Wise Wealth Advisors

D.Muthukrishnan (Muthu), Certified Financial Planner- Personal Financial Advisor

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Posted by Muthu on January 1, 2009

Wish you and your family a very happy, prosperous, healthy and wonderful new year.


Today we’ve stepped into the New Year 2009. There are people who take new year resolutions and there are others who say why one should wait for a new year day to take a resolution. Whichever category you belong to, I wanted to share few thoughts with you on this new year day.


In my opinion, Money or Wealth basically has three primary functions 1) Current Consumption – spending for our life style 2) Savings and Investments- for our future safety or ‘rainy days’  3) Giving- what we spend for others. Most of us focus either on the first or second or both but completely ignore the last one.


For the last 2 years, I’ve been an Investment advisor, Financial Planner, Trainer and Teacher and hence come across lot of people. I’ve made presentation on Wealth Building in various forums including Spiritual Organizations. So I feel that I’ve seen wide spectrum of people to obtain certain insights. When it comes to Money, the focus is primarily on either consumption or investment. But I feel that we should start giving equal importance to ‘Giving’- donations or charities.  


To some extent, all of us give some money to others for helping them. No doubt about it. But it is very random and impulsive. We are not as methodical or as planned like how we approach our expenses or savings.


I did some research about western societies on how they give. On an average, they donate 2.7% to 4.2% of their post tax earnings for helping the under privileged in their local community. One interesting observation I found was that the Lower and Middle income group donate around 5%  of their post tax earning where as the Rich and Ultra Rich donate close to 3% of their Post Tax earnings.


In Modern India, though we are rooted in a rich culture and tradition, I feel that giving is relatively less and is not in an organized manner.


You may ask me, since I’m talking about giving, what I’m doing for others. As I always tell you, even when I recommend investments, I eat the same food I serve others. So the same is the case with ‘Giving’ too.


Till 2006, even though I was considering myself ‘generous’, when it comes to helping others, I was also giving only on a random and impulsive basis. I did not plan for giving, like I used to meticulously plan my expenses and investments. On introspection, I felt that I need to change this trait of mine.


Hence I resolved and has started giving 10% of my post tax income towards charities from last financial year. Also my wife is sponsoring the annual cost of education for couple of needy children and is planning to do more. To have an external check, I’ve requested my Auditor to verify if my contribution to others is not lesser than 10% of my post tax income. For some reason, either I’m unable to find a suitable recipient or due to liquidity issue, if there is a short fall in giving, it would be automatically carried over to next financial year.  Since all my income and wealth is 100% accounted for (i.e. no black money), it is easier for my auditor to verify whether I’m carrying out the self imposed obligation.


A word here about my Auditor, Mr.S.Ravi. When I discussed the above issue with him initially, I also came to know about how much he is giving for charities, despite his huge commitments and liabilities. It is not appropriate for me to discuss further his personal details. All I can say is ‘Hats off to him and May his tribe grow’.


To quote Bhagwan Ramana Maharishi, “What one gives to the other, he gives himself’. If we look this statement in a narrow perspective, we may understand that if we give others, God will give more to us. But this is an incorrect way of understanding wherein we are making ‘Giving’ an ‘Investment’ for better returns in future. In a broader perspective, this statement means that we are all inter connected. In an inter connected world, pain and suffering of others affects oneself. That is why Ramana also used to say that ‘There are no others’.


For the purpose of this article, I’ve restricted ‘Giving’ to the monetary giving. As you all know, giving is not limited only to money. Giving can also be in the form of time, energy, kind words, listening with empathy, prayers, sending goodwill and peace through meditation etc. Some times these intangible giving is more valuable than monetary giving. Let us keep this perspective in mind while we donate money.


Also giving need not be restricted to the organizations which are registered under Income Tax and offering us Section 80G benefit. Giving can also extend to ‘unorganized group’ (i.e.) helping our maid servant’s children education, helping the old security guard for his medical expenses, feeding the poor old and disabled people we come across in streets etc.


I would strongly urge that let us give 1% to 3% of our income exclusively for the benefit of others. This is only the minimum threshold, the more one is capable and willing to give, it is better for our society. In a country like ours, where around 750 million people are earning less than a dollar per day, we can understand how each one of us can make a significant contribution to the society through our giving.


Usually I write a lot on investments, wealth building on a regular basis. But had a strong urge to share my thoughts on giving with all of you on this New year Day. Hence this article.  

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