Posts in category "financial-planning" - page 2
A Confusing Time In Stock Market
The Indian stock market has been unrelenting in its growth. It feels like yesterday when I wrote that Sensex crossed the 60,000 milestone. Now, just 2 years later it is about to cross 70,000. But there is nothing impressive about it because that is a relatively low growth rate of 8%. Hardly anything to write about since we expect markets to do at least double digit growth. What is really impressive is that the market doubled in just three and a half years, which is a solid 22% growth. In June 2020, Sensex was around 35,000. The long term Sensex returns are around 13-14%. So should we be worried about a market crash?
...continue readingBe Prepared For Retirement
There are many reasons one might want to retire early. Some may want to travel, some may want to sit and dream, and yet others might want to work on a startup or hobbies. Whatever the reasons might be, be prepared if the plan does not pan out. But more importantly remember that early retirement is not for everyone. I know a lot of people who have realized that early retirement is not for them. They don’t know what they would do if they retire early. For them, work is the thing that keeps them busy. That is a very good reason not to retire early and I am glad these people have a clear idea. While a few others want to retire early because the thought of freedom to do whatever you want sounds nice, or they are in a very stressful job. These kind of people can land up in trouble if they don’t have a plan.
...continue readingRevisiting My Stance on SGB
A reader asked if I could share my views on Sovereign Gold Bonds. I have already expressed my views on SGBs more than 3 years ago. Since it has been a while I thought I should revisit and see if my views have changed. Although nothing has changed from my perspective, it may still be a good investment for some. So I decided to do another post on SGB with the latest information.
...continue readingHow Debt Fund Taxation Affects My Planning
Debt funds are taxed differently after changes to the Finance Bill 2023. This is old news I know, but I did not plan on writing anything about it because it does not change anything in my financial plan. But a reader asked my opinion and I thought I will do a quick post. Remember that anything that I write in my blog is not financial advice for people at large. It is just a recount of my experience and how various investment opportunities or taxes are applicable to my specific situation. Even if some one is exactly in my situation, my advice or experience may not apply to them because it also has to do with the mindset. So unless you are in my exact situation both financially and mentally, most of what I write may not even be relevant to you.
...continue readingRevisiting My Stance on NPS
It has been a while since I talked about NPS. At that time I did not consider NPS to be a good investment choice or an interesting asset class for a few reasons. A few things have changed with NPS and I have become older and perhaps wiser. Did my stance on NPS change now? Time to find out.
...continue readingHow To Think About Return On Investment
Sometimes we may want to compare two investment opportunities and figure out which is a better one. Say for example should we rent or buy a house? One way go about it is by using the return on investment method. Basically we calculate how much return we might get going with each opportunity and pick the one with better returns. It is usually not as cut and dry especially if we are dealing with different risks. Yet, it is a good practice to at least find the numbers and later decide if the difference in returns is worth the risk. So in this post, I will discuss how I go about calculating the return on investment. You may have other metrics or different way to look at things, so don’t consider this to be the only option.
...continue readingWatch The Lifestyle Creep
Have you ever though about why your expenses keep going up year after year? Perhaps you say your expenses haven’t increased that much since last year. But if you compare your expenses today with expenses some 10 years ago, you will see a huge difference. Why is that? Well you can attribute it to inflation. However, that is not the only culprit. The other culprit is lifestyle creep. And because it creeps in so slowly you can be forgiven for not recognizing it. If you don’t watch the lifestyle creep, you are in for a surprise when you do your retirement planning.
...continue readingIs Investing Early Really That Important
Many financial planners and advisors including yours truly will have you believe that it is important to start investing early if you want to have a comfortable retirement corpus. In fact this is the first step I propose in my five step plan to early retirement. After all it makes sense right? You have a long runway if you start early and it will allow compounding to show its effects. Compounding needs time. But is it really all there is to it? The genesis of this thought was an article that I recently read on the internet. While there is a kernel of truth, it is not all its made out to be. Let me try and explain using the information from the article.
...continue readingReview Of A Reader's Retirement Portfolio
Every once in a while I receive emails from some of my readers asking for advice on financial planning or unschooling or other things. I have posted a couple (A Reader’s Dilemma, Should I Retire Early?) of emails along with my replies in this blog. Today I wanted to post one more such conversation I had with another reader. As usual, I took permission from the person. Most of the conversation is published as is and I tried to make minimal edits. Hope you might learn something from it or perhaps have better advice. Feel free to comment at the end of this post if you want to post your advice. Lets get started.
...continue readingCost Of Owning Something
Whenever I plan to buy something expensive, I go through this exercise of figuring out the cost of owning something. Remember that for most material things in life, the cost of owning it is not just the sticker price. There is more to owning it. After running through the exercise objectively if I still feel the need to buy something, I sleep over it. Gives a bit more clarity on the subjective aspects. Some things are an absolute necessity and I am not talking about those ones. Moreover, what is a necessity for me may be a discretionary spend for someone else. Finally, there is no point doing this exercise if the cost of the thing you want is cheap and doesn’t affect sustainability too much. Again, for some sustainability may be important, for others it is not.
...continue reading