NEW DELHI: We were out recently with a large group of women travellers. It was a fun trip filled with great stories from the lives of our co-travellers. The average age of the group was 65 years. Many had worked all their lives and were now enjoying retirement on their own terms. These women were spending on clothes and accessories, enjoying their outings and holidays, and laughing and having a good time. Each evening we had conversations about something, led by one of us: children, in-laws, husband, work, men, and food. Here is what I discussed when it was my turn to speak about money.
First, it is wonderful to enjoy financial independence. Do not shortchange that idea of money that you can call your own for anything at all. If you are employed, set up a corpus for yourself; if not, ensure a portion of the family’s income is invested in your name. Not all us have the benefit of pension, but we must have money that is ours to use.
Third, do not obsess about passing wealth over to your children. By all means support your children and enable their growth if you so wish, even after you have provided for their well-being and education. But draw the line at some point, when your kids have begun to earn money. They will do much better when they have to fend for themselves.
Fourth, there is nothing complex about investing and finance. Money left idle loses value, while money deployed to work earns an income or grows in value, or both. Every investment option can be understood in terms of where the money is deployed, and what happens to it. Return is what you get by allowing others to use your money; risk is the quality of that promise to give you something for using your money. Ensure that your money is put to use by scrupulous institutions. Don’t hand it over to your streetside broker.
Fifth, do not part with your wealth too easily and early. Money in the hands of an elder attracts many in the near and extended family. Many dismiss the needs of senior citizens, and generalise they don’t need much money. Whatever is yours should be in your control, so you can decide how to spend, save, and give away at a time you deem appropriate.
Sixth, do not assume that all the wealth you have should be hoarded and kept in a place you deem safe. Money has many uses and there are many institutions who will use your money for their business and pay you for doing so. Only a portion of your wealth might be needed for your routine activities. The rest must be invested efficiently to earn an income or grow in value. What you do not need immediately should be allowed to appreciate. Allocate your wealth between growth and income, based on what you have and what you need. Do not allow fear and misinformation to guide your investment decisions.