New, old and gold.

Some new, some old, and some gold. What I learned about personal finance in 2021.

1. New companies and old comparisons

The IPO market challenged our minds. New companies and new business models listed, and challenged our minds that were used to "consistent compounder frameworks." The easiest thing to do was making comparisons about how one food delivery was worth more than all real estate and hotel companies, and ignore the segment. Not all of these issues were good, not all were bad, but the mind needs a open but honest approach to understanding how to value the new age beast... because its not going away anytime soon. 

2. Dotting the "i"s and crossing the "t"s

April-May of Covid 2.0 were a depressing and challenging time. As people grappled with health, they also dealt in a tough time with the problems of not being able to access their money when they lost a loved one. A missing nominee, incomplete paperwork, or one spouse knowing nothing about family finances when the other is suddenly gone. Not having the basics in order can cost you at the toughest time. Take the time to do it, NOW. 

3. The cryptic case of...

Twitter can debate active v. passive all it wants, but can't deny hoards of people are drawn to crypto, despite many folks like me crying hoarse about its lack of regulatory status. When I ask most people why they do it, "my friend told me" is part of the answer. In stocks, funds, crypto, a social media world has made FOMO much powerful in investing. Having a strong sense of personal goals to anchor to matters... because finally investing is about satisfying them, not winning a horse race. 

4. Mirror, mirror on the wall...

In investing everyone seems to know it all! Investing advice is so easily available and for free. The year has seen the rise of many personal finance influencers, and while there are some very good people out there, who to take advice from is a hard question. You don't want singing advice from Sachin or cricket advice from Lata do you? Money is serious business. Take advice from the right people who are giving it to you for the right reasons. And remember, free isn't always good. 

5. 10 minute deliveries...

A family friend was gifted some bluechip shares, of a small value and went to the US. Came back a decade plus later to realize this paltry sum had grown into a huge corpus, because he enjoyed the benefits of compounding in a stock called Nestle. Investing is about compounding, but how do we think for decades in a world of 10 minute grocery delivery. The quick returns of the year have made time horizons shorter when equity investing is actually a decade long game. And at these prices, investing demands more time... 

6. Limited time opportunity....

A year of NFOs and IPOs. A rush to try every new idea - especially a lot of the exotic ones - because time is running out. A portfolio full of 50-70 schemes, that quickly looks like the market. Restaurants will always open but we don't need to rush to eat everywhere. No opportunity in the markets requires you to act today, especially if you don't understand it. NO is never a bad option, and most things don't run away. 

7. Dal and rice...

Speaking of food, I just did a 15 course tasting meal, and funnily, in all the courses, the one I enjoyed the most was khichdi - dal and rice, served the old school way... although smartly made exciting with a new topics. In all the global, thematic, new ideas let's not forget the core of our portfolios should be dal-rice, basic, simple funds and companies that are good for us. As an AMC head, my learning is I should perhaps learn how to sell dal rice in a more innovative way too! 

8. Waves and cycles

Covid 2.0. A low and a lockdown. Then an opening up and an almost normal life. Travel. Offices. Restaurants. Theatres. And then Omicron. The year truly moved in waves. And it's important to live with a sense of balance in these waves just as it is in market cycles. A lot of investors who saw the ups felt extreme doom in the just 10% recent correction. And it was just 10%. We live in a news and noise driven world. Let's learn from the goldfish, ignore the noise and be less agitated. 

9. The greatest investment...

Is not a mutual fund or stock. Debate the pricing, but what's inspiring about the IPOs is how Indian entrepreneurs from often humble backgrounds are building great companies and creating great personal wealth. Freshworks produced hundreds of new crorepatis, Nykaa gave us a female billionaire. To every young person trying to create huge wealth from the markets, your greatest asset is your own talent. Use that to build wealth. It's a multi-bagger that the market can't match. 

10. The greatest wealth...

I grew up to middle class parents who made little compromises in their own life so we could have a better one. Their friends, the same. Thankfully they planned for retirement well. And now, when I went home... what a joy to see them comfortable laughing away at 70, enjoying their money, but more than that their time and their relationships. When invested wisely, money enables a peaceful life. But the pandemic has also reinforced that life is much more than money. Save it, invest it, but don't forget to enjoy it. 

Wish you safe living, sane investing, and many smiles in 2022.