Posts tagged with "investment"
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Revisiting 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.
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How 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.
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Capital Gains Harvesting
A couple of weeks ago, I mentioned about tax loss harvesting being a legitimate way to reduce your taxes. In this post, I will explain another way to reduce taxes while taking capital gains using capital gains harvesting. A capital gain harvesting is basically a method of tactically selling some of your investments for capital gains without actually paying any taxes on them. How does that work? Let’s find more about it in this post.
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Our Income Sources In Retirement
While I mentioned my retirement income sources many times before in my blog, I still get questions about that. So I thought I will revisit our income sources after our early retirement in 2018. It has been more than 4 years since we retired and nothing has changed in terms of income sources. I think most people are skeptical when I say I retired early and wonder if I am getting income from multiple sources. Actually that would be a good, probably correct way to retire early. But like many things in my life, I have taken huge risks with very little recourse if things fail. Having a plan B means I don’t have enough trust in Plan A. So plan B really is to make plan A work (you heard that one before didn’t you?). So in this post I will list out all our income sources again.
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Franklin Payment Is Now Complete
If you did not already know, I had a bunch of investments in Franklin Ultra Short Term Fund. At one point, I had as much as 50% of my fixed income invested in it. However, my asset allocation being almost 80% in fixed income at that time, my exposure to this specific debt fund was almost 40%. Now imagine how it would feel like to know that Franklin has decided to wind-up the fund? I was not worried that I will lose the money, but the problem is that most of my investments are now illiquid. The whole point of investing in mutual funds was for the liquidity.
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Have A Checklist
Whenever I notice that I need to do something routinely which has a bunch of steps based on certain conditions, I turn to creating a checklist. Having a checklist helps me immensely. If you follow a checklist you can avoid mistakes and complete the work quickly. Take for instance doing taxes. If I did not have a checklist, I am certain to miss something or the other and then will have to file a revised tax form. Of course when there are new entries in the tax form, or if your incomes have changed, I update the checklist. I have similar checklists for making backups of my media (photos, music, movies etc), laptop (code, libraries etc) and even for investing.
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How Much Do You Need To Retire At 45
A few days ago, I read an article where the reader wanted to know how much corpus they need to retire by 45. I thought it was interesting and wanted to use my own calculators to see what numbers I would arrive at. I was surprised at how very close my number was, compared to what the advisor in that article gave. But do remember that for the exact same question different people will give different answers based on their own past experience and their biases. Anytime you take financial advice, do keep that in mind. No one has the perfect right answer. They are just approximations to lead you in the right direction. In the end, you need to figure out what the right advice for you is.
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Should I Invest in Retail Direct Scheme
The minute I read about RBI launching retail direct scheme to allow retail investors to invest directly in the government bonds, I got excited. I have a huge portion of my investments in G-Sec (government securities) via various mutual funds. If there is a way I can invest directly with RBI, side stepping mutual funds, I could save on some expenses (expense ratio). Sounds good in theory, but will it work? Here are some of my initial thoughts on the scheme as applicable to me.
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Trimming Expenses
In my last post I mentioned that I was confident of my approach to early retirement. In addition I wrote about a couple who have been retired for 30 years by just following the 4% rule. One of the learning from that post is that there could be a huge drop in market that may hit my investments badly. In that case my investments may not keep up with my expenses. For example if there is a prolonged market slump. And I need a plan. The plan starts with cutting down my expenses temporarily so that my investments can catch up.
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Year In Review – 2020 Investments and Redemptions
In the past few posts, I have written about my expenses, investment returns and net worth. In this post I want to show you my investment pattern over the last year. I will try to explain my weird investment behavior. A word of caution though. Do not copy my investment style. It will most likely do you more harm than good. The reason is quite simple. I am a retired person with no income. If I had a salary I would certainly invest differently (read more equity investments). I will most certainly do my monthly investments and not the random investments as you will soon see.
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