2 weeks ago
Experts Share 5 Financial Mistakes That Quietly Erode Wealth
Imagine you are building a tall tower of blocks.
If the ground is shaky, the tower can fall down.
Money works a little like that.
Experts say many people start investing before they have a safety net called an emergency fund.
That money should be saved for surprises, like losing a job or getting sick.
The experts also say people should not buy mutual funds like they are toys they can swap often.
Every time you switch, you pay extra costs and taxes.
Another tip is to spread your money across different things, like a plan with equity, debt, and gold, and check it once a year.
Families should also have health and life insurance to stay safe if something bad happens.
If you are patient and do not keep changing your plan, your money has time to grow bigger and bigger, like a snowball rolling down a hill.
Experts say building wealth requires a holistic financial plan, not just picking winning investments.
Divam Sharma of Green Portfolio advises securing six months of expenses as an emergency fund before investing.
Shashank Udupa of Vayu Capital says frequent mutual fund switching costs exit loads, capital gains bills and lost compounding.
Sectoral and thematic funds drew ₹96,489 crore in FY25, nearly half of all equity inflows, but inflows fell roughly 80% in FY26.
Ignoring asset allocation, lacking health and life insurance, and switching investments too often are also flagged as costly mistakes.
- Who
- Financial experts Divam Sharma (Green Portfolio), Shashank Udupa (Vayu Capital) and Sonam Srivastava (Wright Research), with a warning cited from Zerodha's Nithin Kamath, addressing Indian investors.
- What
- Five common financial mistakes — skipping emergency funds, misunderstanding exit loads and capital gains, ignoring asset allocation, lacking insurance, and switching investments too often — that can erode wealth.
- Where
- India — the advice targets Indian investors and cites Indian market data and regulators such as SEBI and Zerodha.
- When
- No publication date is given; the article references mutual fund inflow data from FY25 and FY26.
- Why
- To help investors avoid mistakes that can quietly undo decades of financial progress and savings.
Key facts
- Mistakes covered
- 5 (emergency fund, exit loads/taxes, asset allocation, insurance, frequent switching)
- Recommended emergency fund
- Six months of expenses, plus adequate health and life cover
- FY25 sectoral/thematic fund inflows
- ₹96,489 crore, close to half of all equity inflows
- FY26 sectoral/thematic inflow change
- Fell roughly 80%
- Suggested mutual fund approach
- 3-4 diversified schemes matched to goals, SIPs kept running, annual review
- Key investment principle
- Asset allocation drives most long-term returns; review and rebalance without emotion
- Cited warning
- Nithin Kamath: most Indians are one hospitalisation away from bankruptcy
Quotes
Sonam Srivastava
Founder & Fund Manager, Wright Research
“"I keep seeing this one mistake that costs investors a lot of money: treating asset allocation like an afterthought."”
livemint.com
“"The biggest financial planning mistake Indians make is skipping the foundation and jumping straight to investing."”
livemint.com











