When I first graduated from college, I was excited about the job that I had landed. It paid good money. I hadn’t mentally transitioned out of the college student mindset though. I was still spending as though I was a college student. So the frugality resulted in slowly accumulating an income in my savings account.

Learning no 1: Saving money but not investing it

I kept saving money but I let it pile up in my savings account. Due to a complete lack of financial literacy, I had no clue what to do. I knew this wasn’t sustainable, also I had read a couple of articles that said earlier you start for retirement the better.

Learning no 2: Never mix insurance with investments

While the motivation to invest for retirement was correct, the execution was wrong. I contacted my parent’s LIC agent and asked him for a financial policy that will help me out for my retirement. He sold me a LIC policy which had a very high lock-in and very low-interest rates. I soon realized what a horrible policy I got myself into. Made a mental note to myself to never mix insurance with investments.

Learning no 3: Inflation the silent killer that eats your money from inside out

After reading a little bit more of inflation, I realized that I should look at financial instruments that at least beat inflation. I purchased some REC bonds as they had a good 8.5% interest rates which were tax-free.

Learning no 4: Equipping yourself with the right knowledge

I started interacting with my friends to find out how they are investing, while most were not investing and busy paying off college loans. One of my friends was getting into stocks trading. The thought of it was always exciting and I opened an account with Sharekhan. As I didn’t have enough knowledge I asked the account manager to trade on my behalf. While he used to tell me on the phone how he made money on almost every transaction. I soon realized the account manager was not making enough profits to cover even the brokerage transaction fee. He was making a lot of trades and the only party making any money was Sharekhan, I revoked access for the account manager. I realized I need to equip myself with the right knowledge.

Learning no 5: Budgeting

By now it had been about 5 years since I graduated and without me knowing slowly but steadily lifestyle creep caught up. Before I realized, I was almost burning through my paycheck every month. I realized I needed to get on a written budget and control where the money is going else the money was going to control me.

Learning no 6: Investing in debt mutual funds which I didn’t fully understand

Over 2018 I had invested in equity and debt mutual funds. I had assumed(wrongly) that God created all debt mutual funds equal. When I saw my debt fund dip by close 15% because of exposure to IL&FS, I received another key learning to not invest in mutual funds I didn’t understand. Since then I have parked money in debt funds that deal almost exclusively Govt treasury bills. I stopped looking at interest rates for these debt funds and scouted for funds that almost guaranteed my principal and were liquid.

Learning no 7: Sharing my learnings

They say experience is what you get when you don’t get what you want. With these learnings I can confidently say I am an experienced investor 🙂 One thing that never went down for me was my passion towards personal finance. I kept reading articles, watching financial gurus on youtube and listening to podcasts. I have since started sharing these on my blog at www.themoneysquirrel.com. I realize that most articles out there make money matters very complex and keep out the average investor like you and me away. This blog is an attempt to demystify personal finance and I dare say humorously.