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  • Jaspal Kahlon

Revisiting my behavior towards Money

You may call it the impact of reading the first chapter of the book, The Psychology of Money. I am refreshing my understanding of finance and my behavior towards it.

How is my thinking and feelings towards money evolving? I know I started it on a wrong note but Am I now in the right direction?


But before that a quick note on recent conversations I was part of:


a. Investing in real estate in India does not make sense. This is said by an entrepreneur 8 years younger to me. And, I agree to him from my personal experience.


b. Buying a house is a sensible decision since it’s an investment. Better than investing in FDs at banks, atleast.


c. Rentals are waste of money. Better pay to own a house and convert the expense into an investment.


d. You build assets by creating liabilities. So if you want to build assets, accept the risk of having liabilities. This is an idea talked about in the book, Rich Dad, Poor Dad.


Unlike in early 30s when I was tempted to defend and prove my viewpoint, I am more prudent at 45, turning 46 in 5 months.


My experience with Money is unique and surprising to me. In mid forties, I tend to have a more holistic thinking, weighing all aspects unlike when in my 30s.


What I learnt from my experience is:


a. Your profession is a decisive factor in your wealth creation goals- employee, entrepreneur, inheriting a family business, into performing arts, etc. etc.


b. What personality type you are? A risk-averse looking to save enough to lead a debt-free modest life? Or indulge in luxuries but with little risk? Or ready to take risks to get rich.


c. How often do you think about money in a day?


d. What have you inherited? Both in terms of wealth and attitude towards saving and wealth creation from your parents.


e. What is your behavior towards towards life and materialism? A spiritual person is different from others. A committed parent is different from an alcoholic.


We have heard of stories of millionaires dying bankrupt and also of poor dying rich.


My only concern is that money is talked but not discussed in our society.


I have heard friends talking about someone they lent and not repaying or someone who cheated them. We hardly, may be wrong as I do not socialize much, talk about money openly. There is a ‘secrecy’ about it.


Who cares what you saved or own or inherit? It’s your behavioral attitude towards money that is to be discussed. This is more important than discussing politics.


Recalling my childhood, my parents and grandparents hardly discussed about money before me. Their only questions/expectations were to have a ‘debt/free life’. So financial prudence that I inherit is being debt-free.


Though, I have struggled with debt for first 15 years of my life- credit card, home loan, and vehicle loan. But bow, for the first time since I started working, I am debt free.


My parents and grand parents never took a loan or borrowed. I did but this fact has governed my financial decisions. I may nit save enough but don’t want to borrow.


This is contradictory to what I did nine years back when under the pretext of saving tax, I bought a house with 80% home loan and 20% as a personal loan. My ordeal had just ended when I was free from my personal loan obligations in first five years and yet I desired to prepay the home loan part as well by selling the house.


But Am I really debt-free? I have my elder daughter’s education to pay. And, to pay for my younger one in 5 years.


This continues... I end this topic in due course


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