Six Financial Lessons from Narendra Modi’s Surgical Strike on Black Money

I did not have enough cash to pay the laundry boy. I was frantically looking through every drawer in my house when my little girl said, “Don’t worry mom, I have money which you can use.”

My face lit up suddenly, and I asked, “Where”?

She said, “In my Barbie piggy house.”

I asked, “How much do you have?”

“Lots,”was her quick reply.

“Tell me the exact count, I said impatiently

“Five rupees.”

Though I was worried about my worthless Rs 500 and Rs 1000 currency notes, I couldn’t help but chuckle at the innocence of my four-year-old daughter. On any other day, that amount may look meager, but now the scenario has completely changed.

Thanks to our Prime Minister Mr. Narendra Modi, the notes of Rs 100, Rs 50, Rs 20 and Rs 10 have become more important now. Those coins which we earlier used to drop in our kids’ money bank have suddenly started playing an important role in the household budget. This whole episode of demonetization has taught me some important financial lessons that I almost forgot in the hustle and bustle of life.


  1. Build a contingency plan

  2. Learn to live within means

  3. Ready to face the life’s unpredictability

  4. Emphasis on tax planning, never on tax evasion

  5. Small is big

  6. Diversify your investment portfolio

  7. Conclusion

Build a contingency plan

Having a contingency plan is the first step that you should take towards building a strong financial future. You may have often seen that people don’t plan for their liquidity requirements. Mainly, it happens because most of the investments are made without considering needs and in most of the cases, it is done in a sporadic manner.

It is pertinent that people build a contingency fund with an amount equivalent to your minimum six months’ expenses in investments that can easily be converted into cash in a day’s notice, and generate better returns as compared to a saving bank account. You can invest in liquid funds of mutual funds which offer dual benefits of liquidity and returns.

Learn to live within means

We all have curbed our expenses after demonetization to ensure that we are left with enough funds to meet daily needs. If this could be practiced in life on a daily basis and the savings could be channeled into good investment options, then achieving financial freedom would no longer be a dream anymore. Be happy with what you have and don’t indulge in extravagance, as you never know, another demonetization might occur in future!

Ready to face the life’s unpredictability

Nobody saw it coming or had any idea. The 8 pm announcement meant no way to make last minute transaction at jeweller’s shop. The punters who were betting thousands of crores on the USA election were caught unaware. Now when you go to the bank to deposit cash more than Rs 2.5 lakhs, the IT department will keep a record of your transactions.

While we know that life is unpredictable, what we don’t realize is that it may catch you unaware. Therefore, it is inevitable to have two insurance policies— term insurance and health insurance— to curtail the impact.

While a term insurance policy pays benefits to your family so that they don’t have to face any financial hardship after your death, a health insurance policy ensures that you have sufficient money to fight against hefty medical expenses. It is imperative to have a comprehensive health insurance for the entire family, which could help with services like uninterrupted medical facilities, cashless payments, etc.

In case you already have a  health insurance and want to expand your coverage, you can go for a super top-up policy that offers extra coverage at nominal rates. In the past few years, there has been a rise in the medical cost. As a result, the current health cover may not prove sufficient. Super top-up policies cover medical expenses when they cross the threshold limit. Also, there is no compulsion to get the policy only from the one you have purchased the health insurance policy. You can buy a super top-up policy, even if you don’t have any mediclaim.