Imagine this, money is spent faster then it is earned!

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Very often we see a lot of people employed in decorated positions spending a huge amount of money. We see that they might head off to Barcelona for a weekend in a jiffy. If you’re getting bored in the house, go to Taj and stay there for a few nights. They basically need ideas about how to spend their money.

I was having this discussion with another colleague in the office and she mentioned in an update that a particular client's family was spending a lot of money.

They were just blowing away money, they were not investing and had no value for money. She seemed to be completely bewildered at the fact that these people were just not concerned, not bothered, not saving a dime! How could someone live like that? She concluded that they will not have anything in the future.

People tend to behave out of the things that motivate them. Let us try and explore what goes through their mind when they, in our language, are blowing away money and in their language, they are enjoying their lives.

You can choose to have a life where money holds no value for you, provided you understand the implications.

This happens under three different circumstances or scenarios.

You think that the party will continue forever. You are earning very well today, you are professional or you have got specialised skills and because of it, you will always be in demand and you will keep earning the money that you are earning now. The truth is scary. Skills become redundant just overnight. Lifestyle might just come crashing as you used to make any compromises in life. Here disasters are waiting to happen.

You have specialised skills but you know that your skills are multidimensional. What I mean by that is even if they are faced with a situation where they don’t have the money or their current job or their industry becomes obsolete you have generic skills, people management skills, leadership skills, process management skills etc.

People who have inherited money, or they can visibly see a large inheritance coming their way. For example, it could be a daughter of wealthy parents which would motivate both daughter and son-in-law to spend as they like. Another example is when one generation invested into properties and then children keep enjoying rents per month which are larger then the original investment. When a lot of money is riding behind you and when somebody has created that fortune, it is only here that you are going to enjoy the fortune. You can choose a life where money holds no value for you.

A word of caution. Money tends to get spent by the second or third generation so figure out where you’re standing.

Kartik Jhaveri is an expert at planning money, life & aspirations. He is a Certified Financial Planner, Wealth Manager & Financial Freedom Coach.

First Published:Aug 24, 2018 9:20 AM IST