I know of people who need the latest iPhone even when they live on rent. This is a stark example but I’ve seen people in Arambol needing beer when they cannot buy decent avocados.
That is wrong. The way I was brought up:
- Food first. My parents would let me spend any amount of money on food.
- Food does not include junk, packed, supermarket food
- Shelter. It is hip to say its cheaper to rent than buy. But my parents always taught me, and I can see why their paper net worth may decline but their peace of mind is kept by the fact that they own a home. Not very prudent as per finance gurus, but it works well in uncertainty.
- Learning: Spend as much money as needed on education, courses, tutors, anything that makes you a better person.
- Tools: Get the best tools for your job. Do not compromise on that. But then use your tools like a craftsman. In India, we have a day where people worship their tools. This is important because you know this is the source of your growth. They may be inanimate things but I absolutely take care of my laptop like it is my mate. It is a source of immense integrity, focus, and craftsmanship.
- Materialistic comfort: This is the fourth thing. I still don’t own a car. I have enough material comforts but I would love to get rid of them one by one. This stage comes when you have “moodi” (in Gujarati) or “capital” to find it.
- Travel: This is one thing my parents were unaware about. In my mind, once you have a decent amount of capital working for you, travel is the biggest mind-opener. By travel, I don’t mean tourism. Slow travel is what I prefer. But each person is different.
- Lifestyle upgrade: This is when your capital is growing. For example, my Dad has enough capital to live an upper-middle-class lifestyle and enough income to not worry about most things people in India are worried about. But he doesn’t upgrade his lifestyle unless he knows he has enough capital that is making enough money to 1. Grow the capital. 2. Spend some extra. Capital must keep growing. If your capital is growing at 8-15% in a country like India in 2020, you’re losing your wealth.
- I could write a book on it but just to be clear. Having a few million dollars in my bank would not make me change my lifestyle. I will still travel by trains and not buy a car. A million of capital is not much in this time.
The priority pyramid needs to be in our DNA. Every time we see an Ad or a discount or another shiny new thing, we need to know our “aukaat” or “stature”.
The world may think I’m rich because I have the latest phone or I wear an expensive watch, but my financial decisions are not to impress anyone in this world. They’re to make my family grow over centuries.