The world is dynamic, and there has been a significant shift in investment options and avenues. Until a few decades ago, financial instruments that were considered excellent investments are no longer good options to help your money grow. As the psychology of money has evolved, certain assets are no longer considered beneficial due to their inability to fulfill needs in the current scenario. Let’s look at some of the monetary rules that might have been the right choice two decades ago but are no longer relevant or fruitful in the current times.

  1. Investing in traditional instruments

    Most of our parents and grandparents consider fixed deposits, pensions schemes, and provident funds as a few of the best investment avenues. For the current generation, the question is, are these instruments still relevant today? Do they provide sufficient returns after adjusting inflation?

    The current inflation rate is around 5% to 5.5%. Savings accounts provide an interest rate of 3.5% to 4%, while fixed deposits offer a maximum interest of 5% to 5.5%, barring certain banks. This data clearly indicates that fixed deposits barely cover inflation. In the long run, fixed deposits will either depreciate your investments or stagnate them.

    While pension funds provide 9%-10% interest, they come with a lock-in period applicable till retirement. The National Pension Scheme allows withdrawal after one attains the age of 60 years. Premature withdrawal is allowed up to only 25% of one’s corpus for meeting certain needs like a child’s wedding, higher education, medical treatments, etc. Provident funds offer an interest of 8% to 9%; however, they also have a lock-in period of 15 years. Therefore, traditional investments options come with a longer lock-in period or offer lesser returns.

    To combat these concerns, the new-age investment avenues that have emerged include ULIPs and Guaranteed Savings Plans. While ULIPs are market-linked instruments that further invest your funds in equity instruments, Guaranteed Savings Plans, which are more secure, opt for debt instruments for further investments.

  2. Buying a house

    For our grandfather’s generation, owning a house provided a sense of financial freedom and security. However, during current times, buying a house comes with its own set of hardships. Firstly, the price of houses has skyrocketed compared to our grandparents or even our parents’ generation. Buying a house without taking a loan is possible only for the wealthy. As home loans usually come with a loan repayment tenure of 10 to 20 years, a huge part of your working life will get tied to home loan repayments.

    Let’s consider a simple example. Suppose you plan to buy a house that is currently valued at Rs 50 lakh. You would probably pay a down payment of Rs 20-25 lakh and finance the rest through a home loan. Your capital of Rs 20-25 lakhs is tied till you resell your house. The EMI payments will ensure a regular outflow of your income. On the other hand, if you consider renting the same house, you will have to pay a rent of Rs 18,000-20,000 per month. However, you can easily invest the down payment savings of Rs 20-25 lakh at 8%-10%. In this way, you can easily earn up to Rs 15,000 per month. Also, the EMI saved can be further invested.

  3. Buying a Car

    Buying a car might be an asset for your balance sheet but it is a depreciating one. In simple terms, unlike investment instruments where your money grows in value over time, the car will depreciate due to natural wear and tear. Apart from that, it requires maintenance which further adds to the outflow of cash from your end. Therefore, buying a car again ties up your capital for the long term and does not provide any monetary gains. Instead, using cab services or other public transport options, can save a lot of your capital which you can invest to generate returns. Buy a car only when it is more of a necessity than a choice.

  4. Retirement

    Earlier, people chose to work till the age of 60 and then begin planning their retirement. In comparison, the current generation believes in retiring early with enough wealth to give them financial freedom. This certainly adds more years to one’s retired life. Therefore, one needs to create an asset base that can easily support retirement costs along with unplanned uncertainties. For creating such a strong asset base, you need to invest in the right products and avenues, at the right time. Selecting the correct funds becomes critical here; otherwise you might end up compromising on the returns. Future Generali India Life Insurance has a proven record of helping investors select the right funds that suit their needs and risk appetite. With proper selection, you can lead a financially independent and stress-free retired life.


As people’s outlook towards life is changing, so are the rules of investment. These four money rules that have lost relevance in recent times show that people need to realize the changes that have come about in the current economic environment. They need to evaluate the assets that will truly make them wealthy, and the liabilities, disguised as assets, that will either depreciate or block their funds for prolonged time periods. Future Generali India Life Insurance provides multiple products to suit your investment needs and help your wealth grow. With various funds and plans that take investors’ needs and preferences into account, one can become financially independent and create generational wealth.