Suppose I have 70 lakhs with me and would like to generate an inflation-protected income for as long as possible, how and where should I invest? The following is based on the Inflation-protected Income Simulator, and a thread at facebook group, Asan Ideas for Wealth (some inputs have been modified) A more detailed how to generate inflation-protected income…
Continue reading →Thanks to the ‘bull run’, ELSS mutual funds are projected as a ‘good’ last minute tax savings instrument. If you are thinking about tax deductions only now, do not use ELSS mutual funds. Last minute tax-savers are not interested in preaching: how you should integrate tax planning with goal planning, plan for it at the start…
Continue reading →Do you even need a financial planner? Money management, especially inflation proofing long-term goals, is not rocket science. Then again, even rocket science is not rocket science! The inclination to act, coupled with commonsense is all that is required. So the answer is, a financial planner is not necessary. Of course, financial planners and ‘independent’ financial advisors…
Continue reading →A long time ago in a galaxy far, far away (that is how the Star Wars movies open), the idea of getting a government job was held in high esteem. Thanks to the boom in the services industry, that is no longer the case among our youth. However, one remanent from that bygone era continues…
Continue reading →Use this tool to compare the risk-adjusted year-on-year performance of two mutual funds over the last 8 years. This is an alternative to the previously published, fund A vs. fund B mutual fund analyzer, in which the comparison could be made for investment durations ranging from 1-8 years. This year-on-year analyzer allows you to compare funds…
Continue reading →“Invest according to your risk appetite” is a refrain often seen in personal finance articles. This is as useless as it is meaningless. The single most important ailment among investors is their inability to recognise appropriate benchmarks and objectives inflation as the primary benchmark for long-term goals capital preservation as the primary objective for short-term goals tax-efficiency…
Continue reading →Here are few tough questions directly or indirectly to personal finance, that I have encountered. I do not propose answers but only wish to point out certain neglected aspects that must be considered before a decision is made. Let us start with a familiar question: Should I rent or buy? The answer is simple only…
Continue reading →If you have used a retirement calculator, you will know exactly what the title refers to! If you have not used a retirement calculator before, you are missing out on a wonderful opportunity to get all stressed up! Freefincal has its origins in retirement calculators. I have a wide range of sheets, the most popular of…
Continue reading →Answers to a frequently asked questions on investment returns. 1. What return does the moneycontrol portfolio manager calculate? It calculates the absolute return. That is the percentage difference = (value-investment)/investment. This does not represent how your money has compounded. Ignore it. Use Value Research portfolio manager to get XIRR returns (a measure of compounding when there…
Continue reading →Thanks to Narendra Bhongale, there is now clarity on when investors can invest online in MF Utility after getting the common account number (CAN) . He was kind enough to attach the response from the MFU team in his comment to yesterday’s post. It is reproduced as is, below. ~~~~~~~~~~~~~~~ Dear Sir, We thank you for…
Continue reading →Here is a set of illustrations that highlight the benefit of investing in direct mutual funds for your long-term goals. First some good news: MF Utility a portal in which investors can consolidate their holdings in different AMCs and invest in them with a common account number (CAN) will start operating from March. You can…
Continue reading →Every now and then, one can find an article that says, ‘should we teach financial literacy in schools?’, where the authors talk about the importance of power of compounding, investing in equity and all that sort of thing. Stuff like math and biology seem unimportant and dispensable to these authors compared to financial literacy. I think…
Continue reading →‘What is your definition of financial freedom?’, is a question I get asked by readers from time to time. Opinions and definitions in this regard vary widely and often a matter of convenience. Some call it financial freedom, some, financial independence, some early retirement! Here is my take on this subject. The following should have…
Continue reading →The automated stock analyzer now includes discounted cash flow valuation. The analyzer now has four methods: 1) Price Multiple Model 2) Sustainable Growth Rate 3) Book Value Growth Rate 4) Discounted Cash Flow First, I would like address a few issues faced by users while downloading stock price from MoneyControl. Let me assure you that…
Continue reading →The sooner you retire, lower the retirement corpus necessary for financial freedom!* * terms and conditions apply! Let us consider this counterintuitive aspect of retirement calculators in this post, which stems from Sudhindra Aithal’s comment on this topic in response to the low-stress retirement calculator. Let us consider a 30-year-old, Dagwood Bumstead who wishes to…
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