Last Updated on October 1, 2023 at 5:42 pm
When Dilbert cartoonist Scott Adams could not find a publisher for a one-page book on “Everything you need to know about financial planning”, he was forced to write a 368-page book – Dilbert and the Way of the Weasels. (Ref: MyMoneyBlog)
You don’t even need a page to hold all the advice that Adams gives. All you need is an index card! To all those who have used a library before the era of computerized indexing, an index card is a 3-inch by 5-inch card on which authors are cataloged.
“LA2-katalogkort” by This photo (C) by Lars Aronsson.
This post is inspired by a recent tweet by the New York Times:
Join 32,000+ readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email! (Link takes you to our email sign-up form)
🔥Enjoy massive discounts on our robo-advisory tool & courses! 🔥
We asked financial experts to squeeze their best advice onto a single index card https://t.co/ucevOGzcVF
— The New York Times (@nytimes) January 9, 2016
The image above is the index card created by Dilbert cartoonist, Scott Adams.
Points 7 and 8 immediately caught my eye. The rest are pretty straightforward – Happy to answer any questions that you may have on these in the comments section.
Point 7 – Minimise fees (essentially)
Since active funds trump their benchmarks by a significant margin, Adams advice for the Indian context: Choose Direct mutual fund plans.
If you prefer index investing because there is no need to worry about fund management changes (either personnel or competence or both!), then choose Index mutual funds and not ETFs. Indian ETFs have significant tracking errors and liquidity issues. It can be difficult to find a buyer for your units when you need to exit. The Nifty Next 50 can be considered as an Index Fund replacement fort active multi-cap mutual funds. Other than that, chocies are limited.
Point 8: Choose a planner who charges a flat fee only!
If you are a DIY investor, this does not apply to you. If you are looking for someone to offer you professional advice, I suggest the following steps:
Step 0: Always remember that the financial services industry stinks with regulatory non-compliance. So watch your step.
Step 1: Choose only a SEBI Registered Investment Adviser (RIA) – SEBI has cautioned investors not to deal with others.
Step 1A: Choose only an Individual SEBI RIA – Not those registered as a company, body corporate, limited liability partnership or ‘others’. They are unlikely to encourage direct mutual fund investing to say the very least
Related post: How to choose a SEBI registered investment adviser
Step 2: Tell the upfront that you will only pay for financial advice and will invest in direct mutual fund plans.
Step 2A: If you think fit, you can give consent to the SEBI RIA to access your direct mutual fund statements. This is not necessary! You can simply send them your CAMS-Karvy Consolidated holding statement. They could upload this into their tracking software.
Related Post: Pay for Financial Advice, But Insist on Direct Mutual Fund Plans
Portfolio management is possible without AMC Feeds!
Step 3: Tell them upfront that you will only pay a flat fee initially for plan creation and every year for review. Do not accept a fee based on your net worth. You might as well invest in regular mutual fund plans.
Step 4: Invest via MFU or via CAMS in direct mutual fund plans. If you like more convenience than you can consider a private, but independent direct fund portal (many are coming soon) for a flat fee. If this third-party portal has a fee linked to AUM, do not take it.
Step 5: A respectable and reliable industry insider told me that ‘very few pay for financial advice in India. Even fewer pay bother to review their financial plan’! Creating a financial plan and implementing is just the first step in a long journey. The plan has to be reviewed each year – either by yourself or by a professional.
What do you think?
🔥Enjoy massive discounts on our courses, robo-advisory tool and exclusive investor circle! 🔥& join our community of 7000+ users!
Use our Robo-advisory Tool for a start-to-finish financial plan! ⇐ More than 2,500 investors and advisors use this!
Track your mutual funds and stock investments with this Google Sheet!
We also publish monthly equity mutual funds, debt and hybrid mutual funds, index funds and ETF screeners and momentum, low-volatility stock screeners.
- Do you have a comment about the above article? Reach out to us on Twitter: @freefincal or @pattufreefincal
- Have a question? Subscribe to our newsletter using the form below.
- Hit 'reply' to any email from us! We do not offer personalized investment advice. We can write a detailed article without mentioning your name if you have a generic question.
Join 32,000+ readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email! (Link takes you to our email sign-up form)
About The Author
Dr M. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. He has over ten years of experience publishing news analysis, research and financial product development. Connect with him via Twitter(X), Linkedin, or YouTube. Pattabiraman has co-authored three print books: (1) You can be rich too with goal-based investing (CNBC TV18) for DIY investors. (2) Gamechanger for young earners. (3) Chinchu Gets a Superpower! for kids. He has also written seven other free e-books on various money management topics. He is a patron and co-founder of “Fee-only India,” an organisation promoting unbiased, commission-free investment advice.Our flagship course! Learn to manage your portfolio like a pro to achieve your goals regardless of market conditions! ⇐ More than 3,000 investors and advisors are part of our exclusive community! Get clarity on how to plan for your goals and achieve the necessary corpus no matter the market condition is!! Watch the first lecture for free! One-time payment! No recurring fees! Life-long access to videos! Reduce fear, uncertainty and doubt while investing! Learn how to plan for your goals before and after retirement with confidence.
Our new course! Increase your income by getting people to pay for your skills! ⇐ More than 700 salaried employees, entrepreneurs and financial advisors are part of our exclusive community! Learn how to get people to pay for your skills! Whether you are a professional or small business owner who wants more clients via online visibility or a salaried person wanting a side income or passive income, we will show you how to achieve this by showcasing your skills and building a community that trusts and pays you! (watch 1st lecture for free). One-time payment! No recurring fees! Life-long access to videos!
Our new book for kids: “Chinchu Gets a Superpower!” is now available!
Must-read book even for adults! This is something that every parent should teach their kids right from their young age. The importance of money management and decision making based on their wants and needs. Very nicely written in simple terms. - Arun.Buy the book: Chinchu gets a superpower for your child!
How to profit from content writing: Our new ebook is for those interested in getting side income via content writing. It is available at a 50% discount for Rs. 500 only!
Do you want to check if the market is overvalued or undervalued? Use our market valuation tool (it will work with any index!), or get the Tactical Buy/Sell timing tool!
We publish monthly mutual fund screeners and momentum, low-volatility stock screeners.
About freefincal & its content policy. Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on mutual funds, stocks, investing, retirement and personal finance developments. We do so without conflict of interest and bias. Follow us on Google News. Freefincal serves more than three million readers a year (5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified with credible and knowledgeable sources before publication. Freefincal does not publish paid articles, promotions, PR, satire or opinions without data. All opinions will be inferences backed by verifiable, reproducible evidence/data. Contact information: letters {at} freefincal {dot} com (sponsored posts or paid collaborations will not be entertained)
Connect with us on social media
- Twitter @freefincal
- Subscribe to our YouTube Videos
- Posts feed via Feedburner.
Our publications
You Can Be Rich Too with Goal-Based Investing
Published by CNBC TV18, this book is meant to help you ask the right questions and seek the correct answers, and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now.Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want
This book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at a low cost! Get it or gift it to a young earner.Your Ultimate Guide to Travel
This is an in-depth dive into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, and how travelling slowly is better financially and psychologically, with links to the web pages and hand-holding at every step. Get the pdf for Rs 300 (instant download)