When Jagannath Moorthy got his first salary as a 20-something coder in 1993, he started on a journey of savings and investments which is bearing him fruit even today. “It was just Rs. 5500, but that was a huge amount in those days. The first thing I did with that money was buy a savings and investment plan,” he recalls with a smile.
For Jaggu, as his family calls him dearly, his financial decisions were tied to emotions. It wasn’t just about the numbers, it was about his love for his family - his mother, wife and kids. When he was a teenager, his father passed away, leaving the family in financial turmoil.
Jagannath Moorthy, started investing right at the very beginning of his career.
“My father lived in the moment. He did not think too much about money and enjoyed life. But my grandfather was the exact opposite. He taught us to live within our means, save for the future. All this had an impact on my life, I was exposed to both ways of living. So when my time came, I chose to be diligent with my money and be financially independent,” he says. Ever since, Jaggu and his family have traveled the world and lived well. “I wasn’t too stingy, but I was careful. Now, we are comfortable,” he says, hoping he could even retire early if he wanted to. “Living within our means and investing a part of the money we earn - these are two important lessons in life,” he says.
Ask Hyderabad-based corporate lawyer Vishaka, and she says that similar sentiments drive her financial decisions too. With her mother having inculcated in her a habit of spending carefully and saving wisely, the 27-year-old says that even when she got married to her partner, it mattered that both of them had the same ideas about money and investment. “Apart from the fact that I loved him, it was important that he was financially sound. I have always been conservative in spending, and it did matter to me that he was also thoughtful about money. We discussed these things before we got married,” she says.
Vishaka says that financial savings makes a person independent, and that freedom fosters a better marriage. “It helps in a relationship. We plan our future together, but when we are not dependent on each other, there is a feeling of equality which leads to overall satisfaction. We also know that on a bad day, your partner has got your back,” she says.
Forty-two year old techie Riyaz Mohammad agrees. “Financial freedom is very important in a relationship. The freedom allows us each to do what we want with our money. My wife prefers saving her money in postal schemes and other safe options, but I like to experiment and be adventurous. The risks I take are mine, her money is safe, the way she wants it,” he says.
Riyaz Mohammad is a salaried IT professional, but has a wide range of investments in his portfolio.
For an IT professional, Riyaz’s financial portfolio is an impressive and diverse set of investments and savings, ranging from insurance plans to equity-linked wealth funds.
I want to invest, but how?
One of the major barriers for youngsters who want to invest is they don’t know how to start. There are just too many options, some of which are risky, and many don’t know how to assess the risk.
Riyaz says that a majority of the people around him fall into the category of those who earn well in traditional careers, but do not have the bandwidth to research markets, assess risk and invest. For them, an insurance scheme which is also an investment plan is a good first step. “I do have plans like that. Insurance is critical for everyone, we all know that. But sound investments need research and not everyone can do it at first, so such plans are a good idea,” he says. Jagannath points out that such plans are like “killing two birds with one stone” - insurance and investment.
For those who can take the time out to research and put in the effort, the world is your oyster.
Vishaka says that we must focus on investing in assets which appreciate. “Do you really need that car? If yes, sure buy it. But remember, it depreciates in value, and the money is of better use in some other investment which appreciates,” she says. Her second tip: start with investments which are tax-saving.
Riyaz says that if someone wants to move beyond basic investments and make more out of the money they earn, they need to research and make diverse investments. “You need to be able to take risks, and also know how to minimise risks,” he says. “I don’t stop with the basic savings and investments, or just a house. I also have stocks and mutual funds. I make investments by buying land pockets where I feel value will appreciate quickly. I also have small business ideas and partnerships that I invest in,” he says.
You have to be willing to learn, he says. “This is all due to my curiosity. I learned about currency markets, stock markets, real estate and startups. I understood the game, and then I invested. Some of my investments have worked wonders for me,” he says.
His top tip: Don’t be emotional about your investments. It is about numbers. Invest safely, and if you are taking risk, know when to cut your losses when things go south.
The dream to retire early
While making the most of their investments today is one goal, all three of them also have their future in mind - they do want to retire early.
“I have thought about it a lot. Retirement is two things: money and being mentally prepared. If you want to retire early, say even at the age of 50, you need to make sure you have money to spend even if you are not earning. The other thing is the mental aspect of retirement - are you ready to retire and do ‘nothing’?” asks Jagannath, who is now on sabbatical. While he is in a pretty good position financially, he says he is not quite ready to quit yet. “But what is important is that I am in a position to do it, when I want to,” he says.
For Vishaka, it is still a work in progress. “It is not about quitting work, but I wonder if I want to be busy all my life. If I have enough money, I would like to spend more time with my family, my mother especially. I want to sit down and truly listen to her, you know,” she says.
“My future is a lot about my children,” says Riyaz. “Yes, I want to retire early. I might get there in about 6-7 years. But to a large extent, my children are the fulcrum of my financial decisions. Sometimes I stop before taking a risky financial decision, because of them. They blunt my aggression. I hope all my savings and investments can provide them with a good life,” he says.
This article was created by TNM Brand Studio in association with HDFC Life, and not by TNM Editorial.