[PreludeSH]

Originally Posted by SnS_12

Something the younger generation need to keep in mind when they just start off earning. Never buy luxury items with money you don’t have.

Attachment 2387081

Good one. But then so is investment in stock markets and earning from it. Is it really based on earnings or earnings potential of a company ? After how many years ? Some of the advices in the thread itself which are based on stock market are based on a virtual world where some rules have been made away from real world.

[SilentEngine]

A wise man once said "Compound interest is the eighth wonder of the world. One who understands it, earns it. One who doesn't, pays it". Once you understand this, everything else will fall in place!

[SaurAswale]

Hi everyone,
I'm following the forum for long time but joined recently. This will be my first post.
I'm into a dilemma that once faced by most of us.

I'm a Mechanical Engineer (25yrs age) staring my career (10 months) in Finite Element Analysis from a small org. Done my Post grad from one of the top government college in Maharashtra, but sadly we didn't had any campus placement in Core mechanical due to covid. And being as stubborn/proud as I am, I decided not to go into IT companies as my friends. I like what I do, using all engineering learnt till now, but salary is not great when compared to IT guys.

My finances-
35% salary spent on monthly expenses ( I live in a hostel near my office which is in expensive area) and trips to home.
Some money goes for a term insurance.
Couple of SIPs I started with 2k per month each and planning to increase once emergency fund is 75-80k.
Remaining goes to emergency fund that I'm building - 12k per month..
Sometime I need to send money to my parents.
I've good spending habits.
I don't spend money on fashion accessories, tech devices or other things people do in their 20's except biryanis and tandoors twice a month.😅

As everyone here 'I love automobiles' is an understatement for me. I never asked my parents for a bike (Another self pride thing). But I always dreamt to own one, love her and go to places with her. Reading travelogues here is like adding oil to the fire.

The Problem -
We have lot of wise people from various backgrounds here. Please share your thoughts, experiences and advise regarding this.
I have Two options-
1. Being from a farmer's family, we don't really have any assets as such. Just our house in villages and some farm land. So no any financial cushion. As everyone says to be financially stable in later years, the key is to start compounding as early as possible. Things like Bike will further add to expenses.
So, Save as much I can now, invest some, and bike can wait for couple of years.

2. Spend all savings and some more to buy a used bike and riding gear (1-1.2L total). Some people say don't overthink and enjoy the life as I hardly have 3-4 year. This time will never come and even if I have money later I can't spend it on these things. And you'll never have "Enough" money

Is it right decision to buy a bike now??
What did you do in your 20s???

[srini1785]

Originally Posted by SaurAswale

I'm a Mechanical Engineer (25yrs age) staring my career (10 months) in Finite Element Analysis from a small org.

First of all, kudos to you for your thought of sticking with core engineering field. Almost all graduates of your age just want the highest offer with FAANG company.

At 25, i did not have not have any intention of saving. I just went for what i wanted. You won't get this age back so what whatever it is that you want just go for it. You can worry about finances later in life.

[AltoLXI]

Originally Posted by SaurAswale

Is it right decision to buy a bike now??
What did you do in your 20s???

I am a Gen X person - so the answer to your question "What did you do in your 20s" may not be relevant. Except for some Bajaj scooters, Hero Honda and Ind-Suzuki bikes, we had no much options to chose one from. And buying bikes then was not as fashionable.

Coming to career, I appreciate you sticking to Mechanical engineering. A few of my relatives did complete mechanical engineering, did MS in USA and are quite in top level positions there. A few of my colleagues switched to IT field and making quite good money. Some of them stuck with Mechanical engineering but did not care about managing their career and are stuck with salaries in range of 30k p.m. even after 20 years. I would suggest focus on your career, get certifications, learn what is relevant to improve your career prospects and thereby the financial status.

My cousin was in similar position (but his family's financial condition is good). He worked for a couple of years, but was just getting 20k p.m. as salary. He learnt German during these two years, and did MS in Germany and is currently working there. Try to see if this is possible for you. Save as much as possible for a couple of years and try to move to European countries for MS. You can as well buy and ride German bikes in future

[skumare]

Originally Posted by SaurAswale

Being from a farmer's family, we don't really have any assets as such. Just our house in villages and some farm land. So no any financial cushion.

Having a similar background in my student life and early career, I will say that any first-gen compounder in a family will have the same question. You will realize later in life that your prudence will enable your next-gen to be able to take risks and enjoy life on a better scale. At the same time, you may want to set a target (X% of your salary) for savings and spend the rest on what you really enjoy.

[androdev]

Originally Posted by SaurAswale

What did you do in your 20s???

I was making plans for world domination Didn't work out, but hey I tried.

You can earn 20K per month and spend all your energies in saving and compounding or you can earn 200K per month and get away without a strict savings regimen. For young person like you, the ceiling should be very high when it comes to career prospects.

Many young people don't have close relatives who have made it very big in career/business line to serve as a reference. This is a huge handicap and they probably fail to understand their true potential and possibilities. Bottom line is, look around and see where people are ending up in their 40s/50s and see how you can learn from the interesting journeys of these people (both good and bad).

The whole thought process of compounding, SIP, tax savings, etc. tend to give you a false sense of "doing well" whereas one should be focusing on the big picture. I don't mean you should get into IT (though it's not good idea to have such a prejudice against an industry with such a huge potential). You can continue in your field of interest but you need to step up your game - maybe you can work abroad in your field, or get into a managerial path, or plan to become an entrepreneur in the same field.

Originally Posted by SaurAswale

Is it right decision to buy a bike now??

About the bike, buy a 2nd hand one without loan and have a blast.

[SaurAswale]

First of all, Thanks all for sharing your thoughts. I was confident that I will get some wise views which can help me to get think more clearly.

Originally Posted by AltoLXI

Some of them stuck with Mechanical engineering but did not care about managing their career and are stuck with salaries in range of 30k p.m. even after 20 years.

Thanks. Fortunately I am earning slightly better in than this in first job but not "Enough".

Originally Posted by AltoLXI

He learnt German during these two years, and did MS in Germany and is currently working there. Try to see if this is possible for you.

This was the plan initially. I did some preparation in my graduation years until my parent strongly went against it. I still don't understand why.
But I did next best thing and prepared for GATE for remaining 1 month to get into a very good gov. college for my MTech.(I still regret this.)
Now the only way is to get couple of years of experience and try to work abroad.

Originally Posted by skumare

At the same time, you may want to set a target (X% of your salary) for savings and spend the rest on what you really enjoy.

I am exactly following this. Saving target amount to build the emergency fund. After that savings should split into a bike fund.
But the urge for scrapping the savings to buy a bike right now is too much. And that's the problem. Hence this post.

Originally Posted by androdev

I was making plans for world domination Didn't work out, but hey I tried.
The whole thought process of compounding, SIP, tax savings, etc. tend to give you a false sense of "doing well" whereas one should be focusing on the big picture. I don't mean you should get into IT (though it's not good idea to have such a prejudice against an industry with such a huge potential). You can continue in your field of interest but you need to step up your game.
About the bike, buy a 2nd hand one without loan and have a blast.

1. At least you tried. That counts.
2. I agree with your thought on bigger picture. Still need to work on compounding as I have less backing on that front.
3. Nothing against IT, I do love technology, tried AI-self driving car algorithms (and failed!!), programming, control systems ( My MTech Project) in my college (My friends working in IT didn't even know what programming is) but I enjoy the stress, strain, theories of failure, the fatigue calculations and the structural analysis more.
4. Yes, plan is to buy 2nd hand bike not sure what is the right time.

[wocanak]

Originally Posted by SaurAswale

I'm a Mechanical Engineer (25yrs age) staring my career (10 months) in Finite Element Analysis from a small org. Done my Post grad from one of the top government college in Maharashtra, but sadly we didn't had any campus placement in Core mechanical due to covid. And being as stubborn/proud as I am, I decided not to go into IT companies as my friends. I like what I do, using all engineering learnt till now, but salary is not great when compared to IT guys.

It is great that you know what you want and have the guts to follow that path. I know many who have taken the less rewarding path, even I have done that to some extent, so a bit advice from that perspective. It is easy in the initial years, as the difference is not much, but gets difficult as the gap widens over the years. Make sure the choice is positive, i.e. you like what you picked, rather than any disdain/aversion/ridicule for the other paths. A good test is you should not feel any bitterness towards Mechanical Engineers who have gone into IT.

Originally Posted by SaurAswale

The Problem -
We have lot of wise people from various backgrounds here. Please share your thoughts, experiences and advise regarding this.
I have Two options-
1. Being from a farmer's family, we don't really have any assets as such. Just our house in villages and some farm land. So no any financial cushion. As everyone says to be financially stable in later years, the key is to start compounding as early as possible. Things like Bike will further add to expenses.
So, Save as much I can now, invest some, and bike can wait for couple of years.

2. Spend all savings and some more to buy a used bike and riding gear (1-1.2L total). Some people say don't overthink and enjoy the life as I hardly have 3-4 year. This time will never come and even if I have money later I can't spend it on these things. And you'll never have "Enough" money

Is it right decision to buy a bike now??

Only you and maybe close friends who know you well, would be able to answer this. Even if you buy a bike (new or old), make sure you keep investing some smaller sum monthly and never fully stop. With Mutual Funds, SIPs can be few hundreds per month. Experiencing compounding in action is the best motivator and constant reminder to come back and save more whenever that becomes possible. If we stop completely, then it delays and/or reduces the chance of getting back to savings.

Originally Posted by SaurAswale

What did you do in your 20s???

I didn't have any dream about bikes, though the first thing most of my colleagues bought was a bike, I stuck to using my cycle from my school days for years. I thought of it also as banking some green karma. Then when I got married, my wife had just bought a car, we car pooled often up to four people. It was only after ~14 years, I started drawing from the karma bank, when I started commuting alone in a car.

So save when you can and spend when you have to, in any order, guilt free.

[SaurAswale]

Originally Posted by wocanak

It is easy in the initial years, as the difference is not much, but gets difficult as the gap widens over the years. Make sure the choice is positive. A good test is you should not feel any bitterness towards Mechanical Engineers who have gone into IT.

Only you and maybe close friends who know you well, would be able to answer this. Even if you buy a bike (new or old), make sure you keep investing some smaller sum monthly and never fully stop.

It was only after ~14 years, I started drawing from the karma bank, when I started commuting alone in a car.

Thanks,
I don't have anything against IT. I did some programming and control system stuff for my project and enjoyed it. But I like to play with stress strain and fatigue calculation more.
You have more patience than me to wait for that much for your ride.

But main question is still remaining, Should I spend my savings now to buy a bike? (mutual funds and 50% of emergency funds will still remain)

what should be prioritized, my finances or satisfying long craving to own a bike?