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Liberate Mind: Family Edition

Posted: Thu Oct 04, 2018 12:08 pm
by LiberateMind
Hi Friends,

Starting a new journal , as I believe my mindset , finances, circumstance changed so much. The main focus on the journal would be like below.
  • Managing Family/Personal finances.
  • Improving quality of life/ options to enjoy life more.
  • Self development

Even though this is ERE forum, I would like to have some kind of public accountability on all aspects of my life instead of one. For the current year and 2019 the main focus would be the last two. Finance would be on auto mode, no major effort would be spend there. Every month I would like to explore the options to improve my life and try out few things. So onwards to goals.

OCTOBER - 2018 - P1

Posted: Thu Oct 04, 2018 12:23 pm
by LiberateMind
Finance Goals:
Family:
  • Save 20% ( Should be from Jan-2019)
Goal: Should cover the expenses, tax saving investments, gifts and one big travel.[/list]
For the current year, it is negative owing to hospital expenses and big gifts. From 2019, contributions will be increased and hopefully not much hospital expenses.

Tracking only for personal:

Ratios to track.
  • Current Net worth/FI Net worth - Liquid.- 50.29%
  • Passive income/Actual Expenses ( Roll over for four years). - 10.34%
  • Forecast on reaching the FI Net worth – May -2022.
How to save cash?
  • Liquid funds
  • Seetu
  • Cash /Deposit in Bank.
I will be tracking only networth goal from now on for the individual finance. The Savings rate is bit skewed as I might save from the contribution to joint account as well. I have added another metric Passive Income/Actual Expenses this is for tracking only not to take any action. As my portfolio would PP. I would be concentrating on asset allocation. My bond allocation is always higher as my tax-advantaged accounts is marked as bond. I will strive to keep the remaining three portfolios Equal before concentrating on Bond.

Still trying to figure out where to upload pics securely for showing up the asset allocation. For now list format.

Cash 3%
Stock 42%
Gold 9%
Bond 46%

October 2018 - P2

Posted: Thu Oct 04, 2018 12:31 pm
by LiberateMind
Quality of life
I would like to design a loosely coupled system as mentioned in the Jacobs book.So that my overall life quality improves. Most of my waking time is devoted to career, money and cooking stuff. I would like to slowly redesign my life to improve my health, spiritual thinking and mindfulness and other whole list of things I have been keeping tract of. So this part of the structure would be mainly for experimenting and seeing how i feel about it and how it affects.

So October goal for this would be to design a loosely coupled system for a holistic perspective of life instead of just finance alone. Right now experimenting without smart phone during work days. I will post the results and thoughts about it at the end of this month.

Self development
All my self development goals will be towards the health, till I reach a desirable level there. I am so ashamed to post the stats here. I will find some form of reporting to keep me on track. For October the goal would be to walk/stretch for 20 mins a day at-least. I will move on from there.

October 2018 - P3

Posted: Thu Oct 04, 2018 12:34 pm
by LiberateMind
Thoughts to come back from Future

Business consideration:
I would like to consider the allocate part of my portfolio for future business, though its not in the cards right now.

Inflation consideration for retirement:
Unlike other developed countries, inflation is a real problem in Indian retirement scenario. Owing to that mainly, two things I would like to accomplish for my retirement
- Own home before retirement, this is to decrease the expenses primarily.
- I would like to convert my Liquid net worth to real estate after a certain threshold. Most of the real estate here yields the rental of 2-2.5%. During my retirement, I would want my 60% of my expenses covered by rentals (preferably commercial). Which is easily triple my networth now. The main advantage for that is the rental income keeps pace with inflation. Have to ponder bit more on this approach to include analyze with taxation and when to build the buildings.
- Threshold: Real estate networth<=Liquid Networth<= 2.5*Real-estate Networth.
This might be over conservative approach. This might change as I observe the market and uncover other opportunities or solutions to generate passive income, which paces with inflation.

Re: Liberate Mind: Family Edition

Posted: Fri Oct 05, 2018 12:34 am
by wolf
How much correlate Indian inflation with Indian (consumer) stocks? Would that be an alternative? What drives inflation in India?

...looking forward to read more about your ideas and journey towards more quality of life.

Re: Liberate Mind: Family Edition

Posted: Fri Oct 12, 2018 10:59 pm
by LiberateMind
@Wolf, Thanks for the suggestion. I have been writing and rewriting replies before coming here to post it. This post is to mainly to show the situation from my perspective. May be it includes fears, pre-concieved notions and such.

Inflation rates in india:

Image

Consumer index

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I am bit reluctant to invest in stock market over 15% of my overall portfolio. There are many reasons for it,
- The financials of the companies are vague at best. Its not entirely reliable. Eg., Scams related to Ramalinga Raju + Satyam& Harshad Metha.
- Dividend yield is not very reliable. At most I get 1% return from the dividends. I don’t want to touch the principal during my withdrawal period. Comparatively my tax advantaged accounts yield 7-8% yield.
- Lack of role models who has done it already , as no one in my personal circle invests mainly in stock market. Few do trading or mutual funds but not for long term wealth or dividend investing.
- I don’t want to put too much energy and research into an area where it’s totally not in my control with.

What drives inflation in India?
 Increasing necessities.. Eg., Water – 15-20 years ago we didn’t buy water or purify it. We got it from the rivers or corporation or well and just drank it. We did not face any health issues due to this. Now that is no longer the option. We have to purify the water due to pollutants and not having the same sweet ground water as the water tables have gone down.
 Competition for the same product population. ( Eg., Rent in the area nearby office four years ago for a 2BHK is 12K , now its 40K. For the same resources, we have to compete with more number of people. )
 Taxes.. Taxes.. There is an increase in tax on everything we buy, around 8-20% even though the tax is less than many other countries, it do add up.
 Medical Inflation- The medical inflation has gone up. I don’t have any data to back it up. It’s more of a personal experience. Eg., Doctor fee during 10 years ago is along Rs.100 per session now its around Rs.500.
 Easy credit. When we were kids, my parents don’t have that much easy credit as now. Home loan is the only loan with most people can get. Right now personal loans , car loans are a norm. So it does drive up certain prices up.
 Black Money. This mainly drives the real estate prices unrealistically as this is one of the main asset class to hide money. Even though reforms are coming, yet to see how effective it is.

So thats long, I am mainly looking for opportunities outside the stock market. Right now invested some money in my dad business and getting 12% return for the loan. Any thoughts or suggestions are welcome.

Re: Liberate Mind: Family Edition

Posted: Fri Mar 01, 2019 9:15 pm
by LiberateMind
Quiet a long time before posting.The main deterrent is I am not that into saving hard anymore.

What happened?
- In November , we met with a minor accident. Spent the entirety of November and December in filing paper work , getting reimbursement and paying for it.
- Went twice on the offical trip (Dec & Feb). Enjoyed both of it.
- Restructured the finances a bit , so less emphasis on personal and more emphasis on family.
- Trying different things on the self development side. Like stopped reading fiction books and no smart phone for a while. Designing days like Ben. Franklin days. Walking 20 mins. Designing life in paper. Time logging. All those stuff.

Recently I was listening to Robin Sharma's videos and he asked a question what are the 5 things you will take bullet for ?

That got me thinking.
1. For the values i hold in my life.
2. In place of a loved one or to protect a loved one.
3. For the benefit of the mankind.
4..
5...

This got me thinking if I am willing to take bullet for it ( at least mentally :) ) then why am i not living for it.

So there you go in succinct what am I about in my absence.

Re: Liberate Mind: Family Edition

Posted: Sun Jun 02, 2019 4:36 am
by LiberateMind
May 2019 Review:

Finance

Family:
Expenses: 36995.
Average Expenses for the year : 46199.

Personal Finance:
Current Net worth/FR Net worth.- 19.10% (Adjusted)
Passive income /Actual Expenses ( Roll over for 12 month). - 52.01%
Forecast on reaching the FR Net worth – Apr-2027.

  • Passive income is high due to the credit of interest on the tax saving accounts on Apr-2019 most likely will tamper down as the years go by.
  • Paid off the personal loan which has been dragging on and on.. :)
  • Though not calculating very strictly my savings rate hover above 72% for all the months in 2019.. :D
  • Formulated a loan agreement (5 year tenure) with the parents for their business and getting monthly EMI for the same. So will have increased passive income from that end to the tune of 3K for the current year. As the years go the interest will get decreased.
  • Started investing on a 300K seetu for a year , so bulk of my cash portion would be residing over there.
  • Owning a home is the next big financial target and its easily twice my net worth now. :lol: .I will have to formulate a plan yet. My parents are most likely to stay with us during their old age. So I want to have a big home, which can accommodate my parents, kids and us.I will evaluate how to achieve this goal , so that my life is not affected drastically. I would prefer to pay 30% of the home investment in cash at least remaining in loan shared with the husband.
Fellow forumites, how do you save cash for home downpayment ? The investment time zone is between 3-5 years. I dont want to concentrate fully on downpayment savings, but would like to set aside half of my monthly savings in there.

Any thoughts or suggestions?

Re: Liberate Mind: Family Edition

Posted: Sun Jun 02, 2019 5:14 am
by LiberateMind
Personal Development :

Finally i have developed my web of goals, it required quiet some iteratations. It might get reviewed in future, for now I am happy with the outcome.

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Few of the things on the personal development end:
  • Primary goal: Walking for 20 mins daily during the evening. Doing it for half of the days. I am finding it difficult to formulate a routine for that during travel to parents/ in-laws place or outside. Again some slag, once returned home.
  • Mediate 20 mins immediately after waking up. Doing it on and off. Not tracking. Definitely improves my mindset.
  • Journal ling at the end of the day. Reflection. On and off again.
  • Doing weekly planning. Using GTD. Not using perfectly, but when in use can definitely see the benefits.

Quality of life/Options to enjoy life more:

I gave myself permission to spend on travel and books. Right now joined a library called justbooks where they door deliver and collect the books from you again. It is costly, but have wide variety of non-fiction to read through.

First book read is Ben. Franklins auto biography. Enjoyed it till 80% after that names are lost on me once he started the war campigning and political career seriously.

Goals of JUNE:
  1. Walk 20 mins daily.
  • Read quality writings only.. Complete the book How to read and return.
  • Follow GTD religiously on all weeks.