Summary: The fictional dialogue between Arjuna and Krishna draws a parallel between India’s firm stance in international trade and the principles of sound personal finance. Just as India resists external pressure to protect its economic interests, an individual must adopt key strategies to achieve and safeguard their financial freedom. Krishna outlines five core principles for investors. First, strengthen financial borders by maintaining an emergency fund of at least six months’ salary and securing adequate insurance coverage. Second, maintain consistent performance through systematic investing, such as SIPs, regardless of market conditions. Third, diversify your portfolio across different asset classes like equity, debt, and real estate, using a formula like the “110 minus your age” rule to determine allocation. Fourth, clear financial burdens by keeping debt manageable, with EMIs not exceeding 30% of income. Finally, do not sacrifice long-term goals for short-term gains; avoid speculative schemes and prioritize financial independence over quick profits. The dialogue concludes that both national and financial independence are earned through discipline and principled choices, and both are worth defending.
Arjuna (Fictional Character): Krishna, On 31 July 2025, the U.S. announced a blanket 25% tariff on Indian export of certain goods, and then on 6 August, they added another 25%. Even after multiple rounds of negotiations, India is standing firm, protecting its financial freedom.
Krishna (Fictional Character): Arjuna, freedom is not only won on the battlefield but defended daily in the marketplace. Today, India faces not invading armies but rising tariffs and unreasonable demands. India Government has specified that they will never compromise on the interests of people of India. Likewise an Individual also faces many financial problems in his life, but he must learn to stand tall against it.
Arjuna (Fictional Character): Krishna, like Indian Government is resisting US attempts to dictate the country’s trade policies and maintaining financial freedom, but what policies investor should follow to take a strong position to safeguard his own freedom?
Krishna (Fictional Character): Arjuna an individual must implement the following points:
1.Strengthen Financial Borders
Just like India builds strong borders to protect against external threats, Similarly, investor should build his solid financial border defense as follows:
- Investors should maintain an emergency fund that covers at least six months of his salary. This fund protects him against sudden financial crisis or emergencies.
- Investor should ensure an adequate insurance cover i.e., ideally 8 to 10 times his annual salary. Insurance premium should not exceed 30% of his salary, because it will become a burden rather than safeguard.
2. Maintaining Consistent Performance
India’s economy is one of the fastest growing economy of the world and it has achieved this through consistent performance. India has not stopped when there were bad situations in front of it, Likewise, investors should invest consistently and keep investing systematically like through SIPs (Systematic Investment Plans) in mutual funds/shares so that they protect against any financially bad situation which may arise to them and not stop it.
An ideal percentage of bifurcation of income will be as follows
1.If one is in age of 20-30, he must allocate his income in ratio of 50-30-20, 50% in investing, 30% in needs, 20% in wants.
2. After age of 30, the ratio remains the same but the allocation will change to 50% for needs, 30% in wants, 20% in investing.
Diversification
India doesn’t depend on a single nation for trade; India has maintained good relationship with every country. Similarly, Investors should invest in a diversified portfolio that includes equity, debt instruments, gold and real estate for long-term security and growth. The simple formula for maintaining the ratio of diversification is “110 minus your age” rule to determine the ideal equity and debt allocation for their portfolio and rebalance it every 5 years.
For example, if you’re 30 years old, you should allocate 80% to equity and 20% to debt, ensuring a balanced and age-appropriate investment. After 5 years, the percentage of equity will be reduced by 5%.
4. Clear financial burdens
Indian government has clarified that by buying crude oil from Russia at low prices, they have been able to reduce the loans taken, similarly one should not have too much debt else the financial freedom cannot be achieved. One must keep it’s EMI less than 30% of it’s income to ensure that cash flow is maintained.
5. Not sacrificing long term goal for short term gains.
The penal tariffs imposed on India mainly for two reasons as firstly India’s refusal to open its agricultural markets to tariff-free U.S. imports; and second, its decision to continue purchasing Russian oil, prioritizing economic needs and energy security. India is taking a principled stand to be committed to India Russia friendship over long yeas to protect its long-term interests rather than yielding for short-term benefits.
Similarly, in personal finance, you must not sacrifice your financial independence for quick gains. Avoid investment in high returns in short term time schemes, avoid using excessive credit cards, entering in speculative transactions without knowledge of it.
Arjuna (Fictional Character): Krishna, what should one keep in mind during tough times when the market is volatile?
Krishna (Fictional Character): Arjuna, just as India refuses to bow to external pressures and stays firm on its trade policies, an investor too must remain steady and confident in the face of market volatility or global economic shocks. Remember, financial freedom is not won in a single day; it is earned through years of discipline, patience, and principled choices. National independence protects a country’s dignity; financial independence protects your dignity for life. Both are worth defending at any cost.
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