During my good old sailing days, the 3 pm coffee breaks used to be my favourite. 30mins of chit-chatting, sipping on coffee, discussing work and complaining more of how bad the internet connection has been!
A great stress buster during a usual hectic day.
One such coffee break, I noticed my Chief Engineer was a little lost, he had not even sipped his coffee that had turned cold lying on the table.
He seemed to be in his own chain of thoughts, least interested in the shore leave story the cadet was telling.
Wondering if he was worried about bunker calculations, I thought to interrupt his chain of thoughts.
Me: Chief, is something bothering you? Are the fuel figures okay for today?
Chief: Did you get your salary today for this month fourth?
Me: Yes, today morning I got an email that salary has been credited in the bank, Company has been doing that very timely I must say. Did you not get it today?
Chief: I also got an email from my bank today which showed the salary credit. Those dollars made my morning. Randomly a thought crossed my head and I decided to calculate how much money I have earned in the last 5 years. I found that I have earned 1 Crore 83 Lacs in the last 5 years, during which I sailed for only 2.5 years; you can say half of the last 5 years I was on vacation.
Me: That’s awesome Chief, then why do you look so worried?
Chief: A few moments after I finished the calculations, I started feeling a little uneasy, my breath got heavier and my left arm started feeling numb. What felt like a cardiac arrest, was luckily not one. But you know how it feels when you realise that you have won the battle but have lost the war. Yes, it felt something like that and that was an eye-opener for me. I have earned 1 Crore 83 Lacs in last 5 years and what I have right now is 8 lacs in bank fixed deposits, some jewellery and few ULIPs which are giving me nothing but negative returns. I am not a lavish spender and the only earning member of the family.
If something happens to me tomorrow, all my family has is one year of finances maximum to survive.
What has gone wrong? Where has all my money vanished?
I am sure many mariners must have or will encounter this question in the future. Most of the merchant navy personals are great at engineering, doing jugaad (Hindi term for “hack”), navigating, living life at seas but are ‘Financially Unlearned’.
Mistakes a common mariner makes in his personal financial management
Let us read the mistakes Chief had done during his full journey from 5th engineer to chief engineer.
Mistake 1 – When he signed off as 5th engineer, he had 3.2 lacs in his bank account. For a guy managing only ₹1000 a month back during his engineering days, the amount was enormous. He purchased a new iPhone, lent money to his friends, started going to expensive restaurants & bought new expensive clothes. Never had it occurred to him that he has a year of unemployment ahead where he had to prepare for M.E.O Class IV. A few months later, he was back to square one, hoping that the money he had lent to his friends would come back, but it never did.
Mistake 2 – His father had maintained an Alto but when he signed off after 4th engineer’s sail, suddenly his Dad’s Alto became difficult to steer and brakes became less effective. He picked up a new sedan with power steering and hydraulic brakes.
That car also became flawed once he got promoted to 3rd engineer and within 3 years, he upgraded to an SUV.
Mistake 3 – He had visited his bank to apply for a new credit card. His bank’s relationship manager, to complete their sales targets, asked him to buy two ULIP policies and told him he will gain attractive returns. Not aware of how ULIPs work and blindly trusting his RM, he bought two ULIP policies from his bank of value ₹1 Lac each. This way the bank RM fulfilled his selling target for the bank and earned huge commissions while Chief money got stuck in not so good ULIP for another 5 years.
Mistake 4 – He owned a nice 3 BHK house in a beautiful town but once he became a chief engineer, it was small for his status as he had to show his peers that he earns in US Dollars (Fun Fact “No one cares”). He upgraded that house to a penthouse with 6 rooms and kept paying EMIs for a very long time.
Till this time, whatever he had spent was in policies which did not give the expected ROI & non-profitable assets. This was also draining heavy chunk of his salary every month in terms of maintenance and operations costs. He had saved some money in FDs but those FDs also started vanishing whenever he had to appear for M.E.O exams.
When & Why a seafarer should start investing
Answer to when is 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 is All seafarers have a pipe dream of a highly paid job but it isn’t so.
Allow me to show you the reality and guide you towards a better financial future.
It’s common knowledge that in order to maintain our lifestyle post-retirement, we need to save a portion of our current earnings. As seafarers, the highest-paid ranks on dry ships earn around 8 lakhs per month, but after considering the time spent at sea, the effective monthly salary comes down to 4 lakhs. After all expenses like housing, car loans, family trips, and more, there is very little left for savings.
It’s important to question if we are making the best use of our hard-earned money and if we can afford to retire comfortably by the age of 50. Financial discipline is key in ensuring a secure future. For instance, instead of constantly upgrading to the latest gadgets, investing that money wisely can lead to substantial savings over time.
Building a safety net is crucial. Having term insurance, health insurance, and emergency funds in place can provide security for you and your family in times of need. It’s also recommended to consult with a financial advisor who understands the unique financial challenges faced by seafarers.
Remember, a ship is safe at port, but that’s not what it’s meant for. Set your finances on the right course and watch them sail towards a prosperous future. Invest wisely, invest smartly.