Book Review – You Can Be Rich Too : With Goal Based Investing – P V Subramanyam & M Pattabiraman

Few months back Jainil had joined as an interest who had a lot of interest in Financial Planning. Although am not good at Personal Finance but luckily there are a few smart Indian Personal Finance Bloggers. 

The daily job for him was to read all the blogs written by 3 of my favorite blogs on Personal Finance.

1) Jagoinvestor - Manish Chauhan & Nandish Desai

2) Subramoney - P V Subramanyam

3) FreeFincal - M Pattabiraman

There are way too many superb articles by all the three authors.

I ll just give a sample of one each of all the three authors which I like the most.

1)  What would it cost to live in a hotel after retirement?!

2) How I arranged my financial life in 4 steps – The Inside Story of my real life

3) One word that can make you RICH…. 

They have written good books too.

1) 16 Personal Finance Principles Every Investor Should Know   by Manish Chauhan ( He and Nandish have 2-3 more books too )

2) Retire Rich Invest: Rs. 40 a Day  by P  V Subramanyam

3) You Can Be Rich Too : With Goal Based Investing  by P V Subramanyam and M Pattabiraman

I would suggest the above blogs and the books are a good ready for everyone and a must for every working professional.

( Disclosure - This is not a paid post. I am an amazon affiliate and may get some pennies if you buy from above link. Will buy more books.Smile)

Book Review of " You Can Be Rich Too : With Goal Based Investing - P V Subramanyam & M Pattabiraman "

by Jainil 

You Can Be Rich Too : With Goal Based Investing  by P V Subramanyam and M Pattabiraman 

The book written by PV Subramanyam and M. Pattabiraman (promoted by TV 18 Broadcast Ltd and Network 18 Group Companies) is aimed at making investing simple and logical. Well, it surely makes investing a lot less confusing.

Straight away, the readers are forced to have a reality check by calculating their net worth (balance sheet). After getting a clear picture of where the reader is financially at that given moment, the book then moves forward to asking the reader to where he/ she would want to be. Essentially, a goal sheet. Goal based investing, which is the core of this book, is highlighted here. After having a realistic goal sheet set, the next step would be to have an income and expenditure account and a cash flow statement prepared.

Authors have heavily focused on breaking down the complete thought process that’s involved before and after investing. General belief, “that returns are the driving factor on how much money is going to be made” is convincingly replaced by the more logical method of “time and the amount being invested”.

The book talks about asset allocation and its thumb rules. With numerous thumb rules and beliefs out there, the authors have lined up a few logical questions to mentally prepare some of the “equity conscious” readers, to invest in stocks. Readers are motivated to remain invested for a long time to squeeze out the maximum returns from their portfolio, and thus beat inflation (which is practically impossible without having equities). A highly subjective topic like reallocation has been simplified to chunks, in the form of simple questions; which can easily be used as a guide or a rule of thumb for young new investors.

Mutual funds in this book has been referred to as a vehicle; an essential tool to reach to your goal. For which, the readers are given guidelines (to say the least) on how to choose one according to one’s goals. From pointers like matching philosophy with the fund house, index funds, choosing managers with overlapping exposures, to identifying the source of the manager’s outperformance, have all been discussed to equip the reader with the necessary knowledge before investing in a mutual fund.

Life and health insurance has been discussed briefly, helping the reader to determine “how much life insurance he or she needs” (an estimate at least). The readers are also introduced to situations where they’re unable to pay the premiums (but the proposed solution might be different from what you’re thinking, hint: endowment plans are not the answer!)

With both the authors having years of experience under their belt, there are a few mistakes that they don’t want you to make:

· Optimism- 20/ 25% CAGR

· Consumerism- Falling prey to smart marketing

· Being impulsive- Collect the necessary information and sleep over it

· Greed- Well…

· Mess- Not more than 8 items in a portfolio

· Poor asset allocation- People blame their luck, whereas the real reason for people being unhappy with their corpus size is the sheer lack of equity in their portfolio

· Being more attentive- Extremely essential to cut off the non-performers

· Buying without researching- Irrespective of how good your source of advice is, NEVER buy without having a look at the balance sheet and the market strength

· Ignoring compounding (Time value of money) - The only answer for it is, SIP. The earlier one starts, the better.

· Income – Savings = Expense – Pay for your retirement, dream car, house or whatever be your goal, first,

· Being too conservative with money- Putting money “ Only” in RBI bonds, PPF, Pf accounts; will never beat the inflation

· Being too aggressive with money- On the contrary, there are some who “Only” focus on equities. It leaves you vulnerable and you’re at the mercy of the market sentiments.

The book can be perceived as more of a guide, which helps in establishing principles that one can abide by while investing. A rookie (like myself) can benefit immensely and start off investing on the right foot. Whereas someone who’s been in the game for a while can pick the authors’ brains and inculcate some of their strategies. Whereas the older generation can grab the book just to have a vague idea of how things have changed and possibly make a tea conversation out of it with their friends and family.

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