“The satisfaction you get in giving something useful to someone is far greater than in getting something from someone.”
Read his Story in his own words & you can also download a personal finance guide created by Anil from end of this post.
My Journey – Anil Kumar Kapila
Hemant’s My Story inspired me to pen down My Journey. This is a journey which attempts to describe how I moved through the financial passages of my life. During this journey I have used different types of financial vehicles. I started my journey with one vehicle, got off at stops where I felt most comfortable, the ones most appropriate for my personal financial situation, to resume my journey again using another type of vehicle.
This journey has not been smooth. I had to take many detours and encounter several roundabouts. The speed of the vehicles had to be adjusted according to the traffic, the condition of the road and the presence of speed breakers. I had to remain flexible about my trip plan and reassess my actions on a periodic basis as different routes were available for reaching the same destination.
What made my journey easier is that for the most part, it followed a familiar pattern. I finished my engineering education and landed a secure job in a leading public sector undertaking. After a few years, I got married and had kids. The kids grew up and got educated. I did better at work and earned more. Eventually I retired.
This all sounds boring.Still, there are many things which provide excitement in life. For me this came from my profession. I must confess that in the initial stages of my life I did not do any serious financial planning because nobody ever mentioned this term to me when I started earning and because people like Hemant were not around then. I started my financial planning which is mainly investment planning only after my retirement when I came in contact with Hemant and TFL. I consider myself lucky as even without any meaningful financial planning during my early days I have not faced any negative surprises in my financial life so far.
Immediately after doing electrical engineering from Thapar Institute Of Engineering & Technology Patiala Punjab in the year 1969, I got my first job in a fertilizer plant, which took me to a small industrial township in a sleepy place in the coal belt of Bihar which has become part of Jharkhand now. Initially I did not like the place but eventually got used to it and spent 17 years of my life there.
My professional life started with a set of limitations. I joined as Junior Executive Trainee with a fixed salary of Rs 400/- per month. There was no DA applicable then. Those were pre-liberalisation days and one had to wait for years after booking a scooter or car. Fortunately I became the proud owner of a Pearl Yamha scooter which was manufactured for a very brief period in Ludhiana and had imported Yamha engine. Luckily my company gave me Rs 50/- per month as conveyance allowance for maintaining a scooter, which proved quite useful as the petrol was very cheap and my scooter hardly needed any maintenance.
Compared to the present generation, the lifestyles then were not very expensive and there was hardly any social pressure to spend and consume more than what you could afford and urgent financial needs were genuinely few. Hardly any store entertained credit card. So I was lucky to be free from financial poison in the form of credit card debt.
There was no deduction from any source as water,electricity, housing were provided free by the company. Nothing to pay for phone charges as nobody had heard about mobile phones. So I was able to save almost 50% of my salary, which was left in my savings bank account. Never felt the need to have any contingency fund as money was always available in the bank whenever needed.
Since I did not have any dependents, there was no need to have term insurance. My company had a very good hospital and all medical aid including medicines was provided free. The company had arrangement with other leading hospitals where the patients could be refereed for treatment free of charge. So health cover was also not needed. Equity mutual funds were not known then. So all savings were put in bank fixed deposits. Nobody talked about inflation.
Got married to a full time house maker girl. So there was only one income. There was no drastic increase in household expenses. There were no big expenses to be planned. As the accommodation was provided free by the company, no need was felt to own a house.
Teaching and writing have been my passions. My company had a training centre for training employees and outsiders. I was a faculty for the training center. This provided me another source of extra income. I also used to write regularly for technical magazines like Electronics For You and used to get paid for that.
Starting a family also did not prove to be a considerable financial load. Did not have to plan for the medical bills of mother and kids as everything was taken care of by the company. Did not buy any special financial product for the kids.
Bought insurance policy for self. No thought process went in to selection regarding amount or tenure. It was bought simply for the purpose of saving income tax. Provident fund managed by the company was the main investment. Some voluntary contribution was also made to the provident fund. Only general purpose saving and investment products were used. Debt instruments used were post office deposits and bank deposits. Equity investment was done mainly in units of US 64 and Mastershares of UTI.
After spending 17 years in a public sector undertaking I decided to change my job .My new job took me to Mumbai. I worked as a manager in a Petrochemical Complex. My perks included a car and a furnished house. So I did not have to take a loan either for buying a house or a car. Medical expenses of self and all dependents were taken care by the company. So there was no need to buy a medical cover. Life insurance covers were bought mainly to save income tax.
I again started technical writing to make some extra money. Initially, I used to write and get my articles typed, which involved a lot of extra work of posting etc. Later on I started using PC for typing and sending soft copies of my articles.
Debt investments were done in PPF, Post Office Deposits,Bank Deposits.Lump sum amount received from PF of the previous job was invested in equity schemes of UTI Mutual Fund, BSL Mutual Fund, Morgan Stanley Mutual Fund, Principal Mutual Fund and Canara Mutual Fund.
Concepts of asset allocation, diversification, systematic investment were not known. No individual goals for kids education or marriage or retirement corpus were set. The only objective was long term wealth creation. Every year savings were converted in to bank fixed deposits or were used for buying units of various schemes of UTI Mutual Fund.
After my retirement I have now moved to my home town Ludhiana. I have now understood that with longer life spans, retirement can be almost as long as your working life. This has a profound implication for the finances of the retired people. The impact of inflation must be considered by all retired people while investing their money. I consider myself lucky to have acquired a house from my father which is a source of extra income for me.
After getting my financial lessons from Hemant I have built my diversified investment portfolio keeping asset allocation in mind. So my portfolio includes diversified equity and balanced mutual funds, post office deposits, bank fixed deposits, gold and real estate. I do regular monitoring of my portfolio and do rebalancing if required once a year.
Personal Finance Guide
Hope you would also like to join me in thanking Anil Kumar Kapila for his great work.