On this fathers` day, I just want to say thank you for all the things you have done for me, selflessly. Thank you so much Dad. I love you.
Apart from being an emotional support, your one piece of financial advice has helped me so much Dad. That one advice, has helped me to achieve all my goals in my life.
I remember Dad, it was the year 2002 when I completed my engineering and started earning. I used to spend everything, never thought of saving or investing.
In fact, I went overboard and spent some 40,000 through my credit card. I was in no condition to pay the full amount for next few months. Neither I was aware that I can convert this amount to monthly installments with 17%–18% nor knowledgeable about the 35%-45% interest rates on delayed payments. I continued for minimum payment due on credit card for 6 months and I was so frustrated.
Dad, you came to my rescue. Somehow, you came to know about my credit card bill. You paid the entire amount and I was so relived.
After a week, I came and said sorry to you and promised to never spend so much.
Your one advice and I never looked back. The advice was “Define your personal financial goals.”
Defining personal financial goals” is the single most effective piece of financial advice which changed my life
Do you remember when you told me – You can spend as much as you want, but and that was a big but, after investing the necessary amount towards your personal financial goals.
After that day, I never asked a single penny from you and was able to start my own business at the age of 40. So powerful was your advice.
Now, why do you need to define personal financial goals? There is a story behind how I defined my personal financial goals.
How You helped me to decide my financial goals?
- I wanted to go for MBA after 3–4 years – You asked me to start investing in debt mutual funds or FD.
- I wanted an early retirement – You asked me to invest in equity mutual funds for that.
These were 2 major financial goals at that point of time and I made no mistake. I started investing first and spending later. Though it took me a lot of time to understand all these financial terms, but I learned. Till then, my entire amount was in FD.
But I still had not learned the asset allocation. I invested in debt funds/FD because you had asked me to do so.
I do not know, how you were so knowledgeable at that point of time. You also asked me to start learning these things by myself and my journey started.
Time flew and I got married after completing my MBA.
I still remember Dad, when you called me after 1 week of my marriage. You said that you wanted to discuss something. Trust me, I was scared. I was scared that you will ask me the same question which every parent ask their children- When are you planning to have a kid? But your questions were entirely different.
I still remember the conversation when you said – Son, now you are married, you have responsibilities. I know, you are investing for some time now. But who will take care of your family if you are not around? Though it was not an easy question to ask for a father, but you still asked (I know, you ensured that Mom is no where around when you are discussing this harsh reality of life, otherwise you must have got a firing 😊)
- You suggested me to buy a term insurance for the security of my family if I am not around. I was not much aware about the insurance part at that point of time. Whatever I had learnt till that point of time was that you should never invest in insurance policies. I asked- how this is related to my personal financial goals? This is to ensure that my family should not suffer in your absence was your reply. Even if you are not around, they should achieve their financial goals. Your child education plans should not suffer. Your wife`s retirement plans should not suffer. You showed me the importance of term insurance.
- Then you suggested to buy a health insurance too, and I argued why I need one if I am covered through my employer. How cool were your replies Dad. Just 4 questions and I bought health insurance
What if you lost your job?
What if you switch jobs and take a break in between?
What if you start your own business?
What about health insurance after retirement? - You asked me to buy a personal accident policy too. I was confused on why accidental policy. And your questions were simple.
If you die in an accident, your family will get money from Life Insurance Company and they
can survive. What if you do not die, what if you are bed ridden for six months and disabled?
Though I bought it reluctantly, but I came to know the importance of it when I had a small accident. It was a very minor accident, but it gave me a lesson.
- Dad, Your questions have been always so simple and you knew how to ask it at the right point of time. Do you remember when you asked me if I have any emergency fund and I replied that I am investing everything in equity. Your advice was simple.Create an emergency corpus for at least 6 months living expenses. This is to ensure that you
do not get stressed out if you lose your job or any emergency comes in between.Do not invest everything in equity, start investing in debt instruments too. Equity
instruments will help your money to grow. Debt instruments will make you secure.
Dad, with your advice, I have done only 2 things
- I have secured personal financial goals of my family if I die, through different insurance policies.
- I have found a way to achieve my personal financial goals through investments, if I survive.
Thank you Dad, for making my financial life so easy.
Now every time, I have a goal, I write it down and start working towards it.
The goals can be anything
Buying a house
Clearing credit card bill
Buying a vehicle
Going for a vacation
Child Higher Education
Child Marriage
Retirement planning
Early Retirement Planning
Happy Fathers Day, Dad! Love you.
