We have a reader question by Anonymous

In a changing world, how do we achieve financial security which will last? There are various ways of achieving it but what is the most optimum way?

Nobody can achieve financial security. Nobody.

Lakshmi is the goddess of wealth. Lakshmi is noone’s slave. Lakshmi will chase Vishnu, the value creator. Whoever creates value, Lakshmi will chase him and stay with him. But not forever. She will abandon her lord and will find a new one in due time.

  • If somebody who has lots of money thinks that he has secured Lakshmi, he is the biggest fool. The moment he thinks that he has figured it all, he will stop creating value. The moment that happens, Lakshmi will leave him.
  • If somebody has little or no money and thinks he is insecured, he is also a fool. The moment he is aware that he is insecured, he will start creating value. He will take up a job or start a business to deliver some value and when that happens, Lakshmi will come on her own without any invitation.

Key thing is Financial Independence, not Financial Security

On a very basic level, financial independence can be achieved by two things

— Keeping your needs to the bare minimum.
— The ability to churn value with your skills, knowledge and existing money.

Financial security is not accumulating lot of money.

People confuse financial security with having lots of money. No it is not. In reality, it is the exact opposite.

I know a close relative, he had lots of money at young age. He got married, built a villa and lived a life of abundance, without having to worry about money at all. He had two sons and both of them would relentlessly buy things I will never buy, regardless of how much money I have. I used to ask my father how they can afford things which we can’t to which my father used to say,

You will understand it when you grow up. We live a life of moderation since I don’t earn through illegitimate ways. He does and the same money he has earned through unfair practices will abandon him some day.

20 years have passed. His two sons didn’t finish school, one is addicted to drugs, another is in Jail for criminal offence. He went Bankrupt paying for the lawyers, lost his house to creditors, went through couple of cardiac strokes and is completely broke at 70 and under debt he can’t pay back. Worst, he and his family has no idea how to recover from this crisis

The ideal goal is to achieve Financial independence and not Financial Security.

We don’t understand this. We try to achieve the latter, not understanding that security cannot be achieved if you continue to be a slave of the financial system.

Strive for Financial Independence

  • People who want financial independence, invest some of their time and money in something that creates more value. People who want financial security give their time and money to corporations, bank and insurance companies, so that the corporation can create value with their time and money.
  • People who want financial independence spend on things that are needs. People who want financial security spend on things that they want.
  • People who want financial independence, acquire skill sets which gives them a better job. People who want financial security cling to one job because they think it is secured and are afraid of change.
  • People who want financial independence are creators e.g Entrepreneurs (Vishnu). People who want financial security are the administrators  e.g Managers (Indra).
  • People who want financial independence have low needs (Vishnu). People who want financial security have high needs (a big house, a car, lot of material engagements).

Eliminate, not accumulate

The ideal goal is to eliminate the dependance on money, not accumulate it hopelessly for the rest of your life.

Step 1: Keep the needs as low as possible. Don’t buy that expensive gadget, car or house because you think you need that. You don’t need that actually. Don’t spend your savings on a grand wedding. Don’t spend to impress others. Some guy (Indra) has convinced you to give him your Lakshmi in exchange of Heaven (a home, car, grand wedding), but don’t buy that heaven.

Step 2: Instead, invest that part of your money in something which creates more value. Invest 1-2% of your salary in something which needs money to survive. Sure there will be many failures but you will learn how to invest in something which creates value. And some part of it will come back to you in due time if you invest diligently.

Step 3: Invest in real world skill development. This could mean learning how to cook, how to drive, how to repair phones, how to speak a language, how to sell something, how to repair something, how to create something. These are real world skills which will never go out of business. You can at least open your window restaurant and sell food which people will buy. You can travel to another country, become a driver and survive for a while. You can take up writing as your profession and work from anywhere. Trust me, not many can do that.

Step 4: Take calculated risks. This could mean quitting your job and trying something new, fixing a problem or creating some sort of value. This is what Vishnu does. If this doesn’t work out, you can always come back and do whatever you were doing.

Don’t cling to that one job or business forever. This is what Indra does. He is insecure and clinges on to heaven forever. He is afraid of change and taking risks. He wants Lakshmi but since he is insecure, he tries to chain her. He puts all the Lakshmi in his Bank and tries to forcefully enslave her.

No, she won’t. Lakshmi will choose the Vishnu who is taking risks and creating value.

The ideal goal is financial independence, not security. You should strive to acquire skills that will fetch some Lakshmi. With the little Lakshmi that has been earned, you should roll it on systems that are creating value and need Lakshmi for survival. In due time, this will create more Lakshmi and she will happily come to you. Now you should let her go and roll it up again and again into systems that need more Lakshmi for value generation.

Never enslave Lakshmi, she will not come to you after a point if you forcefully try to cage her.

And don’t listen to the Indra. This guy has a heaven but he wants your Lakshmi. He will show you different toys and will seduce you. He will show you an expensive gadget, a grand wedding, a big house, some schemes and plans. His goal is to convince you to give him your Lakshmi, so he can use that Lakshmi to become a Vishnu himself.

You should keep your needs to the bare minimum and continuously use Lakshmi for value generation, that alone is the goal towards financial independence.

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