Indians are generally conservative savers, and I come from a family of such savers. My parents worked in the Indian banking industry. Their long term investment preferences were traditionally 'guaranteed-return' investment products such as fixed deposits, government bonds, public provident fund (PPF), and Gold.
Even insurance products are often perceived as instruments of long-term investment (often wrongly marketed) in India. While in reality, they should only be considered for mitigating our risk.
People generally, successfully secure their retirement years by putting their complete faith in our closed banking system, which fortunately has a good track record of securing savings of every participant in the system. Most of the time people comfortably lead their lives without having to dip into large portions of their retirement fund, unless they are in an emergency.
Today, I’m sharing a few key life lessons I've learn’t and in return I hope to learn further from your experiences dear Steemit readers.
So, Let's talk!
Important Lessons Learnt the Hard Way
It was early 2008 and I was a 19 year old college student pursuing my graduate degree in business management. My strong interest towards the financial markets led me to the world of internet forex trading as well as mutual funds in the Indian stock market. I borrowed some money (the ONLY time I took any loan) from my mother and dived right in.
Using Liberty Reserve to load up a Lite-forex metatrader account-I quickly learnt the basics and began day-trading. I won in some trades, and lost in a few but in the first month, my investment grew at a consistent 2% per week. Those were some exciting days learning to manage my risk while learning to leverage, ride the bull, even shorting and hedging as needed. Things were fine until one day my email account was hacked and the hacker managed to subsequently steal all the funds from my trading account.
I lost about $1500 in this online theft. The initial capital came my mother’s retirement savings—luckily she still loves me more than the money! At the same time (only time) I got suckered into a ponzi scheme (very popular in India) which I entered at the behest of a very close friend. Despite a terrible gut feeling against it, I proceeded and lost more money in the process.
To make matters worse the financial crisis of 2008 also negatively impacted India. It caused a massive crash and a bearish run of the stock market until 2010 resulting in a further 20% capital depreciation of the funds invested into mutual funds. An urgent need of funds necessitated an early exit at a loss, leaving me with a terrible feeling in my gut!
Over a period of a year or so we were disappointed, saddened and I was absolutely gutted!
But my mother despite being a conservative saver is a genius in managing personal and household finances. She assured me that everything is okay as she had backups in place. A small backup emergency fund consisting of Gold jewellery and fixed deposit was there for the worst case scenario and short-term needs. When the emergency situation was triggered, we pulled from it.
She has never stopped trying to save up money, even as she continues receiving her pension today. She instilled the habit in me to save very early in my childhood and that proved useful later in life.
Importance of a Financial Contingency Plan
The whole point of any contingency budget is to provide a monetary backup during unexpected financial difficulties. It’s there to prepare ourselves against anything from a decrease in income, loss of a job, medical emergency, temporary disability, and in the worst case scenario, sudden loss of a bread earner and escalating expenses as a result thereof.
Earlier in February this year I met with a major accident. As I lay in the hospital wondering about the escalating medical costs which during my initial hospitalization amounted to $5000, I was worried if my health insurance would cover a significant portion of these costs. It was March, and Steem price was still in the dumps.
But, between 2010 and 2017 my experiences had taught me a valuable lesson. Any emergency fund that you create must ideally be kept in a liquid form of investment. You must be able to access it fully and immediately if needed. It should be sufficiently large enough to last about 1 year and you should never touch it unless there’s a real need for it.
A bank fixed-deposit always made good sense and by the end of January, 2017 I had once again managed to save a liquid emergency fund ready to last me atleast 6 months, after having utilised the previous one in 2015.
Steem and Cryptocurrencies based Financial Backup
With my right hand not working up to its potential, and the uncertainty of it's recovery, I had to make a difficult decision to close down my business after my accident, ergo losing some precious clients built over 5 years.
Momentarily, I began considering job opportunities in different domains. With my multitude of skill-sets, sufficiently wide network and goodwill, I figured I could atleast find one to get me back on my feet. A job that only required minimal use of a computer—I wonder how many such jobs exist today! This was the worst case scenario and it was staring me in my face!
Luckily enough, my health insurance covered most of my expenses, but soon I was going into another $2000 surgery again and my emergency fund was dwindling down faster than expected. I was going into my fourth month of unemployment. Steem at the time was hovering around 20-30 cents and I figured I could sell a little to tide over these tough times. But, even as I powered down, I decided against selling any!
My mother is there to support me financially if needed. Even my friends, including a few Steemians offered financial assistance. @donkeypong straight away sent me some Steem, and never even mentioned it until when I looked into my account and found it there after several days. I cannot thank him enough for his kind gesture!
Truth is, I just didn’t want to burden anyone. It’s just the way I go about my business! I wanted to make it on my own, atleast in most aspects of my life! Well, what’s the point in growing up if one cannot manage their personal finances! Right?
Riding the Rising Steem Crypto Wave
Steem continued to remain bullish, ergo I set aside 2000 Steem on Polo for a quick sale. When it hit 65 cents, I sold it and kept tracking its progress and bought it lower again. Whenever I could be online, I followed the discussion in price channel on Steemit.Chat with @wingz, @ats-david, @kingscrown and many others who made it easier to follow the market as best as possible, whilst being their funny selves!
I found @ats-david’s Steem price analysis posts corroborating my basic understanding of the charts, analysis and judgement. Therefore, I continued trading occasionally, just as I used to until January with a bunch of different cryptos. This helped restore some of my confidence in general after the recent accident.
Easily enough, with some luck and as expected Steem rallied and retrenched a few times, but eventually going up to $1.30+ couple of times allowing me to rinse, repeat and make approximately an additional 1353 Steem which I sold at the most recent $1.50 rally and I’ve now set that aside as my emergency fund already!
Last year, I had also invested in the ICONOMI ICO and continued buying it when it was still low in January. Today, it's worth a lot more than 6 month emergency fund. I also hold a few tokens of other cryptos, all of which have increased their initial value and even found a tiny sum of bitcoin stashed away in a BTC wallet that I had momentarily forgotten about!—Something that'll never happening again!
These developments made a positive impact that I so badly needed and gave me the confidence and financial stability to tide over these rough times.
Which brings me to @jerrybanfield's article that I agree with: 10 Reasons for $10 Steem Price in 10 Months! and @decentralized feels that Steem could potentially reach a 1 Billion USD valuation in the short-term. Anything can, and will happen!
If I had dipped into my ‘retirement fund’ I would have lost considerably on years of planning and I came so close to liquidating it all! Feels adventurous for sure, doesn't it? Steem, for me now is nothing short of a precious metal, just as Gold is to Indian people. I’m going to HODL my Steem for a long time to come!
I’m also going to buy a little bit of Gold using Vaultoro to set aside as a long term precious-metal based backup investment which I could potentially withdraw anytime, any place if needed—as I understand it! You can read more about this service in Steemit user @petethekiller’s post on Vaultoro: Old Gold vs New Gold
What is my situation today?
Over the past several years I’ve steadily focused on building a ‘retirement fund.’ Now, I have a decent portfolio for a 29 year old solopreneur and digital-nomad from India who wasn’t born with a silver spoon and had to work his way up as any other person born to a middle-income family—I’m actually quite proud to say it today!
Even as I spent a lot of money traveling across my country, I made sure that I save up alongside, just as my mother has all these years!
Much of my portfolio today is spread across fixed deposits, mutual funds, public provident fund and equity—in this order. Indian economy is booming which has resulted in a steady 14%-15% appreciation p.a of my mutual funds—my risk spread across 20 of these and 8% approx appreciation p.a of my fixed deposits and PPF. As you can tell, it’s not a high risk, high yield portfolio. On the outset it looks moderately-conservative with ‘protected’ debt-based investments taking lead but then this is where cryptos come in!
I've invested any extra that I’m willing to risk 100% into my crypto allocation from over a year now.
Massive increase in Steem price and overall crypto market turn-around, has in-fact turned around my portfolio completely. Cryptocurrencies, with Steem leading the crypto allocation now represents a greater part of my overall asset allocation at ratio of 2.5:1.
If you are on the fence about cryptocurrencies then you must read @nanzo-scoop's fantastic article: Cryptocurrency is exploding! Should I invest more? before proceeding, and certainly watch several easy to comprehend videos on cryptocurrencies for beginners at our beloved @heiditravels' blog!
In the World of Motorcycling, There is a Saying:
When in doubt, go throttle wide open!
So basically, I:
- Never lost hope that Steemit is real, tangible and it will grow with
time. - I accumulated more Steem/crypto till January.
- Continued working towards building a Steemit community which
stands by me! - When in panic, HODL! (hold)
- Kept FOMO (fear of missing out) at bay!
- I never stopped believing in myself!
- Stood by my financial decisions.
- I Keep calm and Steem on!
Best part about all this is that today I have ZERO liability in spite of all of these incredible situations. In fact, since 2010 till date I’ve never had any financial dues towards anyone, in spite of various roll-coaster moments in-between. I've an excellent credit score as well!
I’m not rich or wealthy yet however, I have achieved greater financial security; today more than yesterday! While my mother’s retirement fund is not only intact but also steadily appreciating in it's value!
Steemit to My Rescue!
I'm proud to say that I'm now Steeming full-time! I’m now totally focused on creating content at Steemit moving forward, even more than ever before! Given my health, it's now easy to just focus on one task at hand, and share my experiences here.
I’ve only authored 23 posts till date as I’ve been heavily invested in trying to build our thriving Steemit community on Steemit.Chat and off it! I've been assisting in running curation guilds and aid in increasing user engagement, retention levels and promoting Steemit within my circles. I’ve set a few challenging targets moving forward as I slowly bring myself to working longer hours again. As you can tell, I’m also highly self-motivated!
I hope someday we can switch to banking with our favourite cryptos like @lpfaust tried do with bitcoin in his latest piece: Deeper Dives: Living la Vida Unbanked in the World of Digital Currencies
If you truly believe in happy endings, you must first be prepared to take the journey, with all the accompanying struggles! —@firepower and you read it first on Steemit! ;)
Did you ever go through a similar struggle? What were your best and worst financial decisions and how did you see them through? Have you had any negative experience investing in cryptocurrencies?
I'd love to learn about your experiences in the comments.
Disclaimer: This isn’t financial advice, only just an account of my personal experience.
I’ll see everyone again at SteemFest 2 as Firepower crew assists @roelandp in pulling it off once again! Roeland will soon be making the announcement!
Thank you dear readers for your time and attention!
Check out these 3 excellent Steemit articles on financial planning and budgeting:
- Setting Goals Towards Successful Financial Planning
- How To Budget: A Step By Step Guide To Create A Financial Plan And Become Debt Free
- Managing your money with a personal financial planning spreadsheet
If you like my work, please share my posts and follow my blog to support me. You may also continue reading my recent posts which might interest you:
- How a Himalayan Alpha Dog Domesticated a Hooman!
- How I faced my demons and fought back!
- Starting 2017 with a Bang by Bringing Joy to HIV Positive Kids!
- Steemit Veni, Vidi, Vici! SteemFest 2016—Together, WE made it happen! Thank you Steemians!
What an excellent post @firepower!
the sharing of your experience in the matters and your wisdom will most hopefully wake many to the need for financial resiliency. I loved you picture of the American dollars in relation to the "Importance of a Financial Contingency Plan"! ;)
Thanks a bunch for your quality work, knowledge sharing and wisdom. Thrive one, Steem on and namaste :)
Eric! Thank you so much for your support every time! It's always a pleasure to read your comments on my posts! I'm happy everyone found this post useful!
Well, Yes.
You have been doing great here, for this community and I hope you carry forward in most significant way possible.
Take care of your health.
Thanks dude! :) I hope so too!
yes we are savers. all I have is steem power ;)
That is fine , it is very hard to save with so many expenses today and this is why I believe Steemit will lift poverty and people can save easily here if they just stick to the basics.
Hope so too
Your financial journey is great, moving like a roller-coster.
We only learn from our vad experience, we spoil from our good times.
I am also like you, I press heavily on saving, but not to keep it in banks or fixed deposits, but to take heavy risks and to keep a part of my money secured if I fail in those risks so that I am not demotivated from Investing and taking risks again. I have had my Good and bad moments in terms of financial stability over last 4 years.
But once I learned that Big risks Come with big rewards and If you are a little bit financially secured, the big risks don't scare you much.
Over the last two years, I have been able to save a few lakhs, with my current life style, I can live on my savings for next 5-6 years provided the inflation.
Still, many things learned and some forgotten things are remembered by me from reading your article.
Same here! I could liquidate my personal assets and travel the world for a fair amount of time or live a simple life at home for years to come! It's fantastic how this is now made possible by cryptos and Steemit! One can truly become a digital nomad and work from anywhere in the globe. There are no rewards without risks and taking a calculated one is always the best way to go!
Currently having my cousin put my pen and paper algorithm to use, "so you do not have to think so much." That is what he said. I enjoy putting numbers together to figure out a foreseen outcome in a certain period of time.
I enjoy it because I can do what most people cannot, YET.
Helping Others To Help (others) 1 By 1.
STEEM on.
Well said! :)
APPRECIATECHA and ALL you STEEM (do).
STEEM on my friend.
1 By 1.
That's true.
What crypto projects have you invested in apart from Steem?
Heavily in Ethereum, Ripple, Zcash, Dash, Litecoin, and a little bit in almost top 20 coins and purchased a few coins of two crowdsourced coins that are not released.
That's a fantastic portfolio right there!
yepp, ethereum has given me most returns. What about you??
Great post. I think in the American culture in particular, we are not taught enough about saving. It is consumption, buy, spend 24/7. I know I learned the art of saving late in life. Crypto has made up for some of my young and foolish spending habits, though. following you for more info.....
I have to agree although the current and younger generation is averse to the idea of planning their finances early. Following you back as well!
thank you for sharing your story,
I am on of the "on the fence" ready to jump in but still not sure.
The links you gave us are insightful
And that's why I love you bro! Excellent writing, good points and the heart of a lion. Was great to meet you in Amsterdam at SF1.
Can't wait for SF2
Thanks for the support buddy! Can't wait to hang around with you and the gang at SF2 :D
Incredible... thank you for sharing . I joined steemit on recommendation from
@prakashghai & had a divided opinion on it.. if its a real platform ..
Your thoughts act as a bit of reassurance to my decision to put in more efforts here ..
Hope the cryptocurrency becomes legalized in india soon & the govt comes up with a positive decision..
Hope you are recovering fine .. stay blessed
Cheers
Thank you for your comment! Well it's been a hard journey but this June will mark a year since I found out about Steemit. It took me 2-3 weeks before I felt a system such as this could work and over the past 11 months I've accomplished so much due to my participation in it. Therefore, I have only positive things to speak about it. I really hope our government legalizes crypto!
Taking in some of your positivity ..⚘
Aww! :D Thanks
All your articles are great and the fact that you share about your life in such honest detail is commendable.
I had a few questions:
PS: I am only about 1 week old on steemit.
Thank you so much for your comment! I'll answer your questions now:
This is my 11th month on Steemit! :)
Thanks for answering all my questions man ! lot of information to process now.
Wishing you a speedy recovery !!
Thank you so much! Feel free to ask any questions about Steemit if you have. :)
Superb and encouraging post!
Hey Thanks for stopping by! I hope you'll check some of my upcoming posts as well. Follow me for updates. :)
I enjoyed your article a lot and I am following you now. :)
Thank you! :)
In the US, you can actually get a specially built insurance policy that acts as a savings/retirement account. There's a significant tax advantage to it, and you gain a lot of financial flexibility once it's funded. It's not a complete replacement for other forms of retirement saving, but provides a nice bit of diversification. You can read more about it here.
BTW, I follow gold markets fairly closely through several financial newsletters and I've always been impressed by how Indians treat gold (esp. jewelry) as a form of savings. It's unfortunate that that's pretty rare. Of course, gold has some drawbacks, but once again it's about diversification.
We have some similar products in the insurance sector as well. While they are great, it makes sense to to invest in a slightly high-risk, high-yield investments when you are in your 20s even 30s.
We have small shopping mall sized jewellery stores in my city! Gold is bought like vegetables in the market on some days! haha!
I'll check the link. Thanks for the same. Hope to see your comments on your future articles as well! :)
I just so enjoyed your story an related to it perfectly, yu deserve all the payments you are getting and Donkeypong is great.
Thank you so much! :) Look forward to seeing your comments on my future articles as well! :) Be sure to check my older ones too!
Hi Iam maya 7 I read your post .Iam also now remain not a very good financial condition.lam a single mother with two kids
with their future .I hear about steemit from my elder son rahul so I interested in it. My few
day in steemit make me so effective that lam quite excited now.your post is very very informative.Followed egarly looking for another one.
It's great to see you here! I hope to see my mother using Steemit as well! I hope your blogs on Steemit helps you improve your financial situation! Good luck! :)
Thanks a lot. I'm writing a new post. Check it out if you have time.
sure! :)
This post in itself is a motivation for me to start posting regularly here. You're doing great. Keep up your amazing posts. Will be waiting for more. Get well soon and get your arse on that saddle. Let's ride ;)
Thanks dude! I appreciate it! I'm glad you found this useful! As you see starting young brings a world of possibilities when you are older!
My steem power is my greatest exposure at my crypto-folio as well.
I am interested to see where steem will be in the next 3 years.
Very nice post @firepower you are not a moderate person neither are your investments.
Hey man! It's been a while. Great to read your comment on my blog. Thank you for stopping by and for your kind words. I hope to catch you at the next SteemFest! :)
The non-liquidity of Steem Power seems to be a double-edged sword. On the one hand, powering down is a very slow way to access cash when you need it. On the other hand though, this is what makes Steem one of the more stable cryptocurrencies, minimising the pump and dump that we've seen with several others.
The "low throttle" of the powering down process is what makes Steem the slow-burner that it is, which, as @jerrybanfield hopes, may reach to $10 before long.
True some challenges remain but its a work in progress. Things will get better with time.
Fantastic, I'm following you. Hope you blog about tips to be successful as a Steemer!
I try to keep a balance between light to heavy topics. I think one of these days I will be writing about it or atleast on topics on similar lines! So please stay tuned.
Thank you for reading and for your comment! :)
If it's not too personal, was it a motor bike accident?
Indians have millions of bikes on the road, poor traffic conditions and riders without safety regulations, it just seems too precarious for me.
Glad for you, you managed to get better. Inspiring story!
Thanks for stopping by @josephd. Yes it was a motorbike accident thanks to a moron who crashed into me at a high speed. You can read about it in my blog here: How I faced my demons and fought back!
That's true, a lot of accidents happen here.
Thank you for sharing your story and wisdom. Such a wonderful and inspiring financial journey. I resteemed this for future reference :)
Thank you! I'm glad you found it useful! I will be sharing more interesting things moving forward. :)
Looking forward to your next blogs :)
Ive posted a new one! :)
Thanks for letting me me know! I like it so funny.:)) Please tag me again next time when you post :)
Certainly! :)
I just stumble upon this post. I must say, it's ride you had. Being in India, I know the situation. I'm sure you have more to contribute here. It's kinda motivation as well @firepower
Thank you! :) Im glad you found it motivating! :)
Great content! Thank you for that
Thanks much! Follow me for more interesting stuff to come! :D
Another excellent article about your journey and your Mom is amazing!!!!
She is! :D Thanks for stopping by!
Congrats. That's pretty inspiring. Like your other post about the Himalayan Dog too :)
Thank you so much for reading them both. I hope you will continue to read my future posts as well. Cheers!
I have a slightly different viewpoint on Bankruptcy.
While I'm against giving that "Fresh Start" to people who have foolishly blown their income or savings, I also understand the lie that has been perpetuated upon our society about "paying your debts".
Young people are constantly inundated with the idea that they have to go to college in order to succeed. Which leads them into crippling debt with almost zero chance of ever paying off their $60,000 Humanities degree.
Guaranteed Student Loans are also practically the ONLY unsecured debt that is not dischargeable in a bankruptcy. The government has a long memory and a long reach.
Media is constantly telling people how much better their lives will be if they just get that brand new car or the latest iPhone.
No cash, don't worry, zero percent interest until 2050.
Oops, sorry, your government health insurance doesn't cover your car accident or unexpected illness so you're on the hook for $75,000.
And the people who create economic bubbles take their million dollar bonuses from government bailouts without ever having to worry about where they're going to live, how they're going to buy food or spending a day in prison for the crimes they commit.
I think the old system needs to be bankrupted to foster in the new age of personal empowerment (and responsibility) that crypto offers.
So if people qualify under the guidelines, they SHOULD file bankruptcy.
While I agree with a lot, i disagree with the anarchic view. You have NO clue if a general bankruptcy will lead to a Renascence financial period of a chaos controlled by the worst individuals.
I do understand your points but we can work to better them from within..to some extent, that's what crypto is trying from my point of view.
The alternative can be lethal. You think owning 75.000$ to the government is bad, try being a slave to an autocrat.
I'm not espousing anarchy by any means. But I think there is going to be some chaos ahead that order will eventually be restored from. The powers that be don't seem very likely to suddenly develop a conscience and become altruistic.
Wow! That's quite an opinion but I must I agree with you! It's crazy how things are today! Even as you speak in the American context of things, even globally things are changing to match the situation in the US i think. It's ridiculous how expensive education and healthcare have become today! :(
History has a habit of repeating itself. How many cultures adopted Roman gods and societal practices during it's heyday? The Roman empire still collapsed. A large percentage of any population looks upon change as something bad or to be avoided. I'm doing my best to embrace the change.
Thats good! :)
Thank you for this amazing piece. It was very helpful and motivating. I have joined Steem very recently and would like to dive deeper now.
A question on the offside. Was Amway the ponzi scheme you fell for? That's Giza compared to all the pyramid schemes in India.
Thanks for stopping by. It wasn't Amways altho a family member did fall trap to that briefly. Follow back for more such updates! Btw, welcome to Steemit and I hope you have a great time blogging here!
resteem and upvote for your post....
Thank you! :)
u r welcome...
Amazing and informative post. Thank you for this encouraging post. Now following!
Thank you for stopping by. Followed you back!
thank you i share your experience to useful and i will resteem it thank very much my dear
Thank you so much! I'm glad you found it useful, follow my blog for more interesting work! :)
This is a great post! I am filled with so many emotions...I must read it again. You have a wonderful mother. Thank you!
Thank you for stopping by and reading my article! :)
Brilliant post, loved to hear your story. I agree about saving (I had to learn this myself, family weren't savers), & family/friends are so important. We all can slip, or need a helping hand sometimes. Upvoted & followed.
Thank you for reading my article. I hope you'll stop be to check the next ones too! :)
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Thanks :)
It's amazing, a great experience
Your experience becomes a lesson for me
I'm glad it could be of some use to you! :)
thanks :)
i'm newbie on steemit follow me @muftykutink
and check my Introduce!!! I'm Mufty from Kingdom of Aceh
Sure! Welcome to Steemit!
Very nice post!!
Thanks :) Follow back for more!
By and hold. Live off of the "coin flow" my term for cash flow. Trading "gambling" can be very dangerous to ones financial net worth.
It is if we aren't cautious in our approach!
Nice... cheers for the share.
GREAT read, Thanks for being YOU.
STEEM on.
1 By 1.
And thank you very much for stopping by and reading my article! :)
Following, RESTEEMED and voted.
Supporting is STEEM POWER (caring).
STEEM on my friend.
1 By 1.
Thank you so much! :)
@firepower - truly inspiring and motivating. i have been thinking of investing in crypto but am worried about getting hacked and losing all the investment. Would like to know how you fool-proofed after your first investment a/c was hacked?
Excellent, I just joined steemit a day before. I am already loving the community here. Your experience and journey is incredible. Keep rocking.