LEARN ABOUT MONEY(LESSON 9)

SAVERS ARE LOSERS

After hearing to what ram said bheema realizes that he cannot be a rich man in his town without having a second source of income.So he starts saving a large pile of amount in his monthly profit hoping he could create a fortune one day.

BHEEMA: I have discovered a way to build my wealth,and its simple saving large amount of money

RAM: Saving and then Investing right?

BHEEMA: No, just saving

RAM: Then,how can you build wealth,saving is just saving and in long term it become worthless.

BHEEMA: Why can't I build wealth😨

RAM: The steps to build wealth is 1.saving,2.investing

BHEEMA: Then just now,you said saving is worthless

RAM: You must understand Inflation the prices of products and services going up

BHEEMA: No,I haven't heard

RAM: Suppose if you want to purchase grocery for a month to your home which almost cost 100,000,the next month again you come to purchase the same quantity and quality of grocery but now the bill is 1,10,000,and this will continuing due to the government policies so gradually our consumption rate decreases and it will become worthless.

BHEEMA: So,what should we do

RAM: Investing is the only solution,to beat the inflation your money grows as the inflation grows and your consumption rate remains stable.

LESSON LEARNED

INFLATION IS MAKING YOUR WORTHLESS AS TIME PASSES

SAVERS ARE LOSERS

                          -ROBERT KIYOSAKI

                                        

 

 

LEARN ABOUT MONEY (LESSON 8)

RELATIVE INCOME VERSUS ABSOLUTE INCOME

Bheema electronic store is successfully executed and making good turn over,everyday he counts his profit and turnover as it surge he is even more motivated to apply Innovative solutions to his business,being enthusiastic he meets ram to share that he is now richest man in his town.

BHEEMA: Hello ram,now I am the richest man in my town

Ram: OH good to hear

BHEEMA: Do you know my monthly turn over is 50 lakh and profit of almost 30 lakh

RAM: How come,your town population is too less to make such a whooping profit

BHEEMA: Good question,I have scaled my business to neighboring town through E commerce,people are finding comfortable to purchase from local brand  than a corporate one.

RAM: Everything is ok,how many hours you have dedicated to your business

BHEEMA: Eighty hours in a week

RAM: Then you are not the richest man in your town

BHEEMA: What,are you joking?

RAM: No,In your town there are people making 20lakh profit by working 40 hours a week.

BHEEMA: But its less

RAM:Yes,there is standard terms to calculate whether a person is rich or not that is known as RELATIVE INCOME VS ABSOLUTE INCOME

BHEEMA: What is it?

RAM: RELATIVE INCOME is hourly income,ABSOLUTE INCOME is per year income,3crore per year/50 work week=600,000 per work week,600,000per week/80 hours work week=7500 per hour,on the other hand your neighbor 2crore per year/50 work week=4lakh per week, 4lakh work week/40hours work week=10,000 per hour

BHEEMA: What is this per hour?

RAM: You are making 7,500 per hour but your neighbor is making 10,000 per hour who is richer

BHEEMA: But how come for me you calculated by 80 , for him it is 40 hour only

RAM: He is working 40 hours per week,but you are working 80 hours per week that is why

BHEEMA: In real terms I am working harder than him,just to make less money compared to him

RAM: Yes

LESSON LEARNED

ALWAYS CALCULATE YOUR INCOME BASED ON WORKING HOURS

RELATIVE INCOME IS THE REAL MEASUREMENT OF WEALTH FOR THE NEW RICH

                                                                                           -TIMOTHY FERRIS

Learn about money(Lesson 7)

BEING UNIQUE VERSUS STUPID

Bheema has started construction for his electronic store,meanwhile he gets to know that Innovation always wins his mind forces him to think in a different way as he heard that eCommerce giants are entering into his town till now there was no service offered to his town.The fear made bheema to think and he came up with an idea rushed to ram's house to ask his advice on this. 

Bheema: I have started to think like you.

Ram: what?

Bheema: Have you heard about eCommerce operations beginning in our town,I have plan to overcome them.

Ram: Oh then tell me.

Bheema: They are offering product and service(delivery),I am going to offer product and delivery(service) in my town.

Ram: But that's not going to work out

Bheema: You are dump

Ram: Understand the E commerce has lot of mobiles which consists of various models,prices,companies and the latest products.

Bheema: so?

Ram: How can you think the customer would come to your shop where choices are a single percentage compared to E commerce.

Bheema: but I heard being differ rent wins the game

Ram : Ya, but you must also know that you have to fix what is wrong not what is right.

Bheema: Do u mean I am wrong?

Ram: No,you have to fix what is wrong in your buisness

Bheema:what?

Ram: E commerce giants need logistics partner when they enter into smaller towns as their own logistics wouldn't be feasible to a small town,In your town there is only a one logistics company and it has no plans of scaling up also.

Bheema So,what?

Ram:collaborate with the logistic partner before they collaborate,after that as the company have no resources to handle new clients they will reject the offer.Later you will the be the only mobile shop owner and E commerce   for your whole town.

Bheema: will they if I offer delivery service

Ram: will buy from Amazon(products not available nearby),their service was in your town.

Bheema: Yes

Ram: Then it will be successful as you are the only one in your town who had both online and offline electronic store.

Bheema: Its like a dream

Ram: But remember being different doesn't win always.

LESSON LEARNED

BEING DIFFERENT DOESN'T WIN ALWAYS 

IN THE NAME OF BEING DIFFERENT DON'T BE STUPID

                                                                                 -TIMOTHY FERRIS

                                        

                                                

                                                                           

Learn about money(Lesson 6)

FILL THE DEMAND 

Bheema understands lots of aspects of financial market and entrepreneurship,however when it comes to implementing it practically he fails frustrated bheema discontinues his financial classes and moves to meet Ram in great anger as if a stone has fallen on his head.

RAM: What happened?

BHEEMA: As if you don't know anything.

RAM: What do you mean.

BHEEMA: Explaining what happened ..........................

RAM: Oh it seems like you were doing well with my practical examples than a course

BHEEMA: Ya

RAM: OK, here after I will be guiding you as I have been guiding you earlier.

BHEEMA: That is always better

RAM: What about your vegetable business.

BHEEMA: Not well , you advised me to change the business model but I didn't that is the problem.

RAM: Not only that

BHEEMA: Then what else

RAM: You don't have enough market, the start up has accessed everything

BHEEMA : What?

RAM:  Remember what I have explained in lesson 4.

BHEEMA: Ya,so now what should I do

RAM : Look where is demand

BHEEMA: How?

RAM: Start new business,by looking at demand.

BHEEMA : Are you mad,I don't have enough money at all for my expenses

RAM: No, from where do you purchase electronic item

BHEEMA: From my neighboring town

RAM: Why?

BHEEMA: Because it is not available here

RAM: Then fill the demand

BHEEMA : Are you asking me to set up a electronics store

RAM: Yes, now a days you are better in understanding few things

BHEEMA: Will it be successful because I am in dearth of money

RAM: Do you buy an item which is available in your town from neighboring town

BHEEMA: No,why should I?

RAM: Then it will be successfull

BHEEMA: OK ,now I got it

LESSON LEARNED

ALWAYS FILL THE DEMAND MUST BE YOUR FOCUS

CREATING DEMAND IS HARD BUT FILLING DEMAND IS EASY

-TIMOTHY FERRIS

Learn about money (Lesson 5)

GOOD DEBT VERSUS BAD DEBT

Following the advice of Ram ,bheema agrees to himself enroll in financial education class. As he prepares himself  he faces hurdles at his very first step that he doesn't have money to pay for the financial class,being a person of egoistic there was no room for aid.On the other hand he was reluctant to get loan from anyone or bank possessing fear of how he is going to pay back.Ram understands his situation and explains to him the distinct between good debt and bad debt.

Ram: If you are ready to listen, I have a solution for this problem.

Bheema: Oh! is it so?

Ram: Yes,but before I reveal the solution know the difference between good debt and bad debt.

Bheema: what is it both are same.

Ram: No,If you utilize your debt to purchase an asset and pay back the loan with interest by the cash flow generated by the particular asset it is good debt.Bad debt is if you purchase a liability may be car  and spend money on petrol and paying back interest that is bad debt.

Bheema: It sounds like a rhythm, you are joking.

Ram: No,I am serious.

Bheema: Unable to understand what you are saying.

Ram: I will explain in your way of understanding....

Bheema: Explain now.

Ram: Suppose you purchase a car,as you are in dearth of money using the debt you have purchased the car,later you spend money on petrol,maintenance,EMI (car loan) which burns your pocket with no gains.This is bad debt.

Consider Financial education as example you pay the debt as your fees later you will be learning about the management and Investment of money,Implementing the knowledge on your money the gains makes you to pay your loan quickly further the returns from Investment is your profit. 

Eg. 1.You Invest in Mutual funds(with knowledge)

2.Returns pay your loan

3. Further returns is gains

This is good debt.

BHEEMA: Wonderful Ram you are genius!

RAM: Stop praising,focus on your classes

BHEEMA:😡😡😡😡😡😡

LESSON LEARNED:

NOT ALL DEBTS ARE BAD

GOOD DEBTS BUY ASSETS BAD DEBTS BUY LIBALITIES

      

Learn about money (Lesson 4)

MONEY IS AN ILLUSION 

Bheema Vegetable market runs successfully,after he follows ram's advice."CHANGE IS INEVITABLE" is a phrase which is truth of the universe,however bheema always hates any bit change in his professional or personal life. Ram accepts it as a part of life and walks with it,he also himself updates with required information in this process he gets to know about " agritech startup" a new wave transformation in agriculture.  He further studies their buisness model and gets to know that his friend needs to get out of the old business model to stay in the market.

RAM: Hi bheema,   listen carefully.

BHEEMA: Sit down, and enjoy the hospitality I have arranged for you,we can take later.

RAM: It is very important.

BHEEMA: R u teaching me about importance? ( showing his ego)

RAM: Sits down and enjoys hospitality of his friend.

BHEEMA: Yes what were you saying.

RAM: You must change your buisness model.

BHEEMA: For what, I am hearing a silly advice from you.

RAM: No, listen to me.

BHEEMA: Then what?

RAM: The model which the present startup is going to bring is "connecting platforms" between farmer(seller) and buyer in return the startup gets a certain amount as comission just as Amazon.

BHEEMA: Even I am doing the same.

RAM: No, you are as a middleman between those seller and buyer because you buy from farmer at whole sale price and sell to the customer at retail price,but startup connects them both.

BHEEMA: Explain me with an example.

RAM: You are buying 25 kg of carrot at 1000 rupee from the farmer(cost estimate for producing 1 kg of carrot is 35 rupee) (farmer gets rupee 5 per kg )and sell each kilo at 60 per kg there by making a profit of 20 per kg however the new startup will connect the farmer to buyer where the farmer negotiate 50 rupee per kg ( he gets 15 rupee as profit) and the buyer buys it for 50 rupee. The rest five rupees the company takes it as commission.
 

BHEEMA: This model won't be successful

RAM: Farmer is getting more profit consumer is getting same product,quality and quantity at cheaper even the startup is making money, why it wouldn't be successful.

BHEEMA: Is five rupees enough for the startup.

RAM : They approach the buyers directly so they have larger market access(PG and Hostels) and promise them to deliver products which is sourced from farmers directly,which leads to high chance of accepting deal by consumers.

BHEEMA: Oh my God.

LESSON LEARNED 

MONEY IS AN ILLUSION,IT WILL BE IN THE HANDS OF THE PEOPLE WHO DELIVER HIGH VALUE.

Learn about money ( Lesson 3)

DESICION MAKING ON MONEY 

Bheema applies strategies as per advise of his friend Ram and eventually he found himself with two properties after three years. He thanked him in his dream,day and night after a year he comes with a successful business idea setting up a vegetable market inside his town limits as there is none. He launches vegetable market after a month it sales picks up as the message spreads,then he sets up another market even the new store sale picks up by 5x within few days. With high expectations he sets up a "super mart" which contain almost 60+ variety,however within few weeks with no sales in " super mart" he shuts it down the revenue from the other two stores are spent entirely for setting up of new store without further money for investment to run the existing stores he again falls into  money trap,he then calls his friend Ram.

BHEEMA: Hello ram

RAM : Yes bheema hearing you after a long time.

BHEEMA: ya

RAM: Is everything ok?

BHEEMA: completely messed

RAM:  what do you mean?

BHEEMA: Vegetable market...explains

RAM: Simple mistake leads to catastrophic consequences.

BHEEMA: What is that simple mistake?

RAM: Lack of financial knowledge.

BHEEMA: You told me earlier, but I was the  one who ignored.

RAM: Listen to me,Your Vegetable market in limits of town was a problem solver and it is really appealing however after your buisness picked up,you become "greedy" and set up stores than the market need.

BHEEMA: I can't understand 

RAM: suppose let's say your town has a population of five lakhs which requires 5000 tons of vegetables per day,now you have set up vegetable stores which is already supplying 5000 tons. Later you set up a additional stores which led excess supply of more than 1000 tons per day (which has no customers) this results in rising operations costs and thus you got stuck in losses.

BHEEMA: So?

RAM: Never take emotional decisions, your emotions influence your decision making,Instead you have to focus on rational decisions.

BHEEMA: You are my teacher.

LESSON LEARNED:

"NEVER TAKE EMOTIONAL DECISIONS"

 "ALWAYS TAKE RATIONAL DECISIONS"

HUMANS ARE CONTROLLED BY TWO EMOTIONS GREED AND FEAR

          -ROBERT KIYOSAKI