From serial entrepreneur to mutual CEO, Varun Gupta on his investing journey

Disciplined financial planning savings plan are key to a secure future and peaceful retirement years. The process involves a timely start, strategic decision making, discipline and smart investments. In the latest episode of Let’s Mint Money, brought to you in collaboration with Groww Mutual Fund, Varun Gupta, Chief Executive Officer (CEO) of Groww MF, offered Mint Editor (Personal Finance) Neil Borate his roadmap to financial success. . He talked about where he invests his own money, how he’s evolved as an investor, and his take on some of the big questions every investor faces, such as the renting versus buying debate, planning for children’s futures, and retirement goals.

starting

Gupta completed his engineering degree from the Indian Institute of Technology (IIT) Madras and always wanted to be an entrepreneur. He comes from a big Ujjain-based business family and though his family hoped he would get a “high-paying job” after graduating from IIT, he had other plans. He knew he had only a few years to take risks before starting his own family, since his parents didn’t need him to support them financially. Watch the full episode here,

Although he was very young when he began his entrepreneurial journey, what worked in his favor was that he was very good with data and technology and could add value on these fronts. He spoke to Borate about the early challenges, saying: “We were quite young and we were talking to CEOs, so it was difficult. But over time, because we brought something that was completely new to India (the analytics service for Indian companies in the consumer goods sector was quite new), people saw value in it and that company did well. ”.

In 2015, Gupta was ready to move on and pursue a consumer technology startup and was one of the first to try distributing mutual funds online. In 2019, Groww acquired that new company and moved with it. But the entrepreneur in him has remained alive as he has created several verticals from scratch such as mutual fund distribution, an AMC, etc.

Invest for yourself

When asked how his career path has shaped his personal life. investmentsFor starters, Gupta called himself “undisciplined,” something he doesn’t recommend for young people. “I only started investing disciplinedly in the markets in 2019, nine years after graduating. That’s a regret I have. I advise young investors to start investing very early because compounding happens only after a certain corpus has been accumulated,” he said.

He learned from his mistakes and has put in place Systematic Investment Plans (SIPs) for the last 4-5 years. Gupta felt that 2014 would have been the right time to enter the financial markets, but a wrong investment choice left him stuck with no excess funds to invest.

golden tips

According to him, the right way to invest is in stocks through SIP. For those who have a lump sum to invest, you can look at STPs ranging from debt to equity. Mutual fund investors do not need to time the market. Commenting on his own investments, he said his ideal portfolio would have about 70 percent in stocks, another 10-15 percent in debt, 10 percent in gold and 5 percent in some type of international investments or bonds. He recently bought a house for his family to live in and that has altered his allocation. So, real estate allocation aside, mutual funds would make up about 90-95 percent of your total portfolio.

Since you have launched so many startups, do you also invest in them? “I have invested in about three startups as an angel investor. But again, because I made a big financial decision to buy a house, I’m not actively doing it right now. I would like to start again next year. It’s a risky proposition, so I won’t keep more than 5 percent of my assets there. I have met many angel investors who never got their money back. For that, you have to really diversify and invest in at least 20 or 25 startups, because that is the likelihood that startups will be successful,” he said.

Its investments have fared well with an overall CAGR of 17-18 percent from 2019 to date. One of the factors that contributed the most to this was the bull run in equities. “Investing has 70 percent to do with discipline and 30 percent to do with where you invest. Therefore, I try to invest in a very disciplined manner in the market, where as soon as my salary comes, most of it goes into SIP, which rebalances after a year,” he further said.

Answering investors’ key questions

Gupta calls himself a core investor in mutual funds because he believes fund managers are much better positioned to generate alpha and manage your funds, compared to what you can do yourself.

“What I’ve started doing now, which I think might be suitable for many investors, is that I’ve managed a core portfolio where I only hold diversified funds. On top of that, I have started keeping satellite portfolios, where I take bets on very specific themes. For example, electric vehicles are a very big trend where there will be a fundamental change in the way people travel. Therefore, electric vehicles are part of my satellite portfolio,” he said.

Another question that every investor asks is how much risk is good to take. On this, Gupta termed himself as a “moderate risk” investor and said he invests more in multi-cap and flex-cap funds. It also has some allocation to small cap funds, which is a consistent allocation. It has not changed its allocation strategy despite the huge rally in midcaps and smallcaps in recent years.

He also delved into the debate about buying versus renting in real estate investments and said that real estate should only be bought to live in, not to invest in. Contrary to popular perception, he believes your dream home should be purchased with 80 percent down and 20 percent loan, not the other way around, to maintain liquidity. “I would say that buying a house was not an emotional decision. It was a very practical decision. Before, I used to buy a house as an investment, which was very stupid of me. But now I have two children, seven and one year old, and I want them to have a stable life. I got a good deal, so I bought it with the purpose of living there,” he said.

Disclaimer: Lets Mint Money is an editorial intellectual property of Mint, sponsored by Groww Mutual Fund

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