You've probably read the story of a carpenter in my last column "Are You a Member of Club 99" and I asked you to consider whether or not you are a part of the club. Let's look at this second concluding part for the answer and understand it better.
Are you a member of club 99?
Yes, you are a member of Club 99 if you have sufficient amount of money to take care of your basic necessities but you still crave for that extra coin and justify yourself by saying that the moment you get that extra coin, you will be happy in life.
Why do you unconsciously fall for it?
As you are aware, one can be happy with all the little things in life yet the same does not hold true for most people. What happens in reality is the opposite because the irony lies in the way you behave - which means the moment you are presented with something bigger or better, you start losing sleep over it, and ultimately, your happiness. Like the carpenter, you may hurt the people around you while chasing your growing needs and fall into the trap of 99.
Why is it a trap?
It is a myth to think that the next big thing like buying a bigger house or a bigger car will satisfy you; because the moment you own one, you may want the next big one and that exactly is the trap. This is how the story of Club 99 and the analogy relate to your financial planning as well.
Can you avoid the trap and be freed from club 99 membership?
Yes, by understanding the importance of "where to stop" rather than deciding "where to start" especially when it comes to your financial life. So rather than going for the best car or a dream house that you intend to buy in future, and working your financial planning around with steps to achieve these goals, you should focus on deciding your basic minimum needs like the kind of a basic car and a house you ought to have.
Even more important factors are to decide about your child's education/ marriage and your retirement. You don't need people like us (financial planners or CAs) to tell you what kind of lifestyle you want for yourself and your family; it is you who needs to take that call, ultimately. The moment you are clear and focused about your basic minimum financial needs i.e. where to draw a line, it will be very simple to ascertain the road map to achieve your goals.
Life will be too difficult if your basic needs are not satisfied and fulfilled, so you need to go that extra mile to achieve it soon. Once you are financially done from your basic responsibilities then you can always strive to chase the next big thing like the best car, dream house or that extra coin.