Are you part of this ₹ 24 trillion industry?

The Assets under Management (AUM) of the mutual fund industry in India at the end of June 2019 stood at ₹ 24.25 trillion.
The AUM on June 30, 2009 was ₹ 5.83 trillion and on June 30, 2014, it was ₹ 9.75 trillion. This means more than a 4 fold increase in ten years and almost 2.5 fold in 5 years.
There has been a positive movement in terms of total number of mutual fund accounts (known as Folios) and at the end of June 2019, the figure was 8.38 crores.
Even the share of individual investors holding mutual fund industry assets has been on the rise and was 54.3% in June 2019 as compared to 52% in June 2019. The rest 45.7% is held by Institutional investors.  

As of June 2019, individual investors held a total of ₹ 14.03 lakh crores in mutual funds, an increase of 14.38% over June 2018.

    (Source of data-AMFI website)

Although the markets have been volatile after budget this month, the long term story is intact and Indian economy is still projected to grow at a rate better than other developing economies.

As they say, ‘In markets, bad news is good news for investors’.

We are aware of the benefits of investing in mutual funds like- diversification, professional management, transparency, liquidity and convenience.

From a regulatory perspective, the Indian mutual funds regulator, Securities and Exchange Board of India (SEBI) is one of the most effective regulators the country has. It has a reputation of protecting investors’ interest, promote the securities market and efficiently regulate the industry by framing guidelines.

As investors, we should understand that risk is an inherent part of market related investments – we need to figure out our risk tolerance and the amount of risk we can afford to take. Money, even in a bank is unsafe above ₹ 1 lakh. (Deposit Insurance and Credit Guarantee Corporation or DICGC cover is available for a maximum of ₹ 1 Lakh, including interest)

Let’s look at certain compelling aspects:

  • SEBI has been consistently working towards safeguarding the interest of investors. Although there have been certain lapses recently (mostly in debt funds), mutual fund houses have a robust mechanism in place for identifying and fixing issues.
  • Fund houses have too much at stake and any wrongdoing purposely can be emphatically ruled out.
  • Most of the fund houses have automated systems and fund management teams in place – this ensures that there is continuity. It also does away with the problem of personal bias in cases where an individual Fund Manager is responsible for managing the fund’s assets.

For better transparency and ease of understanding from an individual investor’s perspective, mutual fund schemes have been segregated as:

a) Equity Funds         b) Debt Funds            c) Hybrid Funds        d) Solution oriented Funds e) Others

  • Schemes have been clearly defined as Large Cap, Mid Cap and Small Cap
  • Only one scheme per category is permitted now, except: Index Funds/ ETFs, Fund of Funds and Sectoral/ thematic funds

For those who haven’t yet, starting with an Index fund would be a step in the right direction, for developing an understanding of how mutual funds work.

This is not a recommendation

(Index fund is a very low cost, diversified portfolio of securities which requires minimum human intervention as it almost replicates a benchmark, like BSE Sensex or NIFTY 50)

Warren Buffett has aptly said, “Risk comes from not knowing what you’re doing.”

So, be a smart, educated and informed investor- become part of the ₹ 24 trillion (and growing) mutual fund industry – multiplying your money is ‘your’ responsibility after all.


Out of the comfort zone

During a casual discussion recently, my friend from college, Jiten informed me that he has deleted his FB account because it was driving him crazy. The reason, “Those who started working when I did, are doing far better than I am. They are taking two international holidays every year, are driving better cars and have a bigger house. I feel like I haven’t achieved anything in life”.

I was amazed because this was coming from a person who has been working for more than nine years and who has a job with a six figure monthly take home salary. His wife is working as well and they are supposedly ‘well settled’.

I started thinking about the first job-it is the culmination of a long cherished dream for most. The thrill that comes with the first salary, the perks, the freedom and above all the independence.

However, within a few years, the enthusiasm of making it big or rising through the ranks takes a hit. It becomes either a mundane routine or gives rise to thoughts about alternate career paths or an escape plan!

The trigger could be different for most of us – disillusionment from the corporate culture, skill/profile mismatch, non flexible environment, no involvement in the overall organisational goals and bad management at a professional level. At a personal level, the factors could be stress, burnout and low income, rewards and recognition.

At this stage comes the urge to learn and unlearn. Acquiring new skills for career enhancement, job change or rather for survival becomes important.

This also teaches us an important truth of life – we cannot dwell on what school or college education has not taught us. We need to pick the best of what is available around us and develop on that learning.

While most of our conversations, discussions and efforts go towards making more money and managing personal finance, these nine aspects would go a long way in ensuring a peaceful and satisfying existence.

Stay healthy                                          as you age, the realization sets in that fitness should be and should have been the top priority. Everything else can be put in place with available resources. Have a routine which is easy to follow and goes well with your daily work hours. It sounds mundane and repetitive but our physical and mental well being should be the primary objective.

Take some risks                                   not taking any risk at all does not make you smart. Take a job in a different city, state or even country. Take up a sport, join a mountaineering club or for that matter whatever you wanted to do but always avoided for the fear of unknown. Not all risks are rewarding, but at the end of it, you would be a better person and would not have too many regrets.

Avoid negativity                                   there would always be the new trends, revolutionary technologies and new age jobs in the so called hot sectors. Do not try to chase the trends- don’t worry about what your cousin or friend is doing. Give a cold shoulder to negative people-be it relatives, friends or colleagues. Your life should not be dependent on their thoughts, comments or advice.

The herd mentality                             you would never get ahead doing what everyone else is doing. So take your chances and try to do something that adds value, is interesting and at the same time gives you satisfaction. It is the unique skill that would sell in the kind of competitive and challenging times that we are living in.

Knowledge                                             gaining knowledge never hurts, especially if it is something that you like. Reading on a wide variety of topics gives you an edge. It definitely helps in developing an independent thought process, stimulates the mind and widens horizons.

Explore options and then settle for the best                      at the age of 12, not many of us know about goals or aspirations or our future vocation. So, we should give ourselves time – we are constantly thinking and ever evolving. There are certain realities we come to know about only when we start working. Explore the myriad of possibilities before finally arriving at a decision.

Savings–it is never too late to start                   a) even if it is just 15% of your earnings to start with, start today, if you haven’t already!    b) Keep on increasing the amount every year. Just follow these two rules and do not count the pennies. You would be amazed at what it amounts to, that too, at an age when you need it the most.

Prioritize and take charge                      get hold of your life, value systems, finances, learning and career. Don’t let anything drift away. Don’t get too jittery, don’t take yourself too seriously. Do not let your boss decide how your career should progress. Do not let your parents, spouse and even friends decide on your behalf. Weigh all the options, but prioritize and decide yourself.

Travel                               like reading, travelling opens avenues and broadens perspective. It instills confidence and helps you appreciate the wonderful world. It helps you know yourself better, enhances creativity and creates new opportunities. For almost all of us, it is a great stress buster.

We can never prepare ourselves for every eventuality. There is nothing like ‘perfect planning’. Life is all about maintaining a balance.

Our education system seldom makes us ‘job ready’ but still our ultimate aim is to get a job that pays well and enables us to lead a happily-ever-after life.

We need to realize that there is much more to life than just making money.

“Ah, but a man’s reach should exceed his grasp, or what’s a heaven for?” – Robert Browning

While it is good to go with the flow, we need to make sure that it is in a direction which holds something promising for our future. Focusing on some or all of these nine aspects might help in setting the direction of the flow for you!

Do you talk about money ?

It is a good idea to have an open discussion about money in a family-between husband and wife and importantly between parents and children.

We keenly watch the governments’s budget exercise for what it might have for us. On the same lines there should be a family budget and a person with clearly defined responsibility of creating and managing the household finances.

Though roles and responsibilities can be delegated and divided, the important point is clear communication and developing an understanding.  If no one from the family is confident/competitive of handling this, outsourcing to a financial adviser/planner would be a good idea.

Having a conversation around these aspects would be helpful:

Assessing the family net worth 

Savings and investment target 

Money inflow v/s outflow 

Who pays bills/routine expenses and are these automated

Major purchase decisions 

Affordability versus usage 

Saving for kid’s education

Retirement planning

Family’s attitude towards money 

Personal finance is an almost ignored aspect and it is not even taught as a subject at school or college level. Thus the role of the person/s in the family managing finances becomes all the more important.












‘Personal’ Finance guidelines

As it is about an individual or a family and is also dependent on certain variables , hence the term ” ‘Personal’ finance”.

We cannot just read about personal finance from books, blogs, newspapers and put it into practice. It has to be customized and ‘tested’ to see what works best for us.

The spending, savings and investment pattern has changed in last few decades. Our parents belong to a generation which used to save and spend.

Our generation spends and then if something is left, tries to save. Ours is an age of instant gratification-it here and now or never.

Thus the savings and investment behavior also has seen a paradigm shift. The total credit card penetration in India as of June 2018 was 39.7 million. That figure is trivial in comparison to our population. However, people mostly have a conflicting relationship with their credit cards!

“Understanding” and Investing in Mutual Funds

While we all are smart at earning and saving but it seems like we are quite bad at ‘learning’ and investing.

Most of us think that there are people who specialize in this area and we would do well to outsource the investing part to them. However how many of us can really afford to have a Relationship Manager or a paid adviser for managing all our money and investments, when in the first place most of us have a grouse that we do not have much left at the end of each month, to “invest”?

“Investing” has to be stressed upon here because we as a society, believe in ‘savings’ only and like to park most of our money in banks-either in the form of Savings account, Fixed Deposits or in the form of Recurring Deposits.

While ‘saving’ is a very good habit and some people I know, do manage to save 30% of what they earn on a monthly basis, investing and multiplying wealth is a different ball game. Very few people actually invest in the best option available to individual investors- Mutual Funds.

Now much has been written about and a plethora of information is available about why and how investing in MFs is a very good option for retail investors. What few focus on,however, is making people “understand” the product.

While many fund houses, stock exchanges, business news channels, AMFI and even the regulators have been working on educating and creating awareness about the benefits of investing in MFs, there is still a long way to go. For a population of the size of India, there are only 42,778,001 accounts (account refers to a folio and an investor may have multiple accounts in a fund or across funds-AMFI).

In fact it would not make much of a difference unless we make an effort to understand the product. I will share a very simple example about how we have an eye for detail when we are buying a tangible product but when it comes to displaying financial prudence, we seem to lose our magical touch.

While purchasing a mobile, my cousin spent a few days in researching, sent a few mails to technology forums, consulted friends, colleagues and finally bought a phone of a known brand for INR 12999. What I liked about this was that at least he was trying to get the most out of his hard earned money. This for me was a step in the right direction and impressed upon me the fact that he managed his finances well  .

However there was a surprise in store and came a few days later. He informed me that he had visited a financial adviser seeking advice for investing in Mutual Funds. The adviser suggested a few funds and explained to him what a MF was and gave him various options. He also made him read through the portfolios of a few MFs so that as a first timer he was satisfied with where his money was getting invested. I was under the impression that he will take this seriously and read more about MFs before taking the final investment call.

A month later he called me and informed that he had invested in a particular small and mid-cap fund which his colleague had invested in. The NAV was down by INR 2.30 from his purchase price and thus he was liquidating his entire investment of INR 25000. I was not happy with his choice, as I have been investing in MFs for over eight years now. So I called him over for having a discussion on his choice of fund and how it would impact his objective of wealth creation in the long term. This is when he had spent a few weeks for spending INR 12999 for the mobile and not even a few hours before spending INR 25000. So much for wealth creation!

Individual investors need to understand that MFs are investment vehicles and before investing they should make an effort to understand the product.

A Mutual Fund at a very basic level is like nutritious, well balanced diet which comprises of  a variety of ingredients and nutrients. In contrast, a Savings Bank account or Fixed Deposit would be more like a staple diet – rice, roti and daal kind of stuff, enough for sustenance but not enough for long, healthy life as inflation constantly eats into our bank savings year on year. I am not going to write about inflation, FDs and absolute rate of returns etc.

Even if you do not understand equities, consider this- your Mutual Fund is buying you a PORTION or PART of –

Your local private/public bank

Your automobile company

Your car’s fuel company

Your TV/ fridge/AC manufacturing company

Your rice/oats/sauce/noodles or any other eatable brand’s company

Your telecom provider company

Your health supplement provider company and many more

Chances are that it might be buying a portion of the company you or your spouse is employed with!

(PORTION or PART here means stake in  the listed company/ies)

In addition there would be some cash lying in the safe deposit of a bank earning fixed returns for your MF (all this is just for illustration purpose and would differ across MF categories)

Ninety percent of us invest in MFs only in the form of SIPs because it is easy and almost akin to a RD for us. We rarely make an effort to check the status every six months or even a year.

Now imagine how, as intelligent and well informed investors we can considerably enhance our wealth creation potential. For the past few days, our markets have tumbled quite drastically. Most of us, who do not understand the market cycles, stop our SIP in MFs and instead, opt for safer options like bank deposits.

However, those of us, who understand the dynamics of markets actually wait for such opportunities and invest small or large amounts (taking into account the risk appetite and availability of investible surplus)  during such falls in the market. As a thumb rule, I always invest some amount whenever the NIFTY is down by 50 points in a single day. Thus your responsibility does not end merely by initiating SIP in MFs. Why is this important? Let us illustrate this with an example-

We eagerly wait for “End of season sale” towards the end of winters, for purchasing those jackets, pullovers and sweat shirts at mouth watering discounts of 40-50 % knowing that we would be able to wear them only in the next season. We know it quite well that the brown leather jacket or the fur coat would never go out of fashion and thus buying these at a discount of 40- 50% would be a very good deal.

Similarly, we wait for festive offers for purchasing consumer durables or weekly bargains for local grocery shopping .When we are so particular about  bargains and buying at the right price or getting maximum out of our money, then what happens when it comes to investing? Once we have educated ourselves, we would start spotting bargains and would wait for specific timelines as well. The inherent issue is that of understanding- we would definitely buy more during lean periods in the market  if we are aware, confident and well informed.

The most common statement that one gets to hear is “there is bloodbath in the markets, I have stopped all SIPs and will park my money only in FDs now. Will never look for opportunities in the market”

What is quite thought provoking and unfortunate is that when it is the best time for investing, people get scared and miss the chance of getting wonderful returns.

The regulators need to ensure that more than advertising and carrying out features in news papers/magazines on the virtues of investing in Mutual Funds and the inherent risks involved, there is focus on teaching the concept of equities at all levels, starting from the elementary level .We need to build a culture where the focus is on inculcating the practical aspects. I am sure our bright students can easily understand the concepts of markets from an early age.

Simplification of documentation and the jargon involved would be another great step. Imagine a customer going through a multi  page SID, SAI, Offer Document, KIM (don’t even know how many of the readers understand these) – it would not make much sense and in fact would add to the mystery. An important step in this direction would be to create a one or maximum 2 page document which would enable the customer to understand the objective and risk associated with the investment in MFs.

In rural areas, people started visiting banks and post offices for getting accounts opened because they saw offices being set up and real people working there. In fact literate rural people are more cautious and make an extra effort in safe guarding and multiplying wealth. The need is to teach and create awareness-they keep their pass books or cheque books in the safest corner of the house and would definitely make a lot of effort in understanding and investing in Indian equity markets- a reflection of the growth story of the nation. Creating visibility at the grass root level in these areas will make a difference.

The scenario is different in urban areas- if a person is operating a bank account online, he or she will get numerous options for investing online and getting maximum returns. With so much information and free advice available, the income class often makes uninformed and unintelligent choices, only to get low, or at times, negative returns.

As intelligent men and women, we need to take charge of our financial decisions. Just sit back and think about it-we take on so many responsibilities at both a personal and professional level. Our daily short term and long term decisions are backed by sound logic-whether emotional or financial.

I was drawn into the world of MFs  a few years back when the markets were doing well and MFs were posting high double digit returns. The huge pile of pages that came along, (they still do) made it difficult to understand the product. But over time and with changing market cycles I have evolved as an investor.

As a start, read about  the basics of financial markets-chances are that if you  spend a few hours focusing on the  end objective, you would develop a good understanding of  MFs and other financial products.

If this is difficult, gift yourself  an online or classroom  course – some financial entities offer it for free while others would charge a fee- but it would be worth the effort.

You would like to check these websites for greater insight:!    and

Individual websites of Mutual Funds in India

The reason for focusing on “Understanding” and then investing is to give control of your investments to you.

Investing in MFs is no rocket science-Just the basic framework needs to be understood, no friend or adviser would be able to make you understand the concept till you take charge and read and learn about it yourself.

So this Sunday (if you are occupied for the rest of the week), set aside two hours and subsequently, one hour each, Monday on wards to read about Indian equity markets and specifically Mutual Funds.

I understand, in the first instance you would not understand the concepts and most of the terms used would not make sense. However search the internet for certain terms and it would look  easy- this would be time well spent.

As per AMFI, the value of assets held by individual investors in MFs at the end of July 2015 stood at INR 5.93 lakh crores-and the total assets managed by the Mutual Fund industry in India stood at INR  13.19 trillion- this is a  huge amount by any standards and we should be a part of this wealth creation process.

As an individual investor, investing in a Mutual Fund is the closest you can get at multiplying your wealth – making some really serious money without actually making an effort in the process itself !

Are you a smart, educated and informed Investor?

As per AMFI (Association of Mutual Funds in India),

 “Assets managed by the Indian mutual fund industry has grown from Rs. 11.19 trillion in November 2014 to Rs. 13.43 trillion in November 2015. That represents a 20% growth in assets over November 2014. The value of assets held by individual investors in mutual funds increased from Rs. 5.07 lakh cr in November 2014 to Rs. 6.14 lakh cr in November 2015, an absolute increase of 21.24% Individual investors held Rs 6.14 lakh crore in mutual funds as of November 2015, an increase of 21.24% over November 2014. Investments of individual investors in equity schemes increased by 28.25% over November 2014.”

 Now that is huge money and if so much of money is going into this all important wealth creating instrument (Mutual Funds), then why is retail participation still so low? There are less than 4.5 crore retail investor accounts for a population of 1.25 billion.

It is that time of the year when we receive e-mails from the finance department for submitting investment proofs for tax savings.

There are many sites which are encouraging investments in ELSSs (Equity Linked Savings Schemes) and while there are positives and negatives, many of us stay away from this product. The problem lies with our natural inclination towards avoiding ‘Risk’-we are so besotted with fixed returns that any investment which has the word ‘risk’ mentioned in it, becomes a taboo.

This obsession of having the ‘Principal’ intact and earning over and above it is the greatest fear that keeps us away from earning higher than inflation returns. We also have to live with a loss by missing out on the all important ‘Opportunity Cost”

Opportunity Cost is the price we pay by staying invested in a lower yielding asset class when the same investment in another asset class would have earned us better returns.

For ease of understanding, if MFs for a particular year returned 15 % and you stayed invested in Bank FDs @ 8%, then the difference of 7% (15%-8%) is your opportunity cost.

We have a tendency to ignore anything related to investing where we need to read, learn, understand and then take a decision. Our preferred investment vehicles have traditionally been instruments which are easy to understand and require little or no follow up or review thereafter.

Most of us bought our first Insurance policy just because a relative or a neighborhood uncle or aunt coaxed us into buying it – we never made an effort to inquire about the product features. We keep on paying premiums only to realize later that it is a dud instrument and not an investment.

There is another reason for our lackadaisical behavior with money- staying un-aware, both at school and home. There are many things which remain only ‘Formula’ for us, with little or no practical application.

Remember the school days when calculating Simple Interest was so simple, however when it came to Compound Interest, the problem always seemed to be compounding as the formula was a little complicated! Money affairs, we believe, are to be kept simple!

Compounding is of great significance and the sooner we understand it, the greater are the chances of benefiting from it. (We can discuss this in detail, later)

What would you do if tomorrow banks start paying you 2% on FD, or if the banks stop paying any interest on your money? Now that is a distant possibility in India in the current environment. However, think about it seriously- what would be your backup plan in that scenario-it would definitely call for studying other options available.

You would go in for real estate, equities, gold, bonds or government securities.

However remember, that from a liquidity & ROI perspective, there would be a lot of variation. Thus start reading and making informed choices. Most studies prove that a person, who keeps himself updated, stays engaged and well aware would be able to multiply wealth manifold.

Understanding a product BEFORE you put your money is of utmost importance. Non Tangible products require greater research, assessment and review.

There are a few people who still choose to neglect equities saying it is risky and akin to gambling – this is as far from reality as it can get.

If you consider Gold and Real estate as investment products, how many times have you sold gold for a profit to invest or for returns? How many of you have really thought about selling your home from purely enjoying the ROI?

Do we look at daily, weekly or monthly price of these two instruments to assess the returns? We DO NOT, then why do we start tracking our equity investments from day 1?

Some important factors before investing in Mutual Funds:

Why to invest                        there are many reasons, but here I would say that invest purely from a diversification point of view. Once you start understanding the magical world of MFs, make a plan and stick with it.

When to invest          for a retail investor, this is a dilemma- whether SIP or when the market goes down. If you are an informed investor, try a rule based approach- say when Nifty is 25-50 points down. If that does not happen, let it be 30th of the month. Have your own logical approach and go with it.

How to invest            this is not that difficult-either get a Demat account or speak with your bank representative. Direct investing with the MF is another option and has its own advantages. There are sites with automated and algorithm based tools, identifying best MFs for you, basis your needs and profile.

How much to invest  the beauty of equities lies in the fact that when you look back, you always tend to think that why did I not invest more! So, for arriving at this amount, you need to take care of your monthly expenses, have an emergency fund ready and then take the plunge. Try to start with at least 5 % of your monthly salary.

Review            this is an important aspect of investing. You might not look at your FDs or RDs during the tenure as you are assured of the returns. However with MFs, there are chances that due to certain market factors, there might be an impact on your portfolio returns. Thus re balancing or re aligning with your long term goals is a necessary step.

While I do not believe in New Year resolutions, I thought of today as a good day to share this as I know there are many who believe in and stick with their resolutions.

Let 2016 be that year-become an informed, educated and smart investor – start investing in Mutual Funds.

Best wishes.

“10 commandments for retiring at 39, or doing your own thing”

I happened to meet my senior from school when I was in my hometown a few days back. He had not changed much and in fact looked as fit as he was 9 years ago!

We agreed for lunch the next day as I thought he was on vacation. I was surprised when he said he was there for good.

I first thought he was the latest to enter the entrepreneurial world- there have been so many stories now of people quitting well paying jobs and picking up farming or some environment related venture in the hills. I was wrong.

The next day we caught up over lunch and our conversation resulted in some vital financial lessons, the only difference being that these came from a person I knew quite well and not from a newspaper article. He said that he was late by three years as he had contemplated becoming his own boss by the time he turned 36!

Just to share a brief background- he was heading a critical department  around 9 years back in a leading financial services giant and was considered to be one of the most prolific managers in the organization. He was ambitious and I remember him saying that one day he would like to lead the organization!

Change of heart? He had clarity of thought, vision, focus and a razor sharp mind. He started investing in different avenues at the age of 23. He is 39 now, having seen his fixed investment in PPF account mature.

The journey has been easy, he said- PPF, bank FD/RD and Mutual Funds/Stocks. Unlike others, he never bothered about real estate. (Which is strange for people his age and a topic for discussion in itself!)

How did he achieve financial independence at such an early age- focus and discipline are the keywords from what I could make out of our two hours long conversation.

1 Starting early                 He implemented his plan for building a corpus at the age of 23. Initially he used to save almost 75% of his take home salary! It helped that his father had insisted on RD/FDs initially.

2 Do it yourself                 Very early in his professional life, he made an effort towards financial self sufficiency and literacy. He practiced the principle of “Outsource only when you understand and if you must”. If you outsource everything, your advisor or bank might start helping themselves rather than creating wealth for you!

3 Goal oriented approach            the end objective gives wings to your goal and brings focus in whatever you do.  All assets were reviewed for returns every year-non performing ones would be substituted, where ever applicable.

4 Mix of asset classes                    Mutual Funds, stocks, fixed return instruments- the mix for him was different as it would be for any investor. Experience taught him that each asset class grows at a different pace and the returns over a period of time are also different. The average return over the years for him has been 18%. (This is substantial, by any standard!)

5 Use your Credit card and automate expenses  a very interesting aspect and something which I always insist on. All expenses should be on credit card and regular ones should be automated. In fact he told me that he even used to track the savings from his credit card and has saved a reasonable amount by way of cash back and discount offerings in the last 12 years. Also, he has never missed on a payment!

6 Patience is the key                     Quick money is akin to gambling, not investing! Wealth creation is a long drawn process. Warren Buffett has created most of his billions by staying invested “forever”. If you have the force of conviction, stay put for the long haul.

7 Build a corpus to take care of all your expenses for one year    the journey becomes easier then. You would not have sleepless nights. This also enables you to take a few calculated risks, as you would not need to worry about expenses on a monthly basis.

8 A second source of income definitely helps    when he started working, his parents were working. This enabled him to invest at a faster pace with a good amount. His wife continued working till the time he quit his job. He ensured that one salary was being invested judiciously, as per the goal. (# 3)

He strongly believes that having a second source of income has helped in multiplying money and also acted as a catalyst for arriving at the ultimate decision.

9 Earning is different from ‘Creating or multiplying wealth”       Earning takes care of your monthly expenses, wealth ensures your life goals are met. You cannot really decide how much you earn, however creating wealth is a step by step process, which if followed religiously and given time to compound, yields amazing results.

10 Buy only what you need         there will always be things which you would be forced to buy due to peer or societal pressure. While we are part of a consumer focused world with lucrative deals across, we need to decide what is good for us financially. As the famous Buffett quote goes: ‘Buy things you like or you will have to sell things you like’

Today he has the equivalent of next six years of salary as corpus, considering a 12% average annual increment, baked in! This amount will take care of next few years as well, even if it grows at a decent 10-12% return. Meanwhile he has taken up teaching, mountaineering and writing, in the cool climes, apart from training his daughter in badminton for two hours daily at the local club.

Last thing, though he mentioned it in the beginning- Invest in your physical well being – any plan would be meaningless otherwise.

Sounds simple? It is, indeed!

Just follow the golden rules.