a balance between securing future and having FUN
After I started blogging about personal finance many people asked me questions like :
why do you write about managing personal finance
why do you think we should start saving early
why do emphasize more on investments.
Why don’t u enjoy life rather than breaking your head on personal finance.
Here is what I feel .
Expenses : gone are those days when a person with ambassador/chetak,LML VESPA was considered being rich enough,when idli was around 6 rs perplate cold drinks were 5 rs per bottle.The cola market is worth about Rs 10,000crore . may be now its pretty more than that.
People now seek to visit Shopping malls, going to multiplex cinema halls, have credit cards, branded stuff, fast food, and more of new gadgets.
Kids and their education:
It starts with sending them to best play homes to providing them education in the best college till they finish their education these days are so expensive.
Apart from regular school/college expense children are also interested in many co-curricular activities. And to nurture their talents and enhance their skills many parents wish to provide them best training. And that’s also an add on to the expenses
People tend to take loans in many such situations to ease their burden of growing expenses. And sometimes with high interest rates
People also have their expenses to be considered for their marriage initially and in the future their child’s marriage as well
Gold investments can be helpful. Not necessarily be invested in physical gold.
Please dream of travelling around the country /world
People dream of buying home. Earlier people used to buy houses in their retirement money. Now thought process has change. People buy houses in their early stage of life so that they can use that house for their regular income or for themselves to stay after their retirement
People always dream of having peaceful life of retirement, playing with their grand children , spending time talking about politics and other social issues with other senior citizens and then go for an evening walk.
But ever thought of expenses if there is no regular income unlike pensions. And also at the growing 7% of inflation now . think about the rate of inflation 30 yrs later . it may be 10% or more
What people do:
People take endowment policy for 15-20 yrs in early life. It provides life cover, yes but what about the rate of interest?? Does it cross 6% per annum? I’m not sure but people who have taken endowment policy can guide me.
I somewhere read this an insurance company is under no obligation to reveal where your money is being invested or what portion of your money is being invested
People neglect equities because of its volatile nature. But it is a good option for long term.
People neglect term insurance cover.
People fail to save/invest/buy basically Pure Term Insurance + PPF+Mutual Funds
What people SHOULD do
Start savings/investmenst early:
Avoid unnecessary expenses
Build contingency fund for a rainy day
Grow assets and make it generate regular income in the future
Get adequately insured
Increase ur financial literacy and change the way your earn, spend, save, invest
People can provide more information to the fact why we should save at all