The Best Financial Advice I Received in My Life
First Prelude Post of ETFinance
Hello there!
Welcome back to my publication!
As promised, I am sharing my first post with you all. It is kind of a prelude to ETFinance.
Let me elaborate, before starting with the discussion on finance and other topics related to it, I want to share three posts that are a bit generic but very important in my opinion.
The reason I want to start with these is that instead of feeding you the chunks of information, I want to be practical and build the foundation. I want to start like I am building a project where I will start with the base and build on it.
Hence, before overwhelming you with the nuances of finance, I want to discuss three topics that are usually not discussed.
Those three topics would be about:
- The best financial advice I received in my life.
- The types of financial conditions.
- Why it’s important to learn to spend before learning to save or invest.
This post is about the first Topic.
The reason I am treating these topics as a prelude to ETFinance is that I know that many of you are starting this journey as I did mine. So instead of just starting with the topics like a course, as promised, I want to make it practical and based on personal experience.
So, without any further ado, let’s start with the first prelude of ETFinance.
“The Best Advice I Received in my Life”.
Let’s Start with the Start:
I will be honest and confess that I was never a financially sound person in my teenage or even in my twenties. Like every other normal person, I too believed that saving a percentage of my income is the best financial decision you can make in life. I was doing the same and was considering myself as someone who has got his finances under control.
“That all changed one day when I learned about Inflation.”
In 2012, I completed my college. I was an engineering graduate, but I considered myself a financially sound person as I used to work part-time on micro-projects in my college days and used to earn a few bucks that would be an add-on over my allowances.
As I believed in saving, I used to save from that extra money as well along with whatever I was saving from my allowances. As a result, I completed college with a small amount in my bank account and a belief that I am in a better place than my collegemates as I have the financial knowledge.
Then, through college campus, I got placed in my first job. It was a product-based company and my work there mostly dealt with software implementation and training. But as it was a smaller company, we had to be aware of all its processes from development to sales.
I clicked with Sales. It was a new area for me, and I love to learn new things. Hence, I started to take an interest in it.
I used a part of my daily time to discuss and learn new things from sales representatives. One day, we started to discuss personal finance. And then they dropped a shocker on me. Their manager was discussing taxes and said,
“To keep all your savings in the bank is not a good thing to do. You need to diversify it.”
And as someone who was doing that with pride, it came to me as a surprise.
The Shocker:
That was some news to me.
My whole life I have been taught and practicing the process of “Savings”, believing that it is the best thing you can do with your money. And here, in a single statement, that belief was being challenged. I didn’t believe it blindly as I never believed any information before confirming its validity.
Hence, I started to research this topic myself and then I found that he was right. The reason was Inflation, and I knew nothing about it. That made me rethink my whole idea of personal finance.
That day made me realize that whatever I knew about finance might not be true or at least partially true. I needed to learn more about finance.
And hence, in 2013, I joined an MBA school.
I joined it to study Marketing and Finance. In that school, I learned what real finance was along with how a business was run.
And from there, my journey to gain financial knowledge started.
The List:
Normally, when anyone asks me about the finance basics that I have learned in my life, I usually don’t stop at one. I give them a list. That list might go as:
- Saving only is not the best way to control your finances.
- There’s a difference between owning things and owning assets.
- You need to learn the difference between Assets and Liabilities.
- Time is your greatest ally in Investing.
- You have to follow a financial rule like 50–30–20 to differentiate your needs-wants-savings.
And so on.
But I still consider the first one to be the foundation as for me, everything originated from that. I started to look at the options once I understood that I was doing wrong by saving and keeping the money in the bank.
That led me to learn about Finance which made me aware of investing. Investing led me to learn about the Stock market. The stock market led me to learn about the financial analysis of companies which then led to learning about assets and so on.
Hence, I can say that whatever I know about finance today, originated from that one advice and the cultural shock that I faced due to it.
Conclusion:
So, to conclude. The best advice I received in my life was:
“Keeping all of your hard-earned money in a bank is not the best financial decision.”
I know it is very basic and might be the very first step in financial knowledge, but as I said, it was the turning point for a young me. With this post, I also want to address that if you think that you know nothing about Finance and it might result in you struggling to understand it, then don’t worry. That’s not the case. Like you, I too started with Zero. And not only you and me, but many of the biggest financial gurus also started with Zero as well.
It only takes one day when you realize that you need to make the change and decide to do it.
That day you take your first step and everything else follows.
So that was my post that will act as a prelude for ETFinance. I wanted my first prelude post to be a bit personal so that I could make ETFinance a relatable place.
I hope that I will be successful in teaching everything that I have gained in my life, and I hope this post helps in generating the same feeling.
If not, then read it like any other story and we will meet on my next post.
Till then.
Shreesh, Signing off!
