18 Years of Earning, But Still Broke — The Financial Lessons I Learned Too Late
The Wake-Up Call
Most people think a good salary alone will make them rich. I thought so too.
For 18 years, I worked steadily. I earned well, saved regularly, and thought I was doing everything right.
Then came that Sunday afternoon last year.
I was sitting at my dining table, laptop open, finally deciding to check all my accounts properly. My wife was in the kitchen. Kids were playing in the next room. Normal weekend sounds.
I logged into my savings account. Refreshed the page thinking there was some error.
₹22,000.
That's all I had. After 18 years of earning. After countless "I'm saving for the future" conversations with myself.
My hands actually trembled as I checked my FDs. Yes, there was some money there. But when I calculated everything together, added up the FDs, the small investments, everything — the number was embarrassingly low for someone who had been working for nearly two decades.
I sat there staring at the screen for what felt like forever. The sounds from the kitchen faded. A cold wave of realization washed over me — I had been fooling myself for 18 years.
If you're reading this and feeling that same sinking feeling in your stomach, that same "how did this happen?" question spinning in your head — you're not alone. I was there. And if you're wondering where all your money disappears every month despite earning well, maybe you're making the same mistakes I did.
Let my experience be both a guide and a warning.
The Biggest Mistakes That Cost Me
Looking back, I can see clearly where I went wrong. These weren't dramatic failures — they were quiet, everyday decisions that slowly drained my financial future.
▼ Click to expand for more details
▶ Mistake #1: Relying Only on Fixed Deposits — Playing It Too Safe
My parents trusted fixed deposits. So naturally, I did too. It felt safe, secure, and responsible.
Every month, I'd put money into RDs (Recurring Deposits), and after a year when they matured, I'd convert them to FDs. I felt good about it. "At least I'm saving," I'd tell myself.
But here's what I didn't understand then: safety came at the cost of growth.
While my FDs gave me 6-7% returns, inflation was eating 6-8% of my purchasing power every year. I wasn't growing wealth — I was barely maintaining it. Sometimes not even that.
The ₹1 lakh I saved 10 years ago? It's still ₹1.79 lakh today in my FD. Even if I had studied more and invested smartly using the FD Laddering System in small finance banks, it would have grown better. But I had that traditional mindset — "where my father invested, I'll invest there too."
Sounds safe, right? But that same ₹1 lakh, if invested in a mutual fund SIP, would be worth ₹3.10 lakh today.
That's the real cost of "playing it safe."
Safety is important, but your money must grow faster than inflation. Otherwise, you're losing money even while saving it.
💡 What I Did to Fix This:
I didn't abandon FDs completely — I kept 40% there for stability. But I started my first SIP of ₹2,000/month in an index fund. Within 18 months, that decision alone added ₹45,000 to my net worth (including returns). Small start, but it worked because I actually started.
▶ Mistake #2: Lack of Diversification — All Eggs in One Basket
Because I only trusted FDs, my entire financial life depended on one investment type.
When interest rates dropped, my returns dropped. When I needed money urgently, I had to break FDs and lose interest. When market opportunities came, I had no money to invest.
"Don't put all your eggs in one basket." — Warren Buffett
I had zero flexibility.
My portfolio looked like this:
- Fixed Deposits: 95%
- Savings Account: 5%
- Mutual Funds: 0%
- Gold: 0% (except jewelry, which doesn't count)
- Emergency Fund: Didn't even know what that was
Don't put all your eggs in one basket. Diversify between fixed income, equities, gold, and emergency funds. Each serves a different purpose.
💡 What I Did to Fix This:
I created the 40-35-15-10 portfolio: 40% FDs (safety net), 35% Mutual Funds (growth), 15% Emergency Fund (liquidity), 10% Gold (hedge). This mix gave me stability AND growth. When markets crashed 20% in 2024, my FDs cushioned the blow. When markets recovered, my SIPs captured the gains.
▶ Mistake #3: Panic Selling During Market Crashes — The Costliest Error
The few times I did try investing in mutual funds, I made the classic mistake: I panicked and redeemed everything during market crashes.
In 2020, when COVID hit and markets crashed, I couldn't handle seeing my investments drop 30%. The fear was overwhelming. I sold everything at a loss.
Then I watched helplessly from the sidelines as the market recovered and hit new highs within a year. The same mutual funds I redeemed at a loss doubled in value for those who simply held on.
Here's what I should have done instead:
Many of us redeem our mutual funds when markets crash, but this actually cuts us financially. That's the exact time we should invest MORE, not exit.
But be careful — before investing in any mutual fund, read all documents carefully. Remember: mutual funds are subject to market risk. Understanding what you're investing in is crucial.
Market crashes aren't disasters — they're opportunities for those who stay calm. The biggest gains come to those who continue their SIPs when everyone else is panicking and selling.
💡 What I Did to Fix This:
I set up automatic SIP payments so emotions couldn't interfere. When the 2023 market correction happened and everyone around me was panicking, my SIP just kept running. Six months later, those "crash purchases" were up 28%. The automation removed my biggest enemy — myself.
▶ Mistake #4: The Most Costly Mistake — No Health or Term Insurance
This is the one that haunts me the most.
For years, I thought: "I'm young and healthy. I'll buy insurance later."
Then two things happened that changed everything:
First: The Health Crisis
Most people don't buy health insurance until a major health issue strikes — and then suddenly, all their savings get wiped out in one go.
Let me share a real example: One of my colleagues was hospitalized unexpectedly. The total bill came to ₹5 lakhs. Because he had health insurance, he filed a claim and received around ₹4 lakhs back. Without insurance, his family would have been financially devastated.
Compare that to my father's situation — when he was hospitalized, we had NO insurance. The bill was ₹4.8 lakhs. We broke every FD we had and borrowed from relatives. Years of savings vanished in three weeks.
Second: The Family Tragedy
A colleague passed away unexpectedly at 42. Heart attack. Left behind a wife and two school-going kids. No term insurance.
I watched that family struggle financially for years after. The kids had to change schools, they moved to a smaller house, the wife had to take up a job she wasn't prepared for. All because of one missing financial decision.
These aren't just stories — these are real situations I witnessed up close.
Here's the brutal truth:
- A single hospitalization can wipe out your entire life's savings overnight
- If the main breadwinner dies without term insurance, the family faces years of financial hardship
- You can't buy health insurance when you're sick
- You can't buy term insurance after you're gone
Insurance isn't optional. It's non-negotiable for protecting your family and your finances.
Get health and term insurance TODAY, not tomorrow. Every day you delay is a day your family is at risk.
💡 What I Did to Fix This:
Within 15 days of my father's hospitalization, I bought ₹5 lakh health insurance for my family (₹8,000/year) and ₹50 lakh term insurance (₹12,000/year). Total: ₹20,000 annually. That's ₹1,667/month. Less than what I used to spend on weekend food delivery. This one decision gave me more peace of mind than any investment ever did.
How I Changed — A Financial Reset
After that Sunday afternoon reality check and my father's hospitalization draining our savings, something inside me shifted.
I spent three months obsessively learning everything I could. Books, videos, conversations with financially successful friends, consultations with a SEBI-registered advisor. I wasn't going to let another 18 years slip by.
Here's what I discovered through my research and real-world experience:
The Mindset Shifts That Changed Everything
1. Saving ≠ Investing
Saving is keeping money safe. Investing is making money grow. I confused the two for 18 years.
Now I save for emergencies (3-6 months expenses) and invest for wealth building.
2. High Income ≠ Wealth
I was earning well but had nothing to show for it. Wealth isn't what you earn — it's what you keep and grow.
I know people earning half my salary who are wealthier because they invest smartly.
3. Avoiding Risk ≠ Avoiding Loss
I avoided stock market risk, but lost to inflation risk. There's no such thing as zero risk — only different types of risk.
Now I manage risk through diversification, not avoidance.
4. Old Habits Need Upgrading
My parents' generation did well with FDs because interest rates were 12-14%. Today they're 6-7%. The world changed, but I didn't update my strategy.
What worked for them in the 1980s doesn't work for us in the 2020s.
The Practical Changes I Made
After learning, here's what I actually did:
📅Month 1-3: Foundation Building
- Opened health insurance for entire family (₹8,000/year premium)
- Got ₹50 lakh term insurance (₹12,000/year premium)
- Built 1-month emergency fund in savings account
📅Month 4-6: Starting to Invest
- Started first SIP of ₹2,000/month in index fund
- Kept some FDs but reduced from 95% to 50% of portfolio
- Started tracking every expense in a notebook
📅Month 7-12: Building Momentum
- Increased SIP to ₹5,000/month
- Started second SIP in balanced fund
- Built emergency fund to 3 months
- Stopped eating out unnecessarily (saved ₹3,000/month)
✓Today (After 18 months)
- Portfolio: FDs 40%, Mutual Funds 35%, Emergency Fund 15%, Gold 10%
- Monthly investments: ₹8,000 in SIPs
- Net worth: ₹4.2 lakhs (from ₹22,000!)
- Most importantly: Peace of mind knowing family is protected
I'm not rich. But I'm finally on the right path.
Final Lessons I Wish I Knew Sooner
Let me share some practical insights that took me years to learn:
The Real Numbers: FD vs SIP vs Gold
Here's what ₹10,000 monthly investment becomes after 10 years:
| Investment Type | Annual Return | Value After 10 Years | Risk Level |
|---|---|---|---|
| Fixed Deposit | 6% | ₹16.4 Lakhs | Very Low |
| Mutual Fund SIP | 12% | ₹23.2 Lakhs | Moderate |
| Gold (average) | 8% | ₹18.4 Lakhs | Low-Moderate |
(Based on historical averages - actual returns may vary)
That ₹6.8 lakh difference between FD and SIP? That's the cost of playing it too safe.
▼ Click to expand for more details
▶ Lesson #1: Fixed Deposits Aren't Evil — Just Don't Rely on Them Alone
FDs have their place:
- Emergency fund (for 3-6 months expenses)
- Short-term goals (wedding, car down payment in 1-2 years)
- Senior citizens with low risk tolerance
But for long-term wealth building (10+ years)? You need equity exposure through mutual funds.
Pro tip: Try small finance banks offering 8-9% on FDs. They're DICGC insured up to ₹5 lakhs just like regular banks.
Related reading: Fixed Deposit Strategy for Pensioners
▶ Lesson #2: Don't Sell Gold in a Crisis — Pledge It
When my father was hospitalized, we sold my mother's gold jewelry at a loss.
What I learned later: You can get a gold loan instead!
- Get 75% of gold value as loan
- Interest rates: 7-10% per year
- Repay when you have money
- Get your gold back
Selling gold is permanent. A gold loan is temporary.
▶ Lesson #3: Start Small with Mutual Funds — You Don't Need Lakhs
I thought mutual funds were for rich people. That's nonsense.
You can start a SIP with just ₹500/month. That's ₹17 per day. Less than a cup of chai at a café.
Beginner-friendly options:
- Index Funds (track Nifty 50 or Sensex)
- Large Cap Funds (invest in established companies)
- Balanced Funds (mix of stocks and bonds)
Related guide: How to Start Mutual Fund SIPs
▶ Lesson #4: Insurance Isn't Expensive — It's Essential
Many people say "I can't afford insurance."
Let me break down the real costs:
Health Insurance (Family of 4):
- ₹5 lakh cover: ₹8,000-12,000 per year
- That's ₹1,000 per month
- Cost of ONE hospitalization without insurance: ₹2-10 lakhs
Term Insurance (₹50 lakh cover for 30-year-old):
- ₹10,000-15,000 per year
- That's ₹1,250 per month
- Peace of mind for family: Priceless
You're not paying for insurance. You're paying to protect everything else you've built.
▶ Lesson #5: Track Your Expenses — You'll Be Shocked
For one month, I wrote down every single expense. Every chai, every auto ride, every online order.
What I discovered:
- ₹4,500 on food delivery (could've cooked at home)
- ₹2,800 on subscriptions I rarely used
- ₹3,200 on impulse shopping online
- Total: ₹10,500 wasted per month!
That's ₹1.26 lakhs per year. That's a mutual fund SIP that could become ₹29 lakhs in 10 years!
Small leaks sink big ships.
Your Financial Reset Checklist
Ready to avoid my mistakes? Here's your action plan:
| Week | Action Items | Done |
|---|---|---|
| Week 1 Protect First |
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| Week 2 Build Emergency Fund |
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| Week 3 Start Investing |
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| Week 4 Track and Learn |
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| Ongoing Every Month After |
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Frequently Asked Questions
QWhat's the real difference between saving and investing?
A: Saving is putting money aside for safety and short-term needs. Returns are low (4-6%) but it's secure. Investing is putting money to work for long-term growth. Returns are higher (10-15% in equity) but with some risk. You need both — save for emergencies, invest for wealth.
QAre fixed deposits really enough for retirement?
A: No. They were enough when rates were 12-14%, but at today's 6-7%, they barely beat inflation. For retirement (which lasts 20-30 years), you need growth from equity. Use FDs for 30-40% stability, but invest 60-70% in equity mutual funds for growth.
QHow much should I actually start investing monthly?
A: Start with whatever you can consistently maintain. Even ₹500/month is fine. The key is to START and then increase gradually. I started with ₹2,000, now I do ₹8,000. In two years, I plan to do ₹15,000. Progress, not perfection.
QIs it safe to start mutual funds during market highs?
A: Market timing is impossible. SIPs work in all markets because you buy more units when prices are low and fewer when high — this averages out. I started during COVID crash, during market highs, during corrections. After 18 months, all are in profit because I stayed consistent.
QWhat if I'm 40+ and just starting now?
A: You're not too late. Yes, you've lost some compounding years, but you still have 20-25 years until retirement. That's enough time. Start with aggressive investing now — 70-80% in equity since you have time to recover from volatility. Just don't make my mistake of waiting another 10 years.
QShould I pay off all debt before investing?
A: Depends on interest rates. Credit card debt (24-36% interest)? Pay that off first — no investment beats that return. Home loan (8-9%)? You can invest while paying EMI since mutual funds can return 12%+. Personal loans? Prioritize paying those off first.
Still have questions? Feel free to reach out or explore more articles on Learn with Amrut.
Final Thoughts
Your income alone won't make you rich — your money management will.
I wasted 18 years learning this lesson the hard way. You don't have to.
Start small. Start today. Protect your family with insurance. Build an emergency fund. Begin a SIP with whatever you can afford. Track your expenses. Learn continuously.
Financial freedom isn't about earning more — it's about managing better what you already earn.
One year from today, you'll wish you had started today.