DevOps requires no knowledge of people in the software industry:
It is a set of best practices where developers (developers) and IT operations (Ops) work together to deliver faster, cheaper, and better quality software. This article aims to explain how you can apply DevOps in the world of ‘personal finance’.
For those first hearing the term “DevOps,” a crude analogy can be made to the FIRE movement. Both are good practices where we need to change our mindset, behavior, and tools, but at the same time there is nothing in the stone and there is no unified approach.
DevOps is necessary because old software methodologies are no longer relevant in a world where innovation has to happen faster. The same goes for personal finance habits and practices: we need to change as we move towards a lower regime of PPF, EPF, and savings rates.
DevOps is often explained by the CAMS model (not the CAMSONline :). CAM means:
Let’s see how each of them can be applied to Personal Finance.
C – Culture
Investors should move away from the culture of investing only in fixed income. As Warren Buffet said in his recent annual letter, ‘Fixed income investors face a bleak future’.
• We need to break the culture of seeing tax savings at the end of the year as a separate business.
• Stop mixing insurance and investment needs and say “no” when using the tactics of a suspicious family member or supporter selling ULIP.
• Focus on goal setting, risk profile, and asset allocation.
A – Automation
• SIP (Systematic Investment Plan) is the automation you can do on your personal finances. In her book – “Let’s Talk About Money” Monika Halan talks about investing in a speedboat with 3 different bank accounts. (salaries, investment accounts, and expenses)
• Automating SIP or RD payments provides discipline and removes personal bias. This can be the first step to ‘passive investing’, as you no longer need to focus on whether the market is positive or bearish.
• For those who tend to spend more discreetly, SIPs can be scheduled in the first half of the month to create a “culture” of savings before spending.
M – Know
• The portfolio should be reviewed periodically (quarterly or semi-annually, depending on the outlook). This is only possible if you have a specific goal, for example, “Target Corpus”.
• As they say about the goals of key performance indicators (KPIs) at the end of the year, goals as personal as retirement and early childhood education should be SMART: specific, measurable, achievable, realistic, and current.
• Autopilot mode investment deduction requires course correction if necessary. However, that does not mean much ‘action’ (agitation).
• Measure and monitor returns and verify that you are on track to meet your desired target or if no further emphasis is needed, as equity returns can vary.
• Since SIPs automate the corpus creation phase, Systematic Retirement Plans (SWPs) can be used to move accumulated investments onto safer paths the closer you get to a goal.
S – Share
• Keep your family informed of financial and insurance decisions and documents.
• Learn for the rest of your life and don’t hesitate to learn and talk about “numbers” (composition, inflation, etc.)
• Read good blogs and participate in personal finance workshops (even when self-employment requires structure and strategy).
Just as DevOps has improved the productivity and reliability of software distribution, the following principles should lead to a ‘virtual cycle’ of prosperity. Maintain the “flow” of building your corpus by pursuing an ongoing investment strategy and giving your periodic portfolio reviews the necessary “feedback loop.”