In continuation to my subjected mails Points to Ponder, I would like to once again touch upon some basic things to follow with respect to our personal financial lives.

Have adequate Term cover and Health insurance in place. Protection should come first rather than investment.

Maintain an emergency fund of at least 3-6 months of expenses in liquid funds and bank accounts.

For people in their professional career major focus should be on enhancing human capital, which in turn helps to create required financial capital to fall back after the active working life.

Do not chase returns. Returns are not in our control. We only have control on our savings and time frame given for the investment to perform.

As Buffet says “The biggest thing about making money is time. You don’t have to be particularly smart; you just have to be patient.”- Warren Buffett

Equity Markets will not move in linear manner. There will be phases of markets moving sideways, giving high returns and negative returns. In order to get long term compounding returns one need to stay put in all those phases without carrying away by day to day volatility and mark to market values.

Several times I reiterated that globally bond yields are low and even negative in many countries. In India the rates are good to invest. One needs to have debt allocation in a portfolio to offset the risk of volatility from equity and to meet other short term goals.

Long term wealth is build by being strategically focused and adhering to one’s Pre-determined Asset Allocation levels.

As Buffet says Investing is simple. But it’s not easy. Stick to simple products. Keep insurance and investment separate. Save and invest 30-40% your income.

As a simple thumb rule one need approx 30 times of his annual expenses as retirement corpus.

Lastly I would like to draw your attention to the events happening in the financial markets in order to be prudent with your finances.

There are certain products like Alternative assets, PMS etc. They are not cost efficient and not an ideal choice for majority of investors. They look good on colorful brochures and presentations; do not fall to tall and false promises made by people backing by a reputed brand.

They are many such episodes of people losing their hard earned money in such exotic products. Recent causalities is one of the reputed institution’s real estate fund with no returns and giving back only 90% of capital after 9 years of investing. And one of the PMS is stuck with illiquid securities.

Another private wealth management company promised high returns on investments, facing the heat of investors through criminal proceedings.

Some fraudster entities operating throughout India have been sending bulk messages on pretext of providing investment tips and promising of hefty profits.

Do not entertain any tele marketing calls promising guaranteed or higher returns from stock market or any other stuff related to insurance etc. There are certain instances of casualties reported falling to such stories