Father’s Day: How the investment patterns changed through the ages

In 1973, Zanjeer, directed by Prakash Mehra, gave birth to a character who would dominate the silver screen for years to come. And if the Angry Young Man captured the imagination of a starved-for-choice India, two years later, Deewar heralded the arrival of the antihero. Amitabh Bachchan, the superstar who built his career on that image, was ecstatically applauded by the Baby Boomer generation (born between 1946 and 1964).

“Aaj mere paas bangla hai, property hai, bank balance hai, gaadi hai…” represented their unfulfilled longing for all the wonderful things money could buy: bungalows, real estate, and cars. The only issue was that in pre-liberalisation, pre-EMI India, houses, property, and vehicles – and bank balance – were hard to come by, and the usual middle-class attributes – or instead values — were austerity, simplicity, and job stability.

Cut to 2021, Shamayita Dutta Chowdhury, 30, works at a marketing technology firm in Mumbai. She is already into her fourth job, earns more than Rs 10 lakh per year and lives alone in a rented apartment.

Shamayita’s popularity among her peers stems from her outlook on life: “Mere paas bangla nahin hai, property bhi nahin hai, aur na hi gaadi hai” (I don’t have a house, property, or a car). She does, however, have a healthy disdain for the status symbols that previous generations desired – after the Baby Boomers came Gen X, those born between 1965 and 1980.

Having said that, how different are millennials from the older generations when it comes to financial planning?

Investing early for retirement

The majority of millennials believe that saving for a goal that is 25 to 30 years away can wait. They think that after the age of 30, one can start thinking about retirement. Millennials opine that investing in financial assets such as stocks and mutual funds for retirement will help them build a substantial corpus because they provide a better return. They are willing to take a chance to get a larger profit.

Older generations begin saving for retirement or other long-term objectives as soon as they start earning. For their retirement, they invest in standard financial products such as FDs, NPS, PPF, etc. When it comes to investment, however, nothing surpasses real estate and gold, even if the returns are low. Investing in stocks and mutual funds is more like gambling to them.

Spending habits

The older generations are baffled by millennials’ penchant for spending money on technology, entertainment, food, vacations, fashion, and accessories. Millennials save less and spend more, causing the economy to become more consumption-driven rather than savings-driven. One explanation for millennials’ increased spending is their ease of borrowing, which includes loans and credit cards and EMIs on nearly everything.

Gen X is obsessed with preserving every penny. They forego the majority of their desires to protect money for long-term aspirations. They fail to live from paycheck to paycheck. 

Some financial lessons to learn from our desi dads

While most millennial yuppies struggle to keep their basic expenses under control every month, our fathers could manage the entire family, pay for tuition/school/hobby classes, manage miscellaneous expenses, cater to the family’s wishes, and still manage the Sunday movie and dinner plan with zeal.

We may not be able to fill their shoes, but this Father’s Day, let’s pledge to take a few financial lessons from Indian dads to become a shadow of the superheroes they have always been.

1. Work hard, ALWAYS

If you’re a middle-class Indian, you’ve witnessed your father struggle for decades. He was most likely attempting to instil the same tendency in you. His approach of motivating you was to let you retain the extra money when you went to get bread and milk or did other home duties. Fathers teach us about the dignity of work, the worth of money, and the satisfaction of witnessing the results of our labour.

2. Have a goal

You most likely recall being bribed for good grades in school. For some, it was a bicycle, while for others, it was a fantastic summer vacation. Fathers encourage us to pursue our goals and dreams for the future by assisting us in determining how to get there. They share the same financial outlook regarding saving for various household requirements, including the bicycle he promised you.

3. Stay clear of debts

Indian fathers avoid debt like the plague unless there is an emergency or a vehicle/home loan to repay. They have a terrible perception of debt, which is why, when you think about it, most of our parents don’t even own a credit card. They will live within their means and never go out of their way to pay interest on something that isn’t necessary.

4. Be happy with what you have

Indian fathers don’t splurge, but they also don’t complain about a lack of funds. They will not allow the rest of the family to feel a load of financial responsibility and power during difficult times. We can learn to appreciate what we have rather than whine about what we don’t have from them. To cope with stress, draw strength from your father’s resilience and serenity.

Our fathers teach us a great deal about life in general. We observe and copy them at times, and we unwittingly absorb some of their characteristics at other times. Our desi values place a high emphasis on money, and if you haven’t picked up on your father’s techniques yet, it’s time to revisit old memories. His approaches may have been conservative, but everything he has done has significantly impacted where you are now.

For any clarifications/feedback on the topic, please contact the writer at sujaini.biswas@cleartax.in