you may have heard this in many personal finance forum: It is hard to get to a net worth of Rs. one crore. After that things become easier. In my experience, this is not an universal truth. Going from Rs. 10K to 20K networth and going from Rs. 1 Crore to 2 Crore could have…

Many are drawn to the concept of generating passive income, yet few can achieve substantial results. This piece will explore the reasons behind such shortcomings and provide a passive income framework that can lead to a consistent income stream. Our focus will be on cultivating passive income online. Many of us struggle to build passive…

If diversification is about ‘not keeping all eggs in the same basket‘, rebalancing recognises that ‘what goes up, will come down‘. Let us revisit the topic of portfolio rebalancing and discuss what it is, why to do it, and simple ways to do it. What is portfolio rebalancing? Rebalancing is redeeming from one asset class…

A reader asks, “At what percentage of networth can I stop contributing to Emergency Funds and include it in my debt allocation for goals? For example – I use a liquid fund and an arbitrage fund for emergency funds. And I use a gilt fund as debt allocation for my retirement goal. When can I…

A reader says, “You keep talking about asset allocation and reducing risk in equity, but I cannot find any source on your site that explains. I request you to write a detailed article on this”. Let us first consider the usual advice peddled around by “experts”. For a long term goal, invest about 60% in…

A 21-year-old M.Sc physics student recently told me his ambition is to gradually lift his family from a middle-class existence and build wealth over generations. We were discussing a career in physics, not money management or investing! When I shared this on social media, a few voices (as always) felt that building wealth across generations…

A reader says, ” I have a question on my portfolio, which I constructed based on various social media’s “finance DIY” content. Recently, I learned that (from various YouTube channel interviews) in India, multiple famous people are investing less than 60% of their money into equity and the rest in Debt, real estate, Gold, etc. After…

Many investors believe their risk appetite falls under three categories: low, medium and risk. They also assume risk appetite refers to “how much risk we can handle”. Both these notions are incorrect. Unfortunately, risk appetites cannot be quantified. Although expensive questionnaires with objective questions like “What will you do if the stock market crashes by…

A reader asks, “Thanks to the invaluable learnings in Freefincal articles/talks, after the last 3-4 years of sustained effort (nearly all of it after missing the Covid times in the market), I am close to bringing my target distribution from a ~0%: ~100% to 60%: 40% (Equity: Debt). I have tried to do it as…

College students often ask me: “What is the best way to start trading?”. They probably expect me to belt out learning resources and the best demat account. But I usually disappoint them with the following response. To make significant money from trading, one needs significant capital, which college students are unlikely to have. Trading involves…

Here are a few personal finance milestones that can help you gauge “where you stand today” on the road to wealth. We will assume the basics like insurance, emergency fund, and goal planning are in place. If not, we recommend this free e-book: Re-assemble Step by Step Money Management Basics. 1. Your Liquid Networth exceeds…

We do not need intelligence to make money. We do need the smarts to make money. We need clarity, discipline, confidence, or conviction to stay the course. Today we have many free and paid materials on managing our money. One could learn to DIY from scratch without professional financial advice. However, very few are successful….

In this article, we discuss simple tips to review your investment portfolio. Every portfolio requires a personalized benchmark for comparison. Our long-term goals, particularly the money required for these goals, form natural benchmarks for a portfolio review. First, the basics should be in place before we start investing or immediately after: Emergency fund Life Insurance…

A reader says, “I have a query regarding mf investment vs loan prepayment. I have an SBI MaxGain home loan account where I can park surplus funds and save on interest. Now I’ve approx 20L outstanding there, and I’m about to receive approximately the same amount from a different venture”. “I have two options. 1….

Phrases like “guaranteed income” or “guaranteed returns” are used to sell thousands of insurance policies or products because they strike an emotional chord within us. Sadly, even in 2024, many investors are unaware of the risk they pose to our lifestyle and our aspirations. So many investors want to buy guaranteed income plans, arguing that…