Archive of Articles and resources for financial planning
Financial health refers to ‘where we stand today’ with respect to our finances and what we need to do in the coming years to handle future expenses and financial goals. In this post, I would like to describe a simple exercise to assess our personal financial health. This process can be automated with the integrated financial…
Continue reading →The charges associated with a Unit linked Insurance Plan (ULIP) can significantly impact the returns from the policy. A two-part discussion on ULIPS: first how charges reduce returns and then a category-wise study of ULIP returns and how to compare them with mutual funds. This post is entirely due to an interesting thread started by Guru…
Continue reading →Tracking gold-price movements in terms of USD and INR is a simple, but intuitive way to understand the strength of our economy. Here are some observations from staring at the historical gold price movement in USD and INR. The domestic price of gold, that is INR is the equivalent price in USD times the exchange rate….
Continue reading →In India, not everyone can offer investment advice. They will first have to be registered as an investment adviser (RIA) with SEBI. Once registered they have the obligation to act as a fiduciary. Meaning they will have to put the client first at all time. Or in other words, prescribe only commission free products. Whether…
Continue reading →Here is what you should know before buying sovereign gold bonds either in the primary market (when the next tranche is released) or secondary market (1st tranche issued in Nov 2015). In my opinion, there is only one thing that someone buying paper gold should know: just how volatile returns can be!! The fin min says They…
Continue reading →It amuses me no end when financial advisors say, “do not do-it-yourself (DIY), find an advisor”. Simply because if I choose to delegate my money management to an advisor then I will have to find one first. Repeat, I will have to find one first! Meaning it requires DIY skills to search for an advisor. It requires…
Continue reading →The basic ideas behind how to manage a personal portfolio are discussed with a focus on the appropriate benchmarks for taking action. Reactions to yesterday’s post, A Mutual Fund SIP is Hope, Not a Strategy!, revealed a disturbing aspect of how many investors approach mutual funds. They are not interested in the inconvenient truth that a…
Continue reading →Too many investors believe that keeping their SIP alive and running over the ‘long-term’ is all that is needed to get ‘good returns’ from equity and achieve all their financial goals. Now that might happen in a fairy tale, but not in real life. In real life, the SIP is a method of buying mutual…
Continue reading →Here is a step-by-step guide to plan for your child’s education and marriage. 1. When to start planning. The moment the pregnancy is confirmed! 2. What do to first? Evaluate your insurance cover and buy more if required. 3. How to evaluate insurance cover? Let us consider a couple with a two year old child….
Continue reading →Risk management is the key to investing in volatile instruments like equity (or gold). De-risking refers to a process of containing losses. This typically is achieved by targeting a better risk-adjusted return instead of a ‘better return’.De-risking can passive or active. Here are some simple steps to de-risk your investment portfolio Cautionary note: A mutual fund SIP…
Continue reading →Why do so many look for a secondary source of income? Now that sounds like a dumb question is it not?! I would like to classify people who look for secondary income into three broad categories. I Some, make that many, do not earn enough and so want to earn more. II Some, make that many (but not…
Continue reading →One of my favourite quotes about goals is by Harvey Mackay: “A dream is just a dream. A goal is a dream with a plan and a deadline.” That just about sums it up!! In this post, let us look at how to define a financial goal with the Audi as a dream car. It…
Continue reading →If diversification is about ‘not keeping all eggs in the same basket‘, rebalancing is realising that ‘what goes up, will come down‘. Yes, investment portfolio management is all about simple common sense. In this post, I would like to revisit the topic of portfolio rebalancing and discuss what it is, why do it is, and…
Continue reading →Facebook group Asan Ideas for Wealth (AIFW) is a fascinating micro ensemble for studying and understanding how investors think and act. Even if you don’t want to consciously study it, it is impossible to not observe a few common patterns. The group is famous for its abbreviations: MDBSC* – My dull and boring SIPs will continue (*…
Continue reading →The withdrawal rules of the Sukanya Samriddhi Account has been modified with effect from March 18th 2016. Thanks to Muthu Krishnan for alerting me about it. They are discussed in this post in case you missed them like I did. Old withdrawal rule: (Source: Gazette of India 2nd December 2014) To meet the financial requirements of the account holder…
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