This is the last part of the three-part series. In the previous articles we discussed the meaning of ‘Investing in yourself’; its importance and its advantages. Further, we discussed why learning and understanding a few things like risk, volatility, markets, market situation and human behaviour greatly contribute in your endeavour of investing in yourself. Having dwelled upon them let us now attempt to answer the fundamental question of why wealth eludes us.
Real wealth eludes most people despite their doing things right. People feel they have invested well and they have been responsible towards their family and themselves. However, it seems what they have amassed is of little or no significant consequence. For those who have not done anything with their money there is nothing to speak of. In any case in my opinion all of this and why wealth eludes is simply because you have not invested in yourself good enough.
It is observed that the ratio of number of people who create wealth vis-à-vis people who destroy wealth is very small. In other words amongst us there are more individuals who either do not create enough wealth for themselves or are happily eroding the wealth they have. Note that amount here is not important. I am simply talking about having adequate wealth.
This level of adequate wealth naturally differs from person to person however by adequate I mean what is needed as bare necessity. So moving on I am further clarifying that people do not even create adequate wealth for themselves based on what they might need. There are many reasons for that and here are three important ones in my view.
DIY stands for “Do It Yourself”. This is a widely accepted philosophy and method of working. In matters of money people want to do things themselves. Perhaps 20 years ago this was fine and fair as there were neither as many options or opportunities. People seem to have accepted this general rule in perpetuity. While nothing is impossible and with knowledge there is nothing that cannot be surmounted one must realise one’s own limitations.
So by all means go the DIY way if you wish. Many go the DIY way by asking experts for free advice. I give a lot of free advice on many forums but I know it has serious limitations. Needless to say that you are responsible for what you do and will do over the years. Finally at about your age of 55 or thereabouts you will get the answer whether you were prudent or arrogant.
This is about the things we do and decisions we take. This is like a vast ocean. It ranges from my best friend making a great suggestion or someone from the in-laws’ side who must be obliged or here’s how he trebled and I want to do the same etc. This is not only restricted to financial decisions. It is also about being unnecessarily charitable like helping anyone and everyone monetarily who comes by knocking on your door be it relatives and friends. It is also about being extravagant i.e. spending when you are not able to afford. It is also about helping your children (above age of 20) to fulfil their redundant wants or wants that you just cannot afford. Remember no one gives a loan to fund retirement!
In matters to do with money many people are strangely waiting to accumulate a certain sum which is some sort of milestone they want to achieve. Their thinking is “When I have X amount of money I will think about planning.” Naturally they missed that poetry class in school which taught many of us that those small little drops of water make a huge ocean. This is a real problem. As many of you already know that this amount X keeps rising with your rising age and just like your shadow you are never able to catch it. The result of this? You already know I reckon.
There are some very simple thoughts I want to leave you with: start investing right now with whatever you have and find a wise friend who can be a good counsel on your money decisions. Do things yourself (if you must) or look for unbiased friendly help but in any case build-up your knowledge rapidly; it is a must do for living in today’s world.
—Author is Director - Transcend Consulting, email@example.com