Vijaibabu's Blog - Personal Finance Guide for Financial Freedom

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 most convinced

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

Don't check the value of your long-term investments on a daily basis Don't stop your SIPs in equity funds Don't try to wait for a market correction to begin investing Don't ignore fixed income if you think there's opportunity in equities, every asset class has its own value Don't begin putting money in equities till you have adequate insurance and reasonable emergency funds Don't overlook tax-saving investments, money saved is money earned Don't ignore equities if you're retired, it's the best way to beat inflation Don't put your money in unit linked insurance plans and such, it's not your duty to make the insurance sellers rich Don't think of gold as an investment, buy it only for consumption Don't invest in sectoral or thematic funds, diversification earns more rewards Don't dabble in stocks directly if you don't have the time, knowledge or understanding of the markets Don't blindly follow everything list

For what is supposed to be a simple (and simplifying) idea, there are way too many misconceptions about the SIP (Systematic Investment Plan) way of investing.  In general, those who have a punter's approach to investing carry over that approach to SIPs, trying to stop and start SIPs by timing the markets. Back in 2010, I remember investors claiming that SIPs were no good, and that they had barely broken over the preceding years. Generally, these were people who had stopped their SIPs after the crash of 2008, and then restarted after the recovery in 2009. The basic idea behind SIP is that while the general direction of an equity investment is upwards, it is not possible to reliably predict the actual fluctuations that it may undergo as part of its general trend. Instead of trying to time one's investments, one should regularly invest a constant amount. As time goes by and the investment's Net Asset  Value  (NAV) or market price fluctuates, this will automatically ensure that

It not only allows you to invest at regular intervals but also enhances returns as the cash is invested in liquid funds, which generally offers better returns than savings bank account. As a mutual fund investor, what do you do when you have large sum in bank account and equity markets become attractive day by day, a scenario that we are going through for almost last three months? Some of you may want to write a cheque immediately. The wiser lot will opt for a systematic investment plan (SIP) to benefit from ongoing volatility but the bit smarter lot opt for systematic transfer plan (STP).  STP allows an investor to invest lump sum amount in a scheme and periodically transfer a fixed or variable sum into another scheme . It is quite similar to SIP which is more widely known and popular of the two among the mutual fund investors. While in a SIP you invest a specified amount in a scheme at pre-specified intervals and the investment amount for every SIP tranche comes directly from you