My investment journey and learnings!

With almost 10 years of investment experience now, it's a good time to look back on my investment journey. I can't claim to have made any out-of-the-ordinary gains so there will be no extraordinary advice here. As they say, most investment stories are boring! However, there might be a lesson or two hidden somewhere :)

Phase 1 - the beginnings

Having luckily bypassed the 2008 recession, my investment journey began in 2010 with my first job after engineering. I took investment advice mostly from personal finance articles in newspapers back then and from http://www.subramoney.com/ (it was a much simpler blog at that time). A good job, no responsibilities, and an innate lack of imagination for spending ensured that I was able to invest the recommended 20% of my salary. While it amounted to only a few thousand rupees per month of SIP in mutual funds, I am thankful to my past me for at least starting to invest which taught me some important lessons:

• Keep aside money for investment and then spend the rest - no amount is enough for spending
• Like anything else, saving is also a habit
• Purchase from savings rather than borrowings
• Know inflation - money decreases in value with time
• Stay away from LIC policies!
• Read a lot, research, make sense of risk & reward, debt & equity, mutual funds & stocks etc.
• Know the difference between saving & investing

Phase 2 - getting serious

1st phase ended with me leaving my job for Mba and withdrawing all my investments and my epf proceeds for paying fees. 2nd phase started with my 2nd job after completing mba with more money to invest, a greater pinch of taxes, learnings from phase 1, some more knowledge from finance lectures, a longer investment horizon, and more spending goals.  Lessons learned have been:

• Importance of health and term life insurance! (with a reminder from a more than minor injury - entirely paid by my health insurance)
• Importance of saving for retirement - dynamics are very different due to very long term horizon
• Investment type must match investment horizon - learnt this the hard way when I had to withdraw my MF units at almost 10% loss because I had no fixed return investments!
• Take advantage of tax saving for investment rather than invest for tax saving
• Lost capital in stock & bitcoin trading - money takes a lot of time to grow!

Phase 3 - coming of age

Some more learnings over the past couple of years, accelerated by COVID times:

• Balancing investments for the long term with spending in short term - it's important to spend on good things!
• Efficient investing - low cost of investments can make a big difference e.g. Direct Funds, Index Funds, NPS, FDs with no foreclosure charges
• Explore more investment avenues - NPS for retirement; online FDs for emergency funds; Gold ETFs/Foreign ETFs, Debt MFs for asset allocation
• Take adequate insurance - not too much, not too less - insurance mitigates risk, it's not an investment strategy
• Invest in building physical + mental health and good habits - money saved is money invested!
• Keep partner informed of total investment, investment platforms, basic investment terminologies

Phase 4 - to be updated after 10 more years! :)