When a young couple came to me for a portfolio review…they asked me ‘when will I get rich’. It was the woman who was doing the talking and these are my views, as I told them….

“But..there are no guarantees of ‘richness’ the way you are seeing in the movies. If you are creating wealth for yourself, you need to know that you will be well off, but the multiple income streams, mansion of a house, retinue of servants which you see in movies is not going to happen at all…and here are the reasons:

  1. You have too much emphasis on savings – and having Rs. 22 lakhs in bank fixed deposits is not a sensible idea. Yes I agree that savings are important, but at your age you have put too many ‘mental’ restrictions on yourself. Geographic – why cannot you seek a job in Dubai for example. Why does your husband keep saying that he is overpaid and cannot get a similar job elsewhere? At this age there has to be a far, far more important thing to concentrate on is EARNING, not saving.
  2. You continue your father’s insecurity about investing in equities, mutual funds, etc. WHEN WILL YOU START INVESTING? I have asked you to invest in ELSS, you have actually bought a ULIP. They sound similar, but from a cost point of view they are different.
  3. You have missed 8 years of compounding for your wealth. Assuming that you could have invested for 30 years, you have lost about 25% of the compounding period. Very expensive miss.
  4. Both of you are extremely risk averse. Your pay cheques are too precious for you – so you will not leave your jobs even though he is working in a shit company which can close down anytime. He is too scared and worried about seeking a job change and you are hoping that you can retire from your current place of work. The ability to see cash in other opportunities is a very important ‘rich’ characteristic.
  5. You do not live beyond your means, but your car is a stretch and your plan to buy a Rs. 2 crore property could also be a stretch. Yes it will use all your existing cash, and you will borrow almost Rs. 2 crores – your own money will be spent on down payment, furnishing, etc. This is going to be a big impediment to your wealth creation process. Of course the trip to Europe did a lot for your mood, but please do realize that all those were speed breakers in your wealth journey.
  6. Your parents did not do any ‘Rich Dad’ kinda activity for you – no PPF account when you were 3 years old, no equity shares as gift on your 5th birthday..kind of activities, that has been an impediment for you.
  7. You are working for the semi government and your husband is pushing somebody else’s dream. Both of you need to change your jobs and geography. If you are going to be chasing some idiotic dream of some entrepreneur – and wasting time there.
  8. Both of you are in a nice comfort zone and refusing to push or compete for a more challenging job. You have a nice salary package, but the work that you are doing is of a much lower caliber. Both of you are capable of doing much better than what work you are currently doing. Move out of one of the jobs and see what is available in the market.
  9. Your money goals need to be made far far more focused. Let’s meet again.

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  1. Sriram Srinivasan When I read that, it seems it was written for me when I was 32 years old. Fantastic piece of advice. Applicable to many of us.

    comment from FB

  2. Subramoney,
    This is a very apt case for most of the younger generation including me.
    Losing years of compounding and trying to build wealth thru FDs.
    Left to them the 22L saving will vanish no money.
    I did an analysis of my income to networth conversion after 12 years of working and it was a shocker to me.

  3. Sorry the comment before was supposed to be addressed to ‘subra’ and not ‘ subramoney’. Please edit.

  4. Subra,

    Very valuable advice.

    Is it possible for you to add option of sharing the link on WhatsApp? I mostly share your posts with family and friends on email but WhatsApp will help great deal.

  5. Seshadri Pillailokam I like the core idea of the post that focus on earnings is often overlooked but is as important (or more) as the focus on savings. Thanks for posting this. (i tried posting this comment on the blog but it keeps giving a 404 error message. Trying from Chrome)

  6. Nice post sir.

    The way i see it:
    Young people of today spend/consume way more than is needed and save little and invest none. hell! they convert everything to emi, even cell phone purchase and airline tickets!

    A large reason for that is “to appear cool and sophisticated” as the global exposure today leads them to want new and shiny things everyday, to try out new and exotic locales everyday.

    but another reason for poor methods saving/investing is their parents, because even today as soon as the kid gets a job parents push products like Life insurance, RDs, FDs and ULIPs forcefully on to their kids. And the kids are stuck forever with these products.

    Parents dont realise that FDs and Insurance used to pay well 25 years ago when they were young, not anymore!

    Alas along with the merits or westernisation and globalisation also come its demrits and if not corrected now, soon the youth of India will be like the American youth – full of credit card debt and no assets!

  7. Hi Subra,

    Can you please review my Portfolio as described below, please let me know thru mail If any changes required:-
    Age: 34 wife age: 32 No kids.
    Income:- 90K for me + 45k wife.

    Term Insurance: 1 cr cover for me, 90L for my wife (with Bharti-AXA as they were offering lowest premium 8.5k+ 8k).
    LIC:- 5L cover (26k premium annual)
    Health Insurance: Company covered for both. (Both working So If one stops working we have cover.). Will Buy when any one stops working.
    EPF:- 10L + NPS started this yr for myself.
    PPF:- in Wife’s name 6L + EPF 1.5L
    RD:- created RD to accumulate amount which goes into wife’s PPF.
    FD:- 12L in FD wife’s mother’s name, as she is senior citizen getting better interest. also tax free.
    Equity:- 30L, bunch of stocks with all caps+ 2L in ELSS.

    Car Loan :- 6L (monthly EMI:10K)

    Monthly Expenses:- 35k (including rent+household expenses).

    Dependent :- Parents.

    Goal1:- Want to create Equity PF which can give me dividends for yearly expense+capital appreciation.

    Goal2:- create wealth of 3.5 cr.

    Please do share your thoughts on my PF.


  8. Hi Subra,

    I am managing investments for myself and my elder brother (doing SIP for both). My brother isn’t really interested in and try to understand equity investments. He is 33 and has a government job, but will not get pension from government when he retires.

    I have taken over his investment for him as he doesn’t appreciate the amount that is needed for retirement (with inflation). I am confident I will manage it as long as I can for him, but you never know what the future holds.

    How do I get my brother interested in his own investments? Any thoughts from your vast experience would be helpful.

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