A CULTURE OF THRIFT CAN BE YOUR MAGIC BEANSTALK

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In our desire to climb the wealth ladder, we take many decisions. From chasing risky ventures to investing in exotic assets to frequent career changes, there are few things that people will not try to ‘get ahead’. Sadly our economic status seems to be  determining our self worth and fueling this type of behaviour.  Yet if the quest is for greater financial security then there is an age old wisdom that can be the cure for our sad condition – thrift.

Thrift is defined by the Oxford English Dictionary as ‘The quality of using money and other resources carefully and not wastefully’

Sadly, thriftiness goes against mainstream culture which emphasizes instant gratification especially through impulsive shopping and expenditure.  Yet this also breeds financial insecurity.

Many young Indian professionals save little and many don’t invest at all for the future.

While this may be all right for a while, eventually slow fears and anxieties about money will snowball into serious problems. It can affect normal human functioning as well as our professional and family lives. secondly, such stress can cause us to act in an irrational and

The best way to avoid this is to do compulsory savings and investing. Instead of saving what is left after spending, set aside a fixed per cent age of your income each month for it. Ensure that you spend for today only after you save and invest for the future. Also ensure that you have sufficient life and health insurance, so that any contingency will not cause unmanageable trouble for you and your family.

Consider this, we frequently spend small sums of money eating out, movies and other pleasures.  A few hundred here, a few hundred there and pretty soon we are talking some serious one. Now imagine what would happen if you were to forego some of those recreation expenditures and redirect them towards savings and investments.  If you were to invest Rs. 5000 per month in a good SIP, then even if it returns the normal rate of return of 13% , you would have created a corpus of over Rs. 12 lakh………………… Make that 20 years and it becomes Rs. 57 lakhs.

Rs 5000 per month is not a huge sum of money to redirect from the wasteful expenditure. Think about it.

Posted: September 2017