Most of the merchant navy personals are great at engineering, navigating, living life at seas but are ‘Financially Unlearned’.
We have been taught lots of technical calculations during our engineering days about how a ship works but was never really taught how to manage our finances once we start sailing on those ships, says in article published on marineinsight.
Answer to when
The moment you earn a dollar, you should invest a dime (that’s 10%) at least. Start investing when you get your first salary, start with an amount as low as 10% of your monthly income. Thumb rule is to start with 10% of your salary and keep increasing it by 10% every year until it becomes at least 50% of your total monthly income.
Answer to why
All seafarers have a pipe dream of a highly paid job but it isn’t so. Allow me to bring you out of this misconception and introduce you to the actual world.
The average salary of the highest-paid rank on board a dry ship is 8 lakhs per month, but most of us becoming Masters or Chief Engineers sail 6months/year, that makes your effective salary 4 lakhs per month for a full year.
The average expense for a family of four would be ₹75k per month, now you are left with 3.25 lacs in which you have to pay EMI of your expensive car, pay EMI of your 6 BHK Penthouse, pay for maintenance and operation cost of your house, car, etc, plan for family trips, buy the latest gadgets, arrange expensive birthdays or anniversary parties and also account for unfortunate health care expenses.
After these expenses, what is left would go to your savings for retirement and if you wish to lead the same lifestyle after retirement, it definitely won’t be sufficient. One must become financially disciplined for that.
The latest iPhone costs us around 1.2 lacs i.e. 10000/month. (assuming you change it annually). But if we plan to use the same phone for 3 years rather than changing it every year then we save 6666 INR every month. Invest this money in Mutual Fund for 25 years with an annual return of 12% you get a whopping figure of 1.07 crores.
Being financially disciplined will set your course but following that course needs voyage planning and as a seafarer, you know what the basic rule is – Safety First.
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Source: marineinsight
