Last Updated on February 12, 2022 at 6:21 pm
Has my earning capacity saturated?. Is this all that I am going to earn for the rest of my life? Do I need to erase some of my dreams because I am never going to earn enough in order to achieve those?
These are some of the most unsavoury questions in personal finance. Most people confront them at some point in their lives. The answers are typically not pleasant. At least that was the case for me.
As a boy, I knew little about the importance of money. I demanded very little from my parents. What I wanted, I got. So mine was a happy childhood. Money did not drive my choice of education. I did not choose a degree based on career prospects. I chose what I liked or what I thought I liked.
I never had any kind of notion about what a ‘good’ salary was. I remember the reactions of my classmates when I told them my research fellowship. Some of them went ‘is that all? How do you manage?’ To be frank, I did not know what ‘manage’ meant. I would draw my salary, give it to my parents and did nothing more.
🔥Secure your future with our Robo-advisory tool trusted by over 3,500 investors and advisors. From effortless retirement planning to funding your children’s biggest dreams, turn your financial goals into reality. 🔥
Subscribe for money management solutions via email! (Link takes you to our email sign-up form) Join 32,000+ readers in our community.
👉 New Tool Alert! NaviPlan: A Privacy-Focused Multi-asset Tracker and Goal Planner 👈
I was 31 when I got a tenured appointment and for the first time got a ‘respectable salary’ (meaning my friends would not go, tsk, tsk!)
A year or so later, during a discussion about how scientists behaved in certain labs, one my colleagues made an observation which I would never forget. He said,
these guys found out pretty late in life that their salaries are not commensurate with their dreams. Beyond expenses and essential financial goals (child’s marriage, education etc.), these guys cannot buy anything else. They don’t have the cash flow. They salaries have saturated. So they are frustrated and it shows in their work.
Those words shook me up pretty bad. For the first time in my life, I realized the importance of holistic money management. The need to take into account future financial goals and if we will have the necessary cash flow to fund them.
The following summer, I spent a lot of time staring at cash flow charts in Excel, answering:
If my salary did not grow beyond the typically expected 8-10% growth, will I be able to invest enough for my all my essential financial goals?
I have been doing this exercise (now fully automated with financial plan creator) each year since then. You can also use the robo advisory template
When I did it for the first time, I had only retirement as the essential goal. Since then, I have become a parent and now have my son’s education and marriage as additional essential goals.
Thankfully, due to the 6th pay commission, my salary increased and I could accommodate the additional goals.
However, I have not be able to factor in my dreams, desires or non-essential goals (relatively speaking) for the last 9 years.
I think it is safe to say that my earning capacity has saturated.
I would not be surprised if many others are in the same boat. For most people, there is a limit to how much they can earn and therefore, a limit to how much they can realistically want.
Yes, yes, we must never give up on my dreams and wants, be optimistic, strive for it as long as we can, it is never too later and all that sort of thing, but who are we kidding?
Correct me if I am wrong, I think for most people, earning potential is determined in a narrow time window, typically after school.
How much we earn is decided more often that not decided by what we choose to read and where we choose to work.
An income over and above that is typically rare.
The moment when we holistically realize what our present and future purchasing capacity is going to be is a watershed momement.
If you have not though along these lines, I urge you to ask the questions that I did with the financial plan creator or the robo template this weekend.
It is important to not lose hope. Let us hold on to it with perspective.
We are on Google News
Use this button to add freefincal.com as a preferred personal finance source on Google News.
Explore 1,400+ videos on YouTube!
Subscribe to get posts via email!
Join 32,000+ readers and get free money management solutions delivered to your inbox! (Link takes you to our email sign-up form)Join our WhatsApp Channel
Explore our products
🔥Join our community of 9000+ users! 🔥- Use our Robo-advisory Tool to create a complete financial plan! More than 3,500 investors and advisors use this! Use the discount code robo25 for 20% off. Plan your retirement (early, normal, before, and after), plus non-recurring financial goals (such as child education) and recurring financial goals (such as holidays and appliance purchases). The tool helps anyone aged 18 to 80 plan for retirement, plus six non-recurring and four recurring financial goals, with a detailed cash flow summary.
- Our Flagship Course! Learn to manage your portfolio like a pro to achieve your goals regardless of market conditions! More than 3,500 investors and advisors are part of our exclusive community! Get clarity on how to plan for your goals and achieve the necessary corpus no matter the market conditions! Watch the first lecture for free! One-time payment! No recurring fees! Lifelong access to videos! Reduce fear, uncertainty and doubt while investing! Learn how to plan for your goals before and after retirement with confidence.
- Join the freefincal investor circle! An exclusive space for investors, advisors, fintech employees and students to access financial planning and insurance tools, mutual fund and stock analysis tools, coding strategies and Excel macros for data extraction. 750+ members are now part of our investor circle.
- Increase your income by getting people to pay for your skills! More than 900 salaried employees, entrepreneurs and financial advisors are part of our exclusive community! Learn how to get people to pay for your skills! Whether you are a professional or small business owner seeking more clients through online visibility, or a salaried individual looking for side or passive income, we will show you how to do it by showcasing your skills and building a community that trusts and pays you. (Watch the 1st lecture for free). One-time payment! No recurring fees! Lifelong access to videos!
- Portfolio Tracker! Track your mutual funds and stock investments with our Google Sheet!
- We also publish monthly screeners for
Our Podcast: Let's Get Rich With Pattu
On Spotify: Let's Get RICH With PATTU! Every single Indian CAN grow their wealth! On Audible: Listen to the Let's Get Rich with Pattu Podcast
Listen to the Let's Get Rich With Pattu podcast on YouTube.
Now watch Let's Get Rich With Pattu தமிழில் (in Tamil)!About The Author
Dr M Pattabiraman giving a lecture
- Dr M. Pattabiraman (PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras.
- He has over 14 years of experience publishing news analysis, research and financial product development. He has over 28 years of teaching and research experience. He is also a public speaker and keynote presenter.
- He is a patron and co-founder of “Fee-only India,” an organisation promoting unbiased, commission-free, AUM-independent investment advice.
- Connect with him via @pattufreefincal on X LinkedIn YouTube
- Pattabiraman has co-authored three print books.
This book helps you ask the right questions and find the right answers. It also includes nine online calculators to create custom solutions.
(2) Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want. 
Both the boy and girl versions of "Chinchu Gets a Superpower".
Most investor problems stem from a lack of poor decision-making. We made bad decisions and money mistakes when we started earning, and we spent years undoing them. Why should our children go through the same pain? What is this book about? As parents, what if we had to groom one ability in our children that matters not only for money management and investing but for every aspect of life? My answer: Sound decision-making. So, in this book, we meet Chinchu, who is about to turn 10. The story follows what he wants for his birthday and how his parents plan it, while also teaching him key ideas about decision-making and money management. What readers say! 
Feedback from a young reader after reading Chinchu Gets a Superpower!
Must-read book even for adults! This is something that every parent should teach their kids right from a young age. The importance of money management and decision-making based on their wants and needs. Very nicely written in simple terms. - Arun.
About freefincal & its content policy
Freefincal is a News Media organisation dedicated to providing original analysis, reports, reviews and insights on mutual funds, stocks, investing, retirement and personal finance developments. We do so without conflict of interest and bias. Follow us on Google News. Freefincal serves more than three million readers a year (5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified with credible and knowledgeable sources before publication. Freefincal does not publish paid articles, promotions, PR, satire or opinions without data. All opinions will be inferences backed by verifiable, reproducible evidence/data. Contact Information: To get in touch, please use our contact form. (Sponsored posts or paid collaborations will not be entertained.)Our publications
- Your Ultimate Guide to Travel. This is an in-depth exploration of vacation planning, including how to find affordable flights, budget accommodations, and practical travel tips. It also examines the benefits of travelling slowly, both financially and psychologically, with links to relevant web pages and guidance at every step. Get the PDF for Rs 300 (instant download)
- How to profit from content writing: Our ebook is for those interested in getting a side income via content writing. It is available at a 50% discount for Rs. 500 only!