For Finance group ( FINWORLD@SEA ) now on Telegram

For Finance group now on Telegram

Despite all of us being familiar with finance and market requirements there is often need to to repeat oneself for the benefit of those who come later in the day.

Whenever person joins our group we try to introduce him to the basic tenets and options available for Investments. Our focus is not to be a billionaire overnight, Rather to gain experience and wealth slowly and steadily.

Our focus is not to become the know all of the finance world rather to be able to distinguish between the rights and wrong of investment so that the unscrupulous elements in the society do not try to get the better of us and fool us.

During our journey of investment our focus should be to ultimately  become independent financially and not be dependent upon the employer for the unscrupulous companies in the market over whom we have no control.

 I would like to advise all those who have joined later in the day please do not be swayed by empty promises and distant mirages.True wealth grows in an organic way in keeping with the economy of the country.

The basic rules of economics dictate this, that you cannot outperform the economy of a country consistently.

Hence I would like to ask newcomers on the group to please first read the books that I have shared above and visit my blog holisticrajeeve.blogspot.com and also the Facebook page Kaushik's FINWORLD.

Since the book was written quite a few years ago a lot has happened in the financial world which calls for upgradation of our strategy  and priorities.

In view of this I would like to to enumerate the following:

1. Please take a simple clean Vanilla and cheapest term plan early  in life.

2. Take a floater health insurance for yourself and the family irrespective of what the company covers you for. The family may mean your parents before and after your marriage also.

3. Target to keep 8-10% per year in your fcnr or nre fds. However at no stage you need to let it go beyond 50 lacs INR.

4. Open the PPF for spouse and children. Sukanya for daughter below 10.

5. Insure your house against natural causes, fire and theft.

6. Having done the above please distribute your monthly salary between 3 to 4 AMC or asset management companies which is an acronym for mutual fund companies.

Deposit this money  in liquid funds of those companies and plan a STP or systematic transfer plan into  4 or 5 equity funds.

7. Your equity funds can be suggested as follows:

- 1 index fund investing in in nifty or Sensex plan.

- one junior Nifty index fund which is also called next Nifty.

- one multicap fund which at the moment can be PPF flexicap fund or any other suitable one.

- 1 fund investing in the international market like PGIm Global opportunity or most N100 , or S&P500 or PGIM emerging markets fund etc.

- as a personal choice I would also like that you invest in one small cap fund which will be very volatile and aggressive but will give a boost to your portfolio.

Keep your investment ongoing permanently and without any break.

Do not be distracted by the market going up down or sideways. The STP  will ensure that your money is invested round the year 52 weeks.

- all the expenses should be met from the remaining money of your salary after the above investment has taken place.

- for buying or making a house do not hesitate to take a loan from a proper institution. By virtue of any calculations the outgo in form of interest will always be lower than the return on your Investments.

- if you will follow the above path it will only be a matter of time before you will achieve your goal and that is is the financial independence.

One final point I wish to reiterate ...

Very often we asked the question of how much would be sufficient for a retired life. For this I had come up with the figure which many found a little daunting. Truly enough a 30 year old may find it difficult to raise 4 cr before retirement and hence may feel discouraged.

Hence I have a separate parameter to enable everybody the flexibility of age as and when one can retire.

So as per my my experience with self and other colleagues if for three years your CAGR on your portfolio is more than annual expenditure then you can assume that you have sufficient funds to last you till you find another stream of income. However if your responsibilities and goals like children's education and marriage are over then certainly you are financially independent and can pursue what you wish in life.

Amen!!!