Vijaibabu's Blog - Personal Finance Guide for Financial Freedom

 Before buying your first house, assess the affordability and future serviceability of any loan you take. Sundar, a software engineer from Chennai got married five years back to Raji, a banker. Sundar and Raji are now 34 and 31 years old, respectively. Two years into their marriage, they decided to buy a house that cost them Rs 54 lakh, funded by a joint home loan of Rs 45 lakh. At the time their combined salary was Rs 1.1 lakh (Rs 65,000 and Rs 45,000, respectively). Fast forward to the present and the couple is expecting their first child in a few months. Raji has decided to be a stay-at-home parent to take care of the child, but it is not going to be an easy road ahead. As they transition from a double-income-no-kids household to a single-income household with a child, they are worried about servicing the EMI which is about Rs 42,500. "At the time of buying the house, we did not think about such a situation arising. We exhausted all our savings in the down payment while buying

1) 80% of gains come in 20% of the time. So an investor needs enormous patience and conviction to hold stocks for 10 or 20 years. 2) Why not all investors get rich? They like to get rich without going through many years of discipline & patience. Process leads to the outcome. 3)Prices change frequently. Value change over a period of time. There lies the opportunity. 4) Compounding is backloaded. It works well only over a long period of time. There is no substitute for time in compounding. 5) 99% of the time, doing nothing is the best thing to do in the market. 6) You cannot predict or control markets. What you can control is how much you save, investment process and behavior. Focus only on that. 7)Markets usually run ahead or fall behind. Rarely in equilibrium. Over or under valuation can last for a long time. Don’t time the market. 8) Buying and selling are easy. It is holding on through ups and downs is difficult but ultimately most rewarding. 9) Invest regularly. Invest for the l

 These pointers can help anyone who runs a business and looking to invest in mutual funds. 1) Use mutual funds for diversification. Most of your investment is in your business itself, as well as in real estate. 2) Invest a minimum of 70-75% of your savings back in your business, and focus on increasing your stock value. 3) Use a part of the remaining 25-30% for investing in equity mutual funds. Use SIPs and tag it to a goal like your child's education. 4) Invest 30-40% of your emergency fund in pure liquid funds. 5) Use the SIP route for monthly investment and systematic transfer plan or STP for lump sum investments. 6) Do not invest in equity mutual funds if you cannot park it for a minimum of seven years. 7) Invest in stocks only when you have the time and expertise to monitor them, and the money to spare, and when you are sure it will not disturb the focus on your business.