Vijaibabu's Blog - Personal Finance Guide for Financial Freedom

What do you thing rich people are doing in real world? They are constantly flying to Bahamas, drinking champagne and party hopping . Well, let me share the life style of one real -seriously rich man I know. He is up at about 5 am and hits the home gym. His instructor comes in at 5.15 and leaves at about 6 am, then this man does his treadmill, and by the time it is 7 am he is ready for break fast. By 7.45 he is in office checking out his emails etc. – he has a rule that he does not do any business at home – not even checking his emails. Almost all his mails get marked to his secy and the secy checks them – and an occasional emergency call is attended to. He tells me he attends to one such call in a week – and he is trying to make it once a fortnight. He works pretty long hours but tries to be back home by 7 pm for his dinner. Not a party animal at all, he tries to get one/ two days holiday when he goes on his plant visits. Twoof his plants are near very beautiful spots, so he goe...

AM I investing enough to sustaining my family's life style in future? . This is the question will most of the person's mind considering the cost of living we are going through now. For this I have prepared the below sheet considering various age and monthly expenses . This will help you to understand what is the monthly income required in future considering inflation. Also what is corpus amount required after my active employment/business income ends(may be at age 55/60) and till my last day(80 years). How to read this sheet? For example if my age is 35 years and monthly expense is Rs 30,000 ,considering 6% inflation I need Rs 96,214 monthly after 20 years(2039) , Rs 172,305 monthly after 30 years(2049) to manage monthly expenses. What if after my retirement? Say if you retiring after 20 years (2039) at age of 55 years , you need to create a retirement corpus of Rs 23,274,641(2.32 Crores) .This is to withdraw monthly Rs 96,214 (equal to Rs 30,000 monthly expenses t...

Why my overall returns from Mutual Funds is less than my current FD rates(6%)? This is the question i get today from most of my mutual fund clients.To clarify this i take one investor who has invested in L&T Hybrid Equity fund ,which is an balanced fund(in old context to keep it simple) which invests 65-75% in direct equity(stocks) and 35-25% in Fixed income products like Bonds,NCD,Gilts etc from year 2015. you can see first 18 investments from oct'15 till Dec'16 he has got more than 8% annualized returns in all cases that is  invested above 800 days Let us see what happend after this you can see investments made 1 year(365 days) before till 799 days he has got less than +8% to -4% varies. Let us take the overall investment how it looks like His overall investment has given +3.5% returns which is less than the current FD interest rates (6%).  Sounds right?  No. It is not true.  Observation 1 Out of overall 57 installmen...

Two of India’s oldest equity schemes - Franklin India Bluechip Fund and Franklin India Prima Fund have completed 25 years of wealth creation. Both these schemes were launched in December 1993.Both the schemes were launched by India’s first private sector fund house Kothari Pioneer Mutual Fund, which was later acquired by Franklin Templeton India. If Rs 10000 invested in 1993 has growth as below. Franklin India Prima Fund - RS  907,208(Nine Lakhs seven thousand two hundred and eight rupees) at 19.75% annualized return Franklin India Bluechip Fund - RS  1,062,399 (Ten Lakhs sixty two thousand three hundred and ninety nine rupees) at 20.51% annualized return We can learn below three lessons that come out clearly through this wealth creation journey: Successful Investing is not a short-term process.  It involves years of following a proven philosophy, rigorous process and continuous refinement. Markets keep throwing opportunities; Catch the ones that you are m...

A consolidated mutual fund (MF) account statement means that you can see all your MF holdings across fund houses in one statement. You may have an old MF investment through a distributor, whose details you may have forgotten. With a consolidated statement, you can get details or a summary of all your MF investments across fund houses in one place. This statement gets updated once a month for transactions in funds serviced by the four R&T agents in India—CAMS, Karvy Computershare Pvt. Ltd, FT Asset Management (I) Ltd, and Sundaram BNP Paribas Fund Services. To get a consolidated report, go to the website of either an R&T agent or fund house, enter your email address and Permanent Account Number (PAN) (this is optional) and select a password. An email will be sent to you and a statement can be retrieved from it. You can choose to get a summary statement with just your account balance, number of units and value, or a detailed statement, which will have individual transactions...

When you reach your early 40s, you are approaching the mid-point of your career. You already worked for about twenty years, assuming you began your career in your early 20s and you have about 20 years to reach your retirement age. This stage of your life is very important both from a career and financial planning perspective for the following reasons:- By the time you are in your early 40s, you are likely to be in middle management or senior management role. Your income, therefore, likely to be much higher than the earlier stages of your career. With higher disposable incomes you should be able to save more. This is the stage of your life, when you are more settled both from a career and family lifestyle standpoints. The lifestyle, you have in your forties, is most likely what you want to have for the rest of your life. We aspire for more improvement in our life, but a cutback in lifestyle is usually very difficult for us . While people today have much more mobility in their car...

We have all made mistakes in past and most likely would also make mistakes in future. Making mistakes is not crime but is something human in nature.However, we must learn from past mistakes and failure to do so is most undesirable. When it comes to personal finance decisions, the best way of learning is by analyzing the opportunity cost for our bad decisions. Opportunity Cost: But before we start, let us first understand what is 'opportunity cost'. The opportunity cost can be understood as the cost of doing any action measured in value terms of the best alternative that is not chosen or is foregone. a sacrifice value of the second best choice available to someone who has picked among multiple choices Opportunity cost is a key concept in economics, and is used in decision making where there are scare resources to be optimally utilized. The concept can be applied beyond financial costs: you may apply it for lost time, pleasure or any other resource that provides ...