Forget IQ – Have you ever thought about your Security Quotient (SQ) ?

Today, on Jagoinvestor, I will coin a new term – Security Quotient. Just as I.Q. (Intelligence Quotient) is a score that measures your overall intelligence, Security Quotient (S.Q.) measures how well you have managed the security of different areas of your financial life. By security I am taking about insurance against external factors.

Imagine a warrior – heading to battle and donning various pieces of armor to protect his body. He covers himself from top to bottom and ensures there are no chinks in his armor. A warrior can concentrate on fighting against the opponent only when he is assured that he is secured from all sides. If he leaves himself exposed, he risks getting severely injured every time he is attacked.

How secured is your financial life overall

Now imagine yourself as a soldier too. You head out of your home everyday and brave the perils of your daily job to earn money. You strive to ensure you have enough funds to meet your financial goals and to have a good lifestyle including buying a home, car and other assets. But you are always exposed to various kinds of external risks in life. If you do not take measures to handle them, you can come under attack from them some day and your financial life may be severely crippled or may even collapse. It is therefore imperative that you protect yourself well from all sides and have the resilience to deal with any kind of risk. This should take the form of preemptive action, which ensures that should an adverse situation arise, you already have put things in place to eliminate or minimize the risk.

Now lets look at few areas, both big and small, and how you can take actions to protect yourself from risks in these areas.

1. Protection against Life Risk (35%)

What if you die before you expect to? A few days back I heard the news that 40 people had died in a mishap while travelling from Bangalore to Hyderabad in a Volvo bus. Do you think any of the passengers had expected such a situation to arise while boarding the bus the night before? Similarly, you have no way of predicting when the truck behind you on the road might lose its balance and run you over. So while you can control your actions, you have little to no control over the actions of others and the incidents arising from those actions.

So have you taken sufficient life insurance through a term plan or are you still deluding yourself by having those 3 or 4 traditional life insurance policies, which would not even feed your family for 2-3 years in the unfortunate event of your demise!

2. Protection against Hospitalization Risk (25%)

The wife of a relative of mine was suddenly hospitalized a few months back after having lived a healthy 55 years without any major illness. Her husband had felt that paying premiums for a product that ‘might’ not be needed was a waste of money. Unfortunately, as a result of the unexpected hospital bills, a good part of his retirement corpus is now eroded and he is making enquiries with me for a good health insurance policy. I had to inform him that it would be tough now to get a policy at a reasonable premium. The best time for him to take health insurance had long since passed.

How about you? Are you sitting on a pile of cash to the tune of 5-10 lakhs? You had better be ready with this money it if you are not planning to take good health insurance cover.

3. Protection against illness (5%)

Now what if you catch some major illness? Are you taking care of your health properly? Are you walking, exercising, biking and eating correctly? These are some steps you should be taking today to make sure you lower your risk of illness or disease. Admittedly, this was a non-finance tip, but also consider taking critical illness cover so that in the event you are diagnosed with some thing major, you get support from health insurance companies in form of money.

4. Protection against Theft at Home or Fire (5%)

I know the probability of these things occurring is miniscule – but there is still some risk you are exposed to. The more I watch Crime Patrol on Sony TV, the more I am convinced that world is not as safe as I assumed it to be! The courier boy might not be a courier boy – He might be a burglar!. A few years back, a relative’s house almost caught fire at Diwali time as a result of children carelessly bursting crackers inside the house.

Again, though chances of something like this happening are minimal, the risk will always be there. It is therefore your choice if you want to be prudent and get insured against home damage due to theft, fire or other natural disasters. The good thing is, it does not cost a lot of money. A Few hundred rupees are all you need to pay for reasonable coverage against these risks.

5. Protection against Frauds on Credit Card and Banking (5%)

The Internet is filled with millions of complaints against credit card frauds and banking related frauds yet at the same time it is also filled with credit card numbers, PAN card numbers, bank account numbers and so many important details.

The frightening thing is that smart people have lots of tricks to exploit the fragile systems to mine this information and loot investors. The ideal way to protect yourself is to know and apply the best practices to secure your information and also study the rules about banking and credit cards. You also have the option to take insurance cover against credit card theft and frauds, if that appeals to you.

6. Protection against Job loss (10%)

The shock of job loss is high because most people are immediately concerned about two things – “Will I get another job?” and “How will I handle my expenses for next few months?”

You can actually handle the second issue by maintaining an emergency fund that is sufficient to cover your expenses for a predefined number of months in the event of job loss. Say for example your expenses amount to Rs. 50,000 per month. You should be setting aside Rs. 3 lakhs only to be used if you lose your job. You could deposit the money in a F.D. and earn good interest on it – but it has to carry the mental label of ‘for emergency use only’! . You should read this article to learn how I created a job loss insurance product hypothetically

You also need to make sure you enhance your job skills and also build a strong position in your company. The ideal situation is when your employer needs your expertise more than you need that specific job! Achieving this outcome is purely in your control.

7. Protection against your Car Accident (10%)

I recently had to get a replacement for my car’s windshield. I was not worried about the expense because I had covered it already. A stone struck the windshield and shattered it. While this was a small incident, there are bigger problems lurking on Indian roads. What if your car were to be in a major accident and get badly damaged? What if it were to get stolen? What if you were to hit someone by accident and have to foot a bill of Rs. 35,000? Who will pay for all these expenses? (A similar analogy can be applied to 2-wheelers as well)

The way you can protect yourself against these risks is by taking auto insurance. Thank god it is almost mandatory in India and no one makes a fuss about getting it (like they do about term insurance).

8. Protection against loss of key documents (5%)

There was an instance when I was convinced that I had lost my Passport, original driving license and a few other key important documents (thankfully they were not lost – just misplaced). I panicked and was cursing myself for not keeping a scanned version of the documents with me, even though I had planned on doing so a lot of times.

After some frantic searching I managed to find the documents and the first thing I did was to create duplicates, keep one copy at my wife’s home and the other in my bank locker. I now make sure, that I am more careful about handling these critical pieces of paper. While I will do my best to ensure I never lose them, I always have a backup somewhere should I misplace the originals. The same goes for the keys to my home as well my important emails and digital documents!

So whats your Security Quotient between 0% – 100% ?

Just look at all the 8 points above. If you think you have secured yourself against that risk, give yourself a score from the number written next to each point. Tally up your total points and let me know how much you scored?

Recurring Deposits – How to get maximum benefit from them in your financial life !

Today I will talk about the simplest financial product known to me – the Recurring Deposit or RD as it is called. Most investors know about Recurring Deposits and have used them at some point of time. However, many investors are still confused regarding this straightforward product.

Also, I will share tips on extracting the maximum benefit out of Recurring Deposits and on using this product to lead a better financial life.

Recurring Deposits

Simple and Beautiful financial Product

Recurring Deposits are often rightfully called one of the simplest financial products in the world. You open a Recurring Deposit for a fixed amount and for a fixed tenure. Each month that fixed amount is invested and you earn interest (at a predefined rate) on the Recurring Deposit.

For example – You can open a Rs. 1,000 Recurring Deposit for 2 years @ 9% interest. Now for the next 24 months, Rs. 1,000 will be invested from your bank account and it will get accumulated in the Recurring Deposit and will accrue interest at the rate that was offered. This is exactly the same as putting Rs. 1,000 in a piggy bank on a certain date for the next 2 years, except that in Recurring Deposit you also get interest income (which is not an option with the piggy bank).

I have been unequivocal in stating that almost all new investors who enter the world of personal finance should start with Recurring Deposits. Typically, new investors do not fully understand the principles behind personal finance and so to protect their money from the they leave funds dormant in their savings account or use them up for some other purpose. Instead, by creating a Recurring Deposit, they will ensure their income is getting channeled into investments and more importantly that they earn interest on their money – eventually leading to good investing habits being formed. Gradually over the next 1-2 years, they can start investing in other instruments such as mutual funds, real estate or bonds.

Planning your Short Term Goals using Recurring Deposits

A Recurring Deposit is a safe investment, or in other words, it is a financial product with guaranteed returns. Stocks or mutual funds are not ideal investments for short tenures. There is no guaranteed return in equity-based productsand consistent returns can only be expected over a long horizon of 8-10 years.

Recurring deposits are therefore the ideal products to consider when planning short-term goals over a horizon of 1-3 yrs. These may include

  • A corpus for a downpayment of our new home
  • Education fees for your children (yearly fees paid in one shot)
  • Home Renovation expenses
  • Higher Education Expenses if you are in Job
  • Upcoming Marriage expenses due in 2-3 years (e.g. sister’s/brother’s marriage)
  • Setting aside funds for a vacation

Now if you look at most of these goals above, Recurring Deposits give returns similar to those of Fixed Deposits. Returns are at the moment in the range of 8-10% depending on the tenure chosen. As Recurring Deposits do not carry risk, they are the ideal investment solution for short-term goals (such as the ones above) where the investor is looking for guaranteed and liquid returns on savings.

Using Recurring Deposits for Ultra Short term goals in life

But the real reason why I love Recurring Deposits the most is this – Recurring Deposits are without doubt, the most powerful way to reach your ultra short-term goals in life. The parts below are excerpted from my 2nd book – “How to be your own financial planner in 10 steps“.

How many long-term financial goals do you have in life – A maximum of 3 or 4, right? Investors tend to overemphasize their focus on this handful of goals in life and spend most of their time working towards them. However most of these goals are so distant in the future, that planning for them is virtually impossible. On the other hand, we have dozens of small goals in life, which are due in next 6 or 8 months or a year at the most. We really aspire to achieve these goals, but ironically, never plan for them – because we think they can be achieved without planning.

Let me explain –

Imagine you want to buy Nokia ‘Lumia 720’ in the coming 6 months. This is very small goal. But most people think about it and leave it hoping to have sufficient money for the phone when the time comes. Now imagine 8 months go by. If at that time, the person has enough money in his account, the idea to buy the phone will again occur to him and he will make the purchase. And if the money is not there, the purchase idea yet again gets pushed out in to the future.

The same habit recurs in a case where you might wish to gift a small vacation to your parents on their birthday next year. Lets say you want to send your parents on a small vacation after a year, and it would cost Rs. 25,000. Now again no one “plans” for it. The matter of having sufficient funds when the time comes is left to chance.

Now here comes the power of Recurring Deposits where you convert each ‘small expenditure’ that is due in the next 6 months to 2 years (not more than this please) into a goal – and open a Recurring Deposit for it. You then let the money flow out of your bank account each month without manually getting involved, set reminders for each goal on the target date and keep achieving those goals!

Example of using Recurring Deposits in a Scenario

Imagine you have 3 small goals within next 1.5 years and those are

  • Buy Nokia Lumia 720 in next 10 months – Rs 20,000
  • Gift a Vacation to Parents in next 1 yr – Rs 25,000
  • Pay Installment of you Kid Pre-school in next 1 yr – Rs 25,000

Most people have goals similar to the ones listed above. To achieve these goals, you can open 3 Recurring Deposits (one for each of these), for the exact tenure (10 months, 1 year and 1.5 years). Consequently, just by having small investments each month, your planning for short-term goals will become quite robust. As the deposits mature, you will find that you have the financial means to achieve your goals without scrabbling to arrange money at the last moment or worse, having to drop your goals altogether.

Taking the above example, The RD’s would be like this

  • Buy Phone – Start 10 months RD for Rs 2,000
  • Gifting Vacation – Start 1 yr RD for Rs 2,000
  • Pre-school Fees – Start 1 yr RD for Rs 2,000
  • Total Money going in RD each month – Rs 6,000

What you have done above is to give concrete shape to your short- term goals by using Recurring Deposits and prevent your goals from turning into perennially postponed wishes or wishes that remain unfulfilled throughout your life.

Simplicity means Fast Action

Setting up a Recurring Deposit is so easy it’s almost effortless. You can log onto your Internet-banking page and open an online Recurring Deposit within seconds. You just have to pick the amount per month, the tenure and the date you want the money to be debited from your bank account – and your Recurring Deposit is all set. This simplicity in setting up also helps you take actions faster

Recurring Deposits Tenure’s and minimum Requirement

The minimum and maximum tenure and amount for recurring deposits varies from one bank to the other. In general, PSU banks such as SBI Bank, PNB or Andhra Bank have a minimum limit of Rs. 100 to open a recurring deposit. However, private banks such as ICICI, HDFC or Axis have minimum limits of Rs. 500 or Rs. 1000. The maximum tenure for Recurring Deposits is up to 10 yrs. Here is a snapshot just to give you an idea

Recurring deposits tenure and limits

Some other Features of Recurring Deposits

  • There is no TDS applicable on recurring deposits, but the interest income is fully taxable in your hands.
  • You can break your recurring deposits anytime before maturity with some penal interest. The interest applicable will be the rates applicable for the tenure RD was running and not the original tenure chosen.
  • Some Banks offer flexi recurring deposits also, where you can increase the amount of deposit each month (but cant decrease it)
  • The minimum tenure for RD is 6 months and maximum is 10 yrs
  • You can start recurring deposits for minimum of Rs 500 or Rs 1,000 . In post office its minimum Rs 10
  • Recurring deposits comes with Nomination Facility, so your nominee will be contacted and handed over the money if you die.
  • You can take loans against your recurring deposits for 80-90% of RD worth
  • Interest is compounded on quarterly basis in recurring deposits

Please share what you think about Recurring Deposits. Have you used them? Can you share one insight or hidden information about Recurring Deposits, which you feel may help others!

How banks make money when you swipe your card and by lending your money to others !

During my school and college years, I often used to wonder– “How do Banks make money?”. I did not however put a lot of effort in understanding the subject and naively assumed that the government was running banks in order to provide services to its citizens and to shore up the country’s infrastructure. It was only over time, that I realized how wrong I was! .

Banking is a purely profit oriented business, Just like any other business – It has its own costs and income streams. In today’s article, I would like to give you some idea of the various ways a bank earns income and makes profits. We will also talk about expenses in the banking business and hopefully provide you with a holistic view of banking.

1. Earning money through Lending

This is the heart of banking business.

Lending to its customers is the biggest money-spinner for banks. The usual way this works is that banks accept deposits from their customers (through savings bank account, fixed/recurring deposits), providing the bank with a big pool of money. Now this pool of money is then used to lend to customers who need loans.Its very obvious that not all the money deposited will be withdrawn the next day itself. If a bank has Rs 100 as deposits, not more than Rs 10 is often needed to repay back to customers, which means Rs 90 can be lent to those who are ready to pay high interest and have repayment capability.

High Interest Charged, Low interest paid

Now, riskier the loan, higher the interest charges it carries, so that in the event of a loan going bad (called as NPA – Non Performing Asset), the huge interest charged more than makes up for the loss incurred by the bank. This also explains why home loans and education loans (which have security deposits – if you cant repay, the home is there to sell off and recover the loan) have comparatively low interest rates compared to loans that are totally unsecured (e.g. personal loans or credit card debt). That explains which why CIBIL report containing high number of unsecured loans do not get loans, because they give an impression that they are so much dependent on credit in their financial life.

Anyways, To put this concept in simple terms, banks make their money by paying interest to depositors at about 4% (saving bank account – the low interest rate is because you can take out the money anytime) or 8% p.a (in FD or RD, because of some kind of lock in there, and a kind of approval by you that you will leave that money for a long time with bank and not withdraw in short term), while they give out loans/credit and earn interest themselves about 12-13% p.a. – thus earning the 5% spread in between. When you further deduct from this, the significant overhead expenses banks have to pay (like rent for offices, salaries to employees and other costs), what you are left with is the profits of the bank.

how banks earn profits and money
This also answers a common question – how banks make money on credit cards?

In case of credit cards, a few bad customers who do not pay on time, pay huge interest charges (3.5% monthly or more than 40% years) and late payment fees, which are good enough to make up for the services given to a good customer who is paying on time and availing the benefits of the card. That should answer those who ask – “How can banks afford to give me a credit for 40 days?” – Its not the bank , but those bad customers who are helping you to get that free credit ! – they pay the BIG charges.

2. Earning money through Services and Products

The other way banks earn money is by providing lots of services in addition to their core banking products. For example, when you open an account, you do not pay for basic services such as banking, transactions on an ATM machine and getting a chequebook.

However, if you need more than these basic features, you will have to pay for them. Such “extra” things are

  • Extra cheque book in a quarter
  • Feature rich credit cards with yearly fees
  • More account statements other than the default you get
  • NEFT/ RTGS charges
  • Charges for SMS notification
  • Processing charges for giving loans

There are all some examples of these paid services.

Why banks keep distributing credit cards ?

I was also curious about the eagerness displayed by banks in providing consumers with credit cards – what made them do so and how were they benefiting from it. I came to the realization later that the greater the frequency of a customer’s credit card use, the more money banks make. This is because every time you swipe your card at a shop,the bank which owns the swipe machine pockets a cool transaction fee of up to 1-2% of the transaction amount. That explains why these days banks are tying up with e-commerce companies to provide “Swipe on Delivery” service to customers other than “Cash on Delivery”

So imagine if you swipe your card for Rs. 10,000 in a month.The shopkeeper has to pay 1-2% of the transaction amount to the credit card company which owns the swipe machine (Break your 4 big myths about credit cards here). So 1-2% of Rs 10,000 is Rs 100-200. Now imagine millions of people swiping their debit/credit card each month over the years, and you can clearly visualize how much money banks make (Of course these banking services have their attendant expenses including the cost of the swiping terminals, employee salaries, rental/ purchase charges for the bank premises and other general administrative costs). So it make sense for banks to keep giving credit cards and debit cards to anyone who has potential for spending and repaying it back 🙂 . So your SPENDING creates INCOME for bank 🙂 .

Here is a detailed note of how banks money when you swipe your debit or credit cards on terminals – Thanks Vivek for the explanation

Do you know why Banks market Credit cards aggressively and give to all and sundry. It is because its one of the highest revenue generating asset for the bank. The interest rates on Credit cards are as high as 3.4% per month (APR 41%), plus service tax of 12.36% on the interest portion, effectively taking it to 3.8% pm (APR 46%). But did you know, that credit card companies have another income stream. It is INTERCHANGE FEE.

For every Credit card transaction done by you, the bank gets fixed 1.1% of the transaction amount as Interchange fee (APR 132.2%). Who actually pays this fee.

The merchant installs a POS terminal called EDC Machine at his place. Customers charge bill to their credit cards on the merchants EDC machine. The merchant in turn submits the charges to his bank called “Acquiring Bank” who acquires the charges. The Acquiring banks pays the merchant the transaction amount, less commission called Merchant Service Fee or Discount rate which is in the range of 1.6 to 4%. Typically, it is 2%. The Acquiring bank presents these charges to the Issuer bank through clearing mechanism, and gets the transaction amount, less Interchange fee. All in all, Credit card is an important folio for banks. The Customer should use to card to his advantage.

It is not free money and if one misuses it, he will have to pay through his nose. I would suggest one to have a Credit limit of not more than Rs.35,000/- or at best Rs.50,000/-. The maximum cards should be restricted to 2. Remember, Credit card debt is a TOXIC Debt. One is better off using Debit card. Interest free Grace period should not be a criterion to have a credit card.

Were you aware about these points? Lets discuss more about this in comments section. Please share your views on this topic!

2nd Batch of Investor’s Boot Camp starts on 25th Nov 2013

Let us remind you again that – Personal finance is not about knowing things, it is about getting things done in your financial life. In other words, It’s all about taking required actions and steps to be in control of your financial life. Now, we know that life throws several responsibilities at you and TIME is the BIGGEST constraint/problem/challenge to complete personal finance pending actions.

To make things doable, we experimented something called Investor’s bootcamp some weeks ago and 33 investors joined our first batch. The boot camp really took all of us with a surprise, we integrated personal finance with social media (yes it happens on your favorite place facebook).

While you hangout on facebook, you will be able to gain key personal finance insights and you will be equipped to complete important personal finance actions in your financial life. Some of the participants had the best personal finance actions days, while they were in the Investors boot camp. It is amazing experience learning from other’s financial life while you are in boot camp. We (Nandish and Manish) will be there throughout the journey guiding you to take actions in each week.

6 weeks investors bootcamp by Jagoinvestor

2nd Batch of Investors Bootcamp from Nov 25, 2013

Today, we are launching 2nd batch of our investor boot camp and we invite those who wants to GIFT a NEW financial future to one self, to those who think it’s high time they get in ACTION, to those who want to expand their actions domain along with knowledge domain when it comes to personal finance.

What is Investors Bootcamp ?

Jagoinvestor Bootcamps is a life changing experience for investors. For 6 weeks, investors who are waiting for doing something concrete in their financial life come together and work on their financial life with help of Jagoinvestor Team on facebook group. Each Week – one area of their financial life is taken and whole group work for the whole week investors work on that area of their financial life. A group structure helps them to learn from each other’s financial life, get accountable to their promises made on bootcamp group. The interactions are rich in nature and deeply meaningful for everyone. If you have been waiting for long time to improve your financial life, its a great way to work on your financial life. Its much powerful than a financial plan because of group structure.

Listen to the audio below to understand what is Bootcamp.

[button link=”#register” color=”#38CFCF” size=”3″ style=”1″ dark=”1″ square=”1″] Register for Bootcamp[/button]

What happens inside Investors Bootcamp ? Here are some Snapshots!

Inside Bootcamp

What Bootcamp Graduate’s Have to Say

“Its going to be a million dollar worth asset for You”

I heard all the 10 audios .Really am speechless when i want to thank you guys for those wonderful audios.If i say your audios are excellent,amazing,marvellous then those words would be the least meant for admiring your words in those audios.I dont think simply you guys are doing your work since we paid.Your words are something beyond that.It shows the real meaning of humanity.It makes me to realise your bond towards the society.

As u said in your audios,you are SERVING us by making ourselves to realise the importance of SLOWNNESS,to be OUTCOME centric,to focus on NETWORTH,to concentrate on what MATTERS,how to CREATE,necessity of COMMITMENT,the vision of BIG game,mindset of playing to WIN,the need of ZERO tolerance I don know how many times am going to hear your audios again and again.I wont stop till i get the complete fruit out of it.Surely i could say these audios are going to be a game changer in my life.I like to thank Nandish and Manish for the quality of their work which helps for the persons like me to grow in their lives.

Friends ,those who got access to these audios ,please dont miss it.Its going to be a million dollar worth asset for u. Thank you.

Sriram Chennaswami

“Not only improve financial life, but also the whole way of your life”

Today I heard all 10 audios! Speachless…. Its not because that all these are superb, yes – it is! , but inspite of all these, these words not only improve financial life but also the whole way of your life. ZINDGI JEENE KA NAZRIYA HI BADAL DETE HAI. I want to start a business after 1 year. For that I wanted use this year to gain more and more knowledge information. Today I learned my first chapter from your audios – ‘PLAY TO WIN ‘ .

Yss – I’ll try my best to follow this principle . ‘Amazing things to realise’ – Thanx to Nandish & Manish..

Dr Minakshi

“It made me look deep into the earnings from the seven years of work life”

Hi Everyone,

First of all, a remembrance to the father of our nation Mr. M. K. Gandhi and to our second prime minister Mr. L. B. Shastri. Whatever their lives and times were, what stands out is that they put the nation in front of their own self. May the message of unity spread by them continue to remind the masses that true happiness lies is helping others grow with us with no boundaries of race, caste, creed, religion, nation or species.

Now to the Week 7 task, Experience till now:

First, I did like to give a look back on how I landed in this forum and then proceed towards the experience of being a member of it. My first encounter with JI was through an email sent by a friend, an article written by Manish on the JI website. One article led to another and before I knew it, I had gained a lot of financial know how on topics I always shyed away from, more like Darsheel Safary in Taree Zameen Par. It truly felt like Aamir Khan teaching the kid in the movie. The simplicity of the language used and the non financial analogies to the concepts made it fun to read and understand. Before long, I had subscribed for email updates on their website and was also following them on the Facebook page. Articles kept coming, I kept reading them and I was beginning to look at Personal Finance in a whole different way. But I must confess, I did not always act upon these articles and most of the time, bookmarked them for later read. By now, I had also hit upon the books written by Manish and Nandish, flipping page after page of immense experience being shared, working through the exercises and relating them to the position I was in and wanted to be at. So, when the mail for registration to this unique Facebook based Bootcamp came up, I knew, this was surely going to help. I did not obviously know the content or the methodology, but I had the confidence. So, I signed up. What followed is explained below.

Wee k0 was thought provoking to say the least. It made me look deep into the earnings from the seven years of work life and arrive at the pros and cons of every financial choice done during those years. If I was a movie producer, I would never accept the script. However, like most things in life, I took the full responsibility to the situation I was in and made a commitment to rework and improve my situation.

Week1 was an eye opener. Thinking is good, especially with past experiences being factual. But if you haven’t written it down, you haven’t done anything. So, if I did not know where my money was flowing, I wouldn’t know which control valve to adjust. So, with all numbers on the excel, I could see why the script of Week0 was so flawed. I knew I had to cut corners, but more importantly I had to make some important lifestyle changes. So, another commitment to look at financial life as an important part of physical life and not as an offshoot.

Week2 was like faith restored. When we start with something new, before even the first step is taken, we are hit by the single most dangerous question of all ‘What if I fail?’. So, security or fall back or whatever we term it can be the only answer. The importance of Life Insurance was well established. But is the investment cost per lakh of insurance justified? Term Insurance was the answer. I went back to correct the traditional policies in-force and then invest in the term policies. Though life was the key asset in focus, importance of personal health insurance policies, over and above the coverage provided through companies we work at and the importance of emergency funds were very well explained. I have since worked on these two aspects as well. Biggest learning which I have never seen highlighted in any other forum was that having insurance is not a license to play with your life. Health is still the biggest wealth. Another commitment, this time to work on health and fitness.

Week3 was Dream Big Week. Dreams, dreams and more dreams, but at a price. So, we had to set targets and work on investing regularly towards these targets. The pit falls of saving up without investing was an eye opener. And the idea of one investment per dream made so much sense. This is when, I felt that current earnings is not enough and I was no where close to making the money work for me. Like any sport, when in doubt, ask the coach and the coach did restore faith. ‘Start small and stay at it’ and ‘You can only try, win or lose is always a chance’. It was also assuring to see that most of us had similar thoughts and were assuring each other with positive feedback. Commitment this time, work on investments as a habit and not when forced to.

Week4 gave another threat. Reminded me of Yuvraj Singh’s ad (… ), and to quote: ‘Jab tak balla chal raha hai, tab tak thath hai. Jis din balla nahi chalega, us din….’. Although his come back to the game is inspirational, his struggle through cancer is a big warning. Anyways, the point being, money does not grow in trees and most definitely, does not pour with the rain. You got to earn it, and what when you can no longer earn it, among other reasons, for you no longer are capable of competitive work? Retirement Planning should definitely be the most important aspect of anybody’s financial life. But yeah, I could see more investments coming, but could also see that less money is available to invest. What do to? Stick to commitment made in Week2, trying to ensure longer work life while investing whatever was feasible towards this goal. Also, a new commitment to never take a job for granted. Stay competitive in whatever you do, lest everything breaks loose.

Week5 was frankly a breather. With some good habits inculcated at home (like being organised with things under your possession), most documents were in order, neatly filed and stored in an easily accessible, but important place. But wait, like other things, storage has also evolved. So, why not use the Internet to make it ‘access-anywhere’ and also, confide the details in a confidant so that, god forbid, if you cannot access it, somebody else can. Like common sense, simple things, but highly uncommon. No new commitment, but to continually review and update this section.

Week6, I could sense this coming. It had to be something to simplify things further. Technology to the rescue again. Automating the banking tasks was never this easy and in this era where businesses run out of a single laptop or even a tablet/mobile, we had to get smarter too. So, some tasks to work on and I was able to automate most aspects of the financial plan.

Week7, did I see a ‘break’ in the title? But wait, how is it a break if we still have to play competitive and win a book? Feels like school holidays!! No school, but you still have home work

That’s the experience so far and looking back, it’s been a wonderful six weeks. It would be injustice to end this note without thanking our wonderful coaches Manish Chauhan and Nandish Desai! Thank you sirs! None of this would have been possible without your efforts!

Anyways, it is the ‘Joy of Giving Week’ and I hope that along with the tasks in our financial program, we also take some time off and do our bit for the under-privileged and the not-so-privileged.

Nanaiah Bayavanda

“This Bootcamp has made me acutely aware of the pitfalls that I had”

I too started with a lot of apprehensions on this bootcamp. My major question was this – I have already taken personal Financial Coaching/Advice from Nandish and Manish just last year and have gotten significant benefits from that. How will this be better? How will this be any different than what they have done earlier? etc. Eventually, I entered this game for one purpose only and that was to improve the RIGOUR and DISCIPLINE into my Financial life.
I also felt that I can take back the learning that I get here into other areas of my life.

So far, this Bootcamp has made me acutely aware of the pitfalls that I had. The single biggest issue that I have struggled with is to have a proper budget in place, and keeping track of my expenses. All this time, my excuse was “anyway I have a lot of disposable income, so, why should I track where I’m spending”?

This whole thing dramatically shifted after I bought an apartment in Dec 2012, and I had to start paying an EMI of 88k per month! Suddenly, all the values of budgeting came up and hit me pretty hard as I was struggling to meet my expenses for the past 8 months. So, since the past 2 months, I have been tracking expenses on a daily basis. I also convinced my wife to manage the Household expenses, and keep track of all the stuff that we spend. To my horror and shock, I see huge gaping holes that I did not even know existed, and this is something that I’m realizing how TOTALLY BLIND I was!

Another takeaway for me has been the whole experience of Automating… Will share more about this in another post soon.

Venkatesh Kumar


Get FREE BONUS Worth Rs 4,000 with Bootcamp

Bonus #1 – 100 moneyactions Program

100 money actions Program is our flagship program for taking lots of actions in financial life. We given this Rs 1,999 worth of program complementary to all bootcampers!. Listen to the Welcome Message for 100 moneyactions Program below

Bonus #2 – 10 part Audio Program

We also give a 10 part audio program worth Rs 1,999 with this bootcamp which is a life time experience for investors. In these audio’s you will learn how RICH people think and what makes poor investors always poor. Listen to one sample Audio here

Missed 2nd Episode of Plan F – Watch it here !

Did you miss 2nd and 1st episode of the show Plan F – Your Financial Fitness Plan. We have been working from last few months with DSP Blackrock team, to create this personal finance show. Each week one of Jagoinvestor reader features in the show, where Cyrus Broacha talks to them about their financial life to add some fun element and then 2 IFA’s from industry give their expert comments on the case study and finally at the end someone from Jagoinvestor Team (Either Me or Nandish) give 3 insights which others can learn from the case study financial life.

It is the first time some known figure like Cyrus has been introduced to the world of personal finance and it has created quite a stir in the world of mutual funds on what Cyrus is doing in these kind of shows. Personal finance is generally perceived as Boring thing and introducing Cyrus would bring in some fun element to the show. He talks to the participants of the show in his own style and also digs out more about their financial life in his own style.

Shooing for the show in Mumbai

All the IFA’s, Jagoinvestor Team and the case studies travel to Mumbai and we are enjoying a lot together. We have fun talking and it is one of its kind to see how these kind of shows become a reality. We are also happy to meet our readers and have their contributions in making this show a reality.

Two episodes are already aired and we have got some praises and appreciations from readers and other viewers . If you were not able to watch them on CNBC TV 18 due to some issue, not a problem , here are those episodes on youtube. Watch them below

Episode 2 – Case study of Shreekumari Dholakia from Mumbai

You should watch the full episode and look at the views of Shreekumari on how “expenses” are so much part of life from birth to death and her passion towards financial freedom.

Watch on Youtube directly

Episode 1 – Case study of Mr. Ramesh Jalan from Kolkata

If you missed the 1st episode too .. you can watch it here below

Watch on Youtube directly

Watch 3rd Episode 9th Nov (Sat 7 pm)

You should watch the 3rd episode coming on next Sat 7 pm (repeat telecast Sun 8 pm). The 3rd episode is going to feature Mr. Ramkumar who is from Mumbai , a self employed personal. You can watch the promo of 3rd episode below

Download Some Bonus Material

We have created a mutual fund guide which is given as downloadable PDF to everyone, along with 12 financial literacy content in form of PDF’s (created by Jagoinvestor). You can download them by registering at below links

Download Mutual Fund Guide – Click Here
Download 12 investment lessons – Click Here

Register at these links and you can get the PDF’s . Let us know what you think about the show overall.