RupeeCamp: 10x Better than Other Financial Advisory?

Posted on March 31, 2011 by Ranjan

“You need to make sure your product is 10x better than that of your competitors. First, you’re probably exaggerating how much better it is. But also when you’re developing so is your competitor. So if you shoot for 10x better you might hit 3x better and that’s super important to win.” (Source)

At RupeeCamp, we are looking at helping you with the following:

Understand and plan your finances.
Help you select different financial products.
Provide continuous support and review

So, while RupeeCamp is a skill development workshop, it has real outcomes as it’s objective. I have also said that RupeeCamp is the middle path of financial advisory

The question is whether we are 10x better than the millions of financial advisors in the country. Even though the proof of the pudding is in the eating (we’ll know on 9th April!), here’s my own targets:

In terms of knowledge, transparency and information sharing, we will be 10x better than the average financial advisor. (The 90% advisors, atleast)
In terms of cost, the professional Financial Planners charges range from Rs 10 – 50K. If we take the average, it’s 30K. My inaugural price for RupeeCamp is just Rs 3k, which is exactly 1/10th.

So if we add up the two points above, I guess the value of RupeeCamp is 20x the competition. Infact, I’d prefer to take it as 10×10= 100 times better!

And thanks for your encouragement, we have just 5 participants seats available as of now. I may have to close registrations in a day or two. Thanks.

Coming Soon! RupeeCamp "Financial Planning Workshop". "Join us"

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!

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What Is The 88% Solution?

Posted on June 7, 2010 by Ranjan

This post is about a simple solution to setup your investments. I call it “The 88% Solution”. Why 88%? Because it works for 88% people. It works 88% of the time! This is the third and the final part.

Part 1: The Background & Part 2: The thought process.

There are more than 300 life insurance schemes, numerous health insurance schemes, over 1000 Mutual Fund schemes, 2500+ stock scrips to choose from. Then there are 100+ deposit schemes with Banks, Corporates and the Government itself.

Wouldn’t it be a good idea to bring down the choice galore to a maximum of 20 products to choose from? Can’t this group of 20 products be the best in class and stands validated through a reasonable thought process?

The answer, to my mind, is yes! Read the following 7 points that gives you the a set of 20 products to choose from for your investments.

Before we go on to investing our money, it’s a good idea to take a bit of cover. Let’s start with the emergency fund.

1. Emergency Fund: Keep an amount of three times your monthly expenses in your Bank in a Savings Account.

2. Insurance: Many of you who are just started having an income, are single wouldn’t really need insurance now. But some of you who have started a family need to get a cover. Trying to find how much insurance do you need from the internet will throw multiple calculations and options. Each one of them have their own logic. A simple thumb rule for me is to get insurance worth 60 times your monthly expenses. Not 60 times your gross monthly salary, mind you. Insurance is for taking cover, not profiting out of it. Two products that I would recommend choosing from is LIC’s Anmol Jeevan and Religare’s iTerm. The first one a trusted name in Insurance and the other one is the cheapest one available.

You also need to get health insurance. A group health insurance privided by your company should be enough. If not, start with a mediclaim policy with one of the General Insurers.

To start investing, you need to first exhaust your tax planning options.

3. Tax Savers: Apart from the PF that might be deducted from your salary, getting a PPF account is a good idea. Plus you might go for equity linked tax saver Mutual Fund schemes. HDFC Tax Saver, SBI Magnum Taxgain, Sundaram BNP Paribas Tax Saver, Franklin India Tax shield and Sahara Tax Gain have given a return of 20%+ over the last 5 years.

From the money left after taking a cover and exhausting your tax planning options is available for investment.

4. New Pension Scheme (NPS): NPS is THE best & effective tool that covers capital protection and also provides growth for your retirement plans. With its lowest charges, it also is the cheapest way to get an exposure to the market. Despite being such a fabulous product, there’s not much sales to boast. This is because there’s no commission for an agent there.

Infact getting a PRAN (Permanent Retirement Account Number) under NPS is not easy. I’ll do a detailed post later.

5. ETFs: This Pdf will tell you why ETFs are the best. Nifty Index ETFs which benchmark the Nifty that are available in India are NiftyBEES, KotakNifty, UTISunder, .QNifty

6. Debt Index/ Balanced Mutual Funds At a young age, you can take more risks and I will not ask you to invest in debt funds. But to get a bit of diversification in your portfolio, I will recommend investing in a few balanced funds. Balanced funds have exposure to both equity and debt and their fund managers take a call on when to focus on equity or debt. HDFC Prudence, DSP Blackrock Balanced, Birla Sunlife 95, Tata Balanced are balanced funds which have done well. In fact some of them are at par with Equity Funds!

7. Gold ETF: Gold has been outperforming the equities for the last decade!. Looks like it’s on a dream run. For diversification purpose, investing 5-10% of your money in Gold ETF isn’t a bad idea. Gold ETF is seeing the highest turnover these days and there are a lot of players which are offering Gold ETF these days.

So the 88% solution has shortlisted a set of 20 odd products out of 5000+ financial products. Does it help you get started?

Advantages of the 88% solution:
It tunes out the noise of the market place which is worse than the fish market.

It takes care of Diversification, Rupee Cost Averaging, Asset Allocation principles, Magic of Compounding and all principles and theory of investing.

It also gets you real bang for every Rupee at a very low cost.

And once you set it up, you can forget about it and focus your life on more happening things!

Disadvantages: It’s boring and non-happening. More like a Cricket Test match when it’s the age of Twenty-20.

But the question is, do you need an audience for your finances? Or do you need to perform infront/for the benefit of others? Remember, it’s “personal” finance.

I’ll wait for your questions and your views on the 88% solution. Thanks.

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What’s In It For Me in a Personal Finance Workshop

Posted on April 20, 2010 by Ranjan

Talking to a group of people, I was waxing eloquent how taking control of their finances was so important. Until I saw a young guy frowning and thinking why he was wasting his time with me. Yes, I can read minds!

In any case, What’s In It For Me (WIIFM) is an important question that needs to be answered.

“Important, Need to be more responsible” are good sounding words when we are speaking from a high, parental ground. Unfortunately, they don’t make an impact on a young guy!

To my mind, it’s important to put a tangible figure on the difference between good and bad money management. Let me give you my own example. Btw, it’s a bad example

I have been working with a PSU for 20 long years and had I been saving regularly right from 1990 when I joined work and investing them properly, I would be having a networth as shown in the following Excel sheet.
Click to enlarge

The assumptions are very simple. I invest 25% of my income every year and get a return of 10% annually. The investments are made every year and not every month. Every month investment will lead to a much higher figure!

Ideally/ theoretically, I should be having a Networth of approximately Rs 23-24 lacs. But, the actual Networth (excluding my House/Ancestral Property) is not even half of that.

That means that my less than ideal money management has resulted in a loss of over Rs 10 lacs. Yes, that’s a million rupee mistake!

I have woken up a little late. I am on my way to mend whatever I can. And I can share my learning with you and help you manage your finances in a better way.

Does it make sense to save yourself from making the “Million Dollar Mistake” (Oops, it’s our Rupee)? Do you think attending a Financial Health Check & Planning Workshop is a good idea?

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Introducing India’s Online Insurance Community

Posted on August 27, 2009 by Ranjan

BimaWorld is a new online Insurance Community in India. They have useful articles and discussions happening online.

Btw, they also picked me as the winner of the “Question of the month” contest. (Vanity strikes!)

I asked Devanand Agarwal, the Cofounder, Bimaworld about how he’s going to build this community. Here’s the questions and his answers:

Q. 1. a) What prompted you to start your website?

Information is the key to make a wise decision. Websites are very handy in spreading the information. Also masses are not yet conscious about insurance. Like any other subject, insurance need to be talked about, discussed & debated, and website can be a very ideal platform for this. Also absence of an advisor cum expert agent, lack of flow of correct information, wrong selling of policies, poor after-sales service and No-claim Assistance promoted us to start our website.

Q. 1. b) What motivates you to keep on going?

Positive responses from insurance seeking community and insurance industry professionals who are not internet savvy but have years of experience in insurance. They have shown willingness to join bimaworld and help community. Soon we will launch a special expert consultancy section where anyone can communicate with our panel of elite members. Kolkata Blogger’s Meet Aug’2009 was very motivating and reaffirmed us that the decision to start an online community was right. Seeing our website taking practical shape and our teammates filled with innovative thoughts, dedication energizes us to continue further.

Q. 2. Why is it that, generally people avoid or have a fear of financial planning?

Liquidity Crunch, Small Savings, Irregular income, Lack of Knowledge, numerous products to choose, Inability to figure-out phases and needs for life that may arise in future, Insecurity of parting liquidity- Stories of Cheat fund Companies, no- corrective measures from Government agencies, judicial delay and Limitations thereto.

Q. 2. b) What is the fundamental problem?

Lack of knowledge, inability to figure-out phases and needs for future are basic issues.

Q. 3. The aim of your site is to help people make an informed decision about their insurance. But the present information asymmetry between buyers and sellers is huge. Do you see the internet making an impact on reducing the information gap?

Yes, to a large extent.

Information on net are numerous and available in text, blogs, forums, graphic, article, videos forms, the users are also getting more and more friendly to these modes. But explanation in simpler terms and its complete understanding is still a concern for all, alike approachability and shortage of time; which we will make easy and happen for the masses.

Q. 4. What role do you see for offline seminars and workshops rather than online education?

Motive of both Online and Offline system is to sell across the message “to the point”.

Online is getting personalized and also picking-up its momentum but offline workshops and seminars are more powerful & very much acceptable to the masses, a lot of live interaction takes place and thousands of unknown questions are answered at a time.

Q. 5. How would you advise? To have one personal finance consultant who maintains your money or have an insurance consultant, Mutual Fund advisor, Stock Broker separately?

A Personal Financial Advisor can be said “Jack of all but Master of none”, who can give an overall suggestion on investment pattern and help in choosing plans.

But like others, he would be having his limitations depending upon his capabilities, skills and understanding. Separate consultants like insurance consultant would be more advisable because of their specialization with compulsion to answer comparative views on other financial products.

Moreover claims handling, policy servicing and suggesting skills are the areas which gives an edge to the insurance consultant over a personal financial advisor, 90 times out of 100.

Q. 6. Do you visualize a growing use of personal finance software to track and manage money in India?

Yes, people in India are trying to have a system to track their business, money, investment, budgeting pattern etc. further MIS reports are getting more popular among individuals alike Corporate investors.

Q. 7. The Regulators are cracking the whip on Asset Management Companies and Insurers. What’s your wish list from the IRDA?

It is an important job and duty of the regulatory body to perform.

The concern is that for public money, which for all times should be protected.

But they (Regulatory) have their own limitations apart from the political and judicial system being very slow in implementing its decisions and setting an example before all. Wish list –IRDA- none this time

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Financial Planning Workshop

Posted on April 12, 2009 by Ranjan

While attending a workshop for Trainers, I remembered that I have been planning a “Personal Finance Workshop” for quite some time. I have been telling myself that one should “Do it well, or don’t do it”. The result: no progress!

Let me list out the workshop objectives and the things that I want to cover in the workshop to get me re-started on this job.

Workshop Objective:

The workshops will help the households to make better financial decisions and avoid common financial mistakes

Workshop Contents: