Stop! Your money or your time!

Dear young earner, what do you wish to optimise? Your money? Or your time?

Would you rather dig deeper and deeper into money management and learn "best" ways to "optimise" money management? Or would you rather spend some mandatory time in getting your finances in order and let it run in auto-pilot with periodic maintenance and use the rest  of your spare time in doing what you love?

If money management is your passion, for eg. finding 'good' business to co-own as a shareholder,  then this choice obviously disappears. And perhaps there maybe some hybrid choices in between the two - I don't care.

If you wish to optimise money management, or in other words get more returns, find ways to track the market efficiently, learn more and more aspects of personal finance then this post is not for you.

If you suffer from "fear of missing out" syndrome, this post is not for you. Rest assured that you will not miss much.

This post is only for those who wish to manage money efficiently with minimal effort so that they have enough time for their passions/hobbies.

With the objective made clear, here are some ways to choose time over money!

1. Stop tracking expenses. It is a waste of time and money.

2. Set a small monthly investment target. If you have just started earning, and just want to 'live life' without worrying about financial independence, set an investment target.

For eg. tell yourself,

I will invest at least 30% of my take-home pay, as soon as I receive it, in a Nifty Next 50 index fund*. Rest is mine to enjoy as I please. Each year, when I receive a pay hike, I will increase the investment amount by 5-10%.

* something I recognised only recently. Not claiming that it will do better than active funds blah blah. Just something simple to get going.

So you will have only two investments: your salary deduction into EPF/NPS (choose EPF if you have a choice) and the above index fund.  Do not buy any other investment product for the next few years.

If you have to save tax over above the salary deduction, use VPF (if you have an EPF - thanks to Amit Gupta for pointing this out at AIFW) or a PPF.

If you don't like equity, that is fine too (your money, not mine and I am not a mutual fund salesman). Put it in PPF.

3. Stop tracking your investments ... on a daily basis. Money does not grow if 'watched' that frequently. Remember we are all primates and sooner or later will want to tinker with our investment just for the heck of it.

Young earners can afford to not watch their portfolios for at least 5-6 years after starting gainful employment. It would help the portfolio immensely if they simply let it be for a few years.

4. Do not go to  investment seminars arranged at work.  They are typically done by insurance and mutual fund salesmen with the help of your HR dept. Stay away.

5. Never talk to any bank employee unless absolutely necessary.

6. Politely tell your salesmen relative that you do not talk money with relatives.

7. If your parents disapprove of what you wish to do, tell them even more politely that you wish to chart your own course.

8. Don't read finance blogs (esp. mine), business magazines/newspapers or watch business channels. Waste of time and money.

Happy noise-free investing. Your time is way more important than your money.


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13 thoughts on “Stop! Your money or your time!

  1. Bashyam

    Dear Pattu,

    Extremely honest and candid, both are fairly contra and unpopular attrinbutes in these times of 'being active' and seeking popularity at every opportune moment.

    I've an experienced corporate person but can completely relate to and understand where from your 'free for all blogs and calculators' come from - pure enjoyment at making them and then just putting them out there, without even a pretence of having shared them for others' good!

    Keep up the good work, this article should come in very handy for anyone, especially a youngster in his / her 1st job / career.

    It takes one to be and feel tremendously secure to make oneself redundant.


  2. Arup

    "It takes one to be and feel tremendously secure to make oneself redundant." ..... liked it so much .. .. very well said... :)..!

  3. Tilak

    Ha Ha... This is very valuable advice ! Where were you when I started working, Pattabi ?
    Please keep writing...
    You've got this Amazing Dual Talent - Finance and Writing ! 🙂
    Thank you for your time.

  4. Anand Vaidya

    A young earner, if he has taxable income & still has unmet Sec80C limits should invest in one good ELSS fund and be done with it, right? Better than an index fund, isnt it?

  5. sundararajan

    very well put except the last one. Don't read finance blogs (esp. mine), business magazines/newspapers or watch business channels. Waste of time and money.
    I started investing in MF based on your articles and some my research. Only time will tell how it will turn out. Thanks for doing wonderful thing which is free is like adding icingt to the cake.

  6. JIG

    Kash..... I found u 15 yr ago i mean in 20s. 🙂 last 5 yr auto pilot mode is going on just what i learnt from dis blog. ( HT200 5 YR Going to end this Dec=16) and with 14 to 15% CAGR happy with that.
    Thanks to u and your blogs.
    Wish and pray your investment and life again come back to auto pilot mode. Njoy


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