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

To me, personal finance is nothing more than commonsense.  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.

  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 http://freefincal.com 😉
  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 withresolution 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?

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87 thoughts on “Imbibe, Implement, Ignore:Suggested New Year Resolutions for Investors

  1. Ashal Jauhari

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

    Reply
  2. Ashal Jauhari

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

    Reply
    1. pattu

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

      Reply
    1. pattu

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

      Reply
  3. Krishna Kishore A

    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 🙂

    Reply
  4. Krishna Kishore A

    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 🙂

    Reply
  5. Syamantak

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

    Reply
  6. Syamantak

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

    Reply
    1. pattu

      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.

      Reply
    1. pattu

      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.

      Reply
  7. Prasanna Varadan

    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 !!

    Reply
    1. pattu

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

      Reply
  8. Prasanna Varadan

    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 !!

    Reply
    1. pattu

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

      Reply
  9. Mohana Ganesh

    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

    Reply
  10. Mohana Ganesh

    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

    Reply
  11. geevis

    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.

    Reply
  12. geevis

    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.

    Reply
  13. Sandip Mukherjee

    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!

    Reply
  14. Sandip Mukherjee

    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!

    Reply
  15. bharat shah

    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.

    Reply
  16. bharat shah

    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.

    Reply

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