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Some Advice for the Young…and Broke

I generally don’t like offering advice on this platform – Safal Niveshak is all about sharing my experiences and learning as an investor and manager of my own money. So the headline of this post seems a bit awkward to me.

But then, what follows is my response to some common claims that I’ve heard from a lot of well-educated and confident (yet broke) young people…and I was one of them a few year back. (I’m still educated and confident, but have taken care of that ‘broke’ part :-))

Here are some things I’ve been hearing all around from the young with respect to their careers and finances, and my thoughts on their thoughts…

“I am educated, talented, and confident, so…”
Well, it’s great that you are educated, talented, and confident…but know that these things are often highly overrated in today’s society.

Albert Einstein has been quoted as saying – “The only thing that interferes with my learning is my education.”

Take for instance the hype surrounding an MBA in Finance (and I have one) or a CA. People believe that you need such financial degrees to make money in investing. In fact, I had this very belief while starting out in my career.

Nothing can be far from truth, because if financial education was what was required to make money from investing, the experts would’ve become rich by investing their own money and not selling worthless advice to you.

Education and talent are good…but only till they keep you rooted to the ground. These qualities appear to increase our confidence without improving our abilities, thus leading to worse decision in our lives (including financial lives).

“Job is my birthright!”
In my 8 year career working as a stock market analyst, I’ve seen a lot of my ex-colleagues changing 5-6 jobs in as many years…all for the sake of a few thousand rupees in salary hikes…and without giving any due thought to the profile offered by the new job.

The thinking these days is – “Job is my birthright, and nobody can snatch it from me! If I lose job here, I can easily get it there.”

Clearly this is a by-product of the last 20 great years that the Indian economy has seen. The youngsters (and I would count me amongst them as well!) have not really seen ‘bad times’, like our fathers and grandfathers did.

But believe me, the stories I’ve heard from some old people, things can sometimes get really bad (look no further than the US, where the unemployment rate is creeping up, and people have lost hopes of getting jobs soon).

“Dad’s there for me…”
This is ridiculous! Your parents will bestow all their love (and money) upon you. That’s what parents are for, right?

Wrong! It’s important for today’s generation (X, Y, or Z) to know and appreciate that you don’t have any claim on your parents’ wealth.

Yes, you have a legal claim on their cash, property and all other assets that they’ve created for ‘you’. But know that you are not ‘entitled’ to the fruits of their long years of hard work…in the same way as your children are not entitled to your wealth (pass on this message to them as soon as possible!)

In a world where saving for your own retirement is getting to be a tough ask, saving for your children must be secondary. Of course, you must save for them like your parents did for you, but know that they can get education and marriage loans…you won’t get retirement loans.

“I have no cash…but five credit cards”
A cousin recently showed me his latest possession – a fifth credit card – that offered him great deals on shopping and eating out.

“That’s great news for all the reward points you might be accumulating by spending through your credit cards!” he expected to hear from me as his expression showed.

But I scolded him instead. I knew he was earning a meagre salary working in a BPO, so using credit cards was like digging his own grave – of the habit of overspending and getting into a high cost debt spiral (that’s what credit cards lead you into!).

I’ve seen people with no intention of spending cash on something buying the stuff just because they could use their credit cards!

This is absurd, and can lead anyone into a big financial problem…especially one who is over-confident about his ability to ‘pay off’ in the future and who believes that a ‘continuous salary’ is his birthright.

“I already earn enough”
This is the most common excuse youngsters give me when I ask them whether they’ve started saving and investing for their future.

They must know that they can’t be working and earning throughout their lives…but they’ll need money to survive throughout their lives.

Each rupee you save is like an employee. Over the course of time, as an owner, the goal is to make your employees work hard. Eventually, they will make enough money for you to hire more workers (cash).

Subsequently, when you have become truly successful, you no longer have to sell your own labour, but can live off of the labour of your cash and the assets you’ve built up using that cash.

However, it’s hard to understand and accept this truth when you are young and confident (err…over-confident).

But then, it’s only when you understand and accept this truth early in your working life can you dramatically change your financial future for the better.

“Let’s go for a Cappuccino”
Forget the cappuccino kid! Start saving money.

Here’s a simple math. If you can save just Rs 50 per day (or Rs 1,500 per month) by stopping to pay for that cappuccino every day, and invest it for the next 25 years, you will have Rs 49 lac in your kitty (assuming an average annual return of 15%)!

Even if you assume that your money will grow at a lesser rate of 12% per year over the next 25 years, every Rs 1,500 you invest per month, will amount to Rs 28 lac then.

So choose now, when you are young – whether you want to survive on credit cards, or your dad or mom, for the rest of your life…or whether you want to take things in your control (you always wanted the steering wheel of your life in your hands, didn’t you?)?

Remember, being broke ain’t cute!

What do you say? If you are young, and NOT broke, what would you suggest those who are (broke)?

And if you were once young and broke, how did you come out of that situation? (It’s nice to be a guiding light :-))

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About the Author

Vishal Khandelwal is the founder of Safal Niveshak. He works with small investors to help them become smart and independent in their stock market investing decisions. He is a SEBI registered Research Analyst. Connect with Vishal on Twitter.


  1. Dear Vishal,

    Safal Niveshak is a great initiative (what does it mean though? Sorry I am a MADarasi).

    I am tired of telling gen-next about the importance of living within their means. However they see hell bent on ‘enjoying’ today and not worry about tomorrow! Sometimes experience is the best teacher.

    • Thanks for the feedback, Pattu! Safal=Successful…and Niveshak=Investor. 🙂

      Indeed (personal) experience is the best teacher, but it’s always better to learn from the experience (and mistakes) of others. Hope the ‘young and broke’ understand this.

  2. Children are mostly a reflection of their parents. The way they talk, behave, walk all of it. If they see you being careful with money most likely they too would be.
    While they will want many things (so do adults) regular reminders that everything ‘wanted’ is not necessarily ‘needed’ starts to convey the message. It takes time and patience. Hopefully they will learn.
    ‘First deserve and then desire’ is the guiding principle. I think parents either out of emotion or financial insecurity (they need to be taken care of when they are old) just pamper to every whim and fancy and then the cat is out of the bag. You will see the consequence of such parenting in spoilt indisciplined youngsters all around you.

    • ‘First deserve and then desire’ is a key thought, Sudhir. And yes, parents set the precedent for children. But I see a lot of the youngsters also giving in to the peer pressure, however sensible their parents are or however hard the parents try to keep the kids away from keeping up with the Joneses.

      Social media is playing a very biog role here. I remember a friend of friend recently borrowing big time to buy a sedan in India…just because his close friend in the US had bought one there. Both these guys are earning well, but then the one in India already has a big home loan to his name. Purely peer pressure!

      As for the effect of parenting in creating spoilt indisciplined youngsters, I can see the examples daily on my street, which houses 6 high-end pubs. Come evening and the pubs are filled with youngsters, drinking and smoking all around! It’s funny to see them show off their wealth and youth, but it’s equally sad to imagine where their future lies.

  3. shankar says:

    Again, it was a well written article…I really enjoyed reading it..That Cappuccino example was a good one..:)
    The only thing I would like to share is, just don’t be a another rat in the rat race….Rather it is worth following your heart.

  4. As with most things in life, parenting is certainly a complex task. Vishal you are right, ‘environment’ read ‘peer groups’ have a huge influence. I have a teenager and home and I can vouch for some of this. Thankfully he has some sanity, he saves his pocket money and even gives me to put in the bank a/c.
    Teenage is an age where cricket is life and life is just a commodity. No investment but all fun. It is a heady cocktail. As a parent you can only guide and pray, while providing unconditional love/ understanding.

  5. I know a well known CA in Mumbai who has lost significant amount of money in stocks. I used to think that being a CA automatically means that you know how to pick out winning stocks.

  6. Ram Krishna says:

    Dear Vishal,
    As usual a great post from you. I have been introduced to safalniveshak by a friend and after reading few of the older posts i was totally amazed at the way you convey your message in so simple and lucid way!
    You have pointed out it very correctly that saving first and then spending should be the way forward. I have been seeing my friends who are crazy for getting new gadgets, phones, tabs and splurging on unnecessary needs without thinking about their future. I have tried telling them many times that saving is more important when time is on your side. Now i am sharing your post with them to convey my message 🙂

    The one thing which i liked in this post was about “job profile”. Most of the people switch jobs for big money but they fail to plan their career. Most of my friends are MBAs and are working in big companies (big brand names) and are earning big but they don’t plan for the longer term. They are switching jobs frequently but they dont have a particular profile. They are just joining companies which pays good money, irrespective of the job profile they are interested in! And i believe that job profile and career progression should be the most important factor. Money will follow once you make yourself deserving.

  7. But at time there are other responblities which comes in between savings for retirement.
    One of my friend who from last 4-5 years was saving for his sis marriage . Now after his sis marriage he has got into huge debts. Now he will be savings for his marriage and after his marriage saving will be to buy a flat/plot and i belive by then he will be around 35-37 with no savings. But around 10 years of his saving spend on his and his sister marriage.
    Another friend of mine who utlised almost his 10 years investment of his and his wife to buy a flat in banglore .

    I’m also in this category who utlised nearly 80% of my investment till now for resposnbilty only diff is i have 2 running SIP which i never break.

    What do you suggest to these type of people for retirment planning?


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