In 1993-94 I lost money because of a broker default. The guy who was handling bungled up on the risk profiling. The owner had no clue what was happening, and the guy who was managing the card was the smartest IIT, IIMA product ever. Some consolation that a few years later Wipro’s Premji and a few other big investors lost billions trusting him. That is another story. (DO NOT worry broker defaults can now not happen, they have a huge settlement guarantee fund and decent internal controls).

To put things in perspective, I lost about Rs. 15 Lakhs.


Remember, it was about 21 years ago, and I did my best to retrieve it, but could not. Not a pie. Not a farthing.

To see the enormity of it, it has to be adjusted to some growth opportunities that I could have had.

If I had kept it in the index it would have been worth Rs. 1.5 crores. If I had kept it in Hdfc Equity fund it would have been about Rs. 7 crores and if I had kept it in Hero Motors (then known as Hero Honda) it would have been about Rs. 23 crores!!

This post is to just tell you that any LOSS that hurts you financially actually cuts very very deep. You do not realize it at that point in time. If that money was with me STILL, it would have made a material difference to my personal net worth, surely. Similarly when you lose money, do not think of it as small amount, NO AMOUNT IS SMALL.  What you do not see is the FUTURE VALUE of the amount at that point in time.

I HATE people who tell me “Yes Subra I bought a ULIP…but the premium is ONLY Rs. 5 lakhs a year” – and as you say i need to pay only for 3 years. THIS IS NOT A SMALL AMOUNT by any stretch of imagination. Try keeping this in a good equity share or a good fund and see the difference. It might help you RETIRE a couple of years EARLIER than your statutory retirement age.

Understand the TIME VALUE of money. Buying a penny stock or investing in a lousy fund is a surefire way of losing money. Not just losing money, but even getting a sub optimum return (by buying Endowment plans – with a predominantly debt portfolio) makes NO SENSE. Losing to management fees does not make any sense.

Being in a lowly paying job is a loss. Buying clothes for the next decade is a loss. Living in a house bigger than your need is a loss. Driving a car bigger than your needs is a loss. A qualified person sitting unemployed is a loss.

Start identifying the losses in your life, and put them to work. If you are working hard to earn money, why is your money not working hard to help you RETIRE?

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  1. I realized so many mistakes I have made after reading this article. Hats off to you Subra for this wonderful article….

  2. Ahh the loses 🙁

    I lost some 80k in endowment plans. I took 3 plans and paid premium for 4 years. Then came in contact with subramoney, JI, pattu and Ashal. Immediately surrendered everything and took TI.
    Lost 80k from the premium paid plus its future value. As Ashal says ampute a finger today or an arm tomorrow.

  3. very much enlightening indeed. i like to add one more through which i ,my family am/is passing: imperfect /opaque personal finance planning is a loss.

  4. Subra,

    Good, you dint run away from Market after loosing 15lkhs. I have seen people cry if they loose 1500 also in stocks


  5. Feel blessed after reading such articles. With 7 years of work and investment experience, the only loss I have incurred is not ramping up my equity investment fast enough, even though it was being built consistently. Have rectified the mistake in the last one year regularly.

  6. This post was like sandpaper, abrasive grade. Yes, you’re right. Opportunity lost and cost. NIIT, IVRCL. MONTARI! Gujarat companies that went bust… Motorol, Guj Tel cable. Purity Flexpack, Rustom Mills—where did the land go??

    Given my recent propensity to test the waters with just-like-that with 10’s – I so needed get SHAKEN , to read this. Thank you.

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