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Independence day & Republic Day

Posted By: Admin

Friends, many of us have often not bothered about the difference between the two days. In fact for the longest time, it has been celebrated as a holiday and we took the time to rest and recuperate from our punishing daily schedules. However there are key differences between the two. 

Independence day marks the anniversary of India gaining its independence from British Rule into being an Independent nation. This day was 15th August 1947, hence 15th August in India is celebrated as “the Independence day”. 

On the other hand Republic day  is celebrated on 26th January in commemoration of the day, India adopted its new constitution as an independent nation run by an elected govt. The tenets of  governance and democratic actions were enshrined in the constitution. Since then India has been hailed as the largest Democracy by the world, in no small measure due to the constitution we follow. 

While independence day marks the culmination of the Freedom struggle to gain freedom from the British Rule, the Republic day celebrates the birth of a new Nation India. They are very different in their significance and their import to all of us. 

In the investment world, this can be likened to the difference between Saving & Investing.

Saving is the culmination of the way you manage your money. So if you have a certain earning and you have a  certain pattern of spending the difference could result in savings. It is the culmination of the journey of money in your hands. 

However where saving stops, is where investment begins. 

Like in the case of the country, the goal is not to gain independence as the end.  Independence is the means to building a  strong independent democratic republic. As is the case with investments, the purpose of a successful saving habit is a necessary  pre requisite which needs to be coupled with a strong investment framework to create long term wealth. 

Nations which have gained independence but not imbibed a strong republic have either gone back to anarchy or have become a banana republic (In political science, the term banana republic describes a politically unstable country with an economy dependent upon the exportation of a limited-resource product, such as bananas or minerals – Source Wikipedia). 

Similarly a  good savings habit if not coupled with an investment framework consisting of  the following :

  1. Goal based planning 
  2. Sound Asset allocation 
  3. Process of Review and rebalancing

Will eventually be fruitless and would just fitter away. 

So just as a Constitution is needed to make an independent country Stronger, a  goal based investment framework is a necessary follow up from savings to create long term wealth.  

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