How Did He Make CRORES with a Low Salary?

Summary

In this podcast episode, Sidharth, an engineer from a middle-class family, shares his journey to financial freedom despite a modest salary. Starting with a salary of ₹3.2 LPA, he grew his net worth to over ₹2 crore through strategic investments in mutual funds, government bonds, and leveraged Nifty positions. He emphasizes the importance of maintaining a savings mindset, disciplined investments, and the power of compounding. Sidharth also discusses his conservative approach to risk, leveraging credit wisely, and avoiding real estate as an investment. The episode offers valuable insights into smart financial planning and long-term wealth growth.

Takeaways

• 💼 Sidhart comes from a middle-class family in a tier-3 town and started his career with a modest salary of INR 3.2 lakhs per annum at Infosys.
• 📈 After switching companies, Sidhart's salary grew to INR 24 lakhs per annum, and today he and his wife collectively earn around INR 44-45 lakhs per annum.
• 💰 Despite lower initial earnings, Sidhart now has a total net worth of INR 2.1 crore, with investments spread across provident funds, mutual funds, and government bonds.
• 💡 Sidhart credits his disciplined savings habits for his financial success, never significantly increasing his spending despite salary hikes.
• 📊 His investment strategy involves 60% allocation to large-cap mutual funds, 20% to flexi-cap funds, and 20% to small-cap funds. He avoids real estate, focusing instead on stocks and bonds.
• 🏦 Sidhart has also invested in government bonds for regular cash flow and takes advantage of the interest rate cycle for capital appreciation.
• 📉 He employs a leveraged investment strategy in the Nifty Index, which he compares to taking out a home loan but with only a 10% down payment and protection from losses.
• 💳 Sidhart uses credit cards as a substitute for emergency funds, relying on a significant credit limit of INR 40 lakhs in case of sudden financial needs.
• 🛡️ He has three term life insurance policies and is planning to add health insurance once his child turns one year old, as advised by experts in the field.
• 💡 His advice to couples starting their financial journey is to explore the power of compounding and focus on increasing active income early in their careers.

Q & A

What was Siddhart's starting salary when he joined Infosys, and how did it change over time?

Siddhart's starting salary at Infosys was 3.2 lakhs per annum. Over time, by the end of his tenure at Infosys, it had increased to 8.5 lakhs per annum.

How did Siddhart's salary increase when he switched companies?

When Siddhart switched from Infosys to Capco, his salary increased to 24 lakhs per annum, representing a 3x increase. He later moved to his current company, Trear, where both his and his wife's combined salary is around 44-45 lakhs per annum.

How did Siddhart maintain a savings and investment discipline early in his career?

Siddhart grew up with a savings mindset and continued saving even when his income was low. Despite salary increases, he did not proportionally increase his expenses, allowing him to save and invest more over time.

How does Siddhart's current cash flow from salary and investments look like?

Siddhart and his wife have a combined monthly salary of around 2.65 lakhs, and Siddhart earns an additional 55,000 from government bond coupons. Their recurring monthly expenses are 1 lakh, 1.25 lakhs go into SIPs, and 60,000 goes toward a leveraged Nifty investment.

How has Siddhart's investment strategy evolved over time?

Siddhart started with small investments, like 5,000 rupees a month in SIPs, and gradually increased this as his salary grew. He also diversified into mutual funds, government bonds, and leveraged Nifty positions, focusing on long-term wealth creation rather than quick gains.

What is Siddhart's approach to leverage in his investments?

Siddhart takes a leveraged position on Nifty, similar to a home loan model where he puts down 10% and enjoys the gains from the full value of the investment. He uses financing at a 5% rate and protects against downside risks by paying for protection, ensuring he doesn’t lose money if the market falls.

How does Siddhart select mutual funds for his portfolio?

Siddhart allocates 60% of his mutual fund investments in large caps, 20% in flexi caps, and 20% in small caps. He keeps his mutual fund selection simple by choosing one fund per category, focusing on performance, high AUM, low expense ratios, and management alignment with his philosophy.

Why does Siddhart invest in government bonds, and what advantages do they offer?

Siddhart invests in government bonds for stable cash flow and the potential for bond appreciation when interest rates fall. He buys long-duration bonds, which offer better returns as interest rates decrease, and he can also pledge bonds as collateral for additional margin.

What is Siddhart's take on real estate as an investment?

Siddhart views real estate more as a consumption item rather than an investment. He believes India’s real estate boom was largely driven by black money, and he prefers more liquid, manageable investments like equities and leveraged products over real estate.

What is Siddhart's philosophy on credit, loans, and emergency funds?

Siddhart does not carry any loans, apart from the leveraged Nifty position, and he does not believe in maintaining an emergency fund. Instead, he relies on his credit cards, which have a 40 lakh limit, as a buffer in case of emergencies, and he can liquidate investments if necessary.

Outlines

00:00

💡 Myth Busting Financial Freedom

In this opening, the host debunks the myth that financially free people always have high salaries. Siddharth, the guest, is introduced as someone who comes from a middle-class family, worked at Infosys with an initial salary of 3.2 lakhs, and later increased his portfolio to over 2 crores despite a modest income. The podcast will focus on his investment strategies and financial journey.

05:01

💼 Siddharth's Career and Net Worth Overview

Siddharth shares that his net worth is 2.1 crore, with investments in Provident Fund, mutual funds, and government bonds. He recounts his career, starting at Infosys with a 3.2 lakh salary, which eventually grew to 24 lakhs at Capco. Currently, he and his wife have a combined income of 44-45 lakhs, and he outlines his disciplined approach to savings and investments, which was ingrained in him from his upbringing.

10:02

📈 Managing Cash Flow and Investments

Siddharth explains how he manages his cash flow and investments. He discusses how he allocates 1.25 lakhs to SIPs and funds leveraged investments in Nifty, with leftover funds used for leisure and vacations. Despite earning more over the years, Siddharth kept his expenses low, channeling increased savings into investments.

15:02

📊 Investment Evolution and Mutual Fund Strategy

Siddharth describes his early investment habits, starting with a PPF account and gradually moving to mutual funds. He admits to selling promising stocks too early but later adopted a long-term view, focusing on sustainable compounding. His current strategy includes investing 1.2 lakhs in SIPs per month, with 60% in large caps, 20% in flexi caps, and 20% in small caps. His conservative approach aims to minimize volatility while still allowing growth.

💹 Leveraged Nifty Investment Explained

Siddharth explains his leveraged Nifty investment strategy, comparing it to taking a home loan. By putting down a small percentage as collateral, he is able to take a larger position and benefit from market appreciation while minimizing risk through downside protection. This strategy, though requiring regular monthly contributions, has enabled him to capitalize on market growth.

💼 Selecting Mutual Funds with a Conservative Approach

Siddharth outlines his method for selecting mutual funds. He keeps things simple, choosing one fund per category: large caps, flexi caps, and small caps. His focus is on funds with high AUM, strong performance history, and low expense ratios. He prefers a conservative split—60% in large caps—due to his desire for steady growth over volatile, high-risk returns.

📊 The Role of Government Bonds in Siddharth's Portfolio

Siddharth elaborates on his investment in government bonds, which offer a stable cash flow and the potential for capital appreciation when interest rates fall. He discusses the advantages of long-dated bonds, how interest rate cycles can impact bond values, and the potential returns from holding them. He also explains the liquidity and flexibility of bonds and their ability to be pledged as collateral for additional margin.

🏦 Maximizing Returns with Bonds and Overall Portfolio Strategy

Siddharth continues to discuss the value of government bonds in his portfolio and how he leverages bonds to increase returns through margin trading. He estimates an annual portfolio return of 24-25%, largely driven by his leveraged positions and the recent bull run in the stock market. His strategy reflects a balance between active management and leveraging low-risk bonds.

🏘️ Siddharth’s Take on Real Estate

Siddharth shares his views on real estate, considering it a consumption asset rather than an investment. He explains that he prefers more liquid, higher-yield investments like leveraged products over real estate, which he finds cumbersome due to liquidity and management issues. He has not taken any loans or mortgages, relying instead on his investment strategies to generate returns.

🛠️ Loans, Credit, and Emergency Fund Philosophy

Siddharth explains his approach to loans and credit, revealing that he avoids debt and doesn't maintain an emergency fund. Instead, he relies on his high credit card limits as a fallback in case of emergencies, which he can quickly pay off by liquidating investments. He prefers not to lock money in low-yield savings products like FDs, focusing instead on higher-return investment opportunities.

🛡️ Insurance and Risk Management

Siddharth discusses his insurance strategy, which includes three term insurance policies with increasing coverage based on life events. He plans to purchase health insurance but is waiting for his son to turn one due to past medical complications. His focus is on securing his family’s future while managing the costs associated with health risks.

💑 Joint Financial Management with Spouse

Siddharth reveals how he and his wife manage their finances as a single entity. While he handles most of the investments, all income is considered shared. His wife is aware of the investment details and plays a role in keeping their financial strategy on track.

🚀 Financial Advice for Couples Starting Out

Siddharth concludes by advising couples to explore the power of compounding, not only in finances but in skills and knowledge as well. He emphasizes the importance of starting early, maximizing cash flow from active income, and staying disciplined to achieve long-term financial success.

Keywords

💡Financial freedom

Financial freedom refers to the state where a person has sufficient personal wealth to live without having to work actively for basic needs. In the video, the myth of financial freedom being tied to high salaries is debunked, with the focus on strategic investments and savings instead of income alone.

💡Investment strategies

Investment strategies are plans designed to allocate resources across various financial instruments like stocks, bonds, and mutual funds to generate returns. The video highlights Sidhart’s disciplined approach to investing, including using SIPs, mutual funds, and leveraged positions, contributing to his portfolio growth.

💡Provident fund

A Provident Fund is a government-managed retirement savings scheme that provides employees with lump-sum payments at the time of retirement. Sidhart mentions having 38 lakhs in Provident funds, which shows his focus on long-term financial security.

💡Mutual funds

Mutual funds are investment vehicles that pool money from multiple investors to buy securities like stocks and bonds. In the video, Sidhart emphasizes investing in mutual funds, especially large caps, flexi caps, and small caps, as part of his portfolio diversification.

💡Leverage

Leverage in finance involves borrowing money to increase the potential return of an investment. Sidhart describes his use of leveraged positions on the Nifty index, comparing it to taking out a home loan where gains are amplified despite a small initial investment.

💡Nifty index

The Nifty 50 is a stock market index representing the weighted average of 50 of the largest Indian companies listed on the National Stock Exchange. Sidhart explains how he leverages investments in the Nifty to capitalize on market growth while using minimal capital upfront.

💡Government bonds

Government bonds are debt securities issued by a government to support public spending, often considered low-risk investments. Sidhart has a significant portion of his portfolio in government bonds, which provide a stable cash flow and potential appreciation when interest rates fall.

💡SIP (Systematic Investment Plan)

SIP is a method of investing a fixed amount in mutual funds at regular intervals, promoting disciplined investing. Sidhart allocates 1.25 lakhs per month to his SIP, which has been a consistent strategy throughout his career to build wealth steadily over time.

💡Cash flow management

Cash flow management involves tracking and optimizing the inflow and outflow of funds. Sidhart talks about how he manages his combined family income and uses structured approaches like SIP and bond coupon payments to handle expenses, investments, and savings efficiently.

💡Compounding

Compounding is the process where the value of an investment grows because the earnings generate further earnings over time. Sidhart emphasizes the power of compounding, both in terms of financial growth and personal development, as a key element of his investment strategy.

Highlights

Sidhart comes from a middle-class family in a Tier-3 town and started his career with a modest salary of 3.2 lakhs per annum.

Despite having a salary of less than 10 lakhs per annum for 10 years, Sidhart has built a portfolio worth over 2 crore.

His current portfolio is diversified into Provident Fund (38 lakhs), Mutual Funds (85 lakhs), and Government Bonds.

Sidhart emphasized the importance of a savings mindset and shared that despite salary increases, his expenses did not rise proportionally.

He and his wife have a combined monthly income of 2.65 lakhs, plus an additional 55,000 from government bond coupons.

Sidhart manages his finances by allocating 1.25 lakhs per month towards systematic investment plans (SIP) and 60,000 towards a leveraged Nifty investment.

Early in his career, Sidhart opened a PPF account, and as his knowledge grew, he transitioned from stocks to a focus on sustainable compounding.

Sidhart uses a leverage position in the Nifty index, similar to how people buy property with a loan, gaining significant returns with a down payment of only 10%.

He invests 60% of his mutual funds in large caps, 20% in flexi caps, and 20% in small caps to maintain a balance between returns and volatility.

Sidhart focuses on government bonds for consistent cash flow and potential bond appreciation when interest rates fall.

His bond portfolio provides a steady 7.25% coupon yield, with the added benefit of selling bonds at a profit when interest rates drop.

Sidhart explains that government bonds can also be pledged as collateral to generate additional returns.

His overall portfolio return over the past three years has been 24-25%, largely due to his leveraged Nifty position and recent bond market gains.

Sidhart avoids real estate as an investment, viewing it primarily for consumption and citing better returns from other asset classes.

He does not maintain an emergency fund, instead relying on credit cards with a limit of 40 lakhs as his safety net in case of unexpected expenses.

Sidhart encourages understanding the power of compounding, not only in terms of money but also in skills, knowledge, and experiences.

Transcripts

so a lot of you like Amit feel that

these financially free people have big

fat salaries but this is a myth and

today's podcast is an example for that

meet sidhart I come from a middle class

family in a tier3 town called I did my

engineering in 2010 after doing the

engineering I got placed in infosis

through campus bement my starting salary

was like you know as usual it goes 3.2

LHS per ANM at the end when I left

infosis I was at 8.5 lakhs perm so for

the first 10 years of his career his

salary was less than 10 lakhs perom but

as of today his portfolio is 2 CR plus

so what did he do right with his

investment we had a great time talking

to sidhart discussing his investment

strategies and the highlight of the

podcast this

[Music]

Cy hi Sadat welcome to power pioneers

and thank you for letting us disturb you

on a Saturday afternoon let's get

started uh right away you know to start

with what does your total portfolio look

like and how is it split across these

different asset classes tell us a little

bit about that as well so at the moment

my total net worth as of today uh is

around 2.1 CR out of which I would say

roughly 38 lakhs is in Provident fund

around 85 lakhish is in mutual funds and

then rest of the money is in government

bonds okay so that's how the breakup

looks like so uh tell us about your

career your background your journey so

far sure so I come from a middle class

family in a tier3 town kagar I did my

engineering in 2010 after doing the

engineering I got placed in infosis

through campus placement my starting

salary was like you know as usual it

goes 3.2 lakhs perom um at the end when

I left infosis I was at 8.5 lakhs perm

okay um and then I switched to another

company Capco at 24 lakhs perm so I kind

of 3x my salary with that switch I

worked there for 45 days then I made

jump to another company which is my

present company trer and I've been

working here since more than 3 years now

at the moment both me and my wife salary

combined if we think about we are

closely at 4445 laks per got it got it

so currently how much percent would be

your savings versus expenses versus how

were they when you started off and how

did you manage to keep that discipline

to have that investment component in

mind right so the family that I come

from we always had a savings mindset so

uh saving habit has always been there

even though when I was learning like

less compared to the market rates I was

still saving substantial part of it part

of uh reason for that is because I was

like very close to home and I didn't had

that much of expenses to begin with uh

but as my income increased over the time

you know I realized I don't need to uh

enhance my expenditure on the same tune

like I 3x my salary but that doesn't

mean my expenses should also go three

times uh so that's where these enhanced

savings or the extra savings went into

the investment route so uh to be honest

you know our cash flow looks like

something like we get around 2.65 lakhs

combined salary in hand and then I also

get 55,000 approx per month from my

government bonds coupons and then out of

that 1 lakhs are reoccurring

expenditures on the like day-to-day life

stuff and then 1.25 straight away goes

into my sip 60,000 I use to fund uh

leveraged Nifty investment which I've

done for one CR so that is used as an

Emi to that component and rest of the 30

40,000 change whatever is left is used

to fund our vacations and trips to

Hometown and those sort of stuff okay

okay so uh you know in terms of of your

say salary breakup into your investment

savings Etc how has that evolved from

you know the time that you were you know

early in your career to today what does

the breakup look like one good thing I

did is as soon as I started my career I

opened a ppf account I started putting 1

lakh a year on that which was the limit

at that point and then the limit got

enhanced to 1.5 lakhs a year so I start

putting 1.5 lakhs but as my career

progressed I got to know more about

things I started uh tingling around with

stocks I did actually CAU plenty of good

stocks which I had sold on to uh very

early like had I Hold On To those they

would have you know been multibagger but

uh at that time my knowledge was also

limited okay so then I got to know about

this sustainable compounding that's

where I started thinking about like you

know if I want to make more money versus

if I want to make like quick money so

that's where I thought like I want to

have more money so I started reading

about mutual funds and how the industry

Works what are the different uh schemes

that we can invest in I started with a

very small amount of 5,000 rupees a

month and have kept on increasing it as

my salary increased and as my like

savings increase as well at the moment

I'm doing 1.2 lakhs per month of sip yes

the leverage product that I spoke about

right so what I've done is I've taken a

leverage position on Nifty of 1 CR what

does that mean like taking leveraged

position on nift so right so U think it

like how people usually buy home right

so if let's say you want to buy an

apartment of once year right as of today

uh what most of the people do is they

put down a down payment of 15 to 20%

depending on the price of the home so

let's say 20% 20 lakhs and rest of the

money people take as a home loan right

80 lakhs so you don't have one CR but

you have purchase a property of one CR

right correct so if the property

appreciates tomorrow let's say it goes

to 1.5 CR right so you had an

appreciation of 50% on it so 50 lakhs

but if you think about your money that

you had put in you have only put in 20

lakhs and then let's say some change

over the let's say one two years as a

Emi right so you still wouldn't have

paid like more than 35 lakhs at Max

right so on that 35 you still have your

35 with you and after paying off the

loan you have 50 lakhs of gain so you

have been able to make that more than

100% in real terms return based on your

deployed capital on the same way what

you can do is you can take a leverage

position in Nifty and the good part is

you don't even need 20% down payment

there you can only do that with 10% down

payment and uh the financing rates are I

think the cheapest in the world it's

only 5% on an average so if the Nifty

goes up I get to enjoy that gain and

then I have also spent 2 3% extra as

buying the downside protection so that

if it goes down I don't lose anything

but to sustain that position I do need

to put a money every month so that when

I roll it over for next months or next

years I have that extra money which

which is required to roll that position

over interesting so that's that's on the

uh leveraged trading part so you know in

mutual funds right there are n number of

mutual funds how did you pick yours and

U is there any framework you follow when

you pick mutual funds so I I like to

keep it like in the terms of percentages

so of let's say of all 100% of my mutual

fund 60% is invested in large caps okay

uh 20% is in flexi caps uh and 20% is in

small caps in terms of number of mutual

funds I try to keep it very simple so

each category only has one mutual fund

so on the large cap I stick to nifty 50

Index Fund uh which gives me enough

diversification as I need to and

tracking also is very n minimal on that

for the flexi cap and the small cap I

try to focus on the funds with the

regular performance and the High AUM and

the lower expense ratio and I also read

about the management like how the fund

managers are talking in the public like

what's the thought process does is it

aligning with my thought process or not

okay okay and the split of keeping 60%

large cap and lower in flexy and small

given that you are investing for long

term how how did you arrive at this kind

of split to be honest I'm a very

conservative guy I can take less returns

but I cannot take a dent in my overall

net worth I don't like that and I think

nobody likes that to be honest so that's

where I thought you know large caps are

usually the ones which are like safest

among the three so small caps will give

you higher returns but they also have

high volatility at the end of the day

that's where I thought you know I don't

want to take that much of a beta risk or

volatility in My overall Network so I

thought I'll assign a little lower

percentages to these flexi cap and the

small cap and flexi cap to be honest is

more of a experimental category for me

you know like if because if you think on

my overall Network it is pretty flexy

cap in that sense right uh but just to

see like how the flexi performs in the

different Cycles so that in tomorrow if

I don't want to take off any pain of

managing anything I can just assign

everything to flexx cap and see how it

behaves and that's where you know those

categories show up in my like strategy

okay got it and then the second part of

your portfolio big part is government

bonds very curious about that because I

want to understand a what is the returns

that you can expect and what is the

process of flying for government bonds

it's not as easy as mutual funds as I

understand so Focus through that as well

so there are two reasons why I invested

in bonds one is you can have funds in

equity and everything but they don't

generate cash flow per se right so I

wanted a consistent cash flow to gives

me a stability and then second part is

as the interest rate are on the higher

side at the moment U I'm trying to play

that interest rate cycle as well so when

the interest rate goes down your bond

appreciates in the value so if you had

invested th000 rupees in the bond and

interest rate goes down your bond can

give you M2M profit of 10 15% based on

how the interest rate has fallen okay

and it can goes other way also so that's

a risk but U you know I've taken a

considerated bet considering the

interest rate are going to go down from

here they are not going to increase um

now coming on how to select the bonds so

usually longer dated bonds like the

bonds which are maturing like you know

farthest are the ones which gives you

Max profit on the interest rate fall so

I'll give you one example right I have

invested in a bond called 725 GS 263 so

every year for one Bond I have in my

account I'll get 7 r25 PES as the coupon

payment now that cpon payment gets split

into two parts so one comes in 6 months

another one comes in another 6 months so

I'll get two times 7.25 divided by 2 for

each bond that I hold so that

essentially means if I buy the bond at

100 rupees my effective yield is 7.25

which if you calculate in xir because

you're getting like semi anually your

xir would be even 0.25 extra so that

would turn out to be 7.5% of xir when

the interest rate going to fall down

this 100 rupees Bond would easily sell

for 105 110 depending on how the

interest rate is if it is very lower

like how we have been in the past during

Co time this Bond would easily sell for

like 110 to 115 so I would make 15 or 10

Rupees profit on that plus I have

enjoyed the cash flow and on the

maturity government will take the bond

back from it and give me my 100 rupees

back got it that is how it works and

from buying perspective you can buy them

on the secondary Market how you buy the

shares so ncbc they both have those

bonds so there is liquidity comes at the

maturity but then uh because you can buy

and sell so there is like like another

way so usually the bonds which are

maturing every 10 years so like this 20

53 63 73 U like same way like 43 33 they

are they have pretty good liquidity okay

okay and then there are certain bond

which don't have that much liquidity but

still let's say even if you have to take

one 2% of a cut in terms of return and

you want to sell it people will buy it

because they're getting one extra perc

of a year another good thing of the

bonds is you can pledge them but that

means is like uh collateral like for

example let's say you have a gold right

you can give gold to the bank and they

can give you loan same way you can give

your bonds to NC they will take a 10%

haircut Bond will remain with you they

will just have a pledge on it which

means you cannot sell it without un

pledging it first so you have to request

for an unpledge once your positions are

closed then you can sell it so it takes

roughly one day to do that but the

margin that you get 90,000 of one on one

lakh bond that margin can be used to

manage other positions so you get your

returns from the bond and then you can

use that margin to extract 3 4% extra on

any year so in turn if you think right

you can make 12 133% extra easy but that

does require an active active approach

on that right right so overall like

what's the portfolio return that you

would so uh like I have started

calculating xir on my overall net worth

from past three years itself so I was

not doing it before that but I have

started maintaining a monthly sheet I'm

currently clocking it somewhere around

24 to 25% of xir which I think is

phenomenal part of it is because of that

leverage position that has played a very

good role um another thing is bonds have

also appreciated quite a bit in last 3 4

months and we all also had like a dream

run of our Equity right in the past

couple of years the Bull Run has yes so

that has contributed a lot as well no

that's that's uh great and um I I

observe you you didn't mention real

estate in your portfolio what's your

take on real estate as an investment to

be honest it's the most controversial

thing when you think in terms of

investment right so to me real estate is

for consumption not for investment you

know we had dream run of real estate in

India because of black money that's my

personal take on it I to be honest have

not decided where I'm going to settle

down so there's no point on having a

real estate here and then trying to

manage it from Delhi or chandigar and

then liquidity is another problem right

and then since I have a better

proposition compared to it if I have a

real estate worth of once year I can

have the same like over the leverage

product and I can pay the like just 2 3%

yield on the rent so like that does not

make sense for me to buy the real estate

at least at this point so then I assume

uh no home loan so far any loans how do

you how do you approach finances and

credit and loans I do not have any loans

I do have this leverage product which we

spoke about right so which sort of works

like an Emi but it's not essentially an

Emi if I want to close it down tomorrow

going into your investment correct and I

can close it down it's like it can be

closed on like one click of a button

right second thing is I even don't

believe in emergency fund like that's

another unique thing which we'll find

right because I have plenty of credit

cards right they have a credit limit of

40 lakhs so I don't think I will have an

emergency which requires me to spend

more than 40 lakhs in a day and if it

does there is a credit limit of like you

know 40 days I can always liquidate my

investment bring that money back to pay

at my credit card but that's where I

feel you know my credit cards are my

emergency fund why do I need to have the

money logged in in FD or a low yeld

asset for that oh that's that's

interesting I think also um because you

know debt to there's fixed return even

if market today goes down right you'll

still have some asset that's you're not

taking it out at a loss I'm actually the

happiest person when the market goes

down I get to buy them cheap so uh I I

rejoice when Market Falls uh since we

were talking about emergency fund I

think um insurance is something that you

know I usually talk a lot about because

personally I feel we are just one

medical bill away from losing all our

money what's your take on insurance have

you planned for that uh in your

financial Journey um absolutely so I do

have a life insurance at the moment I

have three different policies uh the one

policy I started uh which has a cover of

roughly 70 lakhs when I started my job

uh second policy worth once year I

bought I was married like I just got

married and the third policy I bought

before our kid was born but I am

planning to buy a health insurance of 50

lakhs plus as well but I'm delaying it

until our son turns one there is a

reason you know because he was in NICU

when he was born so like my friends who

work in that industry have told me you

know if you have a claim in one year on

the kid usually the insurance company

deny it saying that you know you had a

pre-existing condition okay and these

life insurance these are term insurances

these are the all three of them are term

insurances got it understood uh one

interesting thing that that I always

like to ask to couples you are a dual

income couple how do you manage finances

so to be honest we don't manage finances

we consider them as one single entity so

everything which comes into the table is

ours to consume and ours to use and it

has been bought by us so everything is

combined and it is used as combined but

in case you interested in details um I

do all the expenses from my salary

whatever whatever expenses they are and

rest of my salary goes into investment

and all of her salary goes into the

Investments okay okay and that's the

joint investment portfolio that you have

so most of the um Investments are

managed by me uh she is aware of all of

them so that in case you know something

God forid happens she's aware of what is

where and how to use it but the only job

for her at the moment is to make sure

that I stay a course I don't like you

know deviate from the plan right right

understood we'll wrap on this note and

final you know if there is a couple in

in a Metro city planning for finances

what is the advice that you would give

to them who are just starting out on

this journey I would say you know

explore and discover the wonders of

compounding that will initiate the spark

in you and also to pinpoint right uh

compounding doesn't only work for money

it works for your skills it works for

your knowledge it works for your

experiences as well right so uh it is a

journey in itself right so once you

understand the compounding phenomena you

will realize you know like I have wasted

some time of my life where I did not

knew and worked on the compounding part

of my things so uh start early obviously

right and try to increase your cash flow

when I say cash flow FL primarily from

your active income try to increase it as

much as possible especially during the

first initial part of your career right

because even the sub average Returns on

an absolute level are way way bigger

than what average people are doing out

there so like you know stay disciplined

and persistent that that's what I would

say great uh I think that sums it up

beautifully thank you so much