Posts in category "financial-planning" - page 12
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How Much Should I Invest?
While having a conversation with one of my friends, it occurred to me that the current calculators are not sufficient to figure out how much to invest per month while increasing the SIP every year to meet your retirement goal. Lets say, you have an age in mind at which point you want to retire. And you want to know how much you should invest every month of every year until you reach your goal. Throw in a twist, which is that you want to increase your investment every year by some fixed percent. There is no calculator on this blog that will tell you how much you should invest every month. Naturally I thought there should be one, and here is that calculator. Hope it helps you reach your goal. Here are some instructions on how to use it.
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Tax Deductions
As I am doing taxes for the recently concluded financial year, I am realizing how much of tax saving one would be forgoing once you retire :). Without income there is no more section 80C deductions, no more savings from interest paid towards home loan via section 24, no exemptions for HRA under section 80GG. These things only hit you once you retire. Of course I went into retirement knowing that, so nothing to worry, but you don't realize these until you do your taxes. During your earning phase, every paycheck is a reminder for saving taxes and claiming as much deductions as possible.
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Am I Financially Ready To Retire?
Here is an alternative take on whether you are financially ready to retire. In this post, I want to help you determine if you are ready to quit with nothing but a simple calculator and just one formula. You don't need to predict expenses, inflation, rate of return etc, and as such, this method is not as comprehensive as the How Soon Can I Retire calculator. So take it with a pinch of salt and use it more as an indicator of whether you are ready to retire or not. Also note that this is only to check if you are financially fit to retire and has nothing to do with your emotional state of mind. Some may have a lot of money and yet cannot retire due to various other reasons (including not knowing what to do post retirement, fear of boredom, peer pressure, family disapproval, social status etc).
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Funding Child's Education Expenses
In the past, I wrote about how to fund children's education expenses, but some of my readers felt that there should be a calculator to figure out education expenses. So naturally, I am obliged to fill the gap with this calculator. I would strongly urge you to read the previous post before using this calculator to understand the basics first. Lets get some shortcomings of the calculator out of the way before using it.
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Form 15G and 15H
It is the start of the financial year and now is a good time to figure out if you need to submit form 15G or 15H. For most individuals, this probably does not apply, but it may be applicable for your parents or if you or your spouse have a nil tax liability. In this post, lets go over when, why, where, who and how one can submit form 15G/15H.
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Financial Support for Your Parents
You are currently working and deriving a salary. It is easy to support your parents with the salary. But how about when you retire? Hopefully, you have included supporting your parents as part of your expenses when calculating how much do you need to retire. Alternatively, they have enough corpus or other income that will let them support themselves and live independently. In my case, it was a mix of both and I thought I should explain how I am handling it. May be it will help you get some clarity on how you want to go about it.
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How to Choose a Debt Mutual Fund
Hopefully you have read my post on how to choose a mutual fund. This post is kind of an extension to it. I will specifically explain what things you need to look for when picking a debt mutual fund as opposed to the general advice given in the other post. While I don't consider myself an expert, I will give you some tips based on my experience. But first, the usual disclaimer:
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Debt Funds vs Fixed Deposits
If you ask someone whether Fixed Deposits are better or Debt funds are better, more likely than not, you will hear a biased answer towards either of them. Some swear by FDs and their safety, while others say debt funds always give better returns than FDs. Lets bust some myths and try to get an understanding of how these two types of investments work.
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The Peer-to-Peer Lending Experiment
It is 3 years to this day, when I first decided to get my feet wet with a new type of investment -- peer-to-peer lending. While peer-to-peer lending is nothing new in countries such as the US at that time, it was relatively new in India. After reading about the lending platform called LenDenClub, I decided to give it a try to see if I could get some good returns.
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Do You Need International Exposure
India is a growth story. As a developing nation, we obsess over growth rates. While most analysts hope for a sustained 8% growth rate from India, our government has sometimes vowed to take India into double digit growth. I am not really sure if that is even possible. Nonetheless, every time the growth rate falls just below 7%, media and analysts make a huge deal about it worrying why the rate is so low. A developing nation is expected to have a high growth rate and so do a lot of investors. So, should one invest in international funds which have a slower growth rate?
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