Ankur Warikoo: From Penny Stocks to Passive Investing
Like many retail investors, entrepreneur Ankur Warikoo also started his investing journey with penny stocks. However, after experiencing the downsides of individual stock investing, he shifted his focus to passive investment strategies. As a passive investor, Warikoo now invests in portfolio assets such as index mutual funds, smallcases, and PMS.
In his new book ‘Make Epic Money’, Warikoo decodes personal finance in a jargon-free language that GenZ and millennial readers can easily relate to. The book aims to simplify complex financial concepts and provide practical advice for individuals looking to improve their financial well-being.
The Simplicity of Personal Finance
According to Warikoo, personal finance has become complex because many books are written to impress rather than inform readers. In contrast, ‘Make Epic Money’ takes a different approach by admitting the author’s lack of expertise and focusing on helping readers understand personal finance concepts without overwhelming them with unnecessary jargon.
When to Buy a House
Warikoo shares his perspective on the buy a house vs rent debate. He advises against buying a house early in life when income is low and future living arrangements are uncertain. Instead, he suggests renting out a house in the 20s and most of the 30s. However, Warikoo believes that buying a house is an important emotional and psychological investment that should be made at the right time. He personally bought his house at 40 and considers it the best time to do so.
Ankur Warikoo’s Asset Allocation Strategy
- 30%: Indian Mutual Funds (across large cap, mid cap, and smallcap)
- 30%: Indian PMS (investing in smallcap and momentum strategy)
- 20%: Startups
- 15%: US equities (excluding Tesla and Meta)
- 5%: Crypto
The Relevance of Gold and Crypto
Warikoo does not predict the eventual relevance of gold compared to crypto as an alternate investment. He personally allocates 5% of his portfolio to crypto and believes that gold will remain a safer asset in the foreseeable future. However, he recommends considering Sovereign Gold Bonds instead of jewelry or other forms of digital gold when investing in gold.
Investment Recommendations for Different Age Groups
Warikoo highlights the benefits of index mutual funds for slow and steady wealth accumulation through compounding. He suggests allocating investments based on age and income. For example:
- In their 20s earning between 3-9 lakh per annum, individuals should consider allocating 20% to safe assets (such as PF, FD), 70% to equities (including Nifty50, midcap index, and smallcap index), and the remaining 5% to gold or REITs.
Advice for F&O Trading
Warikoo acknowledges the allure of F&O trading but warns about its risks. He advises allocating only 5-10% of investments for trading and treating it as play money. The majority of investments should be passively invested to minimize risk and encourage long-term growth.
Hot Take: Simplifying Personal Finance for All
Ankur Warikoo’s book ‘Make Epic Money’ offers a refreshing perspective on personal finance by prioritizing simplicity over complexity. Through his own experiences and expertise, Warikoo aims to empower GenZ and millennial readers to make informed financial decisions and achieve their financial goals. Whether it’s understanding the best time to buy a house or crafting an asset allocation strategy, ‘Make Epic Money’ provides practical advice that can be easily implemented by individuals at any stage of their financial journey.
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