When we discussed the lifestyle of Santhosh, a middle-class crorepati, we received questions from young earners that can be paraphrased as “I cannot be like Santhosh. I like to live a good life with a car and expensive smartphones. However, I feel guilty that continuing my lifestyle will impact my investments and the wealth I…

The cost inflation index for the financial year 2024-2025 is 363 – an increase of 4.31%. We compile 44 years of cost inflation index data to understand the devastating consequences of inflation and why our singular focus should be on beating inflation for our long term goals. The cost inflation index (CII) is not a…

A reader says,  “Where do you get the data for your analysis discussed in this video? Index Investing In India TNIA Talk Part 2. I also want to make a similar analysis. Where can I get it? Can you please share the website?” This list of free data sources can be used for DIY investing and…

A frequent criticism by those who encounter freefincal articles or videos is, “This guy is very pessimistic about equity investing”. I also often get asked why that is the case. Please allow me to explain. There is a difference between lack of faith and pessimism. If I lack belief in equity, I will not go…

We discuss how pretty much all of investing (lump sum or SIP) and borrowing (debt., EMI) can be described by a single equation! In finance workshops, people are often taught to use spreadsheet commands like PV, FV, PMT, NPER, etc., without a deeper understanding. Consider a lump sum investment we shall label as pv (for…

Are you worried about market volatility due to the elections and beyond? You can easily reduce portfolio risk with these simple steps we refer to as goal-based risk management – a combination of passive, systematic investing and active risk reduction. If implemented sequentially, these steps would result in greater focus and success. You can automate…

It is quite common to see one partner (either the husband or the wife)  utterly uninterested in money management and investing. They take for granted that the other partner will handle everything. Perhaps this contrast is higher in households if one takes an additional interest in personal finance. Although my wife is super-smart and capable…

A reader asks, “Our daughter is one month old. How should we start investing for her future?” Starting on a clean slate is always the best way to start. Let’s dive straight into the goal-planning steps. The goal-planning steps We need a target corpus after 17/18 years, depending on when she was born. That is…

Many investors rush to invest Rs. 1.5 Lakh between April 1st and April 5th or as early as possible in the financial year to “maximize” the interest advantages of PPF. Is this wise? What are the factors to consider? If you invest Rs. 1.5 lakh during the initial five days of April, the entire amount…

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…