Saturday, July 17, 2021

I have read 19 books in the past 6 months. Here are my Top 5



There's no denying the fact that books are best friends. It is no different for me. And like friends you can be selective on who you pick. There are more than a million books released every year and 1000s of them each day. One can only read a handful of them in their lifetime. Hence, it is very important to pick good books to read. Based on the goals and time one have, one can choose the books to read. Being a parent  to a very naughty kid and full time employee in a Data Science company, I am quite picky with what I read in my limited time. 

I set up goal every new year and keep revising them every quarter. At the start of 2021, I intended to read books on finance and leadership and few famous fictions (award winners mostly). Almost, every book teaches me something new, some more than the others. I have read more than 15 books in the first half of this year. Here are my top 5 (in no particular order).

1. The Psychology of Money by Morgan Housel

Image from Goodreads
If you want to read only just one book about finance and wealth - this is the one. It is one of the those books that lays the fundamentals required for investment and saving your money without pushing and punishing with a lot of jargons and technical terms. According to the author - as opposed to the popular idea, numbers on spreadsheets don't determine financial decisions. A person's psychology does. That's why, with some rational thinking, you could set yourself on the path of raking in handsome rewards with your investments.
This is definitely a more than one-time read book.

Few lessons from the book are: 
1. Save, save and save
2. Believe in tail events, only few will give you huge returns
3. Luxuries don't impress anyone but yourself
4. Money is what you don't see. Rich people do not spend unnecessarily 
5. Keep room for error. There will be times when things go wrong. Be okay with that
6. Be a long term player, make friends with long term outcome instead of short term spikes
7. People respond to their experiences. Don't judge them
8. And for many more - read the book

Image from Goodreads

We have been made to believe that in order to succeed in this competitive world you need to be specialist. David Epstein tries debunk that myth. With enough examples, he showcase his discovery that in most fields - especially those that are complex and unpredictable - generalists, not specialists, are primed to excel. 

I have been a fan of being a generalist and this book gives me enough evidence that I wasn't an exception.

Few learnings from the book:
1. Instead of specializing, especially early in your career, he says, explore and diversify your interests
2. Don't feel behind -Approach the personal voyage and projects like Michelangelo approached a block of marble, willing to learn and adjust as you go, and even to abandon a previous goal and change directions entirely should the need arise
3. Compare yourself to yourself yesterday, not to younger people who aren’t you
4. Interleaving - For knowledge to be flexible it should be learned under varied condition
5. Hypercorrection effect – the more confident a learner is of their wrong answer, the better the information sticks when they subsequently learn the right answer. Tolerating big mistakes can create the best learning opportunities
6. His final message is to remember that there is nothing inherently wrong with the specialization


Image from Goodreads
The story is a beautiful tale of love, integrity and hope from one of the most gruesome war of human history. Eva, the protagonist starts forging documents for identification for Jewish in order to save them from the cruelty of German Nazis. As the story unfolds how Eva did what she did to save the people and the support she received from well intended people; we also get to know the love she has for books in general. The story is indeed beautiful and engaging and leaves you with all the more optimism, that can bloom even in the darkest of the times.

Few quotes from the book which I will keep close to my heart:
- We are only responsible for the things we do—or fail to do—ourselves
- I know it's sometimes hard to believe the best. Isn't it better than believing the worst, though?
- He had taught her to love reading, one of the greatest gifts a parent could give a child, and in doing so, he had opened the world to her
- I’ve always thought that it’s those children—the ones who realize that books are magic—who will have the brightest lives



Image from Goodreads
I was told by my book club colleagues that read anything by Matt Haig. I started with the Midnight library and I wasn't disappointed. This book is sometimes philosophical and tend to repeat the same message again and again at few places. But in general I found it quite intriguing. Nora the protagonist meets a librarian on the day she took her life and then is taken in for a ride. 
This is indeed a well written book, which will make anyone contemplate their life choices, regrets, decisions and life in general. Found so many lessons - more importantly to not lose hope under any circumstances: 
- Every life contains many millions of decisions. Some big, some small. But every time one decision is taken over another, the outcomes differ. An irreversible variation occurs, which in turn leads to further variations . .
- You don’t have to understand life. You just have to live it
- Dream big . . . You can be anything you want to be. Because in one life, you are
- Well, that you can choose choices but not outcomes. But I stand by what I said. It was a good choice. It just wasn’t a desired outcome
- She didn’t want to die. And she didn’t want to live any other life than the one that was hers. The one that could be a messy struggle, but it was her messy struggle. A beautiful messy struggle


Image from Goodreads
Getting to this book was not planned. Amazon was giving this in huge discount. Bought it and then read it and did not regret it. The book is easily read within couple of hours but I think it kind of motivated me to be proud of what I do. The book won’t drastically change your life and most of the things it mentions are logical things but it was kind of good to read these things. The book is full of good advice that's to the point and easy to follow.

In today's world everyone is an artist or creator in a sense. Everyone creates something or the other. This book will help you how to bring one's creation out to the world. Austin teaches you how to introduce yourself at a party, how not to be human-spam, to tell good stories, to share something small everyday, to build a mailing list. But then there are good life lessons like being grateful, stepping away from what you are doing, or starting over, teach what you know, think process not product, and so much more. The book uses examples and points and drawings which make it very digestible and fun to read! I Hope I do apply some of the things I learned here.

I really recommend this. If you're looking to boost your output of creativity you'll love this.


Honorable mentions

The Almanack of Naval Ravikant is a collection of Naval's wisdom and experience from the last ten years, shared as a curation of his most insightful interviews and poignant reflections. This book is available for free on navalmanack
The Decision Book is a reference book, not a book to read linearly from cover to cover. The book is structured into 4 main categories: 1. How to improve yourself, 2. How to understand yourself better 3. How to understand others better 4. How to improve others

A short, sweet and simple book takes on a huge task of explaining economics in a very lucid way

The Boy, the Mole, the Fox and the Horse
This incredibly wholesome and hopeful book will leave you charmed with uplifting messages

Leadership U: Accelerating Through the Crisis Curve
Leadership starts with starts with 'U' but it's not about 'U.' In Leadership U: Accelerating Through the Crisis Curve, Burnison lays out a framework--his "Six Degrees of Leadership"--to show leaders how to create change: Anticipate, Navigate, Communication, listen, learn and lead


Disclaimer: Clicking on the links for the books will take you to Amazon site for book purchase. If you buy it using that link I will get some commission (as per the affiliate program)

Monday, July 5, 2021

Is financial literacy important?




Let me start with asking few questions. The below table consist of 2 columns. Each column has a set of questions, you must answer each question with answer of either “Yes” or “No”. Read the question and see if you can answer it or not. I do not need the answer - I just need to know if you know the answer or not. Confused? Let me clarify – Say the question is “Who won the Bengal election?” If you know the answer, then say “Yes” otherwise “No”. Similarly do that for the below set of questions. Give yourself 1 point if the answer is “Yes” and 0 for “No”. And then sum it up separately for both the columns.

Column A

Column B

Can you recommend me the best app among these: Instagram, Snapchat or TikTok?

What is compound interest? Does it affect us?

Who won the last cricket world cup?

Why do we pay taxes? Can we avoid it?

Which place creates the best cake or the best pizza?

If I give Rs.1000 can you earn 200 by using it within a week?

Where to buy clothes from? Amazon, Flipkart or Myntra?

Can you save money in today’s age of inflation and high expenses?

Can you listen to 5 songs in 20 minutes?

Why does credit card charges interest amount?

Do you have notes for next exam?

What is inflation? How to prepare for that?

Do you have a job? Or do you own a business?

Where would you keep your money for it to grow? Bank? House? or someplace else?


Once you have the points summed up, compare which column did you get the maximum points. If total points in column A is more than column B, then you’re in for the ride. Then this write up of mine is of significance to you – do not stop, continue reading. If you get more points from column B, then too continue reading and let me know if I make sense.

Knowing answers to questions from column A is good for general knowledge but not beyond that. But knowing what is being asked in column B directly affects us. You may not know but if you have answers to questions from column B, then you are sorted with money matters of this life. And you would be called financially literate.


What does It mean to be Financially Literate?

Before I answer that let me tell you what finance is: The money for any project or a business is called finance. Finance is also the activity of managing the money. Taxes, insurance, loans, budgets, banking, credit cards, expenses, savings are all part finance.

Financial literacy is the union of financial, credit, and debt management knowledge that is necessary to make financially responsible decisions or choices that are integral to our everyday lives. Financial literacy includes the skill to understand what using a credit card really means, where to invest, and how to avoid debt. It also gives you answers to questions asked in column B. Financial literacy has a direct impact on us as we try to balance our budget, buy a home, fund our children’s education, and ensure an income for retirement.

The absence of above-mentioned understanding is referred to as being financially illiterate. According to an accredited financial literacy survey, traditionally, India hovers at around 24% in financial literacy rates, which compared to 55 per cent in developed countries, is woefully insufficient. This means nearly 76% of Indian adult population does not understand even the basic financial concepts. This reveals the pressing need to educate the masses about finance. Financial illiteracy puts a burden on the nation in the form of higher cost of financial security and lesser prosperity.

Despite having the world's 10th largest and Asia's oldest stock exchange, low per capita income, education inequality, non-banking habits and informal borrowing and lending, ruled the country for years. Thus, it is imperative for the country to now optimize its resources and boost the economic and financial backbone of the nation. India’s financially literacy rate, albeit abysmal it’s increasing. Not long it was around 15% and now it 24%. Recent reforms like push for bank accounts, digital payments, increase usage of mobiles for payments is significant, as India is already the world’s second biggest smartphone market with over 220 million smartphone users. There are enormous possibilities to go digital and create new opportunities to engage and share financial knowledge with consumers.

How important it is be Financially Literate?

Financial literacy is important because it prepares one with the knowledge and skill to manage money effectively. Without financial literacy, the actions and decisions one make or do not make with respect to savings and investments would lack a strong foundation. Financial literacy helps in understanding financial concepts better and enables one to manage their finances efficiently. It also enables an individual to prepare for future, create himself or herself with enough wealth for his or her retirement.

It is important to inculcate financial awareness at an early age as that would benefit the people in planning their investment properly at a later age. The introduction of financial education at an early level will also help the students to identify whether to narrow down to the same career in future or not. As currently, they are able to take this decision only when they are undergoing graduation.

How would you benefit if you are Financially Literate?

Managing bills: Bills for electricity and such, loans, rent can easily be managed

Savings and expenses: What you earn should be divided into two parts: savings and expenses. Education in finance can help you know how to divide it better

Building wealth: One should be wealthy and not rich. Money with education makes one wealthy

Protecting oneself in case of emergencies: A sound knowledge in finance can be helpful in creating an emergency fund

Achieving goals: Without financial education one mostly lives life from paycheck to paycheck with no goals and ambitions to aspire

Retirement planning: How to save, where to invest – knowing answers to these questions will help one to prepare for their retirement

Lead a tension free life: Being financially literate will also help you stop stressing on your expenses

How to Become Financially Literate

There is no dearth of knowledge in today’s digital age. One only needs to do a simple search in Google or in YouTube to get multiple responses to a single query. I am listing down links to few videos which I hope will be helpful to the seekers of financial wisdom.

Financial literacy for all - https://www.youtube.com/watch?v=pWU3DYvnP0s

Investing in your 20s simplified - https://www.youtube.com/watch?v=qsCUE7kzFHA&t=2s

3 money management tips - https://www.youtube.com/watch?v=TITs-R1BM-M

Best money management tips - https://www.youtube.com/watch?v=uYNfT6B2Hqg

Best personal finance strategies - https://www.youtube.com/watch?v=nbrkmJTuGoY


Source for the writeup - The facts and figures are taken from the following sources:

https://www.livemint.com/Opinion/f5xo11OSPqxGWUdaWKVb8J/Why-India-needs-to-work-on-financial-literacy-now-more-than.html

https://timesofindia.indiatimes.com/home/education/news/why-encouraging-literacy-in-finance-matters/articleshow/78060694.cms

https://www.investopedia.com/articles/investing/100615/why-financial-literacy-and-education-so-important.asp