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Start seeing the counter on your phone. Hello, everyone. This is our series of conversations around Financial Freedom. And we have with us Manoj Arora who's the bestseller author of the book around Financial Freedom. We have had one previous conversation with Manoj where he was explaining about why Financial Freedom is important and how to think about them today. We are going to extend some of the Bulls around that and probe Manoj more to understand how each one of us can better manage wealth and better aspire to achieve the Financial Freedom. So welcome Manoj. Thanks Ashwani. Thank you for the lovely introduction. It's a pleasure to have you here Manoj so much. As a starting point. Would you want to just give us a quick overview of what do we mean by management wealth management principles? Okay. So actually, you know, basically there are certain principles related to managing wealth which you know, which are time tested and which have been there for ages. But typically happens is we tend to forget them with time and very very important that we you know review them understand them again, and you know refocus on those principles and they are so time-tested that and they just do not failure things change. Your investing strategies can change your way you handle your money can change where you transact you money can change but those basic principles of managing wealth remain the same. Right, right, right so so much if we were to go down that path of understanding some of those principles, what would you recommend? What is that? What is that first and most key element of these principles to start understanding? Right. So I think the first principle which I would say which comes off the top of my mind is if you go to build wealth whether its Financial Freedom or otherwise also you go to have a very very strong reason why you're doing it, you know, there's a lot of people, you know want to get financially free and whenever I transact with them first question that I ask them is why do you want to get finished? You know Financial Freedom can never be your end goal. It can be a means to achieve something bigger than life. You know when I gave a few examples during our first talk as well. So I wanted to be financially free but they're very strong reasons to be financially free. So I wanted to have a lot of time to spend with my children. I wanted to start an NGO for tree Plantation. I wanted to write books. I want to help. So many people achieve Freedom which am doing now. So this has to be stronger reason behind trying to build wealth. So having a very very strong reason is vital and you know why I'm saying this is vital is because this process of Building Wealth is not complex, but it needs lot of commitment and discipline and commitment and discipline things like these do not come easy to us. Look and if you are a very strong reason to do it, you will then be able to you know, go through this journey relatively smoothly. So I think that's that's the first principle which I would say, you've got to find a reason why you need wealth otherwise was this journey is going to be difficult for you. They to manage a very true. So just to prove you a bit more on that. What would you say is a great reason actually, what would be in your My mind or in your conversations value written about a lot about it. What were some of the reasons which came across as potential reasons sustainable reasons because of which people build it, you know, genuinely genuinely positive reasons why people find that energy to build it. So what were some of those reasons in your understanding great question. So as soon as a hero I have I think interacted with close to 4,000 to more than that in fact People who want to really get financially free and the topmost reasons I would if I have to group them would typically be into doing something for others. You know, when I said doing something could be a lot of people who want to let's say Elevate their society like I was there then there are people who want to you know, do something for the underprivileged children. There are people who want to do something for the environment. They people want to forbid Reyes causes, you know people are ready to do and you know, but the challenge with all of them is that they are stuck today, you know, they're stuck in their own race to either on money or they don't know how to come out of it and they're all stuck. So but that reason, you know is potentially one of the biggest reasons I saw is a Common Thread among all the people I interact with and of course, there are other things which we will want to do which would be like people want to roam around the world. We'll see things people want to follow their passions which could be things like painting photography Sports lot of people want to go into meditation, which they don't don't find time. Otherwise or even if they find time they're too stressed out to you know, really focus on those things. There's a lot of reasons, but potentially the biggest one is people more to help others whether it's somebody in the society or they want to do something for For others and I think Financial Freedom gives them a hope that yes, I mean that's possible to do if they can secure their family. It's really possible to do right when I was in fact across literature. There is this there are many people which are now talking about starting with why there's an author called Simon sinek who specifically wrote a book around this and and your first point exactly goes back to that that first of all, And why you want to build it? So so that's pretty a fantastic starting point for somebody. So so let's image. I have figured out or who listens of figured out that okay why they want to create a where create wealth now, how would you say? What do they do as a Next Step? Next principle I would say is get started. You know, the so many times you figure a bird you're waiting for some Magic Moment before you get started and I have you know, I have done this myself this mistake, you know when I was, you know, long time back, but when I was trying to invest in stock market and all, you know, I was thinking how do I start? When do I start do I have enough knowledge to all these questions? Keep coming to my mind and then I then I used to think. Okay, I'm gonna hide it remember at least spent around 3-4 years. You're just thinking about whether I should get into it or not. So, you know that starting itself is a big big challenge for people. So I would say start you know, that's the second principle. You will learn on the way. There is no way anybody is going to be perfect. It's a lifelong journey to build wealth. It's a lifelong. Earning you go to get started. If you figure out your why there should be nothing stopping you. In fact, if you truly figure out your way. You won't be able to resist yourself. You got to get started somehow, you will learn on the way, you know, so starting is important and when I say start I would rather say you do start as early as you can because you know time becomes a very very big factor and we touched on this particular point in our first talk as well time is going to be a Biggest Loser. were to generate wealth they of course you going to learn Financial techniques strategies. All this stuff is fine. But the biggest thing that you have in your hand is time and when you're young you're getting started at that stage nothing like it so nothing beats time. So we go to start you go to start as early as you can that I would say goes on to be the second the second principle which everybody should follow. Right, right, right. We'll just one question on that and I think one of the some somebody in the listeners also probably wanted to have this question answered. So but like you said that you know, so let's say I am somebody who wants to build wealth and as soon as I like you said that I figure out my why that okay, I want to do this because of this but then getting started do you mean by getting started? Okay, you know start immediately trading without really understanding the risks or using the really get started with Please, you know getting the right knowledge or at least looking for the right mentors all looking to the right sources who can who can then guide you so when you say get started just to clarify a bit more. Is it getting started with you know immediately putting your money to use or putting your taking those decisions or getting started? Okay start acquiring the right knowledge start getting the right mentors. Yeah. I think the top most of it would be start getting a right Mentor, you know, because Before you can invest your money. First of all, you go to take charge of your money this so many people I know who don't even know where all the money is lying. How much money is lying what returns it is only if no clue. If I ask a person was newly, you know comes to me he I would ask him. Okay how much of assets to you have? You know, he doesn't he doesn't he'll tell me. Okay, maybe one crore maybe 50 lakhs. He has no clue. He hasn't yet. In charge of his money. Okay, how much returns each of the assets are giving no idea. How much is your exact expenses per month? How much is your running? So what are you saving the see? These are very very basic simple things which we lose control. We are so focused on earning money that we have lost control on what to do with the money with that we have already on and saved, you know, so when you when I say get started get started with getting getting a person or a mentor who Who can tell you how to take charge of your money first before you talk about investing that money? I think that's absolutely fantastic point is taking charge of the of the money, which you hard-earned money is itself starting point because it is given the distracted word that we live in and given that people around especially Our Generation Z, which is all which is lost in so much social media, you know inundated into social media crowd and all that. They are not really they don't even know what are their income sources. How I raise money lying and so this is I think this is getting you this is one of the principles, you know, get control of your money first get a good hold on. Yes. Yes. Absolutely. Right. I'll tell you I asked people. Okay, tell me an idea about what the average expenses you have in a month. Somebody will say Okay 50,000. It's okay for three months. We going to jot down each of your expense after three months will say, oh it's not 50,000 to 80,000. This is very this is the average each deviation. I'm telling you there have been bigger cases than this. So this very simple thing if somebody doesn't know how much money he or she spending. How do you expect him to generate massive wealth? Okay, absolutely. So this is again, as I said Building Wealth is not complex. It's you know, it's a lot like running a marathon, you know, it's not complex. I mean if unless your view no running it for for a medal or something. It would just run and finish and have fun with it. It's not complex. But you know, it needs some discipline. It needs some commitment from your side. It's not that easy also that anybody can go and run it there's nothing complex about it. Nothing scientific about it. If you're running for fun, but you need some commitment. You need to discipline same goes with belt. You need some commitment and discipline is nothing complicated about it. Very well said - very well said so so so what after that so I've now understood my reason for creating wealth. I've taken control of my money or at least where are all my sources of income are what do I do next to your started on themselves on the journey to build wealth with yes. So then you go to start really thinking about how much you're saving how much you're spending and we we follow very basic principle here. Carlos pay yourself first, I don't know whether you've heard of it. It's a very time-tested very old principle, but truly truly valid and much more applicable in today's world. What it says is your definition of investment. Normally. We follow an equation called as income minus expenses is equal to savings. Which basically means I unsummon come I spend some money and whatever is left is is what is my saving and then I try to invest that saving that's the general people follow but pay yourself first says income - savings is your expenses. So what it means is you on some income you first save how much you say we go to have a of course, you got to have a plan for that you go to consult somebody how much you can save first you save and then whatever is left is you're going to spend. Okay, so I think up after saving if you follow this is this is why we call it as pay yourself first, so you before you pay your electricity bills before you pay your telephone bills before you pay your grocery bills you pay yourself. Okay, so, of course you need a plan for that. So how much you want to save but if you follow this principle that on the first of the month once I've got my salary I go to say first and then I go to spend very time-tested. Very practical very applicable in today's world. This is absolutely that the Simplicity of it is so so compelling is that you know this I think that every Every Generation Z person should be listening to this and at least bare minimum of doing that, you know, at least in thing before they go out and swipe that card before you go out and pay through that wallet go to the next page or Club whatever they want to do. Yeah, like pay themselves save for their future first at least in there. You don't know asking them to you know, stop living their lives so we know we're not saying you don't have to really spend anything or just pay your bills and Grocery and don't spend your not saying that go enjoy whatever you want to put you first pay yourself. Whatever you think you did you pay yourself and then go whatever you want to do with your money. And then they're also means is there is there some is there some very high-level Benchmark or a percentage, you know, which somebody who's just starting on this path should keep in mind that hey, let me just start with maybe 10% or 15% of whatever is man-cub is is there some should there be some guide by guiding principle? They should keep that in mind as well put any any such principle there, although if you read a lot of books from foreign authors, you will find that. Ten to twenty percent is the minimum you should be saving every month, but there's nothing like that. It's all driven by your lie. I was so fascinated about opening up my tree Plantation NGO. I was saving 60% of my earnings. When I you know, when I really got into this entire Financial Freedom thing before only saving 20% So I mean there are no guidelines. It's all driven by how fast you know, you want to be financially free how fast you want to be wealthy which is driven by your why and if you want to speed it up, it can be as high as 70 80 percent of your income again. I have people Freedom Seekers from from all categories. So people who are into negative savings. Sighing people who are saving 80% of the cell vehicle. So but again, it depends on a lot of factors and there's a lot of role of a family also involved in this because when you're into family and you have children and people to take care of then of course, I mean everybody has to contribute and it may not be really possible for everyone to contribute and understand your why so it's very, you know, subjective but I would say minimum anybody should when you starting your career, you should at least say 30 40 percent of whatever you're learning. Fantastic. In fact when I was there are few, I think questions they have which people have been asking in fact that a few callers who want to join and I think I'll put them off till the end of our conversation. There's a question. I think Rahul in asking question may be necessary expenses are better than necessary expenses better than savings and then then after savings discretionary expenses, so maybe in the equation, you know. Oh, they can even split your expenses if there are some which is rentals. Yeah. Yeah, and it's true inherited. So when I say see first with basically means is you go to understand how much you can potentially save certainly necessary expenses. They of course you cannot save that. So you go to consult your planner financial planner to really understand. I mean how much saving is possible for you? Right, right, right. So I'm just going to maybe digress a bit. So one of the things also now that we are on this topic one of the things that I've seen with a number of people at least in my age or even younger is this whole this whole phenomenon of keeping up with Jones, you know that your next-door neighbor, you know that they want the next one Miller big screen TV, or they want a similar car. So, you know, how do I am if you please correct me? If you had aggressing from the topic, but if it is created, please how do you how do we put those blindfolds and just focus on our long-term goal because this world or this, you know, instant gratification or short-term gratification has just taken over a whole generation now, so who put those blinders on hmm. You know, what you saying is absolutely right and there is no way you or me can control anyone know financial planner can Control, somebody's urge to you know compete with the society, but I can only share you share with you a few examples one is Warren Buffet. He still drives a second-hand car. And you know, I'll tell you my own example. I was in u.s. For a few years when I was working when I was not yet financially free and we'll see, you know pursuing this Freedom journey and they were times when you know, I was running so well, and it was very easy for me to you know, just go and buy the best of the latest cars available there and all my colleagues even my juniors. You know, when I was there my team in my project they were having some good cars and I had that luxury that option to buy but he my I survived with probably a lower model and I never felt like let like being Guilt or anything because I was being driven by a goal which you know, which convinced me that it's what I am doing is short-term and I will come out of it and ultimately be financially free. So it's all driven again it goes back to our first principle, which is our y by unless that is strong. Nobody can you know, nobody can help somebody build massive wealth that y has to be very very strong. Absolutely right as time permits. I want to share a very small small example. Go ahead. You know, let's say you have a house and let's say there's a fire in your house. You know, first thing you would do is get out of the house, you know, first you go to save yourself and your family, right? But let's say you come out of the house and you never going to, you know, get into the fire unless it is those But let's say there is a small baby left behind now the entire situation changes now your your reason to get back into the house is so strong that you won't really bother about that fire. It's so ultimately whether you get back into the house, which is burning or you do not get back into the house. It's all driven by your reason. Why would you do it? So whether you want by a the latest Apple Gadget or you want to buy a latest car or the TV or whatever it's all driven by why you won't spend that money away won't save them. If I had some blood right now, but I think we've digressed a bit and I would love to come back to the topic, but just maybe one last question while we are on the show, you know, I think we this this discovering your y itself. You should have been one conversation in itself. It's so important we keep going back to it. So just one final so let's say let's say today I decided my what my why is or Decided what their why is but as life progresses, it changes as life progresses. There are so many things will change in your life. So absolutely is it good practice to know just keep going back to it and realigning it or you know, just seeing that. Okay, this is maybe now it's the time to then recalibrate it okay, probably I'm looking for other things in life or maybe family or maybe you know doing something else in else in life becomes important to let me save for that rather or build Wells for that. So how often Often or what is that? You know that not star reason. How do we keep aligned with that? And how often do we keep going back to it? You know, when when do we decided? Okay. Now I've lost motivation to this one. Just just some more guiding principles around the with building that why you know, so you very rightly pointed out. There is nothing I believe which is like a passion of your entire life. Now, you may be passionate about something today for probably next five. Stephanie has maybe 20 years, but it's quite likely which I have experienced in myself as well. And so many other people have seen it's likely to change over 10 20 year period very easily changes. I mean there was a time in my life and I was so passionate about working for the best of it companies in the world. I was very passionate when I was actually not into ID industry I was into An electrical basic electrical engineer service into that stream. I was very passionate and and ultimately I could achieve my dream I work for some of the best ID companies in the world with its IBM or TCS or whatever you name them then slowly, you know, it changed over 10 20 year period it changed then I wanted to be financially free in order to write books. And now I want to do a lot of other things in life. I want to do something for the environment I want. Do something for for children. So things are changing are evolving and you would know it a person knows somebody who is driven by Passion would not bother about how much money is earning from that particular thing would not bother work day and night will never get tired working on that particular thing which I mean so so these are the things which tell you whether you're passionate about something or not and it changes so you go to if you if you losing focus if you do using momentum you go to Recalibrate, in fact one of the things that we do in our you know in our website there is a forum where we ask people to come and jot down your passions and a lot of other people other Freedom Seekers, you know, they get inspired by the passions of others. So so that's how it works. You know, there's no hard and fast rule that you identified and that's that's going to remain fixed for the rest of your life. Nothing like that. It can change. True true true Seminole. I think we should continue our wealth management principles in maybe we should continue it in another conversation. What do you think so Hello. Can you hear me? Hello. This is to all the listeners. I think maybe Manoj is not able to connect right now. So this is I'm calling out to Shawmut her vast lava Hemorrhage. I can hear you. I can hear you. Yes. Yeah so much. Yeah. I wanted to cover one more point one more pressure or we you know split this call. So that's called as unleashing the power of compounding pounding, you know is something which all of us have heard. I mean you have also heard about it inning every pitch every child. I would say was gone into 10 standard has heard about compounding knows the formula knows probably how do we calculate the market risk? Hmm every closet but none of us probably except for few truly. We realize how big it is. So you either when I go to some seminars and ask people, okay, how different is compound interest from simple interest in is drastically different, you know, it's some extra intense definitely but we don't really see a huge difference while Albert Einstein says compounding is the eighth wonder of the world. So, you know this this son of ab somewhere, okay, and so, you know when I when I give some examples for you, let me remove who share quickly. Temple hit if I give you a piece of paper and ordinary piece of paper from a copy, let's say and ask you to fold it. Okay and fold it in kind of into a half. So you got to do your basically double the thickness of the paper and ordinary paper. If you do 50 folds like this. Do you know how thick it can become they have an it just gives you more to make a guess I shouldn't be. So each time. It's doublings. There's like 50 times in doubles. So let's say point point 1 M thick paper. Regular staple. Okay, right, right. So 54 make a quick guess. Okay, and it does it is 1000 then raised to the power 5 so that will be about how is a million million million $3 million or something like that guessing. So yeah, so how many meters or how many centimeters meters give me a rough idea. It's 0.1. Mmm take don't try to calculate. I just want to understand how do you you know want you to realize the power? Yeah, maybe it will become around hundred kilometers or mean 100 of the order of that so hundred kilometers. So actually it goes into lakhs of kilometers. Okay, and you know you limited I have most people even worse from Financial background who have been working in dealing with financial. I mean with clients and suggesting them portfolios and In all those things, they they're thinking doesn't go beyond 50 meters hundred meters not beyond that and that's the high level in and it's lacks of kilometers, but the beauty is not that 50 folks gave you lack kilometers beauty is what is the 51st fold going to give you? is it going to give you whatever 54 so one extra fold can give you has the power to give you what the first 50 folks gave you so the point here is compounding works together with time and we talked about starting early, you know the compounding works together with time to leverage time and create Magic for you, but the magic is not created in the First few folds magic is created in the last few Folds. Okay, and so you got to give it time and that's why it's important to start early so that you have time for those last few Folds. Okay, so you want to really you know, we all understand what compounding is but we don't realize how powerful it is. So I have my children who understand compounding they are still intense Tanner and 12th standard their own earn money, but they handle money they earn interest even if it's a simple savings account interest. It's important for them to understand what compounding is how powerful time is in their life if to if they will generate wealth Principle is very simple again, but we must realize how powerful it is. Anyway, that is fascinating. Actually, you're absolutely right if it works in such a way which Fascinating People to see that and it's a shame if you know people don't see through the whole power of compounding itself. And now that you mention it, it just doesn't work in one wonderful wealth is what we're talking about today, you know money. I think Ling Works in other ways also for example, you know, if you're if you do something well and you keep doing it consistently. Back in keep getting better at it and it's sometimes the changes not just incremental it adds my flute. So and you know understanding compounding at a very fundamental level Beyond a formula is so critical. So true critical so many which I just have one question for four examples. I have this privilege of talking to you and and listeners are privileged to listen to this example that you've given but you know, how do how do common person who's not exposed to such knowledge who has not gone out and seek? Such knowledge was actively look for this knowledge. How do they realize this? What is a good way for them to understand that this is what how how money or how anything works in the world? Well, I mean unless they go and seek. It's very good. It could be very very difficult for them to really realize its potential. I had a trigger moment in my life, which I talked about in the first talk when I realized the power of compounding. That was some very the age of 32 33 today. I'm 44. So some way it was a very it was a coincidence. I saw something and that triggered something inside me, but you know, unless you're seeking information or you have divine blessing. It's going to be very well through truly realize the power user. You will think that you know compounding that's the problem but you will never realize how powerful it is. You for your entire life, you will keep thinking, you know compounding and so that's I mean you would read you go to consult your women. You really go to seek out. Right? Right, right so much hair before we close. I'll just share a quick anecdote which even which got me thinking about this whole compounding and actually there is stuck me. So there was this New York Times article where this is very old lady. She was a clerk throughout her life. So so no major income. Was very basic and and I did they just some late 90s. So she retired at early fifties early sixties early 50s and then for 40 years her money just grew and she kept saving like like, you know, very meager amount kept saving but for on profession light, which was 30 40 years and then beyond that all her retired years, which was another 30 40 years her mom just they're growing and the time she died. She was a LT milliner, apparently she had like 30 million dollars in her account by when she died so they will just find out. Yeah, that's exactly the point of Financial Freedom is you go to collect enough filth which can set you free. And then you decide what you want to do with your life, right? Okay and what your money will keep growing even if you know learning anything that's Financial Freedom. Right, right, right absolutely knows I think so. I think we touched only four points but I think therefore more principles to table top, which of course will continue in our second example, so married before we close just one I'll take one question from listeners observe. I think we've answered bits of it by will be great. If you can even just sum it up with that. So the listener is so MIT, the srivastava his question has been that how can we manage unplanned expenses? Has so in that equation. I think it's coming from the equation we talked about. So if there are, you know, if you say first you pay yourself first, and then there are expenses and these are potentially your plan expenses because that's what you have oversight of so you and for those planned expenses, but what if there is a sudden medical emergency or whatever there is a sudden unplanned expenses. Which in arms, how does that fit into that equation? How do we allocate make allocations for that particular expenses? the various techniques we use, you know, when we do financial planning for various Freedom Seekers one is of course, you don't go by one month or two months or three months of expenses and see how much is your expenses we take in and keep improving on the data month on month and we try to average out the data over last 12 months or 24 months and then sequels those 12-24 months will cover certain unplanned expenses automatically, you know, so that's one Way to do it second when we plan our expenses in our Financial Freedom. We also keep a buffer. Okay various buffers we keep but we can keep our first like, okay, I'll keep 10% before every month for certain unplanned expenses that second Technique we use third. We look at possible future events, you know one is how much you're spending today, you know, but that's not likely that you want to continue spending the same heads for the rest of your life. So we're going to you expensive going to change with time. So we try to forecast our expenses. Also, again keeping lot of buffers in place. So entire planning activity, you know works on these principles. So this all these things, you know reduces the risk of you know, unforeseen expenses having said that still you know life is not going to go as per your plan get life is going to give you surprises. So always going to be times when we going to replan. No plan, isn't it? Present perfect all plans are based on assumptions people to keep tuning our plan as we go along. That's how we do it. I think it was that was very insightful. And I hope that my I myself have a clear revised a few of these principles now that because in day-to-day life you tend to keep you know, ignoring it in to just get the work done. But I think it was a great division. In fact learning for me. Your stories are super interesting and I'm sure for a lot of listeners who are some of them are at a younger age as well. Probably it's a it's that moment for them where they are. So realize and start figuring out there why? Yep the most people renting, correct? Right? Right, right. So - thank you so much for taking this time out and sharing with us these insights. Would love to catch you again to cover more principles and, you know feeling bring about a holistic understanding of wealth management. Sure if Benny wonderful talking to you same universe. Thank you so much and have a great day. What? Bye-bye.