In the last couple of months two of my lady friends, both in their 40s and happily single, doing very well in their careers, declare they want to be rich! And knowing that I have been in the Mutual Funds for close to 15 years and comfortable with Finance and investments, they asked me for advice.
I was a little surprised, why all of sudden after so many years they are now thinking about money, finances, investment. These topics had never entered our conversations earlier, so why now?
So I tried to put all the pieces together and understand the psyche. Both have been working for the last 15 -20 years, they have seen ups and downs in their careers. They have had gaps in their jobs, due to companies closing down, downsizing, dissatisfied with their roles etc. All those working for private sector know that none of this is unusual, in fact it’s quite common in various sunrise industries. Career in the private sector is not exactly a smooth ride, apart from the daily work pressure, there’s always a fear of job security. This did not bother them much when they were young as is always the case. Whenever they wished to change their job; there was one readily available. So life and lifestyle turned out great. But things have been different for the last couple of years. High bonuses, incentives, salary hikes, increments are not easy to come by. The number of desirable jobs started narrowing down as they climbed the ladder. Above all, the realization that there may not be as many years of work left! Retirement age in the private sector is considerably low in comparison to the public sector.
So now they are anxious to build a corpus to sustain their comfortable lifestyle thru the long post -work phase of their life. Not that they have not been saving, they definitely have. But the question is, is that enough? Probably not. Here’s when people, just like my two friends, start thinking of ways of making quick money and fall prey to the vagaries of the investment world! A common mistake that people in such a situation always make, that is taking high risks in order to gain higher returns at this stage. Please understand, you cannot cover up the lost ground by doubling your investment; it is a recipe for disaster. So my suggestion to them and to all of you in a similar situation is not to get tempted, continue to look at safe financial options, discipline yourself to invest regularly till the end of work life, hopefully that is still about 10 odd years. Seek the help of a financial advisor if required, they will put an appropriate plan in place. And if you are really feeling adventurous, go on a trek!
So I’m glad that they started thinking about it, a tad bit late, I would say. But as the Chinese proverb goes
“The best time to plant a tree was 20 years ago. The second best time is now”