I remember it is personal finance, but cannot personalise it!

Last Updated on September 7, 2019

Facebook group Asan Ideas for Wealth (AIFW) is a fascinating micro ensemble for studying and understanding how investors think and act. Even if you don’t want to consciously study it, it is impossible to not observe a few common patterns.

The group is famous for its abbreviations:

MDBSC* – My dull and boring SIPs will continue (* represents nature of goal and context)

RIPFPI: Remember it is personal finance, (so) personalize it.

CRATON: Corpus required at the time of need.

NIKE – Just do it (after the ad)

KISS – Keep it Simply Simple (Ashal Jauhari is annoying politically correct!)

In a large group,  administrator Ashal Jauhari, a champion of financial literacy needs such abbreviations badly because most members do not bother searching for past discussions or using Google. So these terms help to quickly respond to repeated questions.

I had written about MDBSC and would now like to discuss, RIPFPI.

We all agree that it is personal finance. However, how many of us can personalise  it? That is, how many of us can recognise our needs clearly, devise a suitable, holistic strategy for it and stick to it, ignoring noise.

Forget about, ‘how many can personalise it?’. How many understand that personal finance should be personalised?! Perhaps this is why someone said RIPFPI could well stand for RIP Financial Planning in India!!

Butun Mohapatra recently wrote a brilliant and most important guest post: Reader Story: Are you sure you can be a DIY investor?.

• Butun recognised personalized solutions are  the key to money management success.
• He then asked if he can DIY or consult a SEBI registered fee-only financial advisor who earns no commission from any product. He decided it is better to seek professional advice from the List of Fee-only Financial Planners in India

There are two distinct problems.

1. Many investors do not recognise the importance of personalized solutions as mentioned above.
2. Among those who do, many simply do not seem capable of personalizing it.

“choose an insurer you are comfortable with” is what Ashal keeps saying in threads life,health, accident or other forms of insurance. Unfortunately very few people can define their own comfort levels. They want ‘example problems’. They want someone else to say, ” I use this product and it is ‘good'”, “I have invested in this fund” etc.

Another person’s experience when it comes to insurance is meaningless as they are highly individual products. The same applies to stocks, mutual funds or any other product. Choice has to be personalized. Financial product selection cannot be done with extrapolation: “XYZ says, ‘I did it this way’, so it must be a good method”!

Only after this personalization is complete can someone call themselves a DIY investor.

It is an indisputable fact that many investors (whether they are members of AIFW or not) want pre-digested information and investment decisions spoon fed to them.  Absolutely nothing wrong with that,  as long as we pay for the expertise involved.

There is a difference between seeking lunch for free and seeking a recipe for free. I have no problems with the latter. I believe it is the responsibility of the DIY community to exchange recipes for each of us to personalize.

To personalize finance requires only inclination and conviction – not, expertise, not experience, not time. If you are interested in DIY personalization, perhaps these posts maybe of help:

What does it take to do your own financial planning?

DIY Personal Finance: How long does it take anyway?

DIY: List of ‘How-to’ Articles at freefincal