A real estate investment trust (REIT) is like a mutual fund that invests in property. Here is why I think REITs are not suitable for goal-based investing. I know very little about how REITs work and I have sourced my information primarily from three articles. If you wish to understand, how REITs work, check this…
Continue reading →Here is a risk vs. reward analysis of debt mutual funds. This is a companion post to: (Equity) Mutual Fund Investing: Risk vs. Reward vs. Volatility and The key to successful mutual fund investing All the posts are based on Value Research Online’s fund selector page. First some definitions. Average Maturity A debt mutual fund holds debt…
Continue reading →I wrote a guest post for Avadhut Nigudkar’s website, financewalk.com aimed at financial career aspirants. The monthly financial tracker I have been using for the past 6 years was modified to include the goal analysis sheet from the automated mutual fund tracker The sheet allows you to keep track of investments for financial goals as well as…
Continue reading →Here is a simple goal planner that serves as a visual aid to highlight the importance of beating inflation for long-term financial goals. It compares the evolution of the current cost of an expense with an assumed inflation rate and the growth of monthly and lump sum investments. The monthly or lump sum investment along with…
Continue reading →Here is a simple Excel sheet to keep track of monthly SIPs. Unlike the automated mutual fund tracker, where the focus is on returns, this sheet helps to visually track the growth of a SIP relative to an expected growth. The user will have to enter the value of SIP each month to track its…
Continue reading →The first brush with a retirement calculator is typically memorable, if not unforgettable(!) for pretty much all investors – including ones who do not take them seriously. The typical responses would be, ‘Why do I need such a huge corpus for retirement?’ ‘How do you expect me to invest this high an amount each month?’…
Continue reading →LIC agents are busy advertising the Varishtha Pension Bima Yojana. An annuity product which would hand out a ‘pension’ against a lump sum payment at an annual return of a little more than 9%. Here is why you should not consider any pension product at face value. The pension received is typically constant for life. If…
Continue reading →Last month I had posted a stock price downloader from the BSE website. Jatin Visaria pointed out that if the price is not adjusted for corporate actions bonuses, splits and dividends, the data is not useful for analysis. Krishna Kishore pointed out that Moneycontrol lists historical prices adjusted for bonuses and splits. I thank Krishna…
Continue reading →While planning for retirement, we encounter several rates: rate of return before and after retirement rate of inflation before and after retirement While calculating the corpus required and the monthly investment required, we assume these rates are constant for each year before retirement and during retirement. In reality, all these rates can vary quite a…
Continue reading →A discussion on why one should not mix insurance and investment and buy pension plans, endowment plans, moneyback policies or even ULIPs. As far as regular freefincal readers are concerned this post is preaching to the choir. Most of you guys know and understand why insurance and investment should not be mixed. Annoucement: My second book, Gamechanger: Forget Start-ups,…
Continue reading →A step-up SIP, also known as growth SIP or increasing SIP or top-up SIP is one in which the monthly contribution amount increases each year either by a fixed amount or by a fixed percentage of the current contribution. Here is a step-up SIP calculator that can be used to back-test investments from April 3rd 2006 onwards….
Continue reading →Given a lump sum, how does one generate an income from it? How do we tackle inflation in retirement? Not too long ago, I was under the impression that such questions are asked only by senior citizens. I soon realized the problem is extremely common. Many children are trying to optimize income from their parents retirement…
Continue reading →Nearly two years ago, one of my personal finance influencers, Ramesh Mangal, cautioned me that there is no clear-cut relationship between risk and reward. Although he had pointed me towards proof of the same, I did not pay much heed to it at that time. Now after being reasonably comfortable with commonly used risk-return metrics…
Continue reading →In the previous post in the ‘young earner’ series, I had listed down a set of personal finance essentials. Two points appear to have caught the eye of many readers. Do not open a PPF account Do not start a SIP in an ELSS fund In this post I would like to expound on the…
Continue reading →Do past returns matter? Does it make any sense to choose a mutual fund that has performed consistently in the past? After all, there is no guarantee that it would continue to perform well in future. Let us try out a simple exercise. Download returns data from Value Research Online of all equity funds currently…
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