How to secure your future financially?
The pandemic has taken a lot from us. Some of us lost future opportunities, some lost savings, a few had to work for a lesser sum, and a lot of folks had to suffer the gruelling truth of joblessness. While a lot of this can be charted down to people taking the brunt of the pandemic, a bit of saving mixed in with a chunk of investment could have made the situation a lot tolerable.
How to get out of this bubble of uncertainty with the end of this hellscape nowhere in sight? Money surely can’t buy happiness but it is an extremely potent tool at keeping anxiety away. Making sure one always has the bare minimum in times of need and plenty of surplus on a good day can be the line between happiness and sorrow.
So, how do we achieve financial security for the future?
Start planning, and in chunks: Plan where you see yourself in the next 10, 20, 30 years. Most of us want to retire around 60 with a sizeable amount in our banks. Accumulating wealth over time can be quite tiresome if done the wrong way. You surely wouldn’t want to live paycheck to paycheck at the age of 50, right? See the bigger picture and don’t get overwhelmed by it. Magnify it into smaller sub-problems. Saving 100₹ today can be seen as adding those 100₹ to your first million.
Of course, take the help of mathematics and do some basic predictions on where your salary alone would take you. How would inflation affect your progress and how much exactly would you be saving for a rainy day.
Cut back on consumption: A lot of what we buy are just impulsive purchases that we think we need. Got enough clothes to last the next year? Buy the next batch later. Got enough snacks at home? Put that biscuit packet back on the aisle. Supermarkets are experts at ‘hiding’ essential products like bread and milk at the end of the store to make sure you have to pass through the snacks and beverage section. Start looking for patterns and the human brain will do the rest!
This saved money might not look much but saving even 50₹ daily can net you 1500₹ a month. This compounds to 18000₹ a year. Just consuming under your needs and not buying unnecessary junk can save you enough for a decent vacation over a year. Compounding works, folks! This money can even be used for the next step of the process.
Split your earning into sections: Split your earnings into different portions. Save some for the general savings account where you keep a bare minimum in case of an emergency. This account should not be mixed in with other accounts whatsoever. Keep another account for investments. Invest only in things you see as under your control. Have no interest in ornaments? Don’t buy gold. Feeling comfortable with the traditional stock market? Buy some shares then.
Investing has never been a more popular term. 18-year-olds with minimal financial knowledge are dipping their toes in the hot waters. Hot, highly responsible and serious waters. The average bank gives a 4–8% annual return in a savings account. The share market can give such a return on a productive day. The cryptocurrency market in mere hours.
The cryptocurrency market had the healthiest run last year. From being relatively unknown to the general public, now everyone and their grandmas know about what a bitcoin is. Writer’s note: my grandma does know about crypto! Just do your research before heading into the battle. It can be quite enticing to just hop into the crypto thinking of getting a 10% gain in a day but losing half of what you invested is also a possibility. Stay safe out in the wild west. Do your research and just hope no external influence changes the outcome you envisioned.
In the past year, the Indian stock market’s poster child, the BSE Sensex grew massively. From a healthy 41,000 points to above 53,000 precisely. Of course, this has its own caveats on where one could have invested or when to put and pull. These are but mere details we shall not fry our brains with. Whether you win big in the market or not, as long as you play your cards right, there would always be greater gains than savings accounts!
Best advice: treat your money as an extension of yourself. Just as you’d never shove your hand in a grinder, don’t put your money in peculiar positions without an SOS button out.
