Most important tool for achieving Finzaadi

Earning financial Independence is quite simple.

1. You earn income
2. You save maximum amount you can
3. You invest you saving.

Right.  So it’s the simplest of plan to be wealthy and more important be Free!

So the first step is to earn and do you know the most important tool to earn financial independence in India – your career.

Your career is defined by your job, either a government job or one in private sector. Having a good and stable job is essential in India Society and a person without a job doesn’t command much respect in society and most probably is unmarriedJ.

First step is to earn

Now if you know or have read about financial independence or personal finance you would most know the key to success is ‘Spending less than what you earn’. This means to have stable finances you need to –

1. Earn something
2. Spend less than what you are earning

There is no denying that these two are perhaps most important steps needed for Finzaadi but what is also important to grow your earning. If you focus on growing your earning it becomes that much easier to save. The gap in you earning and spending is what you invest which in turn will drives your wealth. Focusing on increasing your earning is a very important aspect of achieving Finzaadi.

How do you earn in more money

1. Your career – For most Indian, this where most earn their income from. You study hard, score good marks in exams, enter into a good college and final step is to get placement in a multinational company through campus. That is the ideal scenario parents and student dream off. Alternative is go through lots of entrance exams for Government jobs and if you eventually manage to crack one you are all set for life. At least that is how most think. Your job is the most important tool of wealth creating. It is a large part of your financial success as it will provide you with significant income and provide both mental and financial stability for many years. This requires significant time and attention.
2. Second job – this could be a side hustle that you do which produces some income. In India, most jobs are either very demanding or if you are living in bigger cities the travel eats up most of your time. In many companies in India, polices are restrictive to accommodate a second job due to possibilities of conflict of interests. Nevertheless, it is an option to earn decent income and there are many hobbies turned into second income I see around, especially with people who have bought DLSR’s J
3. Side Business – Business has its pros and cons but you cannot deny the earning potential. ‘Business me hi paisa hai’ is the saying you would hear a lot in India. If the company policies allow and you find a business you are passionate about a stable job works as a perfect hedge.

Now we do have other ways to earn like interest you receive from your fixed deposits, dividend on stocks or rental income. However, they are cash flows from your investments and hence I think should not form part of the earning part. Earning is all organic and should be defined by only the efforts you put in.

So if you see, you career is the most important asset you have and the most important ladder to achieve financial success. Manage this well and you will be rich.

Your career is biggest financial asset, worth Lakhs and crores of rupees

Yes, it is true. You would think the asset like you home, investments are the biggest assets but you are wrong in this assumption. All of the financial assets are the results of money that you have earned. So it is worth more than many people give it credit for.

Consider this –  if you begin your career with a 3 lakh per annum (yes I took a standard Indian IT company example) and if you get a raise of 8% every year over a 50 year career you would end up making 2.20 crores Rupees.

And I consider this as base case scenarios where raise is very reasonable with no case of onshore opportunities, big bonuses or career switch with a hike. So you are a ‘crorepati’ with just your salary!

What other asset do you have with can be worth over two Crore Rupees. In fact it would be the other way around. Your financial assets will not be more than you career. only possible way is either you have inherited wealth from your parents or have a side business or you have saved and invested smartly. (Side note – can you check if your financial wealth is more or less that the amount you have earned in your career as yet).

Manage you career and it will make you a crore more

Think if someone is to come now and give you 2 crore rupees? What will you do? I think most people will first freak out and then do whatever they can to manage and protect this money. Most will also try to grow it by investing it. If you have a career which is worth that much then why wouldn’t you spend some time and money growing it, making meaningful progress and more importantly protecting it.

Here is the beauty of it, by just slightly efforts you can differentiate yourself and can increase the value of your career by a lot. Just see the numbers again with slight changes

• You just increase the increment numbers by just 2% and you would end  up by making almost 3 crore.
• You increase the increment amounts to 12% and you would get 4 crore
• For a top performer rating 15% is not uncommon. The number is 6.3 Crore!

You see, just 1 or 2 percent incremental increase in your salary each year matter and can make a very meaningful impact on you today corpus. And if you put real effort in managing your career you would be richer by few more crores!

Do you think achieving 12% or 15 % average raise is can be done? I think we all can. Would it require efforts? You bet!

Your career need not be mundane

It’s not just the money. If you are doing something which takes up bulk of you life it should be something that you are interested in. Though I preach for Finzaadi and financial independence it is not because I don’t like my job. On the contrary I am excited to go to office every day and that is how it should be. It only happened when you grow in your career. My first job wasn’t as exciting however it was a lot of learning. My subsequent jobs gave me a perspective of what I love and what I don’t. It enabled to me to grow as a person, be more mature. More I grew in my career it gave me opportunities to do more interesting and fulfilling work.

Which position would you choose, an entry level position or a manager, AVP or VP level. Most will choose the later.

Enjoy what you do and if you don’t then find one- Finzaadi

It’s never too late

You can grow your career no matter at what stage of you career you are in. You may be 35 and think this all is not applicable for me, and this is only applicable for those you are just beginning you career. Well think about it –

• If you are happy with what you do then going the extra mile is not going to be an effort rather it should be fun and fulfilling. But just doing this would will make more money and have a bigger corpus for your Finzaadi.
• You would think is it worth putting effort at this stage of life making much of a difference. I think if it would. It would add more wealth to you corpus, will challenge you mentally and possibly physically and provide new goal to your life. 

In my 13 years of professional career, I have seen very few people putting a meaningful effort to progress in their career. Most are either not interested or have some or the other issues with company or their manger. They find reasons to be unhappy and not be motivated. Come increment cycle or promotion cycle you would see disappointed faces and subsequent dialogue like ‘Itne me itna hi kaam hoga’. The whole approach towards works is wrong.

The culture we live in is very materialistic.

You work throughout the year, spending most of your time awake, away from your loved ones at work and the only thing that you expect is a promotion and a raise. I don’t want to say that it is wrong. You should expect them if you are working hard.

The bigger picture is you should be improving yourself, learning every day. That should be your primary goal.

Focus on things which make things better. Better for

• your colleagues,
• for your company,
• for your manger
• More importantly for yourself.

If you do this, you would be rewarded automatically. If you are not then you are already worth more and you will find a place which pays for it! Watch out for more to come on this topic.