Are you committing slow financial suicide? Pay heed to this finance expert
Many of us slog and some for well-paid jobs. We all feel an urge to splurge thinking that we deserve it, since we are working so hard. But says this personal financial strategist, each of these steps can push you to a financial precipice.
Kolkata: All personal finance experts advise their clients to distinguish between needs and wants. Focus on the needs and don't entertain the wants, they say. In a rhetorical social media post, the founder of Finwisor, a wealth management consultancy firm, has listed several common financial practices which he described as "slow financial suicide".
He said that these habits are common and quite imperceptibly drain one's wealth over the years and the individual who indulges in these are actually killing himself/herself financially every day without having an idea of the cumulative impact. However, he/she continues justifying each of these routine actions. "I’ve seen this up close. People with great jobs, big salaries, and sharp instincts still end up stuck financially because of these patterns,” wrote Jay Shah, CEO of Finwisor.
Pernicious financial habits
So what are the practices and habits that can push even a well-paid person to the precipice? Shah has listed them out. All of these are steps that many of us feel tempted to indulge in regularly -- "little things" which have a huge impact.
Burning a big amount, say Rs 1 lakh, on a party. The regular justification: "I deserve it."
Making unwise investments such as in Bitcoin or other crypto assets simply because it is a fashion or a trend.
Venturing into Futures & Options, oblivious/indifferent to the risks involved.
Purchasing a car worth Rs 20 so that I appear to be as prosperous as my colleagues or friends.
Not to buy an insurance policy since nothing unfortunate will is "likely to happen".
Going on vacations abroad every year.
Keep postponing financial planning.
Keeping a huge sum in savings accounts because I am too busy to plan investments.
Shah has also written that he is not speaking on presumptions. He has seen many conducting their lives in such small but reckless manners and face financial ruin. "Understanding money isn’t hard, but sticking to a plan takes real effort,” he wrote.
Shah has also listed out a few questions that one can ask oneself to see where one stands on the responsible financial behaviour spectrum. One, if you are investing, check whether you are investing an increasing share of your income over the years. Two, whether you can lead a life withouot hiccups i=for six months if you are without a job. How will your family carry on, should something unfortunate happen to you. Can you justify each of your investments?