Embrace a new money mindset

When Andy Gupta graduated from Lafayette in 2000, Wall Street was abuzz with a stock buying frenzy as he started working as an investment banker with Goldman Sachs in New York.

Armed with his economics degree and recommendations from Rosie Bukics, Thomas Roy and Lura Forrest Jones Professor of Economics, and Dan Bauer, professor emeritus of anthropology, he accelerated his early success by moving to Australia, where he continued with investment banking, then returned to the U.S. and earned an MBA from Harvard Business School. After Harvard, he worked in private equity and a hedge fund in Boston for 14 years until 2021, when the pandemic halted everything.

His wife, a neuropsychologist, gave him something to think about during the global slowdown. “She would talk about how she saved a life or made a difference with a person,” he recalls. “I had my MBA from Harvard and several years of experience on Wall Street putting together billion-dollar deals. Sounds pretty fascinating, but I began asking if my life had purpose.”

Born and raised in Mumbai, Gupta recalled how his mother and other women in India experienced gender inequality, especially regarding financial independence. He also reflected on his humble beginnings, unable to afford bedsheets in college, and what it meant to change his future. As a result, in 2021 Gupta started Anyone Can Invest Now, a 10-week stock market investing course held over Zoom. Although designed primarily for women, it’s open to anyone interested in building financial portfolios. Here, he shares a few guiding principles for investing strategically.

Ask yourself what matters

The first part of Gupta’s mission in teaching people how to successfully invest is taking them through a seven-step series of personal questions designed to reach a very intimate response on an individual’s financial goals. He asks about why a person wants financial independence until a revelation is achieved. For example, a client may want to be able to help friends and family members in need, something his parents couldn’t do because of unexpected health setbacks. Identifying these priorities, Gupta says, can help budding investors define their financial goals.

Be willing to move with the market

“Cash in the bank is guaranteed to lose you money because it doesn’t keep pace with inflation,” Gupta says. “Picture two Lafayette alums, both 25, earning $150,000 for the rest of their careers. They tuck away $25,000 a year. One, let’s call her Natasha, invests wisely at a 7% average return, through market ups and downs. The other, we’ll call him Prince, opts for the safety of a bank’s 1%. Fast forward to retirement. Natasha’s sitting on a mountain of wealth, $5 million, while Prince has saved $1 million. After inflation, Natasha’s still got $3 million, or three times as much as she put in. Prince has $750,000, losing a quarter of what he put in. This is the foundation of generational wealth. And it didn’t require earning the big bucks.”

Calculate the right amount of risk

“Most people don’t realize that investing is like going on a roller coaster. But you can choose what kind of roller coaster you go on,” Gupta says. When he graduated from Lafayette, he could take on some risk because he was in his early 20s: With 40 to 50 years of investing ahead of him, it was easier to ride out and absorb market crashes. “But now that I’m 46, I have intentionally gone on a smaller roller coaster, because while I still have many years ahead of me, I want a smoother ride,” Gupta says. Those in their 60s, he adds, will want to choose a path with lower risk—having more of the less risky bonds, for example, which are still paying 5% a year.

Diversify, diversify, diversify

The holy grail of investing? According to Gupta, it’s very simple: Invest in five to 10 solid diversified funds—by having several different funds, you aren’t relying on just one to perform when market conditions fluctuate. “This allows the investor to cut risk by 50% to 80% without potentially giving up returns,” Gupta says. “Investing in single stocks can be frustrating, like a wild goose chase.”

In other words, building wealth isn’t about picking the next Tesla or Microsoft. “Instead, pick funds that don’t move together like global equities; fixed income; income proxies; gold; and commodities,” he says. Gupta, who is not a financial adviser, adds that you should always consult your financial and tax advisers before making any investments.