10 minutes video guide to check your FREE Credit Report & Score

Posted on March 27, 2017November 19, 2019 by Jagoinvestor

Do you know that every person is entitled to 1 free credit report and score each year from each of the credit bureaus in India? There is 4 credit bureau in India which are CIBIL, Experian, Equifax and Highmark.

As per RBI guidelines, now each of them have to provide one free report each year. For those of you who do not know, a credit report is a document that has all your past loan repayment history and a score that tells a lender if you should be given any loan or not.

So each lender checks these reports and scores as part of their loan approval process. It’s very important for investors to keep track of their credit scores from time to time.

How to get free credit report and score in India each year

Step by Step Process to Check FREE Score online

So today I am going to share the process of getting the free report and score online from each CIBIL Transunion, Experian, Equifax, and Highmark credit bureau. I have personally checked my own score + report from each credit bureau and I will teach you the step by step process of how you can do it too. The whole process is online and you do not have to fill any form by hand or send any documents anywhere.

Note that your credit report will be available only if you have taken some kind of loan or credit card. So if you do not have any kind of loan, you will most probably not have it, unless someone has misused your documents and applied for some loan.

So let’s start with CIBIL first.

How to check the FREE CIBIL report and Score?

In order to check your free CIBIL Transunion report and score, you need to follow below steps –

Go to https://www.cibil.com/freecibilscore
On that page, click on the link which asks you to apply for a free report
Enter your basic details like name, address, PAN etc and submit
Enter more details on the next page which asks you detailed information
Once you fill the details, CIBIL will send you a temporary password on email
Then go to https://www.cibil.com/mycibil/ and sign in with your temporary password
Change the password mycibilpage and relogin with the new password
Now on this page, you need to verify your details like loans and amounts
If everything is correct, then you will be taken to a page which shows you FREE Report

Note that you should watch the video above to exactly understand the steps required to check your report.

How to Check FREE Experian Report and Score each year?

In order to check your free Experian report and score, you need to follow below steps –

Go to http://www.experian.in/index.html
On the right bottom sidebar, you will see a link for free score and report, click on that
It will take you to http://www.experian.in/consumer/experian-free-credit-report.html
Enter your basic details like Name, Email, and Phone and submit
You will get a voucher code in your email using which you can get a free report
Go to https://consumer.experian.in/ECV/content/landingPageSubmit.action
Enter your current details like Identity Details, Contact details etc and continue to step 2
Confirm your email on next page, and then go to your email to click on a link inside for email verification
On the page, enter your voucher number and move ahead
You will then be asked for some verification questions related to your debt.
Once you answer them correctly, you will be taken to your free report

How to Check FREE Equifax Credit Report and Score?

Here are the steps to check your free Equifax report and score

Download the Equifax India mobile app (android or iOS)
Register your email and get temporary PIN number
Enter a temporary PIN and reset a new PIN and then log in to the App
Enter your Name, Phone, Date of Birth and Adhaar Card
An OTP will come to your phone number which is linked to adhaar card
After OTP verification, your KYC check will be complete
On the app, click on the link “Credit Report”
On the page, click on the link “Request Free Credit Report”
Enter all your details and then click on Submit
Now your “Knowledge-based Assessment” will be in the pending stage.
After 24 hours, your knowledge-based assessment will get generated.
Click on the app, and click on the link which says “Knowledge-based assessment”
Give correct answers to the questions asked, after which your credit report will be in the “Initiated” stage
After 24-48 hours, you will get an email with the free credit report as an attachment
Download the attachment and have a look at your report and score.
You can also login to the app and check your report there

For those, who do not have mobile linked with adhaar, they can send their KYC documents along with a filled form to Equifax customer care, and on verification, they will get their free report in 48 hours

How to Check FREE Highmark Credit Report and Score?

Here are the steps to check your free Highmark credit report

Go to https://cir.crifhighmark.com
Register as a new user and set your new password
Activate your account by clicking on the link inside the email
Again login and choose an option to get a free report on the top of the page
Enter all your details and click submit
You will get a notification that inquiry was successful and now wait for the email
After a few hours, you will get an authentication email
Click on the link and verify some of the information asked on the page
On successful verification, you will get an email with PDF attachment after 48 hours
Open you free Highmark report and check it

I hope the above videos must have given a good clarity on what needs to be done to check your report online, totally free of cost.

Why you should check your report every year?

A credit report is fast becoming a very integral part of the credit system in India from the last few years (it’s already is). It’s highly recommended to have a clean record and a fairly good credit score if you don’t want to get rejected for your future loan applications.

Now with one free report from every credit bureau, everyone should check theirs from each company and make sure that all the credit remakes and details like name, age, score, and other details are correct. If you find any problems, immediately raise a dispute with the lender and the credit bureau and start fixing it.

PRO Tip – Subscribe to each report with the gap of 90 days

One of our readers Krishna mentioned a wonderful trip

Don’t subscribe all 4 reports at the same time. Time them one per quarter so you can monitor your credit report for any frauds frequently instead of once every year.

So the point is that if you divide your free reports checks every 90 days, you will be able to find out if there were any frauds happening throughout the whole year. However, if you just apply for all the reports in a single month, then you will be able to apply them only next year.

Let me know if you face any issues while checking your free report

11 investing Bias which impacts investors – An audio Podcast !

Posted on March 21, 2017November 19, 2019 by Jagoinvestor

Do you take all your decisions based on facts or emotions? Be it personal or financial life, it’s a well-known fact that 95% of our decision are based on emotions.

Today we are going to look at various kinds of behavioral biases in the area of money and in general. For this, I got in touch with Mr. Siddhartha K Garg who is an expert on this topic.

We had an hour-long conversation on various things and how investors make mistakes in their financial life because of various emotions. You can listen to a 1-hour long audio podcast below. Just make sure you listen to the full conversation as there are various points discussed.

If you do not want to listen to the audio podcast, you can go through the summary point of our talk below.

What are biases?

Simply put our brains give more attention to something but less attention to something else, despite there being no actual inherent reason to make such a distinction.

And hence it is a bias – that is making a distinction without any reason. A simplest example which you yourself can notice right now – how many positive stories from today’s news do you remember v how many negative stories? I am certain many more negative stories than positive ones.

This is because our brains are hardwired to pay more attention to negative stores than positive ones as the negative ones are more likely to harm us. Or why that pollution in Delhi only becomes an issue every winter, but not so much in summers. Because we are biased to give more attention to an issue when it is right in front of us as opposed to something in the future (this is called proximity bias and we will shortly discuss it).

Now, apart from small purchases like everyday items, these biases can wreak havoc on your long term wealth if you don’t take steps to check them! Want to know more? Let’s read on and think which ones of the following have you already fallen prey to?

Bias #1 – Anchoring effect

Definition – Rather than explaining what this bias is, allow me to illustrate how it originated – once a shopkeeper was trying to sell a mixer grinder and was having a very hard time trying to do so. He had priced it at 25US$ and was aggressively marketing it, yet the customers just wouldn’t buy it.

But one day suddenly his sales started shooting up. Perplexed as to what is the cause of this upward selling, he went to the aisle where the mixer-grinder was stocked and noticed that a shop employee had put another similar company mixer-grinder next to it and accidentally put a tag of $100 US on this 2^nd model, despite there being barely any difference in the 2 models.

What the shopkeeper noticed was that the customers would anchor the price at the heaviest figure and then judge the models based on such price and not go into the features etc of the models at the display. As a result no one even touched the 100$ mixer-grinder but the sales of the 25$ shot up.

Example – Another similar example would be that of a famous café in Italy, that apart from the usual coffee and food items in the menu also have available for purchase a Vespa! (one of those hipster scooters) Now they obviously don’t expect anyone to buy it, but just by seeing that price tag of 800 Euros on the menu card makes the 30 Euro coffee seem not that expensive.
Solution – Now that you know about this bias, you will automatically notice yourself gravitating towards such an item, whose actual value is not worth the price or maybe you just don’t need it. Point being – decide on the purchase on the cost of the item relative to its own quality and your need and not to some item thrown in the menu to throw you off track

Bias #2 – Sunk-Cost Fallacy

Definition – Divestiture aversion or in simple we are averse to letting anything go which we already possess. In more common terms this is when we throw good money after bad.

Example – keep sticking with some stock despite consistent under-performance because we think it may improve
Solution – cut your losses – yes, a little bit of loss is better than huge loss and what you get back can be re-invested and earn to counter the loss made

Bias #3 – Confirmation Bias

Definition – we look for sources of information that confirm our beliefs rather than oppose our beliefs

Example – people who have a right-wing philosophy prefer Facebook pages that cater to that view or with left-wing philosophy will only follow pages that talk about their beliefs. Or in investment parlance – those who believe that FD is safest and surest will try and avoid news outlets or people who say that you must have equity exposure also.
Solution – get a mix of information sources and don’t just limit to one side. Hear everyone and have contrast exposure to all investment strategies.

Bias #4 – Halo effect

Definition – Halo is the golden circle you see above the heads of angels. Like in Tom and Jerry, whenever one died they showed the character in white robes in heaven with a golden circle above their head.

So in this bias, we get a halo above our head after we do something good (like not over-spending throughout the week or doing a financial review of all your insurances and investment on a weekend), that now you think that you are good boy and can get away with a little bit of unexpected spending.

Example – Sometimes people work out a lot in a gym and think that now they deserve it and come home and order Dominoes. Similarly, people can do in financial life, like for example after spending a weekend going through your finances, documents and portfolio status people think that they have done all the right financial habits that they go and splurge in the mall on Sunday evening.
Solution – notice that this is a common behavioral trap when you see yourself falling for it, back off and stick to your investment or budgetary plans.

Bias #5 – Bandwagon Effect

Definition – in simple words it is the herd mentality

Example – in your office everyone decides to invest in gold because the market is low and do so you. Or your relatives and uncles decide that life insurance is the best way to save tax, you also decide to follow. When clearly they are the wrong choice. One person example – in the SCBA (Supreme Court Bar Association) there is a tie-up with a particular company’s life insurance. And I see many people just buying that insurance because most of the other lawyers are also buying it. Now I am not saying that this particular company’s offering is bad but only saying that just because everyone else is purchasing it, makes it the right option. One should always purchase, not blindly following the herd, but after carefully analyzing the options.
Solution – Don’t just follow the crowd but analyze what are your requirements and then what are the best solutions based on your investment need. If you are a young salaried person then invest in equity and if about to retire and obviously can’t carry many risks then look for safer options – maybe debt funds. But don’t just follow the crowd and invest based on your requirements and financial situation.

Bias #6 – Proximity bias

Definition – we give more importance to things in our current than in the future.

Example – The study of people under F-MRI shows that for future they viewed themselves with the same regard as a stranger. In fact, doctors in the US, show the pictures of people on a computer screen that if they don’t exercise or take their medicine then in the future they will look so and so and this caused more compliance to the diet plan.
Solution – it might not seem important now but your future will be present soon. Days are long but years are short – so, start saving for retirement from the very first cheque and start your SIPs early to take advantage of cumulative interest.

Bias #7 – Recency Bias + Negativity bias

Definition – we pay more attention to negative and recent things

Example – stock market crashed – as opposed to a long string of bull runs or that many companies did farewell and decide to go for FD and not invest in mutual funds
Solution – Stick to a chosen investment strategy based on goals and not let blips change your mind

Bias #8 – Status Quo Bias

Definition – that we prefer to let things stay as they are and not rock the boat – it’s going fine then why shake things up

Example – simples would be not analyzing your portfolio – it’s going fine. Why apply mind and let it be
Solution – No! Get over the laziness and devote some good time like Sunday afternoon after lunch one hour once a month without phone calls or emails or any distractions and get things done.

Bias #9 – Information Overload and attention deficit

Definition – you are overloaded with information and you just get paralyzed. You stop taking any actions because you are over-analyzing things and not able to arrive at decision.

Example – let’s say you want to decide which mutual fund to invest in and get bombarded with options and decide that let’s just get the simple FD done. In fact, a study from the US shows that a company offered its mutual funds to invest in on the company’s expense. With 3 options, 75% of people selected a fund. But with 10 mutual funds options, the purchase rate dropped down to 25%.
Solution – get basic research done and then keep cutting out irrelevant information, get the main data and then decide with the help of an expert – hired or a family or friend. But just because lots of work doesn’t mean you should not do it at all.

Bias #10 – Snowflake fallacy

Definition – if you see snowflake under the microscope the you see that each snowflake is unique and so do we, think that we are special in the universe and that we know what we are doing is right or that our problem is unique and no solution to it out there, as result don’t look for the solution

Example – We think we know it all and can conquer the stock market. Stop – if you are an average person who wants full-time work in the field you are better with mutual funds. Which is basically a collection of stocks picked by experts.
Solution – remember that you are not unique and get your major decisions reviewed by someone knowledgeable in the field and don’t just ignore the basic rules of investment.
Main example – Even Sir Isaac Newton was not able to beat the stock market! In the 1720s had lost about 3 million US$ (in today’s term) when he tried to play the market on the stock of a company called “South Sea Company”.

Bias #11 – Lifestyle inflation

Definition – This is also called the “Hedonistic adaptation” – it basically means that once your salary etc starts increasing, subconsciously your spending also starts to increase. You won’t even notice it. And hedonism means the philosophy of seeking pleasure and when your salary increases you adapt your lifestyle for more pleasure, hence causing the hedonistic adaptation.

Example – You have a nice 50 inch LED. Your salary increases and you start thinking why not a 60 inch LED TV. Then after some time, you decide why not a 4k LED. Then you decide why not an Android enabled LED. Now even with the 50 inches LED you were fine. But slowly and creepingly there was inflation in your lifestyle. And to afford the same TV on EMI, you have to work more, the same time you could have just spent with your family enjoying the latest movies on the 50 inch LED! The problem that I am highlighting here is that I am not at all saying that don’t buy more as your income increases. Obviously, with more income, you would want more things but don’t go overboard and stick to your needs. And make sure that as your income increases so do your savings for retirement etc also increase because otherwise with more income and also more expenditure your savings rate will remain the same and maybe, if you don’t notice, it might even decline – as you save less even though are earning more!
Solution – be wary of your purchases. Keep strict logs and budget your discretionary spending. If you start going overboard then you know that you have become a victim of lifestyle inflation. In fact, a US study showed that people would be happiest at the income of 75,000 USD income and after that particular level of income, the happiness level remained the same and it meant only more stuff in the house.

Few general solutions to deal with biases

Accept and acknowledge that you are not perfect and can make mistakes – Remember – that you are human and our minds are not in as much control as we think we are. Accept that our mind works in ways that we can’t even imagine and not all decisions are “rational” decisions. This acknowledgment and acceptance is important because then you will know that yes I can make mistakes and I must setup safeguards so that I do not commit these mistakes.
Never buy major items on the spur of the moment
Never make any investment decision when (a) sleepy, (b) hungry and (c) irritated
Sleep over it! – Economists call this as a cool-off period – so you had the requirements with you and you got the various pitches. Now just take all the data and the pitches to your home, go through them once and just forget about it for one day. In a day or two automatically your brain will tell you which one to choose.
Write it down and be accountable! – When going purchasing – be it a TV, or in the market for an equity mutual fund or new health insurance for greater coverage because you want separate insurance for your old parents away from your family floater policy – WRITE DOWN your requirements and your budget and give them to your partner/spouse/friend. And if you exceed or breach the budget then again write it down again and tell your partner/wife/friend to question such a breach. This will make you accountable for the decision you took. In fact, keep looking at your written note (paper, Google keep, iPhone notes whatever) when doing the purchasing so that any aggressive sales pitch doesn’t throw you off your goal.

We hope you liked this audio podcast and the article. Please share your personal experiences around this topic? Which bias do you feel you have gone through? Share in the comments section.

(This piece is authored by Siddhartha K Garg who is an Advocate in the Supreme Court of India and a former Junior Research Scholar in the Law and Economics Department of University of California, Berkeley. He also runs an NGO Angel Trust for Animal Care in Delhi and can be reached at [email protected])

6 simple reasons why you should get serious about Savings starting today?

Posted on March 14, 2017November 19, 2019 by Jagoinvestor

Think for a moment that you have 3 yrs worth of your salary in your bank account.

How does it feel?

So if you earn Rs 10 lacs a year, you have Rs 30 lacs lying in your savings (other than real estate). If you earn 20 lacs per annum, its 60 lacs!

saving money for future

But in real life, most people do not take enough effort to save more money. It’s on their wish list to “start saving from next month”, but the motivations soon fizzles out. Most of the people are so busy and stuck with various problems in life that with each day, saving money for the future remains a distant dream for many.

Are you one of them?

Life has various dynamics.

Many people are stuck in a bad job, while some people are in a bad marriage which is draining all their energy and time. Some people are running around to arrange for a house down payment, while some are wondering if they should have a second kid or not!

Life keeps throwing so many things at us, that we forget where we are headed towards and we are not able to see how our actions today will shape our future.

We keep dealing with the NOW, only to realize many years later that our FUTURE is almost there waving at us. And then suddenly we realize that we have so much to catch up in life. More health, More money and more happiness!

We start our jobs in our 20’s, then settle by the end of the ’30s, move to next level in our lives while we are in our 40’s and then in this journey we realize we are approaching our 50’s and if we have not done a good job of saving enough money then we PANIC !

And we tell ourselves – “Oops .. I could have handled my life in a better way, if only …”

As per an HSBC report, around 47% of the Indians have not yet started saving for their retirement or have stopped it after starting.

6 reasons why you should save money and create wealth

Today I want to do a deep conversation regarding saving money. I know you might feel, is there a lot of it to talk about that?

Today I want to make sure that this is the last article, to get serious regarding saving & investing more money in your life (I will refer to “saving and investing” as “saving” in this article henceforth).

Almost all people feel that “saving money” is only related to securing your future. The equation for them is

Save money = Lead a better life tomorrow

But there is more to it!

[su_table responsive=”yes” alternate=”no”]

Reason #1

To secure your future

Reason #2

To do what you love in life

Reason #3

To spend and live a better lifestyle

Reason #4

To be financially independent

Reason #5

Peace of mind

Reason #6

To pass your wealth to next generation

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There are various other angles you need to think about, and that’s what I want to discuss today. So read this article with all our eyes open!

Reason #1 – To secure your future

Let’s start with the most basic and core objective of saving money. You save money to accumulate the money and use it for your future requirements.

Let me give you a surprise – “One day, your salary will stop coming in your bank account”

There will come a time when you will be left with 40 more years of your life and there won’t be a regular salary coming into your account like it happens today. You need to create a big enough corpus, which helps you to lead a life you desire for the next few decades till you die.

You should not be worried about “death” in today’s world, It should be “living enough”.

Some people think they can avoid creating their wealth because their kids will take care of them. However, it’s up to you to decide if that’s the right approach towards life or not.

Savings and Investing definition by a 9 yrs old girl

Long back, Subra had asked a 9 yrs old kid to read a book on money and summarize what she learned about “saving and investing” and she gave a very crisp understanding about it. Please appreciate the simplicity of the girl’s thoughts.

Saving: Saving money is very important. We should save money because if one day suddenly we need money we will have it with us. If we just keep on spending all the money that we get and one day we need money we will not know what to do. I am also saving all my pocket money because I might need it in the future. I have kept it in a bank account and I get interested in that every year.

Investing: Investing makes our money grow. Just as a plant grows from a seed to a plant. When we keep our money in a savings bank we get interested but if we will invest our money in fixed deposits, shares, mutual funds, public provident funds, etc. our money will grow from a small amount to a big amount faster. Real money takes more time to grow whereas a plant grows within weeks.

Start saving some money for future

If you can’t manage to save enough money, at least start saving some money starting ~~next month~~ TODAY. Let me share with you some numbers on this. If a 30 yrs old person invests Rs 10,000 per month for the next 30 yrs consistently, then @12% average return over the long term, a total of approx Rs 4.4 crore can be accumulated.

How Rs 10,000 per month investment will create a big corpus of 4.4 cr in 30 yrs

I know a lot of people who can surely start with Rs 10,000 per month investment. Don’t worry if you can’t do that much?

What about Rs 5,000? Rs 2,000 ?

Anything is a good start! , upgrade later – but at least START.

Our team at Jagoinvestor helps our readers to start their SIP in mutual funds and track their goals on an ongoing basis. If you are interested to start your wealth creation journey with us, just leave your details here and a mentor from Jagoinvestor team will reach out to you in the next 24 hours

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Reason #2 – To do what you love in life

Do you love what you do?

No, I am not talking about pursuing your passion for living or doing a full-time job in the area which you love. All I am saying is do you have enough time and money to do things you love for a few hours each week? Something which you truly want to do other than your regular job work?

Do you love traveling to new places, but you are stuck because the EMI needs to be paid first?
Do you love photography, but those costly lenses seem to be out of your budget?
Do you want to socialize more by throwing a party for your friends, but worried about how you will afford to do it?
Are you afraid to tell your boss that you want to go on a month-long road trip, with your best friend which was planned years back?
Want to go on a weekend trip with your friends, but oops. it’s out of the budget!

It’s going to be very tough to achieve all the points mentioned above if your bank balance is very low. Less money means less power with you!

While you cannot afford a lot of things, you can’t also arrange for a lot of time to do all these things, because you can’t make some tough decisions because you are so dependent on monthly paychecks.

You need two things!

You need money or time to pursue your hobbies and both of these will come only when you focus on creating wealth.

money and hobbies

I understand that you will not be able to achieve all these things right now, but If you don’t start your wealth creation right now, you will NEVER be able to achieve the above. Enough wealth in your kitty gives you that power to do things you love.

If you are so much dependent on your monthly paychecks, it’s going to be very suffocating going forward. A lot of wonderful people are dying slowly inside because they have no wealth created.

Reason #3 – To spend and live a better lifestyle

A lot of things in life do not require money. A great nap, a conversation with a good friend, a simple meal with your loved ones.

But then there are things in life which require money.

Yes, I am talking about those materialistic things.

A better Car
A better house
Dining in a great restaurant
Partying with your friends
Buying that gadget
Going on that trip
Redesigning your house
That Ladakh road Trip
That DSLR Camera
Travelling to exotic places with your family

You will spend money on various experiences and possessions, only if you have the money in the first place (not always, but most of the times), and you be able to do it only if you have money saved at your end at the first place.

Your lifestyle will improve only if you have created enough money.

While you can always take a personal loan and upgrade your car or go on that vacation and earn all the facebook likes, I am not talking that!

I am talking about, the real upgrade in your lifestyle which does not increase your EMI or stress level and does not compromise your cash flows to a big extent.

wealth and freedom

It’s easy to upgrade your life from a bike to a car and a rented apartment to the first house, but then beyond that’s it’s not as simple as it was earlier. It takes a good amount of money and dedication because we get stuck with EMI’s and mid-level crisis in our 30’s

So see, what are your aspirations for yourself and your family? What kind of life are you looking forward to in the coming times? Is your wealth enough to lead you there? Are you doing enough for that?

Reason #4 – To be financially independent

Don’t confuse financial independence with retirement.

Retirement happens “when you don’t work anymore”
Financial Independence happens “when you don’t work for money anymore..”

While retirement is linked to age (which is generally around 60), financial independence is a function of wealth and not your age. Financial independence can happen even at the age of 35 (My best friend at age 32 is already financially independent)

Where do you stand in your financial independence?

Financial Independence is often referred to as financial freedom. Nandish likes to describe as “A situation where your passive income equals your desired lifestyle expenses”

For a normal investor, financial independence can happen only when you start your wealth creation journey well at the start of your life and are disciplined enough not to disturb it for a long time.

Do you always want to keep doing the same job you are doing? And wait desperately for that “salary credited” SMS at the end of the month? How dependent are you on that monthly inflow in your bank account? How will your life look like if that SMS that does not arrive (I mean the money) for the next 6 months?

Millions of people go to their jobs in the morning with different moods depending on the day. They are happiest on Friday and very sad on Sunday night. You need to seriously start investing for the goal of financial independence if this is the case with you.

Difference moods of people when they go to work on different days

You need to also reduce your dependence on your active income (salary) as you move from age 25/30 to age 45/50. You should have created enough wealth in the first 10-15 yrs of your life that some part of your expenses can be met by passive income your wealth can generate if things go wrong.

I am not saying that you should create wealth and then start the passive income right away, but you need to create that situation for yourself. It will bring peace of mind (which I am going to talk in detail next)

Reason #5 – Peace of mind

Not have enough money brings a lot of stress. If you need peace of mind, you need enough wealth on your side which can comfort you!

You will keep worrying about the future now and then and every small financial problem will give you goosebump and force you to think about your scary future.

Imagine a guy who is around 45 yrs of age, and has not to create any significant wealth to show. By this time, he should have ideally created a corpus of 1 crore, but he has just 2 lacs in an FD which might get broken if some financial emergency happens!

This is bound to cause a lot of stress.

Various thoughts will cross the mind …

How will I meet my financial goals?
What if I lose my job?
What if I suddenly need a lot of money?
What if I am not able to give my kids all the things they want?

A respectable amount of money saved at your end might not end your worries, but it will surely bring some peace of mind and lower the stress. You know you are not in that bad shape and have arrived somewhere in the middle at least.

We surveyed with as many as 2,440 investors and we found out that 40% of the investors in our survey reported that the money matters have taken away their peace of mind.

As a general rule of thumb, If you have worked for X yrs in your life, you should at least have X/2 years worth of basic expenses saved at your end. This I think is the minimum one should aim for.

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Reason #6 – To pass your wealth to the next generation

A lot of families struggle for money generation after generations. The grandfather worked for money all their life, then father and then the son is also doing the same.

Many people who struggle financially set a goal in life that their kids should not face the same. They want to teach them money lessons and make them responsible, but also want to leave them a house and some wealth which makes their start a little easier in life.

Is that the right approach?

It’s a debatable topic if that’s the right thing do to or not. Many people believe that they should not handover anything to kids and let them create their own life out of what they have learned. Let them see the struggles and only then they will appreciate what they earn in life.

While that’s the correct approach for many people. I am sure we have many others who will not agree with that thought process in the same way.

Anyways, coming to the point, if you create wealth in your life, you can leave some part of it for your kids so that they can pursue things they truly wanted to do and not work just for money to bring food on the table.

A lot of wonderful people are never able to do things in life which they truly want to do. They are not able to live their own life fully because of the money matters. You need to check for yourself, if passing wealth to your next generation is part of your plan or not?

What will happen if you don’t save enough money for future?

So to summarize this article, there is a great possibility that one or more things mentioned below will happen to you if you do not get serious about saving money in your life going forward.

You will have hard time maintaining a good standard of living
You will depend too much on others (your kids maybe) for money
You will be spending a lot of time worrying about the future and how will your life end
You will be too dependent on your active income and will be forced to keep working even when you don’t like it
It will be hard for you to focus on things you love to do because you don’t have enough money or time
You will find it tough to lead a better life compared to current lifestyle

Final words

If you have still not crossed the age of 45, You still have a good chance to create a respectable corpus by the time you retire, even though you have lost a lot of time for compounding. Our team can help you in getting your financial planning done if you are interested to do leave your details for a small chat!

Just make sure you do not reach your pre-retirement age of 50+ without doing anything because that’s the zone where it’s going to be very tough creating any sizable corpus.

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

Posted on March 2, 2017November 19, 2019 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.

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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,

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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.