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Chanakya Niti And Personal Finance

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Chanakya Niti And Personal Finance
Smita Nag - 09 June 2019

A renowned teacher, philosopher, jurist, economist and royal advisor of ancient India, Kautilya, popularly known as Chanakya is the author of the famous political treatise Arthashatra. His story of falling ut with Dhananda lading him to seek revenge on the great empire by guiding and assisting the young ChangraguptaMaruya is well known to all. However, what one might know is that Chanakya’s book and his advises not only held relevance then, but is of extreme importance till date, even in the world of finance and investments.

Here’s what one can learn from Chanakya’s advises and implement it in their investment game;

Financial Planning

“ One should start a work only after adequate planning”

It is always advised to chalk out a proper plan before taking up any work, this is applicable in terms of personal finance as well. According to the Chanakya Niti, it is said that only if your work is well planned will you be able to earn good results. Similarly, even during bad markets, if you have a proper and well chalked out plan in place, you are likely to gain profit.

Emergency Fund

“ Save your wealth against future calamity... when riches begin to forsake one even the accumulated stock dwindles away.”

This piece of advice from Chanakya holds great importance. We all know of the recent Jet Airways incident where almost 20,000 employees lost their job. Imagine the struggle the employees are undergoing at the time, it is when such incidents come up that we wish that instead of splurging on the expensive pair of shoes or that branded perfume, it were rather saved for such an emergency situation. If you have gone to a financial planner, you will know that they all advise you to first create an emergency corpus, which would suffice you with at least 6 months’ expenses.

Risk Assessment

Another noteworthy quote by Chanakya is “One should wear ornaments according to one’s financial capacity.” This piece of advice is of great importance while planning your investment. Every person has their own sense of taking risks, some are alright with taking higher risks while others are timid. So, it is better to create a risk profile keeping in mind your preferences and capacity, instead of following blindly.

Investment Planning

“Accumulated wealth is saved by spending well in business or in charity or by investing it profitably, just as a reservoir is kept fresh by letting out the stagnant water”

Today, there are a variety of investment options available in the market. So, select an option, which is stable and has a sustainable value or return. As mentioned previously, one must always examine the opportunities before investing. With customers being spoilt with choices, it is of utmost importance to gather knowledge of the options before you zero down on anything. But first, one must be sure of their financial goals before taking a step in the direction of investing, as a lot is dependent on it. Always invest with a motive and according to one’s suitability, since it is better to invest the extra amount of your hard earned money instead of parking it in the savings bank account, which will deliver no return.

Gather More Knowledge

“Learning about various disciplines is like a cow of desire. It, like her, yields in all seasons; Like a mother, it feeds you on your journey. Therefore learning is a hidden treasure.”

One who is aware of the works of Chanakya will know that his magnum opus Arthashastra did not talk about just one discipline. It was a book which spoke of politics, economy, daily duties of a king and the subjects, and so on. He has always encouraged his disciples to gather knowledge of more than one discipline to widen their knowledge base. This is similar in the case of financial management as well.

Now, that you have decided on the investment organ and also invested, you might feel a sense of relief and consider your job done. However, that is not true... It has only begun. Much like your personal life, in financial life as well if you stop educating yourself your investments will get stagnant. It is always necessary to stay abreast of the happenings in the world of finance and investment so that by availing those opportunities you can take better benefit.

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