Whenever I talk about investing, it is important for you to find the money to grow. How can you find more money to invest? These are the following ways (largely Indian context, not sure about other countries):
- Earn more from your current job
- Find a second / side job
- Make sure that both of you – H and Wife earn to maximum potential
- Use all sign up coupons, offers, etc. – even this adds up!
- Make your money work harder.
- Plan your taxes sensibly
At the beginning of your life remember the ONLY multi-crore asset you have is your CAREER. Between settling for a Rs. 3L job in a call center vs doing an MBA from an ordinary college and getting a Rs. 5L job vs doing an MBA from a premier institute and getting a Rs. 30L job there is a HUGE, HUGE difference. No ‘pay yourself first’ or ‘awesome power of compounding’ can ever, ever bridge the gap between Rs. 30L and a Rs. 3L job.
Negotiating yourself to get a better salary and being brave to shift geographies, careers, etc. can also make a huge, huge difference. In the tech space it means having the guts to leave an Infosys or TCS to join a start up in Rajkot or Bharuch. In finance it may mean leaving a bank like Hdfc bank and becoming an IFA and charting your own course in life by adding many other products. Takes tons of guts, skill, and talent.
Constantly upgrading your skills and being lucky in career choices is also important. For those of us who qualified as Chartered Accountants in the early to mid 80s careers were available in the Gulf. All CAs had a choice of becoming accountants, bankers, investment bankers, brokers, auditors, etc. However those who chose IT and joined the software industry made the most money – but it meant they gave up on their accounting expertise! That required guts. They got rewarded. The investment bankers, and brokers too did well – leaving behind the accountant, the taxman and the auditor.
A 10% rise negotiated year on year for the first few years will have a far greater impact on the total income earned vs the 6% raise in income that you get without much negotiating. Part luck yes, but being alert to such opportunities and jumping was important. For those CAs of our batch mutual funds and life insurance careers were not yet open. However those who qualified in 1992 had the Mutual fund and equity research industries throwing tons of job opportunities. For those who qualified in 1999 or later, the insurance sector has(had) many opportunities.
Spending time, efforts, and skill EVERY MONTH in trying to increase your Earning capacity is a fantastic investment. One small tweak and the best asset of yours will be put to better use. Even in the mid 40s your career is likely to be your best asset. Imagine if you were an IFA or a practicing CA or a practicing doctor, you could work till your age of 70. This alone will put more money in your hands AND the need to provide for RETIREMENT also REDUCES.
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