Sooner or later mutual fund investors recognize that there is more to a mutual fund than the return it generates. Analysing a mutual fund when one wants to begin investing, or when one wants to evaluate current holdings, requires a comparison with the funds benchmark. Some questions to ask and answer: How consistently has the…
Continue reading →As someone who knows very little about home loans, the popularity of the titular question never fails to surprise me. When this question was asked again in the facebook group, Asan Ideas for Wealth (AIFW), I learnt something new. Here is an account of my understanding. I thank the members of AIFW for their insight….
Continue reading →Tired of confusing and ever-changing mutual fund star ratings? Would you like to rate and rank a mutual fund with respect to its benchmark for investment durations ranging from 1-8 years on your own? Here is a risk and return analyzer for equity mutual funds with which you can Determine SIP and lump sum returns…
Continue reading →Here is a set of simple steps that might help young earners minimise their taxes and take control of their financial life. This post is based on a request from one of my students who started out on an IT job some months ago. Tax planning – a set of actions designed to save tax…
Continue reading →A few weeks back, an article in a mutual fund distributor’s blog caught my attention. The article listed the price of 10 gms of gold from 1925. The author wanted us to observe the huge increase in gold price from 1925 (Rs. 18.75) to today Rs. 29,190 (average price of FY 2013-14). It was therefore…
Continue reading →My wife hates personal finance! If I want her out of the room, all I need to do is to utter words/phrases like, freefincal, goal-based investing, CAGR, retirement planning (most effective!), just about anything that is not metallic, shiny and yellow in colour! Therefore, you can imagine my surprise when she handed me a diary…
Continue reading →In a classroom, the power of simplicity and clarity is valued above all else by students. Unfortunately, many academics unknowingly abandon these virtues as they latch on to jargon, secondary details and an obsession to ‘cover’ a syllabus. A teacher is recognised as ‘good’ and their contributions remembered fondly, if they demystify the subject. This…
Continue reading →Does size matter? Does the size of a mutual influence its performance? Do funds begin to underperform when the assets under management (AUM) increase beyond a certain point? Be it copulation or investing, questions on size vis-à-vis performance have troubled us forever! This post is not an attempt to answer this question one way or…
Continue reading →Most freefincal readers would be familiar with this question and perhaps more familiar with the answer – do not hold more than 3 or 4 funds. More funds do not mean higher diversification! So why bother writing another post on this? In academia, we have a saying: there is no such thing as a dumb…
Continue reading →Is early retirement in India possible? Can a 45-year-old with ‘enough’ saved up, hang up his boots and avoid a full-time job for the rest of his life? In this post, I do a feasibility study considering three different scenarios for early retirement to determine the most practical approach. Early retirement is a phrase that…
Continue reading →Should disciplined long-term goal based investors use mutual fund systematic investment plans (SIPs) or rupee cost averaging? This question has been bugging me for long and personally, I hate a SIP I think it is a product tailor made for mutual fund distributors and sold to lazy people. Should intelligent investors buy SIPs? Here is…
Continue reading →Here is why I think one should not invest in the National Pension Scheme even if you get tax benefits. This is the updated version of an earlier post. Earlier I had recommended subscribing to the NPS if you get tax benefits via the employer contributions. Tax benefits have actually increased since the govt. announced…
Continue reading →Whether you are contemplating early retirement or are close to your natural retirement, here are four simple calculators than can answer four important questions: What is the corpus required for financial independence in retirement? How long will my retirement corpus last? How much can I withdraw from my corpus each year? What is the rate of…
Continue reading →Since the time my step-by-step guide to selecting (Equity) mutual funds become popular, I have been receiving requests to publish a similar guide for debt mutual funds. Well begun is half-done. If an investor can confidently select categories suitable for their financial goals, short-listing a set of funds from that category is that much easier….
Continue reading →Here is a list of ‘qualifications’ necessary to do your own financial planning. This is not a ‘find a financial planner, if you cannot find the time to do it yourself, post! I am writing this for two reasons: out of irritation and fear. I am irritated that time and again financial planners and mutual…
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