Before I bought my first mutual fund, I bought two LIC endowment policies.
I bought them because everyone said you should. They did two things at once, the agent told me — insurance and savings, in one neat product. Both my parents nodded. My friends had bought theirs. The premiums went out of the account every quarter, and I felt grown-up about it the way a junior resident feels grown-up about his first stethoscope: it was a thing serious adults owned, so I owned it.
When I finally cashed them in years later, the returns were pathetic. Not disappointing. Pathetic. And when I looked at the actual death-benefit clause, the insurance cover the policies provided was a tiny, negligible amount — roughly ten per cent of what the policy was supposed to be worth on paper. The endowment policy was neither. Neither real insurance, nor real returns. I had been quietly paying into a product whose only honest function was the agent's commission on the day I signed.
I am telling you this not because I am the first surgeon to be sold an endowment policy. I am telling you because you have probably been sold one too. Or your father bought one in your name. Or there is one sitting in your locker right now, premium auto-debiting from the salary account, and you have not opened the policy document since the day the agent handed it to you across his desk with both hands and a smile. You have, if you are honest, no clear idea what it actually pays out, when, or under what conditions. That ignorance is not your fault. It is the product's design. Endowment policies are sold to people who do not have time to read them.
That was the moment I knew I had to read about something else.
I started reading about mutual funds the way a surgeon reads about a new technique — slowly, suspiciously, with the half-formed sense that the people writing the papers were probably hiding something. I read Value Research Online. I read the FundsIndia site. I read Dhirendra Kumar's articles back when nobody around me knew who Dhirendra Kumar was. And then, around 2009, I opened an account through FundsIndia and started my first SIP.
Here is the part I will not bend the truth about. Without realising it, I had walked in right after the 2008 crash. The market was at its knees, and I, who knew nothing about market cycles, picked exactly the right moment to enter — by accident. The percentage interest in those early years was amazing. The money grew at a pace I had never seen in any fixed deposit, any government scheme, any endowment policy. Compared to what I had been doing before, the mutual fund returns were terrific.
I want to be careful with this story. I did not time the bottom. I did not predict the recovery. I read what I could read, opened an account, and the market — for its own reasons, on its own timetable — happened to be at a place where my discipline got rewarded faster than it deserved. That is honest authority. The luck was the timing. The discipline was the SIP. The discipline is what I am still doing seventeen years later. The luck never came back.
What became obvious, in those quiet months of watching the standing instruction execute on the same day every month, was the boring elegance of the architecture itself. You set up an SIP. Month after month, year after year, the money goes out of one account and into another. Once a year you review and decide whether to continue with the same funds or switch. That is it. Very little involvement. Very little drama. The thing mints itself while you operate.
Here is what I want you to feel about the time I am describing, because the contemporary reader will not feel it on her own.
There was nobody else around me who had done it. Nobody in front of me to advise me. Nobody around me with whom I could even talk about these things, because the moment I raised it, the conversation drifted back to fixed deposits and gold and how property in the right colony would double in five years. Everyone around me was talking about FDs. The really daring ones — a small, slightly-mocked minority — were doing direct equity. Demat accounts had just started becoming popular. FundsIndia had just launched. Value Research Online was a website that the people I knew had never heard of. I was, in the small social world of my life at that time, the only person doing what I was doing. And I had no way of knowing whether it would work.
You will recognise this feeling. It is the same feeling you have right now, the first time you sit in front of the SIP setup screen on your bank's app, the cursor blinking in the "monthly amount" field, your finger hovering over the keypad. You wonder if you should ask someone. You realise there is nobody to ask. The seniors who could advise you bought endowment policies and one BSE stock their broker recommended in 1998. Your friends are buying flats they cannot afford because the EMI is "only" thirty per cent of their take-home. Your father — if he is the kind of father most Indian surgeons have — has a fixed deposit ladder and a deep suspicion of anything that is not a fixed deposit ladder. You are alone with the cursor.