How You Choose To Mess Up Your Financial Life — Without Even Realising It
Here's a look at some common financial mistakes—and the 'unseen choices' behind them.
Do you really 'make decisions' in your financial life—or are you simply making choices by default?
Many people assume that because they haven’t done anything wrong financially, they're on the right track. But 'inaction is also a decision'. And every time you delay, ignore, or postpone something important in your financial life, you're actively choosing the consequences.
Let’s take a look at some common financial mistakes—and the 'unseen choices' behind them.
1. Buying Endowment Or Moneyback Policies
People justify these by saying, “It saves tax,” or “It’s safe and backed by a trusted company.”
But deep down, here’s what you’re actually choosing:
Subpar, below-inflation returns
Illiquidity in times of need
Inadequate life coverage for your family
Safety comes at a cost—and that cost is long-term financial growth.
2. Not Buying A Term Plan
“Why take term insurance? It doesn’t give money back.”
That’s the logic. But here’s what you're really choosing:
A financially insecure future for your loved ones
Passing on your debts and stress to your spouse and children
Denying your family the life they deserve if something happens to you
It’s not about dying. It’s about living responsibly—for others.
3. Not Buying Health Insurance
“I’ll buy it next month” or “I’m healthy, I don’t need it.”
Fair enough—but the hidden choices are:
Letting your life savings vanish due to one hospital bill
Borrowing during medical emergencies
Living with anxiety about healthcare costs
You don’t buy health insurance with money—you buy it with foresight.
4. Stopping SIPs Midway
Imagine this: Mr. X starts a Rs 1,00,000 SIP to build a Rs 10 crore corpus in 20 years. He stops after 5 years, thinking it’s “temporary.”
End result: Instead of Rs 10 crore, he ends up with just Rs 5.54 crore—a shortfall of Rs 4.46 crore.
Stopping SIPs is like stopping oxygen to your financial dreams.
5. Not Creating A Will
“We’re too young for that,” or “I’ll do it once I reach Rs 1 crore net worth.”
But this delay leads to:
Frustration and legal hassle for your family
Unnecessary court visits and lawyer fees
Fights and confusion among heirs
Making a will isn’t about your age or net worth—it’s about clarity and care.
6. Not Hiring A Financial Advisor (When You Need One)
“I can handle it myself” or “advisors charge too much.”
Even a mutual fund CEO recently credited his early retirement to having a financial advisor!
A financial advisor nudges you to walk towards your financial goals, stops you from making mistakes, puts the objective at forefront and manage your emotions at the time of pessimism and exuberance.
If top professionals hire coaches, why not you?
7. Not Understanding The Difference Between Need And Want
Credit cards, EMIs, social media pressure… and suddenly, buying what you want feels like a need.
This shift leads to:
Poor savings habits
Missed compounding opportunities
Lifestyle inflation that silently ruins your future
Spend consciously—or wealth will always feel just out of reach.
8. Ignoring Tax And Inflation
That 7.5% fixed deposit? If you're in the highest tax bracket, then the post-tax return is of around 5%. Assuming inflation at 5%, your 'real return is zero'.
Net return = Gross return - tax - inflation
You’re actually locking your money into stagnation, not growth.
9. Overexposing Emotionally To Real Estate
Many believe: “It’s tangible, it’s safe, it appreciates.”
But:
It’s illiquid
Difficult to partially sell
Often underperforms financial assets over time
Emotions don’t grow wealth—disciplined asset allocation does.
10. Falling For Tall Claims
Ponzi schemes, quick-rich plans, guaranteed double-your-money pitches—many so-called long-term investors fall for them.
Result?
Capital loss
Loss of trust
Delayed financial freedom
Greed and gullibility are the costliest expenses.
11. Herd Mentality
“My friend is doing this, I’ll do the same.”
Following trends over goals leads to:
Poor alignment with your needs
Emotional, fear-driven investing
Regretful U-turns during market volatility
Financial success is personal. Herds don’t build wealth—goals do.
Conclusion:
Every action or inaction in your financial life is a choice—whether you see it or not.
You are fully responsible for the outcome of your financial journey.
Choose growth
Choose discipline
Choose planning
Most importantly, 'choose to take control'—with the help of a financial advisor if needed—because your financial future isn’t written by chance, but by choice.
