First of all remember that all people claiming to want to teach you personal finance are not here to teach. Many of them are here to peddle products.

I am not against peddling of products, I have done it in the past, and would happily peddle something or the other. Financial planning should be planning, peddling should be peddling. In fact teaching should LEAD TO LEARNING, NOT, SELLING.

Read both the links in this article – one is Debashis ripping a product, one is a sales pitch for LIC. Know the difference? Read and find out

And this obviously is the WORST WAY TO PLAN your old age retirement…

One day when you are 40, your wife will scream at you saying ‘You have done NOTHING’ for our old age…..

So you will feel guilty and continue to watch TV….but there will be no action….

Then one day at lunch your colleague will tell you …’hey you know what I just bought a pension plan’ and my old age is taken care of…and you will be impressed. Let alone that he is also a geek working on CAD and wanting to migrate to the US but his dad is not allowing him to…He is aged 32….and now you are doubly impressed.

So you tell him…’arre from whom did you buy?’ and he says…apna banker hai na…nice guy. He had come and showed me the projections…if I invest Rs. 25000 a month, I will get 51000 a month pension for the rest of my life after 58….

So you are impressed again! Wow Rs. 50,000 a month! Wow….


SEE what Debashis has to say….lol……

So how should you actually do it?

1. Know when you will retire

2. Estimate your expenses

3. Do a SIP in 2-3 funds starting NOW….Simple?

4. Do not touch a pension plan, unless you can reverse engineer the cost completely, find a low amc product, check the total cost and you are willing to pay the premium for the full term – best is stay away.

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  1. Sir, If I am buying my very first mutual fund, would an Index fund be best for me (as they have low charges and its difficult to beat index on long run) or…..

  2. yes Vasim. The Index fund with a) least expenses and b) least tracking error – i.e. the least variation from the index.

    So if the index gave 12% return and one fund gave 11.1% and another one gave 11.18%, the second fund is better. AS blind as that.

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