Last week’s Yellow Insights featured Rahul Jain, a leading Fintech influencer. He is known for simplifying financial discussions without using jargon that often confuses the minds of ordinary people like us who are not well-versed in financial strategies.
How important is it to save and invest so that you can be financially ready when your dear ones need security the most? He enlightened us with the habits, tools, and mindset shifts that lead to long-term financial wellness.
He is the founder of GR Finvisors and a certified retirement goal planner, with experience managing portfolios and investments for clients in over 175 cities across 26 countries—and the number continues to grow.
In addition to these, he holds an MBA from the Narsee Monjee Institute of Management Studies. He’s a strategic business consultant at IIFL Securities. Earlier, he worked at CoinSwitch, Kuber, and Groww.
He was a senior Consultant at EY for 2 years in the Financial Services Team and a program Manager at YES Bank.
If you’re one of those people who open apps like Zerodha and Groww but don’t understand a thing, then this blog is for you. What this session will cover:
- Budgeting tips
- Smart saving strategies
- Investment basics
- How to avoid common money traps
- Financial goal-setting
- Debt management
When Life Happens, Will Your Finances Be Ready?
Look at this picture, and what do you see?
Some people (mostly young) don’t believe in savings and investments. They wanna make hay while the sun shines. We are all for enjoying life; however, sooner or later, you will have financial responsibilities to cater to.
Chances are, these are all the financial goals that you’re working for in your life. We’ve tried to cover all the essentials and luxuries under one roof.
- Education
- Medical expense
- House
- Car (maybe a luxury car)
- Family
- Vacations
- Marriage
Financial planning helps you achieve all of these things so that unforeseen circumstances can’t affect your life plans. A few days ago, an Air India flight crashed, and an attack happened in Pahalgam.
Some people dying in these tragic incidents were primary earning members of the family, and their families were affected. You should plan for these circumstances if you don’t want your loved ones to be stranded after something happens to you. Money can’t solve these problems, but it certainly makes things a little easier.
Check out his full video 
When Purpose Meets Planning: A Conversation
Rahul asked a bunch of questions from the Yellow Slice team, and the team had diverse and interesting answers.
Rahul: Why are you working today?
Yellow Slice Teams’ response:
- To have a good life
- To be able to afford the necessities
- To pay rent and bills
- To upgrade the lifestyle
- To be able to follow the passion
- To plan and execute vacations and travel
- To support the family
Rahul: Great, so you have a goal in mind for which you are working right now at this job. Is having a goal enough, though, or do you have an actual plan to achieve it? Winging it one day at a time is just not enough.
The next question I would like to ask is, what is your goal?
Yellow Slice Teams’ response:
- To buy a dream car
- To buy a house in a metropolitan area
- Financial independence
- To have an early retirement
What is the 50-30-20 Rule?
The 50-30-20 rule is a guideline for dividing your earnings into three categories. The rule says that,
50% of your income should be your expenditure (needs + wants).
30% of your income should be invested.
20% of your income should be saved for the future.
Does this rule always make sense, though?
Rahul says otherwise. His expert advice was that if you earn 1 lakh a month right now. Your rent is 30,000, and your expenditure is 20,000. You can easily invest the remaining 50,000.
However, in a few years, if you get multiple hikes and your salary is two lakhs a month. In such a case, 50% of your income is 1 lakh, but you don’t have to increase your expenditure by 50,000 suddenly just because you earn more now.
Try not to upgrade your lifestyle when your salary increases. In this case, the 50-30-20 rule doesn’t apply. You can consider increasing the percentage of investment to a higher degree, rather than significantly increasing the amount of expenditure.
What is FIRE?
Somebody mentioned early retirement as their goal, and Rahul went on to explain a concept known as FIRE. It’s an acronym for Financial Independence, Retire Early. People nowadays often start thinking about early retirement in their late 20s and early 30s.
When you incorporate FIRE in your mindset, it doesn’t mean you have to retire early. It simply means that you can, if you wish, once you have established a financial standing. You can still choose to work on whatever you like, at your own pace.
The concept of FIRE emerged in the USA, where people were withdrawing the profits they earned from their investments to maintain their lifestyle after retirement.
How Much Money is Enough Money?
As people go on to live their lives, they acquire financial responsibilities, such as marriage, a child’s education, parents’ medical bills and other emergency funds. Many people begin planning for their children’s education long before they plan to have children, so that they have sufficient funds to support their living expenses.
Rahul asked for a number that Yellow Slice team members would consider sufficient to sustain a life with all these financial responsibilities.
Everybody had a figure in mind, from 50 lakhs to 10 crores. He suggested everyone be realistic concerning the timeline one has in mind. For instance, if a person wants to purchase a house in Mumbai within the next five years, they will need to save around one crore.
One should keep their goals in mind and align them with their earning potential, making investments accordingly. Some people earn five lakhs a month but can only manage to invest 1 lakh. Some people make 1.5 lakhs a month, but they’re able to invest 1 lakh as well, simply because they have different goals, priorities, and responsibilities.
It depends a lot on a couple of factors, such as,
- Liquidity
- Necessities
- Hobbies
People often have the misconception that they should not spend money on what they want to spend money on if they want to have a certain amount in their bank account. That’s not true, though. You can accumulate money even while enjoying your life. Live in the present while planning for the future.
Working for 30–40 years and trying to save until the age of 60, while not enjoying your life, is just delayed living.
Inflation also affects how much money you need to save right now for a future goal. For instance, if you save two crores right now, after 35 years, that will only be worth what 15 lakhs are worth today (assuming an inflation of 6%).
If a wedding is worth 10 lakhs today, then after a few years, that same wedding will be worth 23–24 lakhs. This is why you should not let your money sit in a savings account; inflation will erode its value over time. If you invested the same amount of money in something, then you would earn it back with interest.
When Should I Start Investing?
The best time to start investing is right now. Do not think that if the market conditions are bad, then you shouldn’t invest. A bad market is the best time to invest in equities. If the market is performing well, consider investing in bonds.
Is FD a Good Investment?
If you want to play it safe, then an FD is a good investment. A higher bond rate or a higher repo rate is when the FD gives the highest rates. In such a case, it’s a smart move to lock your money for a more extended period so that even when the rates fall, you still have a higher interest rate for yourself.
A fixed deposit is the safest option, and that’s why it doesn’t offer a massive amount of interest, as there’s almost no risk. “Almost” is the keyword here, because there’s also some risk even in FDs.
Is Gold a Good Investment?
Gold is a good investment option if you’re looking to buy it for trading purposes. For instance, if there’s a war coming, like right now, there are some speculations of war happening between India and Pakistan. In these times, gold prices shoot up.
Whenever you see that the price is low, consider investing in it. Having a diverse portfolio of investments and incorporating gold in it helps to accumulate higher and safer returns.
Keep Emergency Funds Aside.
After making investments and expenditures, always set aside a certain amount in case of an emergency, such as a medical emergency. The emergency corpus should be sufficient for the next 6 to 12 months.
NOTE: Banks typically offer an interest rate of 2.75% per annum, whereas the inflation rate is currently at 6%. That’s why there’s no point in putting the money in a savings account in the name of an emergency corpus of more than 6 months to a year. Because then you lose interest in the amount that you would earn if you invested it.
What is Asset Allocation?
There are four asset classes:
- Equity
- Fixed Income
- Commodities
- Real estate.
For equities, we have mutual funds, Systematic Investment Plans (SIPs), venture capital, private equity, listed shares, and direct stocks. How should you allocate your funds across different equities? There’s a rule for it.
Your equity exposure should be,
100- Your age
| Rahul: “I have a much higher equity exposure than this because I can take more risk. Additionally, I don’t have an immediate need for a large sum of money. That’s why I have invested in long-term equities, allowing for higher returns.” |
Examples of fixed-income assets include fixed deposits (FDs), bonds, and other similar investments. They give you a fixed rate of return.
Examples of commodities are silver, gold and others. Apart from buying them in physical form, one can also buy them in electronic form.
Buying a piece of land or property, like a flat or a house, comes under real estate. It is challenging for a salaried person to purchase real estate because it requires a substantial amount of money.
| Rahul: “Buying a house for yourself and your family is not necessarily a financially wise investment. However, buying a house gives you peace of mind, so don’t consider it an investment, but rather a luxury you want to have because you want to feel secure.” |
When you have a goal to achieve, and you’ve decided to allocate your assets. The first step would be to analyse your current financial situation, including your income, expenses, and the inflation rate currently in effect.
The next step would be to measure your risk appetite. Two people may share the same goal, but their risk appetites can differ significantly. It depends on your experience with investing and the consistency of your income.
After profiling these key factors, you decide how much will be allocated to equity, fixed income, and gold. Here, Rahul advised staying the course when investing and regularly monitoring your investments.
What Plans Should You Take?
Life insurance provides coverage in the event of death. Health insurance covers the cost of any illness or medical emergency. Household insurance covers your house if a natural calamity were to happen, like an earthquake, flood, or a plane crash into a building.
What is a Term Plan
Taking a term plan is what Rahul advised; it’s sufficient and should be taken by everyone. If someone has a term plan and passes away, their close relatives, who are the nominees in the plan, will receive the compensation amount.
The coverage of the term plan should be roughly about 20 times your annual income. So, if you are earning 12 lakh rupees, then the coverage under your term plan should be roughly 2.4 to 2.4 crore rupees.
Why Learn Personal Finance?
Earning six figures isn’t enough; you have to plan your investments if your goal is to get an early retirement, buy a dream house or simply support your family. Don’t just work for a salary, but focus on how you can build wealth. Learning personal finance gives wings to your dreams, moving beyond mere wishful thinking. Have a strategy and start investing today.
For more informative sessions like this, stay with Yellow Slice for insightful conversations about UI, UX, and more. Head to the YouTube video to enjoy the entire session and gain valuable insights into personal finance.
Frequently Asked Questions (FAQs) About Personal Finance
1. Why should I take health insurance?
Health insurance provides coverage in the event of a health emergency, such as an accident, disease, or illness. Everybody should have health insurance because if you get admitted to a hospital, the bills can quickly mount up. It will come as a shock to you when you have to pay for them if you are not covered under any health insurance.
2. What should I consider when taking out a loan?
Suppose you have a loan with a floating interest rate, which most banks offer these days. What happens if the repo rate goes up? The interest rate on your loan will increase. If the repo rate decreases, the interest on your loan decreases.
However, banks these days will not inform you that the repo rate has gone down. In such a case, you should reach out to your bank and ask them to either lower your EMI or cut down on the number of instalments that you have to pay.
