Podcast – Handling Financial Emergencies
We think differently when planning finances for a company (work-life) than when we do it for ourselves (personal life). Understand what goes into thinking about financial emergencies and a bit more, in this conversation between Sanjit and Tushar. Watch below…
Introduction
Video Transcript: Financial success is often associated with education, career growth, and smart investments. Yet, many of life’s most important financial lessons are never taught in school or business school.
In this conversation, Sanjit Singh, Managing Partner, Modulor Capital, shares his perspectives on investing, financial preparedness, wealth creation, and the psychological aspects of money. Drawing from nearly two decades of experience in financial markets, he explains why managing money is not just about returns—it is about preparing for both opportunities and uncertainties.
Why Financial Planning Must Account for Life’s Uncertainties
According to Sanjit, one of the biggest challenges people face is imagining negative outcomes in the future.
Most individuals naturally envision success, growth, and stability. Few actively plan for situations such as:
- Job loss
- Medical emergencies
- Legal challenges
- Market downturns
- Unexpected life events
Yet these events are a natural part of life.
Just as businesses maintain reserves, contingency funds, and risk-management systems, individuals should adopt a similar approach toward their personal finances.
“Happy days and difficult days are both part of life. The key is to prepare for both.”
Running Your Personal Finances Like a Business
Businesses routinely plan for uncertainty.
They create:
- Emergency reserves
- Contingency funds
- Insurance coverage
- Growth capital
However, individuals often fail to apply the same discipline to their personal finances.
Sanjit argues that every person should view themselves as a small enterprise.
When businesses face challenges, they rely on reserves and structured planning. Similarly, individuals need financial buffers to navigate unexpected situations without disrupting long-term goals.
Sanjit Singh’s Journey: From Engineering to Investing
Sanjit’s professional journey began in Chandigarh, where he studied at St. John’s High School before pursuing Mechanical Engineering at Thapar Institute.
Like many young professionals, his career path was far from linear.
He entered the stock market in 2005–06 as a trader and later developed expertise in:
- Trading
- Portfolio management
- Algorithmic investing
- Quantitative finance
His academic journey eventually took him to the Indian School of Business (ISB), where he deepened his understanding of finance and investing.
From Trading to Investing
While trading offered excitement and opportunities, Sanjit eventually realized that long-term investing created a more sustainable path.
His key insight was simple:
Trading requires constant attention, while investing allows wealth to compound over time.
This realization shaped the foundation of Modulor Capital’s investment philosophy.
Understanding Quantamental Investing
One of the concepts closely associated with Modulor Capital is Quantamental Investing.
Quantamental investing combines three approaches:
1. Fundamental Analysis
Evaluating businesses based on financial performance, management quality, competitive advantages, and growth potential.
2. Quantitative Analysis
Using data, statistical models, and numerical factors to identify investment opportunities.
3. Technical Analysis
Analyzing market behavior, trends, and price movements using mathematical frameworks.
Rather than relying on a single approach, Quantamental Investing seeks opportunities where all three perspectives align.
This overlap creates higher-probability investment decisions and helps reduce emotional bias.
Why Psychology Matters More Than Finance
One of the central themes of the discussion is the role of human behavior in financial decision-making.
According to Sanjit, people often make excellent financial decisions in a professional environment but struggle to apply the same logic in their personal lives.
For example:
- Businesses carefully evaluate expenses before spending.
- Individuals often make emotional purchases without similar scrutiny.
This difference stems from what Sanjit describes as two competing perspectives:
The Financial Perspective
Logical, structured, and objective.
The Human Perspective
Emotional, intuitive, and influenced by personal desires.
Neither perspective is inherently wrong, but understanding the balance between the two can significantly improve financial outcomes.
The Inspiration Behind the Book
Sanjit co-authored What My MBA Did Not Teach Me About Money with S. S. Saini.
The motivation behind the book came from a shared observation:
People repeatedly make the same financial mistakes despite having access to information.
While many books explain financial products and formulas, very few address the real-life situations people face.
The book focuses on practical financial decisions related to:
- Career transitions
- Family responsibilities
- Financial emergencies
- Major purchases
- Retirement planning
- Wealth preservation
The goal was to create a resource that speaks to young professionals navigating real-world financial challenges.
The Importance of Emergency Funds
A recurring theme throughout the discussion is the importance of maintaining financial reserves.
Sanjit recommends creating dedicated financial buffers for:
Income Disruptions
Periods when salary or business income may stop unexpectedly.
Medical Emergencies
Healthcare expenses not fully covered by insurance.
Life Contingencies
Unexpected events that require immediate access to capital.
Emergency funds may not generate extraordinary returns, but they provide something equally valuable—financial stability.
Retirement Planning Starts Earlier Than You Think
Retirement is often viewed as a distant milestone.
However, Sanjit emphasizes that retirement can sometimes arrive unexpectedly.
Factors such as:
- Health issues
- Career disruptions
- Family circumstances
- Economic events
can force individuals to stop working earlier than anticipated.
This is why retirement planning should begin long before traditional retirement age.
The objective is not merely to accumulate wealth but to create financial independence.
Insurance: A Critical Component of Wealth Protection
Insurance plays a key role in comprehensive financial planning.
Sanjit highlights the importance of:
Health Insurance
To manage medical expenses and protect accumulated wealth.
Term Life Insurance
To provide financial security for dependents.
Asset Protection
Safeguarding major financial assets through appropriate insurance structures.
While not every risk can be insured, individuals should identify and protect against the most significant financial threats.
Wealth Creation Is About Preparation, Not Prediction
One of the most powerful takeaways from the discussion is that successful investing is not about predicting the future with certainty.
Instead, it is about preparing for multiple possible outcomes.
Good investors:
- Accept uncertainty
- Manage risk
- Maintain liquidity
- Stay disciplined
- Avoid emotional decision-making
This mindset often matters more than any specific investment strategy.
Rapid Fire Insights from Sanjit Singh
Subtle Luxury vs. Loud Luxury
Sanjit prefers subtle luxury, noting that true wealth often seeks comfort and quality rather than visibility.
Biggest Financial Fear
Missing a great investment opportunity because sufficient cash reserves were not available during a market downturn.
Daily Routine
His day revolves around market analysis, client interactions, strategic thinking, and maintaining a balance between work and personal well-being.
Handling Setbacks
According to him, setbacks become meaningful lessons when viewed through the lens of long-term growth.
Thoughts on Taxation
He believes taxation plays an important role in economic development and social progress, helping create opportunities across society.
Final Thoughts
Money is not merely a tool for consumption or investment. It is a framework for navigating uncertainty, creating opportunities, and building resilience.
As Sanjit Singh explains, the most important financial lessons are often the ones not taught in classrooms. They are learned through experience, preparation, and the willingness to think beyond short-term gains.
Whether it is investing, insurance, emergency planning, or retirement preparation, the underlying principle remains the same:
Financial success is not about avoiding uncertainty—it is about being prepared for it.