Common man’s guide to financial independence

One of the burdens of being a high-profile chief executive officer of a mutual fund house — Radhika Gupta, one of the coauthors, heads Edelweiss Mutual Fund — is that people accost you with questions about investing everywhere — airports, marriage functions, and even in the market during saree shopping outings.

- SANJAY KUMAR SINGH

What is dismaying is the nature of the questions they ask. They reflect a short-termism that is one of the root causes for investors floundering in the equity markets.

“Should I invest in the Bank Nifty (or some stock) now?” Most people want tips. Very few pose questions such as: How can I build a portfolio for a medium-term goal, like buying a car or accumulating the down payment to buy a house? Or, how can I build a diversified, all-weather portfolio that can be held for the long term for goals such as my child’s education and my retirement? This book is an attempt by the authors to answer such critical questions and equip retail investors for lasting success.

Ms Gupta and her coauthor, Niranjan Avasthi, senior vice-president at the same fund house, begin by offering real-life examples to illustrate how a lack of financial acumen can prove ruinous. A friend of Ms Gupta lost her husband suddenly to a heart attack. After the grief came panic about her financial situation. A few financially savvy friends thankfully stepped in to sort out her finances.