personal finance Archives – Page 6 of 10

10 money mistakes you should avoid for sure

March 15, 2016 by Vipin Khandelwal

“What money mistakes have you made?”, my friend asked casually.

“Well, tons of them”, was my confession.

“Really.”

“Oh Yes!”

“Would you share them?”

“Of course.”

10 money mistakes that you should avoid

Here are the money mistakes that I made, some of my friends made but probably you shouldn’t.

Let money sit idle in a bank account earning 4%
Go swayed by greed and get rich quick schemes
Excessive use of credit card, revolving payments and interest piling up
Invest all savings into fixed deposits
Do not have goals and a plan
Put all money into stocks and trade
Make tax-saving your reason to invest
Do not make yourself aware about money
Try to time the market – when to invest, when to get out
Don’t know the status of your portfolio

Financial Goals – What gets measured, gets done

March 8, 2016March 8, 2016 by Vipin Khandelwal

“What gets measured, gets managed“, is a quote often attributed to the renowned management guru, Peter Drucker.

A slightly different version of it says “What gets measured gets done”.

I will let you pause here for a few moments and reflect on these words.

…

Done?

Great!

I am sure as executives, professionals and business persons who have to manage teams, projects, businesses and P&Ls, you have come to hold these words as a mantra.

In any of the roles, you work towards a certain goal – a definite reaching point that involves use of time, effort and resources. A goal sets everything in motion in a particular direction

Now the simple point is unless you measure, you will not know how far have you reached, what has been the result of the efforts and what corrective actions need to be taken so that you make the right progress towards the goal.

Makes sense?

Personal Financial Goals – what gets measured, gets done

But is that an approach you apply to your personal life as well, say your health, your financial goals and investments?

India Budget 2016 – Cut the Noise!

January 5, 2017February 29, 2016 by Vipin Khandelwal

Cut the noise

So, the budget 2016 announcements are over. The finance minister is done with his speech.

Now the incessant and sometimes over the top, commentaries on the budget will start – by experts, economists, journalists, news anchors, et al. Each one is vying for your attention presenting analysis, etc.

I am sure you too couldn’t resist taking one glance at your TV screen or your twitter timeline to find out what’s the budget saying – such is the frenzy around the event.

As I write this, your email inbox probably has also started receiving highlights and summaries of Budget 2016 – one each from your mutual funds, online newspapers and magazines.

Several of them speculated about the budget contents. How some tax benefits are going to be taken away or how more tax benefits would come in? Thankfully, none of that came true. Gives you one more reason to not go by rumours and stay away from speculations. Basically, an urge to think for yourself.

Now, if you are really interested in what was actually said and the true highlights of the budget, here is a link to the official budget site of the Govt of India.

What’s wrong with a ULIP?

February 25, 2016 by Vipin Khandelwal

There is a raging debate on ULIPs. Article after article is being published in favour or against a ULIP. Since this is the last leg of the tax saving season, the pitch has become even more shrill.

There was recently an article on ValueResearch about choosing ELSS vs ULIPs and there are angry comments on the article to the extent of accusing the writer of taking sides and not presenting a true picture about ULIPs. Both the camps, for and against, have made their points and it is difficult to ignore either.

If you are not truly aware of what a ULIP today is, you may want to first read another post here.

Now, let’s come to the real issues with ULIPs. What’s wrong with a ULIP?

Do you have a written investment strategy?

January 26, 2016 by Vipin Khandelwal

It is not news that most ‘investors’ do not have a thought through investment strategy. Asking for a written one is a far cry.

In good time, you would agree that your investments continue to be random acts driven by popularity, hearsay and need to just get the best returns.

The same randomness is equally visible in the not so good times. Stop systematic investments, sell current investment due to panic or take a vow to altogether avoid any market linked investments are some examples of these random acts.

If you were to ask me the difference between having a strategy and not having one, it would be that an investment strategy helps you stay the course. You know why you are doing what you are doing.

An investment strategy holds your investments together and hopefully, you too. It keeps you sane. It is difficult to waver a mind that understands the ‘purpose’.

Call it a set of road rules in your journey of financial independence.

What is an investment strategy like?

The investment strategy is a set of guidelines that direct your savings towards investments in a way that help you meet your financial goals.

I am sharing with you the investment strategy for one of my client’s – let’s call him Bruce Lee.

Investment decisions – How to get them right?

January 8, 2016 by Vipin Khandelwal

Investment Decisions Case 1 – Insurance Premium

A few weeks ago Rahul, a friend of mine, called up an insurance company to buy a term plan. He wanted a cover of Rs. 3 crores for 40 years.

The agent heard him and said that for a cover of this amount Rahul would have to pay Rs. 36,068 every year as premium.

The agent then told him that he wanted to make another suggestion.

“Yes, tell me.” Rahul was keen to know.

“Sir, I will give you an option where you pay premium for only 10 years but you will get a cover for full 40 years.”

Rahul was excited. This seemed like a bargain.