Manish Chauhan , blogger at Jagoinvestor.com, is a very enthusiastic guy. Manish writes on Financial Planning and his aim is to make people make self dependent when it comes to taking their Financial decisions.

In my effort to improve my own financial IQ and learn from a fellow blogger, I asked Manish a few questions. Dig in and see his response.

1. How did you get started writing yr blogs There was a country called India where all its citizens were not given proper information about financial planning and they were in a mess from last many decades . Top Insurance companies never bothered to sell them Term Insurance which they needed and sucked their blood using Endowment and money back policies , Mutual Funds agents with their half baked knowledge made investors beleived that they are giving them the best information and sold them “unsuitable” mutual funds . So Called TV experts gave Buy and Sell signals for stocks to just increase their firms brokerages without teaching them the basics needed for stock markets trading and investments. No one bothered to understand a person Financial need and never gave them a plan which they should follow to acheive their Financial Goals . All this happening in this nation of 1 billion from decades and every one was sleeping from long time, Enough was Enough and One day I just stepped forward to wake them all one by one .
1 Billion People , 1 Big Vision . 1 small Step . JAGOINVESTOR ! the movement started !! .

2. What are the various options available for investments? What would be your recommendations?
I will keep it very Simple and short . There are two main classes of Investment , Equity (Equity Mutual funds , Direct Stocks ) and Debt (FD’s , Debt Funds , PPF) , I will consider Real Estate as Equity only for this . Equity is for long term and Debt products are for short term . People know Equity is risky , but its risk decreases over long term and its a must have for long term goals like Child education , Marriage and Retirement . One has to understand that there investments or for that matter over all Financial Planning is very personal thing , and depends on there Risk appetite , Knowledge or Willingness to be involved in Finances , their Future Goals and its priorities . To end this question , here is what I would recommend to any common person

- Take Term Insurance
- Have some money in PPF account
- Invest in Equity Mutual Funds through SIP for long term (10+ yrs)
- Have 4-5 months cash in Bank for Liquidity

This is what I call as “A common person Financial Plan” . Simple and sweet .

3. Can you give a brief overview of how should one’s portfolio be at different ages.. Eg at 25 years, 35 years, 45 years etc.
The main funda is as your age grows your Risk appetite goes down , so you decrease your Equtiy component in later years , So here is the recommendation

25 yrs : Mainly put most of the money in Equity , Aggresevily invest in Mutual Funds . If there is interst and Knowledge try Some Equity too . Let you EPF do your Debt part .
35 Yrs : Still the Core should be Equity , but now keep some money in PPF and some Money in other Debt components for Short term goals . 60:40 in Equity : Debt is good .
45 yrs : Now Equtiy component should do down , because the variation in portfolio can really hurt the mental state and situation . When a person is 25 yr , he can see his 1 lacs go down to 40,000 , but for 45 yrs old , its not possible because he has lots of responsibilities . Equity component should not be less .

So your Equity : Debt allocation depends on AGE and your person Risk Appetite for Risk , Low Equity and High Debt is recommended for 45 yrs old , but it might be possible that he has high equity allocation , thats personal .

4. Is it advisable to have a personal finance consultant who maintains ones portfolio? Are there people who do this? If so how much do they charge? Are they really helpful in the first place?
If its very specific to one “portfolio” which is investments side , then one can do it themselves without a personal finance consultant , I think building weatlh using Mutual funds and Equity can be easily learned with some learning , but if one doesnt want to be involved atall , they can see a consultant on hiring basis .

If you are talking about over all personal Finance , I think its ok to hire a Financial Expert or planner for one, because every one does not have time or expertise to do it them selves , People often try to save the fees and think they can do it themselves , but often mess up because they can not match the expertise and understanding of a good Financial Planner . This brings us to next point . Who is a Good Financial Planner ? This is very debatable topic , The issue is there are millions to claim that he is personal finance expert , Most of the people who sell Insurance or Sell mutual funds , or know jargons to scare common people claims to be a Personal Finance expert and thinks that he can do someones Financial planning . They do not understand what is Financial Planning them selves. Financial Planning is not about Maximising ones returns or buying the best Mutual funds , Its coming up with a detailed plan for an individual and create a framework for this Financial Life which he can follow himself . Most of the people stress a lot of Providing Facts and data and try less very in giving people knowledge to understand things . They give peopel Fish and they dont teach “How to Catch a Fish” . I would recommend people to look for Certified Financial planners (CFP’s) or someone they feel is knowledgable and Trustworthy enough . CFP aspirants are also an option because they have enough understading to help clients .

5. Are there some online resources that you would recommend for readers to handle their money?
Truly Speaking , I dont recommend people much on online resources . I beleive in keeping things simple , But there are some specific things which they can look for like Valueresearchonline for there Mutual funds research , There are mnay portals to get good information on Home Loans , Term Insurance , Mutual funds ,Fixed Deposits etc . If nothing one can put down things on simple excel sheet , thats what I do . No need to do fancy stuff . Read some good blogs and websites which teaches you how to make your self a informed Investor .

6. Do you visualize a growing use of personal finance software to track and manage money in India?
Truly speaking , I feel the use of personal finance software can grow upto some level but cant scale much for rest of India . People are still not interested to “do some work” for their personal finance, and its boring for them to track their expenses and do its analysis them selves . The awareness on financial planning is growing and it has good scope , but commercially i dont think personal finance softwares have good scope beyond a point . There has to be a different model of making it commercial . I would like to emphasis that its purely my personal view without any statistical proof to support my point , its just based on my experiences with people and my limited understading .

7. Can you talk about bit about your Blog? What motivates you to keep on blogging? How they can add value to readers?
My Blog JagoInvestor.com is a intiative which aims at making people there own financial planner and have enough knowledge and understanding of concepts in Financial Planning , Jagoinvestor does not beleive in just telling people “what to do” , It teaches them “Why to do” and “How to do” and “How to think about something” . I write on various aspect of personal Finance which common person has to deal with in his life. Its a blog with simple language which everyone can understand . It explains things well with examples and the one assumption is also taken care that “reader knows nothing and I have to teach him in simple language” .

My blog is 2 yrs old , with readership of over 30,000 pageviews per month at this moment , which is growing very fast . My readers are my blog power and my motivation . I am very happy with their involvement and their appreciation which keeps me active in providing rich and useful content .

8. what’s your three best blog posts
Oops , 3 is a bad number , what about 4, This is the toughest of all the 10 questions and took me maximum time to decide .

1.Value Investing by using Nifty PE
2. Early Investor , Smart Investor
3. Magic of SIP
4. Power of Asset Allocation and Portfolio Rebalancing

9. The three blog posts of others that u wd recommend
1.The $28,000 question: Why are we all hypocrites about weddings? - by Ramit Sethi
2. Asset Allocation is like Marriage - by Ranjan Varma
3. Should you rent or buy? – By Deepak Shenoy

(Note by Ranjan: Manish Chauhan is unmarried. And it shows! )

10. Why is it that generally people avoid or have a fear of financial planning? What is the fundamental problem? Is it specific to India or is it a global phenomenon.
I think the biggest reason for not taking Financial Planning seriously is attitude towards Money in India . People do not want to take responsibility for their Financial Situation . Other issues are Less Awareness about Financial education (I think we have more Sex Seducation then Financial Education in India at present) . Also people do not have clear vision about the importance of Financial Planning in one’s life. They underestimate the importance of Financial Planning . I see people working hard all their life day and night , spending all time in their work, but spending no time for their Financial Planning or understanding it . This is a global phenomenon , but in India its more deeply rooted .
==============================================
Thanks Manish.

तमसो मा ज्योतिर्गमयः|; Sharing is Caring!The purpose of this blog is to improve the way Indians manage their money and improve their knowledge about personal finance. We are living in a world which is increasingly becoming smaller and information is being shared at lighting fast pace.

However it still remains a mystery as how less we know about personal finance. The only solution is to share whatever useful stuff you find.

Some readers have come back to me saying that I should facilitate easy sharing of my content. So go ahead share it with your friends and family

Welcome back! Join me on this journey to improving our financial IQ and sharing what we know. Updates at RSS feed or Email. And spread the word please Thank You!

Coming Soon! A Personal Finance Workshop & Software "RupeeManager". Stay tuned

Most Commented

• October 1, 2009 -- RupeeManager in Private Beta Now (31)
• April 15, 2009 -- How to Maximize your Income (19)
• August 12, 2009 -- How I Made Rs 1,27,535 in One Day! (16)
• April 12, 2009 -- Financial Planning Workshop (14)
• September 4, 2009 -- Thank You, You Are Invited! (13)

• Previous Entry: How I Made Rs 1,27,535 in One Day!
• Next Entry: Setting Up a Financial Literacy Policy for India