"I got the package of 10 Lacs per annum, got the position of manager.” “I’ve studied hard to reach a good percentile which results in selection in an MNC company.” “Now I'm planning to book a home and especially 2BHK.” “Also changed the phone with high configuration and latest model..........” These are the few common statements of the upcoming generation who are just trying to enter into the trap of financial illiteracy which we all will understand at the end of this small blog.

The Most common mistake we make is to invest without financial knowledge. We have different ambitions right from our childhood and gradually they become the priority once we start earning. Already we have told our short term/ long term goals to our nearby people and they themself start reminding you what your goal was. So, now it becomes a status issue and we finally dive in the ocean with no direction and destination.

Even when we try to prove to our parents why they are far behind from competition, what is right and what is wrong, our parents have started from nothing, neither home, car, bike or bank balance. They live conservative because the situation was of that type only. But still they made something due to which they have prestige in our society. No matter whether they have enough assets or not, they taught us and sacrificed everything to reach us to this destination where we are making 10 Lacs per annum even if they are not that much educated.

Let's come the main point, I'm saying about the situation created because of academics and financial illiteracy. We need to understand the process of making money rather than working for someone else’s dream and earn money. If you understand the exact difference between ASSET and LIABILITY, money will work for you in latter stages even when you stop working. Otherwise, you will get trapped under financial crunch and the situations like COVID-19 will make you poorer.

I'm giving a simple example of person who purchases liability in his early golden days.

Package per Annum;10 Lacs (for an example)

• Budget of Home:70 Lacs
• Personal Arrangement: 20 Lacs (using all the saving of entire family)
• Bank Loan; 50 Lacs
• Other expenses:3 Lacs (from credit card or unsecured loan from friend/ relative)

These was simply over budgeting scenario. The journey towards economic crisis begins from here.

Per month income: 84k (as per package per annum 10 Lacs) and expense:

• Bank EMI :35k (Approximately)
• Car Loan:15k
• Family expense;15k (including lightbill and all)
• Personal expense:10k (travelling, mobile bills, credit card bills etc..)
• Balance amount:9k

This journey goes next 20 years and till that time we would have reached upto the age 50.

So, my question is, what we have achieved till that time? The answer is only one liability (because that home is not giving you rent, you are staying in it). People think that the price of property have increased and made them profit. But they don't calculate the actual cost of home (actual amount + interest).

My genuine suggestion to the upcoming generation is to take the financial education while you are taking academic qualifications parallel.

This might make your life more happy, futuristic and less stressful. I'm not the expert of this but I understood the mistakes which I have been made in past and correcting till now. So, I want you people to get early information to avoid your mistakes

This is my genuine attempt to be aware about the need for FINANCIAL LITERACY along with ACADEMICS