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Firstly, I pray for you and your family's safety.

In 20th Century India, the primary investments avenue included:

  • Own business
  • Real Estate
  • Gold
  • Fixed Deposit
  • Money kept under the mattress

21st Century Investor

In this blog post, let's have a look at how 21st Century's financially literates look at investments:

  • Own businesses: Even if a substantial amount of net-worth is invested in their own businesses, they understand its risk (e.g. key-man risk) and the need for diversification.
  • Real Estate: Unless their full-time business is real estate, they understand it is only for self-use.
  • Gold: Even they believe gold is not an investment, but for self-consumption (jewelry).
  • Fixed Deposits:
    • Investing in fixed deposits is like home quarantine of your young and bright children full of potential for years and years.
    • Fixed income investments are only for short term goals. Mostly retirees invest some part of net worth in fixed income due to lesser risk appetite and cash flow requirements.
  • Money kept under the mattress:
    • It actually loses value due to inflation.
    • No more such stuff. Slowly, they are paying taxes, and investing that amount wisely, helping a good night's sleep.
  • Global Equities (includes Equity ETFs and Mutual Funds):
    • Equities investments are not a piece of paper but part ownership in the businesses, eventually creating a second source of income.
    • They understand the power of equities.
    • They know compound interest is the eighth wonder of the world.
    • They know volatility can be reduced with appropriate diversification and asset allocation (i.e. how much to invest in an asset class). They welcome, rather than fear volatility.

What do financially literate individuals ensure?

  • Beat inflation and taxes: They understand inflation and taxes will eat up their money. They invest in assets that will help them earn over and above inflation and taxes consistently for a long period of time, with low risk.
  • Forecasts and budgets: They have forecasts about cash inflow and budgets for cash outflows. They monitor the deviations between budgeted and actual frequently.
  • Focus on liquidity:
    • Let's assume today's value of the real estate is INR 100 crore. The investor cannot withdraw INR 1 crore tomorrow, if required, that's illiquidity.
    • They understand (R)eal estate (I)nvestement (P)roperty (RIP) is not their cup of tea from a long term viewpoint unless real estate is a full-time business.
    • Real estate won't help you reach the promised land.
  • Say "No":
    • 50,000+ listed companies in the world
    • 2,000+ mutual fund schemes in India
    • 1000+ insurance and investment policies
    • An investor cannot invest in all of them!
    • They say "No", unless they understand the investment thesis, logic, do own research, and trust the advisor.
  • Accept mistake with an open mind:
    • Keeping ego and emotions aside, they accept the mistake of investing huge amounts in
      • illiquid real estate investment
      • illiquid real estate investment because a friend bought it
      • illiquid penny stocks or bankrupt company due to greed or less prudent decision
      • illiquid and low yielding LIC policies
      • Unsecured loans with or without interest to a friend, family, etc. and borrower defaulting the same
  • Start small: Starting small is okay (increase gradually, preparing a customized and flexible investment plan for yourself), but remaining consistent and not committing a mistake or loose capital is vital.
  • Asking the right question: Regarding investment return %- asking kitne saal milega (for how many years) is important instead of kitna jada milega (what's maximum return).
  • Succession planning: Would you like your children to fight in court just because you did not make a will or trust? No, right. Plan in advance. Nobody is immortal.


  • You cannot sow something and reap tomorrow! A seed has to go through the various seasons before it turns into a fully grown tree. So is the case with investing.
  • Sad, but the reality is 75% of Indians are unaware of the plethora of the financial opportunities available as per the S&P survey. Ohhh! No wonder, 2% of Indians have 98% of India's wealth!

You may contact me in case you need to ask or tell me something. I am waiting to hear from you.

Stay home! Stay safe!
Thank you very much for your time!

Aaditya is the founder of Aaditya Chhajed Financial Advisory Services, a Financial Planning and Wealth Management Firm in Pune. He loves helping family, friends, and, clients make better financial decisions. He believes learning is perpetual. He loves reading books, travelling around the world.

He is a commerce postgraduate and Chartered Accountant. He has also cleared all levels of CFA(US) in the first attempt. He can also be reached at chhajedaaditya@gmail.com.


Disclaimer: Investors should seek the advice of their financial advisor prior to making any investment decision based on this report or for any necessary explanation of its contents. Future estimates mentioned herein are personal opinions and views of the author. This post is not a recommendation to buy or hold or sell securities. Investments are subject to market risks. Please read all scheme related documents carefully.


Published by

CA Aaditya Chhajed
(Financial Investments)
Category Shares & Stock   Report

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