The Most Authentic Guide on Personal Finance and Investments


Words of Wisdom : "There are only two lasting bequests we can give our children... one is roots, the other wings." ~ Steven Covey

Concise A to Z Personal Finance Guide

Are you a 'time-challenged' person, looking for quick advice on money matters?

Then, this blog post is written specifically for you.

Paramount aspects of your personal finances are described in just 26 alpha'bets'. These, I am certain, would guarantee that you get most of your 'bets' right.

A : Arbitrage funds are an excellent way to park your short term money. Are you still stuck with the obsolete Savings Account / Fixed Deposits to keep your surplus cash (over and above the day-to-day expenses)?

B : Borrowings are of three types. The Good (e.g. Home and Education Loans). The Bad (e.g. Personal Loans). The Ugly (e.g. Credit Card Outstanding). Naturally, you must avail only the Good Loans, take minimum of the Bad Loans and totally avoid the Ugly Loans.

C : Credit cards are Weapons of Mass Financial Destruction. Use these plastic explosives in your pocket, with utmost care. One false move and... BOOM, your personal finances will be blown to pieces.

D : Debt Consolidation is the answer, when you are drowning in debt. It translates into lesser number of loans; lesser interest outgo; lesser time pressure; and lesser harassment. Try it out... now. You will always feel "indebted" to me (pun intended).

E : Equity shares must be bought only by the experts. It is extremely dangerous and harmful for amateurs to directly invest in stocks. As I once remarked 'Just because you know how to drive a car, doesn't make you eligible to participate in a Formula 1 race'.

F : Fixed Deposits are probably the worst investments (except for the senior citizens and nil-tax depositors). If you don't fall in this category and still put most of your money in FDs, you need to do some serious rethinking (and restructuring).

G : Gold's legendary glitter is only momentary. Only on rare occasions has it delivered good to great returns. Otherwise, in most years, it has been (at best) an average performer and (at worst) a losing proposition.

complete-personal-finance-guide
The A to Z Personal Finance Guide that will enlighten your financial life.

H : Health insurance is a MUST for all. It's dirt cheap. But the protection that it offers, against exorbitant hospitalization and medical bills, is simply invaluable and indispensable.

I : Insecurity or risk is inherent to ALL financial decisions (even when you lock your money in a safe). Therefore, "protection" against risk is the right approach; "prevention" or running away from risk is a myth.

J : Jaitley's plan to save India from gold-obsessed Indians — Gold Monetization, Gold Bonds and Gold Coins. And, of course, you also have the Gold ETFs, which are infinitely better than buying physical gold.

K : Kaun Banega Crorepati? Answer these questions and check your Crorepati-Potential Score.

L : Life Insurance is best served through the "cheapest and simplest" Term Policy. Other plans, such as endowment and moneyback, that mix insurance with investment, don't make any financial sense. Poor returns, poor liquidity and poor flexibility, all add up to make them very poor products.

M : Mutual funds are the perfect approach to investing in equity shares, fixed income products and gold. Given the many benefits  diversification, professional management, regular monitoring, nil or minimal tax liability, high liquidity — your finances are incomplete without mutual funds. 

N : Numerology is a must to identify the best investments with maximum returns. However, there is a difference. I am talking of the mathematical power of numbers, NOT their mystical powers. IRR, YTM, PEG, EVA, CAGR... these are your numbers to success.

O : Options (and Futures) are the fastest way to becoming penniless and poor. It is like driving Maruti 800 in F1 racing. Crash and Disaster are inevitable.

P : Property provides a strong 'foundation' to your finances. Provided it is the right one and within the right budget.

Q : Question, in detail, every financial product or service offered to you. As I often advise, 'Either your KNOW it, or say NO to it'.

R : Retirement Plans (including Pension and Annuity) suffer from High-Tax Low-Flexibility. Avoid them. A Do-It-Yourself Plan for retirement, would be an infinitely better alternative.   

S : Scams, frauds and mis-selling are found everywhere, everyday. Don't trust anyone... I repeat, anyone. It would be utterly foolish to believe that someone will offer you a goldmine on platter (and himself be happy with a measly commission).

T : Tax Planning is undoubtedly important, to maximize your post-tax returns. However, don't make it as the primary objective. Focus on your goals and then try to build tax planning around it.

U : ULIPs were, once upon a time, as dangerous as plague. But times are changing. New Improved ULIPs could be a good choice, if chosen with care and caution.

V : Vanishing Money Trick is being played upon you every day... Flipkart ya Amazon pe khareed... OLX ya Quikr pe bech de.... Beware of this loot mantra.

W : Will (along with all the necessary nominations) is a must for smooth transfer of assets to your loved ones. I am sure you don't want them to run around courts, banks, insurers etc. after you are no more.

X : X is on the prowl to hack into your bank accounts. Beware of phishing and other such attacks. Don't share your OTPs, Passwords and other confidential account information with ANYONE... not even the bank officials.

Y : YOU should be the focus of all your financial decisions. Copying what other are doing with their money matters, is a surefire recipe for disaster. As advised in the past best investments are a selfie not a photocopy.

Z : Zzzzz... I am sure you would have slept by now... J

You have moved from dumb phones to smartphones. You have moved from a simple house to intelligent homes. You have moved from standing in the middle of the road to catch an auto or a cab, to ordering one on the phone.

Then why are you still stuck with the old fashioned and outdated methods of managing your personal finances and investments?

Use this Personal Finance Guide to become a Smart and Intelligent Investor (and I am always available to assist you).

You Learn A Lot By READING... And Even More By SHARING.

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Ignorance is like a SIGNED BLANK CHEQUE... anyone can MISUSE it.

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