Well the short answer is, of course, no. Monogrammed shirts (bags, ties or towels) are definitely not a necessity. But in terms of style, they can be a fun way of personalizing your clothes. And like anything that's been around for a century or so, there's an old way and new way of doing things. Here's how to brand yourself without looking like an old fogey.
Monograms should be discreet. While the brash American thing to do is have your moniker sewn onto your sleeve, opt for a more subtle display on the tail or chest, either on or just below the pocket of your shirt. If you decide on a sleeve, go for the left one.
Traditionally, initials were sewn where the polo pony would go, but near the waistband is more modern.
Ties should be initialed on the narrow, underside.
Monograms on bags and handkerchiefs should be simple and centered.