Ayush's Blog

Financial Journey

Journey to financial freedom


  1. Able to generate passive livable income asap.
  2. Invest in things we understand - legality and tax considerations especially.
  3. Always keep enough liquid money to not feel poor.
    • Definitions of poor vary person to person. For me, it’s when I don’t REQUIRE to think when wanting to splurge on something. Side note, do not splurge.

I like to invest in Stocks and MFs except for usual Saving account in a bank and FDs. Note that I lie in the 30% bracket of Indian tax system so my optimizations are accordingly. Also, it’s mostly like 33+% because of other cess levied. If you are in the surcharge bracket, then this goes even higher.


My father is my guiding light in this matter. He advices me on what stocks to look out for and what valuations to go for. They are not always a hit, but I have seen 10x stocks in last 3-4 years which is a great thing!

Mutual Funds

This is where I shine. My father is categorically against mutual funds as

  1. “funds always take their cut, be it profit or loss”.
  2. you can easily get better returns by investing in stocks directly.

I don’t blame him for being against MFs as his points are valid for him. Also, the MF space has matured a lot in the last 8-10 years with direct funds and online transparency.

Where do I invest? I invest mostly in passive direct index funds. In India, Nifty (top 50 shares) and Nifty Next 50 (next 50) indexes are famous and the list of shares is decided by NSE every 6 months (check, not sure). N50 and NN50 cover all of the high cap companies that most of the funds go for, so I avoid investing in active high cap funds.

Instead, I lean towards small cap funds to generate some alpha. They have not disappointed me yet. :)

This is all good, but putting up most of your funds in stock markets can be unhealthy, especially when you are on of the scared ones like me. But the less risky alternative is FDs which are highly tax inefficient. To give a data point, FDs at this point range around 5-6%. Even with 6%, a tax of 33+% leaves you with hardly 4% returns. And it actually is lower for FD rates of 5%.

Enter Arbitrage funds. I initially went with debt funds like liquid funds, but the taxation is complex and to get to any benefits, you have a lock in of 3 years at least. To top that, most debt funds aren’t much better than FDs until they start taking risks. Thus, arbitrage funds. Arbitrage funds use 70+% funds to benefit from differences in derivative and delivery market. Rest 30% is mostly parked in liquid funds. Since all bets are covered (literally arbitrage), it is a rather safe bet and for taxation it is considered an equity fund! Win-Win!

Lastly, to get some outside-India exposure, I use a fund that gives me that at a rather low expense ratio. They too haven’t disappointed.

I maintain a google sheet with my custom formulaes to mark when a fund can be redeemed with Long Term Capital Gain. If I want to stay invested, I reinvest the amount the same day. So for eg, if I have 10k worth of N50 MF and I want to invest additional 10k, I purchase 20k worth of MF and redeem the 10k investment.that way i can rotate the capital gain efficiently making use of the 1 lakh limit every year.

Note: I am not a professional advisor, and this is not financial advice. Please make your own decisions.