Just think if you don’t have any liability then what would be our life?
If you see human life, start from childhood we are engaged with the things which come by force like education, learning, brought up culture and lifestyle. After childhood, at the starting of young age at around 15-18, we actually start thinking about ourselves. At this age, we start constructing our life as an individual and making ways for our upcoming direction of life.
What dreams do we have?
In this young age, having dreams about life is making us more adventures, explorer and once we start exploring life, we are getting trapped with the liabilities which become dreams of most people. But the reality is that these are not dreams, it’s liabilities either your dream house, your dream spouse, your dreams kids, your luxury, your power/ position in society and many more things which look like a dream but in reality, it is a bunch of liabilities.
To fulfill these liabilities during your age, you get busy chasing these and thinking this is real life. Slowly life is become more like a routine or monotonous and we are just missing the liveliness and essence in our life and getting trapped in the rat race.
This is happening just due to our brought-up culture which telling that this is a general way to live a life. With time, our un-satisfaction is growing up even after getting many things in life. This is just happening as we are getting the things in life as liabilities for which we are struggling hard and facing real hardship of life.
Why these are liabilities?
A liability means your earnings are less to effort it. If your earning is good enough to effort it then it is not a liability. So it is very important that one should take out these from the list of liabilities by increasing your affordability.
What are the major liabilities which impact our whole life in a big way?
If you see start from our adulthood till our end of life, we have four big liabilities which keep us financially & physically engaged whole life and we are spending our major part of earnings of entire life to fulfill these four liabilities. Whole life gets engaged to earn/collect money for these liabilities.
These four liabilities are
- Dream House
- Kid’s Education
- Medical Security
- Future Security
For these four liabilities, we are always worried and these are eating a major chunk of money. We are earning, saving and spending just to get these liabilities.
Let’s understand in detail how these liabilities are eating our hard earned money and if we get these four things then our life becomes more relaxed and we can become financially stress-free?
1. Dream House
This dream of having a house now a day’s become major liability of life. First people buy their house by putting their hard saved money as down payment & loan and later to upgrade the house again they are getting into the trap of loan. Some time paying these loans are taking 15-25 precious years of our life. This liability always keeps our mind in stressful conditions for a very long period. This takes good time of our life. In this long time, people are busy clearing their debt liability instead of exploring life.
Very few people are lucky who got house from their parents or ancestors as a gift. If you can free yourself by this liability at very early age then your life will be much stress-free.
2. Kid’s Education
Our expectation from kids now a day’s become a big chunk of liability. Every parent wants to have their child in an International branded school where since pre-schooling days, the cost of education is more costly than higher education.
A kid needs at least a minimum of 18 years of education to become a graduate starting from Nursery, Jr. KG, Sr. KG, 1st to 12th standard and further three years of graduation. This entire 18 years required for one kid to complete basic education and if someone has two or more kids then these 18 years stretch to 18-25 years.
So our large part of life is going to fulfill financial liabilities of Kid’s education other than physical efforts. Even after spending on these 18-25 years, there is no guarantee that your kids will start earning just after completing their education.
If someone is having a dream that their kids will become a doctor or study abroad then the cost of higher education becomes a liability as a loan or debt.
Your major chunk of life is just engaged with this major liability of kids education which continues every day, month, year till your cross age 50-55.
3. Medical Security
This looks like a small liability but for many people it will become a major financial liability if someone in the family gets hospitalization diseases or is met with an accident. Even many people have spent their entire life earning to save the life of their family members.
So if someone is not having any medical security then this is a very major liability that needs immediate money to save the life of the family member. For housing or Kid’s education liabilities, these need money in the long run like 15-25 years but in case of any major medical emergency, one should need immediate money which is difficult to arrange suddenly.
So, this liability one should take it very seriously.
4. Future Security
Everyone is thinking about their future security and this force us to save money for future emergencies. Future security is a very wider word which is differing person to person. As we are progressing, our cost of living increases and the same time the corpus amount from future security also increases parallelly.
As your future security amount increases, now you have to save more money to match your progressive lifestyle. Slowly this future security corpus becomes your liability and just to reserve the corpus our chase for money continues till older age.
So these four major liabilities keep us engaged the whole life and an Indian middle-class citizen’s life is roaming around these major four liabilities.
Is any Government helping us to secure these liabilities?
In many western countries, people are covered with Social Security which will be provided by the government like free medication/hospitalization, education stipend, good average earning of the citizens, job security and retirement benefit like a good amount of pension. That makes their citizen’s life good & easy.
But in a country like India, a middle class & a rich class are not covered with any social security even after paying hefty taxes lifelong. In case of any disaster in life, no government scheme will support these classes.
So who will take care of these liabilities?
In India head of the family is taking care of the liabilities of their family. The dependent may be spouse, kid’s, parents and siblings. The joint family culture is eloping and the nuclear family concept is spreading across the population due to which head of the family burden & liabilities are increasing and he/she is spending his/her entire life just to fulfill the liabilities.
In India, that becomes a lifestyle of most people. These liabilities look never-ending and we feel there is no option other than fulfilling these liabilities.
What are the major reasons due to which we feel these as liabilities?
Few major reasons are responsible for these long-life responsibilities.
- No support from the Government as Social Security.
- The average monthly income of an Indian is very low.
- The purchasing power of an Indian is becoming low day by day due to increases in commodity prices.
- Housing becomes an investment sector where people are investing for multiplying their money that is why housing becomes a big liability.
- School education has becomes an investment sector where business people are investing money to build education institutes to fetch more n more money.
- Land cost is become so high due to which no one is donating land for educational Institutes.
- Week infrastructure built by the government like Govt. Housing, Govt. Schools, Govt. Collages, Govt. Hospitals where getting basic facilities are very difficult.
In any country, the life of citizens is good where Housing, Medication & employment security cover are easy to get? But in India, it is not easy to get these security covers.
Is any way-out?
In India, there is the only way left that one should create things for Self. No one else is going to help other than if you got something from your parents or ancestors.
Firstly in our entire journey of education since childhood, no one is teaching about personal finance and how to plan it. But now things are much easier to know in this internet age.
Secondly one should be clear about their money goals and what he/she wanted to do in life. If you are clear with your money goals then you can start planning your professional growth and earning goals. Both are equally important to achieve money goals.
Now your money goals should have these four pockets to collect the corpus for Housing, kid’s education, medical security and future security. Accordingly, you should plan to collect your corpus by your savings. Same time if you learn to invest then you can multiply your money at faster pace and can be free of all the major financial liabilities in early age. Most important that your life should be debt- free.
How to collect the Corpus for all four pockets?
There are ways & means to collect the corpus for your money goals so you can able to achieve at early age.
- By Earnings
- By savings
- By Investing
- By creating multiple sources of passive income
- Use your talent to earn money
What is more important to do?
Being an earning member of the family, everyone is earning & saving money but It is more important that you should very much aware about your financial status as on date and how much earning you are getting every month from your money, investment and assets. It may be Rs 1000/- per month but more important that you should aware. Which most people don’t do and this discourages them to plan and not being able to design money goals for these major liabilities.
This assessment will help you to monitor your money goal and accordingly to can plan your investment properly and can fetch more return from investment.
If we focus on these four liabilities and accordingly plan money goals then getting things in shape will be much easier. More important that you should be aware of your present financial status even your single rupee and keep updated. That will largely help you to accomplish your financial targets.