We interviewed Ashok Kumar ER, the CEO and Co-founder of Scripbox to help our community learn from his wealth journey.
Scripbox: When did you realize that you wanted to become rich?
Ashok: "More than being rich I decided to become financially independent. There is a difference. Financial Independence is about the freedom to choose what you want to do. You are not compelled by monetary reasons. Being rich on the other hand is just a number; it means different things to different people.
It was two years after marriage, in 2003. At that point you have many desires. You want to see the world and do everything. The only constraint is money. That was the trigger for me personally but taking this decision is important.
Scripbox: What were the first steps you took?
Ashok: "As an IT guy, I began reading about Bill Gates and then moved on to Warren Buffett. What better way to learn about growing wealth than to learn from the best?
I understood that equities were the favourite instruments of the wealthy, but I made the mistake of beginning my equity journey with stock trading. I realised in the first year itself that it was a game that I couldn’t hope to win with any degree of certainty."
Scripbox: So what was your next move?
Ashok: "Systematic Investment Plans or SIPs in equity based instruments; that was one thing I had started along with my trading activities. While I discarded trading as part of my plans, I made sure I had a definite plan when it came to SIPs. I made sure I put money in the SIP before I spent anything.
I was fortunate in finding an IFA (independent financial advisor) who helped me in this journey. I met this gentleman recently at an industry event and could not thank him enough"
Scripbox: Did you increase what you invested each year?
Ashok: "Yes, I made sure I increased my SIP amount each year (on certain occasions, such as when the markets fell significantly, I increased it by 3x-5x; this meant that if I was investing Rs. 1000 in one year then the next year I increased it and invested Rs. 3000). I treated it more like an EMI and thus as mandatory. In fact, by 2005 my wife started investing as well."
Scripbox: When you started with the SIPs, was it a challenge keeping up with the growth in your investment amount? Did you have to make any sacrifices?
Ashok: "Yes, it required some disciplined planning of expenses and more importantly "belief" that one day I will have enough money to buy anything of my choice if I continue to invest. I bought my first house in 2004 with the help of a loan, so I had to pay an EMI for that. This didn’t mean that I stopped or reduced my SIP amount. Rather, I decreased expenses that were discretionary in nature"
Scripbox: Did you start out thinking that your investments are meant for the long run?
Ashok: "In 2008, I had a Eureka moment. I saw my funds statement and realised that my investments had grown to the extent that I could now pay off the remainder of my housing loan. This proved to me that long term investing works."
Scripbox: But wasn’t 2008 also the year that the financial markets were in turmoil due to the subprime crisis?
Ashok: "Yes. My investment portfolio also took a hit and I was filled with doubts for a moment. I had three choices - to sell off my holding fearing that perhaps I would end up losing more, to stay put, or finally to add more. I chose to hit the books again to see what the greats had advised.
There is a famous Buffett quote – "Be greedy when others are fearful and be fearful when others are greedy". That guided my decision to add more to my portfolio. I increased my SIP amounts by three times."
Scripbox: So how do you feel about your decision in 2015? Ostensibly a year that has not been good for equities?
Ashok: "By 2015, I had met all my liabilities. I can meet my family responsibilities with ease and my investments are worth enough that I can call myself financially independent.
Frankly I feel like 20 again, because I feel I have the independence to do what I choose; which is why when the opportunity to join a start-up (and quit a well-paying steady job) came along, I could grab the opportunity! That’s what financial independence allows you to do"
Scripbox: A lot of people say that you need to earn a lot to save a lot or for that matter invest towards financial independence – Is this so?
Ashok: "The journey to wealth can start with a lakh or even a single rupee. The first thing we need, even before a high salary, is conviction that it is possible.
I didn’t start off my career with a very high salary. It was about average in those days. What I did do is save first for my SIP and then only did I spend the remaining. This latter spending had the added advantage of being guilt free spending.
What I also ensured was that I kept increasing my SIP by the same percentage as my salary increase. I have met a lot of individuals who have kept the same SIP amount what they had 5-6 years ago even though their salaries went up by 2-3 times in that same period.
Scripbox: Have you always only invested in Equities?
Ashok: I didn’t focus on too many other asset classes. I dabbled in real estate only to realise that it takes two months to buy and two years to sell. The hassle is simply not worth it.
As for debt I only invest in debt what is required for 3-4 years of expenses. The rest I invest in equity. "
Scripbox: Once you attained financial independence – what did you do with that money?
Ashok: Perhaps the most important thing that I have gained is the fact that now I can sleep like a baby. It is a wonderful feeling knowing that you are free to pursue any interest and not have to worry about meeting your responsibilities to your family.
I am sure I can afford almost any educational choice my children make because I have already catered for it. I can take my friends and family for all expenses paid trips (at least in India!). Basically the peace of mind translates to a lot in terms of happiness.
Scripbox: Any specific advice for our community?
Ashok: "Only one, investing is no rocket science. Becoming financially independent is a definite possibility for most of us. If I could do it then I am sure almost anyone can. And that’s my mission in life as Scripbox CEO – help everyone get to this goal."