I had asked in general what issues do HR managers face..here is one set of questions by a HR manager….will answer more. I have a selfish reason to do so. I AM PLANNING A LECTURE ON ‘WHAT FINANCE SHOULD A HR PERSON KNOW’…so all these will become a part of that lecture….

Some of the questions I get from my HR team members are below When I first bought your book 4 years back and got delivered to my office – all the folks in my team commented – you are just 23 and worried about retirement? 🙂

I am contributing to my 401(k) ( this is from my US team since I moved here) or PF ( in India) what else should I do for my retirement

Well, saving money in a Provident fund account nice, but do remember it is a SAVING instrument. By definition, a savings instrument will UNDERPERFORM inflation. That is to say your PF will not keep pace with inflation.
Saving money in Provident Fund is a nice thing to do, but NOT SUFFICIENT to build a corpus for your retirement.

You need to invest small amounts regularly in SIPs of good mutual funds so that the amount grows into a big tree. This happens because of the power of the equity markets, and the power of compounding over long terms of time.

I am planning to buy pension plans – this would help me save tax and also get a pension right?

This is like a trick question. Very difficult to answer in a generic mode. If you are YOUNG (say under 40 years of age) it does not make sense for you to buy a pension plan. SIP in good equity funds is a far better option. Keep doing that. Once you reach about 40 years of age, invest in a pension plan managed by UTI or Templeton India Pension Plan. If you have been a very aggressive equity investor, some portion of your money being in a classic endowment (as a balancing debt component) is also not a bad idea. However it should be a very small amount, and limited pay. OMG it is complicated 🙂

Do you invest in shares? Can you tell me the shares which are good , I will buy them ? ( I think you have done enough post on this)

I will let this question pass.

the following questions I have answered in the past, so will let the readers give their rejoinders!

Insurance – We are giving the best employer insurance why should we take one more insurance outside?
– I am paying 95K as insurance premium ( L*C endowment most of them ) so my insurance is take care of – but the coverage was just 25L
– Among the CTC post – one question they do not understand or miss most of the time – the employer contribution of PF is part of the 80 C , so they end up doing the Endowment policies to save .


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  1. Hi Subra, I daily read your articles, they are good. The only thing I am confused about is how equities outperform inflation in long term, other than handful of stocks 99% stocks either eat your money or give no/very little appreciation. Finding these handful of good stocks is like finding needle in the haystack. I can give you examples: Reliance has not given any return to investors in last 5-7 years, infact people have lost money, PE of most of the MNC’s are pathetically high levels. Pharma same story.. New gen IT like Info edge/Just dial have eps of 10-15rs and trading at 606/1640 (in what term these are sound investment only a fund manager can get convinced, after all its not his personal money)… Mutual funds are the same story none of them gives more than 6-7% per annum..

    Don’t you think you are very biased towards equity investments without helping the readers with the road map to invest in quality stocks at reasonable valuations. Else, this being a financial planning blog you can focus of other instruments like Tax Free Bonds etc as well.

    When I ask questions like these, normally I am being thrown out/banned from blogs, hopefully you can see some little logic in my view point.

  2. Atul,

    Can appreciate your point, but you need to understand my limitations. Readers come from a huge pool – some who know everything about equities and some who know nothing. I can ONLY SAY what I did in my life. I do not know how to duplicate the conditions TO TEACH.

    So your learning HAS TO COME from the reading…howsoever conservative or slow. Writing about ‘what is post office saving’ and ‘tax free bonds’ is just too boring for me. There are blogs doing EXACTLY that – and are SURELY more popular…but Iam not keen on that market at all.

    I do not ban, throw out any reader – I do not even edit comments. I guess i am too lazy to act 🙂

  3. Hi Atul.Am not a direct investor in equities, but do invest a decent bit in mutual funds and can,vouch for the,returns. In fact if you had,invested in the two index funds run by templeton, the 10 year returns are around 14% pa and there are many actively manager funds which have beaten this number quite well. 6 odd % is the return these funds return in 3 years which is not exactly a long term horizon. The general theme that a diversified set of equities will outperform debt over long term remains. More importantly the probability of outpacing inflation is higher in equities provided one stays patient for the long term.

  4. I have been investing in the following four funds via SIP for the last 3 years (36 installments till now). My returns are:
    *Franklin India Bluechip: 9.30%
    *ICICI Focused Bluechip Equity: 13.48%
    *Quantum Lond Term Equity: 14.01%
    *IDFC Premier Equity: 17.55%

    The point I am trying to make is even the last 3 years(which is short term & the market has been flat) many funds have delivered good returns. We have to do the necessary due deligence & invest for the long term (atleast 10 years), preferbly via SIP

  5. Atul, your response highlights the problem of half baked attempts most of us makeat investing in the capital market.

    As far as your mutual fund investment is concerned, you can use the methods described by Pattu in his blog to select good mutual funds for investment. I am sure you will definitely get double the returns being quoted by you.

    MNCs, IT companies are like those beautiful girls in your college on whom everybody had a crush and wanted to take on a date. Since these girls knew they were “in demand” they could and were acting haughty. If you look without the hormone kick, you will find many opportunities available for you to get some good returns.

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