scorecardresearchHeterogeneity in one’s portfolio is essential while investing, says IIM

Heterogeneity in one’s portfolio is essential while investing, says IIM Ahmedabad student Khushi Singh

Updated: 08 May 2023, 01:27 PM IST

In order to comprehend what money means to today's youth in a growing world, this series explores students and young working professionals and their perspectives on money and finance.

Khushi Singh, a final year student of the Indian Institute of Management, Ahmedabad

Khushi Singh, a final year student of the Indian Institute of Management, Ahmedabad

In today's world, achieving financial independence has become a top priority for the younger generation. They now have the opportunity to manage their finances well and earn a consistent income thanks to expanding educational and employment options. Early financial independence development aids in the formation of sound money management practices like saving and investing, which can pave the way for a more secure and prosperous financial future.

Khushi Singh, a final year student of the Indian Institute of Management, Ahmedabad, tells MintGenie in an interview she has made it a priority to save a portion of her income each month which allows her to treat herself to things that bring joy without feeling guilty about spending the money.

Before this, she completed her undergraduate degree in Political Science from the University of Delhi and is currently interning with Kimberly-Clark in Marketing. Khushi is also an avid cat lover and enjoys spending time with her furry friends.

Edited Excerpts:

What does money mean to you? Is it the most important factor when it comes to your life decisions like what to study, career and so forth?

I am from the first generation of women on both sides of my family that has had equal opportunities in terms of education and career prospects. Financial independence becomes an important tool in that context, giving me choices that the women before me might not have had. My sister and I were motivated from the very beginning to make independent career-oriented lives for ourselves, and we saw our parents actively prioritising that, which only pushed us to do better. Money is important in the security it gives me while making tough decisions.

Money is not the most important factor in my life decisions, and this statement comes from a place of privilege, where my parents have never let me feel the lack of money even while they compromised on many things for themselves. I have made these decisions based on my interests and their feasibility, and thankfully they have panned out well so far.

What do you spend your money on every month at the moment? Can you give a breakup in percentage terms?

Currently, the biggest chunk of money I spend every month is on rent and food (not including the tuition fee, which would swallow the other fractions up). Out of my expenses, about 50% goes to rent, 30% to food, and the other 20% to travel/shopping.

What are the things you want to spend money on?

I want to spend money collecting more books, which is quite a task right now because I do not have a permanent location to set up a library. I would love to lend books to others who want to foster a reading habit. I also want to spend money on girl child education since the opportunities for this segment of society are so closed off. It has the potential to turn lives around if only more resources were directed to the cause.

Do you save money? If yes, how frequently and what do you do with this money?

I believe in the importance of having an emergency fund as a safety net for unexpected expenses. Therefore, I make it a priority to save a portion of my income each month. In addition to my emergency fund, I also save money for discretionary purchases. This fund allows me to treat myself to things that bring me joy without feeling guilty about spending the money. For example, I might use this fund to vacation or purchase a new gadget I've been eyeing, although it is yet to find its true purpose.

What does having a job mean to you? What are the top two factors you will want to think about when deciding a company to work for?

I recently started my first corporate stint for the academically mandated internship we are required to do over the summer, and my experience has been extremely pleasant. Apart from the financial security aspect of having a job, it gives me a routine and the opportunity to learn firsthand while also practicing the skills I’m acquiring in real-time, which is different from the theoretical concepts learned in school.

As a marketer, the top two factors that I would prioritize while deciding on a company to work with would be the organizational culture and the relatability of the product they are offering. Organizational culture is important to me because I believe that a positive and supportive work environment leads to higher job satisfaction and better performance. Working in a culture that aligns with my values and provides opportunities for growth and development is crucial to my overall happiness and success in my career.

Additionally, the relatability of the product is important because it allows me to better connect with the target audience. If I am passionate about the product and believe in its value, I am more likely to create effective marketing strategies that resonate with customers and drive sales.

What do you think about investing your money? If you have a certain amount of money set aside, will you want to invest it in the stock market, mutual funds, or do you just keep it in your bank savings account?

Diversification is the name of the game, and I would aim to invest in a bouquet of financial instruments that cater to the following three requirements of mine - a) ensuring liquidity at the time of need, b) giving returns over my investment above the inflationary trend, and c) safety of the investment. A single form of investment cannot grant all these three; thus, heterogeneity in one’s portfolio is essential. I would want to create a portfolio that is both stable and has the potential for growth over the long term.

Do you think you have an understanding on how to save and invest? If yes, how did you learn? If not, are you trying to learn?

Considering that I started earning rather recently, I had not given much thought to investing before. While I understand the how-tos of saving, I am very new to investing correctly. My main source for this information has been my father, who has worked in the banking industry for the last twenty-seven years. The natural tendency is to let him handle the finances because of his expertise in the area, but I am trying to learn the basics.

Do you follow social media influencers and follow their investment advice?

No, I do not follow social media influencers for investment advice. While some influencers may have valuable insights and knowledge, I believe that investing is a very personalized act and different people have different goals to achieve out of it. The investment strategy that works for one person may not work for another.

Additionally, many social media influencers are motivated by generating traffic for their pages or accounts. This can lead to clickbait thumbnails and content ideas that prioritize views over providing valuable and accurate investment advice.

Overall, I believe it is important to do your research and consult with professionals before making investment decisions. Blindly following the advice of social media influencers can be risky and may not yield the best results for everyone involved.

Do you talk to your mother or your father about money and learn from them or follow their advice?

Yes, I do. As I mentioned before, my father has a lot of experience in the banking industry, which makes him the expert of the household, with most of our relatives and acquaintances coming to him for financial advice.

However, my mother has discovered her own tactics for saving over the years, with consistent recurring deposits and other such accounts that she could handle on her own, using this money later for her making discretionary purchases for the household, such as buying a laptop for the family. This was rather inspirational because it made me realize from a young age the cumulative effect of saving, circling back to the first question.

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First Published: 08 May 2023, 01:27 PM IST