Why do we work in an organization?
To gain knowledge and learn new things? Yes, yes. Adding value to the world? Of course yes. But what else can we even do with our time if we don’t type away on a laptop? Oh muchly much, so let’s not go down that rabbit hole.
Money. Its a big reason any of us works in a for-profit corporate and it isn’t shameful to admit it. It’s good to earn money, eat well, buy that thing we always wanted but never had money to buy, spend on our near and dear, travel around, have a good lifestyle.
When my first paycheck came in… oh wait, that’s not a figure of speech. I got an actual “check” to be encashed. Not because I am from an era where people received salaries as checks but because I was so drowned in work I forgot to update my bank account details on the salary portal.
As far as money matters go, that’s a big NO and nothing to be proud of. Nearing 40 now, if I had the utopian time machine, I would first go back and whack that 22 year old me for being irresponsible enough to miss that crucial task.
Now, going to the original point, when my first paycheck came in, I had no one to give me wise investment advice. Nor was I the kind who “asked” for advice, because “Gosh, that would seem so stupid coming from me, having crammed through first principles of financials and investment management for two years.”
So, like any good South Indian, I bought a gold coin. Because, gold always appreciates no? Conveniently skipping the point that gold is one of the most illiquid assets, a gold coin only ever becomes gold jewellery and gold jewellery only ever becomes different gold jewellery.
Well, no matter.
Over the years, I became more astute. Starting with FDs and RDs, the go-to “safe” instruments of middle class India and upgrading to mutual funds and shares, the portfolio diversified, waxing and waning, but existing. Also, I never got gold again as an investment, it’s an oxymoron in this country.
Anyway, I am not here to give you tips on where to invest your money. Like I mentioned in an earlier post, I think tips such as those are overrated. But I do have some thoughts to share.
Know your revenue. Keep a tab on how much you get in hand (which is very different from that nice number called CTC).
Track your expenses. I don’t advocate frugal spending, if we don’t spend how else is the economy going to grow etc. But, understand how much you spend monthly on essentials and discretionary, whether the discretionary spends really give you joy or you need to pivot to other spends. Like, does it make you happier buying a nice dress from a high-end label rather than buying nice shoes? You like both? That’s cool too.
Do your own homework. I am not a big fan of outsourcing the thinking on money management. I run my own research, understand sectors and segments, read up about companies and saving instruments.
Be consistent. As with everything else in life, nothing pays like consistency. Even if the amount you invest is frugal, make sure you invest regularly. The sum of the parts will eventually work out.
Shut your eyes during downturns. No, seriously. The investment dashboard will give you heartbreaks, and make you want to sell something because “oh gosh, all my notional profit from that mutual fund (MF) is dead”. It isn’t. Steady instruments like MFs mostly square off in the long run. Downturns come and go, but money grows forever, unless you have invested in a really bad egg.
Insurance isn’t investment. However, every elderly person in your family will tell you it is. Insurance is very important but only to cover for risk. It’s a price we pay to safeguard against untoward incidents, not to get paltry returns after thirty years.
Pay advance tax. Trust me on this. It’s ok to anticipate and pay some advance tax always. The interest on tax at the end of the year because there was some wrong computation feels like scraping fingernails against a brick wall, which can well be avoided.
A part of adulting is taking ownership of a myriad things from electricity bills to vehicle maintenance. Shouldn’t management of our own money figure at top of that list?
P. S. Views strictly personal. Post doesn’t refer to any organisation that I am currently associated with.
Such lucid writing. Keep them coming Kavitha..and really good practical advise too! Thank you