Are Mutual Fund SIPs Suitable for Disciplined Long-Term Investors?

Should disciplined long-term goal based investors use mutual fund systematic investment plans (SIPs) or rupee cost averaging?

This question has been bugging me for long and personally, I hate a SIP I think it is a product tailor made for mutual fund distributors and sold to lazy people.

Should intelligent investors buy SIPs? Here is why my vote is a vehement NO.

I PE-based investing

Investing has to be goal-based. If you have no expense in mind, why would you need the money anyway! Even for the idiots who think they have no goal in mind, retirement is a  goal!

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National Pension Scheme (NPS): Do not invest unless you get tax benefits!

I am tired of reading articles and comments about why one should not invest in the National Pension Scheme (NPS) because gains will be taxed, because of mandatory annuity stipulations, low equity allocation, etc.

I think such articles are way off the mark and fail to educate the reader as to why NPS is a bad product for people who are serious about their retirement planning.

Here is a list of reasons why you should not invest in the NPS. These reasons are valid for those looking to invest in NPS on their own accord.

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Four Simple Retirement Planning Tools

Whether you are contemplating early retirement or are close to your natural retirement, here are four simple calculators than can answer four important questions:

  1. What is the corpus required for financial independence in retirement?
  2. How long will my retirement corpus last?
  3. How much can I withdraw from my corpus each year?
  4. What is the rate of return required for financial independence?

This sheet is an update to the previously published Excel inflation-indexed annuity calculators

Question no. 4, the rate of return required for financial independence is probably the most important question for any retiree.

If this is too large,

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How to Select Debt Mutual Funds Suitable For Your Financial Goals?

Since the time my step-by-step guide to selecting (Equity) mutual funds become popular, I have been receiving requests to publish a similar guide for debt mutual funds.

Well begun is half-done. If an investor can confidently select categories suitable for their financial goals, short-listing a set of funds from that category is that much easier. This is especially true for debt funds, since choosing one is typically tougher than equity funds.

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What does it take to do your own financial planning?

Here is a list of ‘qualifications’ necessary to do your own financial planning. This is not a ‘find a financial planner, if you cannot find the time to do it yourself, post!

I am writing this for two reasons: out of irritation and fear.

I am irritated that time and again financial planners and mutual fund agents tell me that, ‘not all can find the time like you to do their own financial planning’! Obviously, they are confusing managing my finances with making calculators and writing a blog!

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