On the basis of some of the requests and comments, here are some of the examples that I see on a regular basis. These are not by themselves wrong, but in a combination of events, keeps a person poor:

a. Refusing to use public transport: Public transport is not the best way to travel in urban India. However, on a weekday afternoon when you are travelling against the traffic or on a Sunday morning, it is possible to take a public transport. However, there are some people who can use their own car, friends car or a taxi. Now in a city like Mumbai let us see what is the cost difference. A second class ticket would cost Rs. 15, a first class ticket Rs. 150 and a taxi about Rs. 900.

This is really difficult to justify a 1000 buck taxi ride when Rs. 300 can achieve the same result. I am talking about a couple travelling for fun.

b. Buying an asset for show off instead of what it can do for you: the car that they choose is more decided by ‘what the others will think’ rather than what it is going to be used for. So a Nano will not be chosen as it is the entry level car, an Indica / Indigo will not be chosen because it is a taxi for BPOs, an Innova will not be chosen because it is a taxi for too many people……these are of course examples.

c. Continuing with b: Even the vacation that they take is decided by “I must make at least one foreign trip” – so a person staying in Mumbai and is yet to see Mahableshwar or a guy in Delhi who is yet to see Shimla – will make a trip to Singapore, Malaysia – and say ‘Is it so cheap..’. Chances of such a person going to North East for a vacation is IMPOSSIBLE….

d. Most assets are ‘show off’ assets – house, car, vacation time share……but not mutual funds, sip, life insurance…

 in case you have not read:

http://www.subramoney.com/2013/01/earning-well-but-poor-part-2/ 

 

 

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  1. As always nice article! It is human mind which dictate an individual to do for others “show off” rather looking for themselves. Long term vision of financial independence is lost by saying “what is there in life if we do not live the life now”!

  2. Subra,

    Till recently I never knew there were people who actually did that – esp when could not afford it. I always thought if someone spent 2L on a foreign trip then he has to have net worth of ATLEAST 1 crore. We seem to be giving Americans a run when it comes to conspicuous spending.

    At least once in life I would like to show off buy a car, take a foreign trip etc to impress others!! But then I will have to find someone who is impressed. That is real effort and too much trouble!!!!!

  3. SAM,

    well said,the main question is what happens if someone is impressed well nothing,People will forget next day but we carry the burden for 6-7 years. too high a price to pay for fleeting glory in the eyes of people who do not really matter.

  4. a cousin of mine used to flaunt endlessly about their foreign trips & used to pester us why we don’t do the same…
    interestingly, i came to know that all their trips (airfare+stay) were ‘sponsored’ by wife’s sister+husband, a little nugget that would useful in stirring up a nice family debate if they use the card next time we meet in a family function 🙂

  5. Impress whom SAM? Sheer ego to think that somebody else is bothered about what you are doing in your life. I do not know anybody who will be impressed by what I do. So impress ‘somebody’ maybe, but who?

  6. Thanx Subra,

    I learned one thing from you, to ask question before making any purchase, is it my Need or Want or Desire? Am I doing it for myself (because I see value in it) or just to keep abreast with my friends (read : to show off).

    PS : A good example is, I don’t mind investing into a quality running shoe (being a runner), but I will think hard before I go for 2k Shirt….

  7. Subrabhai over the last two weekends I have used BEST extensively and I must say it more than lives up to its name, clean, well maintained buses and knowledgeable, helpful conductors. I now call them my personal limousine.I have no problem spending Rs 22 in place of Rs.200 cabfare.

  8. Thanks Subra Sir, These set of Articles of “Earning well but Poor” is excellent for me. I also thought of foreign trip atleast once in a life time, though i have not seen shimla and nor the best places in india.

  9. The foreign trip part is slightly misleading. Thanks to the high air fares in India, a trip from Delhi to Kerala will be more expensive than a trip to Bangkok. Of course one can claim LTA for the Kerala trip which might bring down the costs by quite a bit.

  10. This is the case moreso with the facebook generation.
    One “friend” on my list posted pics from every place on his 5 country honeymoon trip.

    One might not be bothered about matching it, but unfortunately it’d be difficult to convince the other half of one’s life of the same.

  11. Also even public transport can be avoided in some cases where you don’t need to go in person, by using postal services.

  12. Point b is the current dillema for me. There is no public transport in my town and 2-wheeler drive is very dangerous because of trucks in my daily route. I already have an alto which my wife uses to commute to office. I need another one. Nano perfectly fits my requirement, but I cant buy anything below swift reason family n peer pressure. I will be laughing stock and butt of jokes in office. My inlaws will kill me with their caustic comments. Even when i bought alto 4 years back i was heckled and looked down upon. People dont understand your words – “Cabapility to buy doesnt mean propensity to buy.”.

  13. Atiker

    I can quite understand your dilemma. People would be amazed that I never bought into ‘status symbols’. We could have been a two car family long back, but I did not want to worry about the price of petrol. Now I have a automatic i10 for myself and dont really have to worry about petrdol, mileage etc. I am very open to selling the car in case petrol price bothers me. Never had pressure thankfully.

    Dont worry about caustic comments, being butt of office jokes. None of them will come to your rescue when you need money! Only your savings and investments will.

    Best,

  14. Refusing to use public transport: and also Refusing to retain two wheeler after buying a 4 wheeler…

    they sell two wheeler after buying a car….than people repent

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