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11 money lessons we wish we'd learnt sooner
How often have you thought to yourself: I wish I had known this earlier?
Here's your chance to benefit from what (most) 30-somethings learn rather late in life.
There are some lessons only time teaches you.
(Like being a wisearse doesn't take you too far.)
But then there are some that could well be learnt when you're still in your 20s (and will benefit you tremendously).
So gather around kids, here are 11 money lessons we wish our parents had taught us sooner.
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1. Buy a house
Take our word for it: Not having a house (or not having bought it sooner) will be one of your biggest regrets in your 30s.
Whatever anyone else tells you, real estate prices will not fall.
If you haven't already bought a house, start the process right away, scrounge or beg or borrow from your friends and family and buy that one piece of real estate.
It might not be in one of the metropolises but it is well worth investing in the outskirts or in the heart of smaller towns where the prices aren't very high.
You may not be able to stay in it right away but there is, as we have learnt, no better investment than real estate.
So start looking right now!
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2. Don't put all your eggs in one basket
Divide your savings in various schemes.
Have a few short-term investments that you can use for that overseas trip or your wedding.
Invest in long term deposit schemes for future expenses -- like your unborn child's education or paying off your home loan or even purchasing a second home (you'll be thanking your stars when that provident fund matures)!
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3. Be patient
You will want all your investments to mature in 11 months and give you stupendous returns.
Here's the problem -- they won't.
So be patient and watch your money grow.
Unless you are left with no choice, do not break your investment. You will have to start all over.
And there are few things more demoralising than that.
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4. If you don't know how it works, don't invest in the stock market
You have probably read stories about how the stock market changed the fortunes of your friend, how s/he bought a house after selling her/his stocks without a home loan or how her/his money grew at 30 per cent every year while you were stuck with an investment that only makes your money grow at 10 per cent.
Most of us have been tempted by the returns of the stock market.
But the stock market is a strange beast.
If you don't know how it behaves there is a good possibility you will burn your fingers.
Any sound investment advisor will tell you that unless you have 30-60 minutes to spare every single day to study the market, it is best you stay away.
Not being interested in pink papers is another sign that you should not go down that path.
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5. Don't spend beyond your means
You have just begun to make money so you are bound to want to spend on that dress or that jacket or the latest mobile phone or iPad.
Take our advice -- resist that temptation.
The rule of thumb is if it needs you to swipe your credit card, it probably isn't for you.
The great way to find out for yourself if you really need something is to begin saving up for it.
If you still want it by the time you've saved up the relevant amount (which will take a few months on your salary) buy it.
Else, you still have all that money! :-)
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6. Take inflation into account
Inflation is the sad truth of our lives.
What costs x today will cost 10x in the coming decade.
So if you thought ten lakh rupees were enough saving, let's say ten years ago, you know where you'd be today.
Take into account rising costs when you save... and more importantly when you spend.
Before you spend on something ask yourself if the returns are wroth the investment.
Do you really need that car or could you do with that bike?
Do you really need that bike or can you make do with public transport?
You get the drift, right?
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7. Begin retirement planning from your first job
We can see you laughing.
But the best time to start your retirement planning is your first job.
Why? Refer to point 6.
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8. Got a raise? Save!
More often than not, raises come with arrears of a few (or more) months.
That translates into a considerable amount.
Ask yourself, would you rather spend that money on a really expensive night out or save it for a rainy day.
Take our advice and go for the less sexy option.
Rather than blowing it all off, consider putting it away... at least a part of it if not the whole thing.
You will not regret it.
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9. Save a third of your monthly income
Putting away one out of every three rupees you earn may not be very easy (especially if you have a home loan to pay off) and it is.
You will feel the pinch, especially when you become a parent and when your monthly budget is stretched out thin.
Don't give up because this is the money that'll come handy if you just want to quit your job and start a business or are faced with a medical emergency or a layoff.
Which brings us to the next point...
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10. Anticipate a layoff
This might not have even figured in our parents' scheme of things but layoffs are now a real thing.
Just because you're efficient, doesn't mean you won't be sacked.
Layoffs can happen to anyone, so figure that out in your financial plan.
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11. Get a medical insurance
Most employers offer a medical insurance for you and your parents.
But emergencies can strike any time and they may not be able to cover all your expenses.
Also, when you insure your parents when they are young(er) and (probably) have lesser ailments, your premium will be lesser than what you'd pay when you insure them later in life.
Don't keep waiting for the lightning to strike, be prepared to tackle the damage when it does.
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