Retirement Planning

Most of us work round the clock for happy life and to take good care of our family. Indeed we wish to have a stress free, wealthy and healthy retirement life. While marching towards that achievement, many of the time we forget our actual goal. Also we end up taking more stress and depression in life. To live a better and happy life and save the most for our retirement, I have identified and observed few ways which might suit most people to achieve happy retirement with minimum effort over time.

There are 2 pre-requisite which need to be identified before planning for the retirement

• At what age are we planning for retirement: Some may plan to get retire at the age of 30 and spend the rest of their life working towards their passion. Few many plan to get retired at 50. Those are entirely fine but this needs a clear fix in mind on what age are we planning for retirement

• How much money are we expecting to save for the retirement: This can defer from person to person. However, there needs a clear picture on how much we need to have for our retirement. You can consider below expenses as your reference (all the below to be planned considering the inflation Year-on-Year by 7%)
• Monthly expenses including rent / EMI, groceries / household, gas, electricity, internet, mobile, transport, shopping & entertainment
• Hospital Expenses
• Tour & Travel Expenses
• Term Insurance Premium
• Miscellaneous - 5% of all monthly expenses joined together

After we finalize the above 2 pre-requisite, below processes to be followed with high level of discipline to achieve the retirement peacefully. The processes are 

• Earn - This is the first and priority step to achieve the happy retirement. Earning can be done either by working for a company or it can be through a business. This depends on the specialization on our capabilities. We should consider to increase our earning on a periodic basis. Probably this can be monthly or it can be yearly. This is because to beat the inflation and to control our expenses.

• Control Expenses - The second and most important step is to control our expenses. This is advised by many financial experts for many centuries to achieve richness and to acquire huge wealth. A person can earn in millions but there is no use on those earning if he / she spends more than the earnings. So, controlling the expenses and keeping it as less than it can be is the second step to achieve happy retirement. In other words procrastinating the expenses is other way to reduce it. This gives time to think if this expense is really needed and there can be a way to avoid it.

• Save - After earning and controlling the expenses, we should save the money earned. We should not give access to the hard earned money to those who will try to destroy it. So, save the money from those people / events that will destroy the capital. For example, the hard earned money can be deposited in banks though we get less interest instead of putting that in a false returns giving scheme by unauthorized companies / person. These days people destroy their hard earned money through online gambling. So, we should protect our capital and save those.

• Invest - The final and most important process to achieve a wealthy retirement is through investing our hard earned money to multiply. There are various investment options like investing in real estates, investing in stockmarket by acquiring quality stocks, investing in gold and much more. It is better to consult a qualified and reputed financial expert before investing to get better returns. Whatever may be the investing way we choose, give it enough time to mature / compound and provide abundance wealth.

I wish everyone plan this as early in life and achieve happy, healthy and wealthy retirement.

B G Nareshkumar.

Manappuram Finance Limited

Manappuram Finance Limited was incorporated in the year 1949 by V. C. Padmanabhan in the coastal village of Valapad in Thrissur District, Kerala. The company's main business was pawn broking and money lending. Mr. Nandakumar took over the business after his father in the year 1986. Today Manappuram Finance Limited has around 5,200 branched across 28 states / union territories across the country. The assets under management (AUM) stands at Rs.420.69 billion with employees more than 50,000.

Services offered by Manappuram Finance Limited does not stops with just Gold loans. They also provide 

• Vehicle Loans
• 
  Two Wheeler Finance
• Personal Loan
• Micro Home Finance
• Business Loan
• Forex & Money Transfer
• Healthcare Industry Loan
• Small Scale Industries Finance
• Restaurant Finance
• School Finance
• Corporate Finance
• Demat Account Services

PB ratio of the company stands at 1.34, which says the company is not trading at an expensive price. PE ration of the company stands at 7.13, this is also under the permissible range to buy and hold for long term. The share price is around Rs.183. A normal middle class person in India can invest systematically at this price. When we consider the past 5 years growth of the company, it was around 30% as of October 2024. From investor point of view, stock with good business background is trading with less price.

Revenue of the company consistently increased every year and it stands at 8,848 crores as of 2024. Net profit of the company also increased to 2,197 crores as of 2024. EPS (Earning per share) was 17.72 in 2023 and it is 25.96 in 2024. The Book value of the company stands at 136.77 in 2024, it was 114.19 in 2023. Foreign investors holding increased from 28.95% in December 2023 to 33.00% in June 2024. Debt to equity of the company considerably reduced from 3.82 in 2020 to 2.91 in 2024. 

Manappuram Finance Limited mainly deals with gold loan and finances. Considering the gold price in India, which is expected to grow exponentially in coming years. When the gold price increases, the lending amount increases for the company by having the enough security. Hence the interest collected on those can be higher as well. As the loan is provided by collecting the gold as collateral, the companies will not have the concept of NPA. If any borrower defaults the loan amount, the company can auction the gold as per the procedure and recover the amount.

Person who are interested in long-term wealth generation can consider investing in this company slowly and steadily. Hope this blog brings you more information about Manappuram Finance Limited.

Have a Great Day

B G Nareshkumar

6 Tips to Save Money & Invest

Below are 6 Tips to save Money and Invest to generate long term wealth. Apart from all the below, it is important that we follow the budgeting system and track our expenses to save and invest.

Automate your savings - As soon as we receive the salary or any other income from business, we need to make sure, a part of the income should directly go to the investment. We can make this automated with the bank and we should make sure it is consistent.

Meal Planning - These days many people spend more money eating outside or spending more on the meal budget. It is better to prepare the meal at home, which can be less expensive and can save lit more on that budget. This can increase the savings and trigger more investments. Obviously, we can plan to eat out but it is better to reduce as much as possible.

Cancel unused OTT subscriptions - Many of us would have subscriptions for many OTT platforms to see various webseries, movies or any other shows. However, we would not be using certain OTT platforms on a regular basis or it would be auto subscribed automatically. We need to identify those and unsubscribe to save bit more money and invest it wisely and consistently.

Consider Carpooling or use public transport - Instead of using a separate vehicle to commute to office, if there is a possibility, it is better to do carpooling or use public transport and save some more extra money on that. This way we can invest further more money to generate wealth.

Use Cash - Google Pay, Paytm and many more apps are easily accessible these days to pay a vendor or do any financial transactions. Because of this, we lose control over our finance and intent to spend more. When we pay using cash, we realize how much we spend and it could reduce the amount of spending. This way we can save and invest bit more.

Have no spend day or weekend - We need to discipline ourselves that we won't spend any money on a specific day or over a weekend. So that we can procrastinate our spending and that could sometime save our expenses. Better to have a weekend in a month as no spending weekend to save and invest.

Hope this blog give you some idea on how to save money and invest to generate long term wealth.

Have a Great Day

B G Nareshkumar

Emotion Management - Thoughts, Words, Optimism & Breadth Control

In Life and Stockmarket, most important thing to conquer or control is our emotions. People live a happy life by controlling their emotions and by holding their anger. People make money in stockmarket by controlling their emotions and not reacting to all the market moves. New position / stock always look better and attractive than the one we hold. If we change our positions frequently, then we will be the big time loser. Compounding doesn't work there.

Let's say when the market is down by 5%, our portfolio might be in red. If we close our existing positions because of this correction, we will lose money. That is exactly what operators are looking for from retail investors. Similarly, if we don't control our emotions in our work space, we might even lose our job or business opportunity.

To control our emotions, we should control our thoughts and control the words we speak. If we are not controlling our thoughts and repeating the negative thoughts again and again in our mind, our emotions will direct us in a wrong way. This will lead to negative actions. Similarly, the words we use have a great impact to our behavior and actions. So, control your thoughts and choose your words to have control over your emotions.

Being optimistic is one of the easiest way to have the positive thoughts and live a happy life. Better to observe and intake the good things in all we see. This will enhance the positive character in us. It was also said, when we control our breath we feel much better and have a controlled emotions. Let's say when we are unhappy and all the negative thoughts run in our mind, and when we breath in and out slowly, we will receive a better feel. It also reduced the stress, depression and anxiety.

A story below for not controlling emotions - Impact

There were 2 departments, operations and administration in a big automobile company. Head of operations team and head of administration were not in good terms. In the company progress meeting, it was noticed the progress of the company was not so good and need for improvement. When debugging the issue, employees complaining that the production was not good enough because the water purifier was not working properly for many days.

After this issue was reported, head of administration was very unhappy that how can a water purifier is linked to the companies production. This was a false acquisition. Moreover, head of operations words against this concern was triggering him to get out of control emotionally. Because of this, the head of administration lost his words, behaved inappropriately in the board meeting, lost his reputation in the company. Because of his action, the head of administration lost his job and the company looked for a replacement.

The head of administration did not lose his job because the water purifier was not working and the productivity reduced because of that. He lost his job because not controlling his emotions. So, this story clearly proves how important is that to control ones emotion. Hope this blog helps you. 

Have a Great Day

B G Nareshkumar

Yutori

There was a famous concept called Yutori in Japan. This means consciously slowing down everything and observing the world around us. No rushing, No Pressure. Just create a space for your mind to feel the beauty of nature and life.

Having a dream and visualizing it everyday to achieve those are good habits. However, many time we forget what is happening around us and fail to live at the present. When we start to live at the present, we will understand how beautiful the world is. It also helps us to realize what is very close to us and value the things we have and own.

When we see this in financial means, we might own few stocks, real estate or any other investments but we always think of the stock or land which we want to buy in the future. There is no wrong in that but we are failing to enjoy the stock or real estate we own now. When we understand and realize what we have now and start to appraise those, we will get the idea on how to build / grow that in a much better way.

In our personal life, when we understand the value of what and who we have now with us, we will make a beautiful relationships, happy life and long-lasting peace of mind. Hope this blog helps you to admire the present and appreciate what we have now.

Have a Great Day

B G Nareshkumar

Controlling Emotions - Fix your Entry, Exit and Time

"The more we feel, we don't have much time, we fail to control our emotions"

These days we live in fast paced environment. We need everything to happen quickly. Our thoughts are build in a way that we want things faster / sooner in life to enjoy it. Emotion towards physical things / money needs to be controlled to get those in a better fashion. Everyone including me wants to make money to be financially free but are we controlling our emotions, greed and accepting the reality to get those ?

When we fix a target and run behind certain things desperately we fail to re-collect what exactly we need and want in life. The same is applicable in making money. Most people don't have any control over their emotions in stockmarket investing and trading and lose money instead of making money.

"Fix your Entry, Exit and Time to control your Emotions"

When we take a position, it is very important we buy the business at the right price and we also should know at what price we should exit the position / holdings and at what time. Let's say I plan to buy a stock at Rs.100, I should fix my mind, I will exit this position when it reaches Rs.150 in 1 or 2 years. It might take some more time to reach that price, not an issue. However, when we enter the position, we should fix the exit price and time frame to control our emotions.

There should never be any emotion towards our holding positions. In the art of making money, we should only consider the profitable in business and capability of the business to take the price to our exit levels at the speculated time.

If we do not fix the exit price and time to the holding position we will keep looking at the stock price movement and forget the capability of the business / stock we are holding and in some point of time, we will exit the position much sooner with less money or might exit in lose.

If there is no plan on exit price and time given to the stock while buying it, we plan not to control our emotion. This will lead to uncontrolled mind and create unnecessary noise in our brain to make unwanted decisions.

Hope this blog gives you information on controlling our emotions in making money.

Have a Great Day
B G Nareshkumar

How to Improve the quality of your Sleep

In recent days we see many people face emotional, physical and psychological problems. Due to these, they get into high stress levels and depression. It is very important to overcome this to have a happy and healthy life. One of the solutions is to have good sleep.

A study says, people these days get into high stress and depression due to lack of sleep. People sleep less than 6 hours a day fall victim for this.

How to improve the quality of our sleep?

Follow the below 5 points sincerely for next few weeks to see the change in your way of thinking and productivity.

• Make sure your bedroom is pitch dark
• Avoid using electronic devices before sleep
• Relax your mind
• Avoid drinking too much water within 2 hours of going to bed
• Have an evening ritual - Fix your time of sleep

I believe this blog would bring some light to your lifestyle.

Have a Great Day

B G Nareshkumar

Control Your Expenses

Many of us focus more on earning money these days. The real secret to achieve financial freedom or to save more money for happy life is to reduce the expenses. A small control on our expenses can lead to a better living. If we need to spend Rs.1,000 today and if we are able to control that under Rs.800 and investing that in a better place will lead to a great heights financially in future.

In many businesses, promotors spend certain amount of money to reduce the tax. As we know the business can pay tax only on the income made after deducting the expenses. Many medium size companies does this to have a tax saving. I personally have a different view on this. Any business should reduce their expenses on whatever the concern it may be. Only by doing so, they can travel to the next level on their business.

When a person controls his/her expenses, it shows the disciple he/she has towards his/her personal finance. It also gives the better image on their future. As Dave Ramsey said in his famous book "The Total Money Makeover" - If you will live like no one else, Later you can live like no one else. 

These lines gives the indication on how one should control their expenses for the betterment of future well-being. Thiruvalluvar said in his 478 kural about controlling the expenses as below:

This means "Incomings may be scant; but yet, no failure there, if in expenditure you rightly learn to spare". No matter how big / small the income is, if one knows how to control his expenses. Else, even if it was a king, he will face the consequences.

How to control expenses and start saving and investing ? Is there a way ?

There is a way as said in the book "The Richest Man in Babylon". This would be tough initially but when practiced, it will make anyone richer than they wished for. What ever you earn as an income from any source, first step is to take 10% aside and start saving or investing it for the future. This can compound and make anyone richer in future.

I wish all the readers of this blog to take control of their expenses and invest in a better way to gain more wealth.

Have a Great Day

B G Nareshkumar

Personal Finance - Budgeting

Many of us are good at managing our finances but few have the habit of monitoring their personal finance through budget system. It is the reality to understand one can achieve financial freedom at the earliest by maintaining the budget process for daily finance. Now-a-days we have many apps and systems to maintain and monitor our budgeting system. This not only allow us to enter the income and expense and see the data, it allows us to plan for the future.

Once a person starts maintaining the budgeting process in their personal finance, he/she will notice the discipline in their spending nature and will ask themselves before spending or buying anything. Budgeting system allows them to keep their requirement and needs shorter as possible. By following this, the investment and saving process becomes very effective. When investing process becomes effective, the compounding plays its role to make them richer and financially free at the earliest.

Budget should be made for all expenses including loan repayment to daily expenses. Few can be Rent / Home Loan EMI, Car Loan EMI, Business / Personal Loan EMI, Groceries, Eating Out, Entertainment, Travel, Fuel Expenses, Shopping, Miscellaneous and so on.

When we have expenses maintained, the most important part is to include the income in our budgeting. Once we start maintaining the income source, we will push ourselves to have more stream of income. Few of the income sources can be Salary, Business Income, Capital Gains (it can be land, stocks or gold sale), Dividend Income, Income from Rent and so on.

Once we start maintaining the income and expenses part on a daily basis, we will automatically push ourself to control our personal finance. Later, this will lead to happier and controlled financial structure.

These days people use UPI payment process for most of the purchases. This easy way of payment process makes people to spend more. This can only be monitored and reduced through budgeting process. Our hard earned money should be kept in a place where it is not easily accessible to spend. UPI is a place where spending is easy. We can follow the below 3 ways to reduce or avoid over spending through UPI.

• It is better if we can avoid UPI payments wherever it is possible and use cash as payment mode

• We can keep a rule to ourself that we will use UPI payment only 2 times a day with a limit to payment

• We link the UPI payment gateway to a bank where we have limited amount maintained and restriction given to the particular bank on spending per day / month

I am not against the easy processing system on payments. However, this should not control us and push us to over spend. These days UPI payments can be done overseas as well. Hence one should be very careful on charges and spending.

Hope this helps the reader of the blog follow the budgeting process on their personal finance and enjoy the investing process and generate huge wealth.

Have a Great Day

B G Nareshkumar

Capital Gain, Tax & Pledge

When we are speaking about stock market and investing, we cannot forget the term capital gain & capital gain tax. There are 2 types of capital gains, Shot term and Long term. Short term capital gain is defined as profit generated by selling a stock or group of stocks which were held and sold with in a year. Whereas, Long term capital gain is stocks sold which were held over a year. The long term gains from equity above Rs. 1 lakh annually are taxed at 10% while short term gains are taxed at 15% as of July 2024.

I invest on selected stocks, which I feel would give great returns on long term. However, initially when I started my investing journey, I own few stocks and sold with in a year. These comes under short term capital gain tax of 15%. This was very huge and revisited my portfolio and spend time in identifying the quality stocks which I would keep at least for 10 years and invested on those. Buying and selling of stocks not only attract capital gain taxes, we should also consider brokerage, security transaction charges, exchange charges, GST and stamp duty. So, holding a stock more than 10 years would reduce our taxation and also increase the profit earned over time.

Let us keep aside this capital gain tax aside. When we hold a quality stock, we also has the option to pledge those and get the collateral margin to perform trading (this is advisable only when a person gets enough knowledge and practice with small money). This collateral margin received could be somewhere between 80% to 90% of the current value of the stock. So over time, when the stock price increases we will also get higher collateral money to trade on futures and options. This could give us some additional profit, if done carefully with patience.

So, this gives the clear understanding that when a quality stock was held for a longer period of time, it will give us higher capital gain / profit, it attracts lesser tax percentage on capital gain and enough margin to trade on futures and options. I would not recommend readers of this blog to do any trading on futures (as I don't believe one can make money in futures). However one can sell far "out of the money" option to gain some premium.

Hope this blog helps in understanding the concept of capital gains and taxes.

Have a Great Day

B G Nareshkumar