Are you surprised that I am writing this post now? Well into my 12th year of blogging why am I doing a ‘Personal finance 101’ for businessmen?

Well I was quite shocked to see how many businessmen are very poor in personal finance. I have been asking a friend for his investment details, and I have not got it over 4 months. Too boot it, his son hopes to be a finance professional. It is clear that the personal finance piece is sick, boring, tedious (equals very boring), irrelevant – or whatever in the minds. In this case father and son. In most other cases husband and wife. I know he reads my blog and he is going to call me with 10,000 excuses if not 1,000,000 excuses. Ditto for doctors. Ditto for many other professionals.

When I talk personal finance to businessmen it is “I am earning Rs. 1 crore a year …my expenses are about Rs. 10L …why do I need to plan” – or some shit like that.

Do you have a will – is a question met by saying “My wife is a joint holder….” shit.

How will you distribute your wealth among your children…is of course blank. They are hoping that it would be EQUALLY…but actually they do not have a clue.

What is personal finance? Well there is no clear definition, but let me start by describing it.

Personal Finance is the process of managing the individual (or family) financial resources (including borrowing), to create ENOUGH wealth to achieve the basic needs, the chosen lifestyle and the aspiration of the people involved. It also includes the documentation, legal, taxation, and other aspects to SAFEGUARD this wealth over generations.

Now this is easy to understand is it not? I would include processes like communicating the personal finances to your family (and non family) members – like your CA, lawyer, financial adviser, etc. also.

Let us keep up our tradition of seeing what it is, and what it is not…..

‘Personal’ means personal! Not your business, not what you ‘show’ as ‘salary’. It is just what money comes home for the household expenses, goals like kids education, vacations, buying your toys….etc. In a business family the expenses are all mixed, and nobody (really nobody – not the accountant or even the sole prop or partner) knows what is personal and what is business.

Finance – of course is the cash that comes home for being used at home. This is the amount that is going to fund all your goals. This also includes the premium paid to cover contingencies like death, illness, critical illness, accidents….and what have you.

Not enough businessmen can explain what they have for their business (business succession planning), or for the family (but Subra the house is in joint names, so it will come to my wife AUTOMATICALLY on my death). Most of them need a kick in the butt, but because they have a big net worth nobody talks to them like that. Having Rs. 20 or 30 crores is not a license to destroy that by being careless.

I am not even talking of what mistakes they make – that will be a different topic. I am just saying that most businessmen have no clue on what is personal finance and what they need to do about it.

https://onewallet.in/wealth-management-class

 

  1. For Indians,Personal Finance starts with Personal earnings & ends with Personal spendings,Personal meaning family.
    That is all.
    Rest is Greek & Latin.
    Indian ranges from a person who always walks to one who always flies for mobility.
    Happy that their careless & reckless spendings nurture my Investments,one or other way.
    Dr.Rajnikant Gajjar
    Bharuch

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