Notes From Pranjal’s Personal Finance Masterclass

You’re not the customer; you’re the product. That’s how the financial world works. And sadly, most people realise it too late.

Before you’ve made your first rupee, someone else has already profited from it:

• Your insurance agent gets 15-40% of your first year's premium. 

• Mutual fund distributor takes 0.5-1% annually from your money. 

• Bank relationship manager pushing that "exclusive" investment gets commissions whether you win or lose.

The truth is simple: No one gets rich by making you rich. Your confusion funds their commissions. So the moment you gain clarity, you can take back control. That’s what personal finance is really about. 

And trust us, it’s no concept-heavy wisdom that you need to “master”. It’s simply doing a few very basic things in the correct order. Pranjal broke them down in his Personal Finance Masterclass, and we’ve turned it into 7 bite-sized parts so you don’t miss a thing. 

So let's begin with the MUSTS of your mast financial plan! 🤌

Part 1: Splitting Your Income 

Stop pretending you’ll invest whatever’s left at the end of the month. That rarely works. Instead, begin with a simple structure you can apply from Day 1. 

• Needs ​​​​​​include your rent, bills, groceries, transport, EMIs, etc.

• Investments ​​​​​​must focus on your emergency fund, goals and wealth creation.

• Wants are your guilt-free expenses on food deliveries, Netflix, shopping, etc.

A small tweak to the classic 50-30-20 rule, and you’re saving 25% a month without even feeling the pinch. If that’s not long-term peace of mind bought with zero lifestyle guilt, what is?

Part 2: Building a System That Supports You (Not Others)

Here’s how to not be the product for agents and RMs: 

One Discount Broker

• Avoid relationship managers selling high-commission products

Three Bank Accounts

• Primary salary account: Monthly expenses + emergency fund

• Investment account: Auto-sweep facility, linked to SIPs

• Expense account: Optional if you wish to keep regular expenses seperate

One Credit Card

• No annual fee preferred

• Pay off completely every month

• Build a credit score without a debt trap

Zero High-Interest Loans

• Personal loans: 12-24% interest (financial suicide)

• Credit card debt: 36-42% annual charges

• Loan sharks: Don't even think about it

✅ Only acceptable loans: The ones that build assets

• Education loans  (7-10% interest) 

• Home loans (8-10% interest)

When setting up your finances, just keep it super simple.

Part 3. Creating a Freakishly Strong Financial Foundation

These steps are first in line of the “right order” of where your money should go:

Step 1. Emergency Fund

If you skip this, every other plan collapses under pressure. And if you do it properly, you’d assure:

• The freedom to quit a toxic job or take a break when you need to.

• The ability to handle unexpected expenses without borrowing.

• A way out of debt traps or maxed-out credit cards.

How Much You Need:

Calculate 6-9 months of your essential expenses:

• If monthly needs = ₹50,000

• Emergency fund = ₹3-4.5 lakh minimum

Where to Keep It:

1. Auto-sweep savings account: Instant access with better returns than a savings account

2. Liquid mutual funds: Safe option with instant withdrawal facility

Step 2. Insurance That Actually Insures

Consider them non-negotiables that keep you sorted during life crises.

Health Insurance:

Most people treat insurance as a “jab hoga dekha jayega” option. And in crisis, they regret. Don’t be them; prioritise this for your safety. Buy insurance early, before age or illness drives up your premiums. And don’t rely on company-provided health cover. It ends when your job does, and that’s when you’re most vulnerable.

Minimum coverage you should get:

• ₹10 lakh+ for individuals

• ₹20 lakh+ for family 

No, you don’t have to pay all that at once. A 25-year-old non-smoker can get a solid policy for under ₹1,000/month.

Life Insurance:

This step doesn’t apply to everyone, YET it’s important. If you’re single and no one depends on your income, skip it. But if you have financial dependents, it’s a must-have.

Minimum coverage you should get:

• 15–20x your annual income.

• So if you earn ₹12 lakh/year, target ₹1.8–₹2.4 crore.

Keep in mind, only go for pure term insurance. No ULIPs, endowment, or money-back plans. Why? Most traditional policies offer only ₹10-15 lakh coverage with premiums of ₹20,000-50,000+ annually. Term plans give you proper coverage at a fraction of the cost.

Like health insurance, a healthy 30-year-old can get a ₹2 crore life insurance cover for under ₹2,000/month. 

Step 3. Clear High-Interest Debt

Once your protection layers are in place, the next step isn’t investing, it’s paying off expensive loans. Think of it this way:

Pay your full credit card bill before the due date, and you save 30-40% in interest charges. That saving is equal to earning the same return, without any risk! And no mutual fund offers that with zero risk. So, prioritise clearing out these:

• Credit card dues (36–42% interest)

• Personal loans (12–18%)

• Car loans (8–11%, depreciating asset)

What can wait?

• Home loans: typically lower interest, tax-deductible

• Education loans: manageable rates with moratoriums

Most people invest ₹10,000 in SIPs while paying ₹3,000 in interest. That’s not compounding. That’s financial leakage.

Part 4. Choosing the Right Investments

Now, you’ve got no toxic loans breathing down your neck, and your protection shields are up. Time to finally invest like it’s meant to be done: simply, automatically, and for goals that matter.

There are just a few proven paths. So, if it doesn’t show up here, you probably don’t need it:

1. Make the Most of Govt. Schemes

Look, the finance ministry isn’t just being nice. They basically put up neon signs saying, “Put your money here and get tax benefits.” 

Why argue? Here are your go-tos:

Investment Avenue	Risk Level	Expected Return (p.a.)	Taxation	Suitability
Liquid Mutual Funds	Low	4% – 6%	As per individual slab rate	Ideal emergency funds
Public Provident Fund (PPF)	Low	7.1%	Fully tax-free	Long-term goals
Sukanya Samriddhi Yojana (SSY)	Low	8.2%	Fully tax-free	For girl child’s (<10 yrs) future
Senior Citizen Savings Scheme (SCSS)	Low	8.2% (paid quarterly)	Interest is fully taxable as per the slab	Retirees (60+) looking for regular income with existing corpus
National Pension System (NPS)	Moderate	9% – 12% (market-linked)	Tax benefit under Sec 80C; 60% corpus tax-free on exit; 40% annuity interest income taxable	Building a retirement corpus
Equity Mutual Funds	High	10% – 15% (long-term average)	LTCG @12.5% above ₹1.25L; STCG @20%	Long-term wealth creation
Direct Stocks	Very High	Highly volatile (can exceed 15%)	LTCG @12.5% above ₹1.25L; STCG @20%	Experienced investors with a high risk appetite & active management

BTW, don’t dump all your eggs in just one of these. Use the different schemes to get the maximum benefit.

2. Mutual Funds “Sahi Hain” 

Don’t get swayed by what’s trending; stick to the three mainstays:

• Large-cap: Stable, lower risk. Best for beginners.

• Flexi-cap: Balanced exposure, decent growth.

• Small-cap: Volatile but rewarding if you stay long enough.

The best hack: Set up SIPs for each goal. (One for your house, one for that Bali trip, one for retiring in peace.) Don’t mix your funds.

3. Try Gold (But Not Like Your Grandparents Did)

A little digital gold or Gold ETFs (5–10% tops) is great as a backup. But gold jewellery is mostly “making charges” and drama.

For safety, go digital:

• Gold ETFs = No stress about lockers, theft, etc.

• The price is clear. You buy or sell with a click.

• Want to sell? No awkward haggling or deductions at the jeweller.

What’s the real use? Gold is your buffer. When the stock market is acting moody, gold usually does its own thing. It’s boring, and that’s what you want for backup. But again, don’t go overboard. 

4. And THEN, Stocks (Once You’re Truly Sorted)

Most people jump into stocks thinking they’ll double their money overnight. Don’t be them. Go for stocks only when all your other steps are sorted. Start with just 10% of your investable surplus, and do it with a long-term view. Stick to:

• Companies you truly understand: If you can't explain how they earn money in one line, skip.

• Ignoring FOMO: Missing out is better than losing sleep and wealth.

• Investing for years, not weeks. Let your money compound.

• Reviewing twice a year, not twice a day.

Once your base is rock solid and you’re cool with market ups and downs, you can slowly increase your equity exposure. But until then, be 10x more careful.

Part 5: Avoiding The Traps 

Saying “no” can save you just as much as doing all things right. Here’s your hit list of what to sidestep:

1. Startups: Most don’t make money, and early investors usually lose theirs.

2. IPOs: Hype goes public, gains go private. By the time you join, there’s nothing premium left on the plate.

3. Crypto: Fun to gossip about, scary to commit real money unless you’re okay with it vanishing overnight.

4. Trading & F&O: It sounds like a shortcut, but it’s mostly a money pit. 19 out of 20 people lose to “smart” trading.

5. Unlisted Shares & Odd Bonds: Hard to buy, harder to sell, and iffy all around. 

6. “Hot” WhatsApp or Reel Tips: If someone knew how to make easy wealth, they wouldn’t be forwarding it to you.

Each promises quick wealth and delivers quick losses. The platforms make money regardless of your outcome. Very safe to say that the best way to be financially free is by keeping your financial life boring. 

Part 6: Building a Goal-Based Strategy

Don’t treat your investments like a bhel puri mix. Every goal needs its own bucket. Otherwise, your Bali trip will eat into your kid’s college fund, and your car down payment will sabotage your emergency fund. 

Here’s how you can match your money to your goals: 

Your Goal	Time Horizon	Where to Invest	Why This Works
Emergency Fund	Anytime	Auto-sweep account, liquid MFs	Aid during emergencies
Short-Term	1–3 yrs.	FD, ultra-short-term debt funds, Liquid MFs	Stable, zero-risk, easy to access
Long-Term	3+ yrs.	Equity MFs (large-/mid-cap, index), direct stocks, PPF,	Compounding for all big dreams
Retirement	20+ yrs.	Only NPS	Asset allocation & discipline are both built in.

Remember: Short-term = safety. Long-term = growth.

Part 6: Sticking With Your Plan

Plans are cute. But sticking with them is what everyone ignores because shortcuts seem better, and “commitment is scary”. But you know what? You can simply follow these and stay put to your basics on autopilot: 

1. Make It Automatic: Set your investments and bills to auto-deduct after your salary arrives. Less thinking, more sticking to your plan.

2. Month-End Checkup Only: Check your accounts just once a month. Don’t react to headlines; let your plan run itself.

3. Let Your Lifestyle Trail Your Income: When you get a raise, increase your SIPs first. Save more before spending more.

4. Don’t Mix Your Buckets: Emergency fund = only for emergencies. Equity SIP = only for long-term growth. Every rupee has its job; don’t reassign it.

5. Don’t Believe Everything: Ignore tips, trends, and hype. Sticking to your plan beats chasing the news any day.

6. If You Trip? Get Up, Keep Going: Missed an SIP or faced an emergency? Reset and restart. Staying in the game matters most.

And that’s all it takes! 

Being Boring Pays In The Long Run

It’s all about doing boring things consistently, spending within limits, saving before you spend, investing with clarity, and ignoring everything else.

Most people lose because they’re chasing something exciting. But you? You’ve already done more by simply understanding the basics and putting a system in place.