Finstor – A Common Sense Investing Guide

There are tons of blogs, guides, and reading lists on the internet that throws a bunch at you about how to invest, why to invest, and where to invest. About a decade ago, the scene was totally different. Only handful few used to invest in direct equities, forget derivatives. However, with information overload, and everyday popping WhatsApp groups and telegram channels, it has become chaotic out there. And, midst all this noise, we have forgotten the very essence of investing – Money Management.

What is Finstor and What is so different about it?

#1: Not a recommendation platform

I am stunned the way every other investor has become an adviser recently. Since 2013, becoming an adviser has become a trend. If you are successful at identifying stocks at cheaper valuations and making a multibagger return out of it, then you have to launch an advisory (Pun intended). That said, few attribute their success to recent bull market. Not many have seen the vertical fall that we witnessed in 2008 and it becomes even more worrisome for me. Though I have spent good number of years in equity markets, I do not intend to flaunt my picks or skills here. Instead, I want to make naive retail investor aware of the risks that are inherent in this pumping bull market. As the saying goes, every bear market is pregnant with a bull market, I sincerely feel it is equally true vice-a-versa.

#2: Equity is JUST ONE asset class

Unfortunately,  few understand that equity is just one asset class of the overall financial portfolio. Aggressive investors bet high on stocks and forget the important of debt or liquid funds. Retail investors are adamant about bank FDs and insurance policies. However, a portfolio is never complete unless you cover all the edges – Term Insurance, Health Insurance, Liability Management, and so on. Equity can never be solution to all of your needs. Hence, understanding other financial instruments is equally important. I want to make aggressive equity investor aware that not every investment is expected to yield monetary returns.

#3: We have forgotten importance of savings

Frugality does not mean cutting your expense short by compromising on happiness. Instead, it means planning for your happiness in a most efficient way. We, Indians, have gone from savings oriented nation to  over leveraged nation. IT industry put quick money in middle class family without even giving them a clue of so called leveraging limit. Owning a credit card became status symbol and buying house the most important priority without even understanding the rationale.

Today, people easily go overboard & over leverage. They lack basic saving sense and invest in ELSS just to save the tax. Annual LIC payment always puts a big hole in the bank account. House loan EMIs put vacation planning out of the question, and spending on unwanted stuff becomes common place on weekends.

I intend to help each of such investor understand how easy it is to save, how important it is to save from the very first salary, and the importance of liquidity. Remember, cash isn’t the king always. I intend to cover strategies that will show you how to plan for LIC premiums in advance without putting a hole in your bank account, and yet making some returns out of premium outgo. I will help you understand how you can still take vacation once a year without worrying of EMIs. Of course I cannot help you if you have leveraged beyond your earnings.

#4: Blind buying

A lot of people buy ULIP because agents some how manages to prove investment and insurance are two sides of the same coin.  A lot of people buy mutual funds without understand what an expense ratio is just because agent used the age old data showcasing the wealth created in past. A lot of people still buy endowment policies without understand the inflation adjusted returns are mostly negative after 20 years. A lot of people avoid buying separate health insurance thinking their employer covers them and their family. A lot of people still see term insurance a waste of money. There are many such situations that I can go talking about. I want to use this platform to make your sense prevail.

#5: Share my mistakes

In whatever years I have spent in equity markets or managing my own finances, I have made tons of mistakes. I too have blindly kept paying for my endowment policies that my parents bought for me. I too went overboard and used to carry over 10 different credit cards at a time. I almost always spent first, and saved later. However, I have learned big time from these mistakes. Be it buying a stock on friend’s recommendation, or buying some tip provider who assures of guaranteed returns. I have also loyally filled insurance & mutual fund agent’s pockets without understand my need and important of direct plans. I want to publicly share my mistakes so that if you are about to commit the similar one, you can be saved from my experience.

Note: I do not intend to sell any service, or offer tip, or recommend any stock for buying or selling. I just want to show everyone that being Indians, managing finances is in our blood and we have some how forgotten that.

I also accept that I am not an expert on underlying subjects. So, please cordially show me my mistakes, if any. I am open for suggestion, and even learning from my readers. With this, I put the hat in the ring and welcome your all to Finstor

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