Monday, August 26, 2019

My books list for 2019 and what I learnt

Just like most people, I had a long list of resolutions for 2019. Unlike every year, this time I intend to keep them. Ok, atleast one of them - to read atleast1 book per month. This could be too less or too much, depending on which side of the 'reader' scale you are. While I have always enjoyed reading, it has not really been consistent and intentional. Hence, the resolution.

Half-way into the year, am already at 8 books, happily in line with plan. Having a clear goal helped. To ensure I follow through, I invested in 2 audiobook subscriptions (both Audible and Storytel) - which has been such a wonderful discovery! Not only is it easy on my pocket with a vast library readily available, my commute time is better utilized.

Each of these books has opened my mind to a new perspective. Sharing their most impactful takeaway for me :

1) Becoming by Michelle Obama
I was blown away by the simplicity and authenticity of her story - their story. She is so relatable as the woman who is donning multiple roles - wanting to be more than just a title. She talks candidly about her journey from a kid with a modest upbringing, to a young adult who was driven by ambition, but torn to creat an impact, to a middle aged mother and wife juggling multiple roles to finally her fears, challenges and lessons which came with the title of the First Lady.

My takeaway - We are all on a journey - with each phase of our life, there is something new to explore. The possibilities of who we can be are endless.

2) Atomic Habits by James Clear
This book gave a step by step action plan towards building a good habit or breaking a bad habit. It is full of examples and stories which makes it an easy, and effective, read.

My takeaway - Setting the right cue, with the right incentive, can train our mind to behave in a desired manner. This is a more sustainable way to build a habit, which eventually add up to meet our goals.

3) The Richest Man in Babylon by George S. Clason
This parables based book took a while to engage me. Since the stories are set in ancncient Babylon, it felt hard to connect with initially. However, this classic offers very practical advice about personal finance like '7 cures to a lean purse' and ‘The 5 laws of gold’ which make it hard to put down.

My Takeaway - We are slaves only to our limited knowledge or the lack of determination; if we work to enhance our skills, anything, including having our desired financial life, is possible.

4) Rich Dad Poor Dad by Robert Kiyosaki
This was my first money book ever when I was 18 and it changed how I thought about money. I re-read it this year and it had a totally new perspective after all these years. It talks about building a whole new way of approaching our money - as a tool to create possibilities and endless opportunities, if only we put our mind to it.

My Takeaway - Creating wealth is a mindset and requires,amongst others, making whatever money we make, work for us. Use our cash flows to build assets and not add liabilities.

Read my detailed book review here ( add hyperlink to medium blog)

5) Smart Money Smart Kids by Dave Ramsey and Rachel Cruze

This book has a world of wisdom when it comes to getting started with money conversations with young kids. It is a step by step guide on developing financial skills at every stage of the child's life. Dave Ramsey and his daughter Rachel Cruze talk about their story, making it relatable and doable.

My Take Away - Took the first step in confidently engaging with my 6 year old on the value of work and how to earn and save money to meet future goals. Lots of tips for kids at every age – am sure to keep going back to this book every 2 years

6) How your child can win in life by Matthew Raggett

A simple book on the key skills needed to raise kids in changing times, by the headmaster of Doon School. He talks about the basic skills of reading (to build curiosity & encourage finding their own point of view), writing (to being more clarity of thought) and play (importance of learning to work with a team , be competitive without making others not want to play with us, building the spirit to give & take)

My Take Away – This was an easy and engaging read on stuff which sounds so intuitive, as a parent. Yet there were parts which stayed with me – like reading with my daughter right till she is in primary and secondary school ; engaging in play with her to build a sense of collaboration; and spending ‘time’ in mindfully developing these skills which will be so critical for her in her adult life. 

7)The Little Book that Still beats the market by Joel Greenblatt

This one is for those looking to actively build their own stocks portfolio. Business principles are explained through simple examples which made it a delight on a relatively complex topic.

My takeaway - The essence of investing in a good stock is to understand business metrics, and set-up regular portfolio review (every year). While understanding the parameters of the Magic Formula, I also came across several other screens being used by investors to identify their own unique portfolio. It got me more confident in making my stock choices and I continue to learn. 

8) Women with Money by Jean Chatzky
Speaking specifically about women behaviors in the context of money, this book walked me through several relevant topics like building a parallel business, to finding the joy of spending, to enabling our kids with money conversations and finally leaving a legacy.

My takeaway - Leaving a Legacy is not about what you will leave behind, but rather the focus canbe on creating a meaningful impact while we are alive.

Travel the World without breaking your bank

Who doesn’t have dreams to see the world? Just ask those around you what they would do if they got a surprise ₹ 1 Crore in their bank today — most of the answers are sure to include “travel”. But what if only a few simple steps could make your dream vacation a reality?
1) Decide your destination and budget well in advance:
For a domestic holiday, it’s best to plan 3–4 months in advance, while for an international holiday — depending on where you want to go — 6–12 months are required. This means setting aside a separate fund for your dream holiday. Preferably, break the budget into flights, hotels, activities and daily expenses, to know where to balance.

2) Look for deals on flight tickets:

In most cases, the flight cost is the highest and the most variable component in holiday budgeting. If you have the advantage of time, watch out for many sales and offers on online travel portals and flight portals. This could be a potential savings of 15% -30%.

3) Explore alternative flight connections:

We know that a flight with multiple stops instead of just one will cost you less, in addition to this, checking for alternative cities to fly off from can make a difference too. Instead of flying directly into Singapore, opt for a via Kuala Lumpur flight, this could mean a reduction of about 20%. Instead of flying directly from a city with single or limited flights, consider choosing a main metro with multiple flight options.

4) Check for package deals:

Gone are the days when packages only offered the traditional ‘travel-in-a-coach’ feature. Now, you have the advantage of customizing and personalizing your travel with assistance from a destination expert. Apart from the benefit of price, booking a package saves your time, effort and could also be a great way to get company! If you have been dreaming to do that bike trail in Ladakh, instead of holding it off, try booking a package for a cheaper deal and make a few friends along the way!

5) Consider staying a bit off the city centre with good local transport facilities:

Accommodation options which are slightly off the main city centre would be at least 20% cheaper (depending on the city). Ensure walking distance to a local metro or a bus station.

6) Try local street food and explore free local experiences:

The joy of a delightful meal while on a holiday with those you love, cannot be underestimated. Instead of sticking to familiar cuisine, schedule at least one local meal every day. This will be a big boost to your vacation experience — with memories to cherish and stories to tell for a long time. From savouring the fresh fruit on the streets of Thailand to gobbling off a plate of Churros in Spain to enjoying Raw Chilli Mango in Ooty, there is always something local, and super affordable, at every destination.

7) Explore local experiences which are free of cost:

Local free walking guided tours, for example, are not uncommon any more. With a bit of research, you can find several cultural tours/UNESCO World Heritage sites, which are free or negligibly priced — book in advance to ensure you are not disappointed on tour.

8) Use a prepaid forex card instead of swiping your credit/debit card:

Apart from ensuring that you stick to the planned budget, prepaid forex cards are cheaper than charges levied on debit or credit cards. If that is not reason enough, consider safety against theft with available assistance/blocking card in case of emergency and the convenience of using a single card across multiple countries.

9) Buy travel insurance:

Protecting yourself against any mishaps on a vacation is a must-have. A good travel insurance would not only cover medical or accidental emergencies in a different country but also non-medical situations such as lost baggage, lost passport. There is a huge variety of options available at reasonable rates — can be picked for a limited duration or even year-long in case of frequent travellers.

10) Keep aside your shopping and indulgence fund:


New places mean new goodies, which means an uncontrollable desire to buy! Pre-plan for this, not by holding back, but by planning these spends in advance. If needed, make a separate envelope earmarked for a daily indulgence. It could be buying that local artwork or their latest fashion or simply enjoying a fancy fine-dining meal — pick what you love and indulge yourself.

How I took back charge of my financial life in my 30s

Image result for money woman financial freedom
Despite having knowledge and experience in the financial services industry, and starting my financial journey early, a few years ago I found myself behaving irresponsibly when it came to managing my own finances.
As life caught up with me, in my late 20s, a working new mom, managing a young child, and the long work hours all left me feeling too drained to focus on my physical or financial health. And just like that, I didn’t realize when all my savings started stagnating and the income was spent on ways to pamper myself or my newborn. The voices in my head during this phase were something like this:
“You deserve this! At least this!”
“Enjoy life today! Who knows about tomorrow.”
“What do you earn for, if not to indulge a bit?”
“It’s too hard to find someone reliable to get started with my investments again.”
Four years later, in my early 30s, after having worked for over seven years, this is what my financial reality looked like:
*Negligible Mutual Fund investments (had used my savings for my business)
*2 Unit Linked Insurance plans with a cover of less than 5L
*Roughly 2 Months’ of expenses saved up as FDs
*Saving about 15% of monthly income
*Luckily, Debt-Free☺
For someone who felt like she knew about investments, this was the moment when I learnt my first meaningful personal finance lesson:
Lesson 1: Success in Personal Finance is 80% discipline and 20% knowledge.
Knowing is no good if it stops us from taking action. One fine day, I finally broke the inertia and decided to take charge. After consulting a highly recommended advisor, after a gap of half a decade, I finally had a long discussion with him about my goals, my current portfolio, my risk-return expectation. Based on his recommendations, after a brief round of questions, in my office, during my lunch hour, I signed that form and handed over the cheque. There is nothing quite like signing a cheque on BIG occasions, is there?
Lesson 2: Take the first step, don’t overthink it
Most importantly- don’t worry about making mistakes and learn and keep moving. After passively investing for a year or so, I decided to find myself a community of like-minded investors. The idea here was two-pronged — first, I wanted to keep the momentum of investing; second, I wanted to upskill and update myself. Within a month, I enrolled myself in a course with a women investor community where I met several other determined, knowledgeable, inspirational women. In addition, I also started connecting with old colleagues and network of friends, who further brought back the much-needed vigour and pace in my financial discipline. My next lesson stared me right in my face.
Lesson 3: Reach Out, create a support structure and upskill.
It could be your close friend who is in the investment industry, it could be your alumni network of investors, or it could just be a meetup group in your vicinity — reach out now.
The last thing which I did was to read, reflect and rethink. In the journey of being deliberate about taking charge, few of the many revelations about myself were:
*I like to do my own reading about investment products
*I don’t trust advisors easily, prefer to take my own decisions which can delay action
*I don’t focus on my spending pattern, only on earning pattern
*Debt makes me anxious because it feels binding
*I want to be financially independent at any cost (no dependency on partner or parents)
The above made me take certain actions like blocking time on my calendar to consciously assign time to my investment study, to create my spending log and play with all types of analysis on every last Sunday of the month.
Lesson 4: Automate and Prioritise
Just like we do for all things meaningful, be it our health, our social life, our family time. We all forget, lose track of things, so if payments investments can be automated, have set reminders it would go a long way. Now after 3 years of having re-started my journey, here is my current financial situation:
*6 months’ of expenses as Emergency Fund in my Auto Sweep account
*Term Insurance cover with critical illness & disability rider
*Medical Insurance cover of my own (apart from employer-provided) of 10L
*Added some debt products like PPF, NPS to my portfolio
*Cumulative portfolio of Mutual Funds & Stocks (self-managed) is now 4X of what it was back in 2016
*Single Excel File with a consolidated view of all my investments (including insurance) including nominee details
*Saving 40% of monthly income
*Still no debt ☺
While it’s a long, long journey to achieve the net worth required for financial independence, it does not feel unachievable. I hope to never go back to my ‘closed eyes’ state and even if I do, now I know the trick to get back on track!

5 reasons I started talking to my 6 year old about money

Yes, you read that right — I talk to my six-year-old about money. While she talks to me about her class curriculum that requires her to learn about the basics of currency, notes and coins, I take it as yet another opportunity to engage with her on a few basic personal finance concepts.
Now, she may be really young, but having conversations about money is not uncomfortable or unusual for either of us. This is because making her a financially independent and informed adult is one of my top parenting goals.
Here’s why I think it is so important:
Money will be an inevitable part of her life
The pace at which the world is changing, the focus is not on passing down what works today, but on enabling her to make decisions for herself tomorrow. Teaching about money is an effort in that direction: she will earn it, she will be forced to deal with it (spend, splurge, save — do something!) and will definitely struggle with a lot of ‘noise’ on the subject once she gets to it.
Teaching her the value of work
I’ve dealt with ‘working mom’s guilt’ for many years. But now, I take it as an opportunity to discuss the ‘value of work’ with my daughter and to teach her that earning money requires us to put in deliberate efforts. There is no shortcut to being wealthy or affording the lifestyle that we do.
To help her understand the sense of satisfaction which comes with earning your own money, we have started charting out 3 chores for her per week (mutually discussed and agreed upon). Basis this, she earns her weekly ‘income’. Even though we aren’t super-regular with this, it has given me a chance to discuss with her ‘action and reward’ and ‘happiness of doing your own work’.
*Also, as a rule these chores are not to be confused with getting paid to help around the house.
It’s okay to get nice stuff as long as it’s within a budget
Let’s accept it. My daughter’s generation is spoilt for choice. There are new dolls, legos, shopkins, num nums and a hot new ‘trending’ toy every week.This decision between what she needs and what she wants will only get harder for her. Working within a budget — today, one set by me, tomorrow it will be set by her — will give her a sense of clarity on what really is her definition of ‘value for money’. There is nothing confining, restraining or miserly about having a budget and living with it.
She has already started demonstrating her understanding of budget and value when I take her out shopping. I hear no tantrum, no excuse, no aggression when I refuse a high priced item. She has started negotiating with me on what her options are, what she really does not have and would like, and how much am I willing to spend. Sounds unbelievable, right?
The joy of delayed gratification — saving up for something special
Every financial advisor worth her salt knows that having a clearly defined goal makes all the difference in reaching it. Working towards a goal teaches us to delay our gratification today for something special tomorrow. Our kids need to see the benefits of holding on. Because they will always have the option of not needing to.
Once we set up the chores, the next step is to link the income with a goal for her. A hook that would keep her interested. Because she adores her dog-sister, I used her upcoming birthday as the perfect excuse. Together we looked up the perfect colorful ball as a gift, and defined how much was needed. I took up 50% of the spend — provided she put up her share of the deal. Voila! Two months later, slow but steady, my 6-year old made it happen!
She should have a healthy money story
Money is one of the least discussed topics within families today. This makes it seem complex, mysterious, uncomfortable. We all have our own money stories which are created when we saw our parents deal with money — sometimes through arguments or uneasy exchange of glances, or even worse, when it’s not discussed at all. As adults, this story defines our relationship with money. If we were deprived of things as kids, we could end up becoming indulgent shoppers, with a sense of ‘ I deserve this’. If we saw arguments because of it, we could have find it difficult to discuss money with our partner, treating it as a subject of conflict.
By sharing, discussing and ideating together, my attempt is for her to treat money simply as a tool to help lead the life which gives her joy and satisfaction. I want her to pass on the same story to the next generation.
It’s not easy being a parent, especially communicating about subjects which are alien to us as well. But being deliberate in our parenting, to prepare our kids to make decisions in a world we haven’t experienced, is the only real thing we can do.


5 simple steps to take charge of your money

Our relationship with money is one we shy away from. In fact, most of us wish it would just manage itself. In all my years of working in various corporates, I have often found young men and women struggle with understanding tax basics to comparing notes on how little they actually have left in their accounts on the 15th of the month. The common myth is that ‘I am not earning enough — how am I even expected to save?’ The truth is far from that. Every small bit counts. One of the most successful investors of all time, Warren Buffet says, “It is not necessary to do extraordinary things to get extraordinary results”.
The journey from scarcity to abundance is only a few steps away
1. Save first, spend later: 
As soon as the paycheck arrives, instead of thinking of what you shall indulge yourself with, put aside your monthly savings — ideally, at least 20% of your income. This is as critical as wearing a seat belt while driving — incase of sudden jerks, the seat belt keeps you safe and secure. It might feel unnecessary and binding, but don’t be fooled. This saving will keep you safe.
Don’t tell me what you value. Show me your budget and I’ll tell you what you value. ~ Joe Biden

2. Spend on what matters: 
Watch your spending behaviour just for a month and you will begin to see a pattern. Sometimes we spend on things which don’t bring us joy or satisfaction, and end up sacrificing on purchases which would have added so much more to our lives. How about trading that excess shopping with a short holiday budget? Consciously choosing what we spend our hard-earned money on, goes a long way in bringing a sense of fulfillment from our earnings.
“Too many people spend money they earned to buy things they don’t want to impress people that they don’t like.” ~ Will Rogers
3. Tax Saving: Invest in understanding the various tax-saving options under Sec 80 C— from what is covered under the Rs 1.5 Lakh limit to additional benefits of Medical Insurance, Education Loan, Donations. Take help of those around you who have knowledge or read articles or watch videos to stay abreast.Understanding your taxes is not optional — and it is not complicated either. Efficiently managing tax will amount to the much needed increase in your cash-in-hand as well as avoid last minute panic of making investments which you don’t fully understand or need.
4. Accumulate an Emergency Fund: 
Your emergency fund is you safety net in case of a crisis. This should ideally be three to six months of monthly spends which should be parked aside as an FD or in a savings account as available cash for unforeseen situations. While one always has family and friends in times of need, it would give you added confidence and a sense of control over your finances, knowing that you can ride through on your own.
5. Watch out for debt: 
Debt enters our life mostly in harmless forms like credit cards, education loans, car loan, EMIs for furnishing your new home, home loan, borrowing from close friends or family to tide over a trying financial time, and so on.Often we find comfort in the knowledge that we are not alone. Debt is the new norm to sustain our desired lifestyle. However, we often forget that postponing payment for today’s luxuries is bound to catch up with us. Stay away from debt taken for luxuries and excesses. If you already have indulged, plan your way out of it today. It’s just like resisting that extra piece of cake because you know ‘once on the lips, forever on the hips’. Taking debt to leverage cash-in-hand towards higher return generating assets is the only plausible logic for allowing it to enter our lives — if you are not clear about the above statement, you are possibly not ready to take on any debt yet :)
“Some debts are fun when you are acquiring them, but none are fun when you set about retiring them.” ~ Ogden Nash

4 Life-changing Money Lessons from Rich Dad Poor Dad

There are a few books which leave an ever lasting impact on our minds — I would even go as far as admitting, they could alter the course of our lives. 

Rich Dad Poor Dad by Robert Kiyosaki is one of those gems which I first happened to read when I was 19 years old. It opened my eyes to concepts of Wealth Creation, Personal Finance, Assets & Liabilities, and more than anything else, to innumerable possibilities, only if I learnt to make my money work for me.


I recently re-read this classic and it offered a new dimension this time. After more than a decade long relationship with money, I realized how hard it was to really practice money discipline. Admittedly, despite having some knowledge of basic money principles, I found myself stuck in the ‘Rat Race’ still.

Here is sharing 4 ideas which stayed with me from the book along with a short roadmap which helps me implement these learnings.
  1. Know the difference between ASSETS and LIABILITIES
    Robert simplifies these terms — Assets are what bring money IN and liabilities are what take money OUT of your pocket. Period.
    This made me reflect on the fancy bags, clothes, shoes, car, which were merely liabilities (in financial terms) — of course, they were much required, however, they did not count as Assets.
It also talks about buying a house purely to live in it — which again is not considered an asset — however, he maintains that it is often a highly debated subject since most people are emotional about owning their own home. 
2. The Rich Invent Money
“Why not seek to learn more than earn more.” ~ Robert Kiyosaki
Robert strongly recommends Upskilling, clearly calling out four key skills which include accounting, understanding taxation, marketing and negotiation. The rich often groom their children to understand various departments to get an overall understanding of business.

To make money work for us requires us to get out of the emotions of fear and greed and think logically.
3. Choosing your network wisely
No man is an island. Any drastic change requires support from those close to us, from professionals and from like-minded people. Don’t listen to the ‘Chicken Little about the Sky is Falling’ theory — there will always be cynics who will talk about all that is bad in the world. Instead, communicate with the enterprising ones around you who are on the path of wealth creation. 
4. Making DAILY choices

Our spending habits reflect who we are and our values. What we choose to do with our time and what we see, hear and consume everyday impacts these habits.
“If you want to be rich it’s important that you understand the power of choice and know how to make good financial choices.” ~ Robert Kiyosaki
Most of us struggle financially not because of what we know, but because of what we do not know. The book talks about the basic money principle of‘Pay yourself first’ and the power of ‘self control’.
Do you have money goals? Is there a book that has altered the way you think about money? Are you a Robert Kiyosaki fan like me? Share your thoughts as a comment!

I asked over 100 Indian women what they did with their money

… and this is what I found

Since I have a fondness of understanding investor behavior apart from reading regularly about personal finance, I came across a study by Merrill Lynch in 2014 about ‘Women and Investing: A Behaviour Finance Perspective’. The report covers gender comparatives across various aspects including:
Mindset towards risk, approach towards investing and defining purpose of investments.
Here is how the report’s first para reads:
“According to new Merrill Lynch research, gender differences among investors tend to be overstated. In fact, the ways in which men and women approach their financial lives are often strikingly similar. Understanding who they are as investors can help women better focus on ways to successfully work toward their personal goals.”
This made me pause and think. How did women closer home really think about money? How did they go about their investments? I put out a short 10-question survey of my own and circulated amongst those around me, closer to my community of Urban Indian Middle Class women.
I received around 120 responses within 48 hours — and here are is the broad demographic summary:
  • 65% of these women were between 25–45 years of age (30% were 25–35 yrs old, 35% were 35–45 yrs old)
  • 76% of these women earned their own money either through a full-time job, their own business or freelance work
So these were primarily earning women, under-45 years.
Here are the overall findings of the survey:
  • Only 19% of the women who had a source of income, save or invest first and spend what is left.
  • Over 60% of the women who took this survey had planned for a financial goal in the last 12 months, but when it came to taking assistance for investment decisions to meet such goals, only 25% used professionals — the majority going with the comfort of advice from friends and family.
  • The biggest challenge this group faced was the lack of understanding of financial products (25%), followed by the lack of personalized advice
  • Their current portfolio included mostly Fixed Income products and Real Estate.
  • The 40% who had not set a financial goal in the last 1 year, were the ones clearly dependent on family and friends for advice or did not take any financial decisions. This segment clearly called out that they ‘did not care’ about managing money and found it too tedious. 40% of them admitted that they did not understand financial products and felt goal-less.
  • Interestingly, 50% of those surveyed would like to learn about Effective Budgeting, Money Management Ideas, Goal-Based Financial Planning. Only a handful mentioned product-specific literacy (the highest being in Mutual Funds).
Here is what I took away from this early, and of course, limited dataset study:
  • Most of these women had financial goals and interest in their money, but hand-holding was missing
  • Most of these women lacked knowledge of basic money and investment principles
  • They preferred the close connect with family and friends on this subject versus professionals/investment communities
  • They definitely wanted to learn about Money Management and Goal- Based Planning — maybe not specifically about each product right away
This short survey made me feel connected, even more, to so many women around me, like me, who work so hard to earn and are seeking answers on how to make their money work for them.
I am not yet sure how women are different than men as investors, but I feel confident now, more than before, that there are oh-so-many who are ready to truly work towards financial independence in the truest sense!
If you are an Indian women on this journey with me, drop a hello in the comments!