ABCs of managing money

An engineer, who set up his own start-up, and studied investing in mutual funds to sharing his learning with others, Deepak Pawar has covered an arc of professional and personal growth. He talks to Smart Investing India about identifying needs vis a vis desires, how to plan for your needs and why you should start investing young.

How much money do you need?

It was a chance remark that Pawar got thinking. “Someone asked me, ‘how much money do you need?’ Till that point, I had no figure, not even an approximate range in my mind. I was aware of broad calculations though. My monthly expenses were say at Rs 50,000. If I had an annual income of Rs 6,000,00, I would have to multiply it with the years that I expect to live. My current age is say, 40 years. Therefore, when I multiply 6,000,00 x 40, I arrive at a figure of Rs 2 -2.5 crore. Is this amount sufficient for me to retire?”

Every person needs to ask this question to themselves – how much money do I need? And, then follow it up with other pertinent questions about their professional lives. ‘What am I doing? Why am I doing?’ “Apart from job satisfaction, people need to take into account their financial planning. The moot question is how much control and visibility do you want to have over your finances. Sometimes even a Xth pass person can plan his finances and budget very well as opposed to someone who is highly qualified, but ignorant of financial planning,” says Pawar.

Three stages of becoming financially independent

Pawar sought to become financial independent with the help of a three stage process. First stage, says Pawar, is realisation. That is becoming aware of what are our needs and what are our expenses. The second stage is planning. “Once we set a target, this is where we have to be in next ten years, we have to start planning for it,” says Pawar.

“In due course, we learn where we are lacking. We then have to come up with a plan to cover the deficit. We have to be aware if our goal is realistic, feasible and so on. For instance, if I earn 10 lakh annually from my job, my only source of income, is it practical to set a target of earning Rs 10,000 crore in the next one decade? Have I taken into account, factors like luck, global scenario and so on?

The third stage is execution and monitoring. “If you want to take full control of your financial planning, you need to invest time, you need to acquire knowledge of mutual funds, and keep a track to see if it’s working as per your plan,” explains Pawar, adding, “Patience is key. Do not get excited or depressed when markets boom or when they are in slump. Stick to your plan and make only required changes.”

A mentee and now a mentor

Pawar talks about his journey of first being a salaried person to setting up his own venture – Adavaita Systems Pvt Ltd – taking up finance planning as a side gig and now back to full time-employment. “I had a mentor, a friend who shared his perspectives on financial planning. I was convinced with what he shared. I only wish that I had a mentor in the early stages of my career. When you are young, you are more ambitious, you have more risk taking appetite. If I had a mentor then, my corpus fund would have been more than what it is now.”

Pawar took up investing more seriously after he paid off the loan on his flat. “I had house of my own, this flat was an additional investment. The EMIs were not pinching me, but I did feel the pressure get off my back after I paid off the loan. It was only then that I thought of setting up my start-up. But the fact remains that I could have set up my venture atleast a decade earlier if I had proper guidance then.”

In 2019, Pawar started Advaita. “There were always ‘what ifs’…what if it doesn’t work. But, I had sufficient funds, so I was not unduly worried.” However, the start-up came with its own set of challenges.

“I operated Advaita for about three years. I have an engineering background, there was no one to look after business development. I was solely responsible for it. There were other hitches as well. For instance, a sizeable amount is still lying with a client. It has not been cleared yet. I paid the staff out of my own pocket for about six months and then I had to stop. In January 2025, I got a job offer and I took it up,” explains Pawar.

In the meantime, Pawar got interested in mutual funds, stocks and equities. The first few years were boring because he thought the funds were not growing. He thought of opting for something else. However, the amount that he had invested was not pinching, and so he continued. “I realised its growth potential once the corpus increased after a seven year period. In addition, there was a boost from the stock market. I decided I had to learn how to manage and shift funds during the various stages of stock market, when to book stocks and so on. I acquired my certifications from National Institute of Securities Market (NISM) for mutual funds. I also applied to become a Certified Financial Planner.”

Pawar gradually started managing funds for his family and friends. “When I did my NISM certification, I thought of setting up an alternate career. However, as there was no pressing need for it, I first decided to manage my corpus fund. After my certifications, I realised that the advise that I was given by fund managers was not purely for my growth. There were other factors like commissions offered by mutual funds, inclination of the advisers,” he says.

Pawar also began helping friends who faced a similar career predicament like he did once. “There is always a fear of being shown the door when you are working in IT companies. You do have to think of your families, education of kids. I had gone through a similar phase. So, I started sharing my learnings with friends. For instance, short term goals can be achieved by investing in Fixed Deposits, for long term goals, you can invest in so and so funds. I helped them to identify stocks. A few of them asked if I could do the planning for them, since they didn’t have time or were not confident of applying this knowledge. I agreed,” he adds.

For beginners, Pawar says, their preference should be investment and not in buying a bike or a four wheeler. “I am not saying wait for 10-15 years before buying a bike. But identify your needs first. When you are fresh recruit, start by investing atleast Rs 5000 in SIP. When I share the projected figure that they could save at the end of 25 years, the recruits are stunned.”

If you become financially secure at an early age, you will be able to handle job pressure differently. Pawar says, “There’s a mindset change between my current job and my previous job life. I don’t worry about losing my job, or getting a hike anymore.”

Deepak Pawar can be reached at ifa.deepakpawar@gmail.com.