to, you have to evolve as a professional manager and present yourself well in corporate life, both at the time of interviews as well as thereafter.
  3. Learning is a lifelong activity, a good B school will set you on the path but you have to traverse it through your career.

So if we broadly agree on the efficacy of doing an MBA from a leading B school, the question is where do you do it from? Let me try to answer it by a ranking hierarchy I have for the B schools when I advise students and others who seek my counsel.

  • IIM Ahmedabad, IIM Bangalore, IIM Calcutta.
  • IIM Lucknow, XLRI, FMS
  • IIM Kozhikode, IIM Indore, SP Jain, MDI, IIFT
  • IIT B schools, IIM Shillong, Other IIM’s
  • Newest IIM’s, Good private B schools

If you are able to get your MBA done from any of these you should be fine. Any other places can also be OK but then you are depending more on your ability as an individual to do well and not so much on the institution’s brand power to get you started.

How much will all this cost? Well, the figures can range from 10 lacs to 25 lacs for a 2 year education. FMS is the cheapest among the lot and XLRI is currently the most expensive. Fortunately, this is not too much of a problem as there are many banks which will give you loans covering the entire cost of education. The pay back will really not be a problem even if you are able to get a reasonable paying job and, for most people, the loan can be squared off in the first 3 years of their careers or so.

How much does one earn? The range can be quite wide and is obviously depend on which B school are you from. For the top B schools an average or median salary can be around 20 lacs per year in India. The highest domestic salaries can go upto 50 lacs or so and the salaries outside India can be 1 crore and above. More importantly, even the lowest salaries in a good B school will rarely be less than 10 lacs a year.

So, if you have the aptitude and the ability to get into one of the top notch B schools of the country, it is always a good idea to try for it. Remember, it is hugely competitive and ,unless you are blessed with the benefit of reservation, the elimination process is rather brutal. I was just in an IIMC panel the other day and we could recommend only 3 out of the 20 general category candidates we interviewed. This was after all of them had scored more than 99.5 percentile in CAT.

But that is life for you – to get the best you have to be the best too, more often than not.

What does being wealthy mean ?

In many ways life is a race and we are all participating in it to reach completion. Fortunately, unlike in a real race there isn’t only one winner here, each one of us will end up at different positions and all of us can choose to be happy or unhappy about it, depending on our expectations and our actual achievements.

If you have studied Maslow’s hierarchy of needs, you will understand that the driving force for most middle class or upper middle class people should really be self actualisation, at least after the other levels of needs to lead a reasonably good life are met. This will also explain why many of us are dissatisfied about our lives, even though we may be doing well in the financial context. Wealth definitely has a financial dimension but it is really a whole lot more than that.

Think of it in terms of the scenario below in order to understand this better :-

  • You have a 5 year old son and your worry is to get him to a good school which hopefully does not cost a bomb.
  • Based on your reading of all the Facebook groups and books written by people you believe in, you invest in MF through SIP for his college education.
  • When the time comes for college, if he does not get through his own ability into a good one, you stretch yourself by paying capitation fee in some private college.
  • Beyond graduation if he does not get a decent job you again look at PG etc.

You will see that in all of this, money plays a very minimal role, though it is important. Even if you did not invest for his college education through MF etc, he could still continue his education through loans etc, assuming he has the capability to get into a good college. The real investment here is therefore, how you have guided him since childhood to attain the standards required for getting into a premium college. If you have that ability then you can consider yourself wealthy not otherwise.

The bottom line therefore is that you are seeking some outcome or you are being sought out by others as they feel you can add great value to them – this makes you wealthy. Very often such skills or knowledge can be used to earn money but even if you give it away without any monetary benefit to yourself, it still makes you wealthy. For example, when I write my blog and as a result, several people interact with me for advice, it definitely gives me a feeling of being wealthy.

When I was thinking about the times when I have genuinely felt I was wealthy, I could think of the following situations:-

  • My ability to do things which are important to me such as travel, attending sports or other cultural events, sampling different types of cuisine etc.
  • The luxury of time I have had earlier and today to read up on any subject I like.
  • The success of my children in their school, college and a variety of other areas which give me the feeling that I have brought them up well.
  • Mentoring of hundreds of my erstwhile colleagues, many of who are working in leadership positions now, in the corporate world.
  • The mentoring which I do with many IIM aspirants which has played some part in their getting admitted to these institutes.
  • The professional work in Consulting I do with SME companies in order to help them scale up from where they are today.
  • The fact that many people look up to me in different ways is a source of great pride and joy to me, which in turn makes me feel wealthy.

In several ways, being wealthy is really the ability to give in order to make a difference to the lives of other people in your personal or professional sphere. Money is definitely one medium of distribution but there are many others. Importantly, it is an ongoing process you do not need to wait for it till you have finished your work life or have assets of a few crores etc. Start in whichever way you can and to whatever extent possible, you will feel the power of being wealthy quite soon.

If you were to look at yourself and ask if you were wealthy, what will your answer be? If you want to share it with me, I will be happy to hear it.

Experiences and money – my take

As I am writing this blog post on Monday, sitting in our unit in Karma Chakra at Kumarokom, I cannot but feel somewhat philosophical. I think it partly has to do with the backdrop of the beautiful Vembanad lake which stretches out in a seemingly endless manner and can be viewed really well from our balcony. So instead of the usual investment related post, let me write one on the quality of experiences and whether you need to have a lot of money to spare if you have to undergo these experiences.

Let me start by admitting that some experiences you seek will definitely require a fair amount of money. For example, if you are keen on visiting the Swiss Alps or the Great Barrier Reef in Australia, you will need a certain amount of money to get there. If you do not have that amount then you simply cannot do it and need to accept the same. However, even here the kind of experience you seek will define the quantity of money you need to have to go through it. So you could go to Australia with 2 lacs or do the same thing for a much higher price.

The concept that we must understand here is what you consider to be the core of the experience versus the peripheral frills. It is much like the cake and the icing concept – the icing looks attractive, tastes good and enhances the whole experience of having the cake BUT it does not really decide the quality of the cake. The core of your experience is like the cake itself, the associated frills are akin to the icing. So it really boils down to the kind of person you are and what are you temperamentally suited to. Is the movie important to you or do you want to lie down in a sofa while seeing the movie?

Let me explain with an example that happened just today morning and led me to think about writing this post. Many of you will know that the backwaters of Kerala and the Vembanad lake is famous for the different kinds of boats that ply through them. You have simple rowing boats, ferries and also the large house boats that come with all kinds of comforts and trappings from air conditioned bedrooms to authentic Kerala cuisine which is prepared in the boat while you relax. Now, if you have not been to one of these Rice boats or Kettuvalams, I will recommend you do it once in your life. It is an unique experience and will stay with you life long. In one of our visits to Kerala earlier, we had taken one such boat from Aleppey and enjoyed our overnight stay immensely. This was about 15 years back and it had cost 5000 Rs then – expensive but entirely worthwhile. Note that in this case, the experience we were seeking as a family was being in the House boat and having an authentic Kerala backwater experience. Here the House boat was very much part of the cake itself and not the icing.

Cut to the present – Lipi and I are visiting Kumarokom after a long time and our resort is right on the Vembanad lake. The location of the resort is breathtaking and you can have your fill of the Vembanad lake, including the surreal sunsets and bird watching. Now this resort has a House boat of it’s own which they rent out to the guests, either for overnight or for a 5 hour lunch cruise. The cost of the first is 17,500 Rs and the second is 9000 Rs. It is a happy situation that we can afford to spend the money, but should we? Going by the cake analogy, what is the cake here? For me it was clearly to experience the Vembanad lake and getting closer to the birds to watch their hunting of fish. Yes, it could be done very comfortably from the house boat, but the rest of the facilities there were really an icing.

We chose to visit a local boat jetty reasonably nearby where there were ferries plying from Kumarokom to Muhamma. It was a great slice of local life, with people driving onto the ferry in their bikes and getting to see the regular inhabitants of Kumarokom. The ferry transported us from one end of the lake to the other in about 45 minutes on way. Through the whole journey we got a great view of the Vembanad lake, got to see the water birds at really close quarters and I can vouch that the experience I was seeking was fully met by my criteria – luxury was of course nor one of them and neither was it available. Note that the core requirement had changed from our earlier backwater cruise as I had already experienced it once before. The cost here was obviously a trivial one – tickets were only 10 Rs each on the ferry and we ate at a local bakery close to the jetty for 200 Rs.

So next time you are looking at an experience, separate the core from the extraneous. If you can afford designer holidays and want them then go for it by all means. However, if you love travelling do not deny yourself just because you cannot do it in style. You really do not need an upscale seaside resort to enjoy the views of the sea, nor do you need a private beach to enjoy swimming there. I think many of us are unable to separate the cake from the icing, so I will give you some examples here :-

  • If you like reading, become a member of a library. Do not give up reading just because you cannot buy all the books you want to read.
  • If you want to visit a place but cannot afford the rates in peak season or in the popular resorts, check out home stays and other less expensive hotels.
  • In case you cannot afford the local cuisine in a 5 star joint, check out the local eateries for the same – many of these will be as varied and taste good too.

Coming back to this trip and separating the cake from the icing, I will conclude with how I have looked at it :-

  • Our stay at Karma Chakra is really the cake – we wanted to stay in a comfortable place and have planned for it over the years through our Timeshare investment.
  • Our travel to Kochi by air was also the cake – read my post on air travel to understand more on this.
  • Experiencing Vembanad lake is the cake and doing so by house boat is the icing.
  • Experiencing good food is the cake – we went to a local hotel yesterday with some friends where the local food quality was superb. It was not really inexpensive but clearly lacked the frills of a high class restaurant. Our resort has one such eating place and we are happy to eat there as well.

The point is have both the cake and the icing as your experience if you can afford it. But too often in life, we ignore the cake because we cannot get one with an attractive icing. Maximise the number and quality of your experiences within your means and you will be leading a much more meaningful and happier life.

My expense audit for 2016

In the last post I wrote about the experiences in 2016 and how they have enriched the lives of me and my family. While I do believe that the best things in life are free, many things do cost money and one needs to plan for it and also keep track of it. I have now done an expense audit for 2016 and some of the results were definitely surprising.

To begin with, this has definitely been the most expensive year of my life so far. While that by itself was kind of expected, I did get jolted by the extent of the spending. As you can see from my 2015 audit, last year was significantly more expensive than other years, therefore a high growth on that already elevated level is a little worrying. A closer look at the expense categories and my earlier assumptions reveal some rather interesting highlights.

My assumption that Rinki would finish her Graduation in 2016 and subsequently join a job did not hold true but I was quite happy to be wrong here. On the balance, I had always wanted to do an MBA from a good B school immediately and this was probably because I had taken the same route 3 decades back. Her excellent result in CAT and the superlative result in XAT, were kind of an icing on the cake. She was very happy to join XLRI over IIM Kozhikode or a job in Accenture which she had got. XLRI is the most expensive B school in India today and the overall costs for 2 years would come to about 24 lacs. We went through a lot of discussion about how to fund it and, while our initial plan was to take an education loan for the entire amount, I finally decided to part fund it. This would leave her free to choose her own path without being burdened by the entire loan. Thus we took an Education loan of 12 lacs from the SBI branch at XLRI, and decided to use it in the second year largely to mitigate the interest costs.

The upshot of this was my having to spend about 12 lacs in this year for Rinki’s education, which was completely out of the earlier estimates. For Ronju the costs were lower at about 4 lacs and this was part of the spending plan. If you look at the total spending it will be about half of our total expenditure in 2016. I am quite liberal about what my children spend in college as long as they are having fun in a responsible manner. After all, these are the best years of their lives and there is no point in not enjoying them.

Rent was the next highest category in terms of expenses, it did increase a little as compared to 2015. However, that was not much of a concern as it gets covered by what our Chennai apartment rental earns. Travel was the next category – we had been to a lot of trips in 2016, some for pleasure others for needs like Rinki’s admission etc. I always consider this as money well spent and such experiences enrich your living , not to speak of broadening your mind. If you are interested you can read about my travel experiences in other posts of the blog. 

Insurance was the next category – I have an LIC policy, one ULIP and one Pension policy apart from the Health and Car insurance. Have never had Term insurance as I did not see a point in my situation. Subscriptions to our Timeshare, where we got ourselves upgraded to the next category, along with services such as Library and internet etc was the next one.

Our discretionary purchases for the home was fairly high this year. The furniture we had was age old, though of very good quality. After the uncertainty of the past couple of years where we vacillated about moving from Hyderabad, we decided to bite the bullet this time. Replacing our Sofas and Dining table along with buying some Balcony chairs and Table set us back by about 75000 Rs. I went ahead and bought an Android TV from Sony too, the deal being sweetened by the cashback from credit card and the exchange of old TV. We also bought a new phone for Lipi and replaced our Tata Sky set top box with the HD variety.

So, on the whole it was a great year full of good events and experiences along with some asset replacements. The cost of all this in terms of our total expenses would be as below:-

  • Children’s education + other expenses  : 50 %
  • Rent : 9 %
  • Travel : 8 %
  • Memberships + Subscriptions : 5.5 %
  • Insurance : 5.5 %
  • Cash expenses : 4.5 %
  • Asset purchases : 3 %
  • Taxes : 3 % 

I did end up spending a whole lot more than my plan for 2016, much of it due to changed assumptions and discretionary purchases. Fortunately, my earlier plans of keeping a separate account for the higher education of my children came in handy and I did not need to redeem any of my investments.

But more of that in the next post, when I talk about my income audit.