No right way of handling money
Each one of us handles money in a different way. There is no right way or a wrong way. I meet IFA who call themselves ‘coach’. I find it odd. Not that I have not called myself a coach ever, but trying to judge people and make them do things our way is not right…Lets see some examples?
Having a child is a 25 year project IF YOU GET IT RIGHT. It is a lifetime project if you get it wrong. A friend referred a senior citizen who wanted to meet me for some money advise. When this 70+ year man came to meet me, I was shocked that he had come to see me regarding RAISING VC money for his son. Well, the son is a 39 year old has a child – and the custody is with his wife who left him a few years ago. The son had got educated abroad, held on to a job,…and then had some medical problems. To cut a long story short, he was unemployable – despite the fact that he had a PhD from a half decent university.
How do you raise money for an unemployable youngster? Charity?
I was blunt. I said “you have no pension, not enough money (he had about Rs. 48L) for you and your spouse…NOWAY can you support your son”.
My friend called to ask what happened..and I said the same thing.
I was thinking like a financial adviser. The old man was thinking like an Indian parent. He called me and asked “what if my son committed suicide”. Honestly I had (have) no answer to that.
Does any reader have an answer?
Another case was that of a father who was very rich and very successful…till he was hit by a string of business problems and is now reduced to being well off, but not really rich. He has 3 daughters (no son). His daughters are 39, 36 and 23 years of age. Yes, the youngest daughter always said she has at least 2 mothers!
When the elder daughters got married, this man had a lot of money – and the weddings were in 5* hotels. The eldest daughter’s wedding was in Delhi with parties in Delhi, Mumbai and Chennai!! All the 3 were in nice, expensive 5 star hotels.
Almost same for the second daughter too.
Each of those marriages would have cost him more than Rs. 1 crore + and he was not complaining.
Now his budget for his 3rd daughter is close to Rs. 1 million – and that would be a stretch. I have even tried talking him into a registered marriage. However, there is a roadblock,
No, not the sambhandhi (he is a north Indian, and his to be son in law is from Tamil Nadu, settled in Mumbai)….BUT FROM HIS DAUGHTER. She is educated in India’s TOP MANAGEMENT institute…and so is the boy. Very, very, sensitive boy, who says ‘do not want a grand marriage’.
The problem is the DAUGHTER who feels a grand marriage is her birthright…and if her dad could spend crores on his older daughters wedding 15 years ago (I adjusted if for inflation, cash spent could have been different) HE SHOULD SPEND that much on hers too.
In fact she has selected a Lehenga whose cost is approx Rs. 4L – and that would be my wedding budget.
But Subra what if she commits suicide?
Any answers?
Please comment
Personal finance is far, far more personal than finance!
Karthik
In the second case , the father could settle a much larger amount as inheritance for the youngest daughter in order to compensate….
Gov
Wow. Really tough ones indeed. No right answer in both the cases.
For the father of the VC, it’s obviously a bad idea to spend on the son. Save whatever little they have for the rainy day. The son is going through a disaster.. and if they spend more money, they would go through a disaster too. Hard luck indeed.
The second case is slightly manageable. The daughter should do fairly well in life (being from a top institute) so as much as I hate it, she and hubby could take some loans and have a decent marriage. Hard luck again that father can’t spend. May be that will teach her that she can’t get a 4L dress. That’s totally dumb.
Ganesh
These are extremely tough questions to answer. On one angle, there is the financial perspective and the other side is more psychological and emotional. One spanner may not work for all nuts and one solution may not fit everyone. We can predict what one may want to do, one may do and one should do. Not to blame the parents, it was their onus to ensure that their children are independent, prudent and self-sustained. It’s too late to correct it, but a start has to be made.
Coming to both cases, the parents have to take some hard decisions and may be communicate to their children about the precarious financial situation they are in. They need to make their children understand that they have to decisions for their life and the parents can no longer support them. It sounds harsh and extremely painful to consider the potential consequences, but if they don’t start now, they are impairing them for life. Life is all about hard decisions and this certainly is one of them.
Though I am not as experienced as Subra sir, I have seen many such situations and I have made it a point to highlight to my teenage children that they need to be independent from age of 18. We ape so many things from the west and I certainly want to ensure that the kids learn the value of money i.e. earning it and spending it judiciously and moreover the need to self-sustain.
My wishes and prayers are with the parents. I hope things work well for both of them.
Krish
In first case, they should not talk about new ventures, businesses and other risky propositions. Forget VC, Father & son duo should pull on with the fund (48 L) that they have. They can’t afford to lose this last lifeline and learn to live frugally. Don’t know why all foreign educated guys talks about funding.
Second case sound bit easier. Take loans and let the daughter clear it. Whatever we try to teach younger gen, they will not understand it. Somethings have to be learnt by experiencing it only. Best thing is not to say ‘No’ and make them go through the hell.
Rakesh
In second case it is mistake of parents. They could have plan goals in advance and control their expenses. Sometimes younger kids in family face difficulties as parents spend most of the money for education or marriage of elder kids.
I am also in same situation so I can understand pain of youngest daughter. My father bought big house for my brother. He didn’t even ask me because there is no money left (fortunately he is govt. employee and getting pension so self sufficient) and I had to buy it my self which I believe is right thing.
During education also he sent my brother to a very good school (spent almost 30% of monthly salary for schooling) and when my turn came there was budget issue.
I am not telling that it is my parents fault. It is more like they are not good in financial planning and didn’t think long term. They could have checked total net worth, goals & arrangement of money for each goal.
Acchu
But I have parents ( both govt job)who never gives me a single penny, get monthly pension of 85k.Empties all money every month.have 2 houses and plenty of properties, whereas I live in a rented house.Same Indian parents.😂
kinshuk4
Nice article again. For the first one, I will recommend them to meet a VC, so that if idea on which he want to raise the money is good, they can get money. After meeting 2-3 VCs, if all of them say, idea don’t have potential, then I would recommend them to hit the reality, and manage the finances well. If idea has potential, may be I will recommend them some contingency fund and invest some money in the idea, because VCs will not lend money, until they see that the founder has skin in the game. What better a person then you, who can tell the financial plan and the contingency plan.
For the second case, I was well off, but I married comparatively simply (though me and my wife are from North India :D). Rs. 4 lac on dress is too much, as I have not even put this amount in buying my vehicle yet 🙂 This is a daughter father issue, and the father should be very convincing explaining the situation. As many readers have already commented, that father can ask her to take loan on her and her husband’s name, this can be the next route. If son in law is in control and financially smart, then father and son-in-law can convince the daughter.
Both the situation are extremely hard, and how irrational we humans are at times.
Ankit
I think in both the cases answer is parent communicating with honesty to their children. All have grown up so it is up to children to decide for “his/her” own life.
bala
Don’t know about the father and daughter, but the groom should escape. This is just a warning for what to expect from his to-be life partner.
Pandu
Yesteryears, husband & wife bond used to be sacrosanct. The family used to stick together to pull thru hard times. Sorry, I am making a judgement call here – nowadays, with the first instance of any medical issue – the bond peters away.