[androdev]

this thread is begging for course correction.

i am surprised nobody mentioned that money is utterly useless during old age unless of course your goal in life is to leave behind a big chunk of money for inheritance or charity. look at all the people in their 50s filling up hospitals with 'healthy' bank balances.

just use common sense, live within your means and don't be reckless. travel as much as you can when you are young. if you just avoid buying iPhones and stop eating out, you will save enough to visit some amazing places. youth travel is very cheap. stay fit, you can easily gain 5-10 years of active life with a healthy lifestyle, that means you can start saving at 30 instead of 25 to satisfy all those stupid compounding calculators.

be interesting, be there for your family. money is over rated. youth and health are wasted till it is too late - and you can't have them back!

[selfdrive]

Originally Posted by AltoLXI

Never trust builders (and the newspaper advts) !!! The picture they paint is too rosy for my comfort. All the words "lakeside", "chirping", "forest", "orchard" never entices me even to look at these apartments/villas. There is enough damage the builders have done to the environment here encroaching on green belt and lakes.

I think we should completely trust their ads. If they say you can hear chirping, they built it right among the trees. or maybe bang in the middle of a water body which will get flooded every other time it rains.

Originally Posted by androdev

travel as much as you can when you are young. if you just avoid buying iPhones and stop eating out, you will save enough to visit some amazing places. youth travel is very cheap. stay fit, you can easily gain 5-10 years of active life with a healthy lifestyle, that means you can start saving at 30 instead of 25 to satisfy all those stupid compounding calculators.

Travel itself is over rated if it is something followed as a checklist and not done according to one's interests. It does not make sense just to visit any place to show 'I was there'. I would want to go to a place to make some memories and try to enjoy some unique local experiences. Just standing by a monument and clicking pictures (and spending to do so); I find to be a waste of money too. I also remember reading somewhere about the impact leisure travel is having on the environment. But so does eating meat, so I should not open that box

I completely agree with your other points about resisting the urge to splurge on material things; be it mobiles, devices or (shudder, shudder) cars/ bikes.

[Chetan_Rao]

Originally Posted by Red Liner

Very sage advice. PM sent.

Originally Posted by ajayclicks

Do you mind sharing some details on his service, fees etc. Here, or via pm.

I've PMed details to both of you.

Mods: I refrained from posting information here as it may be seen as solicitation. I have no stake in the person's advisory business outside of being a satisfied client. Can post info publicly if acceptable to you.

Originally Posted by androdev

....
just use common sense, live within your means and don't be reckless.

Advice worth its weight in gold, and I dare say I try to live it.

It's a value proposition end of the day and varies person-to-person. I'd rather have a cheaper phone and use the 50k on travel to gain a life experience, but I'm not judging the person who buys that expensive gadget or drives a fancy car. Whatever floats their boat.

[am1m]

Originally Posted by androdev

i am surprised nobody mentioned that money is utterly useless during old age unless of course your goal in life is to leave behind a big chunk of money for inheritance or charity. look at all the people in their 50s filling up hospitals with 'healthy' bank balances.

Well said, well said. Health is first of course. But that does not mean that you will not need money in your old age, even if you are healthy. Average life expectancy is going up, especially for urban middle-class folk like us. By several indications, the job market is going down. While I agree that one should certainly enjoy one's life while one can (and that means different things to different people, for me perhaps travel, for my friend perhaps an iPhone 8 or whatever), one should also save enough to live, while not lavishly, at least in a dignified manner through one's old age which could last a while. Especially when there is little chance of keeping a job beyond a certain age.

[Ragavsr]

Originally Posted by androdev

if you just avoid buying iPhones and stop eating out, you will save enough to visit some amazing places. youth travel is very cheap. stay fit, you can easily gain 5-10 years of active life with a healthy lifestyle, that means you can start saving at 30 instead of 25 to satisfy all those stupid compounding calculators.

Thanks for knocking some sense into my brain. Considering that my parents are ill, they have been ordering in food and I have been eating out all 3 meals a day costing me money using which I can probably take a month of a domestic vacation or 2 weeks of international travel .

As you mention, youth travel is dirt cheap. Take this , I spent only 35k on 20 day trip to Ladakh and that included 2 way flight tickets from Chennai to Delhi plus bike rentals.

Also, eating out all the times has taken a huge toll on my health. I mostly end up eating junk. I could become healthier and save money for travel if I can spend 30 minutes cooking basic stuff myself.

[androdev]

Originally Posted by Ragavsr

.

As you mention, youth travel is dirt cheap. Take this , I spent only 35k on 20 day trip to Ladakh and that included 2 way flight tickets from Chennai to Delhi plus bike rentals.
.

Traveling as a family man is 10x more expensive, 1/10th fun and restricted to very few places. Anyone saving money while single and spending it on traveling with wife and kids need to get his head checked

[Red Liner]

Originally Posted by androdev

Traveling as a family man is 10x more expensive, 1/10th fun and restricted to very few places. Anyone saving money while single and spending it on traveling with wife and kids need to get his head checked

You are trying to change the veritable DNA of the young indian male. Not gonna happen.

We will work dead end jobs, to buy cars we cant afford, homes we hardly stay in (we spend more hours on the road and in an office), a wife and kids because thats what my parents want (forget what i want)...

Goibibo gives good deals for families. Just saying.

[selfdrive]

Originally Posted by androdev

Traveling as a family man is 10x more expensive, 1/10th fun and restricted to very few places. Anyone saving money while single and spending it on traveling with wife and kids need to get his head checked

It depends what one defines as fun. Sitting alone in a roller coaster as against sitting with kids and seeing them smile in a 'dashing car' or a smaller roller coaster could be fun for some people. As one could enjoy building sand castles or snowmen with their kids as against biking alone or in a group. People who go for vacations with their families would also think that lone bikers/ trekkers/ travellers need to get their heads checked

As someone else said, whatever rocks your boat!

I wish my parents took me for some holiday at some point during my childhood. They spent a lot on travelling, but it was always some pilgrimage. Maybe that was how they defined fun. Now that I am a parent, I try to see what my children would like to do before deciding where to spend our limited budget allocation. I do agree with you that for an individual's bucket list, the tasks should be completed by themselves. This can be done even after you have kids, assuming you have a supportive family who would let you travel alone. For everyone else, there is always an onsite project

[subraiyr]

Originally Posted by androdev

Traveling as a family man is 10x more expensive, 1/10th fun and restricted to very few places. Anyone saving money while single and spending it on traveling with wife and kids need to get his head checked

I have done all these kinds of travel. Travel alone, travel with friends, with girlfriend, with wife and now with wife and kids. As one matures in age and wisdom each of these travel holds a completely different meaning and provides a different view of the world.

In the Indian context, people find their freedom as they come out of their teenage and start working. It is then that one begins to really plan travels. There are checklists as someone said and we want to tick off some of the places where all of our friends have gone

The beauty of traveling as a family is much different and one enjoys it as one starts growing a bit older and mature. In all the varied stress of life and work, imagine sitting next to your child on a beach and running to avoid the waves or getting dunked in the sea. The sheer enjoyment that you see in your child and the joy that you yourself get being a child is non comparable

Over the last few years, priorities have changed. I have been traveling a lot thanks to my job. But it has been tiring living out of a box. I took a decision to change my role even though the new one is not as glamorous, it provides me with a lot of time to spend on myself and my family. The remuneration might not be comparable to the previous one and the hikes and bonuses may be very small or nil, but it beats staying in a 6*6 hotel room and reheating leftovers

I have learnt a lot in the past few years and money is definitely not what you want to run behind long term. I am not advocating amassing a certain amount of wealth. Need and Wants need to be defined. I need to go from Place A to Place B and a cycle will do. But all of us want a Prius or more.

At the end of it all - i guess its each one to his own. Remember though that none of your materialistic goals and possessions will not support you at time of need. They might help you, but will not be a support to you.

[androdev]

Originally Posted by Red Liner

You are trying to change the veritable DNA of the young indian male. Not gonna happen.

What's your avtar pic?

Originally Posted by selfdrive

It depends what one defines as fun...

Originally Posted by subraiyr

The beauty of traveling as a family is...

You guys have misunderstood my post. I am not against family travel, quite the opposite. My post was in the context of this thread about savings vs spending and I was suggesting "don't be obsessed with saving for an uncertain future.. instead enjoy the present especially when young" - a vast majority of Indian youth who just started their first job get such an overdose of advice to save (as is the case in this thread).

We may disagree on which phase of life is the most fun for traveling, but it is a fact that youth travel is way cheaper with a lot more choice and a sense of unpredictability. To be honest, I don't literally mean one must travel to make life more meaningful. Do whatever enriches your life, just don't surrender to the daily grind too soon.

[SmartCat]

Originally Posted by androdev

My post was in the context of this thread about savings vs spending and I was suggesting "don't be obsessed with saving for an uncertain future.. instead enjoy the present especially when young" - a vast majority of Indian youth who just started their first job get such an overdose of advice to save (as is the case in this thread).

You underestimate the power of youth to simply disregard all such advice. The fact is that only a small percentage of bachelors or DINKs save money for the future.

My friends and cousins call me for financial advice, usually 3 to 5 years after marriage. Most of them start financial planning (saving, investing etc) only after a kid is born.

[subraiyr]

Originally Posted by androdev

What's your avtar pic?

You guys have misunderstood my post. I am not against family travel, quite the opposite. My post was in the context of this thread about savings vs spending and I was suggesting "don't be obsessed with saving for an uncertain future.. instead enjoy the present especially when young" - a vast majority of Indian youth who just started their first job get such an overdose of advice to save (as is the case in this thread).

We may disagree on which phase of life is the most fun for traveling, but it is a fact that youth travel is way cheaper with a lot more choice and a sense of unpredictability. To be honest, I don't literally mean one must travel to make life more meaningful. Do whatever enriches your life, just don't surrender to the daily grind too soon.

Hey - hope no offence taken. But one of the things i do believe is to start saving early. I did it and it did not hurt my spending. The point is if you get 100, put in a small sum into savings even if it is 2 bucks. Back in 2002 when i started in a new place in Bangalore, i had a salary of under 8k and with that managed to do a night out at Purple Haze every Saturday and saved some for rainy day.

The point is to spend and spend it vicariously, but put aside a little away. It will certainly help

[RajBajwa]

I have gone through this thread many times in the last 5 odd years. I have a long post to share my personal experience which is almost a bio and my thoughts on how I have been living on the edge.

I am quite meticulous in planning my finances. I have always tried to save ever since I started working. I worked on part time assignments during my college days and I used the money to splurge on things which a kid from a middle class house with limited means couldn’t dare ask his parents for. Expensive branded Shoes and clothes, Movie tickets, eating out, etc.. The pocket money which I got from my parents was to be used only on basic necessary expenses such as bus and train fare and lunch in the college cafeteria. I started saving only after I started working full time after completing my graduation by the age of 21.

I have been following certain rules on how I spend money. Can’t really debate if they are right and I definitely do not preach that they should be followed by all as each individual has his/her priorities and commitments in life.

1. Never take a loan for things which are of personal consumption. (Loan may be taken only if I have the equivalent amount with me in savings in Bank so that if I lose my job I can still pay off the loan).
2. Before purchasing any thing ask yourself if it is a 'Want' or a 'Need'. If it is a 'Need' then buy it. If it is a 'Want' then deliberate over whether I can afford it and only then proceed.
3. Definition of affordability: How will I react or how much of it will make a difference in life If the new thing which I am buying (Car/Watch etc…) get’s completely destroyed due to any accident or act beyond my control. If it is going to make a huge difference then I am not ready for it even If I have the required money in my bank account.
4. Try (Read Try) don’t spend more than what I save annually on buying a car.
5. Always prepare for the worst and hope for the best.

I have a fair understanding of my annual savings after taking into account the regular expenses which I have (Some necessary and some luxury indulgences). I don’t buy a car on loan but what I do is save enough money to be able to buy the car with the 100% upfront payment after a particular period of time. I like to travel but plan to save money for that vacation once in 5 years. The things which I love are Cars (I guess most of us on this forum) and travelling to places around the world.

House Purchase Decision:
I continued living in my parent’s home rent free in Mumbai right till the age of 37. The personal family circumstances were such that I was living alone for a few years and then with my wife in the house as my widower father was working and living in a different part of the country before retiring 3 years ago.

I have purchased a house which is loan free which is in the outskirts or affordable area outside Mumbai. As I save more I’ll sell the house and add the savings to move into a more aspirational neighbourhood without taking any home loans. The idea is that I can use the investment to enjoy the confines of a nice house and during retirement I can sell that property and move into relatively inexpensive real estate.

I am currently 40 and I save about 70% of my take home income. However I know that I need to constantly re invent myself to be in the corporate work force. The job market will always prefer younger people for certain reasons. The younger work force will have grown up in a more contemporary world with more easy access to knowledge and information which will be more relevant for modern times. The younger managers will be able to connect better with a similar demographic. The younger people with less numbers of years of service will be brighter and will work for a lower pay cheque compared to an industry veteran.

However it is not that older resources do not bring value to the system. The experienced and older managers don’t get overwhelmed with extremely large projects as they have got experience on working on them and the wisdom. I won’t get too much into this subject as we are discussing something else here.

The point that I am making is that I am a middle aged guy, I now am changing my spending pattern. My savings rate is going to reduce now as the annual pay hikes which I get are going into the highest tax slab resulting in a nominal increase of take home pay which is less than inflation. Certain expenses which I didn’t have earlier will pop up. My child’s education and other parental obligations, health care expenses for my father, my medical bills, etc.. I might be able to save only about 50 – 60% of my take home pay in the future or may be even less. I am mindful about the higher uncertainty about the longevity of my professional career. There is an increased risk of losing the job and then taking a pay cut which may bring me down to earning the minimum salary one can earn in Urban India (7- 8K per month) or worse be rendered unemployed for the rest of my life. (My mantra of being prepared for the worst)

I had bought a Fiat Linea in 2009 and it still serves me fine. Replacing the car is an unnecessary expense and the cost of upkeep of the old car will still be lower than losing money on another car. I plonked a lot of money on a toy last year. I refer to my second car as a Toy and nothing more than that. It was on my bucket list and I bought it being well aware that it is absolutely not needed. My thoughts were, ‘I am 39, I have saved well and let me buy that BMW at this age (Zero Car Loan for a 3.5 year old car). These things won’t excite me at a later age. I travelled across Europe with my wife when I was in my early 30s with the same concept that I want to do all those things when I am relatively young and have no regrets when I get older.

I hope that my career does take a leapfrog jump and I’ll be able to upgrade my lifestyle. However I am also prepared that if it doesn’t happen then I’ll be moving into a different phase where I start downgrading my cars and also lifestyle in order to maintain that balance of saving enough for the future.

Savings are essential but we need not be too obsessed about it. We need to save just about enough to live a basic dignified life. Need to contribute enough for our kid’s development to make them independent but not leave all to them. I am the only child and my father has some assets such as property, investments, etc.. but he has made it clear that he will always have a choice to give it all away for charity. I do not automatically become a benefactor by virtue of being the son and I am completely fine with that.

The below part of my post is about my other philosophy of life which is quite the opposite of what I have mentioned above. The key is finding the right balance.

There are certain things which make us happy. Some don’t cost money at all probably something like sitting on a bench under a tree in a park. Some cost money such as travel or buying things. I feel that sometimes one needs to let go and take that leap of faith. Go ahead and spend on whatever makes you happy. If it is that ridiculously priced iPhone then so be it. If it means going on an impromptu vacation with friends or family to some exotic location so be it. If it means buying that car which you always stared at in magazine/newspaper adverts then buy it. The list is endless.

I think that it what makes us human. We do crazy sh#$ and if there are aliens who must be observing us from outer space then they might be scratching their heads wondering what are we up to. We still haven’t figured out what is our purpose in life.

Live your life. Don’t worry about the Edge!

[am1m]

Originally Posted by RajBajwa

I hope that my career does take a leapfrog jump and I’ll be able to upgrade my lifestyle. However I am also prepared that if it doesn’t happen then I’ll be moving into a different phase where I start downgrading my cars and also lifestyle in order to maintain that balance of saving enough for the future.

Some great advice in your post, thanks!

The minimizing of consumption/lifestyle is going to become a reality for most of us as we move past our peak working ages. Irrespective of career growth, the sheer number of people at the same income levels competing for the same limited resources in our cities will ensure that however much we earn, we may not be able to match a standard of living we once could have enjoyed with the same income. I'm not talking about depreciating assets like cars or about lifestyle goodies like expensive vacations or eating out everyday at fancy places, but about real assets.

My mom managed to raise two children, educate them in what are supposedly Bangalore's 'best' schools, built our own house without taking a loan, managed to purchase a plot of land elsewhere again without a loan, changed cars every 5-7 years, took us on modest vacations in India every once in a while, all on a single income. Today, numbers-wise, my wife and I earn a lot more compared to what she did, even taking into account inflation. But we will not be able to afford to buy a home in Bangalore in the same area without taking a ridiculously expensive home loan which we'll have to spend the next 20 years paying off. If we had children, I'm not sure we could send them to the same schools. And hearing the college fees these days makes me wonder how most of my friends are going to put their kids through college in 5-10 years. Sure we can afford all the latest the toys that a disposable income can buy, could rent a place in a posh part of town and go on foreign trips, and that could give the illusion of a 'higher' standard of living. But in real asset terms, it's a different story.

[AltoLXI]

Originally Posted by am1m

the sheer number of people at the same income levels competing for the same limited resources in our cities will ensure that however much we earn, we may not be able to match a standard of living we once could have enjoyed with the same income..

True. Wealth is a relative term. A link here.

Lead researcher on the paper Chris Boyce from the University of Warwick's Department of Psychology said: "Our study found that the ranked position of an individual's income best predicted general life satisfaction, while the actual amount of income and the average income of others appear to have no significant effect. Earning a million pounds a year appears to be not enough to make you happy if you know your friends all earn 2 million a year."

Originally Posted by am1m

My mom managed to raise two children, educate them in what are supposedly Bangalore's 'best' schools, built our own house without taking a loan, managed to purchase a plot of land elsewhere again without a loan, changed cars every 5-7 years, took us on modest vacations in India every once in a while, all on a single income.

Those were the good ol' days...

Originally Posted by am1m

Today, numbers-wise, my wife and I earn a lot more compared to what she did, even taking into account inflation. But we will not be able to afford to buy a home in Bangalore in the same area without taking a ridiculously expensive home loan which we'll have to spend the next 20 years paying off. If we had children, I'm not sure we could send them to the same schools. And hearing the college fees these days makes me wonder how most of my friends are going to put their kids through college in 5-10 years. Sure we can afford all the latest the toys that a disposable income can buy, could rent a place in a posh part of town and go on foreign trips, and that could give the illusion of a 'higher' standard of living. But in real asset terms, it's a different story.

True again. Real estate used to be a trap for the working class people till recently. Now "education" is getting added to the list. What used to be the fees for the entire engineering course a decade or two back is what the parents are coughing up for their child's monthly school fees now . Crass commercialisation and resulting rat race will ensure middle class people will always be in the "trap".