Taking an endowment policy. This is the first major financial decision I have taken and it turned out to be bad. It was almost 7,8 months into my work life. I took the policy thinking insurance policies can not go wrong. I did not even calculate what I will be getting. Even a lakh was big number for me at that time and looking at 6,7 lakhs of money with 4Lakhs insurance I went for it. I will be paying more than 5 Lakhs as premium but as I said I did not do any calculations. If I did calculations or spent more on financial blogs I would have avoided the mistake. I still have the policy and it has around 4 more years to run. Finally last year I ran calculations and decided against surrendering or making it paid up as at this stage I have to earn more than 10% on the rest of the premiums and surrender value. 10% tax free is good enough so I am continuing with. I am expecting around 5% to 6% IRR on the polciy and considering the further mistakes I did, it pains me to say that it actually turned out to be one of the better investments I did in the earlier days on my financial life.
Policy: ICICI Prudential Cash bak, 15 years endowment policy.
Taking an ULIP. Citibank offered to sell this and I took this again without much research.This is around 1.5 years after I started working. By this time I should have learnt pros and cons of insurance and how to take insurance. But I learnt soon but implemented late some of the financila learnings I did. This policy form Birla Sunlife is one of the costliests at that time with rediculously high premium allotment charges. I surrendered it with some loss after 3 years and surrendering was a good decision.
Policy: Birla sunlife ULIP, Dont remember the name of the plan.
Stock Market: I invested/traded money a lot in the first 4,5 years of my job. Without any analysis and research. Due to boom periods I generally did well overall escept with one stock. that stock I increased my holding at every drop and still have the stock trading at around Rs8. I saw it coming down from Rs.150. By the time I brought everything in order, the stock is already low and my networth compared to the investment is so high that I decided to keep it. I know there is opportunity cost but the holding is so little and the risk reward is so high (The company is showing some signs of life) that I am keeping it. This stock lost everything I gained and a lot more over that making my stock market investing a big joke. I am a lucky guy that I realized that I dont have time and aptitude for stock market before major catastofe. Inspite of this I still keep around 30% in equity and plan to increase it to 50%. Only that I invest in mutual funds and they generally did ok for me. The mutual funds gained more than what I lost on the stock market.
Derivatives: For some body who did that badly in the market, derivatives could have ruined the life. Fortunately from the begining I was afraid and kept only small amounts and it was a zero sum game for me by the time common sense prevailed. I am very lucky to have this resulted in zero sum game than losses. Only winner was ICICI with those huge brokerages I paid.
Now I invest only in mutual funds. I have 70% debt and 30% equity protfolio which within one year will turn 50% equity, debt. I will be continuing my sips for rest of my work life and I am reasonably confident that this will result in better gains for me. If and when I have enough money to invest in a good real estate for 25% of my investments I will diversify to that space. In principle I don't keep more than 5% of my networth in Gold and the gold component of the jewellary my wife has is more than 5%. So I may not be investing in Gold also for a long time.
Keeping the money in savings account: Worst type of mistake one can do. for around 4,5 years most of my money was lying idle in savings account waiting for that killer stock which is going to grow 10 times in 2,3 years. thankfully it never came. Money lying in the bank account, not even FDs.
My estimate is if I did what I am doing now from the start of my financial life, my networth would have been atleast 1.5 times what it is now.
Policy: ICICI Prudential Cash bak, 15 years endowment policy.
Taking an ULIP. Citibank offered to sell this and I took this again without much research.This is around 1.5 years after I started working. By this time I should have learnt pros and cons of insurance and how to take insurance. But I learnt soon but implemented late some of the financila learnings I did. This policy form Birla Sunlife is one of the costliests at that time with rediculously high premium allotment charges. I surrendered it with some loss after 3 years and surrendering was a good decision.
Policy: Birla sunlife ULIP, Dont remember the name of the plan.
Stock Market: I invested/traded money a lot in the first 4,5 years of my job. Without any analysis and research. Due to boom periods I generally did well overall escept with one stock. that stock I increased my holding at every drop and still have the stock trading at around Rs8. I saw it coming down from Rs.150. By the time I brought everything in order, the stock is already low and my networth compared to the investment is so high that I decided to keep it. I know there is opportunity cost but the holding is so little and the risk reward is so high (The company is showing some signs of life) that I am keeping it. This stock lost everything I gained and a lot more over that making my stock market investing a big joke. I am a lucky guy that I realized that I dont have time and aptitude for stock market before major catastofe. Inspite of this I still keep around 30% in equity and plan to increase it to 50%. Only that I invest in mutual funds and they generally did ok for me. The mutual funds gained more than what I lost on the stock market.
Derivatives: For some body who did that badly in the market, derivatives could have ruined the life. Fortunately from the begining I was afraid and kept only small amounts and it was a zero sum game for me by the time common sense prevailed. I am very lucky to have this resulted in zero sum game than losses. Only winner was ICICI with those huge brokerages I paid.
Now I invest only in mutual funds. I have 70% debt and 30% equity protfolio which within one year will turn 50% equity, debt. I will be continuing my sips for rest of my work life and I am reasonably confident that this will result in better gains for me. If and when I have enough money to invest in a good real estate for 25% of my investments I will diversify to that space. In principle I don't keep more than 5% of my networth in Gold and the gold component of the jewellary my wife has is more than 5%. So I may not be investing in Gold also for a long time.
Keeping the money in savings account: Worst type of mistake one can do. for around 4,5 years most of my money was lying idle in savings account waiting for that killer stock which is going to grow 10 times in 2,3 years. thankfully it never came. Money lying in the bank account, not even FDs.
My estimate is if I did what I am doing now from the start of my financial life, my networth would have been atleast 1.5 times what it is now.
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