Why Does the Slow and Steady Win the Race?


The buzzer rang loudly, announcing the end of the classes for the day. The students stormed out of the classroom with high-pitched chatter and squeals, in a fashion that resembled the freeing of a thousand birds at the same time.

But Allisha kept sitting, staring hard at nothing, her mind in a turmoil. She darted a glance at Muriel, her friend and partner in crime, who was preparing to leave the classroom. Allisha, felt a pang of jealousy as she saw the happy smile on Muriel’s face. It fuelled her anguish.

The reason for Allisha’s sullen mood was her inability to register for an exchange program to a top university in France. It was an expensive program, but she was sure that her father would fund it, just the way he paid for all her expensive indulgences. However, he expressed his inability to pay for the costly program as he was experiencing some financial trouble in his business.

Allisha hated the idea of missing out on all the fun she had planned for her French trip. However, what added to her irritation was the fact that Muriel, who hails from a family with limited financial means, signed up for the program.

Allisha came from a well-off family. Her father was a successful businessman, and their family led a plush lifestyle. Muriel, on the other hand, had a modest lifestyle. Her father owned a little grocery store, behind which stood her old mud house. It was nobody’s guess that Muriel’s family managed just a little better than merely surviving.

Yet, Muriel never felt at unease owing to her financial background. She was confident, intelligent and full of life. A calm certainty of wellbeing sparkled in her eyes.

“Muriel, I need to talk to you,” said Allisha as her friend reached the classroom door.

Allisha tried to circumnavigate the topic, but couldn’t restrain herself from blurting out the thoughts that were troubling her.

“How can you … I mean … this expensive program?” asked Allisha hesitantly.

“You mean how can I, a poor girl, could afford such an expensive exchange program?” Muriel teased her friend good-naturedly. She could imagine how Allisha felt; in spite of being from a wealthy family, she was unable to pay the hefty program fee, while a girl from a family with a meagre income could.

“Hmm, it’s a long story,” said Muriel, “that starts precisely ten years ago …”

Both the girls sauntered towards the cafeteria, and over a hot cup of tea, Muriel shared her story with Allisha.

“The 2008 market meltdown is a very significant turning point in my family’s life,” began Muriel.

“Oh, the infamous financial crisis in the US that affected all economies around the world? A lot of people lost money,” interjected Allisha.

Muriel nodded to confirm the story but added, “Only those who panicked and sold their investments lost their money. The markets have boomed since then; especially the Indian stock market, that has achieved much higher levels since 2008.”

Muriel recounted how her father met a financial expert at a wedding. A group of people discussed the market meltdown and cursed the stock market. However, one person, who talked facts and figures, reasoned that market volatility is normal and a major market crash is a time to rejoice for serious investors as they can buy good stocks at a low cost.

Muriel’s father was quite impressed by the financial expert’s reasoning and knowledge. He met him after a few days to discuss the possibility of investing in a few shares.

“I remember accompanying my father to the financial expert’s office,” beamed Muriel.

The financial expert asked Muriel’s father about his financial goals and aspirations and chalked out an investment plan.

“He suggested that since my father wanted to invest in my higher education, he must make small, yet regular investments in mutual funds through SIPs (Systematic Investment Plan),” said Muriel to a slightly confused Allisha. She was having a tough time comprehending the story narrated by her friend.

Muriel explained to Allisha that mutual funds are a collection of money belonging to a large number of investors. A qualified financial expert, called Fund Manager, invests this pool of money in various stocks and bonds and other instruments.

“A fund manager is a smart person who keeps a tab on the market and makes educated decisions in response to the fluctuations in the market,” explained Muriel.

She concluded the story by revealing that her father had been investing in mutual funds on her behalf from the past ten years. The initial investments were as low as Rs 500, but he increased the amount gradually with time.

“The expert handling of the Fund Manager and the power of compounding in mutual funds has grown my portfolio significantly,” revealed Muriel.

As both the friends parted to go to their respective homes, Allisha couldn’t help but marvel at the ingenious plan of investing regularly to grow a large corpus. She realized that though her father earned a lot of money, their lifestyle was equally expensive to maintain. The idea of small, consistent savings escaped him entirely. Looking things into a new perspective, it dawned on Allisha that her extravagant lifestyle was a mere imitation of her family’s spendthrift ways. Muriel, on the other hand, spent only on things that she needed and avoided expenses that were borne out of an impulsive desire.

By the time Allisha reached her plush house, she had resolved to change the way she had been living her life. She was now determined to make regular investments out of her generous pocket money, and later, from her salary as she starts working.

A thin smile played on Allisha’s lips as she recalled being jealous of Muriel; her dear friend who taught her the important lesson of being financially independent.

Dr. Celso Fernandes, with his team at Nave Marg Financial Consultants, is working religiously to spread financial awareness towards the youth of the country. Author of five much-loved books, the financial Doctor of Goa, as he is fondly referred to, Dr. Celso believes that financial literacy is the only recourse through which we can build a happier, healthier and prosperous India. Join the Super Young Achievers Club, mentored by Dr. Celso Fernandes, that grooms youngsters to be millionaires before they turn 30 years of age.

Contact: +91-9422058741.


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