Sunday, 2 December 2018

Market intelligence for non-intelligent investors – 10 basic rules of investing

Market intelligence for non-intelligent investors is the topic which I was considering to address since long. This is not because I am the most competent person to discuss the subject matter. But because when I talk even to someone with the domain knowledge, they also have lots of confusion when it comes to basics of investing. When it comes to investments, even the most un-knowledgeable becomes the matter experts. However, we should not forget that investing is an art as well as science. And needs to know various investment products along with human needs in the different situation. Unlike food, water, and air, we need a proper stream of money lifelong, in order to survive. And hence, we can’t take investments casually. 
Market intelligence may relate to stock market intelligence, financial market intelligence or equity market intelligence. Now the question is what is market intelligence. Before understanding the concept of market intelligence, let us understand the meaning of intelligence. The famous scientist Stephen Hawking sayings best suits our purpose of understanding intelligence. And in this contest market intelligence are instrumental in making us capable to adopt the optimal perspective of investments suited to our need.

Meaning of market intelligence

In the context of investments, market intelligence means information relevant to various financial products. We need to gather and analyze pieces of information specifically for the purpose of accurate and confident decision-making. Decision making to determine strategy in areas such as investment opportunity, choosing right investment instruments, and timing such investments. Here timing means when to buy or sell any investment products

10 basic rules of investing which everyone should know

  1. Decide your financial goal – what are your long term and short term goal
  2. Analyse risk factors – How much risk you can take, no risk, high risk, low risk or medium risk
  3. Decide on expected returns – Analyze that whether you want a fixed return or variable return based on your risk horizon
  4. Compare risk vs returns – Higher risk higher return, analyze your risk appetite before selecting an asset for your portfolio
  5. Duration of investment. You want to invest in a short period or long period and what would be your financial needs of future
  6. What are the various asset class available to you – Analyse various category of the asset class with their characteristics
  7. Do allocation in the right asset class – include right proportion of debt and equity in your portfolio
  8. Is it right time to invest. Know the market trend. Know about the uptrend, downtrend and sideways trend in the market before jumping in the market
  9. Do you need to diversify your investment – Diversify your funds to enjoy some safety and add variety to your portfolio
  10. Make yourself financially literate – know where your money is going and what return you will get out of it
I am elaborating each of these basic rules in details for greater understanding. The process of investment differs depending upon the needs of individuals. Investment for short-term might differ from a mid or long term. Similarly, the investment instruments for a risk-averse investor will be quite different from that of a risk lover. Quantum of investment and the choice of instruments also depends on the age of an investor. Despite such differences, basic rules of investing remain more or less same for everyone. Now let us understand these basic rules of investing. 

Rule # 01 – Decide your financial goal

You can call a financial goal as a financial target as well and is based on money. You can make a short-term financial goal or a long-term goal. Or even a mid-term financial goal is possible. If you maintain a financial goal, it will help ease your future’s needs for money. Some good example of a financial goal is as follows –
  • Maintain an emergency family fund
  • Become debt free
  • Plan for early retirement
  • Create multiple income streams
  • Start insurances to cover contingencies
  • Make a plan to do what you love
Now the question is from where to start and set your own financial goal. I am enlisting the following steps that will help you set goal one for yourself.

Basic steps involved in a financial goal planning

  • First of all, determine what you value most. Whether it is leisure, lavish living or anything else.
  • Next, organize your financial documents and take out your time to manage your money.
  • After that gain control over your financial situation. Keep track of where all your money goes.
  • Smatter spending decisions help you to find more money without making more. This also helps to plug spending leaks and free up cash.
  • As a general thumb rule, you should maintain a debt of less than 20% of your net income. You must plan either to reduce your debt or completely make yourself debt free.
  • Individual financial credibility is must nowadays. So you need to keep a strong credit report. A credit report is a record of how you had paid your debts. This helps get a quick and favorable loan, better rate of insurance and etc.
  • Saving is essential for financial well-being and security of future. So before even start spending, you must make a habit of keeping some portion of your income aside. This will help secure your unforeseen future.
  • Setting up your financial goal comes next.  You might have a plan for a vacation, or going back to college for higher studies or of marriage. All these needs money. So you need to plan ahead and arrange money for the same on time which requires goal setting and planning.
  • Besides making a financial goal, you also need to plan for your spending. Occasionally you may spend unplanned. However, sticking to some basic plan of spending will help you make your financial goal achievable.
  • After making the financial goal, spending plan and initiation of saving, you need instruments to put your savings. You must evaluate the available financial instruments and match it up with your goal before actual investment.

Rule # 02 – Analyze risk factor

Next to the setting up of your financial goal comes assaying risk factors. With every kind of investments, some risk is associated. And every individual has his or her own risk appetite. Risk appetite means risk taking capacity. So it is always good to analyze the available set of instruments for investments on the basis of risk. Stocks are riskiest instruments among other alternatives. Other alternatives are mutual funds, bank deposits, bonds, post office savings, ETFs, and others.
Further, risk also depends upon the duration of investments. Short-term instruments may be less risky than its mid or long-term counterpart. However, the returns from those instruments might also carry lower interest as compared to long-term instruments. So it’s always better to make a list of instruments based on risk, for each and every financial goal.  

Rule # 03 – Decide on expected return 

Every financial instrument gives some sort of return. Returns may be high, maybe low and in some case, it may be negative. Returns are time-dependent. So, it is always advisable to assay what you expect from investing and then select the instrument. You will always get a chance to a trade-off between risk associated and your expected return from an instrument.
Investing directly in the equity gives you more returns in a bull run, then investing in equity-linked mutual funds. However, equity investment carries much more risk than investment in any mutual funds schemes. Likewise, a fixed deposit gives safe but low returns as compared to corporate deposits. If you are investing for a shorter period, say post office fixed deposits, your returns will be low when compared to higher period returns.
So, decide upon how much return you expect by putting your money locked in for a given time frame. Then compare the instruments based on the risk before finalizing for investments.

Rule # 04 – Compare risk vs return

In the investment risk is the chance that your actual return from an investment differs from your expected return. Thus, risk refers to the possibility of losing some, or even all, of your investments. In general, if there are low levels of uncertainty then the potential of return is also low. This principle is known as risk-return trade-off. Hence, return will rises with an increase in risk.
You must understand that low levels of risk always result in low returns. Whereas high levels risk will result in higher returns. Now is there any way to increase return while keeping risk to a lower extent? Yes, it is doable. It is doable by spreading investments into the variety of asset classes. This is known as diversification of the portfolio. Diversification is a portfolio strategy that combines a variety of assets. This reduces the overall risk of the whole bucket of investments in a portfolio. A diversified portfolio includes stocks, bond, mutual funds, fixed deposits, cash and etc.

Rule # 05  Decide the duration of your investments

Duration measures the sensitivity of the price of a financial instrument. It becomes more important in case of fixed income instruments. Some of the examples of fixed income securities are, bonds, banks and post office fixed deposits, corporate deposits, etc. For investment purpose, the duration is expressed as the number of years.
Now, for an investor the concept of duration become important. While constructing a portfolio, the knowledge of duration will help you to compare fixed income instruments. Suppose you want to invest in bonds. Then with the knowledge of the period of holding a bond with a variety of coupon rates and maturity dates will help you select a right one for your portfolio. If interest rates are expected to rise then you can go for short duration bonds and vice versa.
Let us suppose an investor wishes to buy a 20-year bond that yields 6% for INR 10,000. Or a 10-year bond that yields 3% for INR 10,000. If he holds the 20-year bond to maturity, he will receive INR 600 each year. And will receive INR 10,000 after 15 years. But, if he chooses 10-year bond until maturity, he will receive INR 300 per year. Also, he will receive the principal after 10 years.
Now suppose that he expects a rise in the interest rate by 1%. Then, in this case, he will go for the 10-year bond. This is so because he will only lose 7%, or (-10% + 3%). While in case of 20-year bond he will lose 14%, or (-20% + 6%). Conversely, when the interest rate falls then the 15-year bond will rise more than the 10-year bond. Thus, knowing the duration of investment will help decide for how long he/she need to remain invested in a particular instrument.

Rule # 06 – Analyze the various investment options

To an investor residing in India, very little options are available for investments. Some of the common investment options are –
  • Investments in bank and post office fixed deposits (FD) schemes
  • An investment in insurance policies
  • Investments in the national saving certificate (NSC)
  • The investments in a public provident fund (PPF)
  • Investments in the stock market
  • An investment in mutual funds
  • Investments in the gold deposit scheme
  • The investments in real estate
Few of hybrid investment options are open now like Real Estate Investment Trust (REIT) and Infrastructure Investment Trust (InvITs). But the scope is limited as of now due to low volume. One thing being an investor you should remember. That every instrument comes with its own risk and rewards. So you have an option to combine instruments in accordance to your need.

Rule # 07 – Allocate yours funds in the right asset class

There is six main type of financial products. These products are also known as an asset class. They are:
  1. Fixed income assets
  2. Commodities
  3. Real Estate
  4. Cash
  5. Equity
  6. Mutual funds
Each kind of asset class has his own merits and demerits of holdings. However, diversification helps overcome limitations of one asset class over other. Your money in savings accounts at banks and post office are equivalent to cash in hand.
A risk-averse person may choose a combination of the asset class for his portfolio. He had the option to invest in fixed income assets like post office savings, NSC. In commodities like in gold, and silver. Some debt instruments like in debt-focused mutual funds. And of course in cash. Likewise, those who are willing to take some risk can go for equity and equity-focused mutual funds. Other options for them includes real estate and real estate and infrastructure investment trusts. To cushion their high-risk investments they can diversify into bullion and fixed income assets.
There is always an option and a choice to make. If you are sincere about the financial security of your future, you have an option to do so. Even if you wish to earn from your savings you can do it, keeping risk at the lowest levels. You always have an option to leverage your risk capacity with interest income and vice versa.

Rule # 08 – Is it right time to invest?

Everything on this earth moves in a cycle. Whether its earth or tide at sea or interest income on your investment. Timing is crucial for every cycle. And, so is for your investment. What goes up must come down and vice versa is a kind of law of nature. This applies to investments also.
When the stock market is booming, you will find bullion comparatively cheap. Interest on fixed deposits will be low. If interests are high, bonds are generally available cheap or may go cheap. To some extent, prices of diamond and real estate are an exception to this. More or less their price appreciates over time. So, knowing the time for higher prices or when it is going to come down is crucial to reduce some of your income risk from investments.  
Not only timing entry in any financial instrument is important. Before the start of your investment journey, you must also plan for exit. Each instrument has rules for exit or partial withdrawal. So depending upon your future stream of needs you must plan to match the timing of exit/withdrawal as well.

Rule # 09 – Do you need to diversify your investment?

Yes, diversifying bits of help grow your wealth and gives you peace of mind. Go for variety with quality and not quantity is always good in investment. You must learn the science and arts behind allocating your savings. No matter whether you are risk taker or risk averse. You must put your savings in diverse instruments. If you are risk averse put 20-30 percent of your savings in riskier instruments. If you are risk taker you can go up to 60 percent in riskier instruments.
Moreover, it is always better to diversify within investments categories. Always take a disciplined approach or either buy-and-hold or dollar-cost-averaging strategy while diversifying your investments.Systematic investment plan, the SIP is the best dollar-cost-averaging strategy you can adopt. Diversification of your investment will always help you reach your financial goal with ease.

Rule # 10 – Make yourself financial literate

One of the main objectives of investments is the growth of your wealth. Another important objective of investments is to save tax with some good returns on investments. TDS free investments fulfill the second objective in a better way. Also, there are many best investment options available to investors. Indian stocks market is the best place for risk lovers.
However, to be successful in investment you must understand investment types,  the basics of stock markets, stock market classifications, postal investments, market status and etc. All these require your time and devotion. In nutshell, you need to keep yourself updated on financial investments. You need to make yourself financial literate.
No matter whether you are a novice, a beginner or have some experience in the stock market, mutual funds investing you need to remain updated. And to remain updated you need financial market intelligence.

Thursday, 29 November 2018

Involve entire family in financial planning: 6 simple steps for wealth creation

Money is not a topic most households tend to discuss, yet it is a topic which draws down most of our family goals. Getting your family finances in order can be a daunting prospect, but by breaking down the process, setting yourself certain goals and being disciplined, it doesn’t have to be. By making a financial plan you can get you and your family on the right path, no matter what your goal is. Below are six easy steps to get around it.

Everyone sticks to the budget
Just about every family member has a budget, the homemaker has a household budget and kids have their pocket money. The easiest way to save is to ensure every member stays on budget. In other words, overshooting the budget is a strict no-no. In fact, members must be encouraged to save a little from the budget every month and set it aside in a mutual fund or saving account. When the spirit of savings is inculcated earlier on, particularly in the young, it gives a big push to the family’s finances.
Use technology
Today younger family members are online and it is really important to leverage technology better to make the younger ones understand when it comes to savings. There are many apps which can help them to appreciate to save that extra money on online deals on groceries, clothing, and stationery. Holidays are generally a great time to dwell into this space, as you may end up with some major ‘festive’ discounts on essential items.
Educate the young
Often the trick lies in getting the young on your side. The mature ones already understand the need to save and contribute in their own way. But the young take a while to appreciate this. So senior members of the family need to educate the young on savings and make it fun by awarding the points if specific saving targets are met. When indoctrinated with the importance of saving and investing at an early stage in life, the young blossom into more financially aware and savvy individuals.
Identify responsibilities
Most parents prefer not to share all the financial details with their teens, so it’s best to get your finances set initially when the kids aren’t around. Make a note of specific categories that you know they have opinions about and ask them for their input after you’ve determined what you could afford. Then you’re better able to guide a conversation with them, rather than making empty promises or an endless string of no’s and maybes.
Have fun at home
It is natural to expect families to make the most of weekends by going to the movies or dinner. This is the families ‘us’ time when all members get to spend time with each other. But there are equally good ways for the family to have a good time without burning a big hole in the family’s finances on dinners and movies. Order food over the weekend from a takeaway joint and instead of going all ‘fine-dine’, enjoy the simple pleasure of a home-meal while enjoying a good television show or a movie with your family.
You may not get it right in the first go
When you create a family plan and give yourself spending guidelines, there’s an initial period of adjustment. No one gets all the numbers right the first time, so expect to revisit and tweak your plan several times initially, then periodically when circumstances change or when you notice that things are off track.
It can be worth tracking your spending for a few weeks to see where your money is really going. When you track expenses, a useful focus for many is big box stores where you can buy anything and everything, as well as cash expenses.
The bottom line
Managing family finances needs to be a family affair, so do what works better for you and your family. At a minimum, everyone needs to be aware that you’re working towards specific goals and how they can support your efforts. This way there is a takeaway for everyone involved.

Wednesday, 28 November 2018

Don’t make these mistakes when investing through SIP

Common Mistake 1 : SIP in a fund with highest past returns.

By far this is the most popular method for selecting a fund. It is like driving a car looking at the rear view mirror. It’s misleading, inadequate and risky. Misleading, because it has the biases of when you started and how the markets are doing at the time of measuring the performance. It’s inadequate because it does not tell us how much risk the fund manager is taking and whether the fund is likely to perform in the future. It’s risky because funds that give the highest returns today have stocks that are overvalued and likely to correct or stagnate.

Common Mistake 2 : SIP in 3-4 recent Top Performing Funds.

This is perhaps the most popular way of doing SIP. It ends up shortlisting funds with a very similar process (the rationale for selecting stocks in the portfolio) that resulted in all these funds outperforming together. For the very same reasons, these funds will someday start underperforming together making investors very uncomfortable and triggering an exit. This defeats the very purpose of SIP in multiple funds which is safety through diversification.

Common Mistake 3: SIP in 1 Large-cap, 1 Mid-cap, 1 Multi-cap and 1 Sectoral Fund.

Many investors make/follow this decision with the hope of having a diversified portfolio. The idea of investing in a Mutual Fund is to use their expertise in picking stocks. In a Multi-cap fund the fund manager can pick large, mid or small cap stocks and stocks from any sector whenever they are attractive. Having chosen a multi-cap fund renders choosing other cap/sectoral funds redundant and probably counter-productive.

Monday, 26 November 2018

HOW TO CHOOSE THE RIGHT INVESTMENT PLAN?

We are living in the 21st Century and we have a wide variety of products & services to choose from. You can buy a Car, branded clothes, a Smartphone, or even customized Tourist Package and akin to this are the varieties of Financial Instruments available in the Financial Markets. You can invest in traditional avenues like Gold and Real Estate or non-traditional avenues like Mutual Funds and Insurance.
What ends up quintessentially is how one chooses which items to look over, when to invest and of course the investment timing.
Even if you have finally decided to invest in Mutual Funds, there are multiple schemes and Fund Houses to choose from. Investing could be very confusing for many & if words like Portfolio Balancing, Market Performance, and Income Generating Assets make your head spin then remember you are not alone. Every investor has a different timeframe, risk appetite, corpus to invest, liquidity need, age factor, and investment objective depending on which the investor should make an investment decision.
While searching a perfect investment avenue for yourself that suits your risk appetite and financial Goal the most herculean Task is to choose a fund manager and an investment plan that would be the most suitable for your situation and goals. You have the choice to choose the manager with whom you entrust your capital.
A Fund manager can offer multiple plans with varied level of profit and risk which will depend on the underlying securities. Therefore, before investing, you need to understand the advantages of each type of investment, time horizon & risk appetite. It is also essential for the investor to understand an essential connection between expected profits and risks: the higher the expected profit, greater are the fluctuations in the value of investments.
Every individual has a different Investment style and the most successful Retail investors are those who believe in short-term pain & long term Gain. An average tax paying investor’s portfolio should essentially comprise of bank deposits, liquid mutual funds which can take care of his liquid needs. He or she can also invest in debt mutual funds, gold ETF. Investing in gold ETF is better than the physical Gold because liquidity is guaranteed in Gold ETF whereas it is not so in the case of physical gold. The combination of all these investments will create a diversified portfolio on a post-tax adjusted basis & will give surely give return to the investor with low risk.
If you are willing to invest then you should ask these 7 questions to yourselves and they will surely help you build a sound investment plan based on your goals.
• What is the Purpose of my Investment?
• What are the minimum and maximum amounts I want to set aside for investing?
• What are my financial obligations especially the debt obligations?
• What should be the time horizon of the Investment?
• What is my Risk Appetite?
• Which is the best Financial Instrument to invest in that will fulfil my investment Goal?
• Which particular Fund House/ Scheme/Plan would give me the maximum ROI?
Once you have identified the level of risk is acceptable to you, & the most reliable and safest fund manager, you should now identify the investment plan that would be the most appropriate to your interests.
Remember, what kind of investment plan you will choose, is only up to you. A Financial Advisor can only give you a piece of advice but it is you who have to take the final decision and once you have chosen a plan, you should regularly review it & stick with it! That is the key to investing success.

Sunday, 25 November 2018

Subway Surfers and Personal Finance: Same Same but different!

After playing, I realised there are lot of similarities and dissimilarities between Subway Surfers and Personal Finance, sharing few of them.
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The credit for this post goes to my daughter who keeps on installing the game on my phone repeatedly after I delete it 🙂
  1. Fast Paced: Going too fast in the game is thrilling and exciting at the same time. However, going too fast with finance decisions may prove to be un healthy for Financial health in the long run. For instance, getting into too many loan commitments considering the current income levels may land you in trouble. Each and every step taken should be a thought over step keeping future in mind, asking few questions to self..”Will I be able to repay the loan in case my income levels fall, Am I prepared to face any kind of emergency, Am I prepared for unforeseen circumstances”
  2. New locations: In the game, one looks forward to a new location everytime. .In real life going to new locations may look exciting however when it comes to investing, investing in every new product may not be a wise decision. Different financial products are there for different financial needs, different risk appetite. Every new product may not match with the attitude you have towards money or your risk appetite. Staying away from complex products is suggested.
  3. Coin collection: The chase of coins in Subway Surfers is endless and without any aim. Wealth building unlike coin collection here in the game has to have a meaningful end. There has to be a goal, objective, aim behind every investment that is done.For instance:,saving for Child’s education, Child’s Marriage, Retirement, Foreign trip etc. Savings and investments are done to achieve what one aspires for and not just wealth accumulation.
  1. Hopping on trains: Hopping from one train to another in the game is required to get saved from being caught. However, in financial life.If you keep on shifting from one product to another, in other words keep churning your portfolio, end result will be an unsatisfied investor. Review of portfolio is required but unnecessary churning will do no good to the portfolio. Stick to a product if it is meeting your expected returns and is in in sync with your goal.
  1. Different Characters: Unlocking different characters in the game is the goal of the game. Similarly, reaching different milestones in life is our goal. One reaches the destination, Financial goal through journey called Financial Planning. The goals should be exciting enough so that one is always looking forward to saving towards the same. For some, investing to own their dream home is exciting and for some, seeing their child getting good quality education is.
  1. Cop / Supervisor: A cop is always running behind the character which is like a motivation and fear at the same time. The cop will get hold of him if he falls down. He is running to save his life and also getting motivated as  he is accountable to the cop. Similarly, there should be full responsibility of accountability to oneself with regards to investment. Trust your advisor who helps in effective use of available resources, identifies the strengths and weaknesses, helps minimizing potential risks and pitfalls and makes sure that you are strong enough to take care of yourself in the times of unforeseen circumstances.
Not only Trust your Advisor but be accountable to him for better results !

Friday, 23 November 2018

6 Factors Affecting Mutual Funds Performance

A mutual fund is a pool of money invested primarily by retail or institutional investors & is professionally managed by the fund managers. The Mutual Fund Performance depends on multiple factors such as the portfolio composition and macroeconomic conditions & these factors will largely determine the extent to which the investor can meet his financial objectives.
Significant factors which determine the Mutual Funds performance are:-
1. Asset Performance and Risk
Equity Mutual Funds are the riskiest while Debt & Gilt Mutual Funds offers less risk to its investors. Investors can invest in either of them or take a balanced approach depending on their risk appetite. Mutual fund performance is affected by the change in the value of its holdings or underlying assets. The asset mix of an investor's investment portfolio determines the overall return. An investor should use the diversification strategy for investing because nobody should keep all his eggs in the same basket. There is a risk-return tradeoff associated with every asset -- the higher the risk, the higher the volatility and return potential. Similarly, lower the risk, lower is the volatility and return potential, For example, stocks are riskier and volatile than bonds, but the ROI of stocks is more than bonds over the long term.
2. Sector Performance
Mutual Funds NAV also depend on the performance of the sector in which the investment is done by the Fund House. Each sector behaves differently under different market & economic conditions. Funds holding foreign stocks will improve when the dollar weakens. Consumer stocks respond to well to a healthy economy where there is a lot of demand for products and services. Energy funds will do well when crude oil prices rise while Bond funds will perform well when interest rates fall and bond prices rise. Index funds simply mirror the performance of market indexes such as the BSE & NSE.
3. Management related Expenses
The return on a mutual fund scheme is the current NAV, minus the management fees and expenses. Every fund house charges fees for management, as well as the marketing and back-office clerical work, needed to keep the fund operating.
4. Fund's Popularity & Cash Flow
A fund's popularity affects its performance. A Popular investment plan in which the investors are piling money, the manager has more opportunity to invest in avenues where he thinks it will achieve the best ROI. If a fund is performing poorly and the market is down the investors will be bailing out. This cash drain will force the manager to sell holdings. An investor should always check the net cash flow when searching for funds before investing.
5. Economy
Macroeconomic factors associated with the economy affect investment's rates of return. A growing economy means more jobs, which means they will spend more & this will lead to an increase in sales, profits, and investments.
On one hand, Rapid economic growth can lead to a higher interest rate which will make credit more expensive, thus dampening consumer spending and business investments. On the other hand, economic slowdowns lead to low employment, lower profits and stock prices resulting in improved bond price. This is how the changing economy affects the investments and it returns.
6. GOVERNMENT POLICY
Fiscal policy, regulations, political stability & arduous regulatory approval process also affects investment rates of return.
If the above points make your head spin then you need a Financial Doctor (Financial Advisor), who is experienced enough to guide your investments. The Advisor will understand your needs, chalk out a proper strategy based on your risk appetite and time horizon & finally will advise some mutual Fund schemes that will fulfill your Financial Goals.

Wednesday, 21 November 2018

Finance ke Raaz..Filmy Andaaz :-)

Reel life is inspired by Real life and at times it is vice versa. Movies started way back in 1900s and craze & popularity is increasing with each passing year.
Let me admit, I am a big movie Buff and I switch on TV for only movies.
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Tanu weds manu Returns: 

Don’t raise your Expectations to an Unreasonable level.It’s been four years since Tanu and Manu’s eventful wedding and they’re already feeling the seven year itch. Settled in London, their relationship is now as cold as the London winter. While Tanu expected her husband to be flamboyant, Manu wanted a docile and peaceful wife. Expectations play a spoilsport here.
Similarly, in investments, the key issue is not the return that one gets on his investment but the expectations that are being set is an issue. After getting decent returns, the greed is not satiated which is the mere cause of discontentment. Firstly, the expectations have to be set right, they have to be realistic and not unreasonable.
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Bhaag Milkha bhaag: 


Hard work has no substitute. 
The amount of Hard work Milkha Singh puts in his passion is commendable. He is not even aware about day and night, hot and cold at times. He is aware about one single thing i.e his win and  breaking the record. He could do so because he kept thinking about the outcome of his efforts.Likewise, we will have to work hard to get good results.  “What we sow is What we reap.” We will have to keep sowing to reap tasty fruits. Stay disciplined and committed by investing regularly without any miss thinking about the outcome everytime.
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Never Race: Don’t ever race just because someone else doing it . It is time to unfollow the herd mentality and break the patterns. In Financial planning, It is time to leave traditional and not so suitable products with New products which are better in all aspects. For example: An endowment life insurance policy should be replace with Mutual funds and term insurance for better return , risk cover and taxation.

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Baghban and  Munnabhai  : 

Don’t Transfer your assets during your lifetime:The first and foremost goal while planning for finances should be to secure your retired life as those will be the years when you need the most support. Retirement statistic show that nearly 68% of people are dependent on others for post retirement expenses. Both these movies are excellent examples of what not do while planning for your retirement. Always, keep assets in your name and find ways to alternate income and write a “Will” well in time for distribution of financial assets after you as per you wish.

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Udaan:

Do what you think is right: Chase your dreams and take the flight.
There will be lot of obstacles, but persistence will take your where you want to go. Keep walking towards your goal . Two things that help reach desired results in life and investments are: Discipline and time .
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Live life to the fullest. It is your thoughts that can take over anything and everything. If you wish to see positivity around despite all odds, you will see positive things and vice versa.
In investments, if you are too much listening to or attracting negative news which are due to external factors and is beyond control , it is not going to help. It is a temporary phase and short term volatility.By saying , All is well, not only the tensions will vanish but also , you will be reaching where you were headed to in a smooth manner.

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Lagaan:

The Biggest risk is the one that you don’t take. One can not discover new oceans unless you have the courage to lose sight of the shore. The movie is about a young man named Bhutan who challenges British to oppose double tax levied with game of cricket for which the villagers had no idea on how to play. He took risk and won in the end.
Risk of losing by investing in equities is much lower than actually keeping money idle or in instruments which yield lesser than inflation and depreciating its value.
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Chak de India:

Planning is very important before execution. It is very important to prepare the roadmap before starting the journey. The hockey coach did accurate planning and practice before sending the girls to get the world cup.
Similarly, for effective planning for financial goals, a roadmap is to be prepared as to what all steps need to be followed, what all milestones need to be reached and so on.
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One size doesn’t fit all. An eight year old boy is thought to be lazy and troublemaker, unless a new art teacher discovers the real problem behind his struggles in school.Every child is unique and has a unique set of talents, which requires nurturing and encouragement.
When it comes to personal finance, remember it is personal finance and has to be personal for everyone. It can not be same for two people as each one of us have different lifestyles, needs, goals and income.