Subra Sir what you are saying is true, but I need the car now, AND i can afford it. Said a 26 year old girl. I was actually delighted.

Coming to think of it, a debtor BUYS a Indica, borrowing money from Hdfc bank, and paying the installments – she is doing ME  a favor.

At a higher level, the borrower (debtor) pays the investor – wow. So quickly make a decision on whether you want to be a debtor (I owe so I go – to work) or an investor (i know how to generate cash flows for my needs).

When a person says I wish to be a debtor, and NOT an investor, they say it in the following ways:

a. Subra sir, what will happen by investing Rs. 500 a month?

b. I know NOTHING about investing – easy for you to say because you seem to know.

c. My father asks me to invest in LIC and you screamed at me when I said endowment plan. Being an MBA with finance and marketing is so inadequate for me!

d. I go to the bank at 8am and come home at 8pm. I have no time to read / browse the net or to even call you to ask, how can I invest? I just do not have the time to invest regularly.

e. My father invested in the share market and lost everything. I am afraid to invest regularly. I am a full time banker, not  a broker, ok.

Here is my reply:

Ok PD (no point in using her name, right?) here is my reply:

It does not matter how much you invest, just make a start. It is none of my business whether you invest Rs. 500 a month or Rs. 8000 a month. Every rupee counts and making a start is important. If you wish to invest Rs. 5000 a month let us put it in one scheme – but if it is Rs. 8000 let us put it in 2 ELSS schemes. Growth plan, no dividend. Let us look at it in 5 years. Remember 5 years. Not a day less, not a day more.

And my dear girl you know nothing about the engine, the HP, the fuel, the gears, combustion….right, but you are getting yourself a car…why goddamn it, you are about to spend Rs. 4800 to LEARN DRIVING! It is a vehicle which will get you from one place to another. Investing too will get you to a location where you want to be ….20, 24, 30 years from now!

It is not as though you know nothing. You have passed the derivative exam, the mutual funds exam, and the bond market exam. I remember one nice ppt that you had made about the mutual fund exam and one about derivatives….so you do know something, but yes a lot of it has to be learnt.

Sorry your father is not a serious banker. He was in the support function, does not understand finance, did lose money in the UTI 1964 scheme, in some stupid company FDs, etc. HE HAS NO RIGHT TO ADVICE YOU ON INVESTING. He does not know his ‘a’ from his ‘e’!! I do not think he knows the difference between Investing and Saving….

Yes I heard that you are working real hard (good show, proud of you!) but starting a couple of SIPs, doing the kyc, should not take more than 20 minutes, I can assure you.

and hey you have my no., email id, fb link,……stop giving excuses…..


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  1. I hope she follows this!
    How wonderful to be young, with forty years of incomes and investments ahead of one!
    I learned abt dividend income in school, going to deposit the cheques when my head was short of the teller counter…

  2. Hi Subra Sir,
    Why do you come up with weird examples like “A CA which doesn’t know how to calculate yearly management charges” or “A girl which is planning to buy a car but is not having any investment plan”

    I think the girl is right when she said that what 500 Rs SIP will do. 500 Rs had a value 10 years back. Investing such a small amount will be maintenance hassle 5 years down the line.

    I think we should align ourselves to our income standard. Every SIP has to be at least as big as 2% of your monthly income.

  3. so Sanjay YOU want to decide how much should be the SIP amount is it? Why?

    What is this gold standard of 2% of monthly income as SIP? btw sip amounts need not remain static. I know people who do 3 sips in the same fund but on different dates…

  4. Hello Sir,
    I don’t want to “decide”. At the most I can advice or suggest. 2% is a ballpark figure and certainly not a standard. It is reasonably small amount still not too small.
    Less than 2% would be maintenance hassle. Certainly, some savvy people can go for 3 SIP in same month or even a daily SIP.
    But I would suggest people to go for at least 2% of monthly income so that savings would be substantially big enough at the same time small enough for experiments.
    Young generation should have saving rate of around 30%. So 2% SIP makes sense as bare minimum.
    Your should have asked to the girl “why don’t you give a try to saving 2% SIP? If you can fill up so many form for car purchase then you can fill up one for SIP. SIP needs a lot lesser maintenance than a car 🙂 “

  5. The 500 SIP is very good i did the same with my friends i just asked them to start with whatever they can spare..they fought back i said then start with 1000 or even 500.

    Once they started that SIP their knowledge has increased in investing by reading more and they have increased the SIP amount.

    So the idea is to make them doesn’t matter how much they start with.they will learn eventually

  6. I wish I was so much finance savy when I was her age. She should read The Richest Man In Babylon by George S Classon. Read & Act on it.You should advice her to save & invest as soon as possible.

  7. To get started and maintain it is the hardest thing. After that, it will be come an automatic behavior and once she sees the benefits of it, she will take much more interest in it.

  8. at saving rate of 30% & 2% per SIP, one should have 15 mf schemes…
    now this starts to make perfect sense why so many portfolio are in such a mess 🙂

  9. Hi param,
    I said 2% as minimum. Honestly I expect the person to increase it to 5% or so but 2% is good enough to begin with.

  10. I think the question was “a. Subra sir, what will happen by investing Rs. 500 a month?”

    IMO a lot. Every 500 saved per month is as good as getting an ADDITIONAL Rs.600/- for rest of your life for EVERY YEAR. [Assuming a 10% retun in FD, or apply return based on whichever instrument you like to invest]. As generating money is a tough process, I seriously value if someone can give an extra 600/- bucks for rest of my life.

    Saving long time is like accumulating every penny you can. It is like collecting drops to get a bucket full of water. I wouldn’t wait only cups of water and leave drops, rather be happy to collect both.

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