Our need for balance between today and tomorrow is essential. For our dads, their tomorrow was more important than their today.
While we treasure and cherish our relationships, days like these help us to be grateful for having them around. We have our disagreements and our debates with parents; but at the end of the day, they want the best for us.
While valuing everything that our Dads taught us, I am attempting to write how we are different and hence need to behave differently from them. Our environment is different, so is our exposure to information. The aim of this article is to celebrate our differences, whilst respecting them.
The first advise most people receive from their dads is to start an insurance policy as soon as they start working. Now while well intended, this isn’t necessarily a great start. They are right in ensuring that since there will be a commitment to save, we will spend less. But, today there are many more ways to save money rather than commit to a small insurance cover for life, where we make practically no money at all and in our overall scheme of things even a few years later, holds no real value. It just acts as one of the papers lying around and one with not much value.
The second advise we get is to buy a home. Now, again a roof over one’s head- I cannot put a value to the security and status this brings us. But, with our jobs taking us to different cities, if not countries- this becomes a commitment which needs to be taken care of and being away and taking care of tenants, taxes and EMIs isn’t really a piece of cake. The other aspect here is we are moving towards a generation that wants to own nothing (not much) and have a life which has experiences- this is more like our nature- considering we were nomads to begin with. So, buying a home becomes an anchor around our ship, while we want to continue to sail.
The third advise we get is to pay off our loans as soon as we can. Now, this again whilst great advice theoretically and in isolation, isn’t really that great when combined with the reality today. The fact of the matter is if we want to make our money work for us, we need to give it time to compound. So, when we have surplus monies, investing them rather than paying off that home loan is a better idea. Home loans are also among the cheapest loans available so that means we are getting money for as low as 8-9% and we get tax benefits too- both on the interest and the principal. So, before you look at prepaying that loan, look at your investment portfolio too. There isn’t a great way to look at yourself if your savings till date is zero and you are loan free at 42.
Our need for balance between today and tomorrow is essential. For our dads, their tomorrow was more important than their today. While this is just a sentence, its actually how we live and hence becomes our guiding principle in life- so we are more different than we think, but the good thing is we are also more similar than we think. They want the best for us, like we want for our children.
Happy Father’s Day to all the Wonderful Dads!The writer is founder of Investography