The Story of Personal Finance of my Generation

 
Lot of our young colleagues have asked about my journey of financial planning. Though I have said about this lot of times on the phone I would like to document for others so that they may make corrections to the mistakes that we have made.
From that stand point I am narrating a story which is not only about me but also my batch match and colleagues of approximately same age.
Our DMET batch passed out in 1986 in the middle of the recession in shipping which was necessity off shoot of Iran Iraq war of the seventies and was still carrying on.
The otherwise job placement situation which used to be more than rosy for DMET had become very bleak. In a senior batch they was just about 25% placements and for our batch it had come down to 20%.
However within about 4 to 5 months of our passing out this situation started improving and those of us who passed out late could also get placements in foreign companies.
The scars and insecurity of no placements was playing at the back of the mind of most of us and that somehow changed the behaviour of everyone in a different way. Some of us took the refuge of FDs, NSC ,Indira Vikas Patra, LIC policies sold by the hostel warden while others started purchasing land and real estate.
The economic liberalization of 1991 coincided with most of us getting down for our chief engineer exam and getting married.
The dollar was devalued almost 25% in a year and some everyone's salary went up and the credit was given to the lady luck of the young wives.
1992 coincided with the great scam of Harshad Mehta which brought in SEBI whose rule grew in importance in the succeeding quarter of a century.
The 1991 government liberalized lot of things for the non residents and introduced a new type of fixed deposit bank account called NRNR or non resident non repatriable deposit, the proceeds of which were entirely tax free and the rate of interest was as much as 18%.
This continued till 1996 after which the account was phased out as the government's foreign exchange position became stronger. 1993 saw the emergence of private sector in the mutual fund industry which was earlier dominated by UTI , SBI and one or two other small players.
Due to the great NRNR deposit there was no need for most of us to look at equity or even read about mutual funds.
However for some reason the word mutual fund had attracted my attention while I was in school itself. There was something very democratic and socialist in the word but I had not known about the working or the nitty gritty of it till I myself started sailing.
I acquired some literature from investment banks during my shore leaves and tried to make head and tale of it.
Still tethering to the fixed income and Bank deposits because those were the days of 12% + interest there was no real incentive to move towards mutual funds except some half hearted moves of rupees 5000 and 10000 in various funds.
As the debt funds also were giving returns of 12% and above those days,  I personally had restricted myself to those and also used to advise my colleagues regarding same.
Almost all the people that I have sailed with opened PPF accounts and have only recently started closing them after completing 30 years.
My venture into equity funds came after the dotcom crash and I started investing in HDFC equity ( now calledFlexi cap) ,prudence, Reliance Growth age vision and Sundaram select midcap at the turn of the century.
With time my exposure to HDFC equity fund constituted almost 25% of my portfolio in over a period of 17-18 years.
In 2006 I took exposure to DSP midcap and small cap.
2010 to ABSL front line equity and ICICI bluechip.
These were my main stays of the portfolio and there  few funds having small amounts for testing.
Debt funds for feeding these Equity funds were changed off and on.
In 2007 the entry load on mutual funds was scrapped and the direct investment category was instituted in 2013 , though I did not change over to this mode till recently and that too at the insistence of my great distributor.
Today I do possess a larger number of funds and that is because my investment philosophy has changed and I like to restrict exposure to one fund to 60-75 lacs.
But when I see in retrospect is that given the tools and the information available my distributor always suggested the correct funds.
In that light I can safely say that having a varied exposure to Flexi cap funds and supported by Mid Cap and small cap funds one can achieve optimum Returns.
My exposure or diversification of portfolio is into MFs, ETFs, gold, PPF, very minor amount in NPS and real estate only. Though I don't consider real estate in value as I will never be able to enjoy the gains unless someone offers 100% white.
My view of the world has changed in these 40 years...and changed so many times.
I have seen how wealth gets accumulated and also how it gets lost...all in one generation.
I have seen intelligent and wealthy people bite the dust and mediocre but persistent souls thrive.
I have learnt that if your wealth is not donated and consumed it destroys itself.
The most apt definition of investment is "Delayed Gratification". Hence our definition of gratification will change with time and we should have the means at all times to fulfill those elements of Gratification ... Which sooner than later will include donation and charity.
Even Buddha said the first duty of a householder is to earn and generate wealth for his family and the society around him .
As Mariners you have a positive impact on the society as you move ALMOST 94% of all the goods produced on the face of this earth.
So help you God.