Born and raised in Pondicherry, India, I went on to study a double degree in Maths and Engineering at BITS, Pilani. After working as a software engineer for a few years, I studied for an MBA at INSEAD. I now live in Sydney, Australia, with my wife and two kids. I’ve worked across banking, big tech and many smaller startups over the years.
The first amount of money that I ever earned was for singing in my school choir, which went to the local radio station in the city of Pondicherry, India. This led to my parents opening my very first bank account. It was an exciting moment as the bank manager gave me this little light book and called it a passbook. Since that time, my knowledge of money and finance has grown exponentially, but I still recall the memory with great fondness.
Growing up in a household of academics, the need to be frugal was always driven into me. What I learned later on was that investing was going to be essential to growing any amount of wealth. In those days, even though interest rates were high, leaving money in the bank still gave a good return. My first exposure to the stock markets happened at the height of the dotcom bubble.
My first investments were in tech companies already at their peak, and when the crash happened, all of those fell by huge percentages. I worked at a partner company called Nortel, which was a Canadian telecommunications giant. The story that was subsequently told about the dotcom crash was that, instead of buying Nortel shares, if you drank beer worth the same amount and sold the empty beer bottles at the recycling plant, you would still have made more money than what the Nortel shares were worth.
So my first hard lesson was that things don’t always keep going up. They had lost so much value, I decided not to do anything at that time and over the next few years.
Subsequently, my portfolio had more than recovered lost ground. So my second lesson was on patience in the markets. That old cliche of time in the market rather than timing the market felt so true when the recovery happened.
While investing is deeply related to the financial dimension, investing greats are also great philosophers of modern times. Pick up any writing from Warren Buffett, Howard Marks or Ray Dalio — these give a fundamental understanding of life and the frameworks to identify patterns in life.
The funny thing about risk is that not doing anything is the biggest risk. Again, this is something true of investing as it is true about life. Inflation is a thief of wealth, income and lifestyle. This makes it the number one risk of not investing or doing something for your future self.
Once you have crossed that chasm, it’s really important to evaluate every investment on its own merit, and in addition to how it would add or subtract from diversification in your portfolio. Too many investors think that by buying many different ETFs, they have diversified enough. But it’s important to consider overlaps. What if you bought four different ETFs that have roughly the same top stock holdings in them? This is where tools like Sharesight come in. With the Exposure report, you can actually see the underlying holdings in your portfolio.
The other metric of risk is assessing whether you are getting the return that justifies the risk in an investment and across your portfolio. Fundamentally, we have a bias towards loss aversion. If I invited you to take part in a bet in which I suggest heads wins you a dollar and tails wins me a dollar, and the chances are 50/50, it’s likely that you don’t feel ready for the challenge. Now, if I change that to you winning two dollars for every win of yours, and you pay me one dollar for every win of mine, the equation has changed. Your chances of winning are much higher. So that’s what I look for while investing. I need the upside to be at least twice as good as the downside. In investing, I want to lose less first. To quantify this, Sharesight again has a fantastic risk report that I use regularly.
Start small, and do it regularly. If you start with a broad index-based ETF, you will reap the benefits of capitalism. By definition, an index is the weighted average of all the winners in an exchange. I have to give a plug that products like Sharesight and PocketSmith make the whole exercise a lot more interesting and engaging. The eighth wonder of the world, also known as “compounding”, presents itself in numerically rewarding ways to keep you going. The quote, “God made integers, the rest is the work of man,” is attributed to Leopold Kronecker, a 19th-century German mathematician. I remind myself of the beautiful ways in which compounding works when I look back on how basic habits can yield some great results.
While investing is deeply related to the financial dimension, investing greats are also great philosophers of modern times. Pick up any writing from Warren Buffett, Howard Marks or Ray Dalio — these give a fundamental understanding of life and the frameworks to identify patterns in life. So, I would say along with the financial benefit, it’s also a philosophical pursuit.
Investing in assets that grow is the single most important decision you will make regarding your financial goals. Compound interest is indeed the eighth wonder of the world, as Albert Einstein attributed it.
I am going to say something controversial. The biggest non-financial decision I or any of you make is who you choose as a life partner. My wife and I fell in love, got married and had children, which on the surface is something that’s been happening for centuries. But how a marriage and your partner affect your financial life cannot be understated. In our case, we have been very lucky to be completely aligned on so many things related to matters of the heart as well as matters of finance. Bringing up a family and providing for children — their education, experiences and travel — all are financial decisions.
In our case, the biggest financial decision we made outside of buying a home was to go for higher studies in the form of an MBA. As a mature-age student (which most MBA students are), taking a break from a career and pursuing higher education in another country takes some guts and a lot of love. We both had ambitions to study further and use it as a launchpad to change careers. So, she was the smart, hard-working one. I wanted to be with her, so we thought, why not do the MBA together? We ended up doing the MBA together in a top business school, in another country, by taking four loans between us! Has it paid off? 100% yes. Between the two of us, we managed to change three dimensions of industry, function and geography, all reasonably well. But being aligned and together made the journey so worth it!
Sahil Bloom, in his book “The 5 Types of Wealth,” has developed a good framework for balance. The framework outlines five distinct types of wealth: Financial, Social, Time, Physical, and Spiritual.
While the concepts themselves are not entirely new and have roots in various philosophical and psychological teachings, this framework provides a modern and accessible structure for personal development.
I use this framework to balance the different aspects of life and wealth.
One of the philosophies I totally believe in is spending less than you earn. This basic principle allows you to define enjoyment and how much it costs
Investing in assets that grow is the single most important decision you will make regarding your financial goals. Compound interest is indeed the eighth wonder of the world, as Albert Einstein attributed it.
If you don’t invest, you are going backwards in your finances. So, whatever your financial situation is, you must start thinking about investing. A regular payment into an investment account, so that you are set up for regular contributions, is the best way to get started. My team and I actually built this time duration calculator to help with this exact question.
Today, there are many ways to get this going. As Ruth the Happy Saver says, “Behaviour trumps mathematics”. The best behaviour to set yourself up with is to invest on a regular basis through some kind of an auto-invest feature with any of the brokers you use. If your broker doesn’t give you this feature, then switch and open an account with one that does.
The first step towards enjoying the present is to keep a store of money for when things are not good. The Barefoot Investor calls this the “Mojo” account. Having this buffer gives you the peace of mind to enjoy the present and not be anxious about the future from a financial perspective.
The second bucket I would create is one for investing. Commit a basic amount, even if it is just $50 — invest that amount from every salary you earn.
The third bucket is the spend bucket. One of the philosophies I totally believe in is spending less than you earn. This basic principle allows you to define enjoyment and how much it costs. One could define how much they should spend and actually spend the amount on things they enjoy. Many things we all enjoy might not cost any money at all.
Throughout my life, I’ve always prioritised financial prudence. I’ve consciously avoided the habit of acquiring numerous extravagant items for myself. However, a particular purchase in 2010 stands out as a significant exception to this rule. That year, I invested in a pair of RM Williams boots for a staggering $500. At the time, this was, without a doubt, the most expensive pair of shoes I had ever bought.
I’m incredibly proud to report that, even to this day, I continue to wear those very same boots. Their durability has truly impressed me; despite a single resoling, they remain in excellent condition and continue to serve me well.
Now, with the benefit of a decade and a half of experience and a more refined understanding of personal finance, I’ve developed a clearer distinction between what I consider a “pure splurge” and an “investment.” Looking back at that particular purchase, I would classify those RM Williams boots as a unique blend of both a splurge and an investment. While the initial outlay was substantial for a pair of shoes, their enduring quality and continued utility have, in many ways, justified the cost and provided a long-term return on that initial expenditure.
On a more serious note, when it comes to my spending habits, my tendency leans towards experiences, with a particular focus on travel. I find immense value in exploring new places, immersing myself in different cultures, and creating lasting memories through journeys rather than accumulating material possessions. This inclination towards experiential spending means that a significant portion of my discretionary income is often allocated to flights, accommodation, and activities in various destinations, reflecting a personal philosophy that prioritises enriching life experiences.
