There is a famous saying “An ant on the move does more than a dozing ox”. I am a great fan of the ant. The ant thinks winter, all summer. Ants collect grains, seeds, pieces of vegetables and meat and of course sweets. I have seen ants walking in lines, into a small hole in my floor or window. I guess they spend their winter days there, in the ant nest. Ants have plenty to eat in the cold winter days, only because they work so hard in the summer days. Yes, ants are able to collect food so easily because, you spill a lot around. They come in no time and grab what they can collect. Do ants store their food in the open? No, ants know there are a lot of hungry mouths in the winter months. They store their food safely in ant nests. This could be a hole in your wall, safe and secure for the winter. Something to ponder upon… An ant can lift objects 50 times its body weight. So what are the financial literacy lessons you learn from the ant?
Spilt a few grains of rice yesterday. Ants came in no time. They lifted the grain and walked to their hole in the wall. This got me thinking. I wanted to invest in the SIP of a good equity mutual fund. Did all the hard work in picking up a good equity mutual fund scheme. When it came to investing in the plan, the famous words…Lets invest tomorrow. Many tomorrows have passed and I am no closer to investing in the mutual fund scheme, than man is to set foot on Mars. This is so unlike the ant which grabs opportunity, the moment it presents itself. Want to invest, but waiting for the right moment? Waiting for that bonus, pay hike, perhaps even a windfall like winning a lottery? The best time to invest is right now. There is no better time to invest, than in your college days. The lessons learnt are carried deep into adulthood.
I carefully observed the ant and found that come what may, the ant never stores food it collects for winter days in the open. The ant knows that all other insects which enjoyed the summer months, would try to steal its food in the winter days. It stores its food, hidden in holes, in the walls and the floor of your house. If any insect tries to steal its food, a group of ants would attack it. The ant believes in safety.
When such a small insect can do so much to protect its food, how much more you must do to protect your finances. What about the money you put in an unregulated chit fund? A chit fund is a collective investment scheme, popularly called CIS. The chit fund works on word of mouth. You put your money in the chit fund…Then you tell your friends and neighbors… who also put their hard earned money in the chit fund. Soon a group of people invest in this scheme. The chit fund claims that you can easily withdraw your money in an emergency. It also promises you, return of 20% on your investment… 50% on your investment…100% on your investment, in very quick time. The chit fund could close overnight and all your money could be lost. This is just like an ant leaving its food in the open, which never happens. You must invest your hard earned money in financial products which offer you security. Your money is safe and you also earn interest on it. Be careful when investing your hard earned money in too good to be true schemes. If a scheme offers you abnormally high returns in no time, ask a simple question…How are they making the money?
The ant knows that moisture is its worst enemy. The ant has to keep its food safe from moisture. Throw a little water at the hole where ants store their food and see what they do? They will carry their food deeper into the hole so that water cannot touch it. What about your hard earned money? What if it is all eaten up by inflation? What is inflation? The rise in prices of goods and services with time is called inflation. You will be able to buy a lot lesser with the 100 rupees you have in your pocket, a few months from now. You have to increase your money to save it from inflation. How do you do it? You have to invest your money in financial products which give a higher return than inflation. You could leave your money lying in a savings bank account and earn an interest of 4% a year, or you could invest wisely and earn a much higher return on your hard earned money. Always invest in a financial product which gives return higher than inflation.
The ant collects its food everyday across the summer months. It does not collect lots of food on one bright sunny day and then rest for the remaining summer months. Which financial product comes to mind when I talk of this approach? You guessed right…It is the SIP method of investing in a mutual fund. Systematic investment plan popularly called SIP, is a method of investing small amounts of money regularly (say each month) in a scheme of a mutual fund. In time your investment in the mutual fund, grows to a very large amount.
It’s pretty hard a job to watch an ant and learn. Better consult our team of wealth doctors at IndianMoney.com, always ready to help and guide you. You can explore this unique Free Advisory Service just by giving a missed call on 022 6181 6111. IndianMoney.com is not a seller of any financial products. We only provide FREE financial advice / education to ensure that you are not mis-guided while buying any kind of financial products.
Mr C.S.Sudheer is a management graduate. He started his career with ICICI Prudential Life Insurance and later on worked with Howden India. After his brief stint in Howden India, he moved on and incorporated Suvision Holdings Pvt Ltd which is the sole promoter of IndianMoney.com. He aims to build a nation that is financially literate with investment savvy citizens.