Demonetisation India Anniversary: 5 amazing money lessons from PM Narendra Modi note ban order

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Demonetisation was not a pleasant experience for those who preferred to keep a stash of cash at home, were not tech-savvy and were also disorganised in financial matters.

The demonetisation of high-value currency notes, announced by PM Modi on the night of November 8, 2016, might have helped the government take on corruption, black moneyand terrorism in a big way, but that was surely not a pleasant experience for a large number of people, especially those who preferred to keep a stash of cash at home, were not tech-savvy and were also disorganised in financial matters. Demonetisation, thus, also taught lots of people to be careful about their finances and have all their wealth and assets properly accounted for. Here we are taking a look at 5 money lessons which all of us learnt from demonetisation:

1. Always build legitimate assets out of tax-paid money

Temptation to become rich instantly is an inherent human nature. To achieve this, it is normal for persons to devise various strategies to avoid paying tax on incomes earned. Taxation or complicity from the tax authorities may even allow these tax-evasion schemes and processes to become prevalent for a long period of time. However, “at the end of the day assets or investments which have been acquired by tax evasion can not only get confiscated by the government, but can also subject you to scrutiny and various legal injunctions from the tax authorities. Hence, the first and foremost personal finance, which aims at achieving financial security, lesson from demonetisation is to have all your wealth and assets properly accounted for,” says Ashish Kapur, CEO, Invest Shoppe India Ltd.

2. Diversify your assets

Always diversify your assets across different markets and asset classes. For instance, investors who were heavily and in some cases solely invested in real estate lost out heavily after demonetisation as the real estate market became very illiquid and depressed. Therefore, instead of putting all eggs in one basket, one should try to diversify one’s portfolio as much as possible. For, diversification of portfolio across different asset classes and instruments is the key factor to earn optimum returns on investments with minimum risk.

3. Remain invested

Instead of keeping a stash of cash at home, you should try to save or invest your money in safe instruments. Financial assets are usually very easy to invest and liquidate. A reasonable part of your investments, therefore, should always be in fixed deposits, bonds, shares and mutual funds.

4. Get familiar with digital modes of payment

Digital transactions are going to keep getting traction as the world becomes more wired and connected. “Everyone should try and get familiar with cashless and digital modes of payment like credit and debit cards, online payments, net banking and e-wallets,” says Kapur.

5. Remain informed about government rules

Lastly, keep yourself well informed about government rules and regulations as well as keep yourself updated on new technologies. People well versed with digital modes of payment and well informed about their income tax status felt much lesser disruption than the others.

Source by:-financialexpress