I want to enjoy life,  I don’t have enough to invest, I wish I had inherited or won a lottery, I don’t know where to start were the questions, fears, comments that were raised during the money awareness presentation that I gave. It is something that every beginner has faced/will face. This article is about the questions, comments raised by participants, presentation and feedback of the presentation.

Questions/Comments by Beginners on why they hesitate to start investing

I want to enjoy life

I want to travel the world, eat at all the nice restaurants, wear the best clothes, drive the nice cars, in short, live life to the fullest. Life should be enjoyed. This is the time when you are free, you have slogged hard to enjoy life. You shouldn’t live like a miser. The whole point of money IS to spend it on things you love. Pleasure purchases should not be a source of shame. Constantly over-analyzing tiny purchases is exhausting and ineffectual. Often we read “With a $6 a week coffee habit (two purchases at $3 each), you can end up $3,900 richer over 10 years if you give it up — assuming you earn four per cent compound interest on your money”

Want to buy that nice dress worth Rs 2000! Want the latest mobile with touch and big Camera! BUT  be aware of where you are spending your money. Buying one dress of Rs 2000 a month if it makes you happy is great, but buying 3-4 expensive dresses in a month ..think do you really need it. Don’t go for impulsive buying, postpone your buying decision by 2 days, a week and the come back and decide. Stop and think why you are buying things. Is it because you had a fight?  time-pass? Or do you really need the things that you are staring at in a shop or to impress your friends? Don’t make your Self worth dependent on what you have.

Allocate an amount consciously to your spendings say buying clothes for Rs 8,000 a month, eating out Rs 5000 a month. Be aware of what you are spending on and then just reflect after some time (a month, 6 months or a year) was it worth it.  My son is crazy about Gems Panda you know the Panda that comes with Gems Surprise worth Rs 30 and he would love to have it every day. But I buy him a Gems Surprise once a month (okay twice on occasions like Valentin’s day or his getting a prize in a competition). His countdown for Gems surprise starts the day he gets one. He talks about which Panda will he get this time, what if he gets the same Panda or no Panda. On 1st day of the month, his excitement reaches the peak. When he opens his Gems Surprise we all wait with bated breath for what he will get. I have to remind him of my parent’s mantra Hope for the Best Prepare for the worst. His excitement on getting a new Panda, his disappointment in getting a repeated one or not getting at all is something is shared by all of us.

The daily extravagances that drain your resources aren’t the cause of your money woes. It’s the combination of high spending with sudden illness, job loss, divorce or accidents, leading to high unforeseen expenses.  Interested readers can read A Dollar Here, a Dollar There. But So What?  Ramit Sethi The psychology of cutting back on lattes  or Can quitting coffee make you rich?

I wish I had inherited or won a lottery

We all wish to be an heir to some unknown uncle or relative who became a billionaire but had no one to inherit the money to or  win a lottery. But getting the money this way will not solve all your problems.  In reality, inheriting large sums of money often feels more like a curse than a blessing. Suddenly, people you haven’t heard from in years want to reconnect. Relatives assume you’ll be eager to share your newfound wealth and buy them whatever they desire. And person inherting wealth usually blow it away. If someone could not manage say Rs 10,000 well how would you expect that person to manages crores of rupees.  There is a quote in Hindi (told by the participant )

poot sapoot toh kyon dhan sanchay, poot kapoot toh kyun dhan sanchay

Meaning if you have a spoiled child there is no need to save money for him and if he is able than also there is no need.

I came across an interesting Chinese proverb

“First generation-coolie; Second generation-merchant;

Third generation- playboy; fourth generation-coolie.”

Remember it all about relativity. I cried for new shoes until I saw a man without legs. People might be interested in reading about :

• The Top Ten Most Astonishing Inheritance Stories,
•  17 Lottery Winners Who Blew It All ,
•  How the Lives of 10 Lottery Millionaires went Disastrously Wrong

or closer home

• Kaun Banega Crorepati riches crush Sushil Kumar’s Indian Administrative Service dream,
• Depression in Life After Kbc-harshvardahan Navathe!
•  Life after KBC (good and bad)

I don’t have enough to invest

When we think of investing we think first of getting lots of money and then investing. The minimum amount for investing is Rs 500 a year for a PPF, Rs 500 a month in Mutual Fund(some even allow Rs 100 a month), Rs 50 a day for a Gold plan! Time is Money!  Use 8th wonder of the world COMPOUNDING to your advantage!  It is important to start, take baby steps. Set aside a small percentage for investing. Do this even if you can devote only a few hundred rupees at first. Even 100 Rs per week will add up over time. Remember Drop by Drop forms the ocean. “Early investing is very much like growing a tree…if you can take good care of it at the start, it will take care of itself later”. For instance, if you start saving at 30, you will have 30 years to build your corpus. At 30, Rs 5,000 invested every month will grow to Rs 75 lakh (assuming 8 per cent compounded annual growth rate) by the time you are 60. If you start at 40, you will have just Rs 30 lakh at retirement. A delay of 10 years will halve the corpus!

I don’t know where to start

Investing is a very confusing topic as it means different things to different people. Who is Your favourite actor? My father likes Balraj Sahani, my husband prefers Aamir Khan, my friend Gunjan is crazy about Akshay Kumar,  my niece Abhishek Bachchan, my children adore Imran Khan and I prefer Shahrukh Khan.  Same with food. Ask six different people for advice and you’re likely to get six different answers or at least three.  Investing is a plan not a product or a procedure. (explained in What is Investing?)

When we read we begin with ABC when we sing we begin with Do re me. When we start investing we begin with ????? Reason being though we are educated we are financially illiterate.  We don’t allow people to drive without taking a driving test yet allow them to enter the complex financial world without much financial education. While we can crib about what school, college, parents, the government should do we also need to start taking responsibility. It’s your money after all!

Investing Is Like Planning A Trip. Investment Products Are Vehicles Like Cars And Trucks. All a vehicle does is to get you from point A to point B. So, an investment vehicle simply takes you from where you are financially to where you want to be, sometime in the future, financially. There are many different investment products, or vehicles, because there are many different people with many different investment ‘needs’, Before you invest, educate yourself

Start by looking at your Salary, your EPF,income tax. Take baby steps in investing (open a Fixed Deposit, PPF acount) , make mistakes, learn about yourself (your risk taking ability, your investing preferences. No one has learnt riding a bike or swimming my reading a book so take action, some action. When your own money is put in line the interest comes! Read Subramoney’s 10 deadly sins that keep you poor…

What if I make mistakes

In life, we make the mistakes first and then it’s up to us to find the lesson if we ever find it. Have you seen a small baby learning to walk? They spend a lot of time learning to walk badly before they learn to walk. They fall a lot of times. They cry on falling, make horrific noises, suffer a lot of bumps and sometimes bruises, skinned knees but they never stop trying and end up learning walking

Remember the frustration you went through as you struggled to learn how to ride a bicycle. All your friends are riding but all you are doing is climbing on the bike and immediately falling off. You make mistake after mistake. Then suddenly, you stop falling off , you begin to peddle, the bike begins rolling, and then suddenly like magic, a whole new world opens to you.

Learning about Investing is just like that. You will make mistakes. I  have made many financial mistakes and I didn’t want my children to grow without basic financial knowlege that is one of the reasons which prompted me to start my website bemoneyaware.com. It is not the mistake but the attitude towards making mistakes. Mistakes are how we learn. Every time we make a mistake, it is an opportunity to learn something new, learn something  . So instead of avoiding mistakes, we need to learn to manage mistakes. Move from Oops I did it! to  Mis-Selling or Mis-Buying: It’s My Money, My Responsibility

I am not interested in money

Money is an important part of our life difficult to disassociate from. You are dealing in money when you are spending, buying, using credit-card, earning,  paying income tax, buying big items like Gold, Car, Home loan, even listening to song Psy’s Gangnam Style ( which is about the poshest area in Korea called Gangnam). You may leave finances to your parents, siblings, spouses but then be aware of where is the money being invested, whether there is insurance and how much. A women may be married, working or not working, but sudden death, illness in family or loss of a job or an unavoidable divorce can put her finances in a topsy-turvy state. Many people get into financial trouble because of greed, laziness, or lack of commitment. Don’t be one of them!

An uneducated(financially) individual armed with a credit card and access to a mortgage can be just as dangerous to themselves and their community as a person with no training who is given a car to drive. Heard about credit card debt, personal loan. Remember Personal Finance is a means to an end. The end is your financial dreams and goals; Your interest, awareness can put you in greater control of where you want to go and how you want to do it. It gives you greater confidence to face uncertainties that may arise in future.

Presentation

“Would you like to give a talk on investment for women/money awareness for women on women’s day”. It all started with a message from my friend Nandini (who refused to take NO for an answer). She put me in touch with her friend Minnie who is HR of AppliedMicro and after discussions, we decided to have an hour-long presentation on basic of money awareness as the participants were mostly freshers. My presentation was based on the following articles: 

• Four Corner Stones:Income, Expense, Assets, Liabilities 
• What’s The Price Of Cool? 
• Life of Debt Responsibly
• Beginner to Investing – Approaches, Plan, Psychology 
• Investing: Think about Liquidity, Safety, Returns, Risk, Tax
• Women and Financial Planning

The presentation that I gave can be accessed on here or clicking the image given below

Feedback from the audience

It was a focused and concise introduction to investing. While you addressed the “women” folk at our office on women’s day, even I came away with a better appreciation of the need for investing and different ways of doing it. “Investing” is a very confusing area for most people, especially the young, and most don’t know what it means, where to start, and what the risks are. People often believe that “investing” simply means “buying and selling stocks” – which as you shared is not true. This lack of knowledge and awareness prevents people from taking their first step, as was evident from our session. I expect that your session created enough interest in some of the young women who attended so that they can consciously take their first steps towards “investing” without the fear of not knowing –  Anil Gupta

‘Your session for us women was an eye opener. Despite me knowing a fair bit about investing, you brought up so many points that even I was not aware of such as the fact that one can invest in one’s job, family, etc. I believe your session was a great “foundation” or first step for the young women in APM to take their first baby steps to learn more about being financially aware and financially independent. An important input you stressed was financial education – no depending on one’s father, brother or husband to make decisions. This is very important and unless one does this we will continue to play second fiddle to the men in our lives who call the shots. I hope the youngsters take a leaf out of your book and embark on a journey that will make them not only financially savvy but also more self-confident to take charge in other areas of their lives.’ – Minnie

It was very useful for women who are new to this “concept” of Money Awareness, so, it was bang on as most of the audience were youngsters who are opening their eyes in the financial world. It was effective as there was no upselling included in the session J! Had you given any suggestion or indicated where and how to invest, people would doubt your intentions.

Also, I felt the slides were a bit crowded with lots of information. I felt that the session would have been more effective if you just had some pointers on the slides that would assist you to address the audience, anyway the handout you have given has all the required information – Anuradha

 I liked your lecture, because you explained it with a very simple and clear idea. I really don’t have knowledge of how to save the money and how to invest and where to invest. Your lecture gave me the thought of how to manage financial conditions in a systematic way. – Rajeshwari Lingaraddi

Note: We did not charge any money for the workshop but got flowers and chocolates making it one of the best Women’s Day I ever had.

Some of the Links example Lottery winners or KBC winners have been added for the article. I didn’t have them that day.

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What factors do you feel stops beginners from starting investing or learning about finances? How should they overcome it? Where should a beginner start?