Money Management – key areas to focus when creating a Portfolio !!

[krish44]

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Hi JK,

Why this selective hacking? Why take only the two sentences from my post and go on a soliloquy? You have not countered my argument with facts. Now let me reply to your points:

1. Acquisition of any asset (need not be a house-it can be a car, a mobike, a piece of land, a costly jewellery or even a lifetime asset of a wife!!!) is not for those who consider themselves to be ultra sensitive and keep changing jobs frequently for all kinds of silly and stupid reasons. The reason can be anything-a demanding boss, a conspiratorial team of colleagues, a distant office requiring long hours of commuting to and fro, a smelly workplace because it is right above a non-veg restaurant, feeling terribly insecure with complexes because of perceived inadequacy in performance of tasks etc., etc., Such a person will never stick to a job and will be a rolling stone earning very little, saving nothing and ending up with a lot of grievances against the society at large. A house is certainly not an asset for him and a housing loan is certainly not manageable by him. He can have hope only on his fecundity and the offspring s will have to make him proud. I have seen people like that.

2. If you have sufficient surplus after your monthly commitments of expenses-a family to look after etc.,-and if you are a IT payer and you are young too, there is nothing like a house acquired with a homeloan from a good bank. An asset which has an inherent accelerator of value matching the inflation to a good extent. If you have not yet settled down in your job with a long term perspective, then wait until you do that for investing in a house. If you are a rolling stone dont invest at all for you won't know when you will have to touch your savings.

So i still repeat my words: Invest in a house wisely in time or perish.

Vaagmi sir
I understand your concerns
As far as item 1 of your post if a person cannot take the pressures of modern work life involving a lot of commuting and 12 hour worklife and is inadequate in performance ,there should be a decent life for such persons also. the society should be enablers for them to acquire movable assets such as cars etc and immovable assets such as house. a good answer for them is a govt job ,he can be both secure and retire on .Govt can also give housing for them until retirement. He also deserves a wife[why not] . they can make wonderful husbands as they have a peaceful and non challenging worklife and be wonderful parents for all you know. By retirement ,next generation can take over. In joint brahmin families there are many like this. we do not discard them and throw them into dustbin. in fact they would be considered successful. only effort is to see that do not change jobs . others can make up in the family for what such a person does not earn and ensure their wife and children are not frustrated because of him. these types are much better than ambitious types working in MNCs and running after high pressure jobs and money
2. your idea that a person should earn enough to have seed money to buy a house and have housing loan from bank to get a house after a few years is sound. before that he should marry and have a child or two. then he will happily spend his life paying for his actions for a lifetime paying for his kids education and home instalments . what more than this can a girl hope for from a husband. great thought . LOL

 

[Jaykay767]

Dear Vaagmi –

First off – you are assuming that people will have jobs for 30 yrs in today’s age & time, and NO disasters will come during this time. And this person will be healthy all his life to work. Most importantly, this person should continue to work for 30 yrs without thinking about retirement/other areas of interest in life whether he likes it or NOT till his house debt is paid off & then he should worry/accumulate for retirement.

In the current age, there is nothing called job security, job stress is very high, & once a person crosses 40 yrs or 50 yrs, they are discarded by MNC/private companies for fresh blood!! As I said earlier, I can quote innumerable instances of youngsters suffering with cardiac, diabetes,etc.. due to high stress.

Money is always limited by your Salary & your ability to work. Hence the fundamental game changer is how do you deploy this limited Cash effectively & grow your wealth; retire quickly from the day to day rat race.

After retiring, one can always build a house, property. No doubt a property is an asset. But life & health are the MOST important assets & one should first protect this & then worry about the rest !!.

Cheers,

 

[krish44]

I am interested in short stay at CBE. How to get info on such flats? Any idea?

try contacting teachers from DTEA schools delhi . there are seven eight schools and dozens of teachers.anyone will help . find a contact .some alumni of the school will be there in your town contact for further help.if you are unsuccessful I will find you a contact .in which town are you . send a private mail with contact mail

 

[indianassault]

This original post by JK is informative. But he assumes 100% investment. I am from IT background and this is my breakup everymonth of take home. .

26% - Rent + Maintenance.
24% EMI for Apartment home loan.
20% - Credit card that covers internet, power, grocery and other expenses.

Apart from this 10% is mandatorily provided as Shares by my Canadian company to make their family board richer.( There is employee and employer contribution from the salary . in case i dont buy, the employer contribution is "abased" by the company)

SO within hours of crediting 70% goes out to other accounts.

So what is the scope you see for investment?

 

[Jaykay767]

Indianassault - first take life/health insurance for your family/kid. Start investing in FD & Debt funds - this becomes your emergency fund. Ensure the Debt fund does NOT have a long lock in period. In the debt fund space, you can invest in GILT funds - these are investments only on govt securities & are generally tax free returns & are capital protected. Then overtime - in a year or two - you invest in the other areas I mentioned in my initial post. Cheers,

 

[Jaykay767]

Indianassault - Key is to invest every month religiously over years - even if the amount is small, it is fine. It will just take longer to build a strong financial base !!

 

[auh]

Money Management – key areas to focus when creating a Portfolio!!

First off, lets be clear on the goals. Whether you are a Senior retired person or a young TB starting in life or you are in between, the golden rules in money management are:

DO’s

1. Create an Alternate Income from Day 1 of your career. Doesn’t matter how well off you are. This is an absolute must. Alternate income could be a simple FD or rentals or side business etc..

2. Investment Plan – Income coming from regular income + “Alternate source of income”, should be re-invested. Park some in safe instruments, park some in low/medium risk investment, park some in high risk investments. Low risk low reward, High risk high reward. So you must always have some high risk investment if you want to strike big in life !

3. Monitor your Investment Plan – It should grow every month, Qtr, year, does not matter by how much. Even if you are growing only by 5%, you will come out ahead. Don’t worry.

4. Insure everything – Health, Wealth, Car, Accidentetc…. Don’t leave anything to chance. Only way people can go bankrupt is by spending recklessly OR by an unfortunate event in life !!

5. Within the first 2 to 5 yrs of your career, you should have retired. When I say retired, you should be able to pay your basic monthly bills from this alternate source of income/investment !! This is really possible if you are a very conservative TB without blowing your money all over.You can do the maths with a simple XL.

6. Within 7 to 10 yrs of starting your career, you should have retired for your kids also !!. that’s it. You are done working in life !!

This is why, I was saying, you should never even entertain about Business etc.. to get ahead in life !!. Today jobs pay you very high, just park the salary, invest/earn from them.

After you retire, do what you want. Infact the ideal work will be to do business with VC money, it can be very satisfying, zero risk toyou, and you can really test your brilliance/luck in life !!!

Don’t’s (Not easy to do as always – otherwise everyone would be rich & super rich by now)

1. Till you have retired, NEVER take DEBT, not even to buy a house or Car or anything. Buy a used car if u really need to. If you have a extended family, never easy to do, unless you are independent & strong willed. After you have made a lot of money, u can buy a house anywhere and retire anywhere for eg in Bahamas..

2. Never Spend other than necessities, save everything else. Rent cheap, share rent, live in a RV if you are in the USA (pun intended), so do what ever. Generally for conservative TBs, this should not be an issue.

3. Remember once you are financially retired, the rewards are even greater than the missed vacations, missed dinners, missed parties during the first 5 yrs of career life. Most importantly when you retire in your 30s, the entire world is in front of you !!

4. NEVER lose on any investment that can derail your life.

5. Never forget the above rules!!

Investment Portfolio:

If should invest a small portion of your salary every month into the following over a period of 2 to 5 yrs, you will almost always get ahead & pot. Retire by then !! This will also help diversify against any market crashes.

1. Invest 23% into FD, and keep paying taxes !! for NRI’s, go with NRE accounts, they are NOT taxed in India, but you may have to declare the interest as other source of income in your home country & pay taxes.

2. Invest 20% into tax free – Short term DebtFunds, and don’t pay taxes or reduce your taxes !! Always put in short term debt funds, make your money, & then reinvest !!

3. Invest 19% into Dividend Blue Chip Stocks – likeL&T, Pharma etc.. OR GE, IBM, HP etc…

4. Invest 12% into Real Estate – more as a hedge against currency risks.

5. Invest 9% into Income Mutual funds – Personally, I have low expectations from the fund managers, but you should have in one’s portfolio. Regular Income will offset any long term risk of funds going “Kaput”

6. Invest 7% in Growth/Sectoral Mutual funds – they may have multiple year lock in but are invested for growth.

7. Invest 5% in penny stocks (@ your own risk !!) –Gambler’s luck – Go Big or Go Home !!

8. Invest 5% into other world currencies – like Pound,Euro, Yen apart from $$


% Allocation are based on risk analysis, you can change it based on your local markets,conditions, etc…

I am sorry for quoting the whole post, but I think the above advice has to be selectively applied based on the lifestyle, earning (& retention) capacity, existing asset base and peer group.

Investing in any risky venture is an anathema to a conservative TB; asking him to invest, albeit a part of his income, in high risk based portfolio is an apparent conflict of ideas.

Investing in shares and engaging in speculation is something that has a high stress value and requires one to have a calm mindset in the even of a loss. Of couse there are fund managers who can do this, but this is not something, imo, that one should be looking to early in his/her career.

The path of an individual crosses many events in life both personal (marriage, kids) and social (friends, relatives) and one cannot be a hermit to abstain from the demands of such occasions to have a financial retirement after 10 years of working. Commitments keep coming, and the stone keeps rolling.

To cut a long story short, I would suggest a simple piece of advise. If you do have any surplus left, and do not have any fixed asset, the first strategy would be to invest in one. You would be able to take the brunt of the EMI in the face before you marry and become a family man. Invest in more than one asset if you have the capacity. By the time kids reach adolescence, the property would have nicely appreciated to a generous sum. Land always appreciates - this is the rule.

Then, after the EMI, should you have any surplus, try to create deposits which would form the liquid core - this is based on your expectations and earning capacity. Plan it wisely and spread it to your spouse and parents with yourself being the nominee (EOR types would work best). There might be some tax considerations to take care of, but now Indian banks have started coming out with NRE FDs which interest do not attract tax. This core can be split into (examples only) essential, medical, education, travel/entertainment, emergency and buffer. How much amount to invest in each slab is to one's preferences.

Insurance - Where health insurance is mandated, it is a must. In other cases, it is better to have at least a life insurance. In some parts of the world (like in the UAE), medical insurance is taken care by the employer itself and hence may not be required; in case it is not covered, it would be wise to take one. LIC recently had come up with an education plan which had the benefits of insurance and savings. Likewise there are some good options out there! Invest in such options where you pay the premium for 5 years (just an example) and forget the rest ! The earnings would start to come in after 18 or 20 years hence. One can also plan for pension plans (annuity) where you get a fixed yearly sum on reaching your retirement.

If you still have surplus, relook in investing in the above options again and again until you are sure that you are covered in all aspects and have enough fixed assets that would ensure the longevity of your core.

And do with the rest, whatever you decide...

This might be good for those who wish to spend and enjoy what they earn while saving a neat sum simultaneously. Many people work like donkeys and save like ants only to grow old and find out that they cannot enjoy what they accumulated.

So, have a healthy life style, and incorporate an exercise routine. And party occasionally !

Cheers,

 

[Jaykay767]

auh - what if some disasters come during the time one is paying the EMI & by the time the property nicely appreciates ? - how do you propose to handle this ?. And after the EMI - this could be after the person reaches say 45 or 50 yrs, I assume you want to them continue working at the whims and fancies of a Boss so that they can create a nice FD for retirement ? Just in case -

 

[Jaykay767]

please don't forget layoffs, companies closing down, health issues, disasters etc.. etc.. I mean if life were so simple - that people just woke up, got a nice job, got a nice salary, got a nice hike every year, got 2 or 3 Big houses nicely on EMI's, & these properties nicely appreciates by the time the kids are in adolescents, and create many BIG FDs for retirement & then ride in a palanquin carried by 4 people into the sunset !!! - LOL !!!

 

[auh]

please don't forget layoffs, companies closing down, health issues, disasters etc.. etc.. I mean if life were so simple - that people just woke up, got a nice job, got a nice salary, got a nice hike every year, got 2 or 3 Big houses nicely on EMI's, & these properties nicely appreciates by the time the kids are in adolescents, and create many BIG FDs for retirement & then ride in a palanquin carried by 4 people into the sunset !!! - LOL !!!

auh - what if some disasters come during the time one is paying the EMI & by the time the property nicely appreciates ? - how do you propose to handle this ?. And after the EMI - this could be after the person reaches say 45 or 50 yrs, I assume you want to them continue working at the whims and fancies of a Boss so that they can create a nice FD for retirement ? Just in case -

Jaykay767, I am not sure whether the context of your question is itself within the scope of the discussion here. There is a lot that can happen between the time the brush is taken and tooth paste is applied on it.

What would happen in case one were to lose big time on the equity front and step up the golden way to heaven on hearing the news ?

The tenure of a loan is linked to the level of EMI; higher the EMI, lower the tenure. I have seen people who have multiple EMIs and have 3 to 4 assets by the time they are 45. If you are advising people to stop working after they have made their money in fund based portfolio, it is not a good idea!

How do you propose that investing in the fund/equity market would work out all rosy and nice for the people who seem to live in the terrible and uncertain world of employment? Is it not an irony that you seem to think that the very same people who are left exposed due to an EMI are hip-hopping merrily when it comes to speculation ! It sure does sould nice in dreams, but not in reality...

 

[prasad1]

please don't forget layoffs, companies closing down, health issues, disasters etc.. etc.. I mean if life were so simple - that people just woke up, got a nice job, got a nice salary, got a nice hike every year, got 2 or 3 Big houses nicely on EMI's, & these properties nicely appreciates by the time the kids are in adolescents, and create many BIG FDs for retirement & then ride in a palanquin carried by 4 people into the sunset !!! - LOL !!!

Yes, we need to be prepared for the worst. I recommend at least 6 moths expenses in liquid assets for such eventuality. Fortunately in India the real estate bubble has not burst, imagine the plunge of 2007-2008 in US real estate. Some People still owe more to the bank than the property value. This in spite of bank loan at the rate of 4% in US. Indian economy is still growing and demand is still there so enjoy while it lasts.

Like Jim Cramer says:
You can make money in bull market, and you can make money in bear market, but pigs get slaughtered everyday.
So invest wisely, and good luck.

 

[vgane]

On the other hand, if you have some VC funding money witha regular monthly salary, by all means, do it. You are earning every month & also building your own company -you many not own the entire company but have a substantial shares !
Cheers,

Jaykay,

VC funding is not easy...A recent study of start ups indicated that the biggest source of funding is personal savings & credit-57%; the next source is family & friends-38%; Banks:1.43%; Angel investors:0.91%; VC's pump money in Millions but is 0.05%

So one cannot depend on VC in the start up..After the company has tasted success and achieved some scale VC's pitch in

For those in India the best is Real Estate..It will appreciate better than a FD...Go for land , serviced apartment, commercial shop & flat in that order

 

[Jaykay767]

auh - Please read my initial post fully. Any financial portfolio is designed to withstand market crashes & is sufficiently diversified. if the equity does badly in 1 yr, the FD, Debt Funds, Real Estate, Currency etc.. will counter balance. if you invest only in top blue chip, & even if the stock price goes down, you can collect dividend regularly - so don't sell the stocks - just keep it. Unless you say, that many of the top blue chip companies have closed down in the last 50 yrs, there is very low risk if you invest in multiple blue chip companies !!

 

[prasad1]

Jaykay,

VC funding is not easy...A recent study of start ups indicated that the biggest source of funding is personal savings & credit-57%; the next source is family & friends-38%; Banks:1.43%; Angel investors:0.91%; VC's pump money in Millions but is 0.05%

So one cannot depend on VC in the start up..After the company has tasted success and achieved some scale VC's pitch in

I liked that part, I did not like the real estate part, as it is more of Goonda-giri than business.
VC will invest if there is perceived potential for future income, they will take a gamble for big payoff. Generally for small business you can not find VC or Angels.

 

[Jaykay767]

Vgane - if you are suggesting that it is preferable to do fulltime business in real estate without VC money, then I would NOT recommend. One should NEVER do any business with one's personal money - because of the risk of a loss even if it is a real estate business. Always do business with someone else's money !! Cheers,

 

[Jaykay767]

Vgane - In today's world, there is NO reason why one should do business with personal money. Jobs are plenty at least in the indian scenario. And if some one has a burning desire to do business, go to a VC. if the VC does not provide funding, then most likely the business idea is NOT great, so no point in doing that business anyways !!. Cheers,

 

[vgane]

Vgane - if you are suggesting that it is preferable to do fulltime business in real estate without VC money, then I would NOT recommend. One should NEVER do any business with one's personal money - because of the risk of a loss even if it is a real estate business. Always do business with someone else's money !! Cheers,

Jaykay,

What I meant is if you have a fantastic business idea along with funds to spare & you are ready for the long haul in business, please go ahead by all means

As far as real estate is concerned so long as the rural to urban movement continues to happen & population continues to grow, the demand will be there for real estate..Once we reach a plateau then real estate will no longer be a viable option

I talked about support from family & friends for funding the business ..This is the back bone of the Marwari community who are willing to help their brothers in business..This is how they succeed ...We need to take a leaf from them in this atleast!

 

[prasad1]

Venture capital (VC) is financial capital provided to early-stage, high-potential, high risk, growth startup companies. The venture capital fund makes money by owning equity in the companies it invests in, which usually have a novel technology or business model in high technology industries, such as biotechnology, IT and software. The typical venture capital investment occurs after the seed funding round as the first round of institutional capital to fund growth (also referred to as Series A round) in the interest of generating a return through an eventual realization event, such as an IPO or trade sale of the company. Venture capital is a subset of private equity.

VC funds are not available for all business ventures.
There is a TV show in US called Shark Tank, it is must for anyone who wants to start a business.
Watch Shark Tank TV Show - ABC.com

 

[Jaykay767]

Vgane –

Even if someone is super super rich, have enough funds & more to spare, why do business with personal money ?. Bank it, earn interest on it – the easiest way to make money !!!!!

See, my point is, why risk personal money by getting into business - they are many players today - VC funding, crowd funding, Angel Investors etc.. from whom you can take money & do business ?.

In the same Marwari communities, I will show you many heros who have gone to zeros. Let me tell u - my classmate marwaris who were rich in those days, going to school & colleges in cars, are all struggling today !! They are all pushing their kids to corporate careers now !!

Also I am not clear as to why is it so important for TB's to emulate the Marwari example to prove our mettle in business that too in today’s age, when a IT career can help you retire in 5 yrs ????

I mean some TB's & similarly from every other community with burning desire will start business, there is NO need to emulate them & risk our personal wealth, community wealth to start business !!

Cheers,

 

[vgane]

Vgane –

Even if someone is super super rich, have enough funds & more to spare, why do business with personal money ?. Bank it, earn interest on it – the easiest way to make money !!!!!

See, my point is, why risk personal money by getting into business - they are many players today - VC funding, crowd funding, Angel Investors etc.. from whom you can take money & do business ?.

In the same Marwari communities, I will show you many heros who have gone to zeros. Let me tell u - my classmate marwaris who were rich in those days, going to school & colleges in cars, are all struggling today !! They are all pushing their kids to corporate careers now !!

Also I am not clear as to why is it so important for TB's to emulate the Marwari example to prove our mettle in business that too in today’s age, when a IT career can help you retire in 5 yrs ????

I mean some TB's & similarly from every other community with burning desire will start business, there is NO need to emulate them & risk our personal wealth, community wealth to start business !!

Cheers,

Jaykay,

I am not asking Tambrahms to emulate Marwaris businesses in pawn broking, real estate..Look at the new age businesses ..They are dominated by them...

Please read the latest article on the top 7 entrepreneurs in the fast galloping E commerce field..All the 7 are led by the well educated Marwari/Banias, not by uneducated shop keepers..There is not a single South Indian leave alone Tambrahm in this list

Top 7 entrepreneurs driving fortunes at India's most valuable e-commerce companies - Economic Times

 

[kunjuppu]

dear sri K I like the line 'one needs the guts and the chutzpa to venture into these things and let us encourage parpanars to who are into those things' on property investment and speculation.
you know tamil school teachers in delhi mostly brahmins bought land and built flats for themselves in coimbotore . interestingly those who do not occupy them give it to other brahmins going to coimbotore for short stay/holiday in summer . one can directly approach the caretaker for a flat for stay more than couple of months. classic case of brahmin exclusivity together with good business management not expected from brahmins
insistence of 20 percent up front payment of total cost in india before loan is on insistence from govt due to lot of defaults from buyers on discovering hidden costs after 70-80 percent payment
and sticky housing loans. builders are very unprofessionel and they get middle class stuck understating the cost and escalating later and also delaying deliveries. A delay of atleast six months is very common without penalty.there are many stuck with flats without power and water connections which have not been got after possession . sometimes it is non availability of lifts in multistorey flats. any bargaining power with builder is only before first payment after which you are at builders mercy. big builders treat them like dirt. poor middle class put up with all this in anticipation of getting their own flats

not much different here in toronto either. once you sign up, and pay a deposit, they got you by the balls. and regular intervals they milk you, and you have very little protection, because in the fine print, which you seldom read, there are all sorts of clauses, freeing the builder from any obligation.

the only thing, to protect you from the hard sell, which can be very convincing, is that they have to, by government rules, give you 10 days to change your mind. ie within 10 days you can cancel any contract.

it is common to lose money by speculators. they buy into an apartment when prices say are 300,000 for that unit, hoping it will go up. the builder promised delivery within 12 months..and in reality, takes 26 months, by then, the market has fallen. the buyer cant even sell it for 200k. lots of stories of indians buying several condominiums (flats) like that, hoping to make a huge kill, and ended up in bankruptcy.

in toronto. where else.

 

[krish44]

Venture capital (VC) is financial capital provided to early-stage, high-potential, high risk, growth startup companies. The venture capital fund makes money by owning equity in the companies it invests in, which usually have a novel technology or business model in high technology industries, such as biotechnology, IT and software. The typical venture capital investment occurs after the seed funding round as the first round of institutional capital to fund growth (also referred to as Series A round) in the interest of generating a return through an eventual realization event, such as an IPO or trade sale of the company. Venture capital is a subset of private equity.

VC funds are not available for all business ventures.
There is a TV show in US called Shark Tank, it is must for anyone who wants to start a business.
Watch Shark Tank TV Show - ABC.com

I know some business incubaters in india specific to e commerce and IT sector . they fish around metropolitan cities for goats mostly youngsters [3or 4 partners] with an idea and development model which they are unable to commercialise and scale up. they fund these products and have a profit sharing model to bring out a commercial product and help market the same. much of it is based on interpersonal relationships between the parties concerned.not many succeed

 

[Vaagmi]

Dear Vaagmi –

First off – you are assuming that people will have jobs for 30 yrs in today’s age & time, and NO disasters will come during this time. And this person will be healthy all his life to work. Most importantly, this person should continue to work for 30 yrs without thinking about retirement/other areas of interest in life whether he likes it or NOT till his house debt is paid off & then he should worry/accumulate for retirement.

In the current age, there is nothing called job security, job stress is very high, & once a person crosses 40 yrs or 50 yrs, they are discarded by MNC/private companies for fresh blood!! As I said earlier, I can quote innumerable instances of youngsters suffering with cardiac, diabetes,etc.. due to high stress.

Money is always limited by your Salary & your ability to work. Hence the fundamental game changer is how do you deploy this limited Cash effectively & grow your wealth; retire quickly from the day to day rat race.

After retiring, one can always build a house, property. No doubt a property is an asset. But life & health are the MOST important assets & one should first protect this & then worry about the rest !!.

Cheers,

Hi JK,

1. There are Home Loans with 10 years repayment period. And there are 1BHK flats in reasonably good neighbourhoods. If a person's dependents are too many and a large chunk of his monthly inflow is absorbed by commitments which can not be postponed, he should invest in one such flat. If and when his position improves he can sell it and invest in a bigger flat or a house/villa. If he postpones his house investment, he will regret it for ever because as he advances in age the demands on his income by other expenses are too high-like children's education, medical expenses, inflation not fully compensated by salary increases etc.,

2. Disasters are not new. They were there when the jobs were predominantly in the public sector and they are there now too when private sector is the preferred employer. Disasters can not be ducked, they have to be managed when they occur. If the demands are too strong you can even sell the flat, close your homeloan and use the surplus(both in value and in savings on interest and EMI) to meet those demands.

3. As long as you perform well, as long as your contribution to the company's profit can not be ignored, you are a valuable asset to the employer. Even if you slow down a good employer gives you many a chance. Any way it is not a Damocles sword hanging over your head.

4. Stress due to demands of workplace has to be managed. There are methods which are very effective in managing stress. An understanding family and a helpful spouse is a great boon if you have it. Otherwise you will have to carry their load of frustrations too on your shoulders because you as the head of the family can not afford to appear to be failing.

5. Take a mediclaim policy even if you are hale and healthy and increase the amount covered by 10 % every two years until it reaches a target amount. The policy should cover everyone in the family. So you ensure protection.

6. After retirement you will never build a house. Even if you have a disease free healthy body and mind, even if your children have all settled down in their life, you will not invest in a house at that age because there is no incentive for that. At that age there is no meaning building an asset to be left behind soon for someone else to enjoy.

 

[Jaykay767]

Dear Vaagmi,

I think we have to agree to disagree here !

You have addressed many points in your post & I agreewith all of them except for one – which to me is the most important.

“The ability towalk away from a Job when the workplace environment turns toxic & makes the life miserable & unhealthy!!”

Recently a 30+ yr old employee in a MNC in Bangalore diedin the office due to harassment by the Boss. I also know 3 or 4 cases wheresimilar youngsters have died due to work related issues.

All these people stayed & suffered all the abuses inoffice because they could not walk away due to the financial commitments –loans, debt.

May be I am talking exceptions here or biased here, othermembers can add.

That’s why I specifically mentioned that you shouldretire first. Also I meant retire by late 20s or early 30s, not when one is over60 yrs. I agree at 60 yrs, no one will have any interest in buyin a house letalong build one.

Cheers,

 

[ashwin_ash]

Speculation can yield decent near term returns. There are many firms which do currency speculation for a fixed fee. Commodity futures also yield decent returns.