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Friday, January 17, 2020

Turning 30 and still no financial plan? Wake up and smell the coffee

The problem is between coming of age, leaving the nest, and learning to find a work/life balance, it’s easy to forget that you have an end goal to work towards.

Updated: January 16, 2020 5:59:19 pm
As carefree as you might feel, you’d be surprised how well a backup plan can take that inconspicuous weight off your mind.

A fairly large chunk of millennials, even entering their 30s, have no idea what they want to do with their wealth. As Gen Y, we’ve gotten used to being called lazy, irresponsible, greedy. You’ve heard it all, and you know that’s not the truth. You’re committed to your career, your home life, making a name for yourself, improving the country. You absolutely have your dreams and goals. The problem is between coming of age, leaving the nest, and learning to find a work/life balance, it’s easy to forget that you have an end goal to work towards.

The thing is it’s easy to fall into routines. Your day is probably occupied by your job, your friends, family, or significant other. You’re accustomed to waking up and heading straight for your cup of coffee or mug of chai. That’s a familiar everyday step, that kick starts the rest of your day, every day. Maybe you might remember in your day that you’re aiming to get married soon or buy a new car or house. But every morning, the smell of that coffee you’re so used to is yanking you out of long term planning and into short term survival mode.

Triumphant 20s to troubled 30s

Worse, it’s easy to get overwhelmed when you’re floundering in a crisis, with no resources to fall back on. Imagine suddenly losing your job, needing emergency medical treatment, or finding out you and your spouse are pregnant. That’s why it’s vital to have a long term plan of action. More importantly, a plan that lets you tackle the crisis without the shadow of tomorrow hanging over your head.

Far too many carefree 25-year-olds turn into panicked 30-year-olds. You probably know at least one person that’s gone through a cash crunch. So why not prepare for all the possibilities with some smart investing? After all, it’s not really that much work either.

Isn’t it? No, it’s not. First, you do a little research on the investment plans that look most attractive to you. And of course, since this is 2019 and not 1999, you don’t even need to go anywhere to do that. Literally just pull your phone out of your pocket, run a few internet searches, and bada bing bada boom you’re done. Then just apply online, maybe talk to an investment manager on the phone, and you’re sorted.

It takes a week or two at most to plan for your investments over the next decade, and then you can lock in without ever needing to make a trip to the bank, or sit waiting in a lobby. So then why procrastinate?

Do more than just get by

Sure, you might have a steady job and a fixed deposit or two bringing in the dough. But that’s the bare minimum. Why do all the work when you can make your money work for you and truly sprout your own wings? In a nutshell, that’s what smart investment can do for you.

Let’s say you’re 30, maybe earning 20 lakhs a year, but you make do with 10, or 15. The remainder goes into fixed deposits that will, in a decade, give you a little nest egg. Maybe that’s what your parents did. But have you ever thought about there being a better way than the one you were taught?

Instead, consider that you start investing that 5 or 10 lakhs a year in something like HDFC Life. Now you don’t have to wait a decade to act on that house you wanted to buy. Instead, in five years you have enough to make a down payment, and your returns can keep helping you offset that loan.

Suddenly, you’re not slogging away with your eyes on the prize, you’re making the prize come to you. 

When you invest smartly, you’re not putting your life on hold now to enjoy yourself later, you can have the best of both worlds. And this has the added benefit of allowing you to cut down on the amount of money you’re spending in taxes every month. No more sad face when you look at your TDS!

Because as carefree as you might feel, you’d be surprised how well a backup plan can take that inconspicuous weight off your mind. It’s a sense of freedom that, instead of coming from reckless abandon, is spawned by a self-assurance that you’ve prepared best you can.

Brewing a stronger future
When you start investing your money intelligently you can make financial decisions based on when the time is right for you. No more budgeting for how many years down the line you can afford what you want now. And when life throws you a sucker punch you’re better prepared to recover, to keep caring for your loved ones.

As Bruce Wayne said, “People need dramatic examples to shake them out of apathy.” But why wait for a kick in the rear end? Wake up and smell the coffee now. Mmm, smells like independence.

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