I was reading stories shared by some people across the industries in 2008 economy bust. It’s always sad to hear that someone has lost the job and what problems s/he is facing now. But after reading those stories, I found few things almost common in all of them:
1) Most of them changed their job frequently
2) Share markets crash made huge dent in their savings
3) By changing jobs, whenever their paycheck became heavy, they also added weight to their liabilities rather then lowering it.
4) None of them have any secondary source of income.
5) In India, family always supports you. We are country of great family values and that’s true even in these trying times.
While reading all of these stories, and especially the mistakes committed by them, I was mentally preparing a checklist of the things that should have been done better then the way done currently:
1) Spend less then you earn.
2) House, even though is an investment in long term, is a liability in short term.
3) Before starting taking risk with your investments, make sure that you have 6 months of emergency fund in cash.
4) Stick to your job for longer time. Changing jobs frequently can pay you good in short term, but will always pollute your resume for long term
5) When you are investing in stock markets, always do remember the risk factor.
6) Identify your goals, and plan your investments.
7) Always try to have some secondary source of income.