Rs 3.5 Lacs to Rs 400 Cr – Naturals Ice-cream Journey of 40 yrs!

You must have surely had an ice cream at Naturals!

But have you taken any inspiration from its story for your own financial journey?

Today I want to give tribute to Mr. Kamath for building Naturals Ice Cream and share some interesting numbers and their overall journey of building a Rs 400 Cr brand. This story can surely help you learn about long-term compounding and apply some of it in your own wealth-creation journey!

How Naturals grew to 400 Cr branch in 40 yrs!

A Friday night of 17th May 2024 – as I was sitting to watch a nice movie with Natura’s Mango ice cream tub in my hand, my phone’s notification beeped. 

The notification was of Mr Raghunandan Kamath, founder of Naturals ice cream, passing away!

A man who failed 3 times in 10th standard, with no money of his own, takes a loan of Rs 3.5 lakhs from his brothers as first investment and goes on to create a Rs 400 crore ice cream brand!

As an investor, here’s how you should study this company. 

Suppose you have Rs 10 lakhs, at what stage would you invest your money with Mr Kamath


What Mr Kamath lacks

  1. No fancy college degree
  2. No big family business background
  3. Doesn’t understand accounts and taxes
  4. Doesn’t speak a polished English
  5. Doesn’t appear in newspapers for interview
  6. No pan India presence
  7. No fancy excel sheets to justify high valuations


What Mr Kamath has

  1. Intense focus on customers
  2. Has a cult-like following from his customers, just how Apple has
  3. Focussed on the quality of his product 
  4. Spends most of his time in the production of ice cream
  5. Designs his own ice cream machines
  6. Understands the fruit market intuitively
  7. Keeps trying new ice cream flavors
  8. Only in a niche market

So now, when you read the rest of the story, keep assessing in your mind if you would have invested in his company.

By the way, it took Mr Kamath 40 years to go from Rs 3.5 lakhs to Rs 400 crores! Don’t look ath the returns, look at the time invested.

Honestly, when I’m asked to define Mr Kamath and Natural Ice Cream in a single frame – then for me, it’s just Customer Obsession!

Brief history of the company

From a single ice cream parlour in Juhu, Mumbai opened in 1984, Naturals has grown to 135 ice cream parlours across India today. 

This might not seem like impressive growth, but it is fairly remarkable in the Indian context, where a majority of domestic brands have only a regional presence, due to inadequate infrastructure. 

Moreover, Naturals made a conscious choice to be the best rather than the biggest.

Let’s talk about the founder – Mr Raghunandan Kamath

“In order to rise from its own ashes, a Phoenix first must burn.” ― Octavia Butler

Born in 1954 to a fruit vendor in the Puttur village of Mulki, in Karnataka, with a family of parents and 6 siblings. He lost 2 of the siblings because the village didn’t have adequate maternity services; sometimes the entire family would suffer from typhoid and there was no money to medicate them.

At twelve years of age, in 1966, Raghunandan moved to Bombay to stay with his brothers. The brothers had moved before his arrival, to work in the hospitality industry.

Unable to catch up with the English curriculum in Bombay, he flunked his tenth board exams three times, eventually giving up. 

By then, his brothers had started a small Udipi—one of many South Indian eateries opened by those from Udupi, a town in Karnataka—called Gokul, which served ice cream along with regular fare such as idli, dosa, and the like. Ice cream was a small, less important part of their business.

In 1983, he married at age twenty-nine (considered late in India then), and he found the courage to back his business vision. As the brothers were planning a separation. Mr Kamath took full advantage of the independence and borrowed Rs. 3.5 lakh from his brothers and friends, and decided to start the ice cream venture.

Back in the 1980s, Bombay only had one, Yankee Doodle, which wasn’t a stand-alone parlour but part of Hotel Natraj.

This is a hallmark of visionaries who are slightly crazy.

Despite knowing these challenges, Mr Kamath saw an opportunity. He opened his first 400 sq feet store in Juhu Koliwada. The location had adequate parking, which was crucial back then because customers preferred being served in their cars.

Thus Naturals was born!

Initially, Naturals offered five flavours—sitaphal (custard apple), kajudraksh (cashew-raisin), mango, chocolate, and strawberry. Production happened in the back of the shop, and the two-hundred-square-foot front-facing area was used for serving. For seating, there were six tables in the verandah.

Just rewind your lives a bit

You are living in the 1980s. 

  • Televisions are a luxury
  • Telephones and Mobile phones are the hallmark of success
  • ACs are not common. 
  • Cars were less in number.
  • Mumbai Pune Expressway is yet to be built.
  • Amitabh Bachchan is your superstar.
  • Indian cricket team wins the 1983 World Cup
  • Sachin is yet to play his first game
  • Modi is still figuring out his career in politics

And yet, there is one man who thinks Bombay is ready for an exclusive ice cream parlour.

“Here’s to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently. They’re not fond of rules. And they have no respect for the status quo. You can quote them, disagree with them, glorify or vilify them. About the only thing you can’t do is ignore them. Because they change things. They push the human race forward. And while some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do.”

― Steve Jobs

And because it was Juhu, Bollywood celebrities like Dimple Kapadia, Jaya Bachchan, Raj Kapoor, Shabana Azmi, and others became customers.

“Customers are the best teachers – Mr Raghunandan Kamath”

Mr Kamath would often seek feedback from his customers. They would suggest different flavours and what they would like to eat. Mr Kamath would work on it diligently. At one point, his unique flavour of Wild Mango became the bestseller across the city.

He would never keep his ice cream for more than 2-3 days because it would lose its freshness.

Caring for the customer began at the procurement level. When buying fruits he always paid for quality. Each fruit was purchased only from the particular region where it grew best. This approach ensured uniformity in the quality of fruit and hence also the flavour, all year.

The culture of customer obsession only increased over time even when it seemed detrimental to the business of Naturals. 


Mr Nitin Churi who runs a franchise of Naturals shared a beautiful incident 

“One time, we were waiting for delivery from the factory, and as soon as the tempos [a type of small goods carrier popular in India] reached, Kamath sir sent them back, ordering the entire consignment to be discarded. Later he shared that three days ago the factory staff couldn’t find one screw belonging to their machine. He suspected it may have gone into these ice creams and didn’t want to risk the customers’ safety.”

Personal Finance Implications

Now, when you are reading this story with the eye of the investor, it’s a no-brainer.

But trust me, it’s hard to spot such entrepreneurs early because they defy every rule.

So what should an investor do?

Firstly, invest for 40 years. If not 40, then at least go for 20 years.

Second, have a proper advisor in place because you need someone in this journey to spot such opportunities in the mutual fund space or direct equity.

Thirdly, create an entire portfolio. Not just 2-3 stocks. For even Mr Kamath his superstar ice creams can be 10 or 15 odd but he has tried 1,000 (thousands) different varieties and flavours along the way.

No one has the insight to only look at what can work and invest the entire money straight away.

Fourth, TRUST your advisor in the journey because you need Resilience along the way.. 

Here’s Resilience from the viewpoint of Mr Kamath

Mr Kamath had to undergo severe losses at times. These challenges came in multiple forms. Let me list down a few.

  1. A relative starting a competing ice cream parlour after learning the tricks of the trade from Naturals
  2. Income tax raid that hit the cash flows hard
  3. Machines that changed the taste of ice creams and the write-off on loans
  4. Finding good franchisee partners


These challenges may sound easy today (in 2024) for a young entrepreneur who is looking for collaborations. For a young businessman who is born in post-liberalized India, getting access to land, labour and capital is relatively easy. 

When you consider the onslaught of private equity funds and venture capitalists, the ability to network and scale has become much better.

That’s why in the hands of the second generation Naturals is growing much faster than it’s ever been. 

And one key reason for this growth is attributed to the resilience of Mr Kamath during difficult times. He evolved as an entrepreneur and Naturals earned a place in KPMG’s 2018 customer experience report because its customers rated it highest on personalization, time and effort, and integrity, and marginally above the sector average on resolution and empathy. 

At the centre of it all, it was his childlike curiosity.

A few years back in an interview with his son Srinivas when asked about his father, he replied, 

‘Full of ideas, he doesn’t stop thinking about how to pack better, how to take Naturals to the next level. . . Before you know it, he’ll have a carpenter create a prototype for some machine. Sometimes, as early as seven thirty or eight a.m., he calls me to discuss ideas, and his focus rarely slips, be it following up or implementation. It gets too much to keep up with him sometimes; he still has tremendous capacity. I wonder whether I’ll be able to live up to that level of entrepreneurship.’

May this kind soul rest in peace!

Jinay Savla, Jagoinvestor

Just Keep Buying

Post Covid-19 hit lockdowns, India has seen a surge in demat accounts being opened. 

Around 114 million demat accounts were opened in 2023 alone which is around 2.8 times of 2020 number. Such has been the craze of the bull market we are witnessing.

The number of ‘demat’ accounts in India

As a result, there has been an unprecedented increase in the number of traders offering tips for undisclosed fees. Add to that, there are so many YouTube videos where people knowing very little about finance and how stock markets operate have now become overnight financial influencers. Too much irrelevant information is now floating around for no reason at all.

In short, the drama around stock markets is increasing.

Think about it.

Stock prices of several railways and infrastructure companies have multiplied in the last couple of years with absolutely no change in their earnings or their fundamentals. Whereas a high quality bank like HDFC Bank which has been holding the ship steady has lost around 18% in January 2024 alone.

So now you get people on YouTube and television trying to justify everything.

  • If the market goes up, there’s enough justification.
  • If the market crashes, there’s enough justification.

So what should an investor do in such a scenario?

It’s simple, just keep buying!

In the long run, stock markets are a net positive indicator for wealth creation. They cannot become zero. It’s not in their nature.

Check this chart out

smallcap vs midcap

It’s a simple chart of Sensex, Mid cap and Small cap index performance over the last 20 years.

You don’t need to go into tremendous details to understand that in the long term, markets keep going up. We have seen the fall out of the 2008-09 debacle, the 2013 crisis of India being a Fragile 5 nation and the Covid-19 meltdown.

Yet, the prices keep going upwards.

Take HDFC Bank for example.

Over the last couple of weeks, there has been a considerable amount of discussion around this stock. A lot of the youngsters who were born alongside the Bank’s launch date are declaring that this Bank’s future is over.

I believe some of these youngsters mindlessly comment via Telegram and YouTube, their careers are in grave danger.

Because if you take a 3 year horizon, then HDFC Bank’s stock has not gone anywhere.

But if you look at the last 2 decades, then the story is completely different.

It’s been a massive wealth-compounding machine for investors. I’ve written my own story of owning the stock which is up 30x now. (read here)

Now let’s take another example: Bharat Heavy Electricals Ltd. (BHEL)

In the last 3 years, it has become a darling of the stock market. Some people want to own it and some people are wondering what stopped them from owning the stock.

Let’s see the charts.

This chart makes your heart melt by missing out on the stock. 

Just look at the chart, if you had owned it for the same period as you would have owned HDFC Bank.

It would have been your worst nightmare of a stock in the portfolio.

Agree to disagree?

So as an investor, you would have made money if you had simply invested with your mutual fund or a portfolio manager whose one of the top holdings has been HDFC Bank and not BHEL.

The shareholding pattern of both companies give a clear insight.



BHEL has had a very low ownership from institutional investors (FII +DII) with 25% at best vs HDFC Bank with an ownership of 82% as of Dec 2023.

Yet, we often get swayed by making a quick buck. So we tend to make a mistake of timing the market. This never works. As a result, in 2024 itself we are going to see too many people closing their social media shops or being financial influencers.

One fine day they would vanish into thin air leaving your trading capital in the red zone.

So what should you do if you don’t wish to be in red?

So all you need to do is switch off from the markets and keep investing all the way through. If you don’t need your money for the next 15-20 years, then why bother about what’s happening today.

Just leave it to the experts.


With the information flow increasing with each day, it’s hard to understand what is signal and what is noise. It’s even harder when you have a full-time job or a business to run. Such stress tends to take a toll on our family lives too.

Some of us might even be thinking of making a quick buck in this bull run so that we can retire early. That can be a big pitfall too. Because you are trying to make immediate money without understanding the very nature of the beast.

So it’s best to leave it to the experts to navigate the bulls and the bears, while you take a good vacation on the beaches of the Bahamas. At the end of the day, what’s the use of money if we cannot spend it.

This article is written by Jinay Savla, Jagoinvestor

Macroeconomics and Long-Term Equity: A Surprising Disconnect

Interest rates and inflation dont really matter much in long-term equity investing.

I am going to prove it to you with my personal experience of stock investing in last 16 yrs!

In the previous article, we discussed 2 key macroeconomic concepts such as interest rates and inflation.

Most investors tend to overemphasize on these 2 concepts and use them for investing into direct equity. One thing to consider is that the equity market is a completely different beast to conquer. And that’s what we discuss in this article, in the long run, macroeconomics becomes completely irrelevant for an equity investor. Sounds contradictory, read more to find out.

In my 16-year-long investment journey, I’ve found that macroeconomics has absolutely no connection to investment returns.

In the short term, yes.

Let me tell you my own story.

My first stock that I had bought in 2006. Right after my 10th Board exams, I was asked by my family to work in the family business. If you’re a Gujarati or Marwari reading this, it’s normal. For others, it’s child labour and yes, I’m with you guys despite being a Gujarati.

Jokes apart.

I was asked to work on the shop floor of our family business. 12 long hours every single day. No social life. I was just meeting my friends on Saturday nights or Sunday evenings. It was tough back then, but now it’s a habit.

After 3 months, I got into the HR College of Commerce and Economics. As a gift, I was rewarded with my first paycheck after 3 months of bone-cracking work for a 16-year-old. And naturally, this money was the most important thing in my life at that time.

It could have gone 2 ways. I would have partied long and hard. But I chose the second option, I invested that money because it was hard for me to waste it over a weekend.

I invested at the high of the 2006 markets

It’s 2006, and the stock market is soaring to new highs every other day. And everyone is talking about how much money is being made. Plus, my family didn’t appreciate my thought of investing in some shares. So the rebellious child in me got an opportunity.

Since I was wiped out of my 3-month vacation, this money should at least give them some stress. A guilty pleasure indeed.

So I decided to open a demat account. But I was a minor back then. So I turned to my mother who accepted my decision because I had fulfilled my promise of securing admission into the top 3 colleges of Mumbai.

After a few days, I had my demat account.

Now came the decision to invest my money. Since everyone in the family was against it. No one helped. So I started watching CNBC TV. After a few days, it confused the life out of me. Plus, my college had started and I was still working at my family business in the first half of the day.

My schedule was:

  • 7 am to 9 am – Accounts and Maths classes
  • 9:30 am to 1 pm – Shop floor of family business
  • 2 pm to 6 pm – College (bunked most of the time and made some closest friends)
  • 7 pm to 8 pm – Learning some new course

The reason I’m telling you this is because it was in Indian Merchant Chambers where I was learning about stock markets, where I had a lucky break for my investments. It was a chance to attend a lecture by Mr Deepak Parekh of HDFC Ltd and Mr Aditya Puri of HDFC Bank on Indian Banking Outlook.

I don’t recollect the speech that day.

But it had a profound impact on the way I looked at investing my hard-earned money. As a result, I called up my broker and asked him to buy HDFC Bank with the money I had. It just made sense to me.

investment in HDFC bank in year 2006

Because I could see HDFC Bank’s service to customers was superior, they had a friendlier staff when compared to other PSU Banks and its standards were equal to a foreign bank. These days, it’s a normal thing. Back in 2006, it was revolutionary.

Fast forward to 2023.

That investment is up 30x.

And yes, I’ve stayed invested.

It wasn’t a smooth journey, to be honest. There were times when I felt that the Bank would be shut the next day. That’s where my hard work in the family business paid off. Whether it’s a boom or a recession, good employers never let their employees go away.

2008 was particularly tough to digest. Because my investments were down by 50%. And there was bad news everywhere. Banks in the US were failing. Sensex was going into red every single day. There was panic all around.

So I did some research. I asked my college professors about my investment into HDFC Bank. One of them was pleasantly surprised and told me his secret.

She said,

“Whenever you feel like selling a banking stock, just keep a check on their non-performing loans. If they are going up more than the industry average, then sell the stock even if you have made a loss. But if the bank is able to provide for those non-performing loans, then be rest assured that it will tide through.”

I made my attempt and discussed it with her. Later on, I decided to hold the stock.

I didn’t buy more because it was my first rodeo and I was just turning 18. I had CA exams to prepare for, it would be my perfect escape from the family business in the later years. Fortunately, I don’t get sleepless nights or anxiety when the stock corrects by 50%, sleep is my superpower.

The same scenario happened in 2013, when India was tagged as the fragile 5 economies of the world. I was in a similar situation of thinking of selling the stock. But again, it didn’t seem like the bank was unable to control the downside.

In the same way, I have taken this decision multiple times. And each time, I have decided to stay invested with the stock.

It’s never a buy-and-forget situation.

It’s a constant analysis.

As a result, I’ve realized how little interest rates and inflation really matter. As an investor, my job is to assess the company’s ability to tide over this crisis properly. Every single time, there’s a macroeconomic event, it’s best to go back to the roots and check the balance sheet of the company. If the business is happening as usual, then you shouldn’t worry so much about the stock price.

I will end my story here.

Leave the macroeconomics to the economists! We are investors!

Who is an investor?

An investor in simple terms is a person who commits capital with an intention to earn profit.

The key thing to understand here is that an investor is purely committing capital, not labour. There are 3 forms of commitments that a business requires, namely,

  1. Capital (money)
  2. Labour (human resource)
  3. Land.

As a result, when we commit capital, our primary objective is to understand whether that business or company has the capacity to efficiently use land, labour and capital. When there are good times, the company doesn’t splurge money or get into unnecessary projects and when there are bad times, the company doesn’t take on unnecessary debt.

A good investor looks for a balance in these 3 aspects of the business. Because both good times and bad times are a part of the economic cycle. It’s the very nature. Cannot be changed.

The banking industry for example went through deep trouble in 2008 and 2013. After RBI Governor Raghuram Rajan asked all the banks to recognise their NPAs and monitor their health closely, the system was shocked to see so many bad loans coming out.

An investor who put his money in good banks survived and thrived. Those who put their money and even averaged while the stock price was down in bad banks have lost a lot of money.

Think about it.

Even in bad times, good banks survived and thrived. Times such as high inflation and interest rates, saw these good banks gain market share from the bad banks.

A smart investor will take a cue from here that timing the market is not important at all. Infact, in the long run, it results in portfolio destruction. We will cover this topic in our next blog.

How timing the stock market is completely irrelevant to build a long-term portfolio.

To conclude, here’s a story of Jagoinvestor’s founder, Mr. Manish Chauhan who has a unique way of building his long-term portfolio.

A couple of months ago, I was sitting in our Pune office with Manish. I was sharing my journey of wealth creation with him.

The one I’ve written above.

While he acknowledged the passion that I have for equities, he gave me a unique perspective, something I’ve never really seen or heard before.

Manish very gently said that he doesn’t track the IRR of his portfolio and does not look at his portfolio performance.

He has a simple way.

  • Invest your savings every month.
  • Redeem money when you really need it
  • Make sure you have chosen the right portfolio
  • Review it once in 2-3 yrs

That’s it.

Constantly looking at any particular metric of return such as annual return, compounded return or any other math number is beyond him. This comes only when you have belief in what you do. This happens when you have done your homework correctly. This happens when you really understand what “high risk high return” means.

The first thought in my head was disbelief.

To me, it sounded like a chocolate seller doesn’t eat the chocolate at all. But after pondering a lot of my thoughts over it, I realized that Manish is exactly doing what we preach to everyone.

Don’t obsess over the short-term returns. In the long term, when the selection of the investment strategy is correct, massive wealth creation will happen.

For an investor, this is the guru mantra. Don’t obsess over the short-term bit of money-making.

Leave it to the professionals. If you have selected your professional such as an investment advisor correctly and believe in the process of choosing a mutual fund manager or a portfolio manager correctly, then you will be able to create wealth.

Most of us forget this simple bit.

So what you should do as an investor in the long term?

You shall choose the right portfolio which suits your needs and temperament. Create a strong equity portfolio of mutual funds, PMS, and real estate and cover the basics like life and health insurance along with a good emergency fund. Work on your income and just be disciplined in investing.

If you do things correctly, the short-term underperformance or overperformance will not make any significant difference to your life.

So there’s no point in looking at interest rates, inflation or the short-term performance of the investments for a long-term investor. What shall matter to you is your health, family, and working on your craft.

Think about it.

“In the end, what matters most is how well you lived, how well you loved, and how well you learned to let go.” ― Ziad K. Abdelnour

The article is written by Jinay Savla, Equity Expert @Jagoinvestor.

Navigating Interest Rates, Inflation, and your Financial Journey (Part 1/2)

Today we will talk about interest rates and inflation, the two hot topics of conversation in the investment world. I will try to simplify these two topics in a simple way and link it with your financial life.

The vast majority of views that we read in newspapers and blogs offer some form of asset allocation advice based on these 2 parameters. A simple retail investor like you and me will definitely get confused.

“To complicate is simple, to simplify is complicated. Everybody is able to complicate. Only a few can simplify.”  ~ Bruno Munari

Before we discuss interest rates and inflation, a story comes to mind. 

My wife and I really like to go for long drives. It just relaxes both of us. In fact, it’s the only common interest between the both of us.

For these long drives, we do some basic checks with the car and environment – whether it is raining or not, food, water and comfortable clothing. Since music is now streamed via the Internet, we don’t need to worry about CDs or cassettes, etc. Sorted.

Now when we start the car, Google Maps tells us that we will reach a particular destination in the next 7 hours with an average speed of 80 kmph based on the traffic. So we simply add a couple of hours of rest, washroom breaks and some lunch or dinner along the way. Effectively our journey becomes 8.5 to 9 hours.

Those of us who constantly drive on highways know the unpredictability of accidents. It’s like you are strolling and suddenly there’s a whole lot of traffic that you have to sit through. The crazy part is that there’s just no washroom or food mall available. So you are stuck in traffic listening to music and praying to God that the traffic clears very quickly.

Some uncles who are strolling around in such situations often become the messengers of bad news. It’s their duty to update every car whether there’s an accident, a fire, arrival of the ambulance, or police and then leave us with the hope that the traffic gets cleared quickly.

These unpredictable events lead us to a delay in reaching our destination and if we are not careful, these events also cause a bit of mental instability that leads to irritation.

But when the traffic clears, we drive as if our school’s last bell has rung and it’s time to go home. That feeling of relief. Some of us even want to cover the time wasted by driving at ridiculous speeds. It’s just different strokes for different folks. But if you just drive, you will reach your destination. It’s not rocket science.

Rocket science is what you do with your peace during these unpredictable events. That defines the happiness of your journey, not the destination.

Similarly, when you have planned your financial journey of life, there’s a destination set in your mind. Our financial independence is when we are no longer worried about looking after the expenses of our home and fulfilling the expectations of our loved ones.

There will always be some unpredictable events that will cause you to rethink your entire investment strategy. My humble request here is to understand the gravity of the situation before jumping into a complete restructuring of our financial plans. Because sometimes, the situation is made to sound a lot more horrible than it actually is.

Please keep an open mind and allow me to simplify these concepts to the best of my ability.


This term has become the most used and highly abused in the world of investment today.

Some people talk about it as an end-of-the-world apocalypse in the making. It’s then linked to consumer spending and how things that are getting expensive won’t be consumed, so let’s stay away from the fast-moving consumer goods (FMCG) sector, and so on and so forth. It’s hilarious and disturbing at the same time.

So let’s understand what inflation really is and what it means to common people like you and me.

Simply, inflation is understood as a simple rise in the price of a particular commodity or service. Suppose, the price of milk goes up from Rs. 75 per litre to Rs. 80 per litre, the extra Rs. 5 is attributable to inflation. If you add human intervention to it, such as putting the milk in a bottle and charging extra won’t be considered as inflation.

To track inflation, the Reserve Bank of India (RBI) uses the metric of the Consumer Price Index (CPI). The idea is to capture the rise in price experienced by roughly 140 crore Indians. It’s a tough job, to be honest. That’s precisely the reason why such macroeconomic numbers should always be seen with a pinch of salt.

In the chart below, we capture the last 10 year’s journey of India’s CPI inflation. RBI has set a mandate to keep the CPI in the range of 4% to 6%.

CPI inflation in india

Currently, CPI is inching towards 8% which is out of RBI’s comfort zone of 4% to 6%. There are multiple explanations for this and in my opinion, every explanation is valid. Because in macroeconomics, data is always supported by a story that we create.

However, if you come to think about it, our yearly expenses don’t rise by a mere 4%. They tend to be well above 18-20%. We call this luxury inflation.

RBI constructs its CPI with the following constituents.

Shares of different groups of items in Consumer Price Index basket.

Don’t be surprised! This is how the RBI budgets itself. Our household budgets are different.

The major pie of the CPI basket falls into Food and beverages. It constitutes a good 45.86%. So any unusual price hikes in onions, tomatoes, etc. have a direct impact on the inflation rate. Housing is 10.07% which is largely stable in price.

We don’t see massive fluctuations in a matter of a few months. Fuel & Light does have a lot of impact on our wallets but for RBI’s CPI it’s barely 6.84%. So a whopping rise in petrol prices might not directly affect the inflation rate so much.

So it’s safe to say that RBI’s expectation of the inflation rate and the inflation rate that we experience are two separate things. Yet, we give a lot of importance to inflation and base our investment decisions on it too.

We should really reconsider it.

Next in line is Interest Rates!

Interest Rates

When an investment professional speaks about interest rates, he generally refers to the Repo rate published by the RBI in its Monetary Policy Meeting.

In layman’s terms, the Repo rate influences our fixed deposit interest rate that we receive from the banks and the loan interest rate that we take for a house, business, car or bike.

Inflation and interest rates are interdependent. When the inflation rate goes high, RBI generally prefers to hike the interest rate. When the inflation rate is low, RBI prefers to bring the interest rate down.

Why does this happen?

Think about RBI as a head of the family, someone like a grandfather who looks after the entire family’s budget. He is constantly strategizing about which child of his should go out on his own and which child will stay together. Plus, business decisions even when they are independently run by his children, he is there to keep guiding constantly.

Suppose our monthly budget is Rs. 3 lakhs for a family of 10 people, and suddenly the entire family wishes to go for a small vacation.

How will he do it?

There are 2 options, to either tighten the household budget for a few months so that he doesn’t need to withdraw from investments or ongoing business. Or he will borrow from the bank to fund the small vacation and recover it later from the investments or business.

In the first case, the entire family will have to go through a tough phase because their expenses will become less for a while. In the second case, there will be too much pressure on the grandfather and his children to recover the money.

Similar is the case with RBI. When inflation goes out of its comfort zone, like a grandfather, it has the option to limit the supply of money in the economy so that people spend less. Or it has the option to print more money that will have to be repaid at a later date to avoid currency depreciation.

In a nutshell, whenever we see interest rates going high, we have to assume that inflation is higher too and vice versa.

Let’s look at a brief history of RBI’s Repo rates (interest rates).

historical interest rates in india

Right from 2014, interest rates have been slowly coming down as inflation eased. However, in the last few months, we have seen them going back up. Home loans have become a bit expensive and so have our day-to-day expenses. But they are not so significant as to affect our budgets. If the price of tomatoes goes up, we will consume a bit less. It’s not a life-and-death situation for us.

Even if the interest on a home loan or car loan gets expensive by a couple of percentage points, most of us simply yawn. It’s not a material impact.

We are not macroeconomic forecasters who will tell you what is going to happen in the future. The intention of this article is different.

Yet, we take these 2 numbers seriously when considering our investments. Isn’t it so?

When interest rates are high, banks offer a very high fixed deposit rate. So we tend to move our money from equity to fixed deposits.

Contrary, when the interest rates are low, we move our money from fixed deposits to the equity market.

We forget the most important principle here.

The equity market is a completely different beast to conquer. Fixed deposit is a completely different financial instrument. They are not supposed to be interchanged due to some temporary economic factors.

What is an equity market then?

In simple terms, the equity market is a place where you get ownership of a business. So suppose, you want to own the growth of Reliance Industries. You will go to the equity market and buy some shares of the company. And if you want to sell because you don’t see any further growth in the same, then you can go and do that.

Companies like Zerodha, Upstox, etc. merely offer a platform to enable such a transaction. They are not the equity market themselves. They are merely enablers.

The factors that make you buy or sell a particular company’s stock is a completely different discussion that we will keep for a later date.

The biggest mistake that we see investors making today is simply moving their money out of fixed deposits and pumping it into equity markets. If you ask them why? That’s because equity markets will make better returns than the interest rates on fixed deposits.

Yes, we agree that equity markets will always make better investment returns than fixed deposits. Here’s a question I want to leave you with.

Will these interest rates and inflation make you a better investor?

Think about it.

Hint – We will cover this answer in the next article. Stay hooked.

The article is written by Jinay Savla, Jagoinvestor.

Beginners guide to investing in Fractional Real Estate

Will you be able to buy a property worth Rs 20 crore? In all probability, you would say NO. However, if I say  – “Can you buy 1% of that real estate property for just Rs 20 lacs?”

Now, I guess the answer may be YES!

Welcome to the concept of Fractional Real Estate.

What is Fractional Real Estate?

So, as the same says, when you buy a small fraction of real estate and become a part owner, that’s called fractional real estate. It’s a growing trend in India and a lot of people are now investing in fractional real estate because the ticket size is smaller and it gives you access to quality real estate.

Real Estate investments are one of the favorite’s of Indians, and in the last few years, this concept is quite a hit among Indians. I would like to share 10 things about fractional real estate which will help you understand various things related to fractional real estate.

Here is how it works

Imagine there is a property worth Rs 20 cr, where you want to invest, but you have only Rs 20 lacs with you, under fractional real estate you will become 1% owner of property.

1. How to buy Fractional Real Estate?

While technically you can make a group of 5-10 friends and all can contribute to buying the real estate which will make it a fractional real estate, truly speaking its not possible for all people and hence there are various online platforms which help you invest a small amount into a real estate. Various investors like you will invest from that platform and this way everyone will become a part owner.

These websites or platforms are called FOP’s or Fractional Ownership Platforms. There are various websites which have cropped up in the last few years and you can search them online. FOP’s are various important because they are the one who carry out all the tedous tasks like.

  • Researching property
  • Buying Property
  • Selling property
  • Documentation work
  • Legal work
  • Collection of Rent
  • Distribution of Rent back to the co-owners

2. What kind of properties can you buy under fractional real estate?

It mostly deals in commercial real estate, because those are the properties which have very good appreciation and a regular rental income. Also, these are prime properties which are quite expensive and can be of the ticket size of anywhere from 20 cr to 500 cr.

Obviously, the retail investor cant invest on their own in these properties and fractional real estate is the only option.

3. Minimum ticket size

The minimum ticket size to invest in fractional real estate are mostly in range of Rs 5-25 lacs, which is within reach of most of the people who want to invest in real estate.

You can see the target IRR, and total price of the real estate along with other details on the website of these Fractional Ownership platforms

fractional real estate example

4. Liquidity issues in Fractional Real Estate

Real estate in general is a illiquid asset class, where it takes time to find buyer and get the right price you are looking for.

However in case of fractional real estate deal, if you want to exit, then you don’t  sell the property per se, but sell your share to another buyer. Hence its quite tricky to comment on the liquidity in fractional real estate. If the rental cashflow and property quality is very good, it will be easier to find a buyer, other wise you may be stuck for a long time, because unlike a residential real estate, the end usage does not exist for the buyer.

5. Less Hassle, no management

One of the best parts of Fractional real estate is that you as an investor don’t have to do all the research about the property, documentation, running around for all tasks, buying process and maintenance of the property.

For the end investor, all you need to do is just research the deal and if it makes sense for your investing needs or not. You pay and that’s all. You become the part owner.

Even the collection of rent, property construction progress, selling the property, paying of taxes etc is done by the FOP and not you as the end investor.

So the investment in fractional real estate has very less hassle, which quite a good thing.

6. SEBI coming up with regulation on Fractional Real Estate

Over the last many years, many platforms have come into this market and there is no standard way these companies deal. There are no proper processes and standardization is the disclosures which are made to investors and how the dealings happen.

Fractional Real Estate Regulation by SEBI

Hence SEBI has come up with a consultation paper which aims to regulate the FOP (fractional ownership platform) and bring them under REIT regulations in the coming days. It will be interesting to wait and watch this development.

REIT vs Fractional Real Estate

REIT’s are already in existence and getting popular from last many years. Its also a simple way to invest in real estate, however when compared to Fractional Real Estate, they are different on various parameters. Let’s see those differences

fractional real estate vs REIT

We hope that you are now clear about the fractional real estate and various points related to it. Do let us know if you have any queries in comments section.

When will you become a Millionaire? Top 1% of world

Recently, I came to know that around 6500 Indian millionaires have migrated to other countries this year.

The moment I heard this, the first thing which came to my mind is “How many millionaires are there in India? and entire world?”

Are you part of that list of millionaires? And if NO, then when will you be on that list?

When we say “Millionaire”, it means someone who has a total net worth of around $1 million, or Rs 8 crore in Indian currency apart from the house they live in!

0.7% of people in the world are millionaires

We all want to create a big retirement corpus and achieve financial freedom, but what if we keep it simple and just think of reaching $1 million first in our life? And if we can do that by the time we turn 50 yrs of age, that would be a wonderful achievement.

Especially because there are just 0.7% of people in the world who are millionaires!

Yes, you heard it right!

number of millionaires in this world

Only approximately 56 million people on their earth are millionaires (many of them are multimillionaires and billionaires also). We have close to 8 billion people on Earth, so that makes 0.7% of people on Earth as millions.

What about INDIA?

If you specifically talk about India, as per the official data, there are close to 796,000 millionaires out of 140 crores people and that makes it just 0.06% of the population.  The US alone has around 2.55 cr millioanires, while China has around 62 lacs.

So if you achieve a wealth of $1 million, then you are amongst the topmost cream layer of the country.

But how easy is it to create $1 million in India by the time you turn 50 yrs?

Truly speaking it’s not an easy task per se.

One has to be super aggressive when it comes to investing money, from an early age if one wants to reach that kind of target, especially because we also have to buy a house (most people take home loans) and clear off the loan too. Apart from these, we have other goals like buying a car, vacations, children’s education and marriage etc.

Forget creating $1 million, most people will struggle to close off their home loan by the age of 50 and create enough corpus to meet their children’s education by the age of 50.

However, A tiny percentage of people who earn very handsomely and invest smartly create good wealth and many of them will become a $ millionaire too. A good thing is that while many are leaving the country, the rate at which millionaires are getting added every year is very high.

millionaires migrating from india

What is required to create $1 million by the time you turn 50 yrs?

Let’s deal with the idea of what exactly is required to become a millionaire ($1 million or approx Rs 8 crore) by the age of 50. Here are some assumptions before we start!


  • This amount is apart from the primary house and any other financial goals like kids’ education, car, vacations etc
  • We will also assume that the person can increase their SIPs by 8% every year and the return on investments is around 10% (net of taxes)
  • We are assuming the same Dollar Rupee conversion rate in future also.

Note: In future (after 10-15 yrs), even $1 million will not be of same worth like today in India, however we are mainly focused on the calculation part here.

If we go with the above assumptions, here is what is required at different ages (an example)

Case 1: Age 25 

  • Current Wealth : 0
  • SIP required: Rs 35,000 per month

A 25 yr old person, with no wealth in their hands, wants to become a millionaire by the age of 50, then they will have to start a monthly investment of approx 35,000 and then continue that for the next 25 yrs. Here is how the growth will look like

Case 2: Age 35 

  • Current Wealth: 50 Lacs
  • SIP required: Rs 1,00,000 per month

A 35 yr old person, with around 50 lacs in hand, wants to become a millionaire by the age of 50, then they will have to start a monthly investment of approx 1,00,000 and then continue that for the next 15 yrs. Here is how the growth will look like

Case 3 : Age 45

  • Current Wealth: Rs 3 cr
  • SIP required: Rs 4,00,000 per month

Finally, let’s also talk about someone who is 45 yr old. They must have approx 3 cr in hand and shall be able to invest around Rs 4 lacs per month (this is just one combination), if they want to become a millionaire by the age 50. This is quite tough for most people, but still, an example has to be given.

As you can see, it’s not a child’s play to become a millionaire by age 50 yr. One has to start early and start very well and continue for a very long time to do that.

Hence, The topmost thing to focus on has to be your income-generating capability which will be income on the table and then the next step will be your discipline to continue your wealth creation path.

I hope you were able to get insights from this article. In case you want to start/continue your wealth creation journey with right-hand holding, then our wealth creation services can be helpful for you. Please click here and reach out to us to explore how we can help you in reaching your millionaire target by age 50.

5 myths about FIRE busted (Indian context)

We all want to achieve financial independence in our life!

  • That day, when we will have enough money!! 
  • That day, when we will no longer have to worry about our future expenses!
  • That day, when we are out of the rat race finally!

For the last couple of years, we are hearing an acronym FIRE for this!

Myths about financial Freedom

Financial Independence Retire Early (FIRE)

FIRE, or Financial Independence Retire Early, refers to achieving a point in life where you have enough money to cover your expenses and financial goals without having to work for a living.

Ideally, this happens well before the traditional retirement age of 58-60 years. Achieving FIRE means having financial security for your future, as well as the ability to travel well, spend on big-ticket expenses and also leave a legacy for future generations.

At this point, you no longer have a compulsion to actively work to “earn money”

FIRE is a great achievement 

Achieving FIRE is a wonderful accomplishment, but there are many myths that are still there in investors’ minds who have not explored or read much about this topic.

This article will bust some myths around the topic of FIRE for you today.

Let’s start!

Myth 1: FIRE is all about a big number!

Most people feel that FIRE is all about just reaching a target number. Like 5 cr or 10 cr

For those people who are totally new to this concept of FIRE, you shall know that one can call themselves financially free when you have

  • 30X of your yearly expenses – at age 60
  • 35-40X of your yearly expenses – at age 50
  • 45-50X of your yearly expenses – at age 40

* Note that all these are high-level thumb rules only!

For example, if you are at age 50 and your yearly expenses (considering everything in this) are Rs 20 lacs, then you would need 7-8 cr to call yourself financially free (FIRE’d) assuming you will live for another 40 yrs

NO, it’s not about reaching a number, but more about creating X times your expenses, when X can range from 30-50 depending on your age and your ability to invest the money properly.

  • For someone with a Rs 50,000 per month requirement in life, they need roughly 2-3 cr today
  • For someone with a 3 lacs per month requirement and wanting to FIRE at age 40, it would mean a 16-18 cr corpus today!

As you move in life, your expenses will change and hence your FIRE corpus goalpost will also shift!

Myth 2 : Life is all set after FIRE

Contrary to what most people imagine, life is not hunky-dory after you achieve FIRE.

Yes, life is very comfortable and you will surely be less worried than someone who doesn’t have enough money. But still, you have to constantly think about how your money is invested and how it’s going overall and if it will really last your lifetime or not.

This is especially true if you dont have enough margin of safety in your FIRE corpus. So if you do your calculations and Excel tells you that you need 10 cr for all your life, then if you actually FIRE with 10-12 cr, then you are on the edge!

You have very little margin of safety. The inflation can be totally different in future, you may not make exactly the same return on your portfolio, and you may have some totally unexpected life event

All these will still keep your thoughts occupied to some level.

Don’t expect yourself to be chilling on the Goa beaches with Pina Colada after FIRE. Life will be almost be the same for you  minus a lot of money worries

This is of course not true for someone who has multiple times what they truly require for financial freedom.

To learn more about FIRE, you can also watch my video below on various types of FIRE

Myth 3: So many people in India are achieving FIRE, and I am a looser

There is a lot of buzz around FIRE these days. You constantly see people on social media, youtube, telegram channels, and podcasts where the conversation is alive about FIRE.

There are many people who have already achieved FIRE or they are somewhere midway.

This has started putting a lot of “pressure” on millions of others that other than them, everyone is getting financially free these days!

Let me tell you something!

Me and my team have already interacted with more than 5000+ families in the last 10+ yrs in India + NRI and we have not seen more than 5-6 people who have achieved FIRE by the age of 40-45 yrs. I am talking about people who are into regular jobs and have to create their wealth from scratch.

Apart from these 5-6 people, there are dozens of other families who will achieve FIRE by the age 50 yrs, but not in their early 40s.

Rest all others, will at best retire at their regular 58-60 yrs age bracket. In fact, many of them may not even retire properly and may face financial crunch. I am considering the whole population here and not a specific class of people.

Only a tiny minority of people in India achieve financial freedom early in life in our observation now.

In absolute numbers, you will often see many people talking about achieving FIRE but remember that thousands of others are not close to it. In a group of 1000 people, if 2 people talk about reaching FIRE, the rest 998 people starts feeling that it’s a common thing these days

Having a few crores means FIRE?

Also, having a few crores does not mean a person has achieved FIRE.

A person having a nice loan-free house plus Rs 3-4 crores may not have even reached midway of FIRE. They look RICH (and they are) but they are not Financially FREE in the true sense. They have their own share of financial worries and insecurities.

FIRE before 50 yrs of age is a wild achievement, but it’s statistically very rare. Understand that it’s quite TOUGH to achieve and it’s normal to not achieve FIRE. You are surely not missing the FIRE bus, however, you shall give an honest attempt to achieve financial independence as early as possible

Myth 4: Achieving FIRE means never working again

FIRE is “Financial Independence Retire Early

However, most people focus on retiring early part which is often unreal. It’s very tough to not do anything all day and just retire from your job.  Humans are designed for staying busy and be active, to pursue something. People who FIRE actually keep working and dont sit at home.

One of our readers once shared with us that to experience how it feels after retirement, he took a very long break from job (around 2 months) and tried to see what life looks like and soon realised that it’s very tough to spend the day and also withdraw from your corpus for your day to day expenses. He had to return back to the job in 2 weeks as he could not take it.

Now that’s not the best example I could give but it simply gives you a hint that “I am not working again” after FIRE is mostly wishful thinking and mostly comes to mind if you are into a stressful job and dont take enough time to enjoy your life.

Better not aim for FIRE with that mindset.

At best, what will happen is as below

You will achieve FIRE, take a very very long break and then get back into some low-stress job/work which gives you a lot of flexibility and help you explore your hobbies/what you enjoy.

Also, its a good idea to talk to your spouse once about your plans of staying at home all day after FIRE, mostly you will be directed to keep working for a few more years as they won’t be able to tolerate you all day long at home 😉

Myth 5: FIRE requires extreme frugality and deprivation

This is one of the biggest myths in my opinion about FIRE.

A lot of people feel that cutting down on expenses and depriving themselves of the initial years will help them move towards FIRE. After all, what you save will get added to your wealth kitty.

This is not TRUE!

Most of the people who actually reach FIRE early in life are those whose focus is on increasing their INCOME and not those who cut down on their EXPENSES.

Cutting down on expenses has a limit, and truly speaking depriving yourself is not a healthy way to achieve financial freedom.

There are people who earn 5 lacs a month, stay their life in a decent manner in Rs 1 lac and save Rs 4 lacs a month in the right manner with discipline for years. These are the people who mostly FIRE young and not the one who earns a smaller income and is trying to squeeze the expenses a “bit more”

Dont do that!

Cutting expenses beyond a limit will mostly take away all the FUN from your life and add up some extra money in your kitty which eventually you will spend on something stupid again. It will not lead to financial independence.

How financial independence or FIRE is achieved ?

If you are naturally a frugal person and live with a very small amount of money, then it’s fine. But just make sure you dont fool yourself with trying to cut expenses where you truly dont want it.

Aim for Financial Freedom

The mail of this article was to simply present some facts about retirement and clear some myths so that one can pursue financial freedom with the right mindset. Do focus on your income and try to increase it and save a big chunk of that to invest smartly in inflation-beating financial products to create wealth in the true sense!

I have tried to share my personal thoughts and what I feel about the topic based on my experience.

Do share your thoughts about this topic. Have you seen some more myths in the minds of your friends/family about financial independence? Do share in the comments section!

No more Indexation benefits for pure Debt mutual funds

In a major change in the finance bill 2023, the govt has brought some changes in mutual fund taxation which will now treat pure debt mutual funds on par with Fixed Deposits. Most of the investors were not very happy with this sudden change, how this change is now a reality and we have to accept it.

As per the new rule, any mutual fund where not more than 35 per cent of its total proceeds is invested in equity shares of the domestic companies will be termed as “Specified Mutual Fund” and it will be taxed at the marginal rate (as per your slab).

However, the gains from these specified mutual funds will still fall under “short term capital gain” category and not as “interest” income, which still leaves debt funds with some advantages which I will share at the end of this article.

Rule applicable from Apr 1, 2023

This change is applicable only for the new investments which will be made after 1st April, 2023. No impact is there for any old investments.

So if you have any debt fund, you can still hold it for future and you will be eligible to get the indexation benefit. Infact, its suggested that you hold it for long term because the taxation will be only 20% with indexation benefit which makes it a very attractive investments.

Also note that we still have the indexation benefit for those funds where the equity exposure lies between 35% and 65%.

Here is a small chart which will give you a clear understanding of the bifurcation on taxation.

Changes in debt fund taxation by Govt to remove Long Term capital gains benefit

Which category of funds are Impacted?

If you look at the definition, here is the list of categories which will now not be getting the indexation benefit

  • Liquid Fund
  • Conservative Hybrid Mutual Fund
  • International Fund of Funds
  • Dynamic Asset Allocation Funds

The fund of funds which invest internationally will also be impacted as they are still treated as debt funds when it comes to taxation because they don’t invest in “domestic equity”. Their portfolio has equity, but its not domestic, and hence they don’t quality as equity funds.

Why Govt made this change?

As per govt, one rational given was that debt funds have a very strong indicative returns and there is almost no credit risk, so they are very much having predictive return and they shall be treated at part with a fixed deposit and not get preferential treatment.

This a bit odd, because debt funds still carry interest rate risk and default risk still exists no matter how small it is. A person investing in debt fund is investing in a market link product and shall get some extra benefit, however govt has other views.

What does this change mean to retail investors?

Truly speaking, this change will mostly impact those investors who are heavily dependent on debt funds for their long term investments and those who were looking for a very safe investment option with low risk and high tax advantage.

Any ways most of the investors were using debt funds for short term and money would get redeemed in 2-3 yrs, for which it was always a marginal rate earliar also.

So right now do not take action in hurry. Anyways the old investments are not impacted due to this rule.

3 advantages of pure debt funds going forward

While the taxation advantages of debt fund has gone, still it has several benefits worth considering as gains from them still is considered as a “Capital Gain” are as follows

  • Tax only on Withdrawal, not on accrual – You can postpone taxation in future when you withdraw unlike a FD
  • Setoff of gains with losses – You can adjust the capital gains if any with the capital gains which you incur now or later asyou can carry forward the losses for next 8 yrs in your ITR
  • Liquidity – You can withdraw anytime from a debt fund without penalty (after the initial 1-3 months) and not pay any penalty like you do in a fixed deposit

We hope it explains what changes have taken place recently. Incase you have any doubts, do write us below, so that we can answer any of your queries.

10 major changes for salaried person in Budget 2023

Today we will be highlighting the important points from the budget 2023 that would be most relevant for the salaried people.

1. There is no change in the old tax regime.

So first thing to know is that the old tax slabs remain unchanged. The slabs are same like last year which are as follows

Old Tax Regime Slabs

2. New tax regime tax slabs made more attractive

The taxation slabs got better in the new tax regime, which are as follows. The taxation got better for middle class and all the people who will choose new tax slabs will pay lower tax. Here are the new and previous slabs

New tax regime slabs

3. Standard Deduction of Rs 50,000 in New Tax Regime

Earliar, the standard deduction of 50,000 was available only for the old tax slab, but in this budget its also extended to the new tax regime. Which means that one can directly reduce their income by 50,000 before finding the taxable salary.

4. No Tax up to Rs 7 lacs income under new tax regime

Its time to cheer up, as one will not be paying any income tax if the taxable salary is upto 7 lacs. This simply means that a person earning upto 7.5 lacs will not pay income tax because there will be standard deduction of 50,000 now which will make sure you come under that 7 lacs limit. here is an example where we show Tax calculation

Based on the information above, when does it make sense to choose between new and old regime?

When to choose New Tax Regime?

  • Income is less than 7.5 lacs
  • Your Total deductions are less than 2-2.5 lacs (if you claim just 1.5 lacs in 80C and 50k to 1 lac in other things)

When to choose old tax regime?

  • Your exemptions and deductions are very high like 4-5 lacs ( when you claim full 80C, 80D, HRA, LTA and home loan interest)

Old Tax Regime will most likely get killed !

Govt has made its mind and aiming to move towards the simple tax structure with minimal compliances. In future there will be no 80C , HRA, 80D , home loan interests or any kind of deductions. Slowly New Tax Regime will be made attractive and old tax regime will be abolished.

5.  Senior Citizen Saving Scheme Limit raised to 30 lacs.

The senior citizens will feel extremely happy after this amendment as the limit in Senior Citizen Saving Scheme has now increased to 30 lacs which was earlier 15 lacs. The current interest rate is 8% for the Jan-March 2023 quarter

6. Post office MIS limit raised

This clearly shows a glimpse that this budget was in favor of the salaried class. National Savings Monthly Income Account the previous limits have increased.

MIS Limits


7. Leave Encashment is tax free upto 25 Lacs.

Now one will not have to pay any income tax when they get the leave encashment amount upto Rs 25 lacs at the time of retirement or leaving their job. This amount was set at Rs 3 lacs till date which was set long back and was very low. So if one gets 40 lacs as leave encashment, then there wont be any tax upto Rs 25 lacs and rest 15 lacs will be taxable.

8. 20% TCS on foreign remittances under LRS scheme

Taking a foreign tour package or investing abroad will increase one cashflow, as there is a 20% TCS rate now. which means that you have to pay an extra 20% money which will be deposited as advance tax from your side to govt when you make any high amount transactions which sends money to foreign. This is applicable only when the amount is  more than 7 lacs.

Below were the slabs ..

TCS Chart

Note that this TCS amount is not the TAX, but advance tax, which means that at the end of the year you can adjust it with your total tax payable or claim it back by filing a refund in your ITR.

9. Traditional Life Insurance policies maturity amount is taxable if the premium is more than 5 lakhs

All life insurance policies proceeds as income/maturity will be now be taxable if aggregate premium paid per year by the person is more than 5 lacs. Aggregate premium means total of the premium paid in a year by the person in his name from all kind of insurance policies

  • This rule is applicable only for all policies issued after 1st Apr 2023. All past policies does not get impacted
  • This rule does not apply for death benefit (if someone dies and family gets the money, then its tax-free
  • This rule also does not apply for ULIPS


10. Capital Gains exemption on investing in other property is capped at 10 cr

Till now there was no limit on the capital gains exemption under sec 54 and 54F, which means that you could buy another property with all the capital gains and just not pay any tax. But now you can only do this till 10 cr.

This is anyways going to impact only super HNI who deal in properties worth multi crores.

Let us know if you have any query on budget 2023. We hope you got a fair idea on all the changes made.

5 priceless benefits of Financial Freedom

I’ve heard the phrase “financial freedom” several times in the previous 3-4 years from the investors community.

Every time I speak with a customer or an investor on various forums, it appears that “financial independence” has become the new catchphrase. So I decided to talk about it more today.

financial freedom benefits

What is Financial Freedom?

Simply said, Financial Freedom is the accumulation of sufficient wealth to cover your living expenditures for the rest of your life. You’ve saved enough money to cover all of your bills for the rest of your life. After that, you won’t have to worry about money.

How much money makes a person financially free is a deep question and there can be debate on this topic alone, but in the most simplest form, once a person acquires 35-40 times their yearly expenses requirement, they are said to be financially free. You can read more on this 30X rule for retirement here

Let me get to the point of this article and discuss the top 5 reasons why I believe most individuals should strive for financial independence early in life (strong>hint/strong>: by the time they are 45 or 50 years old).

5 benefits of pursuing Financially Freedom

Benefit #1 : To buy Freedom in Life

We all labour all hours of the day and night to make money. Money covers all of our costs. Rent, food, school fees for your children, and healthcare costs. Everything..

If money is not everything in life, it is certainly a very important factor!!

Many people do not feel FREE in their lives. They become money slaves because making money becomes their major aim in life.

  • They cant say NO to their work
  • They cant say NO to the schedules
  • They can say NO to their bosses

All the times, money dictates their life and decisions.

Sufficient money in life can give you a lot of freedom.

  • Freedom of when to work
  • Freedom of with whom to work with
  • Freedom of when to wake up
  • Freedom to take long vacations ..

You name it and you can feel freedom in that area

If you want to experience a lot of freedom in life in various areas, you shall work towards financial freedom.

#Benefit 2 : To bring more power in your career

A lot of people have this myth that one shall achieve financial freedom, so that they can quit their job and retire from work.


One has to reach financial freedom so that they can bring more energy and power in their career or anything new which they want to truly do in life.

Most of the people have to do things in life with the primary motive of earning money and not because they wish to do it.

  • You feel that the new project in your company is quite exciting, but does not pay enough? What do you do? Forget it!!
  • You feel you really enjoy taking risks and do something challenging in your workplace, but wait.. what if it fails and you are fired or do not get promoted next year? You forget it and you focus back on things which are “SAFE” for your career.

We are continuously looking for ways to boost our compensation package, even if it means avoiding activities that we would like doing if money were not an issue!

When the money component is gone and you have to do things just for the love of working and reaching greatness, your job takes on a completely new vitality. You achieve more quickly, and your job happiness grows. This is the actual method of working, but it does not happen for most people since MONEY stands in the way of what you truly want to achieve in life.

#Benefit 3 : More flexibility to pursue other passions

Financial Freedom also gives you freedom to pursue any long due passion which you were not able to fulfil while in the regular job.

“What will you do once you are financially free?” I ask our workshop participants. I receive some unusual responses, such as

  • I will become music teacher
  • I would like to run a restaurant
  • and even I would like to become a scuba diving instructor

Compulsion of “earning money” has crushed a lot of dreams and financial freedom is that point where one can explore those new careers or opportunities.

#Benefit 4 : Reduced stress and worry about money

This is a no brainer.

Ask the question to yourself right now. If you loose your job and are never getting another one again, how many years worth of expenses do you currently have?

  • 3 yrs?
  • 10 yrs?
  • or 2 months?

And wait!..  What about repaying all your outstanding home loan, and funding the expensive education of your children on top of that?

Its quite scary right!

We are all concerned about the future since we do not have enough money.

Here is a quick 25 questions financial health checkup, if you wish to take

The day you have enough money to support everything and live comfortably is the day you feel really safe and at peace. Money does not solve all issues in life, but it does solve MONEY problems:)

#Benefit 5 : Pass a strong Legacy and build generational wealth

  • Your grand-parents worked for money
  • Your parents worked for money
  • You now work for money

Where is your generational wealth? Do you have family legacy which takes care of atleast the basics of your family?

You will see various family where they work towards generational wealth. They have enough money which produces income for family, be it some business, equity wealth, real estate wealth or whatnot!

But lot of families are not able to create it because they dont have attitude like that. They earn and finish the money and at family level they always are in that never ending cycle.

If you achieve financial freedom early in life, there is a good chance that you may put seeds of generational wealth, but you also have to ensure that you teach right attitude towards money to your next generation.


I have kept a very simple version of financial freedom for this article. This topic is quite deep in reality.

Do let me know if you liked this article and if you can add any more benefits of financial freedom?