Get a grip on your investments before the 'Money Heist'!

It's finally time to bid Bella Ciao to your wait for the most-awaited heist of the season! With Money Heist Season 5 hitting Netflix on September 3, now is perhaps the perfect time to rewind your memories of this iconic show and revisit the words of the Professor, Berlin, and Tokyo amongst others! 

But this time, how about meandering down the memory lane in a different, albeit intimately similar ‘money’ way to reach this La Casa De Papel? In the depths of the Royal Mint and Bank of Spain, there awaits a treasure trove of investment and financial management information you ought to know. Read on:

“Love can’t be timed. It has to be lived.”Andrés de Fonollosa aka Berlin might not have been the most romantic person on the planet, but he sure knew how to love and surprisingly, win big in the stock markets! Trying to time the market is a futile endeavor. Anticipating and acting on these supposed market highs and low projections is something even the legendary investor Warren Buffet refrains from because the stock market is uncertain and very volatile. That’s why staying long-term is the only way to make the most of the markets!

Consider this: In 2018, JP Morgan tracked the performance of a $10,000 investment in the S&P 500 over 20 years.  On the face of it, the investments generated an average of 9.85 percent in returns per year. But if the investor withdrew from the market for a short time and missed just the 10 biggest days out of the total cumulative duration of over 7,000 days, their returns would sharply fall from 9.85 to just 6.1 percent! 

But what about the market lows, the bearish phases? As Nairobi puts it, “Everything can go to hell in less than a second. In moments like this, you feel death creeping in, and you know nothing will ever be the same. But you need to do whatever it takes to survive”. 

Nothing so dramatic about losing money, but it should not mark the end of your investment journey, even if you wake up one morning and find that there’s been a massive bloodbath in the market! If your portfolio is currently in red, persevere, because sooner or later, the market will come roaring back, painting your investments green. And why not? You have Berlin’s words to swear by, when he says, “Believe me, I’ve had five divorces. Do you know what five divorces are? Five times I believed in love”. 

The inimitable Tokyo also served some financial wisdom gems with her, “Things we can’t see affect our lives much more than we think”. That’s the case with your investments as well, which are multiplied over time, thanks to the power of compounding and time! Imagine you invest just Rs 30,000 per month for a period of 20 years. At an assumed expected rate of 12 percent p.a., your invested amount of Rs 72,00,000 would have generated almost Rs 2.27 crore in returns, taking your total corpus to almost 2.99 crore! 

No mention of Money Heist is complete without its commander, the enigmatic Professor! He says, “In this world, everything is governed by balance. There’s what you stand to gain and what you stand to lose. And when you think you’ve got nothing to lose, you become overconfident”, and from a financial standpoint, it makes sense. Striking the right balance even in your portfolio is important because your hard-earned money is at stake!  

Ideally, your portfolio should be generating high returns via volatile asset classes like equity, along with having an inflationary hedge like gold and less risky instruments to cushion the market uncertainties like debt. Of course, when you’re young, you can take on more risk and hence, higher allocation to equities, but don't forget the balance! 

You wouldn’t want yourself staring into the sunset 50 years down the line, regretting not investing and strengthening your financial future, right? Or, as Tokyo would say, “Have you ever thought that if you can go back in time, you might still make the same decisions? We all make our own snowballs out of our bad decisions. Balls that become massive, like the Indiana Jones boulder, chasing you downhill only to crush you in the end”. Don't let the ill-informed decision of not investing and starting early get to you! Start investing, and binge-watching!