25 personal finance tips to manage your money.


We have entered new year 2019 and most us take resolution every year . So here are few tips or resolution for new year , which can help you to have better financial condition in this year . This basic tips can actually help us to have better financial independence in long run.

  • Your expenses should never exceed your income .
  • “Do not save what is left after spending. Spend what is left after saving”. Warren Buffett.
  • Make a list of your future goals and start the investment accordingly .
  • Start working toward having passive income.
  • Always make the complete payment of your credit card on time every month.
  • You must understand the difference between “ Need and Want “ , your priority should be always your Need.
  • Refrain yourself from impulsive buying habit.
  • You should always have your life insurance and health insurance .
  • Stay away from the investment about which you have no idea.
  • Always do the due diligence before making your investment .
  • Always first close that loan , which you have borrowed at higher interest rate .
  • Maintaining an emergency fund. Everyone should have between three and six months of living expenses in the bank.
  • You should always have a nominee on all your investment .
  • Habits like smoking and drinking should be avoided , If you cannot avoid cut down the volume or have it occasionally .
  • All your goals in life should realistic and investments should be linked to your goal .
  • Always spare few hours from your weekend every month to understand your personal finance .
  • Refrain yourself from investing all your funds in single asset class.
  • Make the list of all your monthly expenses and evaluate the expenses which can be avoided.
  • Don’t fall in the trap of credit cards , don’t have more than two credit cards.
  • Never be a guarantor for friends and family members for their loan ,if they have bad credit score and asking for your help .
  • You start investing as early as possible in your career.
  • Don’t hesitate to talk to financial advisors , if you don’t have ample knowledge of investments and making portfolio.
  • Adopt healthy lifestyle and do health check up at least once in a year for self and family .
  • Every penny counts ,so always look for the best deals for all your household shopping to save .
  • Always evaluate your net worth to understand your financial conditions from time to time.

This tips can resolve most of your money problem if implemented in real life and can give you peace of  mind for any problem related to money in long run .


What can be the best gift for your child ?


As a parent you always think of providing the best life and future to your child . But the million dollar question is “ How can you ensure best future for your child “ . And the answer is best education can ensure a safe secure future for your child .

But we always think we have enough time to save for the future of our child and will start making savings at appropriate time. But you should understand there are several things which will impact your financial goals for arranging the funds for education of your child . Below are few  the points which need to be considered before making the investment .

  • What is the current cost of higher education you are planning for your child ?

This would be the most complicated question to answer, because we are not sure of “what career our child will be choosing or what would be his/her interest area after 15 to 20 years “ , So one should be prepared for the best option .

Lets assume my child is 2 years old now and will be opting for engineering from one of the premier college in India , which is costing approximately between Rs 16 -18 lakh for complete course including every expenses currently and suppose he will be doing post graduate in management studies (MBA ) after his engineering , that cost  approx. Rs 22 lakh currently.

  • What would be the future cost of education ?

As per above estimated current cost completing the course is Rs 40 lakh for both engineering and MBA . As our child is 2 years old currently ,so you are having approximately 15 years for his engineering and 19 years for is MBA to accumulate the funds .

Last 30 years average inflation is 7.5% for India , so you will need approx. Rs53 lakh after 15 years for engineering and Rs 87 lakh for an MBA degree for your child.

Below is the 30 years average return from various asset class . And how much you need to save monthly to achieve your goal . Its evident from below table the best assets class to achieve the goal is equity .


  • Selection of investment vehicle .

That most important role in achieving your goal is the investment vehicle , which you are selecting to achieve your goal . In the above table you can see the difference in monthly savings required from different assets classes. And equity out stands among three with approx. 16% average return in last 30 years . So as per us the equity would be the best option to achieve your goal in long run .

  • Implementation and regularly reviewing your plan.

Once you have selected the asset class as per your comfort zone ,due diligence and risk taking capacity , final step would be the implementation of plan and review of plan . As the tenure is long , you will need to review it on regular intervals whether your investment’s are moving in right direction to achieve your goal. Always remember if you have no idea of how to make your portfolio , please don’t hesitate to get in touch with good financial planner to build your portfolio . A few thousands of fees for financial planner is always good option.

Few of the myths and truths about mutual fund SIP.


Mutual funds are one of the best instrument to create large corpus of wealth . Since last couple of years it has become one of the most favorite investment options among the investors. Even though the varoius attempt has been done to create awareness among investors about mutual funds , but still there are number of myths still prevailing among the investors. We will try to clear some of the myths here in the post .

Myth : SIP and Mutual funds are two different investment products.

Truth : SIP is basically a name of process through which investor systematically buy small amount or units of mutual funds on monthly basis . Its just like recurring deposit you are buying mutual funds every month on fixed date and fixed amount . You can buy mutual funds in two ways either lump sum purchase or through SIP.

Myth : Mutual funds invest the money only in equity.

Truth : Mutual funds invest in several assets class such as Equity ,gold ,Crude, Corporate deposits, Commercial papers ,Govt Bonds and Treasury Bills. So mutual funds are available in market not only in equity but also in other asset class.

Myth: Demat account is must for investing in mutual funds.

Truth: Demat account is only one of the many options to invest in the mutual funds . You can investment in mutual funds through various options such as buying directly from fund house , through Mycams , Paytm , ET money and other channels.

Myth: Investment in mutual funds should be for only long term .

Truth: Only incase of equity mutual funds , its advised the investment should be for long term , to get the benefit of compounding . But other than equity mutual fund you have options such as Liquid fund , short term debt fund ,which can be used for investing the funds from 2 months to 2 years .

Myth : Your money is lock-in for 3 years in mutual fund .

Truth: Only in ELSS ( Equity Linked Saving Scheme) funds are locked for 3 years tenure and on other plans you will be charged only exit load at the time of redemption of funds if applicable by fund house.

Myth: SIP in mutual funds provides the guaranteed return.

Truth: No mutual funds can guarantee the return , even if the funds are debt linked . Mutual funds are linked to market and volatility. Fund houses always show the past return .

Myth: High rating funds delivers higher returns.

Truth: High rating never guarantees higher return of fund . Rating of funds are determined on several factors such as risk , return , volatility , consistent return and risk adjusted return .

Myth : You should always buy Mutual funds with low NAV for better return.

Truth: NAV is nothing else but current market value of the portfolio . A fund with good growth has higher NAV and it doesn’t reflect that’s fund is expensive .

Myth: Stop the SIP in mutual funds in falling market .

Truth: If you are market expert and know ,how to time the market you can stop SIP .However SIP should not be stopped as no one can time the market and continuous SIP can help you to average out and make profit without thinking of timing the market.

Myth : You can withdraw all the funds invested in ELSS SIP after continuous investment for three years.

Truth : Each monthly SIP should complete the 3 years lock-in period before withdrawal. This is one of the biggest myth with ELSS plan SIP that you can get all your money back after 3 years . Example : Mr Ashok started with ELSS SIP in the months of Jan 2019 , so the investment made in the Jan 2019 can be withdrawn in Jan 2022 ,and subsequently investment of FEB 2019 can with drawn in Feb 2022 and so on. So in the exact 3 years time only your first month SIP clears the 3 years lock-in period.

Myth: You cannot stop SIP once started , unless you reach the tenure you have fixed for investment.

Truth : You can stop your SIP at any given point of your investment cycle. It get executed only if your account has the sufficient funds on SIP due date .

Above mentioned are few of the many myths which stops you from making investment in mutual fund SIP. So this myths has been busted to assist you to start with your SIP in mutual funds.

How to know your UAN?

We all come across this situation at least once in our lifetime especially the people in salaried class. Its either transfer or withdrawal or balance inquiry of EPF (Employee Provident Fund). Now the government has made it easy by putting all the information and process of withdrawal and transfer online.

The first thing which you need to have is your UAN (Universal Account Number) before proceeding further to get your EPF transferred or withdrawn.

What is UAN ?

UAN stands for Universal Account number , it is basically a 12 digit number issued by EPFO to each individual who contributes to EPF. This number will remain same through out the service tenure of employee irrespective of number of organisation it changes. Every time employee change a company will be issued new member id and employee will only need to link this member id with UAN and transfer his entire PF balance from one account to other.

How to get the UAN ?

We generally have two ways to get the Universal Account Number(UAN).

  • Employer: Most easiest way to get the UAN is salary slip , its generally updated in your salary slip. In case its not showing up in salary slip you get in touch with your company HR for UAN.
  • UAN Portal: To get your UAN through portal you need to keep few thing handy such as PF number or Member ID. Once you have this details you can obtain UAN from its portal in following steps.

Step1: Open UAN portal through this link https://unifiedportal-mem.epfindia.gov.in/memberinterface/

Step2: Now click on the tab Know your UAN status mentioned under important links in the right hand side of the page. Following page will open-up.


Step3: Now in this page you have three options to know your UAN , With the help of PAN number , Adhara number or EPF number . Select any of the three options and fill the other mandatory details in the page and click on tab “Get Authorization Pin”.


Step4: Once you have authorization PIN on your mobile ,enter the pin and click on Validate OTP to get UAN.

Step5: You will receive your UAN number on your registered mobile number.

Once you have your UAN number you can proceed with the process of PF transfer or withdrawal . And also with the help of UAN number you can check your current PF balance and either your employer is submitting the amount deducted from your salary into your PF account.

Ten most common investment options available in market.


We always keep on analyzing and discussing with others , which is the best avenue for investment in current situation. Rather than analyzing the current situation , we should first try to analyze our financial situation and when do you need the funds back and what is the objective of investment .

We will try to analyze the basics of various investment options available in the market as of today .

Fixed Deposit/Recurring Deposit : Fixed deposit is basically a financial instrument provided by banks with fixed rate of return for fixed period irrespective of market conditions. Similarly recurring deposit is financial instrument in which you make investments monthly rather than single payment as in fixed deposit.


  • A wide range of tenures, ranging from 7 days to 10 years, to suit your investment plan.
  • Facility of automatic renewal
  • Loan facility is available upto 90% of principal and accrued interest
  • Guaranteed return as fixed before deposit.
  • Highly liquid as premature withdrawal is allowed with penalty.
  • Offers interest rate higher than saving account.
  • One of the safest investment products available in market.


  • Premature withdrawal will lead to penalty.
  • After tax return is often lower as compared with other products.
  • Lack of flexibility as funds are locked for fixed period.
  • Often it has been seen after tax return is either equal to inflation rate or less.

Risk: Very low as compared to other products.

Return: Moderate or low.

Mutual Funds : Its an investment instrument where fund manager collects the funds from various investor and invest the pool of funds in securities such as stocks , share , money market and other various assets .

Advantages :

  • Wide range of investments options or diversification, such as equity , debt , money market , gold etc.
  • Liquidity in funds offers you buy and exit the funds without any penalty in open ended funds.
  • Funds are managed by experienced professionals .
  • Best in class returns as compared to other asset class in long run (Equity Mutual funds).
  • You can start the investments with even Rs 500 per month.
  • Also provide tax saving schemes under ELSS.


  • Funds always have certain cost expenses involved .
  • Doesn’t provides the guaranteed return .
  • Returns are linked to market conditions and decision’s of fund managers .
  • Liquidity issue in tax savings funds . As funds are locked for 3 years.

Risk: Moderate to High , depends on category of funds you are investing.

Return: High

Corporate Fixed Deposits : Its basically a instruments used by corporate raise funds for business purpose , in which you get fixed amount of return for fixed period of time.

Advantages :

  • Interest rate is higher as compared to bank fixed deposits.

Disadvantages :

  • Return after adjusting tax is not exceeding the inflation rate if you fall in 30% tax bracket.
  • Corporate fixed deposit are not secured . Your money is at risk in case of company goes bankrupt.
  • Liquidity is one of the major issue with company fixed deposits , most of the company doesn’t allow pre-closure till six months of deposit .
  • Incase you go for pre-closure a penalty will be charged by company.

Returns: Moderate

Risk : High.

Real-Estate : Its investment in property , such as buying land , building or flats with objective to earn profit in long term.


  • It provides the diversification to your portfolio .
  • Can be good source of monthly income.
  • It provide good return in long term

Disadvantages :

  • Cost involved in property investment is very high .
  • Liquidity of investment in property is always very low. It takes time to sell the property .
  • Property needs to be hold for very long period to earn good returns.
  • It also incurs the cost for both buying and selling.
  • Requires maintenance .
  • May fall in legal trouble.

Return : High with exceptions.

Risk: Low to Moderate

Stocks and Shares : Its basically the investment in the business , as investor you will buy the ownership certificates of the company. As the company grows , value of your shares will also increase .

Advantages :

  • Its easy to make investment in shares.
  • Return is best in all the asset class
  • Highly liquid investment .
  • Your investment grows with the growth of company.

Disadvantages :

  • Highly volatile , returns are not guaranteed from shares.
  • All your investment can go to nil , incase of company bankruptcy .

Return : High

Risk: High

Debentures : It’s a fixed income investment , in which investors loans the funds to company or government for fixed period and fixed rate of interest .Debentures are backed with creditworthiness of organization.

Advantages :

  • It provides regular and fixed source of income .
  • Its relatively safer in case of company liquidation.
  • You can get loan on the instrument to liquidate it in emergency.
  • Its safer as its guided by SEBI.


  • Interest earned on debentures are taxable.
  • The prices of debentures in the market fluctuate with the changes in the interest rates
  • Redemption are not allowed before the maturity .

Return :Moderate

Risk :Moderate

Bonds: Bond is an investment instrument in which investor loans the money to company or government for fixed tenure at fixed or variable rate of interest .

Advantages :

  • Bonds are often liquid.
  • Bonds are relatively safer .
  • Bonds are backed by assets
  • Bonds are less volatile as compared to stocks.


  • Bond value fluctuates on the basis of credit rating.
  • In case of company bankruptcy investor can loose money.
  • Inflation also impacts the bond value.

Return : Moderate

Risk : Moderate

Gold: Gold is an precious asset which is basically used by investors as an hedge . Investor generally buy the gold in different forms physical , digital and paper. You can buy gold at low price and sell it at higher price to get the profit . And basically the price of gold moves upwards in case of uncertainty of economy.


  • Gold has a good global demand.
  • An ideal hedge for financial market risks.
  • Diversification with gold offsets inflation.
  • Highly liquid assets .


  • Physical gold has storage cost .
  • Gold ETF incurs the brokerage .
  • Gold can be volatile in short term.

Return: Moderate

Risk: Very Low

Public provident Fund (PPF) : PPF is long term investment plan backed by government which provides the safety as well as tax saving .

Advantages :

  • It provides the tax benefit.
  • You can start the investment with minimum Rs 500 per month.
  • Its one of the safest investment .
  • Easy to open the account.
  • Facility of partial withdrawal after certain period.


  • Maturity period is 15 years.
  • Only one account is allowed per citizen.
  • Interest rate are below inflation rate sometimes.

Return: Moderate

Risk: Very Low.

National pension Scheme: Under this plan subscriber has to contribute a fixed amount every month from salary during his working tenure . Subscriber can withdraw a lump sum amount after the tenure , but a subscriber have to buy a annuity plan from 40% of corpus to get monthly income.


  • The plan is quite cheap as the maintenance cost is low.
  • You can withdraw any amount from the investment account but not from pension account.
  • You are flexible to change your fund manager.
  • 40% of your matured amount is tax free.


  • 60% of your matured amount is taxed.
  • Returns are not guaranteed.
  • You are eligible for only one NPS account .

Return: Moderate

Risk: Low/Moderate

Note: You need to have proper mix of above investment options , according to your risk taking capacity and goal period to achieve your financial goals. Also you must keep in mind each asset class carry some amount of risk along with it so you must be very careful before choosing the investment vehicle for your financial goals.

What are the different types of Insurance?


We all keep on getting the phone calls from insurance agents for various insurance plans for tax saving and saying best investment plan in the market , but most of the time we ask them not to call again or don’t disturb. If you don’t have some of the basic insurance such as term plan or health cover. You should always give a second thought to this calls ,because this small premium can give to big relief in future .

We generally have two types of insurance ,which is further sub-divided in various other insurance scheme.

  • Life insurance.
  • General insurance.

What is life insurance ?

Life insurance is basically a contract or agreement between the insurance company and insured. When we come across life changing event , such as death or disability . As per the agreement of policy your family member or nominee will eligible for the sum assured .

What are the different types of life insurance scheme.

Term Plan: Term  insurance plan is basically a pure financial  risk cover against the death of insured  during the period of policy .Beneficiary or nominee can claim the sum assured from the insurance company in case of death of insured.

Advantages :

  • Premium is too low as compared to other policy available in the market.
  • High cover with low premium.
  • Tax benefit.


  • No return after the tenure completion.

Whole life insurance : This policy gives you life cover for your entire life ,along with life cover it also has return linked to it , which will be paid to insured family .Maturity age for this policy is 100 years.


  • Provides cover for whole life.
  • You can withdraw partial fund after a particular tenure.
  • If insured lives past 100 years ,policy turns into normal endowment plan.
  • Tax benefit.

Disadvantages :

  • Performance of insurance company can impact your return negatively.

Endowment Insurance: It covers your life for specific period for the sum assured and it also act as regular saving plan . Most of the endowment plan participate it the profit of the organizations. It provides the survival benefit with an average return of approx. 5-7 percent per annum.


  • It provides the maturity value if insured outlives policy term.
  • You can avail loan on the premium paid on the policy.
  • Policy has surrender value.
  • Policy pays bonus and profit.
  • Tax benefit.


  • It should not be considered for saving plan as the return is too low.
  • Premium is high as compared to term plan .
  • Surrender value will be less than premium paid as it charges penalty.

Unit Linked Insurance Plan(ULIP): Like any other endowment plan you have life cover and maturity benefit in ULIP. The unique character of the plan is it provides both insurance and investment option in single plan. A part of your premium paid is diverted in to stock market /debt such as mutual funds , also you have flexibility to choose the fund .


  • Tax benefit .
  • Returns are linked with market ,so in long run returns of ULIP will be good.
  • Flexibility to plan your investment in insurance.


  • Returns can be effected negatively in case market doesn’t perform good, as its linked to market.
  • Pre mature surrender value will be less as it comes with high cost.
  • Returns are not guaranteed.

Money back policy: Its more like a endowment plan but only difference is you get a set percentage of sum assured in regular intervals along with the maturity or survival benefit of balance amount of sum assured. And in case of death during the policy period nominee will get the complete sum assured.


  • Tax benefit.
  • A fixed part of sum assured is paid on regular interval.


  • Usually the tenure of policy is high.
  • Return is very low.

Child Plan: Its basically a cocktail of different insurance plans ,such endowment, term plan , investment and money back. Its designed to take care of your child future in case of your sudden demise with lumpsum payment and in case your survival you get fixed amount on following events such as child higher education and marriage.


  • Helps in building corpus for child education and marriage.
  • Most of the plans matures around 18 or above age of your child.
  • It come tax benefit.


  • Low return
  • High cost of policy.

Pension or Annuity plan: Its basically a cover to take care of expenses after retirement. This life long policy in which you start getting monthly income after paying the premium for certain period of time for life long.


  • Guaranteed return.
  • Tax benefit
  • Life long benefit


  • One of the costliest plan
  • Low return.

What is general insurance ?

A general insurance is basically a agreement between insurer and insured to cover the financial losses for other than death. Such as a financial loss due to car theft , or accident , medical treatment or theft in house.

What are the different types of general insurance.

Health Insurance: It covers you and your family against various types of medical conditions . It basically takes care of medical cost arising due to different types of disease and illness.


  • It provide the benefit of tax.
  • Most of the health insurance covers all the diseases.
  • It also covers the pre and post medical expenses of hospitalization.
  • In single insurance all family can be covered .


  • Most of the health insurance doesn’t cover the pre-existing diseases for certain period.

Travel insurance: Travel insurance covers your financial loss during travelling both within and outside country. It covers following losses during travel.

  • Loss of baggage
  • Emergency medical expenses
  • Loss of passport
  • Hijacking
  • Delayed flights
  • Accidental death

Home Insurance: It covers the financial loss occurred due to damage to your home from natural calamities , fire, burglary, theft, flood, earthquakes.

Vehicle insurance:  Vehicle insurance covers your vehicle against theft ,accident ,natural calamities and fire. Also third party  insurance is mandatory in India for using the vehicle.

Fire Insurance : This insurance provides the cover for financial loss occurred due to fire in your property. It is mostly bought by large manufacturing company and business personals to protect their business from financial loss due to fire.

Note: We must not forget or understand that insurance is not investment , it’s a protection which you are buying against future uncertainties. Also you need to understand the need insurance as per your requirement.


Some of the best performing mutual funds from various category.



Since last couple of years mutual funds has been a  hot selling financial product in Indian market . Either through lump sum purchase or through SIP. It deserves the tag of one of the best selling financial product due the stellar return it has given in last couple of years

But still a question which revolves in our mind is “ Which is the best fund to invest ? “ . And this will always be question for all the mutual investors . Most of us when we look for mutual fund SIP , look at the return from fund for last 1 year and sometimes also rating . Last one year return  generally shows the current performance of the fund . 

But you should also look for the return of last 3 to 5 years along with the rating  , this shows how consistently the fund has been performing since past few years. Because  equity investments are generally done for  long term financial goals. So considering the only  current  return would not be fair to start your investment and build your portfolio .

Rating of funds should be considered before starting up with your investment , because rating agency’s such as CRISIL are masters at their work and they consider several factors before rating any fund . But if you are an old investor and find that your fund is not listed among the top raters fund list , you should not get disappointed because ratings are not consistent and also along with rating , there are several other factors which need to be considered ; such as long term return in last 3 , 5 or 10 years and consistent return , risk factors and stability of fund manager and fund houses performance.

It has been my personal experience  the funds which were top rated in my portfolio 3 years back  are no longer top rated but the return of my funds has comfortably surpassed benchmark and most of its peers in term of return. So one should not worry about the ratings always , you should be more concerned that your fund is surpassing the benchmark and the returns which you are getting can easily help you to reach your goal amount .

On basis of consistent return and rating , we will try to figure out some of the best performing funds from multicap , midcap and largecap funds  as of today  .

Multicap or Diversified Fund :

  • Principal Multi Cap Growth (Rank 1)
  • UTI Equity Fund(Rank 1)
  • CR Equity Diversified Fund (Rank 2)
  • Kotak Standard Multicap Fund(Rank 2)
  • Motilal Oswal Multicap 35(Rank 2)
  • Mirae Asset India Equity (Rank 2)
  • DSP Equity Fund – Direct (Rank 3)
  • HSBC Multi Cap Eq. (Rank 3)
  • SBI Magnum Multicap Fund (Rank 3)

Five years annualized return from this multicap funds has been in the range of 16%  to 23%.

Large cap Funds:

  • Axis Bluechip Fund (Rank 1)
  • HSBC Large Cap Equity Fund(Rank 1)
  • ICICI Pru Bluechip Fund (Rank 1)
  • Reliance Large Cap Fund(Rank 2)
  • UTI Mastershare Unit Scheme (Rank 2)
  • SBI Blue Chip Fund(Rank 3)
  • Kotak Bluechip Fund (Rank 3)
  • HDFC Top 100 Fund(Rank 3)
  • Tata Large Cap Fund (Rank 3)
  • DHFL Pramerica Large Cap Fund(Rank 3)
  • BNP Paribas Large Cap Fund(Rank 3)

Five years annualized return from this largecap  funds has been in the range of 15%  to 22%.

 Large and Mid Cap Fund:

  • Can Robeco Emerg-Equities(Rank 1)
  • Sundaram Large and Mid Cap Fund(Rank 1)
  • Invesco Growth Opportunities(Rank 1)
  • Principal Emerging Bluechip(Rank 2)
  • Mirae Emerging Bluechip Fund(Rank 2)
  • SBI Large & Midcap Fund (Rank 3)
  • Kotak Equity Opportunities (Rank 3)
  • Tata Large & Mid Cap Fund(Rank 3)

Five years annualized return from this large and Mid cap  funds has been in the range of 16%  to 34%.

Mid Cap Fund:

  • Axis Mid Cap Fund (Rank 1)
  • L&T Midcap Fund (Rank 1)
  • HDFC MidCap Opportunities(Rank 2)
  • Kotak Emerging Equity(Rank 2)
  • Edelweiss Mid Cap Fund (Rank 2)
  • HDFC MidCap Opport(Rank 2)
  • Sundaram Mid Cap Fund (Rank 3)
  • Reliance Growth Fund(Rank 3)
  • Tata Mid Cap Growth Fund (Rank 3)
  • Franklin (I) Prima (Rank 3)

Five years annualized return from this Mid cap  funds has been in the range of 16%  to 34%.

Small Cap Funds:

  • HDFC Small Cap Fund(Rank 1)
  • Reliance Small Cap(Rank 2)
  • L&T Emerging Businesses Fund(Rank 2)
  • SBI Small Cap Fund (Rank 3)
  • ABSL Small Cap Fund(Rank 3)
  • Franklin (I) Smaller Co (Rank 3)

Five years annualized return from this Small cap  funds has been in the range of 25%  to 38%.

ELSS Funds:

  • Invesco India Tax Plan (Rank 1)
  • Axis Long Term Equity Fund(Rank 2)
  • L&T Tax Advantage(Rank 2)
  • ABSL Tax Relief ’96(Rank 2)
  • IDFC Tax Adv(Rank 2)
  • Tata India Tax Savings Fund(Rank 3)
  • IDBI Equity Advantage(Rank 3)
  • Kotak Tax Saver – Regular(Rank 3)
  • Franklin India Tax Shield(Rank 3)

Five years annualized return from this Small cap  funds has been in the range of 19%  to 26%.

Selecting the funds for ideal portfolio is a tedious task , however list of funds mentioned above can help to make a model portfolio . You can start with proper mix of funds from different category  of funds . And start your financial journey to achieve your goal . But you should always track the performance of funds every year and analyze if any changes are required on the basis of performance .

Four basic pillars of financial freedom.


Most of us during our entire career and working age focus on increasing our income as fast as possible .  But one need to understand increasing only income will not solve all your financial problems .Because earning alone doesn’t guarantee the financial independence and peace of mind .

It has been evident from the past that good income doesn’t guarantee  to save a lot and become richer in future  . You all must be knowing this famous sports person , who earned in millions during their sports career  eg; Mike Tyson , Evander Holyfield , Allen Iverson  they are few of the famous players who earned more than 200 million dollar in their career and are now under debt  with no savings . So the point is good income alone is not a solution to all your financial problems .

Our financial planning foundation  stands  on four  pillars Income , Saving , Investment  , Discipline . If any of your pillar is weak , all your efforts will be go waste .

  1. What is Income ?

Income is the money which we receive as individual or business  in exchange of providing goods or services or through making an investment . eg salary , rent , profit. We use this income to meet our day to day expenses .

Points to remember about your Income.

  • You should always have a regular source of income to meet all your expenses
  • Your income should always exceed your expenses .
  • If your expenses are exceeding your income on regular basis , you should either plan to increase your income or to decrease your expenses.
  • You should always have a back up plan for your income.
  • You should always look for passive source of income .

You should understand income act as  take off gear for your personal finance planning .

  1. What is saving ?

Amount which is left with you after meeting all your monthly expenses is your saving for the month.

Saving can actually only come to existence if your income is higher than your expenses. Saving should be a habit  just like eating and sleeping on time daily .

Why saving is important ?

  • Saving provides financial security against unforeseen events in life.
  • Savings gives to cushion to invest money for future goals.
  • Savings help for emergency financial needs.

How much should we save ?

The thumb rule of saving is 50/30/20, you should reserve 50 percent of your income for essentials like rent and food, 30 percent for discretionary spending such as money spent on luxury items, vacations, and nonessential goods and services., and at least 20 percent for savings.

But  their should be no rule for saving  ,the saving should be always linked to your future goals  and necessities . You should always understand saving too much and too less both are not good for your personal finance . You should understand financial planning is not always about your future , it should  also be about living today . You should not sacrifice your todays need to fulfill the future needs.

Your saving should be calculated as per your  future requirement  and need , its should not be done with closed eye without  proper planning and right balance of  saving .

  1. What is investment ?

Investment is an act to put some part of your money in an asset class to generate higher return in future . Such as buying shares , mutual funds with long term objective.

Why should I make investment ?

Investments are always made to  safeguard  present and future financial  goals and security . If you have any long term financial aspiration such as buying house , child education , child marriage or retirements. Suppose you want to send you child for higher education to foreign country and you don’t have sufficient fund for that right now , but you have time of 10 to 15 years , so in that case you can start investing small amounts every month , so that by next 15 years you will have sufficient amount to fund your child education.

What are the different type of investment options ?

Below are the most popular investment options available in the market for both long and short term investment .

  • Fixed Deposit
  • Recurring Deposit
  • Mutual Funds
  • Shares
  • Bonds
  • Debentures
  • Gold
  • Real Estate
  • ETF
  • NPS

How much one should invest ?

This purely depends on ‘ how much your are saving “ and how much you need for your future goal . Your investment should always be aligned with your goal . Suppose you have 5 goals for future and you have  the estimated amount you will require , so the investment should be made in same proportionate to meet all your goals.

Investments should always be made with proper research and analysis because your hard earned money is at stake . If you don’t have adequate knowledge on investments and its avenue its always advisable to consult some good and reliable financial adviser before proceeding . Most of the time our reluctance to pay fees to financial adviser and make the investment by self or on the advice family members and friends cost you a lot .

  1. What is Financial Discipline ?

Financial discipline is nothing but your willingness and attitude towards money . Its basically your approach towards your Income , savings and Investment .

One should understand the importance of financial discipline , because in the absence of discipline all the other three pillars mentioned above will never come to existence . Financial discipline should be followed religiously ,to achieve your financial independence  .

Note:  When we have all the above mentioned four pillars at right place with equal strength , than only your financial planning can begin its journey towards its goal of financial independence .



Understanding “I Wish recurring deposit “scheme from ICICI Bank


We come across various financial product this days to meet our long and short term financial goals. I Wish is one such product of ICICI bank which provides the several benefits with number of features . Its worth sharing with everyone .

We all must have seen piggy bank (gullak) in our childhood , when ever we use to get any coin in home we use to drop it in piggy bank .Which was one of most popular way of saving during our childhood . I wish also has the similar concept of dropping the fund into I wish deposit as and when you have any savings in your account and earn the interest equal to fixed deposit or recurring deposit.

How to start saving in I Wish deposits ?

You just need to have an ICICI saving bank account with net banking facility . Once you login into bank portal you can see the option to create I wish deposit under products tab.

How it works ?

It works just like any other Recurring deposit or fixed deposit it provides the benefit of both the product . The beauty of the product lies in its flexibility . Investor can invest the funds depending on the timeliness and financial requirement . Whenever you have some spare fund you can deposit the fund in to the account with no fixed date or amount of deposit.

Features of the product:

  • Goal Focused Saving: This saving plan is always linked to your goals . Before staring the deposit it will always ask you , why you want to save this funds and within how much duration you want to achieve your goal. Goal can be your higher education, vacations, wedding, buying a gadget or anything.
  • Track Goal Progress: You are just a click away to track the progress of your goal , you can easily track what percentage of your goal has been achieved and pending.
  • No penalty for missed payments: If you miss to make the deposit for any particular month , you will not be penalized for same ,as it is done in recurring or fixed deposit.
  • Multiple goals: You can create any number of goals without any limit. You can create unlimited I wish deposits .
  • Deposit Amounts: There is no limit on the amounts you deposit and number of transaction you make in this scheme , not only you but your friends and family members all can make deposit in this scheme to help you in achieving your goal . In recurring deposit you are bound to make fixed amount of deposit every month with only one deposit , we have no such limitation in the I wish deposit.
  • Deposit Dates: Again we have no limitation of fixed date for making the deposit , you can make deposit on any date in a month .
  • Rate of interest : Rate of interest is same as the bank provides on its fixed deposit or recurring deposits.

Limitation of scheme:

  • Premature withdrawal : In case, you withdraw the funds before the maturity date , you will not earn the interest rate mentioned at the time of goal creation. You will only get interest for the period the goal remained with the bank. Beside this, a penalty of premature closure of account will be levied on the applicable rate.
  • Auto Closure : Even if you achieve the goal before or after duration , it doesn’t closes the goal automatically , you will have to place a online request to close .
  • Partial Withdraw : You will not have the facility of partial withdrawal in the middle of the goal tenure.


Its one of the best product if you are looking for secure and fixed rate of return , as it gives you good flexibility with your saving and investment . You can have return of fixed deposit and recurring deposit and deposit the funds as and when you have it , without bothering of due date and penalties. But its advisable to avoid the plan if you have any goal longer than five to seven years tenure . In that case you should always opt for equity mutual fund to have better returns .

Whats your views on Term insurance cover ?


“ Is an Insurance cover of Rs 1 crore enough ? . This was an article in Times of India few days back on personal finance page . Article was about covering the basic aspects on under insured Indian , amount of insurance ,requirement of Term plan and other details of term plan .

The most important point which drew my attention in the whole article was the comment of readers at the end of article . We will try to understand few of the views of reader in the below post on their understanding on term plan.


  • Yes you are correct the Insurance company wants to make money by selling their product . But they are actually not freighting us , but asking us to be prepared for future uncertainty . Its not about considering earning ability of your family members , its about the gap which would be created by future uncertainty in your family income . It all depends on your requirement and understanding the product you are buying from insurance company. Always look at product as per your requirement and need.


  • You should understand insurance is not investment , its just a protection which you are buying to cover any uncertainty in life . Your investments will give you good return in long run , but in case on any uncertainty your insurance will take care of your family needs .


  • My dear friend “God helps those who help themselves“, What’s wrong in being prepared for uncertainty of life , by just paying a small amount if your family is being secured you should always opt for it. We should be more focused on our needs and requirement ,rather than on what insurance company is making from selling you insurance .


  • Its not about enjoying your earnings , its just about planning your personal finance for yourself and your family . Its all about an attempt to secure the future of your family in case of any uncertainty with the earning family member .

We must understand insurance and investment is two different financial products . Every financial company wants to make money by selling their products , but we should not waste time on analyzing what the company is making out of selling its product to you, rather you should be more concerned and analyze , how the product will be beneficial to you and fits to your requirement .

Lets try to understand this way , Suppose you want to buy a car for self and family use so we look for the price of the car as per our budget , and how economical car will be in maintenance, mileage and look for other features of car as per our requirement and need .

But when it comes to any financial product ,we stuck at only two points “What will be the return and How safe is the product “ But you need to understand all financial products are different ,on just this two parameters of “return and safety” , you cannot judge all the financial product. Financial product should be bought on the basis of your goal and it should be linked to your goals and requirement’s .