Kumar

Kumar, 26, is single, a computer programmer whose whole life revolves around the Internet. He designs websites and does custom programming for a growing list of customers. As his business grows, his income also grows.

He is very thrifty, lives with his parents, and saves the bulk of his income in fixed deposits and a savings account. He drives an old car, which is fully paid and has no debts. As an independent businessman, he does not participate in the EPF scheme.

On a tip from a friend, he withdrew some savings and bought several hot stocks. Soon after he bought, the stock market collapsed and with the collapse, a good part of his share holdings went up in smoke.

After this bitter experience, Kumar resolved to keep his money in a safe savings account. He knows the interest on his savings is less than inflation but at least it is safe. Kumar would like to move out of his parent's house, marry, start a family, and expand his business. He knows he will need to accumulate more capital than he currently has but is unclear about what to do next.

Are these familiar stories? Everyone's financial story is different but there are similarities. Some people are thrifty and have financial plans while others fail to budget for the future and believe that money is made for spending. Most people are somewhere in the middle.