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Book Review: Money Wise
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Author:
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Deepak Shenoy
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Publish Date:
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November 2021
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URL:
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@ Amazon
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Atul's Rating:
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*****
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Review Date
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30-Dec-2021
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Chapter 1 is about fundamental concepts of money and investing, that you would think
are common knowledge and will be intrigued to find that they aren't. I certainly
am.
Salient Points:
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Let the money compound
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Money is largely made when you sleep
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You don't need that much money to make money
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Initially focus on earning money. Not returns. Focus on increasing your income
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When you have enough money, think about 'allocation' - categories with varied
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amount of risk
Plan for absolute necessities
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With the rest, enjoy your life!
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Why invest at all ? To build personal leverage
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Must have emergency fund and (term and health) insurance
Chapter 2 is all about Mutual Funds
Salient Points:
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You can let Mutual Funds do your investing if you lack the time, skills, energy and
knowlege to research, track, buy, sell.
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At its simplest, MFs are a made by a pool of investors giving money to an advisor to manage it for them. 'Abeyaar, not just stocks'.
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In practice, they are quite complex: Risk-n-Cap-Classification, AUMs, NAVs, Cash%, Redemptions, Fees and so on.
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And there are one-too-many types: index funds, ETFs, international funds, gold
funds, and if you are 'well heeled' AIFs, PMS, it goes on ...
Chapter 2 gives a neat recipie for investing in MFs, but you will not find it in
this review, please read the book :)
This chapter has a nice conversational style
and discusses real-life examples, as well as interesting pieces of history of
mutual funds like UTI, from which there is a lot to learn . At the end of it, you will certainly be highly
knowledgeable about MFs and will also be able to decide how you want to invest
in them. I hope all readers finally learn why monthly dividends from MFs are
pointless!
Chapter 3 puts it all together to suggest a practical approach to investing
Salient Points:
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Investing is wholly dependent on your context - age, starting level, time
horizon and goals.
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Here is a piece that is so important that I am going to quote it: 'Always get
the emergency funding right and do it first. If you hate your job, or your boss
is harassing you, you are going to need this just to be able to move on without
anxiety. This is also crucial if your company shuts down, or you have to stop
working for some reason.' There is also a easy-to-get flowchart that will help
you with this.
This chapter looks at the various needs one is likely to have at various stages
in life and has practical advice, with nifty tables having example calculations,
on strategies and tactics that will help you meet those needs.
Chapter 4 has all you ever wanted to know about stocks and how the various players of
this world look at them and act on them. There is a whole section on a bunch of things to watch out
for.
Chapter 5 has a cute mythological story retold to help drive home the point - don't get
suckered! And oodles of golden advice on staying safe in the markets. And very
interesting takes and anecdotes on some of the current moneybags stories,
including the crypto craze.
Overall, this book is a must read for every Indian investor and not just the beginners
and the young. With this book, Deepak continues to inform his audience as he has
done for past many years through various fora. Given that there are so many good
books on investing already, it's Deepak's genius that has found a layer that is
not generally touched upon much by other books and has addressed it so well. Once you
read the book, you will agree with me, go buy it! :)
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Message in Public Interest
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