Common Sense

This post requests the attention of all those who want more money in their accounts.

Let me share almost a real life business case.
There is a company that sells packaged noodles. They have a standard paper box packing of 500 grams of noodles for retail customers.
With the help of an automated assembly line, 10 paper boxes, containing 500 grams noodles each, are put in a big carton.
Factory then supplies these cartons to wholesale distributors.
Sometime back this company was facing an issue.
Its wholesale distributors complained that out of each carton, containing 10 paper boxes, 1 or 2 paper boxes are empty.
The COO of this company got worried. They invited big consultants to solve this problem. It was a million dollar consulting contract.
The consultants installed a smart weighing machine on the assembly line just before carton packing.
Whenever an empty paper box reached there, the whole assembly line would stop and play an alarm button.
They recruited a new person whose job was to remove this empty box and restart the line.
Overall project costed multi-million dollars.
The issue was resolved.. in fact resolved by 100%. The wholesalers were happy.
The COO was happy and surprised at the same time. Because as per the consultants' estimate, the solution was not meant for 100% success.
The COO himself went to the factory to have a look at it. He asked the new recruit what was happening there.
The new recruit casually told the COO that he was bored of leaving his chair everytime an empty box reaches near the carton, removing the box and restarting the line.
So what he did, he put a strong fan just before the installed weighing machine.
This way all the empty boxes were blown away even before reaching the installed weighing machine.

He used Common sense.. isn't it?

It sounds common but we apply it very rarely.
Every time we encounter a situation, we try to go the usual way- find a complex approach.
The interesting part is that the more complex an approach or solution, the more confident and assured we become.
Why not we shun this practice? Instead of finding complex approaches, why not we use common sense?
There are many benefits of using common sense. It is cheap, takes less time & is sustainable.

But I understand that this rare "Common sense" might not be available for every thing we do in life.
So why not we make a priority list of usual things we do? I will give 5 seconds to you all to make a mental list of usual things that you want to do.
All right.. if I am not wrong.. most of the usual things that you want to do have a connection with money.
Yes
So the simple thing, we can do is to use common sense while making money or finance related decisions.

But, If we look at the history of mankind, we have miserably failed in using common sense for finance related decisions.
Case in point- Year 2008, US sub prime mortgage crisis. We heard terms like - securitization, mortgage backed securities, collateralized debt obligation.
All these terms were made by some of the most intelligent minds of this world. Big institutes and wiser people invested heavily in those securities.
But they could not see or overlooked the basic factor that these securities were based on sub prime mortgages.

Well, it seems we need to reduce the scope of common sense again. What can we do at our individual level?
Remember I started the speech asking for all those who want more money in their accounts. And now I have something to share with you.

What if we apply common sense in our impulsive financial decisions.

We take many financial decision in our lives, such as- buying a mobile, new clothes, holiday package, bike or a car.
If any of these decisions are impulsive, you need to take a step back and use common sense.

Last year I met a friend of mine. She had bought a new car around that time. It was an impulse decision.
The on-road cost of the car was 8 lakhs. She had only 2 lakhs. So she made a down payment of 2 lakhs and got a loan for the rest.
She told me that 3 things have happened that make her unhappy-
1- she is paying actually 11 lakhs instead of 8 lakhs due to the loan.
2- The credit rate of loan was always going up so she had to pay extra
3- The value of the asset i.e. the car was always going down. In fact, just after 1 month of purchase, the bid price of 8 lakhs car
was not more than 6 lakhs.

The observations were eye-opening. If we could have applied common sense, this situation would have never happened.

I use a small strategy in similar situations.
If there is a possibility of impulsive decision where I have to shell out an amount that is more than 2 months of my take-home salary,
I ask 3 questions to myself-
1- Do I really need it?
2- Do I really need it now?
3- Will this thing/asset give me actual benefits even when I have to take credit to buy this?

Sometime back, I almost decided to buy an Apple Laptop. The price of Macbook was 65000. While my take home salary was around 25000.
Before making the payment, I asked myself-
1- Do I really need it? Not exactly
2- Do I really need it now? Certainly no, i already had a working laptop.
3- Will this thing/asset give me actual benefits even when I have to take credit to buy this? I had to take credit to buy this and I could not see
any different feature that it will give me compared to my existing laptop.

Finally I decided to postpone the purchase and saved money.

I urge you all to use common sense before making any impulsive financial decision. If possible
ask yourself those 3 questions before making any financial decision on an impulsive basis.

Feedback

Have you heard of the English word- "Efficiency"?

I believe we all know the meaning of "Efficiency"... It is
"The extent to which time is well used for the intended task."
Today I will share with you about my EFFICIENCY and 1 of the best feedback that I have ever got due to my EFFICIENCY.

Since my school days, I have always regarded efficiency as the most important virtue.
Whether it was a home-work, sports practice or even a fun outing... I always intended to make it efficient.
I used to set-up a timeline in my head and completed all my tasks within that timeline... thus making myself efficient.

When I came to college.. I followed the same principle. If there was a pre-read for tomorrow's lecture, I would finish it within a set timeline.
If I got an assignment, I would set a timeline and push myself to complete the assignment within the timeline.
Even night-outs.. I used to agree for a deadline (for example 2 AM) when I would stop the fun and go to sleep.
I always made sure that my task at hand is finished within a time frame.

My school teachers and college professors were always happy with me. They appreciated my ability to finish everything in time i.e. my efficiency.
For them I was an ideal student.

I liked a girl in my college.
Believe it or not... Efficiency was so ingrained in me that I actually set a timeframe for myself to woo her.

Time passed by and I was happy with my efficiency.

In 2007, I joined Infosys. Even there, I was hugely appreciated for my efficient work.
I was never the best performer but always figured in the top 20% in appraisal cycle.
In all my performance appraisals , the term "EFFICIENT" was always mentioned.
Whenever any project was pressed for time, I was asked to handle the situation. And I never failed them.

It was all good.. BUT.. one thing started crossing my mind again and again.
Why am I not the best performer? Is there anything missing?
I knew I was hard-working, quick learner, sincere and EFFICIENT as well.

I did not have an answer to this question for quite long. But then one day, things became a bit clear due to an incident.

It was during my MBA. I was sitting in 1 of the open-house meetings.
An open-house is a meeting where student representatives meet the college administration. They discuss the major issues raised by students.
The issues could be- internet speed, sports facilities, placement queries etc.
That day, the open house was being chaired by the Executive Director of our college. He was the professor of Strategy.
There were 10 points to be discussed and we had a time of 1 hour.
My efficient mind started working. I thought that keeping 10 mins of buffer, we should not take more than 5 mins for discussion on a single point.

The meeting started smoothly. While we were in the middle of the meeting, the discussion on 1 point got stretched.
I waited for 1 more min. And then I signaled to make a hard stop and move to the next point.
The meeting was happening inside a lecture room. I was sitting at 1 of the student chair. From my place I made this gesture..<   >

The Executive Director saw me. He stopped the discussion. He looked at me and gave me 1 of the most important feedback of my life.
He said.."Sumit.. Efficiency is not the only thing to be tracked. We have to look at Effectiveness as well."

Effectiveness.. his words echoed in my head. My whole life replayed itself.
My life would have been different if I was equally effective while studying, sports practice, fun outing, assignments and all those things.

Actually this was the feedback I was looking for.
Had I been effective, my appraisals and even life would have been very different.
With this feedback, I had got the answer to the question that crossed my mind few years back.

I want to say that we can not walk in a single direction in life. Because we get pulled from many directions. We have to balance it all.
We have to make sure that we are efficient but don't stop at it. Make sure that at the same time we are effective in whatever we are doing.
Being effective and efficient is the feedback that we should always remember.

I got wowed

I have been wowed many times in my childhood.Today I will share few of those "wow" moments with you.

1994, it was the time when Doordarshan was the only channel in my city. I watched an advertisement about the Prime Minister
doing something about the economy. I got curious and asked my dad "what is this". My dad explained that the PM has liberalized the
economy allowing more private and foreign investment. I said "how can 1 person do such a big task that impacts the whole
country?". My dad said that he was the prime minister and he has the powers to take such decisions.
My career goal was formed then and there. I decided to become the PM of India.
I started participating in debates, speeches etc.
Result- I became the class monitor.

1996- It was the cricket world cup. And I got a chance to watch cricket first time on TV.
In a match I watched bowling of Wasim Akram. And I was wowed. One of
my seniors in neighborhood told me that he is the best bowler of the world. And sadly there is no such lethal left arm
pace bowler in Indian Team. This is the reason India lost.
I was pumped. Being a natural lefthander, I thought this is what I am born to be- The left arm pace bowler of India.
I started practicing bowling. And devoted more time to cricket.
Result- I came at 4th rank in my class that year. My father was hugely disappointed as our neighbor's daughter came 2nd.

2007- I joined Infosys Bangalore. Fresh out of college, I was super excited and raring to code all the world.
By chance, I went to the gym there. I saw a person lifting 75 Kg each side i.e. 150 Kg bench press.
I was wowed. I thought this is the actual target of my life. I should be lifting 200 Kgs, i should get 8 pack abs.
I joined Infosys gym. Started with going twice daily.. Gradually became an occasional visitor.

I got wowed by these instances
I haven't yet become Prime Minister but I did start participating at district level debate competitions.

I haven't yet become  Wasin Akram but I enjoyed a lot watching more cricket.

I haven't yet become  a body builder but I did become more aware about fitness.

To all of you, my message is that keep getting wowed. Keep your inner child alive and there are a lot of things to learn and enjoy.

Table fan at the temple

This was my first visit to home after the grueling 1 year MBA at greatlakes. I was chilling out to the fullest. Mom and Dad were very happy, after all their son was home with 15 days leave. As a routine my father goes to nearby Taraknath temple every Tuesday and Saturday. This temple is some 200 meters from my home. It is situated on the banks of Sarayan River, a tributary of River Ganga, and has many small temples within- Shivji, Shri Hanuman, Bhagwaan Krishna and Durgaa Maa.

That was a Saturday in the first week of April 2012 and my father asked me to come to temple. I said yes as I wanted to visit temple and meet Babaji, the pujari of Taraknath temple. Babaji became pujari of this temple 10 years back. Since then we have witnessed improvement in administration and prosperity of the temple. We have also seen increase in the number of devotees there.

During my last visit to the temple, probably at Diwali, I was very impressed by the cleaner look of temple and huge number of devotees worshiping there. When I discussed this with my father praising the management of temple, he said these are nothing but by-products of something else. What’s this something else, he said that Babaji is a great pujari and he keeps on performing some puja or other almost 24*7. Babaji’s puja and faith are real things; the improvement in management of Mandir is by-product. I was somewhat convinced and was really happy.

Back to this Saturday visit: when I reached temple we straight away went to Shri Hanuman’s temple where Babaji was standing. My father and I touched his feet. When I looked at his face, he seemed worried. This was the first time I was seeing him worried, he always smiled and remained calm. I was surprised and curious. My father was equally bothered to see this change.

Babaji blessed us and went to Krishnaji’s temple to offer evening prayers. We followed him; he looked even more worried there. My father could not resist and asked the reason. Babaji told that a table fan which was in Krishnaji’s temple is not working. It had been 24 hours but the mechanic he called had not come. My father assured him that he will take care of it and get it repaired asap.

I was not impressed by this cause of worry. Babaji’s room had a fan which was working fine. Babaji visited Krishnaji’s temple for a max of 2 hrs a day. I could not understand why he was unable to pray without a fan for 1 or 2 days.

I was wrong….. grossly.

After pausing for a moment, Babaji told that a devotee advised him to replace this table fan with the working fan at Durga Maa’s temple. It seemed a fair enough thing to me. To this advice Babaji replied-- how will Durga Maa feel for 2-3 days without a fan.

My GOD….. now I understood his reason of worry. It was summer time. As per him, gods were also feeling hot and required 24 hrs fan, just like him. When every other god is relaxing in fan, Krishnaji will not feel good without one.

It was a jolt to me… what a conviction and what a faith it was. I have seen people stupidly fighting over religious matters and trying to prove or disprove one god or other. I myself have participated in these conversations. But here I stand before a man, almost 75 years of age, pujari of a temple, above all those trivial things. He takes care of gods as one among us. He believes gods live there. He is not there to become a respected pujari, nor to manage the temple properly, not for anything else, he is there to take care of gods… which is the duty of a pujari.

I am not sure what proportion of his faith do I have in what I do……………..