Some things I follow: 1. Real estate is not an investment - unless you can sell it, or unless the annual rental yield for it is greater than 10% of the purchase price. The truth is this, sure, the value of the property you buy to live in, say a 2 bhk can triple in 5 years time. But when it comes time to sell it, all you can do is to use the money to buy the same thing. i.e. you can't magically afford a 3 bhk. Unless you move out of town - and keep doing so every 5 years, further and further away. So there is no net increase in standard of living by buying property.
2. Buying jewelry is an even worse investment than buying property. For the same and more reasons. 3. Buy a bunch of stocks from the index - BSE / NSE if in India - and not more than 15 stocks. And forget about it. Buy an index mutual fund, where the annual management fees are less than 0.5%, through a SIP, if you continue to have an income in the meanwhile. 4. If you do have a little left over, buy some US stocks - I prefer ones like Google, Tesla, Twitter, which will do nothing but rise in the next 10 years. 4. Your parents never paid for your college education - it isn't your responsibility to pay for your kids' college education either. Let the buggers take a loan, win a scholarship, or find their own way. Your job is done by the time they're 16 or 17. This, more than ever, teaches them not to mooch off you, and to be responsible adults, like all of us were. 5. Beyond this, don't save. Spend it on yourself. No savings rate matches your increase in personal value, if you invest in doing the things you love. 6. Do this and you'll find retirement, or the rest of life, is a cinch. My $0.02, Mahesh On Tue, Sep 30, 2014 at 9:11 AM, skn <s...@skn.fastmail.fm> wrote: > Hi all, > > All this talk about retirement and how closely coupled it is with > financial freedom got me thinking (more) about financial planning. > > I was wondering how my fellow Silkers (is that how we are collectively > called?) have been (or have already) preparing for financial > independence in the later years? What are the good financial principles > to live by? Some of the things I have been trying to get my head around > are about property as an investment, (long term) investing in company > shares vs. index funds vs. mutual funds, % income to save vs. how much > to invest vs. how much that can be spent (given I have very young kids) > etc. etc. > > Any insights, life lessons? > > -skn- > >
