Most personal finance bloggers talk about their mission to spread financial literacy and yet ...
1. Tax-saving Every year in Jan. and Feb. there is invariably an article on 'how to save tax this financial year' and none for the rest of the year. Tax-planning should be integrated with goal-planning. A prudent investor starts his/her planning in April based on the union budget. Very few blogs stress this. Why? Is it because no one will be interested in a 'how to save tax this financial year' in April?
Manish Chauhan's second book, "How to be your own financial planner in 10 steps" is a great 'action' book guiding people through the basic steps of financial planning. This post describes a retirement calculator inspired by the book and is based on 'corpus withdrawal rate'
Step no. 6 is "Start your retirement planning". In this chapter Manish writes: "If you had to take only one learning from this book and implement it, I would suggest that you take this particular point from this book and seriously save for your retirement. If you don't do anything else, life will still move on, but this particular part cannot be ignored, simply cannot!". The 'point' being, 'delaying your retirement planning will put serious pressure on your retirement life'.
A few days ago Subra called me to discuss a calculator idea: a comparison between a lumpsum investment made in a bank fixed deposit and a debt fund, like a income fund, over a period of several years.
Interest from a bank FD has to be declared each year and will be taxed according to slab. Whereas taxation is deferred until redemption for a debt fund and is either a flat 10% or 20% after inflating the initial investment using the cost inflation index. The 20% option typically implies lower tax and if inflation is high there could be capital losses instead of gains!
I am not a fan of international women's day (8th March). I think it is condescending and insulting to women. The biggest mistake one can do is to compartmentalize human behaviour in terms of sex, religion, ethnicity etc. That said, today gives me an excuse to acknowledge one of the most impressive personal finance blogs I have seen: