In today’s world, it is important for young adults to come forward and take active financial decisions. Learning how to make wise decisions now will help them to become financially independent later in life. This includes budgeting, investing, saving, understanding taxes, and more. Knowing these concepts now will set them up for financial independence and security down the road, while also helping them make better decisions when it comes to their career
Rishi Dewan of Shaheed Bhagat Singh College, University of Delhi tells MintGenie in an interview about how he tries to develop his understanding of personal finance and investing by actively reading books such as The Intelligent Investor, Psychology of Money, Think and Grow Rich, etc. As a final year economics student, he has cleared the FRM Level-1 Examinations and has interned with prestigious institutions such as Niti Aayog, Impact Investors Council, and Aditya Birla Sun Life Insurance.
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?
To me, money is more than just a tool for purchasing material possessions or accumulating wealth. It's a means to create lasting memories and experiences that I'll cherish for a lifetime. By carefully balancing my spending on building those memories today with investing and planning for the future, I aim to achieve a state of financial harmony that will allow me to pursue my dreams and achieve self-actualization.
Of course, finding this perfect balance is not easy, and it requires constant effort and adjustment. But I believe that the effort will be worth it in the long run, as it enables me to live a life that is rich in both material and non-material wealth. It will eventually me to take risks, explore new opportunities, and pursue my passions, all while ensuring that I am financially secure and able to meet my long-term goals.
What do you spend your money on every month at the moment? Can you give a breakup in percentage terms?
As a Delhi University student, fortunately, based in Delhi, I have some paid internships and freelance gigs that allow me to save 20% of my budget for long-term goals. I invest in myself by allocating 10-15% to books and online courses and prioritize health with 20% for the gym and 15% for travel. The rest goes towards a startup I'm working on. By balancing finances, personal growth, and pursuing my dreams, I aim to achieve fulfillment.
What are the things you want to spend money on?
For me, the most valuable experiences in life involve spending time with friends. It's not about how much money you have but about the memories you create and the bonds you build. I enjoy exploring the world with my closest friends, whether that means traveling to new places or simply trying out new cafes and restaurants.
Another way I invest in myself is by reading books on topics that interest me, such as finance, entrepreneurship, and chess. I believe that continuous learning is essential for personal growth and success, and books provide an affordable and accessible way to expand your knowledge and skills. Of course, like many guys, I also dream of owning a sports car one day.
Do you save money? If yes, how frequently and what do you do with this money?
As I previously mentioned, I try and save money monthly. Fortunately, enough, my father has been very open to the idea of investing and trading in the stock market and that is where the saved money goes. I have been an active trader and investor for the past 6 months.
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 have invariably been an ardent learner and a potent believer to discover from others' experiences. I suppose a 9-5 corporate job in the initial years helps you to acquire conviction and improvise your thought process. I feel that a job and money are a manner to satisfy the essential physiological and safety needs and build a base for my long-term ambitions and goals. Having a job would also give me the ability to take risks on the side and build my own venture.
In accordance with Maslow’s hierarchy of needs which is something that I firmly believe in, an ideal company to work for would be one where I can achieve self-actualization and at the same time am compensated well for what I bring to the table.
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?
I believe that investing money is fundamental to ensuring financial security in the long run. According to the rule of 72, at an average inflation rate of 5%, we lose half of our wealth in around 14 years. With the advancement of healthcare, our life expectancy rates are bound to increase, and we must plan well for the future.
Being a student of finance and economics, I prefer to invest in an amalgamation of the stock market, small bank fixed deposits and gold. I believe that keeping money in your bank saving accounts is not really a wise decision because of the high inflation rates that we are currently witnessing.
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?
As a finance enthusiast, I have a fair enough understanding of how the markets and investments in general work. After long conversations and discussions with my mentors and seniors in this field, I believe that understanding the stock market is not an option but a necessity while building long-term wealth.
A careful study of the most prominent investors in the Indian stock market such as Late Rakesh Jhunjhunwala, Amit Kedia, and Radhakishan Damani to name a few, suggests that research-based direct stock investments with good concentration can sometimes give you outsized returns over a period.
To develop my understanding of personal finance and investing, I have actively read a lot of good books such as The Intelligent Investor, Psychology of Money, Think and Grow Rich, etc. Amongst the resources available online, I think Varsity by Zerodha is liquid gold for an elementary understanding of the markets and gives you a comprehensive overview of the same.
Do you follow social media influencers and follow their investment advice?
It's true that in the world of personal finance, there are certainly some social media influencers who are worth following. However, it's important to keep in mind that there's always a price to pay for any information or advice we receive - whether it's in the form of our time, money, or both.
That's why I've found that a hybrid approach works best for me when it comes to staying up-to-date on the latest financial innovations and building my investment portfolio. While I certainly value the insights and perspectives of these influencers, I don't rely solely on their newsletters or blogs. Instead, I make a point to do my own research, reading, and discussions to ensure that I'm well-informed and able to make smart investment decisions that align with my goals and values.
At the end of the day, it's up to each of us to strike the right balance between leveraging the knowledge and expertise of others and taking ownership of our own financial futures.
Do you talk to your mother or your father about money and learn from them or follow their advice?
Fortunately, both my parents have conversations with me around money, finances, etc. It is a blessing to be able to learn from their years of managing our family really well. My dad has been pushing me toward the concept of investing in the stock market and that has enabled me to operate freely in the same, allowing me to expand my learning opportunities.
