[Podcast] Setting Financial Goals with Swapnil Bhaskar- Part 2

Listen to Part 1 here.

Anupam of the Paisa Vaisa podcast talks to Swapnil Bhaskar, Co-founder of Goalwise about setting financial goals and how you can achieve them.

Listen to the podcast here:


Anupam Gupta: Folks, welcome to Paisa Vaisa. I am your host Anupam Gupta @b50 on Twitter and this is the second of our two part series on Goalwise, which is an app and a website that helps you set and achieve your financial goals.

In the first part we spoke about the basics of setting your goals and how to achieve them and how Goalwise helps you along the way.

In this episode we're going to talk about how exactly is Goalwise different, right? Because we are living in a time where I don't have, they're like, I don't know how many fintech startups are out there and all of us have different options. You've got a real life financial advisor, you've got a robot advisor or hey, you can use your own intelligence.

Goalwise believes that they can do a better job than this and let's find out why.

Please welcome back to Paisa vaisa. Thank you for joining us. Let's get down to this. Okay.

How Goalwise is different from other platforms or say I give you three examples, right? So let's take a actually the two examples. One is when you have external help and one is if I'm doing my own financial planning. Okay, let's start with the external help. There are two choices. One is a real life financial advice and the second a Robo Advisor. Let's find out how it's Goalwise different from them.

Swapnil Bhaskar: So, actually best of the both the worlds - basically when there is an external financial advisor, we are that financial advisor plus you have automated systems to execute that plan.

You have a real time view, you can see realtime progress to your goals which gives you the focus that you can see how how you are, are you on track to achieve our goals? Are you offtrack? If you're off track, they should be a suggestion. Recommendation, advisory,come into the picture. So it's that real time thing. So it's your financial adviser plus a integrated technology behind, which is always working for you. Always.

Now, any advisory comes, you need to talk to a person; you need to talk about the things which you don't understand. Then you just request for a callback. You have a dedicated financial advisor who is going to call, have the full discussion why this recommendation has come, what are the things you should do?As human being.

Anupam Gupta: Not as a customers

Swapnil Bhaskar: No, no, not as a customer. So we are SEBI registered, investment advisor also. So that gives us the investment advisory aspect. Now you're going to talk to a certified advisor and talk about anything regarding personal finance. So that gives you that peace of mind. The only thing is that it's going to be over the phone, unless you want to come to Bangalore, most welcome, we'll be happy to host you at our office.

Anupam Gupta: One question. Okay. So the financial advisors always say that this is one advantage that they have over the other, which is that when the markets are very volatile, this year has been volatile, they kind of step in there and manage your emotions and manage your whatever thoughts you're going through.

Because when you see your portfolio and therefore your goals, take a severe hit, you need to be handled at that point of time. What, so how does Goalwise helps me there, I mean, let's, let's take a concrete example. I've set a goal. Could be worried about retirement planning and this year the market has seen two falls in February and then later I think in September, October, both around 10-15% down, my portfolio is definitely going to take a hit out there. How does the Goalwise help me?

Swapnil Bhaskar: So basically thats the behavioral aspect of any investor. So majority of the investors think short term and they're starting to think long term. But when things like market corrections happen, the, the whole vision becomes very, very short term. And this is coming from that loss aversion thing that it's very painful to see losses.

Nobody likes to lose money. It's their hard earned money, right? So that's where the advisor comes into the picture. Since now advisor's role is to again, reorient the investor towards their goals, which are long term now you don't need that money right now. It's some temporary or interim thing, which is happening now.

The advisor also assesses that are you taking a higher risk then what was assessed earlier? Because risk profiling has a very, very critical role in your investing journey. So when you start investing and when you have thoughts like this, your portfolio is negative, you get some sleepless nights, then probably you're taking risk on a higher side, which you’re not comfortable with. That's where that portfolio rebalancing, the whole talk about your emotions also will be that part of the conversation with advisor.

Anupam Gupta: So do I get a calls like listen, hold on, don't sell stuff like that.

Swapnil Bhaskar: Right. You're are free to actually click on redeem and do whatever you want to do. But that's where the role of the advisor comes into the picture that you don't make those mistakes or take ad hoc decisions.

Think about Roger Federer - he is the best of the tennis player. He still needs a coach. Yeah. Just because everyone has their own blind spots. They have their biases, they can make mistakes on ad hoc basis so to avoid them, that's where the advisor come is who is thinking about you and works for you at that time.

Anupam Gupta: I think that in some ways probably answers the next question, which is how you different from a robo?

Swapnil Bhaskar: Right. So that's why I was started with best of the both the worlds. So most of the Robo advisors I see in India are transaction oriented. They say you come buy and sell mutual funds now, whatever you want to do, start SIPs. And that's all they have.

Some kind of a place holder for goals and all those things. But goal based investing goes way more in depth than what I see. In India right now, goal based investing is not just about creating a goal and starting your SIP a lot more things like having the tracking to achieve your goal portfolio, rebalancing, risk management, having the glide path in place where with time you're moving closer to the goal and your equity exposure is going down and you're moving towards the safety because when you need the money, you can't take risk.

Right? So all that aspect needs to be done and it needs to be managed. It's a full time thing. It's not just buying or selling mutual fund, that's the one component of the overall thing. That's where I feel, so robo advisory has become a very generic thing now, but the real thing requires a lot more than just buying and selling mutual funds.

Anupam Gupta: Okay. And how are you smarter than me? I'm the star. I think that I'm very happy doing a 50% equity, 50% debt. I just say, I'll just take a 50, 50% NIFTY ETF, I don't know, I'll just put the balance 50% into some liquid fund or something. And I'm sorted. I'm not someone who believes in active management. I'm not someone who wants to go through all that. I don't know how many mutual funds are there now. So schemes, I think there's some 3000 plus massive number. How you better than that?

Swapnil Bhaskar: So I mean, if you're already convinced, and I can't do anything, but yes, I believe in what, Goalwise has the strategy. So we did the back test and we, based on that strategy, it has beaten the sensex by 3 to 4% CAGR and that's a backtest timeframe of 12 years.

Now beating that index, active mutual funds still beat index in India. Large cap might be a little difficult to generate the alpha, which is higher than your benchmark returns, but still multicap funds are there which can generate higher returns than your ETFs or the benchmark indices now basically what the strategy is that best of active mutual funds you pick, if you're beating 3 to 4% CAGR in a realistic long timeframe, you've done it.

Now I can just give you the example, like talk about financial year 2016 that's the out of sample returns, performance of Goalwise. Now nifty was around 19, 19% returns and Goalwise was 21% to 24%.

Anupam Gupta: So to learn prior to FY16..

Swapnil Bhaskar: it's FY16. it's FY16

Anupam Gupta: in, in the financial year FY16 NIFTY was up 19%

Swapnil Bhaskar: yeah.

Anupam Gupta: Goalwise portfolio of pure equities no Debt.

Swapnil Bhaskar: Yeah. Pure Equities.

Anupam Gupta: would have?

Swapnil Bhaskar: 21% of 24% depending on the risk profile. Sure. So low risk profile have those large cap funds, moderate risk profile, have the multicap funds, high risk profile people have multicap plus mid cap and small cap fund. So that's chosen by the data driven selection strategy. And that's the range I'm giving you is 21 to 24%. Now think about 2017. So in 2017, Nifty gave 28-29% returns. Now Goalwise's recommendations gave 33% to 43% in that year.

Anupam Gupta: And this is without any biases, it's just purely based on your algo based.

Swapnil Bhaskar: Yes, yes. So there's no point of bringing in biases when picking up the funds.

Anupam Gupta: Let the machines do their work.

Swapnil Bhaskar: Yes. So data driven is always better than our opinion based Mutual Fund selection always.

Anupam Gupta: Have to ask fees.

Swapnil Bhaskar: So basically what we do is when you are investing in mutual funds, we give the regular mutual funds.

Now when you are investing in a regular mutual fund, you are investing in a mutual funds who have their own expenses of managing your hard earned money. So investing in stocks like for the equity mutual funds, bonds for the Debt mutual funds. So Mutual Fund company take out the expenses out of the funds, out of that expense they pay to us. Now this is the fees which basically we say this is our advisory fees.

And if you go to Goalwise dot com on our home page, we write pricing. So that's being transparent and despite giving the regular mutual funds, we write about how you are going to pay. And the thing is through mutual funds for sure. And this payment is for the advisory, the whole value added services. Managing your money is part of it, planning plus the execution over a period of time. So that's there inbuilt. So we don't pay anything extra, anything directly to us.

Anupam Gupta: I was just going to say that so that we, that I don't pay anything to you. It's mutual funds. It's been you and I. So when I subscribed through your platform is buying the regular plan. Okay. how, how do listeners reach out to you? Okay, tell us about that. So first we've got a website.

Swapnil Bhaskar: Yeah. Goalwise.com is the website. You have the app also.

Anupam Gupta: Goalwise.com folks check out the website. Very interesting stuff. A lot of interesting blogs out there. Okay. Blog posts, sorry. They've, they have a blog section which has a lot of data heavy, a lot of interesting posts post done by Ankur, I believe.

Swapnil Bhaskar: Yeah. Ankur.

Anupam Gupta: Yeah, there's your name also. So I would really recommend that you guys check out some of their posts. I found them quite, quite interesting. I think a couple of them deal with what we've spoken about, the whole returns thing, uh, and tax planning and a lot of this stuff. Website. App. Okay. All right.

Swapnil Bhaskar: And so one thing that you will get at Goalwise is jargon free things. Talk in English, no Greek Alpha, Beta, gamma and nothing like that. Simple around your goals. That's our focus is that ultimately that's what you want, right? Finally you reach your goals. So that's the whole thing. It hardly takes five, 10 minutes to set up your account completely online and once you start, you just add your goal, start investing rest of the hard work is done by us.

Anupam Gupta: And where are people going to reach out to you or say Swapnil are you guys on twitter? Are you guys on Twitter?

Swapnil Bhaskar: Yes, we are on twitter. So we do have our official handle as Goalwise.

Anupam Gupta: @goalwise, G-O-A-L-W-I-S-E and it's got some really funky stuff I just saw yeah, out there. So you could reach out to them on twitter. The handle is @Goalwise, so for any queries.

Swapnil Bhaskar: We are available on facebook also where we have really good reviews investors talking about how we have helped them. So really you can go and check out that also.

Anupam Gupta: So folks, I'm trying a new thing this time with this episode. I'm going to ask all our guests two standard questions in the end of our recording. So Swapnil is my first Guinea pig per se.

So what is the single biggest financial or investment mistake that you made? What and what was your lesson? I know we were talking about how before the recording that you've done plenty of them. I've done plenty of mistakes. I want you to choose just one. Okay. Like what was the mistake, what is the lesson, right?

Swapnil Bhaskar: Yes, so, as I said plenty of them. So two major or so even if I want to just make it to one, then ULIP thing, which I already told you that now, so that was one thing.

Anupam Gupta: You almost bought a ULIP.

Swapnil Bhaskar: Almost bought. So the lesson learned from that incident is never invest without understanding the basics of it. Never. Like there will be crazy stuff going around bitcoin and all those things will come and go. But if you don't understand, don't invest.

Anupam Gupta: That's really simple.

Swapnil Bhaskar: As simple as that. Then when that ULIP thing happened I was on on my own again because now I don't trust the bank relationship managers. So that's where, I started investing into stocks and mutual funds altogether and that was, again 2007-2008 what I realized within a year, direct stocks is not meant for me. I'm working for Schlum. It's a oil field company.

Anupam Gupta: It's not all your time.

Swapnil Bhaskar: Absolutely. It requires a lot of time and energy to just get into stocks if it's not your full time job. Just my stock portfolio didn't work at all and Mutual fund was working very well for me. So that's the mistake which I made because it was not my full time job and I was investing into stocks directly.

So I stopped completely. And that's my, again, lesson learned. Just your time is very critical. And just prioritize what you want to do and outsource all the things which are not your interest, just to the professionals. And that's what I say if you want to earn money, just focus on your skills building up that you'll earn more. Even I'm a full time investment professionals now.

Anupam Gupta: Yes, yes.

Swapnil Bhaskar: But my money is invested through Goalwise completely.

Anupam Gupta: By the way, I was just going to say that your website has all your portfolios.

Swapnil Bhaskar: Yes.

Anupam Gupta: Tell us about that.

Swapnil Bhaskar: So when we started, again, it's that you want to be the most trustworthy financial company by 2025. So when you're reaching out to an advisor, I think you should know more about the advisor. So that's where we disclosed all of our portfolios.

So if I'm going to advice you that start with an emergency fund, am I doing the same? It starts from there. Like what I'm telling you, am I following that thing or not? So we disclosed all of our advisers’ portfolio, how they are managing things. And, again it's all money invested through Goalwise. I don't have the time. There's someone who's managing it for me.

Anupam Gupta: And also you're buying the same mutual fund that is recommended here.

Swapnil Bhaskar: Everything's same.

Anupam Gupta: Fantastic. So that's the first question. And second question is I recommend a book or a Youtube video or a movie or Netflix or whatever it is that you think our listeners can see here. We need to improve the knowledge.

Swapnil Bhaskar: Okay. I think I'm not a Youtube guy, but I can recommend a lot of books.

Anupam Gupta: Your favourites.

Swapnil Bhaskar: So, basically when as a beginner the first book I would recommend is Rich Dad Poor Dad by Robert Kiyosaki.

Anupam Gupta: Robert Kiyosaki.

Swapnil Bhaskar: Yeah, it's really good as a starting point, as a fun read because finance is not that fun. That's very light.

Anupam Gupta: Easy to read.

Swapnil Bhaskar: Easy to read. Then my second book in the same reference, someone who is starting or hasn't started, but once have, have structured investing the structured finance, then the aspirational investor by Ashwin chhabra. Really good book. Now, once you're sorted with these two books, then comes my favorite. It's thinking fast and slow.

Anupam Gupta: Daniel Kahneman, Nobel laureate. 2011.

Swapnil Bhaskar: Yes, yes.

Anupam Gupta: Amazing book.

Swapnil Bhaskar: Your biases which are your own enemy and your investing, even in any decision making.

Anupam Gupta: that self-awareness hits you, right? Whats anchoring bias, representativeness.

Swapnil Bhaskar: That's my favorite.

Anupam Gupta: That will be favourite.

Swapnil Bhaskar: No, no, no.

Anupam Gupta: I'm saying anchoring or the book

Swapnil Bhaskar: The book.

Anupam Gupta: Hey, I've got a list of biases or you can just see where you're making that mistake. Okay, I'll go on.

Swapnil Bhaskar: So I mean, these are the 3 books. still if you have been very seasoned and..

Anupam Gupta: May be two more let's go for five. Okay. You said Rich Dad, poor dad. You said aspirational investor. You said thinking fast and slow. Okay.

Swapnil Bhaskar: Right. Then a, if you've been investing directly or investing for some time, then Fooled By Randomness.

Anupam Gupta: By Nassim Nicholas Taleb

Swapnil Bhaskar: The whole book is about how we have the illusion of being smart.

Anupam Gupta: and you've already got skin in the game. Right?

Swapnil Bhaskar: And now you're asking them and we have already we disclose our portfolio.

Anupam Gupta: You're actually living with what Taleb said for the word skin in the game or anything else? Anything that people who are new to investing or new to personal finance anything that can, that can help them, these books are great.

Do you subscribe to a certain way of thinking that you believe could help our listeners to, sort of, manage their finances better?

Swapnil Bhaskar: I think the, again, it's setting up the priorities, right? It's always that thing. your priority is what? What do you want? It always starts from their head again, the goal thing, right?

You have life goals, you have financial goals and everything. Just sit down and write them. Writing Really, really helps. You'll read a lot of things and whatever books I have told you, you could take out a lot of things. You make notes, you do everything there. But finally, whatever you want, you write them down because that will clear your thoughts.

Then reach out to the, professionals, life coaches, mentors and talk about it. Then you'll get a more perspective of what you were thinking. And once you are set, you make a plan, then execute that plan meticulously. Like without any deviation. That's what my advice would be. and other books, if you, there's a lot of their you can just go from one book to another book.

Anupam Gupta: May be they can reach out to you on twitter. And ask.

Swapnil Bhaskar: Yeah, definitely.

Anupam Gupta: They can just ask Goalwise you seem to have read, the Lot. I mean, then these four or five books are also...

Swapnil Bhaskar: building blocks. I would say building blocks.

Anupam Gupta: They can go on and on, we've not even mentioned, I don't know, Warren Buffett's annual letters for example. Hey, the intelligent investor stuff, all of that is.

Swapnil Bhaskar: All of them.

Anupam Gupta: Yeah. Fantastic Swapnil. Thank you so much for your time folks. That was Swapnil Bhaskar, co-founder of Goalwise and that concludes our two part series on setting goals.

In the first part we spoke about introduction and the basics of setting goals and how Goalwise helps to put you on that path to achieve your goals. In the second part, this one we spoke about how Goalwise is different from a financial advisor, from a Robo, and of course from your own great intelligence that you use. And with that we come to an end of this two part series.

Thank you for listening.