Last Updated on February 11, 2021
Its been a while since I wrote a roundup post. Haven’t been able to find the time to squeeze it in. This week I have some news to share. So here goes:
1. Series on financial planning
I am writing a series on financial planning at Market Express a finance portal.
The first part: Financial Planning: Using Common Sense to Achieve Fiscal Fitness was written in Sep. 2013.
After repeated prodding by the editor I managed to write the second part: Financial Planning: baby steps with perspective
I would appreciate your feedback on these articles
2. Risk and return
An interesting article on the relationship between risk and return
3. Laddering Term policies
The previous post Laddering Term Life Insurance Policies -Calculate and Customize
was inspired by a comment Sanjeev Bhatia made in one of Subra’s post. When he read my post, he had a couple of things to say which I would like to share with you.
First, here is Sanjeev’s original comment:
“The flexibility pure term plans offer in terms of switching, lower premiums due to competition kicking in or due to technological advances (online term plans instead of regular agent based insurance)cannot be matched by anything else. Further, as you (Subra) have rightly pointed out, if God has been kind to you, the Sum Assured that looks like ample right now might not amount to anything in your overall wealth portfolio at later stages of life. So it’s better to junk the plan totally and invest the amount somewhere else.
Another way you can still minimize the insurance expense is through laddering. It might not be known to many that contrary to endowment plans/Ulips etc, a term plan becomes costlier as the duration increases. For, say, a 35 year old male, premium for 40 year term plan will be more than a 30 year plan for same Sum Assured. What you can do here is to Stagger the plans as per your needs. In my case, for example, I have taken one term plan of 10 year duration to cover Kid’s education expense, one of 15 year duration to cover their marriages and one of 30 years to cover life expectancy. The total premium outgo is much lower than a single policy of 30 year duration. Now if I were to die today, the total SA will be available to my family. If it happens after 10 years, my kids education would have been completed by that time, and there will not be any need to cover those expense. So I don’t need to have that cover at that stage. Ditto for marriage. Of course, you need to keep a few things in mind to do so, the first and foremost being filling the insurance form yourself and providing details of your existing policies there”.
Sanjeev’s thoughts after reading my post:
“I feel you must also emphasize the fact that Term Plan premiums are inverse of Regular endowment policies. Here, the longer the tenure, higher is the premium. So it does not make sense to pay the premium for that part of SA whose need has expired”.
Here is the illustration he shared with me. This drives home the advantage of laddering better:
Let me know if you like to see the weekend roundup posts more regularly. I will do my best to post them more often.
We now publish both equity fund and debt fund (+ hybrid fund) screeners each month!
Use our Robo-advisory Excel Template for a start-to-finish financial plan! Now with a new demo video! ⇐ More than 415 investors and advisors use this!
Unlock the secrets of successful financial advisors and entrepreneurs with our new course!
My new book for kids: “Chinchu gets a superpower!” is now available!
Must-read book even for adults! This is something that every parent should teach their kids right from their young age. The importance of money management and decision making based on their wants and needs. Very nicely written in simple terms. - Arun.Buy the book: Chinchu gets a superpower for your child!
How to profit from content writing: Our new ebook for those interested in getting side income via content writing. It is available at a 50% discount for Rs. 500 only!
Join our courses in exclusive Facebook Groups!
- 550+ members are now part of our new course: How to get people to pay for your skills! (watch 1st lecture for free). Learn how to get people to pay for your skills! Whether you are a professional or small business owner who wants more clients via online visibility or a salaried person wanting a side income or passive income, we will show how to achieve by showcasing your skills and building a community that trusts you and pays you!
- Goal-based portfolio management! Join 2220+ members and get clarity on how to plan for your goals and achieve the necessary corpus no matter what the market condition is!! Watch the first lecture for free! One-time payment of Rs. 3000 only. No recurring fees! Life-long access to videos (10+ hours content) in an exclusive Facebook Group! Reduce fear, uncertainty and doubt while investing! Learn how to plan for your goals before and after retirement with confidence.
Want to check if the market is overvalued or undervalued? Use our market valuation tool (will work with any index!), or you buy the new Tactical Buy/Sell timing tool!
We publish mutual fund screeners and momentum, low volatility stock screeners .every month.
About the Author
M. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. since Aug 2006. Connect with him via Twitter or Linkedin Pattabiraman has co-authored two print-books, You can be rich too with goal-based investing (CNBC TV18) and Gamechanger and seven other free e-books on various money management topics. He is a patron and co-founder of “Fee-only India,” an organisation to promote unbiased, commission-free investment advice. He conducts free money management sessions for corporates and associations based on money management. Previous engagements include World Bank, RBI, BHEL, Asian Paints, Cognizant, Madras Atomic Power Station, Honeywell, Tamil Nadu Investors Association, IIST Alumni Association. For speaking engagements, write to pattu [at] freefincal [dot] comAbout freefincal & its content policy Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on developments in mutual funds, stocks, investing, retirement and personal finance. We do so without conflict of interest and bias. Follow us on Google News. Freefincal serves more than one million readers a year (2.5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified from credible and knowledgeable sources before publication. Freefincal does not publish any paid articles, promotions, PR, satire or opinions without data. All opinions presented will only be inferences backed by verifiable, reproducible evidence/data. Contact information: letters {at} freefincal {dot} com (sponsored posts or paid collaborations will not be entertained)
Connect with us on social media
- Twitter @freefincal
- Subscribe to our Youtube Videos
- Posts feed via Feedburner.
Our publications
You Can Be Rich Too with Goal-Based Investing
Published by CNBC TV18, this book is meant to help you ask the right questions, seek the correct answers, and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now. It is also available in Kindle format.Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want
This book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at a low cost! Get it or gift it to a young earner.Your Ultimate Guide to Travel
This is an in-depth dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, how travelling slowly is better financially and psychologically with links to the web pages and hand-holding at every step. Get the pdf for Rs 199 (instant download)Free android apps
- All calculators from our book, “You can be Rich Too” are now available on Google Play!
- Install the Financial Freedom App! (Google Play Store)
- Install Freefincal Retirement Planner App! (Google Play Store)
- Find out if you have enough to say "goodbye" to your employer (Google Play Store)