Danger of Copy-Paste in Financial Decisions

Financial Decisions are supposed to be taken keeping one’s risk tolerance and future need of money in mind, no wonder that’s the reason probably it is called Personal Finance.

Over last weekend one of my close relative called me and asked to give him the list of mutual funds I am investing in so that he could also mirror my investments. In certain cases, it may work, but for that to work our risk tolerance and future need should be close enough. In our case, we are poles apart. I have risk tolerance of above average, wherein he was more curious to compare it with 8% of fixed deposit. I have all the investments based on goals and their future need of money. Except one, all of my goals are long term goals, 15-20 years in future. Wherein my relative just started earning, he needs to plan for his marriage and buying home for the future family. Marriage could be considered short term goal as it might happen in 3-5 years or earlier than that, but buying a home is certainly long term goal for him, it might happen in 5-7 years or even later than that.

So, what he should be doing instead of Copy-Paste. Considering his goals he should start investments in 2-3 diversified mutual funds. He is young so he could take more risks with his long-term investments. He should read my article on Direct vs Regular investment, and start investing with some Robo Advisor who could help him make Direct investments. Most of Robo Advisor monthly subscription plan is priced lower than least priced cold coffee from Café, he can certainly afford it for next few years. And start investing on own or through guide when he possesses enough understanding on Personal Finance.

Buddy, Copy-Paste does magic in code / exam, but certainly not in Investments.

Enjoy your financial journey!!!

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Also published on Medium.