Last week I spent some time with a friend evaluating his portfolio. Like many of my friends he had started his SIPs about 10-12 years ago and had done well in his investing, simply by being disciplined, not arguing too much and letting the compounding go on!

However, his wife did not know too much about how much money they had in their kitty…so I asked her to take a guess.

She said : Rs. 40 lakhs + provident fund + a house in the Western suburbs of Mumbai with a current valuation of about Rs. 2 crores.

He knew how much he had invested, but had just kept all the STATEMENTS in a closed cover and had no clue about what it was worth.

Surprised? I was not? To me people not knowing how much money they already have is normal…so here was one more friend like that.

I then showed that his investments over the years had grown to Rs. 1.47 crores in mutual funds + he had about Rs. 40 lakhs in own provident fund + Rs. 14 lakhs in public provident fund and about Rs. 10 lakhs in his bank accounts.

No loans, – all loans repaid.

She suddenly felt rich – and said ‘See we can afford that Europe trip now that you have so much more money than we thought we did’. I was intrigued….

Then I worked out her KNOWN big expenses – daughter’s wedding, son’s wedding, etc. She was still basking in the Rs. 1.47 crores of the mutual fund money…

Then I worked out the RETIREMENT REQUIREMENT…she was stunned. Normally the retirement requirement comes as a hit on the solar plexus. They needed about Rs. 4 crores to sustain their lifestyle. And they did not have it. Well retirement was only 4 years away. Even adding Rs 30 Lakhs to the corpus every year it looked tough.

It reminded me of my EATING. On days that I work out more than other days – either running, cycling or walking, I subconsciously eat more. This is what I call ‘compensatory eating’ – or overeating. This negates all the calories burnt…and actually adds weight!

Sounds funny remember markets are not predictable. If you see a nice round portfolio sitting on your calculator see how much of it is caused by luck and how much by diligence. Discount the luck portion of your portfolio !!

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  1. There is a need for professional fund managers here. Something like a shared family office. The concept is available abroad. Lacking here.

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