A reader says, “For a salaried employee contributing to an employee PF, would it be good advice to invest 50% of take-home pay first into PPF and the remainder into an index fund? This would be an investment towards a retirement corpus. The EPF and PPF would be the fixed-income part of the corpus, and…
Continue reading →Many individuals close to retirement are unfamiliar with buying government bonds vis RBI Retail Direct and how it differs from purchasing a life insurance pension plan*. We discuss the essential differences in this article. In this article, a life insurance pension plan refers to an immediate annuity plan, not a deferred one. Always avoid deferred…
Continue reading →In 2008, my expenses dropped to ‘normal’ levels after my father passed away (post a prolonged battle with cancer). By then, I had been in a regular position for less than two years, taking stock of my cash flow and investible surplus (money net of all expenses). Immature me, I remember asking my mom a…
Continue reading →The latest freefincal Equity Mutual Fund Performance Screener is now available. Use it to screen for consistently performing equity mutual funds. You can screen based on fund category & benchmark and spot mutual funds with a higher return than a benchmark at a lower risk. Inside, you get discounted links to our robo advisory tool…
Continue reading →A reader says, ” How did you manage your emotions for all those years when you had negative or zero returns? I always had this question about your investing journey. How could you keep faith that it will all turn positive one day? I wouldn’t have done it for so many years. Did some sane…
Continue reading →This article addresses common misconceptions about the National Pension Scheme (NPS) by government and private subscribers. Update: This article was conceived before the announcement of the Unified Pension Scheme (UPS). The misconceptions remain unchanged. Though I am eligible for the UPS, I am partial to the NPS and quite emotionally attached to my NPS corpus!…
Continue reading →This article discusses income laddering (aka annuity laddering) in retirement planning and how to go about it. There are two extreme options in retirement planning: one where the corpus is managed in a diversified portfolio, and an increasing income is withdrawn from it as required. This is known as the bucket strategy. We had earlier…
Continue reading →This is a National Pension Scheme Fund Screener to shortlist consistently performing NPS schemes. You can also spot NPS schemes with a higher return than a benchmark at a lower risk. This is similar in design to the freefincal Equity Mutual Fund Performance Screener. Inside, you get discounted links to our robo advisory tool and…
Continue reading →A reader says, “Suppose my total investment in a mutual fund is Rs. 12,000, and its current market value is Rs. 17,000. If I redeem Rs. 8000, how do I calculate the current total investment?” Each time we invest in a mutual fund (or stock), we buy units at market price. Each time we redeem,…
Continue reading →Let us discuss a retirement plan for a 28-year-old who wishes to retire by age 50. These are the following inputs and assumptions used in the retirement calculation. Age 28; Retirement age 50; Life expectancy age 90; Monthly expenses Rs. 40,000; Current corpus is practically zero; Inflation before retirement: 7% and after retirement 6%, Return…
Continue reading →A reader asks, “What are the differences between finfluencers and financial experts? Is there any way to distinguish them? How can investors be wary of finfluencers?” Definitions for both types are subjective, and these are mine: A finfluencer has a good understanding of the kind of content that would be lapped by consumers (viewers/readers/listeners) and…
Continue reading →We publish a list of stocks with low volatility and momentum each month. We provide data for BSE 500 and BSE 100 stocks. There are now three different screener files available. (1) Stocks with low volatility and momentum from the BSE 100 large cap universe are available as a separate file (2) Stocks with low…
Continue reading →What does the term “safe withdrawal rate” mean in retirement planning? The safe withdrawal rate, or SWR, refers to the amount of money that can be withdrawn annually from a retirement fund in the first year of retirement. This rate is calculated by dividing the initial withdrawal amount by the total money available for retirement….
Continue reading →For a long term goal, invest about 60% in equity and the rest in fixed income. Three years before the goal deadline, start reducing equity allocation. This is the usual advice peddled around by “experts”. How successful is this idea against a rigorous backtest? As you might guess, this is just arbitrary gyan, and if…
Continue reading →A reader says, “I was planning to retire in early 2025. The markets in the last few years have been good to us all, and I was confident about retiring early (I am 45). But now, I am not so sure. I have used your robo-advisor tool for the last four years and, with its…
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