‘Do not tell a lie to the man whose face you see while shaving’ – is an old English saying.

Well, we do. We tell a lot of lies to ourselves, and many of them are likely to impact our finances. Let us see the lies:

Retirement is an old age thing, I will worry about it when I am about 50 years of age:

Wrong. Wrong. Wrong. Retirement is about accumulating money at a particular age so that you need not work AFTER that particular age/ money goal is reached. So the earlier you start, the better off you are.

I have to pay for the higher education of my children.

Not true. Today with school fees running into 6 digits per annum, and college fees following closely, parents would be drained out by the time the child is out of college. If you can pay for their higher education, fine. However your TOP PRIORITY has to be your retirement corpus. Not your children’s education, and surely not their marriage.

I know my finances too well, I do not need to write it down.

Wrong. Only when you write down your expenses and track them will you be able to control them. Same is true for your investments. You know your finances only when you track them. As simple as that. Mental accounting is one of the biggest crimes in Personal Investing.

I will start investing once I have Rs. 100,000.

Worst possible excuse to postpone investing. When you earn you start saving. As simple as that. So if you can start a SIP for ONLY Rs. 1000, by all means start. All those small bits of money add up to a nice big sum at the end of the period. So do not postpone your investing, start today.

I should be on my own. I am old enough for it.

Just because you say Mark Zuckerberg earned north of US $ 2 billion (Rs. 13,000 crores!) and you born about 2 years earlier to him, does not mean you should be on your own. There are many people I know who are just not capable of being on their own. Those who cannot postpone gratification, those who cannot track expenses, those who cannot be good leaders – do not do well in business. Do not get into that ‘I am competent because I am older’ bit. That is crap.

I need to get a social life, so I cannot save money.

Again nonsense. You cannot afford to spend more than 20% of your net take home on lifestyle expenses. Bikes, fun, eating out, fancy clothes. Cameras. Whatever. Stop telling yourself that you are ‘entitled’ to such a life style because your friends are doing it. They may be inheriting money, earning much better than you, or be as stupid as you. Whatever.

Four years post qualifications, I must have my set of 4 wheels.

Awesome media trap into which all kids are happy to fall! Well if you have a well paying job, a dad who is planning to gift you a house when you turn 28, pay for your indulgences, and leave you a nice retirement corpus, maybe yes. If YOU have to create your own corpus, house, pay for 2 children’s education, and own retirement kitty apart from paying for your wife’s ‘foreign vacation’ musts, God help you and your car. Or your Rs. 4 lakh bike. God bless. Petrol, of course, does not come free last time when I checked.

 I spend what I earn, I have no debt, no kids, that is fine!

Sure. If your job is going to last forever, you are not going to fall ill, not planning to have kids, not planning to buy a house ever! Stop lying to yourself. Under pressure you will get married, change jobs, have kids, take a foreign vacation, buy a nice new bike, a new fancy Apple laptop, …..and hey nothing comes free. You need to have a corpus, even to fall ill. Wake up, and smell the coffee.

What I do not spend is in the bank – in the savings bank account of as FD, that is fine.

Surely yes. Being poor and getting sub optimal returns in the negative region is optional. If you have to get REAL returns beating inflation by a decent margin, you need to have asset classes with higher returns. Sure, the standard deviation will be higher, but so will the average return be. If you and your spouse are ‘scared’ of standard deviation, LEARN, do not RUN AWAY from investing. By the time you are 50, you would have bled. If you are 30, remember you have already missed about 5-6 years of compounding.

Missing one or two credit card payments is fine

Worst lie you can tell yourself. Missing loan or credit card repayments is not fine. Simple. You need to meet every installment of your loan repayment. Does not matter whether the loan is a student loan, marriage loan, housing loan, car loan, or a simple vacation loan. Borrowing is bad. Not repaying it is worse. I love the guys who do not repay on time – Hdfc bank is a share in my portfolio!







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  1. Also Young Fellow Readers who have just joined corporate Rush…You Got Mantra for financial Piece if you internalize this super peace from subra….Time and knowledge both are on your side…Lets be COMPOUNDERS !

  2. Dear sir, Thank you for the post.Being a young professional, I can very well relate to the post. However, I did not understand the second point. The kid will never be in a position to pay off his school or college bills or marriage expenses. Hence, this responsibility lies with the parents. Hence, will it be right to say that retirement will be the first priority over and above a child’s education and marriage? I can only think that one will have to plan for all these events, giving them equal priority. I would love to hear your thoughts.

  3. Kids have to pay for their postgraduate expenses and for their marriage expenses. Over spending in marriages happens because parents blow their money and have no retirement corpus left. That is a shame. The middle class has to spend less, and be willing to invest more for retirement.

  4. Sir, Thank you for your reply. I fully concur and cannot agree more that marriages have now become more of a mere status symbolic event driving parents to give in all that they accumulated over the years. I however, continue to opine that marriage is a huge responsibility and a life turning event for youngsters. For most girls, they would be 2-3 years in their career, while guys probably have multiple things going through their minds of the various responsibilities that rests on their shoulders post marriage. In this backdrop, I think it is parents responsibility to fix up a budget for their child’s marriage and plan for it. Post marriage, children are obviously expected to manage and plan for their own. Spending on their marriage themselves will shaken the ground on which they can start their new lives. However, I am only a novice in the investment world and open to learning with your views which are backed by much more experience.

  5. @ Neeta K
    “The kid will never be in a position to pay off his school or college bills or marriage expenses”.
    NEVER?? Do you really believe that?
    – what good is such education? Wont that education make that kid worth at least equal to the amount spent for it?
    – if so why bother with such an ‘useless’ education??
    this is coming from someone who paid for his management PG education within 2 years by getting job and paying EMIs from salary.

  6. Hi AJ PlanRupee, thank you for your views. Yours is indeed an great example. My statement was more for school and graduation fees, however should not have generalized it. While, many will be able to pay off marriage expenses, why I think it will be a good idea for parents to pay is reasoned in my previous comment. No education is useless, there are some who manage Tier 1 B schools and earn fat pay checks, rightfully so. There are others who don’t and need some support from their parents in their way to financial independence. And I see nothing wrong with that.

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