Liberate Mind: Family Edition

Where are you and where are you going?
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LiberateMind
Posts: 128
Joined: Fri Oct 26, 2012 8:18 pm

Liberate Mind: Family Edition

Post by LiberateMind » Thu Oct 04, 2018 12:08 pm

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.
Last edited by LiberateMind on Thu Oct 04, 2018 12:39 pm, edited 2 times in total.

LiberateMind
Posts: 128
Joined: Fri Oct 26, 2012 8:18 pm

OCTOBER - 2018 - P1

Post by LiberateMind » Thu Oct 04, 2018 12:23 pm

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%

LiberateMind
Posts: 128
Joined: Fri Oct 26, 2012 8:18 pm

October 2018 - P2

Post by LiberateMind » Thu Oct 04, 2018 12:31 pm

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.
Last edited by LiberateMind on Thu Oct 04, 2018 12:37 pm, edited 1 time in total.

LiberateMind
Posts: 128
Joined: Fri Oct 26, 2012 8:18 pm

October 2018 - P3

Post by LiberateMind » Thu Oct 04, 2018 12:34 pm

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.

wolf
Posts: 659
Joined: Fri Jan 06, 2017 5:09 pm
Location: Germany

Re: Liberate Mind: Family Edition

Post by wolf » Fri Oct 05, 2018 12:34 am

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.

LiberateMind
Posts: 128
Joined: Fri Oct 26, 2012 8:18 pm

Re: Liberate Mind: Family Edition

Post by LiberateMind » Fri Oct 12, 2018 10:59 pm

@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

Image


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.

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