Have you ever thought how it would feel to have 3yrs of your salary in your bank account?
Which means X being your pay package per annum, you have 3X lying in your savings account (excluding real estate assets)!!!
But bringing this into a real life scenario may practically not have been possible for many – reasons being stuck with day to day issues and all the other priorities.
Is that you?
Life is full of challenges. It makes us deviate and lose focus on how we chart our future that we forget about that one day when it’s too late for more health, wealth and happiness.
We start by 20’s, settle by 30’s and by the time we move to the next phase of a better life in 40’s is exactly when we feel that 50 is fast approaching and we haven’t geared up yet. Reports from HSBC say that there is close to 47% of Indians who have never planned for that life after retirement or probably have discontinued it doing so at some point.
6 reasons why it is important to save money and create wealth
So, let us discuss in depth about how to go about this. Let us make this as one final article which would let you finalize and start your plans.
Many think and believe that saving money simply relates to a better tomorrow wherein there is more to it.
Reason #1 – Securing your future
To start with – the most basic and core objective of this discussion is saving money.
Have you ever realized what is to happen when there is that one fine day you will stop getting that monthly credit? It could be lot worse where it could be another half of your life without a regular salary from now, which means there should have been one huge sum as an available balance to lead a life by your wish. People who strongly believe in the fact that their kids would take care of them is an entirely different topic.
Begin that saving today for future
Entering a commitment of saving Rs 10,000 every month is very common amidst a lot of people. If not, how about Rs 5,000 or Rs 2,000 to start off with? Anything but now is the time to start!!!
Reason #2 – Don’t miss out your wishes
Do you have desires you wished to explore?
- Travel but your EMI’s are there?
- Photography but is expensive?
- Party but the costs are scary?
- Road trip but wondering about leaves and expenses?
- A weekend trip but can’t afford?
Without a healthy bank balance, it would be impossible as you are dependent on your paycheck and can be achieved only when there is a concrete focus on creating wealth. It could be tough now, but if you don’t start creating wealth, not only will you never will be able to do any of it, but it could lead to a disastrous situation in future.
Reason #3 – Lead and upgrade to a better lifestyle
Not everything requires money. A long chat, a sound sleep or a simple meal but then there is a huge list which definitely requires money:
- An upgraded car
- A better house
- A grand dinner
- Road Trips
If you have created enough money, you would have improved your lifestyle thereby spending a lot on possessions and experiences. And it was never about doing all this by taking a loan.
Moving from a bike to a car or from a rented to an own apartment is always easy but then maintaining that lifestyle and moving beyond is what we are talking about.
Introspect as to what you and your family need, the kind of life you wish to have in the coming future with the wealth that you have.
Reason #4 – Be financially independent
Not about retirement.
- Retirement means “when you don’t work anymore”
- Financial independence is “when you don’t work for money anymore..”
Retirement is usually by 60 yrs of age, whereas financial independence is a function of wealth and not about age. Financial independence can be achieved even at 35 yrs.
Are you financially independent?
Financial Independence is best described as “A situation where your passive income equals your desired lifestyle expenses”
This happens when wealth creation as disciplined a habit is started during the early stages of life / career and is also clearly understood that it cannot be disturbed for a very long time.
What happens when your salary stops for the next 6 months? Reducing your dependence on your salary is very important and for this you should have created enough wealth during first 10-15 yrs of your life. You will never get shocked / surprised when unforeseen expenses come your way which will be taken care of by the passive income your wealth would have generated.
Reason #5 – A stress free mind at peace
You need to create enough wealth which would keep you in comfort! If not, you would end up worrying about everyday financial constraints which would scare about future.
Numerous questions would cross your mind
- How will I achieve my financial goals?
- What would happen if I lose my job?
- What if there is an emergency for a lot of money?
- What if I am unable to provide all that my kids want?
A decent balance, even if not solving all your issues, will give you a confidence towards a future.
About 40% of people suffer from stress due to money issues. If you have worked for X yrs then a minimum of X/2 years worth of basic expenses should have been saved. This is the general thumb rule you should aim for.
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Reason #6 – Creating wealth for the next generation
A lot of people believe that they should not pass anything to their kids and they should create their own life out of what they have earned and learned.
But, when there is enough wealth created for the next generation, they would be able to pursue their ambitions instead of fighting for everyday survival. Many people in reality are unable to do many things in life owing to money issues. What have you decided on this?
What turns out when there isn’t enough money for future?
To summarize what happens when you do not get serious about saving money for your future:
- Hard time maintaining a good lifestyle
- Being dependent on others ( kids may be) for money
- Concerned and stressed about future
- Too dependent on salary
- Difficult to think on passion / desires
- Find it tough to lead a better life
If you are still lesser than 45, then you stand good chances to create a respectable corpus by the time you retire. Should you feel interested, then please do leave your details for a small chat and our advisory team can help in getting it charted out for you!