Let us gain wisdom
I am starting my column with a few quotes from one of the world's best financial wizards – Warren Buffett.
Let us learn from his wisdom.
Buffett's two rules for investing
"Rule Number 1: Never lose money. Rule Number 2: Never forget rule Number1."
Don't be greedy
'If you buy things you do not need, soon you will have to sell things you need'.
Today if all of us followed Warren Buffett's advice we would indeed benefit in our lifestyles whatever financial condition we are in.
Investing your hard earned money does not have to be difficult, painful or risky.
We must remember high returns come with high risks and also lack of knowledge of the products. Today as I look at my investments I realise that my returns, which my life depends on, have reduced considerably due to the fall of interest rates. Banks have to follow guidelines set up by the Central Bank and interest rates both for lending and deposits have to be within the slab prescribed. However, you will still get calls from new NBFIs (Non Banking Financial Institutions) offering much higher interest rates, very tempting indeed! Do not fall for this or even if you do try out small amounts with short tenures.
Investing in share markets is also an option – I understand we are all wary of this after the debacle of the past; however, the market has changed and as long as you are investing only 20% or less of your total available funds it could be worth a try. Make sure it is a good financial institution, which has specialised and knowledgeable staff to assist you.
Also remember that you can invest in Paribar Shachaya Patras (Family Government Bonds) for 5 years which will give you a good monthly interest. This was originally launched for women (over the age of eighteen), but now men over sixty-five can also invest in this. The maximum amount per person is Taka forty five lac – a husband (if he is over sixty five) and a wife can invest Taka ninety lac in total, but individually.
Lastly but importantly, we must all learn to curb our greed; this culture in our society of being one up or 'keeping up with Joneses' is really this:
'If your friends overeat, you're more likely to overeat. If your friends are active and sporty you're more likely to be active. And if your friends like to spend money, you're more likely to spend too! ' We must all learn to have our own individual identity and follow what our own intellect tells us – it will be foolish to want to purchase an expensive piece of jewellery just because your friend has one. Greed is evil and can ruin you, do not ever get trapped in it!
By Nasreen Sattar,
Former CEO, Standard Chartered Bank, Afghanistan
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