Updated: Apr 2, 2021
Let me just take a moment to appreciate SAB TV's not so old show - Wagle Ki Duniya (New) I love how they teach life lessons and the value of life with each episode by beautifully weaving them into memorable storytelling. A recent episode was just the same where they touched the topic of a Middle Class Family's Relationship with Investing and Money. The episode touches various financial lessons throughout the story and today I am here to shed some light upon the same lessons or the lessons that you might have missed in the latest episode of Wagle Ki Duniya (17th March 2021) So without further ado, let us start right into the topic.
The episode begins with the lead character - Rajesh Wagle calculating the monthly expenses with his wife Vandana where they are concerned about their rising expenses. With limited income and increasing expenses, Rajesh sees that this month they have a deficit. (More expenses and less income) Rajesh then remembers an FD that he had in the bank for emergency purposes (actually it was a vacation fund but as their vacation got canceled, they had to now use the FD to finance the gap in income and expenses) and suggests that he should use the same this month to fund the expenses. Vandana then reminds him that this way of lifestyle might not be sustainable in the future and they should look to cut their expenses so that they can reduce the gap. Here comes the first lesson when Rajesh tells Vandana a perspective that his friend had told him some time ago which was,
Rather than looking ways to cut his/her expenses, a middle class individual should focus upon increasing their income.
Often, we focus on ways to cut some expenses in our monthly budget and are always looking for some opportunity to save so that we feel that we cut down our living costs. But more often we end up spending more because we were trying to save some rupees by buying into deals like Buy More and Get More Discount and so on.
So, the lesson here is that instead of micro-managing rupee to rupee in our spendings, we must look for ways to increase our Income. Creating various sources of Passive Income is just the right thing to do. It increases your income and you also do not need to focus more on the later stage. Coming back to our show, Rajesh then starts searching for ways to increase his income. In the office, he hears his co-worker brag about the huge profit he made in a particular stock (40% in 10 days) and thus was fascinated by the fact that the stock market can provide opportunities to make a quick buck. Rajesh thus decides to lay his foot in the stock market and here is our second lesson,
Just because someone made a quick profit in the stock market, it is not true for you as well. Stock Market provides you the opportunity and not the guarantee to earn money. Don't get fascinated by huge returns and enter the stock market.
Rajesh having decided to enter the stock market goes to his neighbor Harshad bhai, who is an equity trader by profession. Rajesh then asks Harshad for some guidance about the Stock Market and Harshad tells Rajesh that this is not the right time to invest as there is a lot of senseless participation from retail investors and thus it is difficult to find the right stock for profitable opportunities. Harshad then tells something which is our third lesson which is,
"Sher Bajaar ki Behti Ganga me kabhi aisa Toofan Aave ki Behti Ganga me haath dhone utara hua Aadmi kabhi aisa Doob jaave ki pata hi naa chale"
which means, In the huge sea of the Stock Market there sometimes comes a huge cyclone wherein an Investor who had come just to make use of the opportunity to cash some quick gains will get drowned in the sea. Don't just enter the stock market because everyone is entering because this creates a risk of losing all you invest instead of doubling your money. Rajesh takes this advice on his ego and decides to show Harshad that he can profit from the stock market and thus immediately opens a Demat account to invest in stocks. He invests ₹5000 which we had kept aside for his daughter's dance class. (Lesson) Vandana suggests Rajesh to get some advice at least before investing anywhere. Rajesh then tells Vandana that if his not so genius co-worker could invest then I can also invest. (lesson) Cut to the next day, Rajesh hears his co-worker talking with someone - probably his broker and Rajesh listen that the person had suggested a stock to his co-worker and thus he too invested ₹2000 and bought 10 stocks of the same company he listened to on the phone. (200/share) Within the next minute or so, the stock goes to 210 and he gets so excited about it that he has earned 5% worth of profit in 2 minutes which he can earn in 1 full year if invested in Bank FD. He then starts daydreaming about the future if everything goes on like this way. While he was day-dreaming the stock dropped to 180 and what he did was what every beginner does in the stock market.
Sell at loss! or Panic Selling
Then while he was crying and thinking about the loss, the stock then again started to rise up and then the stock rose to 220. Now he started blaming why he sold the stock when the stock just dropped a little. He should not have sold it before. This guilt of his was going on in his mind through the day and also at home and he was not able to give attention to his family members. He then realizes that he should have researched about the stocks he was going to invest in and thus researches about various stocks all night and decides to invest in stock by looking at its fundamentals and charts. The indicators were in favor of the stock and also the quarterly results were going to be announced the next week. So he decides to buy the stock of that particular company. Throughout the next day Rajesh keeps on checking about the Stock's price even in the office and this also affects his work's efficiency as well. Even in his house, he did not hear attentively from his family members. Seeing the stock go rising he was so excited about it, he goes into the full confident mode and thus decides to take an overdraft on the fixed deposit to invest in the same stock as it was going up. By the end of the week, he gets to know that the quarterly results were not so good and thus the stock was expected to drop drastically due to the same. Listening to the news, Rajesh gets worried about the same and thus was angry and sad all day about it and thus could not even attend her daughter's dance ritual as well. Rajesh then goes to his father about the situation and his father then tells him that he should not have taken overdraft on the FD which was for emergency purposes. Rajesh then tells it is okay because next time he will research more about the stock and then invest in it. Rajesh's father then tells that if he is going to research about the stock then who will do his job? The actual job, the job of the father, the job of the son, the job of a husband, the job of the head of the family. Fixed Income is fixed and side income is side income. In order to attend to or increase side income, you should not harm your fixed income. It can lead you to lose your job. If you don't have time or expertise then,
Get an Expert!
Rajesh then realises the lesson which was even if he had to suffer monetary loss, he earned a profit in value and experience that one should not just drop into anything just because everyone is doing it and also if one is not an expert in doing the job, one should always consult or get an expert. Well, these were the lessons throughout the episode. Let me just quickly summarize them so that it stays with you forever.
Rather than Micro-Managing your expenses, try to increase your Income.
Stock Market is not a place to make guaranteed quick money. While it gives you an opportunity to make a quick profit, it also has a risk to eat all your Investments as well.
Just because everyone's earning profits, it doesn't mean it is the right time for you to invest your money.
Always Invest according to your risk profile. Don't take extra risks to earn profits.
Taking a loan to invest is never a good option
Stock Market is volatile. You cannot time it. Nobody Can! So investing when it is going up and withdrawing when coming down, leads only to more losses.
Don't risk your fixed income streams to create side incomes. You'll end up with no income if nothing works.
If you don't have the time, get an Expert because, "Jiska Kaam Usi Ko Saaje, Aur kare to Thenga Baaje"
That is it for this one, I hope you didn't get bored! Stay connected, look around other blogs and I will see you soon.
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