In the course of the last three decades of investment behaviour that I have seen…let me tell you some of the lies that I have heard…. I am too young to start investing for retirement Younger people do not like to hear about saving/investing for their retirement – it is just too far away. My take: forget retirement, this generation will need money to eat from when they are between jobs. Job loss can happen at 32, while retirement may happen at 60.
I have no money to save or investI have heard this from people earning Rs 9,000 per month as well as from people taking home Rs 1,34,000 per month. Need I say more? I have so much debt, how can I invest Well, assuming you have debt at 10% p.a. interest and a decent Index return of 13%p.a., it makes more sense to keep investing while repaying the loan. Do not give up one for the other.
Sir I am in the defence forces, my provident fund and pension will take care of my needs. It does not matter if I lose some money in Endowment plans – ULIP or otherwise, said one senior person. One of the senior defence personnel (now retired perhaps) said: “The older people may be bad, but the youngsters of today in the army know everything about investing”. He gave examples of how all of them had e-brokerage accounts and they had attended a four-day session on technical trading.
“Sir you talk too much about saving and investing… We are middle class and not in the greedy rich class… We do not need to worry so much about saving and investing,” said a woman, who was sure that Rs 80 lakh would be available to her at her retirement, and was not worried about how long it would last. I do not understand anything about markets. I need to know how the markets work and then I will start investing. Humorous? Well, true. “I am a doctor (any profession would do) and I will never retire, so I do not see any need to save/ invest…”
It is too late Sir! I am 48 years old and I think it is too late. This is the opposite of “I am so young…”’ My take: start; better late than never. If you live till 92, you still have 44 years to go! The fact that many Indians are not saving enough for retirement is downright scary. Not getting enough exposure to equity is even scarier. Without proper government services in place, a vast majority of these people will be forced to subsist on children, government hospitals, relatives or…??? If you do not want to be one of them, now is the time to get real about investing for the future.
You may think you cannot afford to save for retirement, but you cannot really afford not to! You might think it’s too ‘hard’ or ‘complex’, but once you find a half-decent IFA and decide to stick to some basic plan, investing is easy and investments are so simple a class 7 child could understand. The amazing excuses for people not investing their money abound, but you would be wise to ignore them. Excuses would not help you get ahead; they can only hold you back from the retirement you deserve.
PV subramanyam
writes at www.subramoney.com and has authored the best seller ‘Retire Rich - Invest C 40 a day’