We explain why “guaranteed income plans” with “assured returns” are inefficient investment avenues for our money and are best avoided. Benjamin Franklin wrote in 1748 that Time is Money in a note titled “Advice to a Young Tradesman“. Insurers use this idea to their benefit in all traditional insurance policies, including guaranteed income plans. Consider a typical…
Continue reading →Hi, this is Sahil. This is the way I track my personal finance-related metrics. This should be helpful for DIY investors and should help them to focus on what and how to measure. About this series: I am grateful to readers for sharing intimate details about their financial lives for the benefit of readers. Some…
Continue reading →Hi, this is Abhineeth. I am a 30-year-old working as an Engineer in the state government service. I joined this position in 2016, and this is my 7th year. This is how I aim to achieve financial independence and buy/construct a decent house for my family. About this series: I am grateful to readers for…
Continue reading →In this article, Vijay discusses guidelines on how to build a direct equity portfolio. This is the second part of the series. The first part is here: How to build a direct equity portfolio – Part 1. About the author: Vijay is an electronics engineer and management graduate (IIM Bangalore). He has worked as a…
Continue reading →1st Jan 2023 will mark the 10th anniversary of the introduction of direct plan mutual funds. This article discusses whether their introduction has caused more harm than good for investors. About 46% of total assets are in direct plans (a good chunk of it is as institutional and HNI assets). The honest answer to this…
Continue reading →This article discusses the most crucial steps in defining and planning for a financial goal. Only after the goal is defined should one consider products for investments. Sadly most investors have a product-first, plan-later approach. Some assume they do not have a financial goal and only want to create wealth. They need to find a…
Continue reading →A reader writes, “Sir, you have mentioned several times that equity mutual fund investing comes with no guarantees. I find this quite unsettling. Each time the market falls, I feel worried and am in two minds about investing. My mind tells me to stay invested, but my heart is worried. Please advise.” It is true…
Continue reading →In this article, we tabulate index funds with the largest deviation in 1Y return (trailing as of 8th July 2022) from their corresponding indices. Regular readers may be aware that the most practical way to evaluate how efficiently an index fund is tracking its index is not the tracking error” but the return difference. For…
Continue reading →A reader writes, “I read with interest your series on market timing. You mentioned that sequences of risk are common to both systematic investing and market timing. Can you please give a simple example of this?”. To those who have not read the series, the article mentioned above is this: A risk in market timing…
Continue reading →In the previous article, we discussed the basics and important considerations while planning for a five-year girl’s future. In this article, we will do the calculations with some inputs and assumptions. We shall also include the retirement planning calculation for the parents in brief. We shall use the robo advisory tool for this illustration. We…
Continue reading →A reader writes, “Congratulations on freefincal’s 10th anniversary. Looking at the body of work the site has published over the years, I wonder if there is any new ground left for you to cover in personal finance or will you only rehash old content for new audiences?” Although a touch insinuating, it is an interesting…
Continue reading →In this article, Anand Vaidya shares his experience of using the RBI Retail Direct portal to buy govt. bonds (gilts) and create an income source. About the author: Anand studied E&C Engg, worked at Wipro and then left for a job in Singapore. He started his own IT consultancy in Singapore. After 15 years, he…
Continue reading →In this edition of the reader story, we meet a young couple who prefers anonymity. They share their money management journey and how they wish to achieve a retirement corpus 50 times annual expenses. About this series: I am grateful to readers for sharing intimate details about their financial lives for the benefit of readers….
Continue reading →Last year in our reader story series, we met 30-year old Rohit, whose early struggles led him, to start investing early in a goal-based manner. He has been kind enough to share an update on his finances – how he handled short term goals last year and why he feels confident about his retirement planning. About…
Continue reading →In this article, a client shares how a SEBI registered investment advisor and fee-only financial planner (Swapnil Kendhe) helped him set his finances in order. Those wondering what to expect from a fee-only financial planner will benefit from this. The client prefers the pen name ‘safed pigeon’. About the advisor: Swapnil is a SEBI Registered Investment…
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