There are many roads to the poor house. Not just for an individual in his personal life but also how a company can to be taken to bankruptcy or the doors of bankruptcy!

Let me enumerate what I have seen:

1. Get used to a high spending lifestyle – far beyond what one person on one / two salaries. So buying expensive things (camera, phone, etc.) and things with a huge maintenance cost (airconditioner, car, etc.)

2. Living for Now: People who cannot even estimate sure things like child’s school admission, college education, marriage – shock me. Not having money for emergencies is bad but not having money even for such things which EVERYBODY knows will happen is so damn stupid.

3. One of the stupidest things that people do is buy a house beyond their current needs. The whole world tells them that you buy a house only once, so buy big. Then they struggle with the EMI for a very long time.

4. Living off Credit Cards. And when one card is Maxxed out, get a new one! I know a few (very very few thankfully) people who live off 2-3 credit cards. Rolling the credit, rolling the payments, etc. is like a game for them…and they get hurt suddenly when the cycle stops.

5. Not having enough medical, car, insurance. When one medical emergency or an accident can just hurt them so bad that they do not where to look. This cuts so viciously that it takes them back by a few years if not to the poor house overnight!

6. Paying the minimum on the credit card, phone bill (OMG did you say?) , and refinancing the home loan for a longer period.

7. Postponing Investments for Retirement. If in your 30s if you think retirement is far away, you have not heard of ‘time flies’.

8. Watch too much television and believe those beautiful people will make money for you.

9. One Television Anchor told me “Subra I am doing my job well. I look good and can read off fast from a teleprompter – and that exactly Is my job”. If you think they are experts, something is wrong with you.

10. Trade like some rapid fire sale is going on! Trading is very good for the broker and does not make money for most amateurs. You need to move with the professionals to know how much they laugh about clients whom they call “Voluntary Donors to the Broker Welfare Fund”.

11. Postpone whatever sounds overwhelming. Even companies whose Boards do this go to dogs. Surprising how a collective body can refuse to see the obvious signals.

12. Whatever ‘investments’ are made are made just to reduce taxation NOW…so even here they make sub optimal choices like bank deposit for 5 years…without realizing that it is very tax inefficient.

13. Financial illiteracy as well as innumeracy is a terrible combination, but very common.

14. Not understand own portfolio and keep falling prey to the same bank, same RM, same….etc. and look like an idiot when queried about their investments.

I can only feel sorry for such people, and my advice is about 4000 years old:
“Work, save and invest”. Believe me it still holds. I would add one more to this – Learn to counter the obfuscation by the BFSI – and remember the regulator protects the powerful. If you are reading this blog, the regulator is not for you