7 costly mistakes young earners make with their finances, investments.
When it comes to our investments, we all make mistakes. The standard connections in these children’s lives, on the other hand, were fascinating.
The first is that you are not taking your college loan seriously. Before doing post-graduation, they all took out student debts. The parents are the loan’s guarantors. They had a slight reprieve until the loans became due. They were, however, preoccupied with spending their newfound wealth on themselves.
Second, avoiding huge bills and expenditures. One of them had been overpaying on his electricity bill for years before complaining and having it fixed; the other had been auto-debited for memberships and updates on his credit card that he had never used and had not bothered to cancel.
Third, not paying enough attention to one’s credit score. They only realized how unconcerned they had been about their credit score when they required a loan. Unpaid university loans, delinquent personal loan EMIs, and ultra-conservative credit card usage all came back to bite them.
Fourth, putting too much money into illiquid long-term assets. One of them maxed out his 401K, while another did the same in India, contributing a VPF and PPF in addition to the PF, while yet another just bought long-term bonds.
Fifth, not having enough or the correct type of insurance. Some of them wore Ulips on which they had no idea how much money they had accumulated. Some of the policies were for a relatively short period.
Sixth, they do not invest the time and effort necessary to learn about personal finance. Many people even had their simple tax returns outsourced. They failed to review their bank and credit card statements.
Seventh, they did not talk about finances with their wives early in their relationship, which is the seventh reason. Even though they were aware that people’s attitudes regarding money could differ, they selected the path of least resistance. Your money was different from mine; the accounts were other; the spending was additional, and no questions were asked.