Wish you all a happy Diwali and Bali Paadyami. The festivities of Diwali is done by commoners to call Lakshmi (The goddess of wealth) to their house. Some by their luck, even being able to get her to visit. But Lakshmi has a problematic elder sibling who comes with her. The problematic sibling is the reason why Lakshmi never stays with family even after she visits them. The sibling Alakshmi causes ‘expenses’. Its the expenses which cause the Laxmi/wealth to go away. But it is unfair to pin the blame of Lakshmi going away on Alakshmi. Alakshmi is able to act because of the inherent weakness of the person calling her sister.

The person calling Lakshmi always starts with an ill-intentioned thought. The thought is often of using her to get things done. Essentially the yajmaan wants Lakshmi to be his servant. In this household, Alakshmi has more power over her sister. In such households, wealth becomes means to an end. I would call such households as income – expense accounting households. When you ‘spend’ the wealth accumulated rationally, you will always have lesser wealth than before. Even if one doesn’t have an ill intention of using wealth as a means to an end, that yajmaan is still vulnerable to “Bladder Theory of Money”.

(See Also: On Apples to Orange comparison on buying a House vs Investing the money)

The person who accumulates more money also gets an urge to ‘piss’ off such money. The allure to piss off money can take hold even if you know 5 points financial accounting. The way to deal with bladder effect is to stop the thoughts about “strategic expenditures”. The bladder effects also cause the person to become neighbourhood money lender. All these essentially causes Lakshmi to go away. To retain her, one needs knowledge as well as good intentions wrt money.

Keeping Lakshmi:

The main principle to keep wealth is dependant on how its viewed. The wealth stays in households which she likes. The field of personal finance is about these principles only. The sister represents expenses and the lesser effect of the sister, more stable will be wealth. It’s Alakshmi who causes the lifestyle creep. Eternal war on expenses will result in wealth. But one thing should be focussed, the essential expenses namely proper food, clothing, shelter maintenance, emergency corpus, insurance for self, etc.. should not be skimped upon. When one skimps on necessary expenses, he essentially makes the very household an unworthy place for wealth. In short, cut on lifestyle expenses but do proper justice to essential expenses.

The essential expenses are supposed to be the real servants. When expense incurred gives you disproportional benefits, one starts the cycle of growth. For example, having insurance 10 times your annual salary, you can be peaceful that your family will not be on the streets if any accident happens to you. Eating healthy foods reduce hospitalization expenditures. Once the necessary expenses are taken care of, the thing supposed to be looked after is the place of wealth.

The wealth one has is dependant on banking facility one has. Banking essentially ensures equitable distribution of wealth. The money with savers moves effortlessly to asset spenders, resulting in growth of that money. If one has a separate account for accumulating money apart from salary account, he will be able to achieve his money goals with ease as well as be able to handle sudden expenditures that may arise. In personal finances, the bank account is the pool to save money.

A separate bank account to save money for rainy day ensures you have wealth buildup. Even liquid and overnight funds are also like this bank account. The wealth buildup is what makes one prosperous, not his lifestyle. In essence, when Lakshmi comes, just keep her in the room called bank account. The idler the money is, the more money you have. Lakshmi blesses those households, who keep her idle without any work.