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Monday, November 24, 2014

Your assets are your employees

You are the CEO of this company called as 'Life'. Your assets are your employees. If you treat them any less, the results will not be surprising. Ignoring your assets, not paying attention to what they are doing for you, what returns they are giving and can potentially give, and not investing time on them is the worst treatment you can give to your on...

I was sitting with my old friend, Arun, who was talking about how things are going on in his organisation.
"No one really cares for what we do." he remarked quite frustrated by the way things were going off late."
"What happened, Arun?" I inquired.
"I have so much potential. Not only me, there are so many of us with immense potential, but I do not know why the management cannot see it. They are all just focused on hiring new people and firing the old ones as if the new blood will solve all their problems." remarked Arun.
"Well, if they can bring in more energy, it might help. Isn't it?" I was playing the devil's advocate.
"Yes, it might. But what about the energy that the organisation already possess - ie all of us. Why cant they spend a fraction of their effort in unleashing the energy that already exists in the organisation, and see the magic."

Arun was not wrong perhaps. We often overlook what we can potentially do with what we already have. And this is exactly what we do with our assets - the investments that we have created over years of hard work and savings from our hard earned money. 

Most of us are too focused on earning more money, getting the next increment, next salary raise, next promotion, a better paying job etc. We devote so much energy into this side of the financial equation, that we often forget and overlook the other side of the equation - ie what happened to all the money that we have earned till now? We did save a good portion of that. We invested that money as well. How are these investments performing? What returns are they giving us every year? Are the returns of all our investments performing as per our plan? Are they doing better than inflation? 

My experience with thousands of readers of my books clearly indicate that most of us will only have a very vague idea for all these questions. What an irony, isn't it? We worked so hard to save and invest the money, and then we tend to dump it into ignorance. Even if we put a small portion of our focus on, first,understanding what my portfolio is giving me, and secondly, on unleashing its true potential, the increase in our income may surprise us like never before. 

Let us take a very simple example. 
Let us say, you have a corpus of 90 Lacs that you have accumulated over time - in different investment options like PPF, EPF, FDs, Savings, Mutual Funds, etc..
Now, assume that you are able to get 5% extra returns from your corpus (by investing a little bit of time every day reading, understanding and tuning your investments) - your returns from your corpus will go up by 4.5Lacs per year - which is close to Rs. 40,000 per month increase in your inflow of money. Now, come to think of it, i am sure it would not be that easy to get an increase of Rs. 40,000 per month in your salary in a years time. And remember that as your corpus grows bigger, the value of this 5% keeps growing. You just cannot beat this additional inflow of money by a salary increase. And think more about it, you are not really working here, it is your assets (investments that increase in value of their own) who are slogging for you, and creating passive income for you.

So, as a CEO of your life, take charge of your assets - and unleash their true potential - and let them work for you. Pay them attention, empower them - because if you don't - then they won't work for you. The only other choice that will be left with you is that you will keep working for yourself for all your life. This was something which was never acceptable to me. What about you?

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