5 Valuable Money Lessons from Diwali Celebrations

5 Valuable Money Lessons from Diwali Celebrations

By Akhil Chugh

Date November 12, 2023

Diwali, a prominent festival in India, not only fills our lives with lights and colors but also imparts valuable lessons in financial investment and planning. Beyond the festive joy and optimism, Diwali offers investors significant insights. Let’s explore some key takeaways that can be gleaned from this celebration of lights.

1.Start planning early:

Diwali, eagerly anticipated in India, prompts meticulous planning months in advance. From home renovations to decorations and gifts, every detail is carefully considered to prevent last-minute glitches. This same principle applies to investments—early planning is crucial for achieving your financial goals seamlessly.

For instance, if your aim is to build a retirement fund, the ideal strategy is to commence planning from the moment you start earning. Likewise, whether you’re saving for your child’s education or aiming for a down payment on your dream home, early and strategic planning, coupled with prompt investments, is essential for success.

If you invest early, you can generate better returns. Let us look at the below illustration to understand how starting early can work to your advantage in creating a larger corpus (> 2x) with the same amount of equity mutual fund investment (Rs 36 lakhs) beating inflation in the long run.

Rohit and Mohit are friends who have just started their career at 25 and plan to retire at 55. Rohit starts investing ₹10,000 every month via SIPs in equity mutual funds from age 25 and continues to do so until he is 55 years old. Mohit, on the other hand, starts monthly SIPs of ₹15,000 in equity mutual funds from the age of 35 and continues to do so until he retires at the age of 55. If both earn, say, 12% CAGR on their mutual fund investments which is Rs 36 lakhs, Mohit would accumulate Rs 1.4cr at the retirement age while Rohit would accumulate Rs 3.1cr which is almost 2x Mohit’s wealth. This is the magic of compounding.

Thus, the longer you stay invested the more money you will make. The best way to take the benefit of compounding is to start saving and investing wisely as early as possible in equity mutual funds aligned to your financial goals. The earlier you start investing, the greater will be the power of compounding.

Power of compounding
2. Goal-based investing:

At the time of Diwali, people buy gifts for relatives and friends based on their age group, taste or preferences so likewise the investments should be based on your various financial goals. You should categorize your goals such as buying a house, child’s education, buying a car, retirement or a vacation abroad.


Goal-based investing is all about identifying your financial goals, setting a timeline for each one of them, and investing for them regularly to be able to reach them. Mapping out all your needs gives you a clearer picture and the time for which you need to stay invested to achieve each goal. Even the type of risk you should take will be defined by your goals. The importance of goal-based investing is that it not only gives you a good investment strategy, but also a direction to achieving your dreams and in the process making your future stress-free.

3. Review & clean your portfolio regularly:

A few weeks before Diwali; everyone begins to start their yearly ritual of cleaning their homes & offices and disposing of goods they no longer require. New items are bought or purchased which can be helpful for us in the future.

Apply a similar approach to your investment portfolio as well. Review your portfolio and identify mutual fund investments that are not performing well. Ensure that the existing investments are in sync with your goals or objectives. Just like in our homes, there are goods that are no longer needed and are disposed of, our portfolio too could consist of ill-performing investments that could adversely affect our returns. Therefore, one needs to eliminate them too.

 4. Safety is crucial:

Although all seems to be beautiful during the festival of lights, there could be uncertainties such as the firecrackers backfiring or malfunctioning. We need to take all the needed measures to keep ourselves and our families safe.

The same planning has to be implemented with respect to one’s financial health. Take the advice of a financial expert before making any investment in schemes. There are a number of schemes that look attractive based on their short-term performance but they can turn out to be a disaster in the long run.

Always consult an expert before making any mutual fund investments to make an informed and wise decision to create wealth in the long run.

5. Diversification is the key:

Diwali is symbolic in offering a variety of things during the celebrations. From shopping for new clothes to home decor, lights, sweets, rituals, there is a lot associated with Diwali, and this variety makes the festival even more fun.

Similarly, proper diversification in your investment portfolio helps you to reduce risk and enjoy the benefit of various financial instruments. Diversification is key to a successful investment journey. Never put all your eggs in one basket. Try having a diversified portfolio within investment circles. Depending on your risk appetite & financial goals, decide on the percentage of the portfolio that you want to invest in Equity Mutual Funds, Debt Funds, Bonds etc.


The radiant festival of lights imparts invaluable financial fundamentals that can be seamlessly integrated into our everyday lives for a resilient financial strategy. Embark on an auspicious journey, strategize your investments, and pave the way for a financially well-prepared life!

For any inquiries, connect with the expert team at Net Brokers, guiding you through your investment journey to achieve your financial goals efficiently.

Happy Diwali!