Financial Planning

I am a strong believer of managing one’s own money and finances.

The simple reason is that it’s your money at stake, and your financial future that’s being planned.

Nobody cares more about your money than you do. So if you are not motivated to improve your financial situation, nobody else is going to do so either…not even the best financial planner around.

I manage my own finances and see no reason why anyone else can’t do that on his or her own.

[Read more…] about 7 Steps to Becoming Your Own Financial Planner

This seems like a season of disclosures!

After disclosing to you the stocks and mutual funds I own in my portfolio, today I discuss the amount of term insurance I’ve bought and my reasons for the same.

Buying a term insurance is one of the most important steps in your overall financial planning.

You may avoid buying any ULIP, Endowment, Money-Back, or Child Plan…but just don’t avoid term insurance.

This is especially true when you have dependents but don’t have enough assets (investments, trusts, etc.) to provide for them after your death.

However in case you have dependents and also have enough assets to provide for them after your death – a fully-paid-for home, a large and well-performing investment portfolio, frugal lifestyle – then you “do not” need term insurance.

[Read more…] about How Much Term Insurance I Have, and Why

This is what happens when you are enjoying your holiday and get a cold-call from a financial planner who first offers you a fee-based service, and then goes down to do anything for you for free.

This is with due regards to Dhanush and his team for their wonderful composition that I’ve twisted to suit what I want to tell you with respect to my view on this entire debate of “free versus paid” financial planning, and which one is better for you – the investor.

So here I go…

[Read more…] about Why This Paid-Versus-Free Financial Planning Di

“Who is rich? He that is content. Who is that? Nobody.” ~ Benjamin Franklin

I was reading The Money Game by Adam Smith last night, so thought about sharing some random thoughts on a too-close-for-my-comfort subject of ‘money’.

“It’s simply outrageous!” you might think on reading today’s headline. “Who doesn’t want money?”

Well, this is indeed a very normal way of thinking (Who doesn’t want money?). But you see, what’s normal isn’t always rational.

[Read more…] about I Don’t Want Money. What about You?

The greatest thing about India is the joint family system. The elders are always there to look after the younger members. The strong are always there to help the weak.

We’ve often seen the old man placing a hand on the sunken shoulders of the disappointed young man – who is out of luck and has fallen on bad times – pats him on the cheek, and says, “Fikr na karo beta…main hoon na.” (Don’t worry son…I’m there for you)

Reassured by the old man, the young man gets a new zest of life and is happy to face the world again.

So we care a lot about our families – their needs, wants, and aspirations.

Nowhere else in the world will you find a father worried day and night about how he will be able to fund his child’s higher education.

Nowhere else will you find a mother saving every bit of her monthly income to buy some gold to gift to her 5-year old daughter when she marries 20 years later.

[Read more…] about Don’t Worry…I’m There for You!

Image Source: The Street

Most of us have a love-hate relationship with money.

We usually resent those who have a lot of it, but spend our entire lives attempting to get it for ourselves.

We struggle, speculate, and squander during our prime wealth-building years, and then suffocate for the lack of ‘good enough’ money in our golden years.

You see, the biggest reason a vast majority of people never accumulate a substantial nest egg is because they don’t understand the nature of money or how it works.

Cash, like a person, is a living thing. When you wake up in the morning and go to work, you are selling a product to earn yourself a living. That product is ‘you’…your labour or hard work.

But it’s only when you realize that every morning your cash also wakes up and has the same potential to work as you do, you unlock a powerful key in your life.

[Read more…] about 3 Quotes to Change the Way You Think about Money

“Most security buyers obtain advice without paying for it specifically. It stands to reason, therefore, that in the majority of cases they are not entitled to and should not expect better than average results. They should be wary of all persons, whether customers’ brokers or security salesmen, who promise spectacular income or profits.” – Benjamin Graham

These words from one of the most successful investors who ever lived and one who remains the most influential investment thinker of all time, is a telling statement on the way an investor must go about identifying the right financial advisor.
[Read more…] about The Art of Choosing the Right Financial Advisor

“I’m looking to invest in mutual funds. Can you help me do that?” I asked the lady who picked up my phone at Bluechip Corporate Investment Centre Ltd.

Bluechip is the financial services company that had advised my friend’s father to invest in over 50% of the 192 mutual fund schemes he held in his portfolio. I had written about this in yesterday’s post.

“Yes sir,” said the lady. “There’s this gold fund that you can invest in for very good returns.”

“Can you explain me more?”

“One minute sir, let me ask my financial advisor to talk to you. He will explain you everything.”

“Aren’t you the financial advisor since you were advising me the gold fund?” I asked.
[Read more…] about You Don’t Need Enemies When You Have Such A Financial Advisor

I couldn’t stop myself from uttering these words as I looked at the papers my friend had handed over to me.

It was a list of mutual funds his father, who had just passed away, had invested in. And this poor friend of mine, physically challenged and utterly confused, was in a state of shock because his father never discussed with him his investments.

Anyways, this was not what disappointed me. I was shocked to see the list of mutual fund schemes, which counted to 192!

Yes, 192 different mutual funds schemes held by a single person!

What was even worse was that each of these schemes was bought through a different folio number.
[Read more…] about Shameless! Horrible! Disgusting!