How to track financial goals?

Participants who registered for the Bangalore DIY investor workshop (btw the next one is at Chennai on Sep. 27th 2015) were asked to list questions for which they sought detailed answers from Ashal Jauhari. One participant, Shyam, sent his questions to me, but could not attend the meet. In this post, let us discuss his main question: How to track financial goals?

As always, what follows is based on “what I would do”. You are free to critique it.  My view towards money management and personal finance is: do what you are comfortable with and ensure minimal maintenance and stress.

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On tracking and managing expenses

A few days ago, I had requested readers to suggest topics to blog on. I will be taking up those suggestions in the coming weeks.  Let us first look at what Anand says:

how about covering the other half of income-savings-investments? ie Tracking and wrangling with Expenses? I am keen to understand how an expert like you would log and manage expenses.

I went from writing expenses (in a 100 page bound book !) by date – then throwing it away to logging all expenses categorised ( eg: groceries, tax, utilities etc) and I noticed wastages and was able to cut down wastages…

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JP Morgan AMC limits redemption from two of its schemes!

Many mutual fund investors (and advisors too perhaps) were shocked to learn that JP Morgan AMC decided to limits redemptions to 1% of outstanding units at the end of each business day. Questions and statements like, “how can they do this?!”, “what is SEBI doing?”, “it is my money and I have the right to take it out when I want”, did the rounds.  A look at the fine print, the implications of mass redemptions and if JP Morgan AMC was justified in its actions.

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Mutual Fund SIP Rolling Returns Calculator

Use this Mutual Fund SIP Rolling Returns Calculator to determine how consistently an equity mutual fund  has performed wrt to its benchmark.

Returns can be broadly categorised into two types: for a lump sum investment (CAGR) and for periodic investment (XIRR)

Please consult this post to understand What is XIRR?You can consider using this Mutual Fund SIP XIRR Tracker to track a SIP investment month by month.

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Understanding Credit Rating Risk in Debt Mutual Funds

JP Morgan AMC is in the news for the wrong reasons.  The NAV of two of its debt mutual funds, JP Morgan Short Term Income Fund and JP Morgan India Treasury Fund fell by -3.38% and – 1.73% on Aug. 27.  The reason: both funds held debentures (bond) of Amtek Auto which was downgraded from AA- to C. A look at how credit rating changes affect debt mutual funds.

Categories of debt mutual funds can appear difficult to understand than that of equity mutual funds. There is a simple way for investors to understand the risks associated with different debt mutual fund categories – the modified duration.

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