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  • Writer's pictureAnkur Kapur

Trying to simplify finance, does it work?

Updated: May 10, 2023

These days there are so many finance influencers on YouTube, authors of personal finance books, and online and in-person courses on managing money, but are the investors getting any better?

Seeing things the way they are

A lot of YouTube influencers pass on strong advice to the novice investor. There are so many influencers who were promoting crypto until the fall happened.

There is no problem listening to these videos, but acting upon them can be disastrous. I believe that knowledge can help you advance but too much information will make you not act at all.

Here is a simple step-by-step process for managing your money better.

1. Cash flow analysis and net worth: Understand your inflow and outflow of funds, your current asset and liability position and what you want to achieve. There are many calculators to do this assessment.

2. Asset allocation: Based on the cash flow surplus and financial goals arrive at an asset allocation. You must also consider the risk profile that you would like to maintain whether it is aggressive, moderate, or conservative.

3. Execute and monitor: Implement the allocation and keep a watch.

These steps are so simple yet so difficult to implement.

Any financial outcome is a combination of your life situation, capital market conditions and your behaviour. All these three areas are dynamic and ever-changing.

Some things can be known, and some things cannot be known.

Life situations and capital market conditions can be observed, and a decision can be made. For example, you know that an increment or a promotion may happen, or you are about to change your job or get ESOPs encashed etc. These events can be known in advance and a decision can be made.

Similarly, capital market conditions can be sensed (over or undervalued markets) and a decision can be made.

However, personal behaviour is the most complex aspect that even professionals will have a challenge dealing with.

Here is a speech by Charlie Munger on “the psychology of human misjudgement”. This speech is all you need to know about human psychology.

Download PDF • 1.91MB

Reading can help but will that make you wise?

Not really!

Awareness of ourselves will make us wise.

A finfluencer or a book author cannot make you wise because they are dealing with their own biases. They are just passing on those biases to you, invest in start-ups, invest in ETFs, invest in crypto etc. Who knows, maybe keeping your money in a bank’s FD is the best option.

One of the ways you can become a better decision maker whether about money or any other thing is to see life the way it is without adding any extra meaning. Easier said than done.

Our Indian tradition has given a lot of importance to ‘consciousness’ and not so much to ‘mind’.

When you are looking at a problem, you need to reflect on which aspect of your mind is dominating - ego, intellect, or memory. If your mind is at work, chances are that the decision is not optimal.

Ego will always make you stick to your decision (status quo bias). Intellect will not help you look past your analysis (overconfidence). Memory will restrict you to what you have seen in the past (anchoring).

To evaluate any problem, you need to ensure there is neutrality in your emotions. You should be able to see the problem vertically and horizontally and once you have decided, it will just ‘feel right’.

This sense can be applied to any problem you are trying to solve - investing, life, hiring a professional, relationship etc. The decision that feels right will turn out to be right. Pre-condition is the neutrality of the mind and seeing things as they are.


  • Investment in securities market are subject to market risks. Read all the related documents carefully before investing.

  • The securities quoted are for illustration only and are not recommendatory.

  • Registration granted by SEBI, membership of BASL (in case of IAs) and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.

Details of the advisor

  • Advisor: Ankur Kapur

  • SEBI RIA No.: INA100001406

  • BASL Member ID: BASL1337


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