Rahul, Divya and Mahesh are childhood friends. Everyone likes to call them  – 3 Musketeers! Right from staying in Mumbai’s suburbs during their school and colleges days to now living in posh locality of South Mumbai, their journey is not less than anything inspirational. Those sleepless nights before exams, traveling in local trains, chai-samosa parties, etc. are some of the unforgettable memories that they relive whenever they meet.

Rahul rose through the ranks of corporate ladder after completing his professional education. Divya became a doctor, she is a visiting doctor to many hospitals in Mumbai. Mahesh established a business while he was in college and has now established into a global company.

As Rahul turns 40 today, he stands on the balcony of his penthouse with Divya and Mahesh next to him reliving those days when they were hustling through life.

‘Life has blessed us with so many fond memories. We used to study till 4 am and write exams the very next day. Not to forget the chaiwalah who used to come at 1 am in the morning and ask us about our preparations for tomorrow. Remember how Mahesh used to confidently say, that we will crack the papers wide open!’ remarked Rahul.

‘Oh yes and we would be worried about whether we will be able to write the paper tomorrow or not,’ laughed Divya.

‘And we did crack the papers every single time. Didn’t we?’ smiled Mahesh.

‘Most definitely we did.’ Divya winked.

‘Seriously, I had to climb the hard corporate ladder and work around my loans for my house and Mercedes while Mahesh has been able to buy three houses and 2 BMWs by now. He seems to have some magic wand.’ Rahul said.

‘I never buy anything on loan. We have a saying in our family, a person works for 12 hours while his interest on loan works for 24 hours. The only loan we take is for business expansion and new product offerings.’ Mahesh replied with ease.

‘WHAT!! You have never taken a personal loan. Then you’re surely missing out on great things of life buddy. See this phone of mine, it’s worth Rs. 1.25 lakhs. I couldn’t afford paying straight away so I got an easy EMI option on it. I just bought my first Audi too and have my bank’s relationship manager working on a house that we are planning to buy in next 6 months. It really improves my image as a doctor, you see.’ Divya anxiously replied as she couldn’t believe Mahesh never ever took a loan.

Mahesh sensed Divya’s anxiousness. He replied, ‘That’s wonderful Divya. I am glad to see you so happy. You are a wonderful doctor but very bad at managing your money.Since you were so busy studying those big books, you never got the time to understand the power of compounding.’

‘I agree with Mahesh. Understanding money and power of compounding is a must, Divya. It’s the 8^th  wonder of the World.’ Rahul interrupted.

‘I don’t believe Mahesh at all. Even Rahul took a loan for your house and Mercedes. So what’s wrong with me taking one?’ Divya was getting a little irritated now while Mahesh maintained his composure.

‘Yes, Divya. But then look at what I had to go through. Most of my money was being spent on servicing the EMIs on loans. Though I don’t have any loan on my head right now, I also don’t have any money sitting in my bank right now that will help me retire. If my daughter gets hospitalized tomorrow, I will have to take loan from you and Mahesh to help me out. Next option is credit card.

Technically, I am still a slave to the system. I can’t escape my job. I am still working for money, I just disguise it saying that it’s my passion. But it’s far from truth and you know that.’ Rahul choked while speaking.

‘Divya, don’t get me wrong. But the loans that you are enjoying today are just financial burdens of tomorrow. You still aren’t able to take your personal time off from work. It’s creating a pressure for you when in reality. You want to start a charity for underprivileged since a long time but you aren’t able to because you don’t have time. You are chasing money while dreams are slipping away.’ Mahesh chose his words carefully this time as Divya went into deep personal enquiry.

Silence for 5 mins.

Finally Divya started talking. ‘You guys are right. I have achieved so much as a doctor but there is no freedom in my personal life. I still cannot take 1 week off from work and spend time with my children. Home loans, car loans and now a loan for phone too. There is no money sitting in bank account that can be used if some emergency in family comes up. Retirement is completely out of picture, at least you have even thought about it Rahul, for me it’s a distant reality.’

Rahul got up to get a juice for Divya. On coming back he asked, ‘Mahesh how the hell did you do it? I mean, how did you become financial independent with so much stress from business every single day?’

To which Mahesh replied, ‘I never really took a loan to fulfil any of my desires. Whatever money we made, we continuously invested back in our business all the time. Plus since last 10 years, we have been investing mutual funds as well.

When you own a business, you own a piece of growth. It starts small and slowly compounds over time. Remember the days when you bought your first car and I was still traveling by public transport. I had the option of taking a loan but didn’t want to burden myself. While Divya was enjoying Europe, I was enjoying Kerala. The idea was to let money work for me.

And it took off. In last 12 years, we saw immense growth in our business. Then even our holdings in mutual funds grew and suddenly we were having more money than we had ever imagined. My business makes enough money for me to not work for a few years. My investments have earned me financial retirement. I am happy with my phone which serves the purpose of emails, chats and calls. There is no financial pressure, what more could I have asked for in life?’

Divya was listening with great interest when Rahul interrupted.

‘Owning a piece of business is so important. I had ESOPs of my company but I sold it off for down payment of my home. Those shares are worth 5x more today. I realize now that I made such a big blunder.’ Rahul almost stopped drinking his juice.

‘That’s in past Mahesh. Now what shall we do?’ Divya looked highly concerned now.

‘Don’t worry. We will crack this paper of your financial life wide open too, just how we did during exams’ winked Mahesh.

‘That’s the spirit boys!’ yelled Rahul with excitement.

Mahesh said, ‘listen to me very carefully now, just don’t interrupt. First and foremost, repay every loan you have. Especially your loan for Audi, Divya. If you don’t need that car then don’t buy. You are not impressing anyone. Just putting too much financial stress on yourself. And for that second home you are buying with loan, cancel that too. Find a nice broker and sell that house. You don’t need an extra house right now too.’

Divya politiely asked, ‘My dearest Mahesh, how do I repay my loans and start investing? I will need someone to guide me through the process. I am not born with mastery in numbers, like you!’

Rahul laughed while Mahesh was gathering his voice.

Mahesh replied, ‘Yes Divya, as always you are right. You need a Financial Advisor to help you through this. Just the way you take care of your patient’s health, your advisor will take care of your financial health. An advisor will see to it that you don’t overspend your income, invest the balance and see to it that you don’t take up unnecessary loans. This will secure your retirement and you will be able to work without having to worry about money any single day.’

‘Wow Mahesh. Do you have anyone in mind?’ enquired Divya with great excitement.

‘We have a financial advisor who will help you out with the process.’ Rahul intervened.

‘What!! Both of you already have one and never told me about it!’ yelled Divya.

‘That’s because you never want to discuss about investments ever with us.’ Mahesh replied.

Rahul replied, ‘Yes. I invest some portion of my salary every month into mutual funds. Also have an emergency fund set up, if I am unable to work for 3-6 months. Since I paid my complete home loan last year, I will be able to gain complete financial independence in the next 5 years. My advisor keeps a very good track of it.’

Mahesh looked at Divya and said, ‘Sit with the financial advisor for a few hours and plan a life of complete financial freedom. Just don’t let your fear or greed get in the way. It’s okay to get rich slowly because ultimately you will get rich. Getting rich fast, never really happens!’

‘Wow. What a speech, can’t get enough of it!. But for now, we are hungry and need food. Right now, we wish to focus on independence from hunger!’ Rahul smiled and thanked Mahesh.

Today’s Thursday Trivia has taken its inspiration from the tweet of Mr. Steve Burns. 

The most satisfying personal finance achievements:

• No credit card debt
• No car payments
• Home can be paid off
• No debt
• Emergency fund
• Big retirement account
• Big trading account
• Cash flowing assets
• No financial pressure
• Financial independence from a job

– Jinay Savla