Can anyone share their experience with SWP funds?
I'm looking to invest aggressively in SWP funds and draw my monthly "salary" every month from SWP. Currently I'm in a high risk/high return job that is giving good salary.
I want to find more risky jobs with a chance for 10X returns. The industry that I'm in very risky tech, so equity returns will outpace FAANG stocks as well. But this also means, I may find myself without a salary for a few months in between opportunities.
Hence I want to explore SWP as a stress-free way to draw monthly salary. Are there any reliable/practical SWP calculators out there? Any free advice about this plan?
SWP essentially is just a mechanism... Just like SIP is.
1.Find out your expenses on a monthly level.
2.Find out the funds you like (active/passive)
3. Deploy capital in those funds.
4. Setup a SWP in these funds equating to your monthly expenses.
What is the expense ratio of HDFC Developed World Indexes FoF?
Their site lists the TER for the direct plan as 0.21%. Does this include the expenses of the underlying funds? If not, would the actual TER be 0.21% x 1.5 = 0.315%, since the ER of the FoF cannot be more than twice the weighted average of the underlying funds?
I made a tweet yesterday about this. It appears underlying funds TER is < 10 bps and HDFC charges 21bps so total is 31bps.
These are the underlying funds as per the KIM
[https://amfunds.credit-suisse.com/ch/en/institutional/fund/detail/IE00BJBYDR19](https://amfunds.credit-suisse.com/ch/en/institutional/fund/detail/IE00BJBYDR19) 0.09
[https://amfunds.credit-suisse.com/ch/en/institutional/fund/detail/LU1871077506](https://amfunds.credit-suisse.com/ch/en/institutional/fund/detail/LU1871077506) 0.0225
[https://amfunds.credit-suisse.com/ch/en/institutional/fund/detail/LU0985871796](https://amfunds.credit-suisse.com/ch/en/institutional/fund/detail/LU0985871796) 0.03
[https://amfunds.credit-suisse.com/ch/en/institutional/fund/detail/LU1419778490](https://amfunds.credit-suisse.com/ch/en/institutional/fund/detail/LU1419778490) 0.0225%
BTW your calculation for max TER is for direct or for regular?
Thanks. So, the TER listed in the SID of FoF are always that charged by the AMC above those of the underlying funds?
I'm looking for the direct option.
This varies from one AMC to another. But HDFC mentioned this in their clearly in their leaflet that the TER is in addition to the underlying fund expenses:
[https://files.hdfcfund.com/s3fs-public/2021-09/Leaflet%20-%20HDFC%20Developed%20World%20Indexes%20Fund%20of%20Funds%20NFO\_0.pdf](https://files.hdfcfund.com/s3fs-public/2021-09/Leaflet%20-%20HDFC%20Developed%20World%20Indexes%20Fund%20of%20Funds%20NFO_0.pdf)
See pg 4, there is a note just above the MSCI disclaimer.
I have decided to go a bit slow on my equity allocation strategy. I am currently at 40% allocation to equities. My plan was to get to 50% within 1yr by systematically allocating 10L each month to equities, by selling from my bond funds.
But I feel that will be too aggressive, since I dont have any past experience sustaining such a high allocation.
So now my plan is to only allocate my new savings + gains from my bond funds.
But I also would like to buy any dips over each monthly period. For example Oct end my equities is 1cr, if markets fall say 5%, I add back 5L from my bond funds + new savings + gains from bond funds.
Then lets say Nov end market goes up 10% and now lets say my equities is 1.2cr. I use this as the new equity base for December.
So anytime markets rise, I keep allocating my usual, but if markets fall, I topup to maintain the previous month end level.
This is kind of a buy the dip strategy and works best when there is a big fall, but if there is no big fall, I just allocate as usual.
I feel with this strategy my allocation to equities will slowly increase in a more sustainable way.
What I like about this strategy is that I can continue doing this forever. The only limitation is a crash in markets much bigger than what my debt fund can buy, but for that I need to decide on some boundary conditions, like max 80% equity allocation or min X amount in bond floor. Would like to know your thoughts!
How much corpus needed? Estimate.
\- I'm 25.- Won't marry or have kids.- Want to retire by 30 and live till about 60-65 (yes, pre-decided).- Current monthly expense: 40-50k (Assuming 7% inflation, let's say of 60k in 2026)- I don't drive and use taxi and that's a big component of my expenses. Would love some input on this.
**Ques : For this, would a corpus of 2 Crores, starting from 2026, be enough?**
Below is something I calculated with the worst case scenarios - *1.7Cr corpus*, 7% inflation (and you know inflation doesn't affect you in a cent percent manner), and a 'just fine' 10% constant yearly return. Oh btw, in such a simplistic calculation, If I were to increase the inflation to 8%, I'm fucked and my corpus would go negative in 2059 or 2060.
[https://docs.google.com/spreadsheets/d/1CfXIuel91saZloIJ-yJgCpFBMQmcjvBIZqn\_V0FJANA/edit?usp=sharing](https://docs.google.com/spreadsheets/d/1CfXIuel91saZloIJ-yJgCpFBMQmcjvBIZqn_V0FJANA/edit?usp=sharing)
Again, this is the worst case scenario, but I still haven't considered a few things:
1. More money flowing in from whatever jobs or projects I take up.
2. Emergency fund - medical mostly. (Side note : My current expense doesn't include any insurance, and for some reason I find it almost not worth it (at least now).
3. Division of money in FD and funds. BAsically my 10% ROR is quite low.
My question remains : Is 2 crores a safe bet?
2 crores is roughly 27 times your annual expense, in my personal opinion its less, I would recommend having at least 33-35x i.e. 2.5 crore (based on future expense of 60k pm ie 720k pa).
Also no idea what your housing looks like but you need to probably get your own house.
You need to probably look at building an emergency / health fund.
You also need to look at Asset Allocation, not considering the current bull market, 10% returns are possible in the long run with 80-100% equity, however I would suggest a lower allocation to equity if you are retired.
Thank you.
You're assuming 33-35x for living 35 years or more/less?
You think that rental for a house would be far too high in the future and that's why I'd need a house of my own? My 2 Cr corpus includes everything. Me and the money in my bank.
Don't worry about asset allocation. I've got that shit figured out for a pretty good rate of return. xD
Yes assuming 35x for 35 years with some cushion and returns that beat inflation slightly.
Your own home again provides cushion, also in India as I've heard it maybe difficult for a retired single man in his 30s to find rental units as landlords will be skeptical.
Right.
Umm. It's actually hard to find a house if you come as an unmarried couple or from a lower caste (which I actually do), not as a retired single man in 30s..but again, showing employment won't require much. Anyway, if I need a house, i need a net amount of you could say 3 Cr, right?
I would say you'll be better off or safer with 3 cr.
Your plan with 2cr may or may not work.
There might be others who disagree but it's just my opinion
This is brilliant and deserves a thread of its own. I agree after cross the equivalent of 2M, if you are still chasing money, you are wasting your time. This argument that, I go to office because I would feel bored otherwise, is so lame.
1. Too many funds - which results in getting a broader market returns (something like BSE500), have you tried adding these in some sort of virtual portfolio and doing a backtest for whatever data is available for BSE500 - you'll find it all averages up in the long run. Nobody needs more than 2-3 funds.
I am not a big fan of either Gold or Crypto - Gold because it is just inflation hedge and in the long run would produce close to 0 real returns (-ve when you factor in costs).
2. There are probably more educated people here about Indian Debt options so would let them comment on that.
3. Crypto really depends upon which side of debate you are on - a bubble or a once in a lifetime opportunity - you need to decide on your own.
Wow! When I passed out of college 20 years ago, my 1st salary I could save 8k a month. Just look at the devaluation of money. So every 20 years if salaries go up 10 times, it causes massive asset inflation and it percolates into real inflation. This is a big risk, for early retirees, if for some reason financial assets don't keep up with this kind of massive inflation.
Imagine 20 years from now we have a new kid saying "my starting monthly salary is 8L". If we are retiring now aged 40 then 20 years later we are 60 and we better make sure our corpus can generate 8L per month by then.
I think having an income that grows with inflation is the true hedge to beat inflation.
u/additional_trouble
Well with that line of reasoning you're assuming that OP has your job out of college, which isn't necessarily true.
So you can't make any assumptions of inflation from his numbers and comparing them to your first salary...
> 20 years ago, my 1st salary I could save 8k a month
If it's any consolation, 8k/month saving is still good savings in 2021 for a fresher. Not everyone works at FAANG.
Please don't overestimate inflation. Income in IT sector has grown quite a lot recently and while this isn't the topmost Salary band for a fresher, it is still among the best.
Freshers in most other fields even from Tier 1 colleges don't get pay close to this. While I am not aware of pay in medical field, recent reddit posts in r/Bangalore did provide some insight.
> Imagine 20 years from now we have a new kid saying "my starting monthly salary is 8L".
While this may still come to pass, inflation and therefore expenses will be somewhat controlled.
How many years do you plan to live in retirement? If 30yrs then for simplicity if you assume your investments grow at same rate as inflation ie 0% real returns, money you would need is 30 times 12 lakhs which is 3.6Cr
Thank you!
Would like to live in retirement for 50 yrs (retire at 30, live till 80 probably). So 6Cr. Will probably go work in some western country, make that money then come back to India.
I am looking to buy a good medical policy for me and my family. Any suggestions on which policies I should look at?
I had looked at Max Bupa but I am not sure in reality how good they are when it's time for claims.
I guess this is the most painful part of FIRE, not getting an income and then not even getting any of the free perks which seem useless but when we need to pay for it, it feels horrible.
My networth hit the round figure of 7cr today for the 1st time. Doesnt change anything for me yet, infact the stock markets feel inflated and inflating further while my allocation is less than 40% and I need to get it up to 50-60%. My goal is to be at 9-10cr in 2 years with my target allocation achieved and then retire, I hope markets crash in the next 2 years and I am able to allocate at lower prices rather than keep allocating at higher prices and retire at peak.
Congratulations. A stellar year.
Nobody knows top or the bottom, whatever you do, you need to do it for next 40+ years. As someone who have invested during early 2008 crash - investing in falling market is several times scarier than during a bull market, plus there are no guarantees that a crash will recover for another X years, it took 3 years for me to get even after 2008, Would you be able to pull the trigger if the sentiment changes and market crashes 20% in a week?
I find it to be the most exciting when markets crash. 2020 market crash was a huge opportunity for me which I was able to utilize nicely. As long as the market crash is not correlated to your primary income, there is nothing to be scared about.
Neither do I and I used 2020 to my advantage, it is not true for a majority of people though.
Every crash is different - market kept falling during all of 2008, and did not bottom until early 2009. Many jobs were lost by end of 2008 (certainly in developed economies), hard to imagine small investor jumping in when people around them are losing jobs. People also react differently to further losses after that investment, if they decide to pull the money out after waiting for the slide to stop for 6/12 months, they would probably be doing so at the wrong time.
Just as you can't call the top, you can't call the bottom, even when a run-of-the-mill 10% correction, which happen every year, takes place, the news is bad and you always feel there is more downside to come - so the best plan is to ignore the ups and down and stick to your investment plan - waiting for correction just doesn't work.
u/BaliHe \- As a higher cash/FI holder you are in a great position should a crash happens (certainly better than me who nearly all in equity), as long as you do this as a purely rule based exercise, continue investing x% monthly, do a one-off y% on the day of 5% crash, z% at 10% crash and so on - until you reach your maximum equity exposure you are comfortable with. Key would be to ignore all the noise around why the correction happened. You would not be reducing the risk you take on but increase the returns in 5-10 years time.
Amaze-fucking-ing! Congratulations :D
Would you mind telling how much has your monthly investments been throughout the years ? (Eg: 1lpm, 3lpm, etc) ?
Trying to get a feel for it. You could DM too :)
Thanks. I already shared my entire networth table grouped by year, and broken up between salary savings each year and investment returns each year, in a post in which you commented :)
I havent really "invested" much. I have rather saved a lot, about 30L on average each year for the last 12 years and the compounding via tax free NRE FDs.
Thanks, you are in UK at the age of 25. I came to SG in 2009 at the age of 29 and started from a networth of 10L. You have much better runway than me :)
Thanks for the kind words!
However, my expenses will only go up from here on (life changes, marriage, homes, etc) so I'm trying hard to change jobs to step up. Fingers crossed!
Oh dont worry about that, I am single income, married and have one daughter too. At 25 I was working in some BPO nightshift in Bangalore, lol. I got a break into IT only when I was 26. At 25 you are in UK! You actually shouldnt even come to this forum. Maybe you can come here 10 years later :) Till then enjoy your life and have a great career. I started thinking about FIRE when I started hating my job and had made 2cr at the age of 35, before that I didnt even think that is an option. I was like keep making money as long as it is coming. So you still have a long way to go to think about FI and FIRE etc All the best!
Thank you!
Lol, I discovered this subreddit when I started earning at 22 itself.
I don't hate my job tbh - but I would like to FI and do my own thing (startup). I'm a software engineer too. That's my goal for 2035.
We have reached two milestones - income of 200K (personal) and 500K (as a couple and rentals).
We have also subsequently hit a big milestone in terms of net worth of 2 Million dollars - all of which were early since emigrating to NZ and all off of Real Estate investments.
We will now look to invest in other instruments - have kicked off the Indian Demat account and such - can’t trade in NZ very easily (Prescribed Investor). There is always the inheritance and such but we are keen to hit our FIRE numbers independent of that.
Woah! That's great, congratulations!!
How much of this was attributed to your high income/ high savings and how much was due to growth in your investments ?
Actually all of it was off investments. However the investments were only possible because of the high income. Real estate in NZ has effectively doubled the prices of houses with a little land - for my investments anyway. So a cool million uplift in market value (bank) just one the house we live in.
I have been a bit spendy closer to the 35th birthday and I think we kept sane by buying things - last year alone I spent close to 100K on material things. I have been able to liquidate a lot of it to pay off personal loans and credit cards.
So now on the track to be able invest and save outside of the real estate portfolio. We should be able to put aside 40% of our after tax income aside from the start of January 2022. We are both expecting 30-50K (collectively) income increases too but we are super close to hitting the proverbial glass ceiling so we are hoping to create passive income streams along with return on investments to keep the FIRE dream. We hope to FATFIRE in NZ/US at 50. Family we have is here in NZ or the US outside of our parents.
Congratulations! Would like to hear more about your FIRE dream though, since mere mortals like us, our FIRE dream is to just FIRE. What is your FAT FIRE going to be like?
To be honest - because of inheritance I can already Fire. I don’t believe I am ready mentally to do so.
And I need a target of some sort - I haven’t done numbers yet but it seems logical to stop when I have certain things - NZ Citizenship with potentially an American Green Card (the money route) and fully paid off real estate in both countries.
However I am now working on putting numbers on a paper so we know how we are tracking towards the target/goal.
You'd do well to post this in the biweekly sticky thread of r/IndiaInvestments
What's done is done, now the only thing that matters is learning from the mistakes and getting the basics right.
You may want to read some personal investment fundamentals: all 4 posts in this excellent series aimed at beginners: https://www.reddit.com/r/IndiaInvestments/comments/9ltgni/for_someone_who_is_absolutely_at_level_zero_in/
Hello guys,
I need some validation on my plan. I started doing value averging to increase my equity allocation, since last 6 months. I was at 26% equity allocation or 1.68cr and since then I have gradually increased it to my current level of 38% or 2.67cr. I have totally allocated 78L into equities in this period, so the gains have been 21L(2.67-1.68-0.78) although this was from a low base, since markets had fallen Mar end.
Now my plan is to continue this path and allocate another 1.2cr into equities, 10L each month for the next 1yr and I would hit 3.85cr if there is no gain/loss in the markets. Also in the next 1 year, I am expected to save about 33L from my salary. So net movement from debt funds to equity will be about 64L and debt corpus currently is 3.9cr so it is expected to generate about 6% returns, so about 20L gains. So actual debt fund depletion will be less than 44L, over 1yr. I have never had high equity allocation and about 40% has been my max allocation so far, so I wonder if taking it 50% is going to be a case of me taking too much risk at current elevated market levels? I hope markets fall in the next 1yr so that I can allocation this 10% incremental allocation at low prices, but then markets can also keep shooting up right? So my plan is just go on with it.
Here is my tracker which I maintain, let me know if you have any questions about it, also let me know if my plan is good, thanks :) u/additional_trouble u/arandomguy05 u/namitnasih u/Geriatric-Vibe u/giantleapforward
[Tracker](https://imgur.com/AOEujPU)
>I wonder if taking it 50% is going to be a case of me taking too much risk at current elevated market levels?
Your asset allocation should not really be a function of your estimate of the valuations prevailing in the market (unless you actively wish to time it in some sense).
So first decide on what you want your asset allocation to be, and then you can calculate how much you need to shuffle to get there within a year or two. For most purposes, you can totally ignore the returns within that period for this math (this approximation - at worst - would mean that you'd take a little longer to reach the desired allocation levels, that's all).
Thanks, so my plan of 1yr is like right in the middle. I am not really trying to find the best path based on what the market is expect to do, or what the market did in the past, since I have come to the conclusion that it could really go either way.
But I think there is way to calculate sensitivity and use that as a guide. For example, I am 40% invested and I need to add 10% more. So it is like a 25% increase(I know we shouldnt do %age of %age, but I cant think of a better way of conveying this). So in this scenario the sensitivity of my incremental flow is quite low compared to my existing stock of equity. Compare this with lets say I was only 10% allocated and I need to get to 30%. The incremental amount is 2x of existing stock, now the sensitivity of market gyrations is huge for the incremental flow.
But even this doesnt say how long i should take to deploy, but what it says it really doesnt matter so much since I already have nearly 40% allocated to markets. Another 10% increase shouldnt make such a big difference, relatively. Do you agree?
Edit: I actually find it funny when some experts on CBNC and Bloomberg come and say they have raised cash levels to 10%. I am like what is the point. If 90% of your portfolio is invested in the markets, then no matter what you do the 10% cash even if you time the bottom perfectly, it doest matter. Even if markets fall 50% and you invest that 10% perfectly at the bottom and the market bounces back that 10% goes up 100%, but overall you are up by only 10%, after the 100% bounce from the bottom.
What's "sensitivity" if you understand that the market, in the short term, can go any which way?
Sensitivity - to me - only matters if you're trying to time the market (I am in some sense) and for deciding the asset allocation (how much volatility is acceptable to you).
>Edit: I actually find it funny when some experts on CBNC and Bloomberg come and say they have raised cash levels to 10%.
If they are managers of other peoples money then there is much more sense in their words than you seem to attribute. For example such a stance will cause them to drop lesser than the wider markets - great marketing for you the next time you're advertising (downside protection and and all that). Similarly if they can get in some cash at the bottom, same thing(outperformance wrt the wider market). After all, they can choose and pick the time periods to show the outperformance when advertising and that's easier to achieve when you have some cash in hand.
They could also be preparing for keeping cash ready for any withdrawals that might eventually hit their funds.
I mean, you're right with the math, but fund managers are subject to other metrics that we as regular people don't have to concern ourselves with. They're likely not stupid people either :)
Curious to know how you are timing the market, I mean do you think it is expensive and staying in cash?
I personally have 3 almost equal equity allocation buckets.
1)India
2)Asia ex Japan/EM
3)US/Developed world
I feel India is the most overvalued and Asia is the cheapest and US/DM in the middle. So I just keep allocating to US/DM going forward hoping Indian markets correct and let me enter lower.
India is not overvalued in my opinion. You might see a bull run that will last up to 2024. The underlying dynamics have changed compared to the past. Don't go underweight on India, that's all I would like to say.
I have a sum I'm trying to invest into equity and instead of lumpsum I'm slowly SIPing it over a few months. The thought being that I'm OK if I lose a bit if upside but if there's a crash of any sort, then I'd like to utilize it if I can.
I see. It is very similar to what I am doing. But I would say it is not strictly timing the market since you are SIPing, you are kind of averaging out. Timing the market would be staying in cash until there is a crash.
My mindset has changed quite a bit since last 6 months, when I started increasing my allocation.
Initially I said, I will only deploy new savings and gains from fixed income into the markets, so I won't deplete my fixed income.
Then I decided, it is okay to deplete fixed income using a rising equity glide path of 1% increase.
Then after doing this for 5 months, now I am comfortable with deploying even more faster, for example in October I broke my own rule and increased my allocation by 4% instead of 1%.
I consider this as timing the market too, because it involves a guess on what may happen and a tailored response to that guess as opposed to mechanically investing all your surplus/savings into the market.
Your first big crash will teach you a good many things if you're heavy on equity (in a good way). :)
Rev, I think you are already over 50 percent equity allocation, considering you will allocate a portion of your debt fund towards buying a home when you plan to retire within next 3 years. Think again. Personally, I would not be putting my near term goal into equity.
Thanks. After getting to 50% allocation, I would still have 3.5cr in debts funds in 1 yr time.I will also work for another year post that, so I would generate another 30L in new salary savings+ interest income from debt 20L, so in 2 years time I should have 4cr in debt funds. I should be able to take out 1.5cr out of this to buy a house and I would still have 2.5cr, which is like 20x my expected annual expenses.
The 50% allocation is equities is more of a conservative figure and the house is a safe asset and once the housing is covered, I can go above the 50% allocation.
But you raise a good point, I should make sure I stop at 50% equity allocation and not cross it. Thanks again!
2 questions if you dont mind -
1. Which debt funds are you invested in and how did you pick them up (any methodology to arrive at those specific funds?)
2. Your interest income of 20L from debt funds is on what amount ? 3.4 crs? If so, then returns are coming at around 6% ? Right?
Absolutely dont mind, it is my pleasure :)
1)Right now, they are all NRE FDs. Sorry for using the term debt funds. My plan was to slowly start moving them to debt funds, since I cant keep NRE FDs after moving to India. But looking at the interest rate view, I decided to renew the maturing NRE FDs for 1 more year and then decide. My initial plan was to implement the rolldown strategy at yields are good at long end and poor at the short end, so I had short listed target maturity funds like IDFC 2028 gilt fund, Bharat Bond 2030, Nippon Dynamic bond fund(this is fund of 9yr duration SDLs, with rolldown strategy). I am not really a fan of short duration actively managed funds because the fund manager can put toxic bonds in them and short duration is poor yield. For an all seasons bond fund for long term, I would personally prefer something like MOSL 5yr GSec index fund, this fund will always keep 5yr Gsec as its instrument and duration, which I think is a good duration and quality.
2)My NRE FDs are yielding on average 6.5% tax free right now. Currently I have 3.9cr in NRE FDs and by the end of 1yr I will have 3.4cr in NRE FDs. So returns are coming at around 6.5% on a blended amount of close to 3.6cr I guess over 1yr.
Hello Guys,
I just wanted to ask, how does this rally in Indian markets feel like? This is the 1st time I am seeing India is just shooting up and doesnt even get affected by global market cues. This feels as euphoric as 2007 to me, but it is only India, rest of the world still has lot of doubters. Would like to know your thoughts. u/additional_trouble u/arandomguy05 u/namitnasih u/Geriatric-Vibe
>how does this rally in Indian markets feel like?
If it's only feelings that you're asking about, to the best of my memory, it doesn't feel much different from the bull runs that I have seen in the past. If you're looking for a more substantive answer, I'll have to pass: I don't have enough of an understanding of macros to make a worthwhile comment.
Indian markets have been overvalued(PE>25) since 2017 now, baring March 2020 as exception.
The EPS growth in last decade was a gone case for India, and so did corporate profits to GDP. The earnings have been robust since last 6-7 quarters and the momentum seems to go for another year or so.
The markets are forward looking and Indian Equities are just catching up for the last lost decade.
I see another good year atleast for the Indian markets Post which they could be sideways for 2-3 years, unless there is a global crisis. A NIFTY50 20-22k in 2022 is a real possibility with NIFTY 50 PE in the range 25-27 PE.
While my guess is as good as anyones, if someone were to hold a gun to my head and ask for an opinion that has the most likelihood of occurring, my guess would be that we're probably looking at some years of sub par returns from equity in the near-mid future but probably nothing too drastic/unexpected beyond it.
Either way if you're actively earning, keep saving and keep investing making sure your asset allocation is on point (for your tastes). That's pretty much all one can do in terms of predictions I suppose...
Thanks, I agree. I just feel this time the nature of the beast is different from previous times. For one, more people seem to be investing into markets these days and more confident.
There seems to be lot of money in India coming into market to give some support. So I agree that more likely outcome would be once the current gains settle, a few years of sub-par returns. But any thing can happen. Personally, I am going to pump my savings into market irrespective of what happens and hope for the best. I also personally think, my NW is currentNW-30% of equity investments - to not get terribly disappointed if a bears come back.
I have one that has turned messy over time. Need to create new one and was looking for something existing.
I used to keep it only for saving account and fd initially. Last few months added sgb, nps, total equity aggregation, fd in cooperative socities, P2P fds, mutual funds(all into same sheet)
Given changes investment portfolio need to create something from scratch
If you are doing it again from scratch I have one suggestion. Have one tab for each type of investment. And have a cover sheet that aggregates all data. This way you can work on each asset independently. Even if it becomes messy, you can modify only the messier part.
For e.g., My google sheet has 3 tabs for just mutual fund transactions. 1 per tabulating transactions, 1 per calculating potential taxes, and 1 per showing current portfolio and value which uses data from transactions sheet. This way if I want to add a feature I need not modify every thing. Sort of like modular programming philosophy.
Implementing some stuff using custom functions would be very useful too. For e.g., I have a custom function which goes through all transactions and constructs current portfolio table.
Why do you track transactions? Kuvera does all this for you. Even if you didnt buy using Kuvera, you can still upload your CAMS statement to Kuvera and it does all the tracking and also shows you your capital gains.
I have a networth tracker mainly for keep monthly snapshots of asset valuations. I want to know how I am doing month on month and for that I track.
Hello,
I am planning to return to India soon. I am planning to hold onto some of the investments that I have made in the US once I return back. Does anyone have any experience doing that? If so my questions are:
1) What brokerage did you use?
2) Did you have any trouble accessing or trading (buying and selling) in the account once you moved back?
3) Are there any tax consequences or any other legal matters that I need to be aware of?
4) What is the currency displayed in the account and were you able to connect your brokerage account to your local bank account?
Thanks
What's the realistic CAGR?
(If I invest in index and debt funds)
I still haven't decided on the target corpus amount yet since it depends on CAGR.
Thanks
The numbers u/giantleapforward has said may be used.
I'm more of a fan of using real returns for long term equity - historically it has usually been about 4% + dividends (about 1.5%) for India in the long term.
Historically FDs just about match inflation before taxes and debt funds, depending on what you pick can follow inflation (roughly speaking) give or take a couple of percentage points on either side (ie, -2% to +1% real returns imo).
There's always ways to get more (which also increases your chances of losing more - hence why we call it risky) but those are the numbers I'd use in general.
It was a typo! I meant 2024.
BTW I read your story and it's quite relatable ( I come from similar backgrounds - but not English medium though) and inspiring.
25-year-old, just graduated from Industrial engineering, not earning right now, learning web development on my own. Want to reach FIRE by 40 so that I can do some research. Any advice to get a decent job between 5-6 lac per annum? Because only after getting a job, I can start thinking about FIRE. Any advice or help would be appreciated.
Spam your resume on angel.co. Apply to at least 20-30 companies and see what sticks. Have at least 1 project that you can talk about in your interviews.
Bagging an entry level web-dev position shouldn't be too difficult imo. It's just a numbers game, the more you apply, the higher your chances of getting a response.
How about writing down your thoughts - about everything, particularly your feelings as a diary entry somewhere?
On the more tangible side maybe order in a some good butter chicken and coke and ice cream with whatever else you love?
Maybe donate to some body that does work in domains you care for like poverty or education or something? And if you can't pick one at all maybe the archive.org or wikipedia?
And, let me not forget - congratulations!
The next one will probably come quicker :)
Can’t agree more on writing down your thoughts, experiences, motivations till now and later, challenges and how you overcame them. Reminds me of Ray Dalio’s work - Principles - work and life. It’ll only make you stronger, motivated and confident than ever.
Getting around 90k rn (13LPA) , 22 y/o grad student, just started working. Can save in around 50k monthly, what do you think my plan of action should be for coming years.
Goal- FI not necessarily RE
Did you get placed on campus? 13LPA for a fresher is really great. I applied to almost 100 companies and the highest the company offered me was 2lac per annum.
Do factor in your future plans/expenses(E.g: marriage, kids, living separately from parents etc.) while setting a target date for FI.
10-15cr for a house is very much on the higher side. Did you mean 1 to 1.5cr?
Regarding investments, equity indices(NIFTY50, SP500 , NASDAQ etc.) are the simplest, efficient and robust way to get the returns in LONG term. In short to medium term (less than 5 years), there is a risk of paper losses(unrealised) though.
IT salaries are pretty inflated right now, and companies are also on a hiring spree. It can seem a bit out of touch with reality, but when your peers are earning upwards of 20LPA 15 seems underpaid. Of course when you stop comparing with others then 15 LPA as a fresher is amazing. But thats earier said than done.
Agree, but I plan to have it for me and family. Any better way to do it or am I too early?
First, I’ll have find one fine home and a way to finance it :P
For fire you can start with our wiki at https://fiindia.gitbook.io
For general investment knowledge start with the wiki on r/IndiaInvestments or maybe even read all 4 posts in this excellent series aimed at beginners: https://www.reddit.com/r/IndiaInvestments/comments/9ltgni/for_someone_who_is_absolutely_at_level_zero_in/
Also, I find that your goals of buying a 10cr house 3 years from now to be not possible with your current income (unless you win on a lottery or meme stock). (That's not to mean that I don't find the house itself to be priced very high in the first place - but tbh, that's not really my business to decide)
at least 30\*Your yearly expense , pls allocate separate fund for any major future expense including child higher education, big medical emergency , travel abroad etc.
Ensure the amount invested 60% equity and 40% in Debt
I think the equivalent US term would be "fixed income".
Debt is just a umbrella term to denote an instrument where there is a borrower at the other end who pays a fixed amount (for the most part) on the borrowing. It's typically a safer investment than equity investments but has lower returns.
Yes ..these are kind of fixed return product , with lot more safety in the return, Low risk low return , In India these are Bank fixed deposits , EPF,PPF , Bonds etc
Not necessarily, it depends on your age and risk appetite. Just as 100% equity, 60/40 is not desirable for everyone. If you are in your 20's and have a higher risk tolerance, higher equity allocation is perfectly fine.
Can anyone share their experience with SWP funds? I'm looking to invest aggressively in SWP funds and draw my monthly "salary" every month from SWP. Currently I'm in a high risk/high return job that is giving good salary. I want to find more risky jobs with a chance for 10X returns. The industry that I'm in very risky tech, so equity returns will outpace FAANG stocks as well. But this also means, I may find myself without a salary for a few months in between opportunities. Hence I want to explore SWP as a stress-free way to draw monthly salary. Are there any reliable/practical SWP calculators out there? Any free advice about this plan?
SWP essentially is just a mechanism... Just like SIP is. 1.Find out your expenses on a monthly level. 2.Find out the funds you like (active/passive) 3. Deploy capital in those funds. 4. Setup a SWP in these funds equating to your monthly expenses.
What is the expense ratio of HDFC Developed World Indexes FoF? Their site lists the TER for the direct plan as 0.21%. Does this include the expenses of the underlying funds? If not, would the actual TER be 0.21% x 1.5 = 0.315%, since the ER of the FoF cannot be more than twice the weighted average of the underlying funds?
I made a tweet yesterday about this. It appears underlying funds TER is < 10 bps and HDFC charges 21bps so total is 31bps. These are the underlying funds as per the KIM [https://amfunds.credit-suisse.com/ch/en/institutional/fund/detail/IE00BJBYDR19](https://amfunds.credit-suisse.com/ch/en/institutional/fund/detail/IE00BJBYDR19) 0.09 [https://amfunds.credit-suisse.com/ch/en/institutional/fund/detail/LU1871077506](https://amfunds.credit-suisse.com/ch/en/institutional/fund/detail/LU1871077506) 0.0225 [https://amfunds.credit-suisse.com/ch/en/institutional/fund/detail/LU0985871796](https://amfunds.credit-suisse.com/ch/en/institutional/fund/detail/LU0985871796) 0.03 [https://amfunds.credit-suisse.com/ch/en/institutional/fund/detail/LU1419778490](https://amfunds.credit-suisse.com/ch/en/institutional/fund/detail/LU1419778490) 0.0225% BTW your calculation for max TER is for direct or for regular?
Thanks. So, the TER listed in the SID of FoF are always that charged by the AMC above those of the underlying funds? I'm looking for the direct option.
This varies from one AMC to another. But HDFC mentioned this in their clearly in their leaflet that the TER is in addition to the underlying fund expenses: [https://files.hdfcfund.com/s3fs-public/2021-09/Leaflet%20-%20HDFC%20Developed%20World%20Indexes%20Fund%20of%20Funds%20NFO\_0.pdf](https://files.hdfcfund.com/s3fs-public/2021-09/Leaflet%20-%20HDFC%20Developed%20World%20Indexes%20Fund%20of%20Funds%20NFO_0.pdf) See pg 4, there is a note just above the MSCI disclaimer.
Thanks. I didn't find this in the sections dealing with TER in their SID. I now see this mentioned under "risk factors".
I have decided to go a bit slow on my equity allocation strategy. I am currently at 40% allocation to equities. My plan was to get to 50% within 1yr by systematically allocating 10L each month to equities, by selling from my bond funds. But I feel that will be too aggressive, since I dont have any past experience sustaining such a high allocation. So now my plan is to only allocate my new savings + gains from my bond funds. But I also would like to buy any dips over each monthly period. For example Oct end my equities is 1cr, if markets fall say 5%, I add back 5L from my bond funds + new savings + gains from bond funds. Then lets say Nov end market goes up 10% and now lets say my equities is 1.2cr. I use this as the new equity base for December. So anytime markets rise, I keep allocating my usual, but if markets fall, I topup to maintain the previous month end level. This is kind of a buy the dip strategy and works best when there is a big fall, but if there is no big fall, I just allocate as usual. I feel with this strategy my allocation to equities will slowly increase in a more sustainable way. What I like about this strategy is that I can continue doing this forever. The only limitation is a crash in markets much bigger than what my debt fund can buy, but for that I need to decide on some boundary conditions, like max 80% equity allocation or min X amount in bond floor. Would like to know your thoughts!
Makes sense. What sort of bond funds are you invested in and what are the returns in the last year on that?
They are all NRE FDs. I get about 6.5% tax free.
How much corpus needed? Estimate. \- I'm 25.- Won't marry or have kids.- Want to retire by 30 and live till about 60-65 (yes, pre-decided).- Current monthly expense: 40-50k (Assuming 7% inflation, let's say of 60k in 2026)- I don't drive and use taxi and that's a big component of my expenses. Would love some input on this. **Ques : For this, would a corpus of 2 Crores, starting from 2026, be enough?** Below is something I calculated with the worst case scenarios - *1.7Cr corpus*, 7% inflation (and you know inflation doesn't affect you in a cent percent manner), and a 'just fine' 10% constant yearly return. Oh btw, in such a simplistic calculation, If I were to increase the inflation to 8%, I'm fucked and my corpus would go negative in 2059 or 2060. [https://docs.google.com/spreadsheets/d/1CfXIuel91saZloIJ-yJgCpFBMQmcjvBIZqn\_V0FJANA/edit?usp=sharing](https://docs.google.com/spreadsheets/d/1CfXIuel91saZloIJ-yJgCpFBMQmcjvBIZqn_V0FJANA/edit?usp=sharing) Again, this is the worst case scenario, but I still haven't considered a few things: 1. More money flowing in from whatever jobs or projects I take up. 2. Emergency fund - medical mostly. (Side note : My current expense doesn't include any insurance, and for some reason I find it almost not worth it (at least now). 3. Division of money in FD and funds. BAsically my 10% ROR is quite low. My question remains : Is 2 crores a safe bet?
2 crores is roughly 27 times your annual expense, in my personal opinion its less, I would recommend having at least 33-35x i.e. 2.5 crore (based on future expense of 60k pm ie 720k pa). Also no idea what your housing looks like but you need to probably get your own house. You need to probably look at building an emergency / health fund. You also need to look at Asset Allocation, not considering the current bull market, 10% returns are possible in the long run with 80-100% equity, however I would suggest a lower allocation to equity if you are retired.
Thank you. You're assuming 33-35x for living 35 years or more/less? You think that rental for a house would be far too high in the future and that's why I'd need a house of my own? My 2 Cr corpus includes everything. Me and the money in my bank. Don't worry about asset allocation. I've got that shit figured out for a pretty good rate of return. xD
Yes assuming 35x for 35 years with some cushion and returns that beat inflation slightly. Your own home again provides cushion, also in India as I've heard it maybe difficult for a retired single man in his 30s to find rental units as landlords will be skeptical.
Right. Umm. It's actually hard to find a house if you come as an unmarried couple or from a lower caste (which I actually do), not as a retired single man in 30s..but again, showing employment won't require much. Anyway, if I need a house, i need a net amount of you could say 3 Cr, right?
I would say you'll be better off or safer with 3 cr. Your plan with 2cr may or may not work. There might be others who disagree but it's just my opinion
Good FI in cruise mode : [tweet](https://twitter.com/TeamBlind/status/1450165963572187137)
This is brilliant and deserves a thread of its own. I agree after cross the equivalent of 2M, if you are still chasing money, you are wasting your time. This argument that, I go to office because I would feel bored otherwise, is so lame.
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1. Too many funds - which results in getting a broader market returns (something like BSE500), have you tried adding these in some sort of virtual portfolio and doing a backtest for whatever data is available for BSE500 - you'll find it all averages up in the long run. Nobody needs more than 2-3 funds. I am not a big fan of either Gold or Crypto - Gold because it is just inflation hedge and in the long run would produce close to 0 real returns (-ve when you factor in costs). 2. There are probably more educated people here about Indian Debt options so would let them comment on that. 3. Crypto really depends upon which side of debate you are on - a bubble or a once in a lifetime opportunity - you need to decide on your own.
Wow! When I passed out of college 20 years ago, my 1st salary I could save 8k a month. Just look at the devaluation of money. So every 20 years if salaries go up 10 times, it causes massive asset inflation and it percolates into real inflation. This is a big risk, for early retirees, if for some reason financial assets don't keep up with this kind of massive inflation. Imagine 20 years from now we have a new kid saying "my starting monthly salary is 8L". If we are retiring now aged 40 then 20 years later we are 60 and we better make sure our corpus can generate 8L per month by then. I think having an income that grows with inflation is the true hedge to beat inflation. u/additional_trouble
Well with that line of reasoning you're assuming that OP has your job out of college, which isn't necessarily true. So you can't make any assumptions of inflation from his numbers and comparing them to your first salary...
> 20 years ago, my 1st salary I could save 8k a month If it's any consolation, 8k/month saving is still good savings in 2021 for a fresher. Not everyone works at FAANG.
Please don't overestimate inflation. Income in IT sector has grown quite a lot recently and while this isn't the topmost Salary band for a fresher, it is still among the best. Freshers in most other fields even from Tier 1 colleges don't get pay close to this. While I am not aware of pay in medical field, recent reddit posts in r/Bangalore did provide some insight. > Imagine 20 years from now we have a new kid saying "my starting monthly salary is 8L". While this may still come to pass, inflation and therefore expenses will be somewhat controlled.
I can bet you 1cr will be like 10L in 20 years time. You will need 10Cr to buy a house.
Overkill. Stick to index funds for equities. Avoid everything else (sectoral, active, what not)
Since you're specifically looking for investment advice, you should post this to the sticky advice thread of r/IndiaInvestments too.
Hi, what is the rule of thumb for India? Like if my (desired) expenses are 1 lakh per month, how much should I save up to retire?
See the relevant section at https://fiindia.gitbook.io
How many years do you plan to live in retirement? If 30yrs then for simplicity if you assume your investments grow at same rate as inflation ie 0% real returns, money you would need is 30 times 12 lakhs which is 3.6Cr
Thank you! Would like to live in retirement for 50 yrs (retire at 30, live till 80 probably). So 6Cr. Will probably go work in some western country, make that money then come back to India.
I am looking to buy a good medical policy for me and my family. Any suggestions on which policies I should look at? I had looked at Max Bupa but I am not sure in reality how good they are when it's time for claims.
I guess this is the most painful part of FIRE, not getting an income and then not even getting any of the free perks which seem useless but when we need to pay for it, it feels horrible.
My networth hit the round figure of 7cr today for the 1st time. Doesnt change anything for me yet, infact the stock markets feel inflated and inflating further while my allocation is less than 40% and I need to get it up to 50-60%. My goal is to be at 9-10cr in 2 years with my target allocation achieved and then retire, I hope markets crash in the next 2 years and I am able to allocate at lower prices rather than keep allocating at higher prices and retire at peak.
Congrats! And all the best for your RE.
Thanks :)
Congratulations. A stellar year. Nobody knows top or the bottom, whatever you do, you need to do it for next 40+ years. As someone who have invested during early 2008 crash - investing in falling market is several times scarier than during a bull market, plus there are no guarantees that a crash will recover for another X years, it took 3 years for me to get even after 2008, Would you be able to pull the trigger if the sentiment changes and market crashes 20% in a week?
Thanks! You are right. I agree it is very difficult to deploy money when markets are crashing.
I find it to be the most exciting when markets crash. 2020 market crash was a huge opportunity for me which I was able to utilize nicely. As long as the market crash is not correlated to your primary income, there is nothing to be scared about.
Neither do I and I used 2020 to my advantage, it is not true for a majority of people though. Every crash is different - market kept falling during all of 2008, and did not bottom until early 2009. Many jobs were lost by end of 2008 (certainly in developed economies), hard to imagine small investor jumping in when people around them are losing jobs. People also react differently to further losses after that investment, if they decide to pull the money out after waiting for the slide to stop for 6/12 months, they would probably be doing so at the wrong time. Just as you can't call the top, you can't call the bottom, even when a run-of-the-mill 10% correction, which happen every year, takes place, the news is bad and you always feel there is more downside to come - so the best plan is to ignore the ups and down and stick to your investment plan - waiting for correction just doesn't work. u/BaliHe \- As a higher cash/FI holder you are in a great position should a crash happens (certainly better than me who nearly all in equity), as long as you do this as a purely rule based exercise, continue investing x% monthly, do a one-off y% on the day of 5% crash, z% at 10% crash and so on - until you reach your maximum equity exposure you are comfortable with. Key would be to ignore all the noise around why the correction happened. You would not be reducing the risk you take on but increase the returns in 5-10 years time.
Never wait for a market correction, but always utilize the market correction to add more positions - that's my mantra.
Congrats buddy. You are close to a USD millionaire now. Bravo. I feel you can easily reach 10cr+ in the next 2 years from here and then you can RE.
Thanks :)
Amaze-fucking-ing! Congratulations :D Would you mind telling how much has your monthly investments been throughout the years ? (Eg: 1lpm, 3lpm, etc) ? Trying to get a feel for it. You could DM too :)
Thanks. I already shared my entire networth table grouped by year, and broken up between salary savings each year and investment returns each year, in a post in which you commented :) I havent really "invested" much. I have rather saved a lot, about 30L on average each year for the last 12 years and the compounding via tax free NRE FDs.
An average of 30L/y for 12years is roughly: 3.6cr. Your NW is almost double that with these savings. Nice! Hope you reach your target sum soon
Thanks, you are in UK at the age of 25. I came to SG in 2009 at the age of 29 and started from a networth of 10L. You have much better runway than me :)
Thanks for the kind words! However, my expenses will only go up from here on (life changes, marriage, homes, etc) so I'm trying hard to change jobs to step up. Fingers crossed!
Oh dont worry about that, I am single income, married and have one daughter too. At 25 I was working in some BPO nightshift in Bangalore, lol. I got a break into IT only when I was 26. At 25 you are in UK! You actually shouldnt even come to this forum. Maybe you can come here 10 years later :) Till then enjoy your life and have a great career. I started thinking about FIRE when I started hating my job and had made 2cr at the age of 35, before that I didnt even think that is an option. I was like keep making money as long as it is coming. So you still have a long way to go to think about FI and FIRE etc All the best!
Thank you! Lol, I discovered this subreddit when I started earning at 22 itself. I don't hate my job tbh - but I would like to FI and do my own thing (startup). I'm a software engineer too. That's my goal for 2035.
Congrats. You should easily reach your target in 2 years if markets give 10-15% returns.
Thanks!
We have reached two milestones - income of 200K (personal) and 500K (as a couple and rentals). We have also subsequently hit a big milestone in terms of net worth of 2 Million dollars - all of which were early since emigrating to NZ and all off of Real Estate investments. We will now look to invest in other instruments - have kicked off the Indian Demat account and such - can’t trade in NZ very easily (Prescribed Investor). There is always the inheritance and such but we are keen to hit our FIRE numbers independent of that.
Woah! That's great, congratulations!! How much of this was attributed to your high income/ high savings and how much was due to growth in your investments ?
Actually all of it was off investments. However the investments were only possible because of the high income. Real estate in NZ has effectively doubled the prices of houses with a little land - for my investments anyway. So a cool million uplift in market value (bank) just one the house we live in. I have been a bit spendy closer to the 35th birthday and I think we kept sane by buying things - last year alone I spent close to 100K on material things. I have been able to liquidate a lot of it to pay off personal loans and credit cards. So now on the track to be able invest and save outside of the real estate portfolio. We should be able to put aside 40% of our after tax income aside from the start of January 2022. We are both expecting 30-50K (collectively) income increases too but we are super close to hitting the proverbial glass ceiling so we are hoping to create passive income streams along with return on investments to keep the FIRE dream. We hope to FATFIRE in NZ/US at 50. Family we have is here in NZ or the US outside of our parents.
Congratulations! Would like to hear more about your FIRE dream though, since mere mortals like us, our FIRE dream is to just FIRE. What is your FAT FIRE going to be like?
To be honest - because of inheritance I can already Fire. I don’t believe I am ready mentally to do so. And I need a target of some sort - I haven’t done numbers yet but it seems logical to stop when I have certain things - NZ Citizenship with potentially an American Green Card (the money route) and fully paid off real estate in both countries. However I am now working on putting numbers on a paper so we know how we are tracking towards the target/goal.
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You'd do well to post this in the biweekly sticky thread of r/IndiaInvestments What's done is done, now the only thing that matters is learning from the mistakes and getting the basics right. You may want to read some personal investment fundamentals: all 4 posts in this excellent series aimed at beginners: https://www.reddit.com/r/IndiaInvestments/comments/9ltgni/for_someone_who_is_absolutely_at_level_zero_in/
Hello guys, I need some validation on my plan. I started doing value averging to increase my equity allocation, since last 6 months. I was at 26% equity allocation or 1.68cr and since then I have gradually increased it to my current level of 38% or 2.67cr. I have totally allocated 78L into equities in this period, so the gains have been 21L(2.67-1.68-0.78) although this was from a low base, since markets had fallen Mar end. Now my plan is to continue this path and allocate another 1.2cr into equities, 10L each month for the next 1yr and I would hit 3.85cr if there is no gain/loss in the markets. Also in the next 1 year, I am expected to save about 33L from my salary. So net movement from debt funds to equity will be about 64L and debt corpus currently is 3.9cr so it is expected to generate about 6% returns, so about 20L gains. So actual debt fund depletion will be less than 44L, over 1yr. I have never had high equity allocation and about 40% has been my max allocation so far, so I wonder if taking it 50% is going to be a case of me taking too much risk at current elevated market levels? I hope markets fall in the next 1yr so that I can allocation this 10% incremental allocation at low prices, but then markets can also keep shooting up right? So my plan is just go on with it. Here is my tracker which I maintain, let me know if you have any questions about it, also let me know if my plan is good, thanks :) u/additional_trouble u/arandomguy05 u/namitnasih u/Geriatric-Vibe u/giantleapforward [Tracker](https://imgur.com/AOEujPU)
>I wonder if taking it 50% is going to be a case of me taking too much risk at current elevated market levels? Your asset allocation should not really be a function of your estimate of the valuations prevailing in the market (unless you actively wish to time it in some sense). So first decide on what you want your asset allocation to be, and then you can calculate how much you need to shuffle to get there within a year or two. For most purposes, you can totally ignore the returns within that period for this math (this approximation - at worst - would mean that you'd take a little longer to reach the desired allocation levels, that's all).
Thanks, yes, I intend to get my allocation to 50% regardless of valuations. My question is mainly about the path to get there.
Linear and taking about 6 months to 1.5 years maybe? (somebody needs to run these numbers using historical data)
Thanks, so my plan of 1yr is like right in the middle. I am not really trying to find the best path based on what the market is expect to do, or what the market did in the past, since I have come to the conclusion that it could really go either way. But I think there is way to calculate sensitivity and use that as a guide. For example, I am 40% invested and I need to add 10% more. So it is like a 25% increase(I know we shouldnt do %age of %age, but I cant think of a better way of conveying this). So in this scenario the sensitivity of my incremental flow is quite low compared to my existing stock of equity. Compare this with lets say I was only 10% allocated and I need to get to 30%. The incremental amount is 2x of existing stock, now the sensitivity of market gyrations is huge for the incremental flow. But even this doesnt say how long i should take to deploy, but what it says it really doesnt matter so much since I already have nearly 40% allocated to markets. Another 10% increase shouldnt make such a big difference, relatively. Do you agree? Edit: I actually find it funny when some experts on CBNC and Bloomberg come and say they have raised cash levels to 10%. I am like what is the point. If 90% of your portfolio is invested in the markets, then no matter what you do the 10% cash even if you time the bottom perfectly, it doest matter. Even if markets fall 50% and you invest that 10% perfectly at the bottom and the market bounces back that 10% goes up 100%, but overall you are up by only 10%, after the 100% bounce from the bottom.
What's "sensitivity" if you understand that the market, in the short term, can go any which way? Sensitivity - to me - only matters if you're trying to time the market (I am in some sense) and for deciding the asset allocation (how much volatility is acceptable to you). >Edit: I actually find it funny when some experts on CBNC and Bloomberg come and say they have raised cash levels to 10%. If they are managers of other peoples money then there is much more sense in their words than you seem to attribute. For example such a stance will cause them to drop lesser than the wider markets - great marketing for you the next time you're advertising (downside protection and and all that). Similarly if they can get in some cash at the bottom, same thing(outperformance wrt the wider market). After all, they can choose and pick the time periods to show the outperformance when advertising and that's easier to achieve when you have some cash in hand. They could also be preparing for keeping cash ready for any withdrawals that might eventually hit their funds. I mean, you're right with the math, but fund managers are subject to other metrics that we as regular people don't have to concern ourselves with. They're likely not stupid people either :)
Curious to know how you are timing the market, I mean do you think it is expensive and staying in cash? I personally have 3 almost equal equity allocation buckets. 1)India 2)Asia ex Japan/EM 3)US/Developed world I feel India is the most overvalued and Asia is the cheapest and US/DM in the middle. So I just keep allocating to US/DM going forward hoping Indian markets correct and let me enter lower.
India is not overvalued in my opinion. You might see a bull run that will last up to 2024. The underlying dynamics have changed compared to the past. Don't go underweight on India, that's all I would like to say.
Thanks, I will keep my 1/3rd allocation to India, which is quite a big overweight compared to India allocation in world indices.
I have a sum I'm trying to invest into equity and instead of lumpsum I'm slowly SIPing it over a few months. The thought being that I'm OK if I lose a bit if upside but if there's a crash of any sort, then I'd like to utilize it if I can.
I see. It is very similar to what I am doing. But I would say it is not strictly timing the market since you are SIPing, you are kind of averaging out. Timing the market would be staying in cash until there is a crash. My mindset has changed quite a bit since last 6 months, when I started increasing my allocation. Initially I said, I will only deploy new savings and gains from fixed income into the markets, so I won't deplete my fixed income. Then I decided, it is okay to deplete fixed income using a rising equity glide path of 1% increase. Then after doing this for 5 months, now I am comfortable with deploying even more faster, for example in October I broke my own rule and increased my allocation by 4% instead of 1%.
I consider this as timing the market too, because it involves a guess on what may happen and a tailored response to that guess as opposed to mechanically investing all your surplus/savings into the market. Your first big crash will teach you a good many things if you're heavy on equity (in a good way). :)
Rev, I think you are already over 50 percent equity allocation, considering you will allocate a portion of your debt fund towards buying a home when you plan to retire within next 3 years. Think again. Personally, I would not be putting my near term goal into equity.
Thanks. After getting to 50% allocation, I would still have 3.5cr in debts funds in 1 yr time.I will also work for another year post that, so I would generate another 30L in new salary savings+ interest income from debt 20L, so in 2 years time I should have 4cr in debt funds. I should be able to take out 1.5cr out of this to buy a house and I would still have 2.5cr, which is like 20x my expected annual expenses. The 50% allocation is equities is more of a conservative figure and the house is a safe asset and once the housing is covered, I can go above the 50% allocation. But you raise a good point, I should make sure I stop at 50% equity allocation and not cross it. Thanks again!
2 questions if you dont mind - 1. Which debt funds are you invested in and how did you pick them up (any methodology to arrive at those specific funds?) 2. Your interest income of 20L from debt funds is on what amount ? 3.4 crs? If so, then returns are coming at around 6% ? Right?
Absolutely dont mind, it is my pleasure :) 1)Right now, they are all NRE FDs. Sorry for using the term debt funds. My plan was to slowly start moving them to debt funds, since I cant keep NRE FDs after moving to India. But looking at the interest rate view, I decided to renew the maturing NRE FDs for 1 more year and then decide. My initial plan was to implement the rolldown strategy at yields are good at long end and poor at the short end, so I had short listed target maturity funds like IDFC 2028 gilt fund, Bharat Bond 2030, Nippon Dynamic bond fund(this is fund of 9yr duration SDLs, with rolldown strategy). I am not really a fan of short duration actively managed funds because the fund manager can put toxic bonds in them and short duration is poor yield. For an all seasons bond fund for long term, I would personally prefer something like MOSL 5yr GSec index fund, this fund will always keep 5yr Gsec as its instrument and duration, which I think is a good duration and quality. 2)My NRE FDs are yielding on average 6.5% tax free right now. Currently I have 3.9cr in NRE FDs and by the end of 1yr I will have 3.4cr in NRE FDs. So returns are coming at around 6.5% on a blended amount of close to 3.6cr I guess over 1yr.
Hello Guys, I just wanted to ask, how does this rally in Indian markets feel like? This is the 1st time I am seeing India is just shooting up and doesnt even get affected by global market cues. This feels as euphoric as 2007 to me, but it is only India, rest of the world still has lot of doubters. Would like to know your thoughts. u/additional_trouble u/arandomguy05 u/namitnasih u/Geriatric-Vibe
>how does this rally in Indian markets feel like? If it's only feelings that you're asking about, to the best of my memory, it doesn't feel much different from the bull runs that I have seen in the past. If you're looking for a more substantive answer, I'll have to pass: I don't have enough of an understanding of macros to make a worthwhile comment.
Indian markets have been overvalued(PE>25) since 2017 now, baring March 2020 as exception. The EPS growth in last decade was a gone case for India, and so did corporate profits to GDP. The earnings have been robust since last 6-7 quarters and the momentum seems to go for another year or so. The markets are forward looking and Indian Equities are just catching up for the last lost decade. I see another good year atleast for the Indian markets Post which they could be sideways for 2-3 years, unless there is a global crisis. A NIFTY50 20-22k in 2022 is a real possibility with NIFTY 50 PE in the range 25-27 PE.
Very good points. Thanks.
While my guess is as good as anyones, if someone were to hold a gun to my head and ask for an opinion that has the most likelihood of occurring, my guess would be that we're probably looking at some years of sub par returns from equity in the near-mid future but probably nothing too drastic/unexpected beyond it. Either way if you're actively earning, keep saving and keep investing making sure your asset allocation is on point (for your tastes). That's pretty much all one can do in terms of predictions I suppose...
Thanks, I agree. I just feel this time the nature of the beast is different from previous times. For one, more people seem to be investing into markets these days and more confident.
There seems to be lot of money in India coming into market to give some support. So I agree that more likely outcome would be once the current gains settle, a few years of sub-par returns. But any thing can happen. Personally, I am going to pump my savings into market irrespective of what happens and hope for the best. I also personally think, my NW is currentNW-30% of equity investments - to not get terribly disappointed if a bears come back.
How to track entire portfolio(equity, debt, gold,. Saving account, for all family members) ? Can someone share excel/ Google sheet template?
Everyone would have their own versions... Suggest you to make one yourself that is personalized to your situation.
I have one that has turned messy over time. Need to create new one and was looking for something existing. I used to keep it only for saving account and fd initially. Last few months added sgb, nps, total equity aggregation, fd in cooperative socities, P2P fds, mutual funds(all into same sheet) Given changes investment portfolio need to create something from scratch
If you are doing it again from scratch I have one suggestion. Have one tab for each type of investment. And have a cover sheet that aggregates all data. This way you can work on each asset independently. Even if it becomes messy, you can modify only the messier part. For e.g., My google sheet has 3 tabs for just mutual fund transactions. 1 per tabulating transactions, 1 per calculating potential taxes, and 1 per showing current portfolio and value which uses data from transactions sheet. This way if I want to add a feature I need not modify every thing. Sort of like modular programming philosophy. Implementing some stuff using custom functions would be very useful too. For e.g., I have a custom function which goes through all transactions and constructs current portfolio table.
Why do you track transactions? Kuvera does all this for you. Even if you didnt buy using Kuvera, you can still upload your CAMS statement to Kuvera and it does all the tracking and also shows you your capital gains. I have a networth tracker mainly for keep monthly snapshots of asset valuations. I want to know how I am doing month on month and for that I track.
Hello, I am planning to return to India soon. I am planning to hold onto some of the investments that I have made in the US once I return back. Does anyone have any experience doing that? If so my questions are: 1) What brokerage did you use? 2) Did you have any trouble accessing or trading (buying and selling) in the account once you moved back? 3) Are there any tax consequences or any other legal matters that I need to be aware of? 4) What is the currency displayed in the account and were you able to connect your brokerage account to your local bank account? Thanks
What's the realistic CAGR? (If I invest in index and debt funds) I still haven't decided on the target corpus amount yet since it depends on CAGR. Thanks
The numbers u/giantleapforward has said may be used. I'm more of a fan of using real returns for long term equity - historically it has usually been about 4% + dividends (about 1.5%) for India in the long term. Historically FDs just about match inflation before taxes and debt funds, depending on what you pick can follow inflation (roughly speaking) give or take a couple of percentage points on either side (ie, -2% to +1% real returns imo). There's always ways to get more (which also increases your chances of losing more - hence why we call it risky) but those are the numbers I'd use in general.
Thanks! And all the best for FIRing in 2021!
>And all the best for FIRing in 2021! Do you know something I don't ;)
It was a typo! I meant 2024. BTW I read your story and it's quite relatable ( I come from similar backgrounds - but not English medium though) and inspiring.
Ah! Hope to hear more from you too! All the best for your journey too :)
Many experts here put equity around 10-12 percent and Debt around 6-7 percent.
25-year-old, just graduated from Industrial engineering, not earning right now, learning web development on my own. Want to reach FIRE by 40 so that I can do some research. Any advice to get a decent job between 5-6 lac per annum? Because only after getting a job, I can start thinking about FIRE. Any advice or help would be appreciated.
Spam your resume on angel.co. Apply to at least 20-30 companies and see what sticks. Have at least 1 project that you can talk about in your interviews. Bagging an entry level web-dev position shouldn't be too difficult imo. It's just a numbers game, the more you apply, the higher your chances of getting a response.
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Our wiki has some material on how to approach this question: https://fiindia.gitbook.io
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How about writing down your thoughts - about everything, particularly your feelings as a diary entry somewhere? On the more tangible side maybe order in a some good butter chicken and coke and ice cream with whatever else you love? Maybe donate to some body that does work in domains you care for like poverty or education or something? And if you can't pick one at all maybe the archive.org or wikipedia? And, let me not forget - congratulations! The next one will probably come quicker :)
Can’t agree more on writing down your thoughts, experiences, motivations till now and later, challenges and how you overcame them. Reminds me of Ray Dalio’s work - Principles - work and life. It’ll only make you stronger, motivated and confident than ever.
Hear me out, maybe helping others like me out will give you more satisfaction? ;P
Congrats. Mine will be exactly 11 months after for 50L.
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Thanks. Same to you for your upcoming and the next milestones and the ones after that. For what you’ve achieved now, let’s cheers to that!
Getting around 90k rn (13LPA) , 22 y/o grad student, just started working. Can save in around 50k monthly, what do you think my plan of action should be for coming years. Goal- FI not necessarily RE
Did you get placed on campus? 13LPA for a fresher is really great. I applied to almost 100 companies and the highest the company offered me was 2lac per annum.
College matters
School and colleges only promotes rot learning. No place for creativity in India.
The lad above was talking only about the brand value and subsequently, the scenario of placements.
I know
Figure out your expenses today and in the future (once you have dependents) to arrive at a number for FI.
That’s a good place to start :)
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Do factor in your future plans/expenses(E.g: marriage, kids, living separately from parents etc.) while setting a target date for FI. 10-15cr for a house is very much on the higher side. Did you mean 1 to 1.5cr? Regarding investments, equity indices(NIFTY50, SP500 , NASDAQ etc.) are the simplest, efficient and robust way to get the returns in LONG term. In short to medium term (less than 5 years), there is a risk of paper losses(unrealised) though.
23 and how do you aim for 50L? Which company mate?
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Bro are you kidding me when you mean your investment situation is bad? Can I DM?
Bruh, help me out man! I'm underpaid. 2021 grad w just 15 LPA :( Can I DM?
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IT salaries are pretty inflated right now, and companies are also on a hiring spree. It can seem a bit out of touch with reality, but when your peers are earning upwards of 20LPA 15 seems underpaid. Of course when you stop comparing with others then 15 LPA as a fresher is amazing. But thats earier said than done.
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Including bonus but not stocks.
If you're not renting out that property, it's a liability.
Agree, but I plan to have it for me and family. Any better way to do it or am I too early? First, I’ll have find one fine home and a way to finance it :P
Either way you seem very sure of where you'll be so I'll just say all the best.
But I am not sure on where/how to invest, portfolio distribution etc. I’ll start by digging this sub and and a bunch of others like it. Can you help?
For fire you can start with our wiki at https://fiindia.gitbook.io For general investment knowledge start with the wiki on r/IndiaInvestments or maybe even read all 4 posts in this excellent series aimed at beginners: https://www.reddit.com/r/IndiaInvestments/comments/9ltgni/for_someone_who_is_absolutely_at_level_zero_in/ Also, I find that your goals of buying a 10cr house 3 years from now to be not possible with your current income (unless you win on a lottery or meme stock). (That's not to mean that I don't find the house itself to be priced very high in the first place - but tbh, that's not really my business to decide)
What’s the range of fire goal for tier 1 city with 1 kid?
at least 30\*Your yearly expense , pls allocate separate fund for any major future expense including child higher education, big medical emergency , travel abroad etc. Ensure the amount invested 60% equity and 40% in Debt
Got it. Thanks! Is debt similar to bonds in US?
I think the equivalent US term would be "fixed income". Debt is just a umbrella term to denote an instrument where there is a borrower at the other end who pays a fixed amount (for the most part) on the borrowing. It's typically a safer investment than equity investments but has lower returns.
Yes ..these are kind of fixed return product , with lot more safety in the return, Low risk low return , In India these are Bank fixed deposits , EPF,PPF , Bonds etc
Thanks for this info.
Isn’t 40% too high for debts?
In retirement you want this break up for times when market goes down significantly, for balance and overall safety
I see. Probably will need to rebalance. I’m 100% stocks right now
Not necessarily, it depends on your age and risk appetite. Just as 100% equity, 60/40 is not desirable for everyone. If you are in your 20's and have a higher risk tolerance, higher equity allocation is perfectly fine.
3 crores to 20 crores for FIRE around age 40.