It is difficult to earn, it is more difficult to save and it is more difficult to grow your savings – but earn money for peace

The heading of the topic is the saying of my father. I just felt today that I agree with him 100% and my thoughts of them are below

Earn: When we start jobs from college, we feel that we are in control of things and we are independent and in control of things.  what we start building is human based capital. Because you work, you generate an income for yourself.  Let us be aware that income generation can stop, if we fall sick or lose the job or failed in the business.

Save: To take care of the risk, we tried to save our finances by investing in shares, insurances, deposits and real estate and other forms where the money will grow. These assets generate income for you or not.The returns from these assets do not expect that you should work as hard as to generate human capital. Effectively we are mitigating the risk in human capital by converting the same to financial capital.

ESOP employees need to convert ESOP’s in to shares and sell them at the right time at right prices. if you leave them as ESOP’s, it continue to be human capital. Failure to convert them in to financial capital has the risk that the ESOP valuations has potential to fall due to external factors, outside from control of the business.

Entrepreneurs need to look that business is human capital and not financial capital. Please pay your self salary out of your business and reduce the risk. I may be quite true that they ROI in business is greater than other forms of investments, but the risk is till high as the human capital and financial and real capital are in the same basket

Grow Savings: Conversion to financial capital does not eliminate all the risks. Risk still is in the form of  inflation beats the bank FD interest and equities markets can crash and the real estate prices crash.

So looking after 10 years of being a professional, I am wondering what is the use of earning more, you can stop there as you need to save and you cannot stop saving, as you need to grow your savings. Let me start looking at life beyond money and let me earn money that will help me to achieve peace in life and live my life to its full , instead of running rat races.

This does not mean that I want to retire, but look more at other aspects of life other than earning money.