In the course of the last three decades of dealing with investors and the relationship managers who manage them, …let me tell you some of the lies that I have heard….
1. 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.
1.a 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.
2. I have no money to save or invest: I have heard this from people earning Rs 9,000 per month as well as from people taking home Rs 1,34,000 per month.
2.a Saving is a habit that has to be cultivated when you get your first stipend. Need I say more?
3. I have so much debt, how can I invest: Well, assuming you have debt at 8.7% p.a. interest and a decent Index return of 13% p.a. – it makes more sense to keep investing while repaying the loan.
3.a. Do not give up one for the other. You need to reduce your debt of course, but you also need to keep investing. Start today.
4. Subra 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 a senior person.
4.a. One of the senior defence persons 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 two-day session on Technical Trading, conducted FREE by a brokerage house that even helped them open brokerage accounts.
5. ‘Subra 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.’ She was sure that R80 lakh would be available with her at retirement and that she was not worried about how long it will last.
6. I do not understand anything about markets. I need to know how the markets work and then I will start investing. Humorous? well, true but very sad.
7. ‘I am a doctor (any profession would do) and I will never retire, so I do not see any need to save/ invest. What this doctor will do if he is forced to retire, is anybody’s guess.
8. It is too late Subra! I am 48 years of age 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 aren’t saving enough for retirement is downright scary. Not taking enough exposure to equity is even more scary. Without proper government services in place, the vast majority of these people will be forced to subsist on children, government hospitals, relatives or…??? as they live out their final years. If you don’t want to be one of them, now is the time to get real about investing for the future.
You may think you can’t afford to save for retirement, but you can’t really afford not to!
The amazing excuses people don’t invest their money abound, but you would be wise to ignore them. Excuses won’t help you get ahead; they can only hold you back from the retirement you deserve.