Top 10 Highly Useful Tips to Learn About Personal Finance for Free

From asking question like ‘How much should I save monthly’ to ‘making a Will’, I grew up. I learnt. I took care of my finance journey. Here is the snapshot of what I did, how I did and what it has led to. The idea is to share with all of you so that you can also embark on the journey and achieve what you always wanted to. During the past 18 months, I have done the following to increase my learning on the subject:

Top 10 Highly Useful Tips to Learn About Personal Finance for Free

Till 18 months back, I was a noob. I had no clue of my finances. They were all over the place from having five saving bank accounts to owning stocks of 16 small cap companies I had not even heard of. This was my story till Mar’19. Then things changed. I got an opportunity to work with Mr. Dhirendra Kumar from Value Research (for one of the office projects). This changed me. Forever. I somehow got interested in the subject and dived into the ocean of learning.

Top 10 Highly Useful Tips to Learn About Personal Finance for Free

1. Listened to Value research (by Dhirendra Kumar) videos in loop

I spent hundreds of hours in listening to Dhirendra Kumar on my way to and back from office [Thane to Dadar] i.e. I listened to him for 3 hours a day. This was the starting point and made me understood various aspects of personal finance. I will remain indebted to him forever. Hours spent listening to him has done me wonders. I don’t think if there could be a better way to start my journey.

2. Read various books on the subject

Let’s talk money by Monika Halan - Read it twice. Reinforced the concepts, created to-do list that I had to complete if I had to take care of my finances. Absolute legendary stuff.

Rich dad poor dad – Read it twice. Helped me understand the importance of passive income, how rich think and what differentiate rich from a common man – they create money, they make fast decisions when opportunity come knocking on your door.

You can be rich too by Pattabiraman Murari and PV Subramanyam - Read it twice. Understood the technicalities of how time in the market is supreme vis-à-vis return and amount, how to evaluate a mutual fund.

Retire rich by PV Subramanyam – understood the basics of Retirement

Coffee Can Investing by Sourabh Mukhurjea – Understood that you don’t need to find hidden gems to make money. The gems are right in front of you. CCI framework is ought to be one of the simplest and useful frameworks in stocks selection.

The Warren Buffet Way by Robert Hagstrom – Understood what’s in the mind of WB (if I can say so). Again, learnt how money can be made in investing in the giants like Coca Cola, IBM. You don’t have to delve deeper into small cap. Understood importance of behavioural finance.

The unusual billionaire by Sourabh Mukhurjea – Fascinating stories of key Indian power houses.

3. In addition to this, have been following various investors/fund managers

Listened to each episode of BQMFShow – Thanks Niraj Shah, Vikas Mantri, Nilesh Shah, Nimesh Shah, Radhika and other countless people.

Listened to countless interviews of legends i.e. Rakesh Jhunjhunwala, Ramesh Damani, Sourabh Mukhurjea, Vijay Kedia, Ramdeo Agarwal, Madhu Kela to name a few.

4. Have been following the AIFW FB group

Thanks to each of the 65,000 members who have been asking all kinds of questions in the group. Have learnt what to do and more importantly what not to do.

So, after spending enormous amount of energy, time and money in doing these things, I could finally lay down a 62-points to-do list which I had to complete if I had to take care of my finances. Few months later, I am a man with a plan - from next vacation to retirement, everything is sorted. 

I am at peace with my finances, finally. No noise in the market, friends circle, group can unnerve me. I am now on an indifference curve. And what has been the result of this? Here it goes: -

5. Simplification

Have 2 Saving Bank accounts from five back then, Four credit cards are reduced to two

6. 6 months Emergency fund in FD

7. Insurance

Term insurance (4.5 Cr), 1 Cr health insurance (normal + super top-up), Cancer insurance, Personal accident insurance (Partial and total disability), Corona Kavach, Bank locker insurance and by god’s grace will be out of all endowment plan by Apr’21. I was able to reduce the term of my LIC policies from 31 years to 10 years. Yes, it can be done. All it takes a 59/- receipt.

Plan to use term insurance – have not only bought term insurance but have created a plan on how money will be used when I am not there. Have told my wife what to do, how to use money. Have handed over the list of fee-only financial planners she can reach out to execute the laid down plan. Thanks to Monika Halan for this. Had never knew how important this is.

8. Nominations

All of them are in place from bank FDs to EPFO for both wife and me. And I know nominations are not enough.

9. Will

A detailed 20-page Will is ready. Have not been able to get it signed yet due to Corona, but it is ready. It will be signed by two witnesses the next week. Have made all the Goals from vacation till retirement. And yes I know that the Retirement is the most important goal.

10. Asset allocation

Not a big fan of a ratio as I believe in goal-based investing. A 45 years old with no major expenses in sight may go 90% into equity as compared to a 30 years old person who can't go into equity if he/she can look at nothing but expenses.

  1. Real estate - will not invest in RE if I am not living in it.
  2. Mutual funds – I had 16 MFs. Don’t know why I had them. Consolidated them to 4. I know why I have them in my portfolio. What is their role.
  3. Stocks – I had stocks of those 16 companies I had no clue about. I had done away all losers, and now owns 6-7 high quality stocks who have well-established Moats in their respective areas.

Everything is documented in an excel sheet which is mailed to my wife every month. These 18 months have been one of the most significant periods in my life which, I am sure, will define how well I going to do financially in times to come.

Personal finance has now become a hobby - my passion. If I am not working on my job, then I am either reading a book on the subject or listening to someone related to the subject.

In the month of May, I thought of sharing my knowledge with my family/friends – Thanks to the book I read ‘5 AM Club by Robin Sharma’ – one of the learning of the book was to share the knowledge.

I then organized online sessions (10 sessions of 1.5 hours each) on personal finance and trained 20 people on personal finance. I pushed at least 15-20 people to buy all kind of insurances ranging from term to health to personal accident. I feel proud that people are more secure now (because of me) than they were before.

I feel thrilled as I share this journey of mine with all of you. Thanks to each and everyone of you, all aforementioned resources, all people I had mentioned above who have helped me get the clarity I needed on the subject. As they say, the fun is in the journey and not the destination. So, I will keep learning and growing.

Credit: Anshul Goel