The Rotarian’s Financial Compass 7 Rules for Navigating Prosperity
As Rotarians, we are committed to serving others. But to maximize our impact, we must also secure our own financial future. Here are seven golden rules to guide us:
1. Plan for Life’s Three Acts
Visualize your financial journey in three acts: Act I (birth to 22) where others provide, Act II (22 to 60) where you provide for yourself and dependents, and Act III (60+) where you rely on self-provision. Craft a savings plan that prepares you for each act’s unique financial demands.
2. Diversify Your Investments
Don’t rely solely on traditional fixed deposits. With current returns around 7% (5% after tax), explore options like mutual funds. They offer higher potential returns, tax efficiency, and better diversification. Match fund types to your goals: liquid funds for short-term (under 1 year) and diversified equity for long-term (6-10 years).
3. Build an Emergency Fund
Set aside six months of income in easily accessible accounts. This financial cushion protects you from unexpected setbacks, ensuring you can continue your Rotary service without personal financial stress.
4. Adopt the ‘Saver’ Mindset
Follow this formula: Income minus Savings equals Expenses. Prioritize saving before spending. Aim to save 25-35% of your family income, in line with the average Indian household.
5. Evaluate Investments Wisely
Consider safety, returns, liquidity, capital appreciation, and tax efficiency when choosing investments. While fixed deposits offer safety, mutual funds provide a balance of high returns, liquidity, and tax benefits with moderate safety.
6. Plan for Retirement
As you near retirement, allocate funds strategically. Use balanced mutual funds for medium-term goals (3-6 years) and diversified equity funds for long-term objectives (6-10 years) to maintain growth while managing risk.
7. Lead by Example
Apply the same diligence to personal finances as you do to Rotary projects. A financially secure Rotarian is better equipped to serve others and create lasting change.
By following these rules, we can secure our financial future while enhancing our capacity to serve. Let’s lead by example, demonstrating prudent financial management alongside our commitment to community service.
Rtn Balu Prakasam , Past President, RC Madras Mount, District Chair Polio Plus Society 24-25
The author of this Article Rtn. Balu Prakasam is the Co-founder of Lampros Asset Distribution LLP and can be contacted for any queries through email ID lamprosasset@gmail.com, mobile: 9500126897
