How To Invest (and Spend) Money - w/ Raghav

Welcome back to the Ready Set Do podcast, where we discuss remarkable stories by regular people. In this episode, my guest is Raghav Daparaya. Raghav is a financial investment official Nada, who has successfully built out robust systems for making strides towards his own financial goals. During this episode, he shares the wealth of knowledge starting with a brief investment for dummy section, investing principles, paycheck allocation methods and most importantly, how anyone can get started on their own personalised investment journey. To steadily progress towards your own financial goals, Raghav shares with us the tools and strategies that enable him to accumulate impressive dividends on a little known stock at the time using only his skills, research and the resources that he will also

share with us. This discussion is for anyone who is interested in the captivating world of personal finance and wants to learn practical strategies to lead the life that they want without compromising their future goals and ensuring long term success. As always, all sections are time stamped both on YouTube and Spotify and wherever else you get your podcasts. In keeping with the theme of learning from somebody that's just two steps ahead instead of an expert, I'd like to emphasize more than ever that this discussion centers on Raghav's journey through learning the systems and strategies that he used to successfully build out his own brand of personal finance. This discussion centers on Raghav's journey through learning and implementing personal finance strategies and systems and do not intend

for this to be financial advice. Rather, my goal is to ensure that you can get to a point where you can begin to appreciate the landscape around investing itself and an accessible starting point to start building towards your goals. So now without further ado, my conversation with Raghav. Raghav, welcome, welcome to the podcast. Hey, thanks man. Excited to be here. I'm excited to have you and let's kick this off by going over what about investing interests you so much? How did it become such a passion project of yours? And that's something that makes you devote so much of your time to it? Yeah, I think there are a couple of reasons that drive me there. I think the first ones, of course, everyone of us who's in the industry, working and trying to earn a living essentially has a capitalistic mindset. I'm looking forward

to capitalizing on that, which is to be able to create great wealth for myself. But the other side of this is just not wanting to be a part of this. How do I put it? My lines? Could one say, yeah, there we go. That's a great word, the matrix. I would like to not be a part of this matrix for the rest of my life. So I'm looking for an exit and that's where all of this comes into the play of me finding this as an exit. That makes sense.

Let's jump into some commonly occurring terms that will be going over in our discussion. So can you walk us through a real quick investing one-on-one type of deal here like ETF stocks? What all goes in that world, so to speak? Yeah, 100%. I think under this umbrella, there's essentially two sides of things. One is finding companies that you would want to invest in for a certain duration of time so that you can see that company grow and benefit out of that growth as well. That's essentially what investing would be and that's trading, which is to utilize a lot of technical and mathematical knowledge to find a stock that you think will have a certain direction of movement and invest in it or buy it to sell and you would know when you're going to sell. Within investing and that's essentially where

I like to play is stocks, so which is a share of a company that you're trying to buy. There's also a great area that for a common man to explore is ETF, which is exchange traded funds. Or let's consider that as someone else managing a big portfolio for you and you buying it on an exchange like New York Stock Exchange or NASDAQ and getting a piece of that pie. There's a few other terms that help you understand valuations and valuation becomes important for you to understand whether you're overpaying for a stock or a company or a share of a company or you're paying a fair value or a discounted value. What you essentially mean by that is that I want to buy this apartment and this apartment is going to give me so and so rent every month and over a period of a year I will have this kind of cash flow which will

essentially be my returns. How do I value these returns and that's what valuation metrics will tell you. So within a stock there's a lot of valuation metrics that people utilize this price to earnings ratio tells you what kind of multiples of value are you ready to give to the earnings of the company, price to book ratio to essentially help you understand what the balance sheet of a company looks like and balance sheet was essentially also have the elements that tell you what kind of assets does a company own and what kind of liabilities essentially loans and payables that a company needs to service. There's a bunch of other things that I guess we could explore through our conversation but this is actually what the landscape looks like. Yeah I think that's a great jumping off point

for some of the things that we'll be getting into but yeah I agree that to start off I think those are that's really helpful context around some of the topics that we are going to cover you know in just a second here. So with that I know for most people there seems to be generally at least two distinct junctures in their life so the first of that is when you're a student and you're making a limited amount of money or just you know no money at all because you're just really focused on you know schoolwork or academics and just trying to get to a point where you can work full time and start making you know building capital essentially. So for you personally what are some ways in which you're spending or investing habits changed when you are a student compared to you know now when you

have a salary position. Yeah that's a good question. I think the first time I made an investment it was right out of my first internship or first paycheck that I had ever received and it actually looked like a paycheck. It was from a particular bank signed by my employer it had 12,000 rupees or $150 a month written on it and I was really excited to you know figure out what I'm going to do with it. What I did was I had four members within my family who I wanted to get something for. So I used 4,000 rupees for it and I had 8,000 rupees remaining which is about $100 in today's value and I ended up investing that in a company called Demart which is what every Indian household you know grocery shopping place would seem like and I remember buying Demart at 800 rupees right now it's at 4,500 rupees or so share

and that was my first 5 bagger stock. So I think what I'm trying to say is things have not changed much since I've been a student or for that matter an employee at a company. I think the scale of investment has changed which is that me using a certain amount of money to put into the market and all of that just you know is driven by the principles that I have that I want to employ when I'm thinking about personal finance and investing. What I do realize that is that there's it's a little bit tough to achieve the kind of discipline that I would want in investing when I'm a student versus when I'm an employee. When I'm a student I'm trying to take care of a lot of expenses with a very limited budget plus also enjoy my student life and find out ways in which I could you know build out

a community. A lot of that involves you spending money and you know reallocating your budget a certain way but I think it was important for me during that time to keep in mind that there's also brought a goal that I'm trying to achieve so I kept on finding pockets of time and coins in my pockets to go ahead and buy stocks to be invested in the market to keep a tab on what's going on and I think that's journey has stayed the same what I've started doing now is being super disciplined just as my company is in terms of giving me a paycheck. I am in terms of putting my money to the market so I think that's how the journey is involved. I think that's really that's really helpful in that it almost sounds like for most people you're saying that it helps to have that long term plan in mind that you

can kind of pivot to at least a version of that long term plan still irrespective of where you stand currently. It's it sounds like it's all about knowing in the back of your mind what really your goal is and then doing whatever you can really at a given moment of time to walk that path and not stray too far away from you know that goal that you set aside for yourself. Would you say that that's an accurate assessment. Yeah that's very well put across and I'd like to take that a little further and say that there's not just investing that should be in the back of your head like you said the broader goal.

Let's keep a focus on that as well at least that's what the sort of discipline that I wanted to achieve but also thinking about personal finance as a whole. I think there's not just elements of conscious thinking about what your money is doing and where it's being spent and where it's being invested but also just making sure that there's a healthy relationship with you and money. So if I go ahead and if I went ahead at Purdue and spent fifty dollars on a meal. I was conscious about it and made sure that I removed that money in a certain way. All I found out that found out ways to make sure that there's earnings that I have deployed further. Interesting so on that same note contrasting that to right now where you know you just so to speak have a little bit more to play with. What does that look like

for you personally? What do you do with your paycheck once it comes in? I think I work very well with systems and methods or like a structure to my approach with a lot of like professional/semi-professional things that I do and investing is one of those or like at least deploying and utilizing my money is one of those. What I end up doing is allocating I get two paychecks a month and that's the story for a lot of employees here in the U.S.

but you could even think about it from perspective of somebody getting one paycheck a month. I know what section of it will go into the things that I need to maintain my living expenses and also think about a few leisure expenses that I want to make and that money is kept aside for those things. There's also another paycheck that would go into servicing my student loan a portion of it and then there's a bunch of ways in which I have set up my money coming in so that it's allocated to investments automatically. For example, my employer provides me with an employee stock purchase plan where they give me 15% discount on about 15% of my paycheck that I would go ahead and invest in my employer stock. What I consider that as is one 15% gains over my investment because I get that 15% discount plus that chunk of money already allocated

to an investment account that I will consider as never accessible for me for any other needs and then there's a little bit of portion of one paycheck after two that's left that's not being serviced for anything else and I use that to either send it to India and invest there or invest in the US depending on what opportunities I find. I think maybe I didn't touch upon the part where how I enjoy life with the rest of the money. I'm just going to say how do you exist in terms of your just ad hoc expenses if we were to just put that under that broad umbrella. That's the right umbrella to put that in. I think with the level of earnings that I have there's still a little bit of money remaining from after all these allocations plus I am super mindful of how I'm spending money what instruments

I'm utilizing to spend money and making sure that in some sense I'm trying to be in a better financial situation even if I spend money using those instruments. A couple of examples of those are if I go out to eat and make sure that I'm using the right credit card so that I can earn the right amount of points those points then would fund my future travel plans if I want to buy something online I'm trying to access a lot of other ways in which I could get the best deals out of that or finding sources of influx that could support those expenditures.

This situation keeps evolving from time to time if I'm feeling rich and if I'm feeling like I have done the less spending exercise for a few months and now I've accumulated some disposable income or like this some disposable part of my money I go ahead and find ways to spend that I don't stop myself from spending money when I'm in such situations. I think yeah I think that's how I approach the the system of getting money and spending or investing money. A couple call out there I think I really like how you said you're almost reliant on the systems you have in place. I've been reading I actually just not hopefully not that strong of a tangent here but I've been reading atomic habits finally and in that James here I believe says we don't rise to the level of our dreams we fall to the level of our systems so I probably

butchered that quote but it's something along those lines and I think that what you just said resonates pretty well along with you know the systems you have in place for yourself to kind of not go off the rails and just derail the plan that you have in place and the goals that you have in place for yourself. So on that note Raghav how do you understand where to invest your money or how do you decide that aspect of it? I think I'm just I've just been lucky with finding ways in which I can invest money and I've also had a lot of help in being able to identify those sources or avenues but I think what made me think about investing as the most appropriate manner and investing in companies or investing in businesses as the most appropriate manner to build wealth has been has come from this experience of

mine where I was in a meeting and I was an observer to an analyst or someone at my level you know really early in their career relative to somebody that they're speaking to in this meeting who's a managing vice president and making decisions of large scale that would impact you know the business at a very high relative percentage level and this analyst went ahead and made their presentations messaging or narrative slightly different from what my manager managing vice president wanted that to sound like and the feedback that she gave my analyst was like her analyst was that how can you think about increasing shareholder value what can you do in your and change in your narrative that when a shareholder who's going to get a hold of this presentation reads and feels confident that they've employed

the right people to be able to increase their value which essentially means that how can somebody investing in that company get the returns that they want to achieve with this company this managing vice president is a BCG veteran which is Boston consulting group one of the top consulting places has an MBA has a stellar color what kind of fantastic personality and employee an exact kind of employee that you want and to think about it I am the shareholder of that company I have invested in that company and I've got such people working so hard and imbibing this narrative in every step of that every step of their work just gives me so much confidence that I just need to do what I need to do is find such companies find such people working for those companies and invest in those companies

and that's just one element of it but it's a very big element of it I think this this element has been highlighted by a lot of really smart people that are working to identify investments that you need to find the right management within a company to be able to get the confidence to invest in so that's the sort of whole psychological angle that played to me and spoke to me and you know got me into investing and that's essentially what I try to find but there's a lot of other other things that you know come into play that then later I try to work on to be able to find what what I can look for look for within a company and invest I think it'll be interesting to speak a little bit about my process but I just want to make sure that you know that sort of gives you an idea about what I think investing should

be like and why I do that yeah absolutely that was that was going to be my next question so I'm very glad you brought that up I just want to add that this may just feel something that's you know probably fairly deeply ingrained in you already because it sounds like you've spent a lot of time thinking about and you know kind of existing in that space but personally that was the first time I was exposed to you know that idea where you have these many people at such a large scale working every day using that those really smart brains of theirs to increase that shareholder value that you can simply just you know leverage for your own benefit granted it's a really small piece of the pie but again if it were that easy we probably wouldn't be having this conversation

to begin with right but as far as promises go or as far as you know having your cake and eating it too goes I do think it's it's a pretty foolproof plan to you know identify those organizations like that and really just invest whatever you can again these are small amounts but obviously as we will get into the compounding effect is you know it definitely leaves ribbles in its wake as we as we should see but yeah absolutely my next question was going to be yeah how does a layperson such as myself go about trying to identifying which of these you know are the most bang for my buck so to speak yeah and and let's let's clarify here that I'm going to include myself in that umbrella as well of somebody who's just learning along the way I want to say that a lot of the success that I've had

within this space has come from come through other people come through my conversations from you know people who are I believe a lot smarter than me and a lot more insightful than me and I've just been lucky to be in that company and what I've tried to do is bring myself up to the air levels as well through self-learning and it's still a very long journey and I'm still learning so what I like but but I thought but I think the couple of things that were super necessary for me to be able to get to the stage that I am with the with the level of confidence that I have in investing is to one find out why I'm I need to invest which we've spoken a little bit about enough told you that you know I want to build wealth so that I can get out of the job type

base and you know think about something that I really passionately want to do that's impactful for me so it was really stage one or stage zero of starting this journey which is to go back to the books what so I went to a couple of people who I knew were super successful within the space and asked them what is this one book that I start reading so that I can understand what investing really means and they told me that you need to read one up on Wall Street by Peter Lynch and I heard this from a few people so I started reading it and it was an absolute banger of a book it gave me such good tools to understand and identify companies and then later be able to research them in depth as well and I recommend that highly to anybody who wants to this wants to start this

journey the other book that is on very similar lines and speaks to me about the kind of principles that I want to invest with it speaks on the same lines if not you know if not exactly that is Dhanzo investor by Monish Pabrai that book will tell you what it means to invest in a very good manner but also by the end of it tell you a bunch of tools that you can start accessing to find the next opportunity that you want to invest in so I think what I would love for anybody who would like to be on this journey including me is to go back to these books and start building out your principle and I think these books are going to be a great starting point to move forward but what's this principle it's so it's also jargony right now when I say this and it's also

to some extent just going to get that yeah okay can you help I guess decode this a little bit for us yeah what what are principles around investing and I suppose more particularly what is your you know approach to that principle and I think you mentioned the word discipline earlier and I get a feeling that this has something to do with that discipline that you referenced so yeah very curious to hear your take on that yeah I think I think in some sense it's attached with the element of you know what my goals are and how I approach it which which is where the discipline angle comes into the picture and that discipline flows into my principle for sure which is to say that I am going to stick to my principle that's the discipline that I want to

bring in myself but when it comes to just investing principle it's essentially what kind of companies do you want to invest in there are various categories of investments that you can achieve there's companies who are undervalued they are not the best most growing businesses but their underlying assets are really undervalued and that is where you get tons of discount on those companies there's businesses who are on a tremendous growth path they're slightly overvalued but you know that ten years down the line you're going to achieve the returns that you want to regardless of their valuation my principle is that I for your viewers who are Indian and know north India a little bit I'm a Marwadi I'm a banya hate over waiting for stuff I love discounts and in in in

my investing world I love undervalued companies I it speaks to me that there's something that I'm finding in this in that company that other people are not able to see which is why they've priced it so less and that makes me feel a little smart that makes me feel a little accomplished so I love identifying these companies that are undervalued and I go ahead and invest in those and that's the principle that I follow I end up trying to find errors or inefficiencies in the market and that of course not my principle it's I've learned this from the most smartest people in the world one of them is one but of course and one of them is Monish Bhabrai as well these two people have a very similar investing style for that matter they run their funds also very similarly and I

went ahead and copied that principle for myself and I'm being super disciplined in trying to stick to it my father who is a very long time investor as well of the of the stock market not in investor inequities he ends up buying a lot of expensive companies and those give me good returns I'm not gonna lie I have seen companies who've doubled in price or in value market value and then I've entered and that market value has doubled again and I get surprised by what my dad sees in a company's performance or it's stock price momentum but I hate being a part of that story and I've given my family and my peers ideas that are super undervalued their school super skeptical about those because they've not heard of the companies ever but I've done my fair bit

of research and I go ahead and tell them that hey this is an undervalued company let's go ahead and buy it and that's where I thrive the most so that's my principle and what I think everybody will be able to achieve when they're starting from stage zero of this journey you know in the in the way that I think is the right ways to learn go back to the books go back to the drawing board is to be able to build that principle first like this is the kind of companies that I love investing in and I am able to identify those correctly and then I'm going to go ahead and stick to these not get distracted by all the knowledge that the market is throwing at me telling me that hey this is a great company or that is a great company as long as I'm sticking to my principles I have that

discipline to be able to achieve good returns as well as we um that's that's so interesting to me it almost sounds like there's an element of personal preference um almost like your own personal flavor that's involved to the type of investment that you go about making like you said you and your father have very different or contrasting principles it sounds like and I think I'm understanding that um where the discipline part of it comes in is that it's very easy to probably get swayed by hey that person did so well doing that so maybe I should pivot to doing that instead but it sounds like what you're saying is over the long term it's really just building that system and you know the know-how really in place for one to really just back oneself at the end of the day and be like

that's fine uh I'm just going to stick to what I have aligned for myself and you know uh not keep pivoting would you say that's that's an accurate way to look at it that's the perfect summary of what I was trying to say I know that I use six thousand words to say it but use it in the best manner and uh I think that's essentially what I was trying to say um so you reference these resources there's a couple books that sound like would be a wonderful place for anybody to start uh you know getting or identifying these um high value companies or you know uh well maybe low value actually because that's why we're you know trying to find them and that's what we're researching so to speak so can you help us contextualize what that looks like in practice so can you give us an example

maybe something from your portfolio or yeah really just an example where you identify um where you used a certain tool or a learning from any of these books to then apply that personally in your investment journey and hopefully you know make um a decent amount of profit from it ideally yeah yeah hundred percent uh I think it'll be a great way to just you know let your viewers and for that matter everybody who's who's looking into getting this journey understand what that process looks like where to where to take those learnings and I think I want to take this back to one of the masters of value investing itself and the first book that I ever read which is one upon Wall Street that book is structured in such an incredible way where Peter Lynch elaborates what are the

various metrics to look at to be able to judge a company and this is all quantitative research and um super easy to replicate into what people who want to identify stocks called stock screener that screener helps you toggle between various ranges that a particular metric could fall into and you could design your own screen which is a filtering system to find out a list of companies that you would then get that would suffice your conditions Peter Lynch tells you what those conditions should be he also then takes you to the qualitative aspect of finding out and company a company so what I did was I applied that screener got a list of 14 15 companies went through all of the various industries that those companies fall into found out what I can understand

well and that's where the qualitative aspect comes into picture he says that you know things should be easy for you to understand and should be something that you have an edge over a lot of other people on which is to say that you understand that industry deeply now the company that I identified and understand the industry but I went back to my went back to drawing board and you know identified ways in which I could one of that was going to my friend who's in the pharmaceutical manufacture industry that this company belonged to and speak to him a lot about what the dynamics of that industry would look like find out what the industry things of the pharmaceutical industry at that point to identify the entry positions that is one aspect of qualitative

research the other one was I went to all of the materials that the company had released that spoke about their business performance started reading those being a business analyst helped there because I was able to understand what they were trying to achieve with their business in terms of growth in terms of profits the company serviced the most sort of overload segment of customers who needed medicines and everybody needs medicines everybody wants to spend on medicines and that's what they did they went to southern America they went to Africa they went to the bottom of the pyramid the large customer base where they sold in volumes the kind of drugs that are easy to manufacture and be super operationally efficient and that came through my quality research

other company I also understood what their ambitions were I looked at what their what the price of their share which essentially speaks about their company's valuations was I think that sat very well with what I learned from Peter Lynch's book which is that a lot of such companies are overlooked by analysts overlooked by media coverage overlooked by the Wall Street or the Dalal Street in India that you know you end up getting those in the most attractive of valuations and that's what happened to me I bought it at around 580 and 630 rupees a share that ended up going to about 15 to 1600 rupees a share for that matter I made my mum buy to it was one of her only multibaggers it was a three bagger for her and it was really an interesting journey such a success story for

myself to you know take to my parents take to my circle and you know tell them that hey this is where you should invest and I'm going to find another company just like that for you and I kept doing that over and over again I think I loved just taking all of that I learned from the book and applying it and you know being successful in that that just sounds incredible yeah I can tell from the way you you're talking about it now how deeply thoughtful it must have been for you a couple questions on that rather of the first being so this screen that you mentioned is that just an online tool is that just kind of like a website and is there one that you recommend I know I will not recommend any of the tools it's so important to find your own because you become

super sort of comfortable with the one that you started to utilize and organically you know looked into what I use was cleaner.in which is which you know has a repository of Indian companies found it really easy to code almost like SQL scripts which is what I utilize in my it's a technical language that I utilize in my work all the time okay so it was just fairly easy to understand and get a lot of information about the company in there so just to be there is a person online sorry yeah sorry yeah so there's a person that isn't from tech and that doesn't understand it can they still use this or is there like a need for okay yeah in in this day and age honestly you know you can find tons of material to make yourself comfortable with any kind of tool yeah if you search stock screener and you know you get a bunch of tools that you can

try your hands with and find out what sits well with you. Makes sense my second question was so all of this research that you referenced rough ballpark um how much time did that take you because I think I was thinking about this and it I just have no idea it just feels like such a broad range so I'm curious to hear what the time investment was like because it does sound like the value investment was certainly worth your while so you know just to kind of contextualize that yeah how much time effort was that in terms of hours let's say uh it'd be tough to give that in terms of hours because there's a lot of like variation in terms of how often I could um work on this at at a given section of my month or a couple of months but I think I tried to big the

story over a period of three months and track the company's valuation which is essentially share price movement over that time as well to find the right entry point or right valuation that I think is discounted enough to give me the margin of safety that I need that's another term by the way in stock one-on-one or investing one-on-one that's important for everybody to go and google super easy to understand but that over a three period of three months of time essentially just you know got myself to the most amount of information that I can captain be the most confident in that investment uh but that's not a thumb rule at all I have taken six months of research for a certain company and stock price tracking valuation tracking to find myself to be in a comfortable spot I in my

exercise of investing do a lot of presentations to a lot of people who are in this space with me coming along the right to make them critique my ideas so that I can identify areas where I need to capture more information some companies require me to research a little more some companies a lot lesser a lot of my ideas also come from there so it's a other way straight as well where I then don't have to do the amount of research that I have to do for my own ideas I have to just validate what they're saying and find out ways in which I can critique them and then them doing the rest of the research so it's sort of a combination play here that defines how much time you're going to take to identify companies but investing for me is so important that I don't really judge

the ROI on my time investment in terms of time value of money at all the this also would bring me to this place where I want to highlight it so um like stress upon it is that you need a partner when you think about investing to build that confidence to find that partner to be able to critique there's tons of ideas that you can get from various different sources and people with different principles so I'm always looking out for partners that I can share my ideas with and have them share their ideas with me as well so yeah I love that and again really appreciate the collaboration that you're always open to on that note from there I think where my mind is going next is that how does all of this look like in practice so I guess my question is what are some you know

I don't really like the word but hats or tools that general people can use in their daily lives as a part of you know they're probably starting out their journey but even people that have been investing for a while what are some really accessible tools that could be used by everyday people to you know begin or continue their journey towards personal finance and smart personal finance really I think what I would love to speak to is a little more philosophical than exact but I'll definitely get to exact because I know that feels excited as well and I would love for people to get to a position where they can think that they're starting off and doing the right thing that makes perfect sense yeah yeah and philosophically I think there are two things that two or three

things that you know got me to think about personal finance really strongly one of them is of course investing that we spoke deeply about the other one is your expenses that are unavoidable your rent is unavoidable your costs exactly food rent you would love to travel if you do love to travel just like me travels unavoidable honestly no in all seriousness though travel is something that comes into the ledger bucket there's expenditures on various shopping sprees that you go out on and stuff like that that comes into the ledger bucket for me but there's ways in which I could find the right amount to spend on and the right deals that so that I can feel one a little accomplished about how I'm being conscious about my personal finance and how I'm being you know mindful of the

money that I'm spending as well so that you know I achieved the most optimum inflow and outflow of money hacks there are of course credit cards that I'm super super involved with I pay my rent using the right credit card so that I earn points on it which essentially I try to convert in my head as discounts or value that in fund my future ledger expenses there's um like I said marketing from these consumer loving companies right I try to utilize those I have some liquid funds that I can deploy in certain banks who would give me a little bit of promotional money for my fun ledger activities I try to utilize those I try to go out and find deals on gift cards which people try to sell online on discounts so that I can use those to buy groceries for myself so there's a lot of

various things that I do within these buckets of expenses that help me find that satisfaction to get things on a discount or on a value that's attractive to me so is a good way to think about this that necessarily there is no end to the amount of hacking or using these offers or discounts or the right credit card for a certain activity that one can get to would you say that it really just boils down to one's appetite of how scrappy do you want to get here like if you want to buy say a TV on Amazon how many people are you willing to um message reach out to and bug before you you know end up pulling the trigger is that a decent way to look at this that's a great way to look at this and I that's what I essentially do which is to find the right amount that makes it worth my

while to find you know the value to decrease for something that I'm trying to buy or like monetary value to decrease but my value to increase I think in the back of my head in a very rudimentary manner what I try to do is assess what value is my time worth and how much value am I attaining to be able to put into that time and then put put into that activity and then you know extrapolated over a period of time for example I'm learning about utilizing certain points a certain way through a credit card that at this moment might only give me 50 worth of value and it would take a bunch of time for me to figure it out but if I'm able to convert that into a process of hacks for the future I think that's worth my while that's a good system for me to act on my portfolio

of personal finance I think I'd approach it that way makes sense I think that's that's a super helpful rule of thumb so on that topic though on the you know the credit card gaming really you know that whole you hear a lot of stuff online and I suspect a lot of it is just kind of made of fluff if I'm being very honest so I think I'd be really curious to really just kind of get a you know gaming 101 and by gaming here I'm referring to credit card gaming 101 and like where exactly does one draw the boundary and you know what's a decent safe quote unquote way to you know go about doing that because I have heard that there are a lot of gains that people leave on the table a lot of times just because of the miss you know the misinformation around or

yeah really just lack of awareness honestly a lot of time so I think that I would really benefit from that you know 101 around that yeah let's okay so gaming 101 would also involve me defining what gaming is which is essentially churning out of various products that give you a huge amount of value on the at the face of it or like right off the bat but then over a period of time you've only entered or bought that product because you wanted that value and not to utilize what services that product gives you in an example of a credit card you would sign up for a credit card because they give you a lot of sign-on bonuses for your initial spend but you don't mean to utilize that credit card often because you know that doesn't fall in an optimized manner in your portfolio and you keep

doing this with multiple credit cards and that's essentially what gaming a credit card would be like I think the online word and this is my sort of perspective what from what I've heard across various portfolios is split in the middle in terms of you know liking or disliking gaming I personally think that we're part of a world where you know taking value out of certain things involves you to be able to define that value in dollars right and that's where my perspective comes into a picture of just being okay with finding the right deals that can help me put myself into a great optimized financial personal financial situation and that's how I approach gaming so there are credit cards that I don't use there are credit cards that I use what gaming would do for

me is get me a lot of value out of each of those credit cards but I try to control myself or optimize my level of signing on to these products is by being aware of what that would do to my credit score or to my level of application or capacity to access this tool in the future for example I want a particular credit card and that's going to be the most optimized for my portfolio that I'm going to want to have a long-term relationship with but this current card is hard to get and requires me to sort of be better with the sign-ups and better with my portfolio less entries of new products so I would stop myself and say that hey this card adds more value to my portfolio so I would want to wait I would not want to sign up to more products and get that credit card I think

that's sort of the one-on-one for me is to be mindful of what you're signing up to but also understand that there's a lot of value that you could achieve if you ended up signing up for a lot of bonuses or sign signed up for a lot of products that these companies want you to take up I think I try to detach myself from the idea that hey this may not be right just because you don't want to use a product it's okay for me to still sign up I'm still there's there's tons of valuation models been behind these products and behind the way in which they give you these discounts and they and these companies do make sure that they account for the gains that you're trying to achieve out of it and try to earn all the money that they still need to from you so there's still

this element of give and take between you and the company and I think what you're getting out of it is great as long as you're not stretching yourselves yeah and I guess a version of that discourse that's also that I have seen and again bear in mind that I'm not even really from this whole sphere is that a lot of people say that what you get upfront from that sign-on bonus actually gets taken out of view as the years go by and once you have to start paying you know annual fees and such which I know not every credit card has and again I don't mean to go down this rabbit hole but I'm just curious to hear your you know take on that whole discourse so is that I think to do to just then cancel or like stop using the card after that promotional period is

over or you know do you just keep that in the back burner and so yeah like I guess yeah how do you go about when situations like that come up yeah I think when it comes to personal finance and anything associated with with with you know your journey of building wealth I would love for me to not ever keep anything on the back burner I would love for me to be super aware super conscious of what's happening with my portfolio of various products and investments that I'm that I'm a part of to answer your question though yeah that's the approach that I take is if I'm not using a card I'm going to and if there's a membership fee associated with it I try to find ways to downgrade the card or take that take a cancel that account consider that there's going to be repercussions

for both in terms of your credit score for in my experience for my credit score the those have been short-lived to really impact my process of approaching personal finance but you would want to be super aware of you know what what's happening what that's doing to your personal system I think there's tons of resources online I would love for everybody to access those resources before there are decisions made but I think that's the approach that I take is go ahead and cancel the card I also tell myself that if I'm spending four thousand dollars that a card wants me to spend in a certain period of time before they give me the sign-on bonus I think the card's earning that money through the spend that they need to to be able to justify the sign-on bonus so that's the

given take that I was speaking about which essentially just puts me in the right spot be able to access that sign-on bonus the element that you're talking about which is that the company ends up getting what they need in the long term has a lot of elements that a simple consumer would understand I work at a bank in a credit card company so I actually do understand how the company ends up making money and it's not just you spending on the card but also at a very high level their entire portfolio of spend bringing them a certain contractual benefit that would like they're okay with you being that churner that you are they either would give you the card if you're a churner if and if it falls in the profitable spectrum for them or they would reject you if it does not uh

the trust me or trust in the company to make the most capitalistic and financially beneficial business decisions for themselves because that's what they're in the market to do yeah I like really both aspects of what you said the first being probably the more actionable one which is that nothing about your personal finance should ever be on the back burner you should be on top of your game making sure you know exactly where every penny is going for the most part anywhere as much as you can without you know like going crazy and ripping all your head out and also the aspect where yeah like people that run these credit card companies aren't dummies like they obviously account for situations like that so I think that's a really helpful takeaway in that you just be proactive really like don't just blindly go off of what your friend said

or what a flashy marketing campaign said read under the fine print make sure you're you know or you're aware what you're getting into and only then um you know take the plunge so um yeah appreciate you keeping it real there and obviously offering your insights so with that I kind of want to jump to this um really the whole spectrum of spending money because we know at least in 2024 regardless of where you live for the most part if you want to exist you're you know forced really to spend money and that kind of breaks me to for the average person um yeah so like say there's this person that likes to you know go out every week for dinner or you know drinks and has a certain expenditure that's just kind of it just adds up for them really it just now we can treat that

thing x to be really just x but it's not planned and it's let's just call it non-essential so what are some smart ways that individuals can look to spend their money in a way that you know doesn't blow them off the rails away from their goals and potentially and I don't even know if this is possible but it still keeps them kind of aligned to what they had in mind for themselves and I apologize in advance if this is too broad um but hopefully that question makes sense and you're able to you know offer some insight into that no I actually no need no need of an apology there because I think that keeping it broad actually makes a lot of sense because in my mind the answer to this is the most broadest possible which essentially means that it's so particular to an

individual on what that journey for them would look like that it's not a one size fits all answer anyway I think that spending money is important for me to be able to keep myself in the process of wanting to optimize and earn more money and build that wealth so that I can you know at the end of the day go ahead and achieve the dreams that I have those are a little bigger than what my paycheck can help me suffice which is why I'm trying to get to that goal of building that wealth and I think the the the whole conversation sort of revolved around optimizing money so much that in in in a non-spoken way we've villainized spending money and I love that you've segued into that because I think spending money because I think I love spending money and I think it's

important you know keeping it real yeah I don't know a single person that is like no you know I will not buy that new thing that I totally don't need yeah but and I think I was really bad with spending money and when I say bad I meant that I spent money in the worst possible manner a decade ago or maybe even five years ago but I think what what I found myself to have gotten better with is being mature of the feelings that spending money provides me and I think that's helped me categorize play you know the areas that I want to spend money in really well which is that hey I absolutely love doing this thing and this is what I'm out there grinding myself for and earning all of this money for so I'm not going to think twice about you know the way I spend here I'm going to

be disciplined in you know telling myself that this is the way in which I need to spend and this is where I need to spend and being through to the principles that I earlier spoke about but I'm not going to stop myself from spending here what that also means for me is that there's a bunch of other categories that I don't think fall at the same level of excitement for me and I've become super conscious in spending money there then take all that energy that I've saved myself of you know devising strategies spend here and apply here so that even if I do have to spend those categories I'm optimizing through my knowledge of personal finance I'm optimizing for inflow versus outflow I'm optimizing to find the right places or the right time to spend on based off of what I've

been able to build in terms of a liquid called this and I think what I'm trying to say is find I think I want to keep telling myself that I want to find the places that I enjoy spending money on and be super smart about what I'm you know what I don't think are the right places to spend money on and then go ahead and you know find that system of spending it I think taking all of this foundation back to the example of eating outright there are various ways in which you can achieve the optimization of spending money on eating out but make sure that that's the place that you absolutely love or to spend on I think that that would be my takeaway from it that's I yeah for for multiple reasons I think that makes a lot of sense and I really love how broadly generalizable that is because it really can be anything all you're saying is that

make sure that that like each person should kind of have their stack rank in order of things that they'd like and anything that's not in the upper eclons should be you know thoroughly investigated like is that really something I want to do and I think that from that point it just really falls down to disciplinary like despite asking that question if you still end up doing that perhaps you know there's bigger fish to fry than you know realizing what or what not deserves your money in terms of spending yeah those were really all the questions I had earmarked for you but while talking to some of our listeners there came a couple other questions that I think are worth you know getting your thoughts on the first being for Indian students that move to the US folks

but mostly around for their masters what's a good way to look at optimizing or you know healthily increasing I'm pretty sure healthily is not a word but um increasing their credit score in a sustainable and helpful manner um yeah I guess once we get through that I can ask the second one if that's okay yeah of course um I think I can speak to my journey a little bit like almost everything in the sphere of personal finance I've captured these learnings from really smart and experienced people what I had in terms of help is that I started speaking to people who were already at Purdue and who were my friends and told me what their pitfalls looked like or what their successes looked like within this journey what they told me was that building a credit score is really

important to be able to achieve a lot of things that you would want to in the US in the most optimized manner if you don't have a credit score you can still get loan but essentially what will happen is you will get it at a higher interest rate and you will end up paying more money for not having a credit score and I would not like to do uh something like that just because you know in my head that's not the most optimized way to spend your money essentially what I did was I found out what ways are available are accessible to me through which I can get a get a social security number and that's essentially what you need to get a credit card for most of the sort of credit cards or credit building activities that you would want to achieve so I looked up online found a job at a place that that would apply for my credit card or apply for my SSN

social security number and then help me build a credit history as soon as I got my SSN I made sure that I found the right student credit card which essentially a couple of providers or few providers give you give students with no credit history your certain credit line with a certain credit amount and that's limited but that still is beneficial for you in many ways that I can think about one of them being that you get a limited amount to spend on it which is great keeps you disciplined absolutely yeah it gives you gives you a chance to build that credit score and I went ahead and started learning a little bit more about credit score which is that hey what elements of my activity on the credit card helped me achieve the most optimal credit score and I had

my own share of pitfalls that I ended up spending I think it was a one-time scenario where I was quite close to my credit limit which is a high utilization and credit companies don't like it because high utilization means stuffer stuff to manage for the debt payer and I was quite capable of paying off that debt because I had all of that debit amount ready with me to pay that off I just let my statement process and register all of that high utilization as my outstanding debt and essentially I ensured that from them from that point onwards I kept paying what I kept spending on my credit card and that helped me keep the utilization low I passed on this knowledge to a lot of people I'm sure including you heard you but also to my sister to a lot of people that I think

about that you know later benefited from it and that's essentially what I would also recommend everybody is to keep be on your toes with these snippets of information little crumbs that you can keep getting from people who you know who have the experience but I think if you specifically speak about students coming from India to the US I think majority of us are super scrappy and I'm sure there are so many resources that we end up accessing to be able to get to this position so just accessing your community for learnings like these would help um yeah the only thing I would add to that I think is that and maybe this is just me who is probably a bigger dummy than most people but I actually waited way too long to get my first credit card so I actually straight up did not have

you know a credit score at all because I did have my SSN because I was working a student job but I just it never occurred to me and I guess nobody told me another way to put that is I never asked anybody about if that's something that's smart that I should be doing and yeah by the time I did it it was late but thankfully it at least for me didn't really affect me that much but it is something to keep in mind I think that yeah the earlier you start the longer your credit history the better your score um exactly so the second question was um and this is intentionally a yes no question so for somebody that's just you know that has accumulated let's say a few thousand dollars of savings um is it a good idea yes or no really to stick um let's say five hundred dollars

every month blindly into an s&p 500 yes or no oh my goodness the consultant in me or the strategist in me is finding it so hard to answer it in a one or zero my goodness uh s&p 500 historically have been great so I would call it a yes but I would love for a chance to elaborate if that's okay I would absolutely yeah what's the caveat there because I think that would be a really important caveat yeah I well yes I think it's important just because you at the end of the day if you're in this investment game what you want to do is get the maximum returns for yourself how do you achieve that is by being smart with your investments it could either mean that you're investing in an s&p 500 and letting the market do the work for you or you putting in that effort

or putting in the work that's required and knowing that you are able to achieve better returns and then finding the opportunity to take that 500 dollars and invest somewhere so if you read the books or if you go through that grind to understand what investing looks like and decide for yourself that hey this is not my cup of tea and I don't virtually have the time to invest in this I'm earning a lot more through my time being utilized somewhere else let's find s&p 500 and invest in that and that's the biggest no-brainer that I've heard from the most successful people in this landscape if you are able to through your performance and your confidence and your historical returns achieved think that you can beat the market or beat s&p 500 I think the 500 dollars are quite

an investment so yeah that's that's really all of the stuff that I wanted to cover I want to thank you so much for you know being here and talking us through this rather messy don't get me wrong I just I was definitely worried about you know just how much value we would be able to get out of this but just having you know stood here and here you talk about this I can already tell the immense value that I have already received and that our listeners are also going to from this conversation so really really appreciate you taking the time today yeah I love that I loved engaging with you I absolutely loved hearing your perspective what I was trying to share as well and I hope that your viewers are able to capture all of that as well in the right manner and thank you for having

me with such a pleasure absolutely see you next time see ya have a good one that brings us to the end of episode five of the ready said to podcast I hope that you were able to glean as much knowledge and insight from this episode as I was being a personal finance nube myself if you benefited from this conversation and would like to support me the easiest way to do that is by subscribing to my channel on youtube and leaving me up to a five star rating on Spotify I have a lot of really interesting guests planned up from all walks of life that will show us how we can achieve whatever we want if we're only willing to ready set to