Oh! But I don’t have money..

“Oh! Sir.. But I don’t have money….”

This is a common phrase I have heard repeatedly over and over again for the past 3 months of 2016. WHY? Because, I have had multiple different conversations with my friends, co-passengers in bus, etc about the importance of financial literacy. Mind you, almost all of these guys are techies, experts in their own proportion.. Even to the extent, that we discussed the solubility of beer as part of quiz questions.

Now comes the most intriguing part.. Why do people hesitate from financial planning? Rather, why do people not start investing? The most common form of investing is real estate which is good from a very long term perspective, but is highly illiquid from the near term point of view. What then is the blocking reason for this behavior? Sample some sentences..

“I don’t earn enough.. I can save only when I earn XXX Lakhs p.a. or if I have XXX money as my take home”

“Oh, It’s very easy for you to say… Your spouse works… I am a single bread-winner”

“I have loans which you can’t understand…”

Now, the ones which are in the humpty-dumpty state on the wall,

“I will start investing from Ugadi…”

“I will start investing from my next hike..”

“I will start investing from New Year ….”

All these are bunch of nonsensical reasons for procrastination and a way to hide one’s own intellectual and physical laziness. Yes, these are pretty strong statements, but if doesn’t get serious enough about the future, I am afraid to even imagine what would transpire if there are some unforeseen challenges in future..

Ok.. It’s very easy to advocate, but what did I do? Fair enough.. I also started off with the very same dialogue.. “Aunty.. I don’t have money.. I have to run the house, pay back my loans, fill petrol in my vehicle.. How do you expect me to put 500 rs. in a RD..” This was the exact sentence that I told my friends’ parents when they were advising me on the importance of financial planning. Going back 16 years, when the salaries were in the 4 digit range, loans to fulfill, aging parents, standing at the cusp of pushing higher from very low middle class, I too felt that it was completely unreasonable for me to invest..

I understand you have your issues.. Try putting the amount away… First 3 months you may find a difficulty, but once you tide over, you will be glad you did…” These were the exact words of advice I received from these angels. Call it conformance bias or the fear of strongly rejecting the advice of such elders, I bit the bullet and took the plunge.. Yes it was difficult for the first 3-4 months.. but later.. man am I glad that I took their advice or what??

The first RD I started came to me at the time when I really required it the most and helped to realize one of my goals at that time. Over a period of time, educating myself and familiarizing with different products like equities, MF etc, I am very comfortable planning my own finances..

So, coming back to the original question, let’s try to get some myths out of the way..

You can start with as low as Rs. 500 in any of the commonly advised investment products like good old RD (if you feel like), PPF, MF

If you wait for reaching a certain amount of salary, sorry to say, you will keep on waiting. My personal theory is that, if you earn Rs. 100, you will find an expenditure of Rs. 100. If you earn Rs. 1000, you will have an expenditure of Rs. 1000. So the golden period of enlightenment which you are awaiting will NEVER come… The right time is to START NOW.. with a NOW or NEVER attitude..

Yes, everyone has different commitments, some of which are more emotional and psychological which can’t be understood or empathized by others.. but for whose good is this advice.. YOU.. remember that it’s YOU and YOUR FAMILY..

Now, let’s attack the I don’t have enough money.. I will quote some examples.. MIND you.. these are examples and end of the day, the CHOICE is entirely YOURS..

First, draw up your cash-flow statement and identify those spots where you are spending mindlessly or those which you can live without.. there is a term for this.. DELAYED GRATIFICATION.. Can you live without changing your wardrobe every month? Or buying that next watch or shoes available at a great discount on one of the e-shopping sites..

Second, Do you have any behaviors, some compulsive which can be altered.. I would definitely recommend a reading of the book Retire Rich by Investing Rs. 40 a day by P.V.Subramanyam sir.. There is an illustration of the Rs. 40 which is simply amazing.. I wouldn’t spoil the fun, but definitely recommend you to give it a read and spend some time thinking about the same..

Third, Identify your lifestyle.. Don’t live life according to others.. PEER PRESSURE is one of the worst forms of ruining your own financial life.. You don’t have to run a rat race to appease or compete against your friends.. Stop basing your life based on Social Media.. Be it buying your next set of clothes or a swanky mobile phone or your wheels.. take a decision based on your need.. not what your friends did.. The examples above are relatively small investments.. Sample these for a moment..

Buying a high-end SUV with an outstanding loan of Rs. 20 Lakhs and paying a hefty EMI..All because one of your businessman friends bought it ?!!!

Buying a swanky flat for Rs. 1 – 2 Crores and servicing a Rs. 75 Lakh loan for next 20 years..

Well, if your response is,Yes, this is what I want do.. Fair enough.. have you factored in a situation when you will loose your job… Do you have enough emergency funds to service these loans ?!!!! If your answer is a comfortable Yes, then CONGRATULATIONS !!! you have taken a decision that’s yours.. Now live with the consequences as they unfold..

Want to go on a vacation.. great.. This is the time you want to take time off with your family and spend some quality time with them.. But, don’t do it because you want to Post the pictures on FaceBook .. Your good friend did recently, so you also want to do the same.. Good for family.. Sure… Financially Prudent.. Absolutely NOT..

Remember, if you start scratching your skin looking at others, you will be left with gashes and rashes..

Each of us is unique and have our own way of spending life.. For example, I spend money on collecting fountain pens, coins and notes as these my hobbies.. but everything has a LIMIT.. Remember, Only Limits don’t have any Limit..(Source: Prof. N.R. Jayaraman, my maths teacher) … And of course, I spend after I save…

To conclude, YOU NEED TO HAVE A WILL to start… Bite that bullet, start the journey.. Some years down the line, I am sure you will be glad that you took the plunge..

Some clarifications are due.. Having 2 salaries is very good from a financial perspective, but this is the reality of life.. Just check the cost of quality education for children… In a good school, for a child, you will incur an expenditure of Rs. 1.5 Lakhs p.a… Don’t believe me.. Just ask around.. For 2 kids, it translates into a minimum expenditure of Rs. 25000 p.m. .. How do you plan to service this with a single salary.. Remember one thing, the choice of a working spouse is entirely yours… No one is forcing you to take that decision one way or other.. Moreover, working spouses compromise a lot.. Thinking about the hardship… From a financial perspective, they incur huge costs in terms of hiring maids to take care of the children.. Talk to people who are in this phase of life..

If you are single bread-winner, you need to be introduced to my good friend.. let’s call him Kiki… He is a very good example of how to manage finances, cut costs and save enough for future… He is a GREAT INSPIRATION for me and for some of us who have had chai-pe-charcha on this topic..

Now, before I end, I need to acknowledge some of my friends who inspired me to write this post.. The intention is poke their interest in this subject and coax them to take their financial planning much more seriously.. While writing this post, I thought.. Ok, but how many have I been to convince or influence..

  1. Some of my friends/team colleagues have become more serious about financial planning including and upto direct investment in stocks..
  2. Some have done goal planning.. Investing in MF to reach their goals..
  3. Influenced my auto-driver friend to start an RD in Post office and contribute monthly.. This has spread amongst his friends who are now saving regularly

Lastly, the conversation which was the basis for this post drove one of my new friends to start a PPF account.. I am very proud of these individuals who have embarked on this journey to be financially prudent and independent..

Next up, I am trying to get my auto-driver friend to start investing into a MF SIP…

Thoughts/Feedback/Bouquets/Brickbats are welcome..


Stocks Portfolio: Mar 31 2016

Financial year requires some serious introspection into my overall investment and how the same lines with my proposed philosophy captured in an earlier post. Overall, it has been a good year of investment and March saw a whole lot of dividends raining in. Dividends were reinvested into either other stocks or invested into MF.

Combined portfolio as on Mar 31 2016 stood as below:


Mutual Fund Portfolio: Mar 31 2016

Financial Year ending is a good time to do some stock taking and check where we stand w.r.t. our investment goals. There has been some interest from my friends on what are the different funds I am investing in. So, I thought why not present the current list of funds in which we invest currently, something some of my friends have been pressing me to do so

Presenting.. my mutual fund portfolio as on Mar 31 2016:


  • Axis Long Term Equity Fund
  • Franklin India Prima Plus
  • Franklin India Smaller Companies Fund
  • ICICI Pru Focussed Bluechip Fund
  • IDFC Premier Equity Fund
  • PPFAS Long Term Value fund


  • HDFC Mid-cap Opportunities Fund
  • Mirae Asset India Opportunities Fund
  • Motilal Oswal Multicap 35
  • Tata  Balanced

Debt Funds:

  • Birla Dynamic Bond Fund – Growth
  • Birla Sunlife Floating Rate Fund – Short Term Fund Plan
  • Franklin India Ultra Short Term Super Institutional Plan

These Debt Funds are part of our emergency fund corpus.

I have been a big fan of VPF and wanted to maximise my contributions to the extent allowed by my cash requirement. However, with the recent proposed taxation rules and potential recurrence of the same in a different avatar in future, I decided to move our VPF investments which was mainly targeted for retirement into a couple of MF. The following 2 funds are currently being employed (last 1 month) for contributing our VPF contributions and building a portion of our retirement corpus.

  • HDFC Balanced Fund
  • ICICI Pru Value Discovery Fund


  • All funds are in Growth Option
  • Funds in this color indicate that the investment is through DIRECT mode and not through any advisor.

EDIT: Based on a request from my friends, I have added this table of returns. Please note that some of the direct funds may not yet have 3Y or 5Y returns.


Source: http://www.valueresearchonline.com  

Thoughts/Feedback/Suggestions/Comments are most welcome….