Imbibe, Implement, Ignore:Suggested New Year Resolutions for Investors

Published: January 2, 2014 at 11:00 am

Last Updated on

To me, personal finance is nothing more than common sense.  Commonsense is simply nothing but mathematics expressed in a spoken language.

Before I started the blog, I knew nothing about investor behaviour and aspects of behavioural finance.  It was irrelevant to me. Now I find myself learning about the different ways in which people handle their finances and how different ‘attitude towards money’ can be.

Please find below some of my findings listed in the form of resolutions.

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  1. I will list my financial goals first, plan a strategy and then worry about investments
  2. I will recognise the returns I need for my financial goals and invest accordingly.  I will not madly chase after returns.
  3. I will ensure all my tax-planning is perfectly aligned with my goals.  I do not care whether it is April or November; my tax-planning depends only on my goals, and I, invest for my goals all through the year.
  4. I will not search for a ‘good pension plan’ or a ‘good child plan’, for I recognise they do not exist.
  5. I will not worry about my mutual fund holdings each time the market slumps.
  6. I will learn to analyse investments on my own …. using tools available at freefincal 😉
  7. I will not be swayed by posts/comments/news that predicts market movements, suggests stocks, gold, real estate, bonds, anything. I don’t give a rat’s fart.
  8. I will not ask for an opinion about an investment option and wait for someone to agree with me!
  9. I will not hold a lump sum in my SB account and wait for the next set of bonds or the next big investment opportunity.
  10. I will recognise that I can die anytime (even before I finish reading this post! Perhaps because of it!) and take a term insurance policy and write a will (thanks to Bharat Shah for pointing this out).
  11. I will recognise that there are a million diseases that can make me sick anytime. If I rely only on my company health benefits and wait until I retire to get my own policy, I may not be able to get one.  So, off I go to get one for all my dependents right now!
  12. I will recognise the importance of inflation and stop obsessing about ‘regular income’.
  13. I resolve to streamline my personal financial life as quickly as possible so that I don’t have to read blogs, follow FB groups on money, watch TV shows, etc. anymore.
  14. I will understand what conflict of interest means and recognise how deep-rooted this is in the financial services. This will help me with resolution no. 13.
  15. In any case, I resolve to stop reading the one written by a pretentious idiot named ‘pattu’.

To me, that is the best way of becoming financial literate:

  • Imbibe the basis, asap
  • Implement the basis, asap
  • Ignore the bull shit, asap

I do hope you agree with this list. Would you like to add (or subtract) to this list?

Do share if you found this useful
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About the Author

Pattabiraman editor freefincalM. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. since Aug 2006. Connect with him via Twitter or Linkedin Pattabiraman has co-authored two print-books, You can be rich too with goal-based investing (CNBC TV18) and Gamechanger and seven other free e-books on various topics of money management. He is a patron and co-founder of “Fee-only India” an organisation to promote unbiased, commission-free investment advice.
He conducts free money management sessions for corporates and associations on the basis of money management. Previous engagements include World Bank, RBI, BHEL, Asian Paints, Cognizant, Madras Atomic Power Station, Honeywell, Tamil Nadu Investors Association. For speaking engagements write to pattu [at] freefincal [dot] com

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89 Comments

  1. Great one Pattu. After so many calculators, such theoretical posts give a glimpse of your other side. 🙂
    thanks

  2. Great one Pattu. After so many calculators, such theoretical posts give a glimpse of your other side. 🙂
    thanks

    1. What is very true, Viren? Please enter your blog url, when you comment. Promotion is 50% of blog-writing!

    1. What is very true, Viren? Please enter your blog url, when you comment. Promotion is 50% of blog-writing!

  3. The first point itself is Awesome. “Commonsense is simply nothing but mathematics expressed in a spoken language.” Very well crafted Pattu sir. Amazing post as usual 🙂

  4. The first point itself is Awesome. “Commonsense is simply nothing but mathematics expressed in a spoken language.” Very well crafted Pattu sir. Amazing post as usual 🙂

  5. a little addition :—- and add to no10 ‘ and write a ”will” ‘ as you resolved already.

  6. a little addition :—- and add to no10 ‘ and write a ”will” ‘ as you resolved already.

  7. 15th point is not a good one to have in resolution list! That would be a disaster to one’s financial life 🙂

  8. 15th point is not a good one to have in resolution list! That would be a disaster to one’s financial life 🙂

    1. Happy new year. Of course, not everyone will be able to think clearly. Expecting that is the same as expecting everyone in stock investors to be value investors. Both are statistical impossibilities. All one can do is to make available, simple pointers free from conflict of interest. Each one will have to worry about their own financial literacy.

    1. Happy new year. Of course, not everyone will be able to think clearly. Expecting that is the same as expecting everyone in stock investors to be value investors. Both are statistical impossibilities. All one can do is to make available, simple pointers free from conflict of interest. Each one will have to worry about their own financial literacy.

  9. Nice list Pattu. One suggestion – We should aim to stay committed to what we plan !! How often the best of plans go awry when we see events unfold around us. If we look at the sheer volume of equity mutual fund folio redemptions in 2013 you will know what I mean.

    Your list is very nice. I particularly liked Point 7 !!

    1. Many thanks Prassanna. Cannot agree with you more wrt commitment. As for redemptions, I have touched upon that in pt 5.

  10. Nice list Pattu. One suggestion – We should aim to stay committed to what we plan !! How often the best of plans go awry when we see events unfold around us. If we look at the sheer volume of equity mutual fund folio redemptions in 2013 you will know what I mean.

    Your list is very nice. I particularly liked Point 7 !!

    1. Many thanks Prassanna. Cannot agree with you more wrt commitment. As for redemptions, I have touched upon that in pt 5.

  11. Fantastic one. Your financial calculators are awesome. I should try to take out some time and try to actually work out.

    WISH YOU AND YOPUR FAMILY AND HAPPY AND PROSPEROUS NEW YEAR

  12. Fantastic one. Your financial calculators are awesome. I should try to take out some time and try to actually work out.

    WISH YOU AND YOPUR FAMILY AND HAPPY AND PROSPEROUS NEW YEAR

  13. Absolutely good sense.
    One needs to be alert while investing.Skip unsafe and instruments you dont understand well enough and those who promise 24% returns annually.

  14. Absolutely good sense.
    One needs to be alert while investing.Skip unsafe and instruments you dont understand well enough and those who promise 24% returns annually.

  15. I love your no-nonsense approach. Straight forward. Straight from the heart. If I read any of your posts in some other platform / site, I am sure that I will still be able to recognise that who is written this. You have a distinct style – good or bad. This is no small thing. Kudos! I will always wait for your next post. For sheer creativity, for ideas – if not for anything else. Happy days!

  16. I love your no-nonsense approach. Straight forward. Straight from the heart. If I read any of your posts in some other platform / site, I am sure that I will still be able to recognise that who is written this. You have a distinct style – good or bad. This is no small thing. Kudos! I will always wait for your next post. For sheer creativity, for ideas – if not for anything else. Happy days!

  17. I will add: i scan all important documents( pan card, election id, vehicle registration etc.) and keep all in any file in computer and/or USB.

  18. I will add: i scan all important documents( pan card, election id, vehicle registration etc.) and keep all in any file in computer and/or USB.

  19. Excellent article, best use of maths with humour. Anyway, can another resolution be to pay off credit card, personal loans etc. as much as possible?

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