Happy Independence Day to all.
I still remember my days in K.V School when we used to go to school in white clothes for Flag Hoisting Ceremony. The special treat used to be Mooti Chur ke Laddoo !!
On this day I would like to bring an exiting topic. Which is Financial Freedom! I am not a Financial Adviser. I believe we can at least achieve financial freedom by taking small baby steps.
- Stop signing up for more credit cards
- Stop taking Promotional Offers on Financial Products in hurry
- Stop taking personal loans if possible
- Save and Invest : Remember that just saving is not enough. You must Invest in order to potentially increase your income and achieve financial freedom.
- Invest in Low cost Mutual Funds : This is interesting as investing in low cost means two things. Either you find a fund which is having less management fees and expenses or Invest in Index Fund. Just now I read this article "The Lost World" on http://www.valueresearchonline.com. Excellent article which talks about Investing in Index Funds and how they are in India Vs USA. But before you jump look at these figures(taken from http://www.valueresearchonline.com) :
|Open Ended - Equity: Index - one Year Return|
|Fund||NAV (Date)||Returns(%)||Return as on|
|ICICI Prudential Index||41.37 (13-Aug)||5.44||8/13/2008|
|UTI Sunder||467.82 (13-Aug)||4.09||8/13/2008|
|Nifty Benchmark ETS||459.69 (13-Aug)||3.88||8/13/2008|
|Franklin India Index NSE Nifty||35.79 (13-Aug)||2.60||8/13/2008|
|Birla Sun Life Index||45.37 (13-Aug)||2.57||8/13/2008|
|Principal Index||31.80 (13-Aug)||2.20||8/13/2008|
|Franklin India Index BSE Sensex||42.56 (13-Aug)||1.91||8/13/2008|
|UTI Nifty Index||28.56 (13-Aug)||1.85||8/13/2008|
|Canara Robeco Nifty Index||23.93 (13-Aug)||1.61||8/13/2008|
|Tata Index Nifty A||27.45 (13-Aug)||1.58||8/13/2008|
Note that with same benchmark of S&P CNX Nifty ICICI Pru Index gives 5.44% Yearly Return whereas Birla Sun Life Index Fund gives 2.57% :) This is what author Dhirendra Kumar of the article I linked above is trying to explain.
- Generate Passive Income : Well this is something needs more thought and planning. It is easy to say but not so easy to implment. I follow this blog regularly and here is one interesting post on Passive Income
- Start blogging your ideas: Its been more than 2 years I am blogging. It is good to put your ideas and thoughts on a blog. It helps you as well as others.
- Invest in Stocks directly only if you know :)
- Invest with Mutual Funds directly with AMCs: This step alone will start saving you 2.25% entry load :)