It was well past the noon and the chilly winds blowing from the just-then-mounted central air-conditioner system made the environs chillier. The weather in Hyderabad too was cool with the wintry pre-evening winds blowing cold. It was exactly a month since I was revelling in the joy of my ‘chivalrous’ act of conquering the contest and landing the job that’s glamorous in its own way.
It was robotic practice for the newspaper publisher I had joined in 1988 to make the payment of salaries on the last working day of the month. The company never missed this cut-off day for the five and a half years I had served. Even now I hear that they never miss the payday date.
I had signed on a 20-paise revenue stamp and took the oblong-sized pink cover in which a cyclostyled proforma pay-slip with details of break-up written with a pen and cash were packed. It was my first time, my first salary. A remuneration for my services for one full month. My eyes glittered and the clerk may have seen many of my ilk in his over five years of stint by then.
It was Rs 700 of training allowance after a deduction of profession tax of Rs 20 and ESI cutting of Rs 30.
I vividly remember this as this was the first time I was earning money of my own in my life. I was barely 19 by then. I am not too sentimental in the sense that I don’t belong to the genre of those who think they should give some money to God, buy a saree for the mom and a pair of clothes for the dad with the first salary. As the days passed by, I moved to a shared bachelor accommodation from an aunt’s house, as my parents lived in another town.
Then life began to teach its lessons. Contribute your part to the house rent, electricity, and maid. A month later, the expenditure began to pinch. So, buy monthly card for lunch and dinner at a mess. I found the taste irritating, the smell of food nauseating. So, I moved on to another mess. Meanwhile, smoking was slowly turning into a habit.
My earnings were barely sufficient for my lifestyle and ego always put a lid to my urge of asking my father for a help. But, I knew where to cut corners. I managed for six months. The stipend rose to Rs 1,000. Since there wasn’t much of inflation, the hike helped me stabilise.
Six more months rolled past me without much of a hassle, but I could hardly save a penny. As I completed a year, my services were regularized. As if it was a godsend, wage board recommendations came into force and my pay went up to Rs 2,500 a month.
This is when I should have become wiser and begun investments. A friend nudged me to buy a couple of acres of land in what is now Hyderabad's financial district. I flatly refused the idea, for two acres – that then cost Rs 16,000 – seemed a useless investment then. If you are destined to live a mediocre life, millions of stars, zodiac signs and wise advice just don’t work.
Dame Luck doesn’t come anywhere near you. My story isn’t different. In retrospect, when I see what is standing tall on the piece of land I ought to have bought, my regrets are unfathomable.
Barring recurring deposits, post-office savings and some funny small savings schemes offered by banks, we don’t even have knowledge of investments. When I say we, it is the people who belong to my class and are in my range of earnings, irrespective of what they are doing.
So, what to do with that extra money? Another friend suggested that I buy a 2BHK apartment. Wisdom got switched off by the Rs 2,500 paycheck. So, the advice on prudent investments went haywire. Just then, State Bank of India had come up with a mutual fund schemes under the name ‘Magnum’. Bank staff were not ‘user-friendly’ those days. Bank branches used to cover us up to our busts and the staff used to look up very reluctantly at customers. A smile itself was scarce, leave alone conversation and financial advice. So, I never understood what a ‘Magnum’ was.
Meanwhile, a poster about two-wheeler loans drew my attention. I approached the section concerned and found out the details. In less than a week, I became a proud owner of LML Vespa 150 NV, with a Rs 500 premium for the navy blue colour. So, the add-on to my monthly expenditure was my scooter loan installment and petrol. Some extravagance on clothing, cosmetics, perfumes, shoes began gripping. So, the cost of bills spiralled. Annual bonuses and incentives were given to dad for building a house in our native town, as my contribution.
And suddenly, I had to quit the job. I was 24. A month’s pay on hand was fine to keep my confidence levels up. The last bonus amount was used to clear off the loan so I did not have much liability. But at the end of five years, what I saved was zero. Yet, I was not in the negative. Meanwhile, there was a windfall in the form of a temporary assignment from an international news agency. A week-long work fetched me an amount equal to my six months of earnings.
After a month, I secured another job, which offered hardly any hike to my erstwhile pay. But as it was prestigious and as I was in dire need of a job, I took it up without second thoughts. I made my first short-term fixed deposit in Bank of Baroda, from the Rs 15,000 earned from a foreign assignment.
Meanwhile, I married at 26. I purchased everything needed for a household well in advance. It was turnkey furnished house for my wife to take charge. But, lack of proper planning of expenditure pushed me into a situation where my monthly salary of Rs. 7,000 was barely sufficient to run the show. Saving grace was that I did not have to raise any loan or borrow money from anyone.
Then, a change of job and place. By then, economic liberalisation has begun settling down in India. Instead of looking to invest in equities and funds, I began to swing more towards the consumerist side of the personal financial pendulum. My savings and a hand loan from my mother – in equal parts – summed up to Rs 80,000 -- and the amount was equal to 5 times my salary – which I used for purchasing my first car (a pre-used one).
Family size got bigger, aspirational values changed, opportunity to rub shoulders with the rich came by and so did the confidence to stretch beyond limits. The thought process naturally tilted towards buying an apartment with a housing loan, as it would get income tax rebate. Thus, I entered the vicious circle, hardly caring for any savings.
Five years later, I was promoted to my dream position and transferred. As the chance of coming back to the city where I bought a house were nil, I had to sell it and it was the first cycle of downturn for the economy. After repaying the housing loan for three years, which largely goes only to debt servicing, I had to sell the house on a cost to cost basis. A major disappointment with a lifetime investment, that was. The proceeds had to be spent in clearing the loan and I found myself empty-handed at the end of the deal. I was 34.
The fat paycheck helped me raise a personal loan from another nationalised bank. This was diverted to clear off a hand loan. Then a transfer came by at my request. This led to an imprudent decision of buying an independent house in a locality where the costs were high when I bought and plummeted soon after the transaction was done, thanks to liberalisation. I was earning Rs 70,000 a month by then. I was 39.
This reminded me of one of the oft-quoted remarks of George Bernard Shaw: “Fools build houses and wise men live in them.” In my case, I began living in it, though I was not sure whether I was wise or foolish. I had to quit my job when I was 40. The entrepreneurial bug was at work. I launched “a well-conceived, but poorly implemented” enterprise with no investor pitching in and exhausted all my terminal benefits.
Misfortune danced till I dropped, leading to a serious health problem. A medical insurance purchased some two years ago and renewed regularly came in handy. It was a nice feeling that Rs 3 lakh insurance could pick up the entre medical bill. But, how to run the family? After recovering, I took up a job and went on changing jobs for a variety of reasons, but never stopped earning. I make a very decent amount a month, now. But all the earnings are just sufficient to clear that perennial car loan, housing loan and manage household expenditure and some personal pleasures. Added costs are medicines. I am 48.
At least now, shouldn’t I plan for my retirement at 58? Where do I invest? And, how much should I? How much would be enough for me to maintain my current lifestyle, when I stop working? Should I buy a term insurance to take care of the family that I would leave behind some day? If so, for how much? With my pre-existing ailment, how much premium should I pay? If I am lucky to live longer, how much should I get per month from the pension schemes?
These questions, if addressed between 25 and 30 years of age, would help one live happily ever after retirement too.