The ‘Trishul’ of Financial Wellness
Banish the jargon, the nerdy terms, the veneer of expertise and the path towards financial wellbeing can be distilled into one sentence –
“Spend less than you earn and invest the difference – wisely”.
This is one overarching principle that covers all aspects of financial wellbeing and has been passed down through the ages. And yet we continue to search for that elusive magic pill that will help us achieve financial nirvana.
Yes, Simple to understand but not easy to implement-
There are basically three variables in that one sentence – Earning, Spending and Investing. The ‘trishul’ of financial wellbeing. Each of these three requires planning, common sense and discipline.
Earning – we need to continuously maximise our income. Most Indians are good at this – but only in the short term. They actively hunt for the higher paying job or opportunity and aggressively pursue it even if this means relocation or any other disruption in their lives. However, many of us stop learning new skills early on in one’s career and in a fast-changing environment this can prove disastrous. The 40’s are where the income level and growth is at its peak and this golden period cannot be fully leveraged unless we re-skill ourselves and become relevant in a changed environment.
Spending – here’s where most of us fail. We tend to spend more that we should. We confuse ‘wants’ with ‘needs’ and are victims to the ‘Kal kisne dekha hai’ approach to life. But the ‘Kal’ comes pretty fast and some amount of frugality today, would go a long way in making us financially secure tomorrow. But ‘Frugality’ is not easy, given that all the pressures from society are to spend, spend and spend.
Investing – this is the third prong of the ‘trishul’. Even if we maximise our earnings and live frugally, if we don’t invest wisely then financial wellbeing remains a dream. That why we hear of many ‘high income’ persons still not financially secure. Sensible investment requires focus, patience and discipline. Your investments need to work for you and generate passive income which then enables you to follow your dreams and do stuff that you always wanted to do. Keeping your money super-safe in FD’s is not going to get you financially security. Conversely, investing in the equity market based on ‘tips’, is going to certainly lose you money.
The good news is that you can start working on all the three prongs of the ‘trishul’ at the same time. Taking small steps, leading to small successes will result in good habits being formed which in turn will lead you to financial security.
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