Thiruvalluvar : About Financial Management

About Thiruvalluvar

Thiruvalluvar is a renowned Tamil poet and philosopher whose most famous work is the Thirukkural,

a collection of couplets on virtue, wealth, and love. He is considered one of the greatest poets in Tamil literature and his works continue to be studied

and revered in Tamil Nadu, India and Sri Lanka. The exact dates of his birth and death are not known, but he is

believed to have lived sometime between the 3rd century BCE and the 1st century CE about 2000 years ago.

Thiruvalluvar on Financial Management

Thiruvalluvar's Thirukkural is divided into three sections, and the second section, which is called "Porul" (Wealth), contains chapters that deal with the nature of wealth and how to acquire, preserve, and use it wisely. The couplets in this section discuss various aspects of wealth such as the dangers of greed, the importance of hard work, and the need for self-control.

Some of the key ideas expressed in Thiruvalluvar's couplets on wealth include:

1. The importance of earning wealth through honest means,
2. The danger of greed and the need to be content with what one has,
3. The need to use wealth in a responsible and ethical way,
4. The importance of saving and investing wealth for the future,
5. The dangers of extravagance and unnecessary spending.

Lets discuss about few couples written by Thiruvalluvar on Financial Management.

"Income may be scant; but yet, no failure there, if in expenditure you rightly learn to spare."

Even if the income earned by an individual is less, if the person manages to control the expenses in such a way that it is way less than the income,

he will not have any financial issues in life. A fiscal deficit occurs when the total expenditures exceed the revenue that it generates.

A balanced budget refers to a budget in which revenues are equal to expenditures. Thus, neither a budget deficit nor a budget surplus exists.

"Expenditure, return, and profit of the deed

In time to come; weigh these- than to the act proceed."

It is always better to do cost-benefit-analysis before proceeding with any business/activity in life.

Let a man reflect on what will be lost, what will be acquired and (from these) what will be his ultimate gain, and (then, let him) act.

Today people start many business without analysing what will be gained/lost doing it. Hence many startups have shutdown in recent times which were initiate without much clarity.

"It is not wise to invest in something citing high profits which has the risk of loosing the principal."

This holds good even today, where many

people start investing in shares/mutualfunds/online cash games/cryptocurrencies to gain high profits, with out understanding the potential risk of

loosing the capital.

Lots and lots of money can be made in the markets, but only if a person learn to control his inner emotions.

The stock market is mainly driven by just two emotions ie., Greed and Hope (known as Deadly Enemies in Stock Trading). After all, most of us have a desire to acquire as much wealth as possible in a shortest time. This get-rich-quick mentality makes it hard to maintain gains and keep to a strict investment plan over the long term.

Greed is usually described as an irresistible craving to possess more of something (money, material) than one actually needs. Greed changes our way of thinking and just like we hold on until the market reserves on us.

"There will be an end to the life of him who, having climbed out to the end of a branch, ventures to go further."

A bias towards optimism often leads investors to have an unrealistically positive view of themselves and their futures. The psychological biases of investors that are prone to overconfidence is perhaps the most damaging because our faith in our judgements usually exceeds their accuracy.

Such overconfidence is something investors must guard against. That is not easy because overconfidence is fueled by related psychological biases, called optimism, the illusion of knowledge and the distortion of hindsight.

"The prosperity of him who lives without knowing the measure (of his property), will perish, even while it seems to continue."

A budget will show us how much money we expect to bring in against all of our expenditures from the required expenses like house payments, rent and discretionary spending like entertainment.

It is important to review the budget on a regular basis to make sure to stay on track. With a personal budget, a person can begin to prioritize his spending and better manage his money and financial future. Otherwise, we risk overspending

and racking up credit card debt, which can be a dangerous thing for our personal finances.

"An undertaking of one who has wealth in one's hands is like viewing an elephant fight from a hill-top."

“Live within your means". Funding a business from own source, often referred to as bootstrapping. ie., pulling yourself up by your bootstraps. Bootstrapping a business often means money is tight, particularly in the early stages. With careful planning and making creative use of the resources, the bootstrapping can be a great way to fund a business.

Once the business is up and running, it should start generating profits and cash that can be plowed back into the business. If the company is doing well, this money will be enough to fund any investments in future. This strategy is very effective, low-risk and low-cost.

Overall, Thiruvalluvar's teachings on wealth emphasize the importance of balance and moderation, and the need to use wealth in a way that benefits both oneself and society.

The world today has seen many financial experts in the last 100 years, but Thiruvalluvar stands tall above them as he had clearly defined the wealth strategies

in a much simpler terms using couplets way back in 2nd Century. There is no doubt his teachings will hold true forever.

Happy Wealth Creation !!!