When is it too late to improve your financial life? 24? 34? 44? 54?

Well, there is no time when you cannot improve your financial life. Normally, the financial situation is a scorecard of some good and bad financial habits that you have got over the years.

So if you are a person to whom anybody can come and sell any product, the chances are that you will have 55 folios of mutual funds, 2 unit linked insurance plans, a few endowment plans, a couple of unit linked pension plans……and you have no clue how much all that is worth if they are put together.

Is that bad?

Well compared to an investor even worse off is his brother who has personal debt, business debt, car debt, housing debt and NO ABILITY to earn a sensible amount of money! You think this does not happen? well, it does.

I do find 50 year old middle aged men wallowing in the mud of debt and not even realizing that their retirement is just a few years away. It is shocking to see them EASILY reach for consumer credit or bank credit to buy vacations, cars, a second house, etc. WITHOUT even bothering to make their own balance sheet!

Yes it is stunning to see such people. Some of them ask “is it too late to improve financially”.

For me it is not just the current situation which is alarming. I am more worried about what got them to such a situation.

Obviously, it is their own bad habits – being addicted to some expenses and items without which they cannot live. A person earning rs. 1L a month and being addicted to alcohol in an expensive bar 5 times a month could be spending 15% of his take home income in a bar! that is not small. What about children being able to extract anything out of such ‘ATM-Dad’ or ATM-Mom? Well children do get away buying expensive tennis racquets, vacations, dresses, education  – and the parent has no ability to say no!

What about those who keep buying a lot of nonsensical stuff? Well dresses, cars, vacations, and worse FINANCIAL ASSETS which they do not understand enough. I found a banker and his son who had signed up for a “only Rs. 50,000 per month” unit linked insurance plan for 30 years. I am sure they had NO CLUE HOW MUCH of their wealth they had written off! When I showed them a number in 8 digits did they look at it wide eyed. Lack of understanding? well father is a retired banker and son went to one of the IIMs.

Well, I am not worried about the scorecard. Of course it is bad. Well almost a disaster, but the bigger worry is that if you continue to make such mistakes it will ONLY GET WORSE.

If you are in debt in your 50s what happens if suddenly LOSE your ability to earn money? And your spouse is not able to earn a rupee on her own? How will you live the rest of your life?

Who will pay for uninsured medical expenses?

How will you live for say another 35 years of your life?

Start thinking. Its never too late to start thinking.