The Most Authentic Guide on Personal Finance and Investments


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Rs.5 crore KBC winner Sushil Kumar unable to feed his family

I am sure you remember Sushil Kumar, the winner of stupendous Rs.5 crore jackpot at the Kaun Banega Crorepati game show in 2011.

You would be shocked to know that, within a span of just few years, he has nothing but empty pockets and is struggling to survive.

In a recent interview to Hindustan Times, he confessed “What I am left with now is very little money, no career prospect and a whole lot of disappointment”.

In fact, his riches-to-rags story is all the more startling given that he is an educated person. After studying extensively for almost 10 years to win at the KBC, Sushil Kumar is surely much more well-informed than most of us.

To begin with, the tsunami of income tax, with a hit of around Rs.1.4 crores, slashed his corpus to Rs.3.6 crores. But, frankly speaking, even this money wasn't bad at all. It was definitely more than enough to live quite comfortably for the entire lifetime.

However, Kumar divulged that "Much of the money was spent in building a house which I share with my parents and four brothers. I have also purchased a plot of land in Motihari in the name of my mother and some agricultural land”. Further, a large portion went in "setting up businesses for my brothers as we are still a joint family”.

So now, with nominal interest inflow from a few bank fixed deposits and a small income from drawing milk from four cows he has purchased, "I can’t say my earning in anywhere near enough”, Suhsil Kumar acknowledged.

He went on to admit that his wife too “feels little has gone her way in terms of the fruits of my KBC victory and that her life had not improved anywhere near the way it should have with so much money coming my way”.

This, you would agree, is the perfect and classic example of how even colossal amount of money is no cure to the financial problems. There is simply no substitute to good money management. In fact, with proper financial planning even modest incomes can be turned into considerable wealth.

Therefore, let me reiterate a few timeless and priceless money management lessons that Sushil Kumar should have followed.

1. As I have repeatedly warned, don't go over budget with your dream home as it can quickly turn it into a real nightmare. Be reasonable. After all, house is not the only important financial commitment in your life. There cannot be any compromise on children's education / marriage, family medical issues and your comfortable retirement. Moreover, your self-occupied house is a dead asset.

2. Disproportionate liking for a particular asset leads to distorted portfolios. Besides, too much investment in unproductive assets such as gold and land can make you asset-rich but income-poor. Balance across different assets is critical so that varied needs such as regular income, growth, liquidity, etc. are all adequately met. As is often said, there is a Pot of Gold at the end of a Rainbow.

3. Bank deposits are probably the most tax-inefficient product, especially for those in the higher tax slabs. Yet, countless crores continue to be parked with banks where tax and inflation actually diminishes the real value of your money day-by-day. 

4. Keep things simple. There is absolutely no need to invest in complex products to make money. Simple investment products, simple mutual funds, simple insurance plans are equally competent, if not better, to make you rich and prosperous.

A decade of discipline and persistence did bear fruits for Sushil Kumar and won him multiple crores. I don't know whether you will enjoy the same luck with KBC. But I am quite certain that a decade of disciplined and persistent investment —  with the aid of right financial knowledge  — would surely make multiple crores for you and your family.

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