5 Financial Lessons I Wish My Dad Had Learnt

Don’t get me wrong, I really love my dad. It is not my intention to pass judgment on him. He did a great job raising and educating us. But he is close to retiring age, and has no retirement savings. He is very uncomfortable accepting money from us. And we can’t just sit by and watch him wear himself out at this age. If he had learnt some of these financial lessons early on in life, I think we could have easily avoided this whole uncomfortable situation.

1. Savings are far more important than “prestige”
   My parents were not always at the lower end of the ‘middle class’ spectrum. At one time they were border line affluent. My dad had a fairly successful business. So they decided to build a house. With a ton of custom features, our house was like no other on the block. It had the most beautiful garden in the front, a huge yard in the back, fancy tile work, granite countertops, built-ins - you name it, and our house had it! Building the dream home however, turned out to be a lot more expensive than my dad originally anticipated. But, with everyone buzzing about how beautiful it was, he hesitated to back down. Instead he kept adding to the list of features. Slowly, all the money being made from the business was gone in maintaining the fancy house and an equivalent lifestyle it demanded. Until then, my parents were very diligent about savings, and had saved every penny to cover the original estimated cost of construction! But now suddenly all their earlier savings were gone and what’s worse, they were not able to save anymore money either. I wish they had learnt that savings were far more important than maintaining the “prestige”.



2. Friends and money don’t always mix
   Around the same time, my dad made a second mistake. He co-signed for a business loan for his friend. To cut the long story short, the “friend” squandered away the money and defaulted on the loan. My dad was left with the short end of the stick. With very little savings, things soon started going down hill. First, the car was sold off. Then, parts of the business. Finally, the dream home. I think it broke him, and he never really recovered. How I wish, my father had realized that friendship and money don’t always mix.



3. Working hard is not enough, working smart is equally important
   In the subsequent years, my dad worked very hard to recover. But with a broken spirit and a bruised ego, I think he found it very difficult to apply himself to his job. Long hours were spent trying to build one failed business after another. He is well educated and smart. Instead of trying to build back his losses with brute strength, if he had tried to use his intelligence and creativity, I think he may have been far more successful. I wish he had realized that working smart was as important as working hard.



4. For a business to be successful, you need to have a cash flow
   During this time, as he went from one unsuccessful business to another, we were severely cash-strapped. I will forever remember how stressed out he always was, trying to arrange for funds to keep the business afloat for a little more time. What I will not understand is his insistence on staying in the entrepreneurial ventures. Like I said before, he is an educated man with a college degree. He worked in a bank before quitting his job to start his own business. Why not go back to a salaried job for a few years, save up some money that is needed to build a business and then return to the entrepreneurial world? I wish he had learnt that it is hard to run a business while being cash-strapped, and looked for other opportunities.



5. No matter what, always put away some money for emergencies and retirement
   In spite of the problem with the business, my dad always made sure there was enough to feed, clothe and educate us. We did not spend on anything extravagant, but we had the basic luxuries in life. I don’t know if it was possible to cut back more, but if he applied himself to it, I am sure he would have found a way. For instance, he wanted to make sure we all got good education. And he achieved it. There are a lot of examples along the way, where I know he managed to find the money needed to pay for something that he was passionate about. I wish had had the same passion and discipline to save for the emergencies, and his retirement.

They say an apple does not fall far from the tree. I started out my adult life being as oblivious to financial issues as he was, believing stubbornly that if you are smart and work hard, success will find its way to you. I am learning now that there is more to financial success than just being educated or hard working. He did the best he knew, to raise and educate us. It is up to us now to pick up from where he left off, and ensure that we do not repeat similar mistakes as he did.

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• Stop Blaming Your Credit Card!

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