Indian retail stock and bond investors may not have heard the name, but John C. Bogle (called Jack) impacted the way mutual funds are constructed, cost and sold all over the world. The founder of the $4.9 trillion Vanguard Group died on 16 January, a little over three months short of his 90th birthday. Bogle straddles the fund management world like a colossus, having turned an industry on its head more than 30 years ago by thinking of and acting in the interest of the retail investor. He did this by focusing on whittling down costs in two ways. One, to cut out the star fund manager and introduce index-based investing with wafer-thin costs. Two, to cut out the distributor and go “no-load”—where shares are sold without a commission or charge.
“A systematic investment plan, or SIP, is a route to a mutual fund and not the mutual fund itself,” explains personal finance expert Monika Halan in this episode of Money With Monika.“An SIP is similar to a recurring deposit (RD) in a way that it cultivates a savings habit, but they differ in returns. RDs result in fixed returns but SIPs are market-linked. Choose an SIP over lump sum investment to reduce market risks as it gives you the benefit of rupee-cost averaging,” she says. Monika Halan is consulting editor, Mint, and author of ‘Let’s Talk Money’. Watch the full video for more.
“There is no perfect moment to start investing. Just start,” says personal finance expert Monika Halan in this episode of Money With Monika. “It takes very little to start investing as much as just ₹500/month in a mutual fund SIP,” adds Monika. She explains to viewers why investing early will allow them to reap the benefits of compounding over the long term. Monika Halan is consulting editor with Mint and author of ‘Let’s Talk Money’. Money With Monika is a weekly personal finance show published on livemint.com
We just don’t get the big picture. The more I talk to people about money, the clearer it is that we compartmentalize our money lives so tightly that we totally fail to see the big picture. Every conversation with whoever I meet now swings around to money. People share their stories, their worries and their fears. They share the power equation within home that money causes. While housewives have always shared stories of the skewed power money equation, working women have equally scary stories. That’s because those who earn more than men have a triple burden—to manage work, home and the male ego. But most often the usual story is the fuzziness about how we think about money and how we simply are not able to see the whole money story.
In this episode of Money With Monika, personal finance expert Monika Halan delves into the importance of having debt mutual funds in your investment portfolio. Debt funds are flexible, she says, and are good for various shorter term goals but can be difficult to understand. ‘You can choose to invest in a conservative balanced fund if you want the safety of bonds with a flavour of equity,’ she adds. Monika Halan is consulting editor of Mint and author of ‘Let’s Talk Money’
The amount spent on the wedding of the daughter of India’s richest man, how much the bride’s clothes cost, what the invitation boxes contained have been the subject of almost every conversation for the last few weeks. This is a carry-over from the same talk about the two big Bollywood 70mm weddings just a few days earlier. Why they are spending so much, how vulgar such spending is and how this money could have been better spent elsewhere is the one thread that runs through most of these social media forwards, office café talks, metro gossip and drawing room debates. The gasp of middle India horror at this vulgarity is loud and clear.
How much should the very rich spend on themselves? This seems to be the issue at stake. Let’s stay with first principals. Media reports say that India’s richest man Mukesh Ambani spent on his daughter’s wedding anything between ₹100 crore and ₹700 crore. Mukesh Ambani’s net worth, according to Forbes, is $47.3 billion, or ₹3.4 trillion at current exchange rates. This makes his spend between 0.03% to 0.21% of his net worth. The 2018 combined earning of the two movie stars, Deepika Padukone and Ranveer Singh, who got married to each other, according to Forbes is almost ₹200 crore. Though estimates vary, a conservative number of ₹4 crore spent on their wedding is about 2% of their annual earning. Or they just had to work for slightly over a week to pay for the wedding.
The average drawing room conversation on the government encroaching on the independence of the RBI tut-tuts over the good guys at the Reserve Bank of India (RBI) getting stamped on by a bully government. Now, the resignation of Urjit Patel has added fuel to the views fire. But I wonder if the conversation would change if the same groups realized what this ‘independence’ or its obverse, the lack of accountability, means to their money. Last week, the RBI announced that new floating rate home loans from banks would be benchmarked to a rate not controlled by banks from April 1 2019. Anybody who has taken a floating rate loan in India knows that as the interest rate cycle goes up, loan rates mostly go up very quickly, but the opposite does not happen. This is not a new problem. I remember flagging the issue more than 15 years ago. It is not as if the RBI has not been aware of the problem of benchmark fixing by banks to cheat retail home loan borrowers. RBI has changed the way the rate is calculated four times in the past 24 years to make it difficult for banks to fix the rate—starting with the Prime Lending Rate (PLR) in 1994 to the Marginal Cost of Funds lending Rate (MCLR) in 2016. But in each case the power to calculate and fix the rate remained with the banks. A power they have mis-used freely at your expense. An internal RBI committee found that banks fixed rates at will.