Category: Stories

“We lost 96% of our Wealth .. from RICH to Middle Class”

Posted on by Jagoinvestor

Today we are sharing a very different money story, where one of our readers is going to share his life journey of becoming a middle class from being RICH years back. Yes – you heard it right.

As per his request, we are not revealing his name and identity. I thank him to share his story with a bigger audience.

Here it goes…

How a person lost 96% of his family wealth and become middle class from being RICH

My story starts with an assumption that most of the jagoinvestor readers belong to a middle-class background or from a humble background. Most of the readers have either already moved to a level higher or are trying to move to a level of lifestyle better than what was available to them in their childhood.

My story is a complete reversal

Yes, I moved from affluent background to a mid-income kind of family (from a big city perspective and not on pan India basis)

My story is a lesson on why financial planning and diversification are important. I was born in a rich business family of a small town (population of 1 lac), my father was a well known and socially connected/respected person in society.

I still remember we used to have a car (when there were only two or three cards in the whole town), BSNL landline with a two-digit number (i.e. less than 100 connections in the whole town!). Money was the last thing to worry about in our family. Things were very smooth in my childhood, and we used to discuss how to take the next leap towards the ultra-rich families.

There was more than sufficient money, my family used to give donations to temples, hospitals, etc. I had an elder brother (1 year) and I never wore his used clothes, never used his books (same school), and never used his toys.

How we lost money

Unfortunately such was the turn of time that the business suffered three-four very bad years, which eroded the entire family wealth.

This coupled with the lavish wedding of my sister left almost nothing for us two brothers. My brother decided to join the business and I was banished to a poor software job 7 yrs back. I initially faced a lot of troubles, but gradually managed to come out of the situation and did an MBA and now I am doing well. Even the family business is doing great under my brother’s leadership.

It still gives me a nightmare, that we had a substantial loss in the family business. Probably I would have never discovered blogs like jagoinvestor and subramoney had that loss not occurred. The virtues of financial planning were learned at a great cost.

Did it impact our social life?

Not much…

One very good (some may consider it wrong) thing which my father did even when business was downhill, he never cribbed in front of society. He never let the lifestyle go down.

So society never knew that the problem is so deep. When my brother joined the business, the total net worth of our business excluding the house and gold was just ~20 lacs (We lost 96% of business value, down from 5-6 crores in real terms. note that this was many many years back) with two marriage and my MBA still pending. But still he was able to conduct business by borrowing (unsecured) and credit, only because our credit rating in the society was still AAA.

Loss in Business up to 96%

Had the society knew about this, we would be ostracized. Luckily my brother turned around the business and things became much better going ahead.

My childhood and money

My first good experience with money was when I got pocket money from my grandfather. I used to get 1 rupee a day and my brother 2 rupee, and we used to get candies from the shop. The pocket money gradually increased to Rs 30 rupee a week on Sunday, and we used to feel like Tata/Ambani on that day.

Feeling like a rich kid with lots of money

Not even a single incident I remember, when my parents refusing to give me money. Even during the bad days they maintained the lifestyle, paid for my college, held lavish wedding for my sister. I as an individual was not a spendthrift and that helped a lot.

I was educated in the best school in the nearby city, but education was just a formality since the ultimate goal was to join business. But very early in life, being from a business family, we were introduced to the importance of money very early.

My lifestyle NOW vs. THEN

Although financially I am comfortable now, there is no more that kind of luxury in my life. I am very frugal now. Here are some points which can give you all an insight into how my life has changed.

  • I live in a rented 1-bed room flat in Mumbai.
  • Consciously own no car and live a frugal lifestyle.
  • Earlier the minimum we traveled was 2AC, now the maximum I travel is 3AC
  • I avoid overseas holidays which my colleagues frequent

Although I do not complain, I wish I should have more wealth. I have done full financial planning (and also my family’s) with the help of blogs like Jagoinvestor.

Since I cannot afford the mistake which my family had done, I am completely opposite to them.

And I am seeing the good result to my net worth, with 5-7 years of job and though my salary is not high, my net worth is high. The only reason is being frugal and financial planning, avoiding toxic products like LIC policies etc. I have never touched ULIPS, endowments, FD ever in my life (totally my views)

How important is Money in life – My views!

Money is very important, as important as health. The emotional trauma of not having enough money is unbearable. When I was young money was always there and I thought it would always be there in abundance. I just have to graduate and join the business, but life had other plans for me.

After the tragic losses in business, we decided as a family that one of the brothers should find a stable job; while others will try to revive the business (which is now revived by God’s grace). All the while, I never felt the urge to study since the ultimate destination of father’s business required no qualification; I suddenly was required to study and find a decent job.

So I pulled up my socks and did engineering and MBA and landed a good job in the financial sector now.

Money is very important in life

I fantasize regaining old glory days and become a wealthy person, and I believe courtesy the financial education I may or may not live rich but I am sure I will die rich. I think if I can accumulate 5 crores (in today’s terms), it will make me feel that my future is secured.

Stupid mistakes people do in area of money

Everyone has their own way of looking at things, but having seen a lot of money in life, I think a few mistakes people do are

Mistake #1 – No financial planning, just random investing

Most of the people just randomly invest in some policies or open few FD’s without any concrete planning for future. They think life will continue in the same way like last 5-10 yrs. But life can have lots of surprises at times. One should always be 2 steps ahead and plan for their bad times. Start doing your financial planning. If you are not smart enough to do it yourself, accept it and hire a professional.

Mistake #2 – Invest/consume gold/jewellery

Do not see gold and jewelry as investments. Some of it should be just used for personal consumption, but nothing more than that. Try to invest your money in robust financial products which create wealth for you over long term.

Mistake #3 – Invest in fixed deposit

Fixed Deposits are not for investments, It’s to just park your money for 1-2 yrs and nothing more than that. If you want to create wealth, fixed deposits are not the best thing in today’s world. By the way, I am yet to meet someone who has become a millionaire by putting money in FD’s , unless you put millions in FD!.

Mistake #4 – Invest in property without proper due diligence

I can’t understand, how people invest their hard earned money in real estate without proper due diligence. There are enough cases where lakhs and crores are stuck in bad deals and people have just lost money. If its real estate, catch a lawyer, pay his professional fees and check things in detail before committing your money.

Mistake #5 – Same with stocks

It is just beyond my understanding that people think they can do stock investing and trading successfully for years and generate consistent profits. If it was so easy, everyone would be doing that by now. Leave things to professional and don’t do stock trading (unless you are really a pro and into it full time)

My father suffered from Mistake # 1. There was no financial planning done at that point in time. Most of the money was either plowed back in business or invested in PPF.

There was a belief that business would always be very good, so no land was bought and no equity investments were made. Some PPF investments were done for tax planning. Even my mother didn’t buy gold.

Such was the belief in business that no investment was made for a kid’s future education and marriage. Two-three big losses and there were no backup assets. So diversification is very important, never put all your eggs in one basket.

I also lost Rs 10 lacs recently!

I would also like to share one incident from my life where I lost money personally and learned an important lesson.

As I come from a business background, I wanted to get into some kind of business. But, I recently lost around 10 lacs in a business I started in partnership with my friend. A business plan was good but somehow it did not work out as per the plans. I learned an important lesson that “Slow and steady wins the race” .

Had I kept the money in my equity Mutual funds, they would have yielded good returns, but that’s fine. You learn from your mistakes. I took a calculated risk, hence the impact on me was less.

Don’t be afraid of making mistakes especially when you are young and have lots of time in your hand in the future.

One suggestion for your future

Manish asked me if I can share one insight I want to share with every one of you out of my years of experience and from my life.

So here it goes…

One should always have a plan B in life, like what will I do if tomorrow my company kicks me out, I have plans like starting a business, someone in IT may be looking at re-skilling or someone can survive on rent/dividend, etc.

There should be a little basket for every goal, as a plot of land for my daughter’s marriage which I will not touch, in my case, we thought that the running money in the business would be sufficient enough to meet all kinds of expenses or emergencies.

Linking assets to your financial goals

All this is a part of financial planning, so even if you are very talented today and earning much more than you require for your expense, you may feel that financial planning is for the poor or middle class,  but that thought is not right. In fact when the going is good; that’s the best time to amass assets.

A real-life example of my friend family

One of my father’s friends with a similar profile, good business which subsequently went bust had a lot of good shares like HUL, SBI at IPO pricing (imagine HUL @10 INR) and he never sold. Can you believe he gifted AUDI to his daughter only from the wealth created by equities (he showed us the Demat slip the day he sold shares)?

If you are low in wealth right now, then I have just 2 things to say

  • Be Frugal, don’t copy your friends and cousins and overspend
  • Try to increase your income, learn some extra skills, work overtime, etc…

Is your happiness linked with money?

Yes, For me it is linked; in the sense that I should be able to provide. There should always be enough money to support the family, health, education, retirement.

One should not ignore the value of good health, relationships, and friends. Even if one has all the money and there is no health or family to enjoy, then what is the use of all the wealth in this world? Given a choice, I will choose the later over money.

What money can’t buy

I feel very good after writing my story. Jagoinvester is providing a very good platform to share your life story. Even if few of the readers can take away a few lessons I will feel that the effort is worth.

What is your money story?

If you want to write your money story, Leave your details here and Jagoinvestor team will get in touch with you with the next actions.

What do you think about my money story? Did you enjoy it? Can you share your views about money and how it changed over the years?

“I created 1.5 crores in last 7 yrs” – here is an Inspiring Money Story !

Posted on by Jagoinvestor

This time we are going to share money story of another reader of ours (Name not disclosed as per request). This person is from Bangalore, belonging to the middle class and is now working in the US from the last 2.5 years. He is a regular reader of this blog and agreed to share his money story with a bigger audience.

Money Story from India

Over to him…

When I was Growing Up

Born and Bought up in Bangalore, I have spent ~30 years of my life in Bangalore and 4 outside of India. Yes, I have seen Bangalore go from a quaint friendly place where I could cycle 20 km in 30 odd mins through peak traffic, be out any time of the night, ask strangers for help to the current madness on the streets.

My parents were both employed in Banks. My sister and I were never left wanting for anything that would enrich our lives. Looking back; there are things that are more evident to me now with some wisdom that I have gained.

My dad standing in ration line 20 odd years ago for necessities like sugar, our first vehicle – A Luna if anyone remembers, the frown and anger (a reflection of his inability to shell out more cash ) when I asked for something by the month end.

Our Financial life improved with new Pay Scales

Things improved significantly around 10 years back when with new pay scales and an open economy, and a mortgage that was paid off, my parent had more disposable income and could get us (almost) anything we wanted – All I wanted was 500 INR per month pocket money when I was in engineering.

dreaming of money

We did have a very sheltered life though. My parent’s primary focus was to get us educated and to ensure there are no stones unturned in giving us a quality education

I completed my BE in Computers Science and after 3 years of work experience, completed MBA from a top 3 business school in India

The Financial Struggle – Money Matters

Unfortunately, like most Indian families, this education never covered financial education. While it’s easy to now look back and fathom what my parents underwent financially when we were growing up – I still remember an incidence when I was in high school and I wanted a quiz book which costed around 5 INR (yes, 5 INR . Not a typo).

My father had told me he can only get that after a week (payday) and I had thrown a fit calling him names (I was a mean teenager). That night, when I was miserable for shouting at my father, I walked towards his bedroom to apologize and I could hear him almost apologizing (sobbing) and informing my mother that he couldn’t get what was necessary for me.

This incident for some reason stuck with me through.

Parents financial struggle for children

I have seen poverty up close through my relatives and some of my friends (while we were relatively bit better). When I was in 5th, I realized that a friend of mine wasn’t able to pay his school fees for the month. It was Rs 30 per month (I studied in a small govt aided Kannada school) and I had asked my mom to pay his fees which she graciously did until he completed his schooling!. Experiences like these made me dread having less money than what was necessary to sustain and to some extent experience life

No money matters discussed openly!

Money matters were never openly discussed and this translated into my spending habits in my initial working years. I was making around 25k take home a month ( a princely amount on 2007 ) and I just burnt through all this – Food, gifts for friends. Zero savings except for a ULIP plan of 60k per year and a couple of LIC plans based on relatives recommendation.

Fair to say that when I wanted to complete my post-graduation, I had to borrow the ~15 lacs for my MBA from banks and relatives and also withdrew the 1 lac I had in PPF

3 years of work and negative 16 lacs to show for it!

Then my financial life took a new and positive direction

During MBA, thankfully, I ran into some good, positive money minded individuals, courses, blogs (Jago investor and Subra money for example) which opened my eyes towards my financial fallacies.

27 year old, out of MBA school and 20 lacs in debt, with a salary of ~1 lac per month, I ensured that I paid off the debt in 2-2.5 years ( I had a consulting stint for 6 months in Canada that helped). My parents btw thought I had gone cuckoo in trying to repay my loans early and selling off my non-performing ULIPS and LIC plans (at a loss).

Now, 7 years later, with 7 more years of work experience, I have more than ~1.5 crores in assets. I don’t own any real estate and am looking for the best investment. I am not in love with Bangalore anymore, as I used to and the area I would like to stay is way-way-way beyond my reach.

Here is my current breakup

[su_table url=”” responsive=”no” class=””]

My savings Amount
401(K) (retirement saving in the US) $55000 (Rs 33 Lacs)
Mutual funds (in the US) $35000 (Rs 21 Lacs)
Liquid cash (in the US) $50000 (Rs 30 Lacs)
Mutual Funds in India Rs 55 Lacs
Stocks in India Rs 3 Lacs
PPF Rs 21 Lacs
Fixed Deposits Rs 10 Lacs
Total Rs 1.73 Crores

[/su_table]

Let me share how I started my savings

Once I started saving money, they were always in small amounts. The guideline was to keep aside 15-20 % take home income into savings right away. This was apart from the mandatory cuts like PF from pre-tax income. Just think that your take home is 15% less and stretch the rest of the money for your needs. Else, your monetary demands will always stretch to match the supply.

I was surprised at how quickly they all add up. Investing in PPF is a good example.

It’s surprising to see that I have 20 lac in that debt-like instrument. Or the mutual fund which was mainly based on small SIPs of around 20-25 k per month, to begin with. With the way markets have behaved over the past years, they quickly grew and have resulted in the current amount.

Over a long-term, a small investment on a regular basis can create huge wealth .. below is one small example of it.

I have learned that the difficult part is to start and I maintain disciple in investing systematically. Once you do that, they give you some surprising results.

My next 6 yrs plan

I intend to not touch my Indian mutual funds, invest another 50 lacs there over the next 6 years and just let it marinate and grow over the next 20-25 years when I retire.

These numbers indicate that I am potentially ahead of some peers in the income and asset curve in the same age range

Money for me now is a means of where I want to be in 20 years from now while enjoying life on the way and being able to help everyone who matters to me. I hope I am able to use money as a tool to enrich not just my life but many others – Next stop, for now, is a small home of my own.

How important is money in life?

Currently, Money is a contributing factor for peace of mind.

I’m glad that I can provide for my family, spend some good amount, have a security blanket in case of emergencies, help my family and potentially don’t have to worry about money when I retire.

It’s not the end at all but is a means to achieve my goals. I know people romanticize having less money, but having stared at poverty up close in many cases, I can tell for sure that it’s always better to have enough money to ensure peace of mind. At the same time, the definition of “enough money” keeps changing. In college, 500 INR per month was enough money.

First job – 7000 per month for the first 6 months was enough for me to live like a king. My salary jumped to 25k per month and 3 years later and I thought I ruled the world. This is how I felt!

How happy one feels when one gets the salary first time in life

Now, with 15x – 20x that income, I am still not sure if it’s enough money (especially as I plan my retirement and my child’s education 15 years from now). I am still trying to find my answers there. My wife calls me a compulsive worrier and over thinker and maybe that’s true.

I started educating others on money

When I meet my friends with less money than me or family members with less money, my first thought is how to help – not necessarily financially, but in terms of education. But it’s not always easy. I tried educating my uncle on how his LIC policies are a bad investment and he can look at markets and MFs as he’s retiring 20 years from now and I was snubbed as a know it all in some circles.

I also donate at least 10k a month or two into micro ventures such as https://www.rangde.org/ to ensure I can contribute some way and make a difference in some small way. One of my goal, when I retire, is to ensure I have enough money to generously help those in real need

Don’t make stupid mistakes when it comes to money

When I see my cousins burning through their money in their 20s with no investment or investing in something just for the sake of 80C, friends buying the latest gadget (iPhone upgrades every year ! ), spending insane money on cars, to me it looks like people are finding happiness through small things which is never-ending.

There will always be the next thing that money can buy. I don’t want to judge anyone. Maybe they know something I don’t. But I find this very running after materialist things/brands and spending without a thought about the future very concerning

My younger cousins make fun of me (all in good humor) for not wearing branded clothes. But I am glad in the “cheaper” clothes that keep me comfortable and have never understood why I should pay 5k for a pair of Nike floaters

I am glad to share my story

After I shared my story with all readers on Jagoinvestor platform, it bought back so many memories – I’m literally in tears thinking about what our parents had to go through to get us this life that we now take for granted. I feel lucky to have such parents and in general to have been bought up in an environment that could get me to where currently I am.

Thank you for giving me an opportunity to share my experience with you ! and I request all readers to share their own money stories with all of us, there is so much to learn and know how others have lived their financial life and think about money matters.

What is your money story?

If you want to write your money story, Leave your details here and Jagoinvestor team will get in touch with you with next actions.

What do you think about my money story? Did you enjoy it? Can you share your views about money and how it changed over the years?

A software guy left his job to be self employed – His complete story

Posted on by Jagoinvestor

One of our readers, Anjan had shared his experience of leaving his salaried job last year to become self-employed. He wrote a detailed experience of his journey on one of the posts so I am reproducing his message in the form of the article here. (note that this was shared last year, but I am posting it now)

Over to Anjan experience sharing below…

I want to start off by saying that I was really inspired by that one article of yours (I am talking about Manish Article) where you wrote your experience about how you quit your job at Yahoo and finally decided to follow your dream against all odds and opposition.

Quit job in India - Real life experience

I left my software job at 27

Ever since the day I read that, I knew I had to get started on my dream and drew up an action plan to free myself from this IT job which I considered as nothing more than slavery from Day 1.

So last month, I successfully quit my job at the age of 27.

How my frugal nature helped me

I was always very frugal by nature even from back in my college days when I used to do odd online jobs that didn’t pay much but I ensured I saved every penny I possibly could. I built up sizeable savings which netted me a few thousands of rupees as interest every month.

I guess that habit carried over to my professional life when I got a job. I started saving almost 95-98% of my monthly income and managed my expenses as much as possible from the interest income.

My salary was a meager 35k, so it wasn’t easy but where there is a will, there is a way.

I was fed up of boring work and Politics

So after working 5 years during which I cursed my company and boss every single day, I finally had enough of the BS and dropped the resignation notice on them out of the blue. I got the topmost rating in 4 out of 5 years of my stay there.

So they were surprised by my decision especially at a time when media is reporting massive job cuts in IT due to US Visa issues and automation.

office politics

Having to do 12 hours of boring donkey work everyday, having to work on weekends/holidays thanks to impossibly tight deadlines without any extra pay, having to beg for 5 days leave to go on a vacation once a year, having to tolerate their politics and favoritism which denied me opportunities I deserved was killing my soul from within and I was dying a little with every passing day.

Even on holidays/vacations, there was an expectation to be available on phone for support.

I started acquiring new skills and planned my exit

I just knew life couldn’t go like this forever. So I made plans to become self-employed late last year. I started acquiring new skillsets through sleepless nights and sheer hard work to switch over to freelancing with the aim to open a small business a few years later.

Once I felt ready and confident, I quit.

After being self-employed for just over a month, it feels amazing. It’s hard work without a doubt and there have been many sleepless nights to deliver projects on time but the sense of freedom is just indescribable.

There is truly something to be said for working for yourself. The best thing is my salary is not fixed anymore. The harder I work, the more I earn, so there is an incentive to work hard and increase income.

Why I planned it NOW and not in the future?

Age is an important factor. I have reached an age where I knew my parents would start badgering me for marriage within the next couple of years. So I knew it’s now or never. I had to act and I knew I had to stick to my plan no matter what may come or else it will be too late.

The fact that I love to travel was perhaps my biggest motivation to become self-employed as employers would never give you more than 5 days’ leave even if you beg. I am the kind of guy who loves to go on month-long tours.

My next plan?

Thanks to my frugal nature, I saved up enough money during my employment to last many years even if I stop working today. I plan to increase my savings to an amount that would last a lifetime by the time I reach 30.

So a few years of sheer hard work is ahead of me but for now, I am enjoying my new found freedom even though I am working super hard.

Conclusion

Congratulations to Anjan for this new journey in life and best of luck to him. I hope reading his experience would be helpful for those who need some motivation to leave their jobs to break the monotony and explore their full potential.

Let us know if you have any more ideas or points to share?

How money shapes our life? An amazing “money story” of Priyanka

Posted on by Jagoinvestor

Today you are going to read “money story” of Priyanka Jadhao from Pune. She is 26 yrs of age and just started her career few months back.

She will be discussing about her life journey till date from the money perspective. I mean she will talk about her view about money, the incidents from her life which shaped her mindset about money. What she feels about money and how some incidents made her realise if money is important or not.

The special thing about her is that she is from Jagoinvestor Team 🙂

Few days back, when we were discussing on what kind of new writing we can do, we relised that we should start a series called “My money story” where a person jots down their journey of life from financial perspective and they felt about money all these years.

So I asked Priyanka to write her own money story. I think she has done an excellent job. This is the first post in the series we are going to call “My Money Story” where anyone can contribute with their stories.

Over to Priyanka from here.. I hope you will enjoy her money story.

Written by : Priyanka Jadhao, 26 yrs, Pune

My Story

I belong to a small town in Maharashtra, where most of the people are either government employees like teacher and regional officers or farmers. Other major businesses are very rare there, because most of the people have fear of taking risk, while others want to go on with the traditional ways of earning. In short, they want to play very safe game in life.

I was my parent’s first child, so it is obvious that everyone in my family had showered all their love on me. My family was not too rich, but it was financially stable enough, so I never faced any major hardships because of lack of money.

We should put limit on our needs

From my childhood, my parents taught me to put a limit on our needs, so that we can save for future. Everytime we needed something, the first thing we heard was to limit it or rethink about it before spending money on that.

This was the way of life and this had deep impact on my thinking. I slowly started beleiving that this is the absolute truth of life and it just got ingrained in my belief. Hence from childhood, I also started avoiding any extra spending, and always lived in limits.

Fortunately, I was never a spoiled child due to this mindset.

I can remember clearly, when I was a child, whatever things I needed like books or other study materials, my parents never gave me money directly in my hand. I had to ask for it and then only they used to buy those things for me.

People around me 

I have seen people from my childhood considering money as a matter of pride, because of which they keep on collecting it and putting in their bank, rather than spend it on things. The focus was on just increasing wealth in numbers and not to make use of it for their happiness.

I grew up in an atmosphere, where earning money and saving it for future was the only motive. I have seen people who earned a lot, but never spent it to complete their dreams or for their hobbies because this was considered as a stupidity.

It was the way of life for them and they all thought that this is the “Right” way to live a life. They were satisfied and had no regrets about this. But that was because they had mastered the art of “controlling the need” and live with the most basic things.

My childhood experience with money

I was a shy child then, I never asked my parents more than what I actually needed. But when I used to see my friends buying dolls or fancy frocks, I always started thinking that ‘when I will grow up, I will earn lots of money and buy so many dolls and new dresses just like that friend of mine have’.

One incident I can still remember, I was in 5th std, one of my friend had a very beautiful lead pencil (lead pencils were very rare in those days, we were “Natraj Pencil” kids 🙂 ) having a beautiful less tied with eraser and two small Ghungroo’s on its cap. I wanted it so badly, but I didn’t have the courage of asking it to my parents.

Then I realized, that my birthday was coming in 2 months and my parents will definitely buy a new dress for me. So I waited for 2 months. And when my birthday came, I asked my parents to buy me that lead pencil instead of a dress. I can still remember its price, it was Rs.12.

Parents perspective about money

Both my parents are teacher. They earned a lot and invested it for only two goals, one is my brother and second one is me. I had never seen them spending money to complete their dreams or hobbies or even their basic wishes which were within their reach.

Whenever I asked them why do they work this much hard and can’t even take some time for themselves, the only answer I got was “Because we need to earn and save money, for both of your bright future”.

One more experience I would like to share. From my childhood I was fond of traveling. But as I told you earlier both of my parents were employed, we never had a family trip till date. My father had his own passion of farming.

Every day after job he used to go our farm (even today) and returned home late night. Whenever I asked him to plan a family trip, he always had his own reasons. He never said – “NO”, but he just always used to postpone it for next vacation.

When I was in school, one day I stared asking my father to plan a trip now. I was literally annoying him. So finally he said Yes, but I knew my father very well.

So, I took a page from my notebook make it look like an agreement paper by sticking a Rs.10 note on it (because I had seen picture of Rupee on some agreement papers before) and I wrote down on that paper – “We are going on a trip this time, papa already has approved it and so papa will now sign this paper” and then I actually took my father’s signature on it.

This time I was sure that the trip is going to happen as there was a written “agreement”.

But, that trip didnt happen till date.

This may look like a very small funny incident to you, but I was kind of shaken because of this. Even after an “agreement” was there, the event didnt happen. The focus was still on making more and more money and not on the trip.

And this incident made my belief stronger that earning money is more important than everything and everyone else.

All these circumstances made my mindset that I should also go on the same path, earn a lot of money, keep it in my bank account or invest all of it into some property like land or real estate so that one day I can had over it to my kids.

My belief become more stronger during my college days

In my college days, when I was completing my post-graduation, I always had to hear one common sentence from everyone – “Study hard beta, you should get good scores otherwise you will not get job and will have to spread your hands in-front of others for money”.

I was very afraid of this statement because of my over imagination, I was actually imagining myself begging for money and only started working hard because of this.

I started relating everything with money. I started seeing everything around me though the lens of “money”.

I started realizing on every point of my life, that without money there is no life. If I wanted to live a happy life, we need money.. and it became my behavior that I actually could not live without money. Whenever the money in my wallet was approaching ZERO, I become uncomfortable. I start feeling like “Oh My God.. What should I do.. ?”

I could not see my existance without money. If money is there, I am there. If money is not there, I thought I will not be able to live life.

I started feeling like if money is this much important then how can I ask for it to anyone? Including my parents!

And this feeling increased my hesitation in asking for monthly pocket-money to my parents.

I started feeling so helpless without money. But fortunately, I never had lack of money in my bank account and was satisfied with whatever I had.

How I turned a money minded person?

I was post graduate and still jobless. I had less money compared to my friends. I want to be on par with me. I wanted to have same lifestyle like them.

So getting a high class and well paid job was my dream just like every other youngster.

Now looking at my friends who had already started working and here I am still unemployed was quiet frustrating. I started feeling awkward, while asking for pocket money to my parents and a cycle got  started in my mind asking same question repeatedly – “How to earn more and more money?”

One of the funniest moment which happened with me, is when my mother took me to a numerologist, who was suggested by my father’s friend.

That person asked for my details like date of birth, education etc. and then while predicting about my career and personal life he said – “She does not have dreams like a common girl, She is totally a money minded person and wanted to live just for earning money”.

I started smiling and thinking in my mind “Isko kaise pata chala?”

I used to get lots of free advise from people (Our uninvited financial advisers) that money is not everything, dont run after money, money is evil and things like that.

Which made me confused. If money is not everything, then why all these people are running behind it?

When I lost all my pocket money

5th September 2013, it was my first week in college – Modern college, Pune. I was new in Pune at that time and hardly knew anyone. On that day, all students including me were busy in the arrangements for the event of teacher’s day. I placed my bag on one of the bench.

Meanwhile I got a call from my mother. I went out to receive the call and came back to class finishing the conversation very shortly.

After that event and one lecture, I went to a snack center which was on my way to home to buy some food. I realized that my wallet was missing. I called a friend of mine and asked him to take me back to college, because I didn’t even have money for buying a bus ticket or for lunch.

I searched for it a lot, asked all my friends if they had seen it, but I was not able to trace the money. I couldn’t find it back.

I had a bad habit of carrying cash all the time instead of using card.

I lost all my pocket-money of that month and some other important things in one moment. But luckily my cousin was also living in Pune, so he came and helped me in that situation.

Since then, I used to carry less cash and started using card as much as possible. I learned that I should keep my money in various forms and at different places.

I started earning and my perspective changed towards money

A year after completing my PG, I started earning as a freelancer and I was little bit relaxed as I was not dependent on others for money. But my earning was not much, whatever I earned used to get spent.

Every month, money came in bank account and it just vanished in my expenses. Though, I was happy because of the feeling of independence, but still something was missing.

I wanted to earn more and more money, so that I can save for future.

Then, I joined Jagoinvestor Team

Before I joined Jagoinvestor team, I saw money as something which is to be earned and invested, and not for spending it for enjoying life.

But then my life changed and my perspective about money totally shifted. I came across various dimentions of money.

I used to hear my teammates talking to clients about their investments for their goals. At first I was completely unaware about goal based investing, which is what is practiced at Jagoinvestor (click here to get help from our team). I even created an audio related to goal based investing which you can hear below.

Only after creating that audio, I really understood why linking your money with goals is important and how it gives real meaning to your money and investments.

https://www.jagoinvestor.com/wp-content/uploads/files/goal-based-investing.mp3

I had never looked at my money from this point of view.

We started having conversations at tea time and lunch time which made my ideas more clear about money. I started looking at money with a completely new perspective and in a more healthy way..

After that, when I looked at my bank balance it was looking like meaningless money, which was just lying in my account without any purpose, because of which it just got spent here and there without any planning, this this resulted into increasing my monthly expenses.

But now I have understood that the money is to be used for my important goals and has to be spent in a meaningful way.

I decided to give a purpose to that money.

My previous perspective about money have changed and I now realize that money is not just for earning or investing for future, but also to spend it for things we love and desire. Just accumulating money into bank account without any planning is meaningless.

There has to be healthy balance between spending and investing both.

We should keep a part of it for ourselves apart from our routine expenses and savings, so that we can live the life which we dream about.

How money is related with happiness?

Last week Manish Sir, gave me a 30 min video to watch and asked me to watch it till end, as it will give some new ideas around money.

I watched this video from Mr. Nilesh Shah about money, investment and Mutual funds. In that video one statement he made which took my attention was

“Money is not important – Make this statement once you earn enough money to spend your life smoothly”.

I strongly suggest you to watch this 30 min video below.

Happiness does not come just from accumulating more and more money, but how you make use of it. If you think of it logically then you will realize that money has become an inseparable part of our life. We cannot buy happiness directly with money, but still we depend on money at some point to be happy.

Writing, traveling, designing various crafts are the things that I want to do more than anything else. It’s my passion. But if I think of following any of these things, I can’t do that without money. Also, I need to have enough money with me, so that I dont have to worry about my basic needs and desires in life, so that I can find time to do things I love.

In short, money has has its own place and value in our lives.

My current opinion about money

I saw everyone around me just earning and passing on to future generation by compromising on their desires and wishes.

I think thats not the correct way to deal with money. If everyone will pass their own wealth to next generation, then who will use it?

If I earn a lot of money just like my parents did and in future my future generation (my child) also choose to earn his own money then what will happen with my investments or savings?

I now want to save for future, but at the same time, I also want to spend it wisely so that I do not regret fulfilling my hobbies and dreams. If I earn Rs 100, I will use Rs 30 for my basic needs, spend another Rs 30 for my wishes and desires (like travelling, shopping, eating out, entertainment) and save Rs 40 for future, which can be used by me only or can be passed to my children.

How I feel after sharing my story

When I took this post to write on, at first I thought I may not be able to write much on this topic. But once I actually started writing, it became more exciting than I thought about it.

I started realizing, how different I was earlier and what have I became now. Meaning and importance of money has changed completely for me throughout all these years and I didn’t even realize it.

Now when I read this article myself,  I feel like I was completely a different person before. All these changes happened because of the experiences in different situations and the environment where we live.

This was my experience about money throughout my life.

What is your money story?

If you want to write your money story, Leave your details here and we will get in touch with you with next actions.

What do you think about my money story? Did you enjoy it? Can you share your views about money and how it changed over the years?

The myth of “Early Retirement” – A real life case study !

Posted on by Jagoinvestor

This article is a guest post by one of our readers Vikram Agarwal, who wanted to share his experience on the concept of “Early Retirement”. Vikram was generous enough to share his story and some of the real-life things which will make you think hard about this concept. Like Vikram, if you feel you can write on jagoinvestor, please click here

Over to Vikram.

—

Most of my friends in my friend circle in late 30’s ask me one question – “How much money I should have now, so that I don’t have to work anymore while maintaining a decent standard throughout of my life, with all the future expenses taken in to account?”

They want to ‘Retire Early’

early retirement

In fact, I also used to be an ardent follower of the concept of ‘Early Retirement’ but now have realized that the concept is more like a mirage, which does not exist in reality and once you reach there, it vanishes.

Moreover – in my view, it is quite dangerous for an individual to run after this concept. In my opinion, you achieve retirement either ‘NOW’ or ‘NEVER’ irrespective of your current level of income or financial state.

Early Retirement is a state of mind

It is a state of mind, rather than a stage achieved. The moment you achieve early retirement as per the physical criteria set by you five years ago taking inflation, life expectancy and all major and minor expenses in your monthly calculations, by the time you achieve retirement as per your old financial definition, all those things become sub-normal or default.

Your mind will have another definition that looks normal for you in today’s context for example for future kids’ education, your house quality, the type of car you own, facilities you desire and all other such expenses.

My personal example

For example, five years before, owing a 2 BHK house in the newly developed area with Marti Dzire hatchback car and with the kids going in a decent school used to be a life I wished for and I had done calculation for the amount required to maintain the same standard throughout rest of my life without working.

And that was ‘Early Retirement’ according to me and as per standard definition.

great future illusion

But, now it seems owing a 3BHK house (one extra room for parents or for guests) in a good location of a metro city, a nice Honda sedan and a ‘good’ school for kids throughout their education duration is ‘Normal’ for me. Now it’s the standard, I would like to maintain before retirement and after retirement.

My next target!

My new “target” might be owing to a villa or bungalow, and a nice SUV and kids in the ‘best’ school of the area. And once I achieve it, I think it will become a new normal with time.

The next level

And who knows, a car for wife will be a standard I will look for in the future, as I will not be able to manage all the household activities on my own and an extra car becomes a necessity. (I did all my retirement planning calculations with taking decent return on investment as 10% which is quite modest in the long term, so as not to fall in the trap of exuberant returns which might be temporary and actual return might spoil all your calculation.)

Even with a slight increase in any of the above ‘wish’ list (like the possibility of sending you kids abroad for his or her graduation) will push you back in time and you will not be able to achieve you ‘wished’ retirement any time and this carrot and stick game continues.

When your desires convert to your “needs”

You would not know when your ‘desires’ got converted into your ‘needs’. And now it looks like there is a meaning in the sayings of wise old man that “There is enough in this world for one’s needs and not for one’s desires”. I can sense the truthfulness in these lines with some financial literacy and practical experiences.

Greed Desires

If at all early retirement could mean anything for a ‘disciplined’ guy is thru’ a windfall gain from lottery or legacy, otherwise if one tries to achieve early retirement from normal gradual process where mind and hard work is involved, his thinking mind will quickly adapt to current situation and will turn the old desired standards in to ‘Normal’ or ‘Below Standard’ life in today’s’ terms.

The word ‘discipline’ need stress here because there is an old saying that irrespective of the size of the pot, if kept isolated all the water will drain out eventually if not refilled on time and only a disciplined life can control this drainage process and can prolong it (Read, why we are overspending these days by Manish)

Or you can become a hermit in deep forest, secluded from this physical world and concepts of ‘Future Expenses’, ‘Inflation’ become meaningless for you, one can think of early retirement stage.

early retirement myth

But, I guess this is practically impossible and this article is not intended for those who might be thinking of this stage as one of their future possibilities.

Story of my seniors – Real-life case

I personally know two of my seniors who after working at very senior positions in the company left their jobs as they thought they had enough money to sustain the rest of their lives and tried to follow new pastures in future life.

But, eventually, they had to join back in their respective jobs in order to meet their monthly bills and continue with their other passions in life.

It is human psychology to get adapted to the current situation and at present it looks like achievable calculations on paper and unreal confidence of being satisfied in case you achieve current target, but in reality it does not happen and by your own nature and human being’s reason of existence, you will always be pushed to work.

Basic foundation of human existence is WORKING

This wish of ‘ Not working’ one day will take you away from ‘Karma Yoga’ which is the basic foundation of human being’s existence. Even in GITA, it is mentioned that all of us have to work one way or other and this is the law of life.

I remember a recent discussion with a prominent businessman in my home town. He told me that he used to ‘struggle’ a lot to book rooms in his locality for any private family functions for his guests they had to ‘adjust’ sometimes as per hotel terms and conditions.

Now, he has built his own guest house and no need to be ‘dependent’ on the hotels any more for bookings, etc. and I was thinking that if this rich man thinks booking rooms in 5 star hotels as per their terms and conditions is a compromise in life, what independence could mean for him ?

Don’t buy anything less than a BMW

A few years ago I was having a discussion with one of my friends and in his views, having something below Mercedes or BMW is a compromise as all other brands do not give importance to safety standards and life is precious more than anything else.

At that time owing a Honda city and maintaining it was the kind of life I wanted to live for all early retirement calculations and now since I can afford Honda City easily, I have a choice, either to keep working to be able to buy Mercedes or BMW one day or put my life always at risk while driving mass-produced cars!

We can retire the day we are BORN

On second thought, I achieved financial freedom years back, the moment I had enough money to be able to afford public transport all through my life. In fact, to take it to one extreme side, we have the potential to retire the day we born and it is only afterward that we enter into the working force in this world, fall into the financial trap and again want to get rid of it.

This wish of ‘Not working one day’ can make you lazy, averse to work and afraid of accepting challenges as in your thought process you are always after something else and it is quite natural that you will not focus on the very basic aspect of life you want to get rid of one day.

Here is a great answer which deals with this issue on quora thread

don’t want to work

These days a lot of people think of retirement at an early stage, some talk about retirement in the late ’30s or early ’40s and there are various articles circulating around to tell how to achieve it.

But, this kind of thinking pattern in today’s youth is preventing them from acquiring skills which can help them in their current job profile and make it interesting.

Story of my father

My father achieved his financial freedom just after his retirement and both of his sons are well settled and living a decent life and he does not have any liability in his life, yet he is always focused on ‘working life’ and whenever he gets any chance of making money with guest lectures etc., he always looks forward to it and that’s what he says is the secret of his healthy life.

Had he focused on early retirement, this ‘fire’ or ‘energy’ inside him would have subsided quite early and he could have attracted many lifestyles related diseases like blood pressure and diabetes etc, which is happening these days even to the young generation.

So, one should not focus on achieving early retirement any time but should think of living a simple, satisfied, and an exemplary life and realize that the ‘Work’ is the only thing that matters in life and for this you need continuous practice for sound physical and mental health to keep your body fit and energetic and let other things come on its own without worrying about it.

Watch this TED video which talks about an experiment of living a simple life in a tiny home.

It is a good idea and in fact a necessity to have the habit of saving and investing, but the idea should come from the need to meet future expenses and not to achieve early retirement.

So what should be your plan in life?

The financial goal in one’s life should be to have sufficient inflation-adjusted funds for all major expenses in the future like owing a house, Kids education funds, children’s marriage funds, emergency funds, and retirement funds in present terms and all funds invested properly.

At large, one can think of a ‘stage’ where he or she will not be worried about ‘Net savings’ from the income and can live a life one desires with his current income from job or business and even If he/she spends all of the earnings he should not be worried financially.

The more one earns, the more facilities one can desire and his current lifestyle will remain in accordance with his income levels and this is what I call real ‘Financial Freedom’.

That is an inherent assumption here that the rise in expenses (with inflation) will be taken care of by salary increments/ job changes or business expansions and for there is no other alternative but to ‘Work’.

What do you think about Early Retirement?

So let us know what you feel about this concept and my points regarding it? Do you agree with them? Is there any point where you can add?

Would you like to share your own story in the comments section and how you have dealt with the concept of early retirement? We would like to thank Vikram for his contribution on this subject on this blog.

Also, if you feel you can write on jagoinvestor and contribute, please click here

From successful CA to Entrepreneur – Real life Journey of Umesh

Posted on by Jagoinvestor

Here is the real-life story of Umesh, who is one of our long time readers. He agreed to share his life story on how he turned from a successful CA to an Entrepreneur. I am sure it will be an inspiring read for other readers and we all can take some learning’s from his story.

How a CA turned into an entrepreneur - A story

Over to Umesh …

I have been a follower of Jagoinvestor.com for the last few weeks. One post from Manish regarding how he quit his job with Yahoo was catchy and I responded back to him stating that I was happy for him as his story pushed me down the not so distant memory lane of my pursuit to being self-employed.

He has been kind enough to let me share the same with you readers and I hope I can add some value to the time that you will spend in reading the same.

And here it goes

I am a CA with over 25 years of experience. As a child, I had been brought up in the company of CA’s and when I had ceased to be an infant, my father – who is also a CA – joined Air India.

And thanks to his position in the national carrier, from my childhood days, I enjoyed traveling by air, in style and comfort of Maharaja Class… The jumbos of Air India really fascinated me as a child and with each passing year, my interest in them kept on growing. So much so that I decided mentally to become a pilot of one of those 747s.

This guy wanted to become a pilot

But I did not become a Pilot

Man’s wish can only progress towards reality when God concurs. In my case, God gifted me with powerful eyes and a nice pair specs and so my dream of becoming an airline pilot is still a dream.

I scored a distinction in SSC and had an alternate desire to become an Aeronautical Engineer – but the burdensome presence of Maths prevented me from opting for that even though I was getting admission. And then, like thousands of others, I joined Commerce and in due course of time the CA blood prevailed over everything else.

I ended up becoming a CA but airplanes and airlines were still part of my hobbies. Even during CA preparations, I used to read airline magazines!

I sent my resume to Singapore Airlines!

So much was the craving that the first CV that I sent was to Singapore Airlines! Knowing very well that it is unlikely that I will get a call. I was not interested in going in for CA practice as I found Taxation and Statutory Audit really taxing. I wanted to do something different – so in that pursuit, I started looking out for a good job or an assignment that I can manage on my own.

I struggled for several months and then my corporate life made a good and healthy beginning. And within a year and a half, I was able to finally enter the airline world on merit and Jet Airways became my third employer and the first in the airline industry. It was a dream come true for me and I simply liked the job.

I never felt that I was working, as airlines and airplanes were my passion and my work was though related to accounting was off-beat when compared to the typical book-keeping type.

I learned a lot in that company and ended up heading its Revenue Accounting unit as a GM at a very young age in comparison to those who were holding that position at the time with decades of experience. I progressed from there and moved on to head the function for 2 other airlines – one in India and one overseas.

I enjoyed the work even with Work Pressure!

Throughout my tenure in the airlines, I was positive and enjoyed the work though the work pressure was enormous, timelines extremely stringent as airlines being in the service industry have to work 24 X 7.

My wife and son and parents have seen me sometimes on the following calendar day but thanks to my passion, I always felt at home.

The best phase of my life was when I was overseas and working for an airline – the work environment was considered to be the toughest within the industry. However, my base was solid and passion too played its role very well and I felt that it was a lot easier than what was perceived.

It was a good exposure in dealing with people from different cultures, countries, and backgrounds. The flow was smooth – but my son was disappointed with the quality of education there and after due pondering, I chose to give his education priority over my professional satisfaction and we returned to India for good.

How I became an Entrepreneur?

By then, I had completed 2 decades in the industry and in my core specialization as well and I decided to do something different and become independent from the clutches of the employers. I had many tempting offers from the industry within India and overseas but I preferred to go the independent way.

Job vs business - which is better?

My family was with me and backed me solidly – I was in that age frame where if my entrepreneurial attempts fail, I would still have the opportunity to get back with humility to the corporate world. Initially, the going was tough and at times making me wonder if I had taken the right decision.

However, my wife was with and behind me like a rock and I remained committed to getting the first assignment before the bank account reaches alarmingly low.

I got my first assignment

Patience and eternal trust in god always pays and I got my first independent assignment overseas. And all in the house were happy and I was thankful to God for showering his blessings. It lasted for a few months – it was a unique experience as I was the boss of myself and had only the mirror to report to in relation to my work.

It was a great feeling and I still remember the moment when I sent out the first set of FEMA documentation to my bankers to get the inward remittance. Thereafter I have been able to keep the entrepreneurial spirit going with one assignment at a time – though I can manage more than one, I chose to work on my newer passion towards stock markets.

Since the past year, I have again been an active student of stock market and am learning by the day and have been helping a few make money by putting my knowledge to test.

I had my first stint as a trader for 2 years which was full of ups and downs and I had to take a sabbatical from the markets as I got an overseas assignment with my sleep hours slot was the active market hours slot in India.

Once I was back, I invested a significant amount in getting trained by the best in India and have since been working very hard to make this as my next profession – where I do not have to source business as the opportunities come knocking on the doors as long as I ensure that I have capital to take advantage of the opportunities.

Should I work for myself or someone else?

From Automobiles to Stock Market!

So in my career so far, I moved from automobiles to IT to airlines to BPOs to TMCs to stock markets – I have learned a lot from the markets – about stocks and related matters and about myself as well.

My ride thus far may seem like an uneventful and seamless but I went through quite a few rough patches and I always remembered the saying – If it were not for the rocks, the stream would have no song and also – Ships are safer in the harbor but they are not meant for the purpose.

In comparison to the present times, my salary was not that high especially after the 9/11 attacks in the US which changed the game altogether. Airlines turned out to be a good place for its vendors and not its employees.

16 habits which helped me become successful

However, I am thankful to some of my habits which helped me reach where I am today.

Few of these are

  1. I always ensured that I am able to pay off any dues immediately on my salary getting credited. Even if the amount was not due, I used to clear it to have surplus identified.
  2. I started investing in Mutual Funds – in NFOs with Dividend Payout Options. Such investments were made on a monthly basis and where there was no NFO in a month, I used to add to my holdings.
  3. I started a couple of SIPs and these ran for 3-5 years one of them was with Dividend Payout Option and one was the Growth Option – this ensured that when the market was up, the value of my investments would also be up.
  4. My father cultivated in me the habit of making sure that I keep making investments in the PPF account that he had opened in my name and then I opened for my wife and son as well and kept depositing whatever possible.
  5. Intermittently, I kept creating FDs – in companies – when the rate used to be 12-15% and in banks and worked hard not to prematurely break them.
  6. I invested in some shares [this was an unprofitable investment though] thanks to the friendly relative sub-broker who was so sure about the scrips recommended by him. I am still an “investor” in those carrying on a burdensome 5% of its original value!
  7. In the last 7-8 years of my corporate life, I started contributing VPF – additional sums as Voluntary Contributions to PF
  8. I had a car loan and 2 home loans – with hard bargaining, I could get a car loan at Zero Interest over a one year period and that helped me save close to 20-22% of the on-road price.
  9. With my above habits and 2 home loan EMIs, I was now having the real pressure to ensure that I do not end up breaking any of my FDs.
  10. Any increase in pay due to revision or change of job was used to either create FDs for home loan EMIs or to part pre-pay the loan.
  11. Sometimes, MFs used to pay handsome dividends and after retaining some for consumption, I used whatever little was left to make ad-hoc loan payments.
  12. Whenever I made an out of turn loan payment, I opted to cut the duration of the loan and not the EMI amount
  13. In the last couple of years of my corporate life, thanks to good revisions in pay, I increased EMI amounts as well which further accelerated the cut in loan term – obviously, the lending banks did not like me as their disciplined customer!
  14. Before I went on my overseas job, I chose to withdraw PF balance and much to the surprise of all, I made a significant part payment of the loans. I am sure many would have wondered if I was in my senses as PF is usually seen as the last resort for a person to touch – to be encashed only when one is retired from the services.
  15. Using up PF for a loan made a happy dent in the loan duration but the end was still far away – but I was feeling a bit relieved.
  16. Out of my final settlement from my last job, I cleared all the home loan dues and began my journey as an Independent Consultant with no hanging commitments.

The above may sound like a well-written script but the journey through these was tough, challenging and at times tense. There are still many who wonder why I am not working with one of the airlines and encashing my experience and knowledge.

I tell them that I am now used to not listening to anyone but my boss in the mirror and he is a tough guy and would not release me.

Should every salaried person become an Entrepreneur?

I have, in the last few years, counseled many regarding several matters, including why one should ultimately work as self-employed – this in no way undermines those who are in service.

Due credit also goes to some of the airlines/entities in India and overseas with whom I was/am associated as they helped me reach the state of Independence. Only those who are born entrepreneurs with no financial burden can start as a self-employed.

People like me and possibly many of you have to toil hard before even thinking of being on our own. Carefully note that since I am on my own, my insurance [car, health, critical illness, travel, term plan, etc.], welfare, administration, travel, infrastructure, capital expenditure, communication and possibly a few more are all on to myself.

Life as self-employed is not rosy!

So, please do not think that life as a self-employed is rosy. I strongly believe in the adage – ”The grass is greener on the other side.”

We have to learn to look at things from a neutral perspective and learn to remain humble, utmost patient and irrevocable trust in God and in our abilities to do the right things.

When we are looking at our future, we need to keep several things in mind – it is not possible to write about all these now, but suffice to say that such decisions have to be thought through and situations 10-15 years from now should also be considered before concluding on a decision.

My story is nicely covered by this picture which reflects the dream, the then reality and the present:

I hope my journey and my way of doing things gives the readers some idea about how easy / difficult it is to be self-employed and also financially disciplined. Whether or not you end up being self-employed, please be financially disciplined as money is required by all and the times are going to be tougher as we move along the path of this beautiful life.

Stay Blessed and financially safe!

Warm regards,

Umesh

Conclusion from Jagoinvestor

I think it was a fantastic life sharing and there were many lessons which can give you a great insight into decision making. It’s always a great thing to read someone else story, you get lots of inspiration and see how other people handled some situation. You get an idea of how things look like on the other side, you read about their struggles, achievements and eventually add the learning’s in your life.

I thank Mr. Umesh for this contribution and wish him the best of luck!

If you feel that you can also contribute to this blog (it can be an article, life sharing, valuable info), just get in touch with me using this form

I don’t own a flat like Techie guys – So What ?

Posted on by Jagoinvestor

This is a guest post which is already published on Ravi Karandeekar’s blog, which is an excellent blog when it comes to real estate (more related to Pune). Ravi discusses various projects and his experience meeting with Builders and various stories of real estate frauds etc.

not owning a house

A few days back, I read a real-life story of a female IT engineer in Pune and she shared various aspects of her life in detail, which I thought should be read by more and more people and I took permission from Mr. Ravi, if I can republish his article on this blog, which he agreed to and I am thankful to him.

Here is a great write up below.

—

Hi Ravi,

I regularly follow your blog and I like your sarcastic style of writing. I have read several of your articles where you have highlighted the importance of living a quality life versus living a life under pressure to own a house as soon as possible at any cost in huge debt.

I think in life we have to make certain choices where we cannot achieve what others can because our circumstances are different. Mine is another such case.

I am an IT engineer and a daughter and a wife.

I am the only child of my parents so their entire responsibility is on me.

My parents are simple middle-class people who worked hard, saved every penny so that they can give me a comfortable life and a good education.

They sacrificed nearly every personal need of theirs so that I can go to a convent school, become an engineer and have a happy childhood with all worldly comforts. Beautiful clothes, birthday gifts, toys, ice creams, picnics. Everything was for me and only me.

We lived in the heart of the city

Until I graduated we lived in the heart of Pune city in our very old ancestral rented home. They did not even buy a new flat within the city limits although they could have afforded it.

If they had bought that flat they would have had to cut out almost all the comforts from my life and quality education.

So they bought a cheap apartment on the outskirts in a pathetic locality (just as a backup) while we continued to live in our ancestral home.

That 1.5 lakh difference mattered to them. And they made a choice – Me

When I graduated eight years back we had to move out of our ancestral home.

Our backup apartment is on the 3rd floor with no lift and my mother has health issues because of which she cannot climb those 3 sets of stairs.

So eight years back, at the age of 22, I had to think about our future accommodation.

My starting salary at that time was 24K and the rent was 7.5k. My father retired around the same time with a government pension. There was not enough money to buy a new flat in the city.

I had 2 Options

So there were two options.

Option 1: Save that 7.5k of rent for my future life and let my parents stay on the 3rd floor in a sad locality.

If I save the rent money I may even be able to buy a home inside the city in 7-8 years.

Or in that money, I can have a lavish wedding.

Whatever!

My mother’s diabetes had impaired her health and climbing stairs would have been extremely difficult. She compromised saying “I won’t get out of the house much so I don’t have to climb the stairs”. From age 55 she would have been trapped in a house for months like a caged animal.

My father too was old. The neighbors were not nice. Water supply problems were there. Medical facilities, our relatives and all the other things that we were used to would have been unreachable for us.

Parents were ready (as always) to live that life as of course they don’t want their daughter to spend 7.5k every month. Our scrupulous traditional middle-class parents will never touch their daughter’s money!

Option 2: Spend the rent money, I will have fewer savings and let my parents live a decent life.

All their life they sacrificed and adjusted. Don’t they deserve a good life at least during their last years?

Importance of TIME in life! YOLO!! (You only live once)

My parents are not going to have these last (healthy) years again!! Soon they will cross mid-sixties after which they will be too old to even get out of the house.

This is the time window (55 to 65 years) when I can give them the lifestyle they deserve as the proud parents of a highly qualified daughter. So I take the decision and rent out an apartment (against my parent’s wishes).

Our backup apartment stays locked.

Eight years have passed and option 2 has worked out really really well!

How?

We live in a beautiful spot in Kothrud surrounded by greenery and beautiful bungalows.

My mother goes for walks every day since we live on the ground floor. She enjoys going to the market and being able to live a normal life.

My father is thrilled as there is a katta nearby where all the retired members like him meet in the evening.

All our relatives live nearby. We live in a 30-year-old 1 BHK and the floor tiles belong to the 70s era. But the people here are so friendly we live like one big family.

I can get a flat on rent in a high rise in a cosmopolitan atmosphere in Baner or Wakad (where I would be very happy btw ).

But here we are surrounded by Marathi families like ours. There is an excellent hospital nearby. The convenience, homeliness and the safety of the neighborhood are important to me. The society does not have amenities like swimming pool, club house but my home is filled with happiness.

My Priorities

Years passed, I got promotions and salary increased. I was easily getting a home loan. 1 BHK was a piece of cake and 2 BHK was also possible.

But turns out not buying a flat was very wise. There were many things that had to be handled first. We planned our monthly budget well, saved most of my salary, spent smartly and also had a little bit of fun.

Four years back my mother had a heart attack. Several hospitalizations and a bypass surgery set me back by around 8 lakhs.

But that was easily managed. I was never tense about money and my parents were relieved that we don’t have to borrow from anyone.

I had managed my finances so well that I gifted my mother a pair of gold earrings 2 months after the surgery for a speedy recovery!

I am happy too!. I was able to save for my own wedding. Since our wedding expenses were well within our reach we were able to enjoy it completely.

I have also been able to fulfill some of my dreams. I am passionate about travelling and I have been to my dream destinations Himachal Pradesh, Kerala, Dubai and New York.

In these eight years, I have lived a fulfilling life. Dining out in fine restaurants, going shopping in malls are some of the things we never thought we would do.

Parents/Family suffering because of loan

My folks are happy that I am able to have fun and don’t have to scrimp and save like a person in debt. I do not frown like a debt-ridden son when some unexpected expense turns up. I have seen the scenes from movies\tv serials where the son reproaches his parents when any expense comes up as he has a big loan and says “Baba atta Kasa Shakya ahe! Tumhala Kalat nahi ka loan ahe” (English meaning is – “Dad, How is it possible right now, dont you know there is  a loan”). Way to go, son!

This is what you give your parents in return for their entire life spent on you!!. Unbelievably, I have seen this scene in real life also in many homes!!!. These guys have a 2 BHK and a Sedan worth 10 lakhs but they will frown upon if their parents\wife have to have something basic.

There was a time when my parents made a choice between me and their dream home. When I grew up I made a similar choice. It’s okay if I don’t have my own flat at the age of 26 like IT engineers do.

I will have it when I am 35 or 40 years old. But these 10 years of my life were important to me.

Spending on top-notch medical treatment, living comfortably, travelling around the world, saving for my wedding, supporting my husband was my top priorities.

All the while I am saving money aside for my dream house too. I am halfway there, slowly and steadily I will get there. You must work out a plan that suits your circumstances and lives happily because you only live once.

Regards,

—

2 Tough Question for all readers

  • Do girls take the decision of buying a house in a more sensible way compared to guys?
  • Do males face more life issues when it comes to “home ownership”?

Disclaimer: This is a personal story and views by 1 person depending on her life, her experience, and her circumstances. Let’s not judge male/females by this one article alone.

Please share your perspective about this article and what do you feel about the issue? How is a male life different then a female when it comes to buying a flat considering how our society has shaped up to date.

I would like to hear your views and stories in the comments section.

 

Financial Life of a cab driver & life of Mumbai

Posted on by Jagoinvestor

I recently visited Mumbai for some work and it was 7:15 pm in the evening. When I came out of a building in Andheri East, Mumbai.

I had booked a cab from Pune to Mumbai and I was now ready to be back. I called up the cab driver and here is the conversation…

ME – “Bhaiya, kidhar hain aap?”

Driver – “Bas sir, Yahi hun 200-meter piche, 20 min me aa jaunga, aap gate ke pass hi rahiye”

ME – “Main aa jata hun paidal chal kar, Aap bataiye kidhar hai exactly”

Driver – “Arre nahi sir, aap wahin rukiye jidhar hai, itni bhid me Mujhe nahi khoj payenge”

Finally, after a long 20-30 min, I saw a car near me, honking like hell and flashing lights on me. It was my cab driver and he was indicating – “Get inside the car asap” …

Finally, I was inside the cab and we were going back to Pune. It took us another 20 min to just get out of the lane. It was really frustrating to just see yourself in the middle of traffic and move nowhere.

The first half of the total time took us to come out of Mumbai and the second half took us to reach Pune. Finally, I reached Pune at 11:30 in night.

Story of the Cab Driver and his Financial life

In this article, I just want to share with you a conversation between myself and a cab driver I met recently. I asked him some questions about his life, a bit about his financial life and his work schedule. I know, it’s not directly related to personal finance, but I think, it’s a good idea to share it with you all as it has some good things to know about.

Tax driver

(The photo above is not the real cab driver in question)

The moment we were out of the lane we were stuck in at Andheri, the driver looked really irritated by the sheer amount of traffic. I asked him – “Bhaiya, Mumbai ki life Kaisi Lagti hai aapko?”

And his answer stunned me – “70 saal jeene waala insaan 50 ke khatam ho jayega, yahi hai Mumbai ki life”

While I knew he was a bit tired and his frustration was making him speak these words, there was surely some element of truth in his words. The way of life, the speed, the running around for everything. It’s really mind-boggling in Mumbai.

Anyways, One my way back to Pune, I had conversations with Driver and here are few things I came to know.

1. He drives 400 km EVERYDAY

Did I ask him if travels to Mumbai often? He said every day. YES – Everyday .. 30 days in a month… May be once in a while there is no pick or drop but in general every day. He said that he does close to 10,000-12,000 KM every month. His legs and Back pains a lot and sometimes it’s so bad, he can’t explain it. We reached Pune around 11:30 pm at night and he had to get back at 4 am again to take someone to Mumbai airport.

2. No family life

I think we felt by good talking to me, and he kept on going.

“Family life nahi hai Kuch Bhi Sir .. Ghar Jata hun, khana khata hun aur sidhe so jata hun”. He told how his life is tough and there is no energy left once he is back home. He has no motivation to talk to his kids, spouse or enjoy with them.

Even when he has to drop or pick someone, he has nothing to do and he just sits inside the car and it’s really tough to do that, day after day, month after month and year after year … It’s the height of boredom”

He was a calm person, but he said that when he is stuck in jams atleast he feels he want to throw away the car like HULK. It was a calm frustration coming out of him.

3. He had Life + Health insurance

I realized that his job is very risky. He has to drive each day and he is prone to accidents. His legs are so important for his job and to earn the money. I thought I will explain to him why he should think of covering these risks and I asked him – “Do have Insurance?”

  • “Yes Sir, I have life insurance and health insurance both from ICICI Lombard”

I was happy and a bit shocked to hear that because I didn’t expect him to have that. He told me that one of his agent friends had explained to him about these products and how it might help him. I congratulated him on that point and said that it’s a great thing that at least he has something. Thank god he did wait to find the “best product”

4. He saved Rs 4,000 per month in Recurring deposit

Though his earnings were limited and he was on a tight budget, he told that he managed to save Rs 4,000 per month. He gave it to his wife every month which is invested in Recurring deposit. I thought it was a great thing and didn’t say anything like “why don’t you invest in equity?”. I think it would have confused him a lot and it was not the right time for all that Gyan. He was doing well.

What do you learn from this?

Let me know what you feel after reading the story of this cab driver? I think that the cab driver did a few things correctly which even many with a lot of privilege fail to do. Like if you see this cab driver, he has a habit of saving some part of his income even though he does not earn as we all do. He had life insurance and health insurance which is really commendable. I know he does not represent an average cab driver from that angle, but still.

Please share your thoughts

5 Inspiring Success stories of people who actually increased their Income? [Bonus FREE EBOOK Download]

Posted on by Nandish Desai

With this bonus article, our increasing income series comes to an end. Over the last few weeks, we have been writing articles which focused on increasing income and also shared lots of ideas around it. We decided to end this series by sharing some interesting real life stories.

We also take this opportunity to thank each one of you, for your participation during increasing income series. We received some amazing comments and numerous emails in which, people shared their unique attempts on how they actually increased their income. Each email sharing has flavor of success in it and you will love reading them.

Below, We have shared 5 real life success stories (name changed at some places as per request). Few of these success stories are sharing from our readers who attempted and succeeded in creating an alternate income. They took right amount of risk, they figured out a unique way by which they can share their talent with more and more people, they converted “increasing their income” into a project and the results have been amazing. Here they are!

Success Story #1 – How a Dentist worked on increasing his income

One of our readers who is a dentist by profession runs his clinic in Mumbai. He read the article on increasing income and decided to take some committed steps by which he can also increase his annual income. He has been practicing from last 4 years now and has good number of patients who visit his clinic on regular basis.

dental kit

He took some professional help and designed a good dental kit, which can be of help to his patients and their family members. The dental kit includes some books, video CD, some products and some other educational material in it. He priced the kit for Rs. 1999/- and showcased the kit in his clinic’s reception area. In the last 15 days, they have sold close to 10-12 dental kits and he is happy to see how some extra money is coming in with his creative effort. If you look at the yearly numbers, you can see that a good alternate income would be generated.

With this new offering he is able to serve his patients better and he could also increase his daily and monthly income. Some of his patients have also started sharing the kit content and material with other family members and friends. We congratulate Dr. Ajay (Name changed) and also thank him for sharing his success story with us.

Success Story #2 – Come back of Yoga Teacher

This story is of a marketing professional who turned into yoga teacher. His sharing brought tears to our eyes (Manish was really touched by his sharing and money story). He is in the field of marketing and works as medical representative for a well known pharmaceutical company. His expenses are higher than his income and so every month he finds it difficult to manage his payments. He wanted to increase his income from a long time so that he can start his investments. It has been 9 years in job but because of EMI and other compulsory expenses he could never invested on monthly basis.

yoga teacher

He read the second article on increasing income series and he decided to increase his income by 50%. He is a certified yoga teacher and after a gap of 5 years he decided to once again teach yoga to people. He decided to take some private yoga sessions in morning hours. He started sharing this idea with people and he got 3 students/clients in Nov first week. Though he has not yet exceeded 50% of his income as per plan, but he is now very close it. With this action he will be able to serve others and at the same time he will also be able to earn additional income from his students.

We congratulate this yoga teacher for his come back and for the success. We are going to assist him in starting his monthly investments from Jan 2015

Success Story #3 – Real estate agent who started leading real estate workshop

Real estate is an area where very few quality programs are conducted for investors.  For those who want to invest in real estate it is important to understand the dynamics of real estate world. There are some very simple ad effective strategies which you can learn to make money in real estate world.

real estate workshop example

This guy from Bangalore took on a project to increase his income and out of his commitment he announced his first workshop for his close friends circle and clients. He got 12-15 participants for his pilot workshop and the feedback has been very encouraging. This workshop is not sales driven or just to showcase new properties, it actually educates investors on the legal front and other aspects of real estate buying. He has priced the tickets at Rs. 5,000/- for a one day session, which would bring in a good amount of secondary income. He is even planning to conduct it in various cities if it works out well in future.

We congratulate this real estate agent for starting such wonderful and informative program for real estate investors. As and when we receive full details about this program we will share the details with our readers.

Success Story #4 – Lady who started preparing dog food

This lady’s story is truly inspiring and so we thought of sharing the same with all of you. She is considered to be an expert when it comes to dog food preparation. She has been in this business from last 3 years now.

She is fond of dogs and on one fine day she found that her dog was not happy with the dog food products which were available in market. She tested some recipes on her own and prepared some dog food packets which she also shared with other dog owners in her city. This is where others could see her talent and her first order came in, slowly she started becoming more and more popular amongst other dog owners in her vicinity.

dog food at home

Today she supplies dog food to almost 50 plus Dog owners and she also owns and runs hostel for pets. We congratulate Latha for sharing her talent with more and more people. We also take this opportunity to thank her for being our reader and for sharing her story with us.

Success Story #5 – From homemaker to cooking expert to bestselling author

This story is of lady called Jenish Parmer (Real Name). She happens to be good friend of my wife. I recently attended an event where she launched her book called “Heaven on Tongue”. My wife insisted on sharing her story with jagoinvestor community.

heaven on tongue book

I (Nandish) and my wife (Himali) have witnessed her professional journey and success so far. She loves cooking and has always been passionate about cooking. She started her journey by participating in one national level cooking competition, she won the competition and a big turning point came in her life. She continued to teach and share her passion with more and more people and slowly she started her catering business.

She recently authored her first book called “Heaven on tongue” and right now she designs menu for some of the most popular restaurants in India. Her story is real, inspiring and easy to relate with. She is not a reader of jagoinvestor but still we have included her story in this article (we called her and took her permission)

FREE Ebook download

Our “Increasing your Income” series has ended with this article. We have compiled all the articles and created a nice eBook which you can download and read it offline on your computer or on your mobile (it’s a pdf file) . Download it by clicking here (right click -> save as) , or by clicking on the image below.

Increasing your income ebook download

Please share your views about these 5 real life stories. Do you get inspiration from these stories ? Do you want to share your thoughts?

How Delay in Land Registration Costed Rs 50 lacs to Vivek – Real Life Experience

Posted on by Jagoinvestor

I want to share a real-life incident. One of my friend Vivek told me how he lost Rs 50 lacs worth of Land in one shot because his grandfather made a mistake of not doing land registration on time and kept delaying it for so long, that it was finally too late. It was just an irresponsible attitude towards documentation. The funny part is that no one in the family knew about this except his grandfather and these guys only came to know about it and were shocked by the incident. Vivek’s Grandfather lived near Varanasi and had always believed that the money should be invested in land and properties, Its the only way to grow your money faster and there is no risk in it.

Whenever he has any chunk of money, he just used to buy land with a future vision that one day it will be useful and give good returns and help his big family and so many children and grandchildren. This was during the 1960’s and ’70s. So once, he bought a big plot near Varanasi. You might be aware of how in villages and small cities, most of the work is done on relationships and verbally. Someone’s word is taken as promise and that was a time when people were not that bad like today:), hence things went smoothly, especially in those days and in a situation where everyone knows everyone.

Land Registration In India - Mistakes and Real Life Experience

So he bought land from one of the known people who lived very near to their home. e paid the money and bought the land (everything verbally).

It was a normal incident.

Their point was “Documentation will happen in a few days/weeks” . Both parties were fine with this, as the world was not going to end and there was ample time to things. Grandfather also started construction on the land and things started moving. No attention to proper documentation and registration even after many weeks and months. The land registration fees was also not that high. Few people kept reminding Vivek’s grandfather that Land registration is still incomplete and it has to be done. But he kept on delaying it as he was over-optimistic and never felt that anything can go wrong. He over-trusted the people around him.

From Future to Now

40 yrs are gone. Grandfather is no more, The guy from whom he had bought the land is also not in this world, he was a good guy. Grandfather’s vast properties were divided between his children (obviously daughters didn’t know that they are also legal heirs and claim their share as per Hindu Succession law). Now the guy who had sold his land took the money and is dead now, his children one day found out the property papers and saw that it’s on their father’s name.

You know what happened next.

They knew this is a bloody awesome situation and gave Vivek and his brother a choice. Either give 50% of the property back (without much fuss and delay) or 100% property with a court case. They knew the other party is totally weak (100% weak) from the documentation angle and legally they can not do anything. The proof that “land was sold and money was paid” does not exist anywhere. Knowing how badly they are stuck with this situation, Vivek and his brother had to hand over 50% of the property to these people else they could have lost everything. The land cost was approx Rs 1 crore and the 50% part was worth Rs 50 lacs in today’s standards.

What is Land/Property Registration and Why is it Necessary?

Land or Property Registration refers to the registration to document changes in ownership and transactions involving immovable property. Whenever you buy a piece of land/immovable property, you need to register the same with the authority concerned, so that a legal ownership title is guaranteed to you. This greatly reduces the risk of fraud and helps solve disputes easily, in addition to creating and maintaining an up-to-date public record. While Land Or Property registration is not that easy, still there are some measures being taken for making property and Land registrations easy in recent times. Also, the registration process depends and varies from state to state, you can get the information about some state here

Is your Land Registration Complete?

A lot of instances like this happen in our life also. We make payments to people and do transactions and make promises verbally. If anything happens to us in between, neither there is any track or it, nor any information about it, our family will never be able to find out what happened, in fact they will not even know that “it happened” . So always refrain from doing anything which is not backed up by supporting documentation. Never!

Especially on the Real estate part, check if the documents are totally in place, see it from “What if I am not there” angle! Do you have any experiences like the above-mentioned example? Do you know someone who has not completed his Land Registration of Property Registration?