‘Be Prepared’ is a scout motto and defense personnel are commonly asked to go and ‘Take Charge’. Both these phrases can be used for personal finance too. Any financial planner will ask you to ‘be prepared’. When I meet an army person with regard to his finances the first thing that I feel like telling him is ‘Take Charge’. In a war situation the defense person has to just go and ‘Do it’. In personal finance, he has to learn, unlearn his past wrong learning, and then convince his wife and brother in law that what I have suggested is not too bad, and then he has to take charge.

Also it is important to remember that Financial planning is called PERSONAL FINANCIAL PLANNING…and it is too important to be just left to the planners and other professionals around you.

Remember?“War is too important to be left to the generals”  – Georges Clemenceau  

‘Art of War’ is not just a book on war, but it is a good book to read for personal finance too. The lessons learned are not exactly only theoretical; some military maxims such as “concentration of force at the decisive point” and “no battle plan survives contact with the enemy” apply very much in a practical sense to investing. Do most of us not remember FM Sam Manekshaw telling Mrs. Indira Gandhi that he requires 4 months to prepare for the war? The actual war itself lasted only 14 days. Exactly same in personal finance too – the preparation takes time. Implementing takes a few minutes – the act of filling up the form!

During times of war it is the duty of the Supreme Commander to make sure that all the units of the forces – army, navy and air force have to be well co-ordinated. It might happen that during peace time inter force rivalry, petty politics, etc. get into the way of their smooth co-ordination. In personal finance you need to use the services of a financial planner, broker, accountant, investment manager, lawyer, ..etc. It is YOU who has to find the best strategy and not get worried about a fight between your accountant and your lawyer. YOU ARE THE SUPREME COMMANDER of your personal finance battle! Successful investors (like a successful general) will first of all evaluate the professionals they trust most to help them, understand the charging structure, and then work to coordinate their efforts to succeed in the common goal:  the financial success of their Supreme commander, you the investor.

Who better than a military man to know that the best laid plans can go awry in battle? Exactly where the scout motto comes in “be prepared”. Things will go wrong. Your son who wanted to do CA (so you did not have to have money for his education) suddenly announces that he wants to do medicine (oops). Or something far worse – your parent has had a major illness, and the costs that go above the medical insurance is eating into your daughter’s education corpus. Well, you have to TAKE CHARGE, right?

Just how does one live to fight another day?  Well, the maxim of Napoleon, – “Victory goes to him who has the last reserve,” – is true for investors too.

“In a man-to-man fight, the winner is he who has one more round in his magazine.” Erwin Rommel.

Lord Rama told Ravana (in the battle when Ravana stood weaponless and almost defeated) ‘Tomorrow is another day’ – but you need to be there. Reminds one of another of Buffett’s all time favorites: ‘To be there FIRST, you have to be first THERE’ . Only when you are alive will you be ranked. So short term survival is important for long term success and prosperity. In the sense that one way to ride out the inevitable turmoil in our financial lives (especially in the short term) is to maintain a reserve of liquidity, whether it’s in short-term bonds, Fixed deposits or whatever low-risk type assets you choose, all with the purpose of having liquidity available when it is needed. Having adequate life and medical insurance is one very important step in this direction. It saves you some embarrassing cash flow moments in life!   There will be temptations in a bull market to go all in when it’s most expensive, but a prudent financial commander (YOU) resists this temptation, knowing that the decisive point at which the reserves may be needed will come.


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  1. Hello Sir

    I noticed that you are still hosting your blog on blogspot.com, this is quite disadvantageous because you are losing out on lots of traffic.

    When I shifted my blog from blogspot to wordpress, my traffic went up by 50% in the first because of the better SEO benefits.

    Have you considered shifting ?

  2. Wow…it is the worst of times when hitchhikers tell the driver to change the car because mileage is poor

    seriously, i mean seriously ????

  3. I would say these 3 master class lines sums up everything..:)

    There will be temptations in a bull market to go all in when it’s most expensive, but a prudent financial commander (YOU) resists this temptation, knowing that the decisive point at which the reserves may be needed will come.

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