Money and Financial Business

Financial experts tell us: “Withdraw no more than four percent of savings a year; allocate investments in a balanced mix of stocks and bonds, etc." This advice, while good, is generic –- and does not take into account the many peculiarities of my financial situation. Rather, as a cautious, semi-retired ...

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This graph is Fidelity's projection for my annual income and expenses. My comments follow the graph. [View first post in this series.] My annual income / expenses

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With my total outlay projected to grow to an eye popping $319,970 / year, how well does Fidelity think my current retirement plan will weather the test of time? To come up with the results below, Fidelity's retirement program ran my current financial plan through "at least 250 historical market ...

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I also wanted to know how much more I could "safely" spend. So I played with expenses to determine what point I become exposed to a 10% chance of running out of money at age 92. The results below assume expenses begin at $6,444 / month*. My comments follow the ...

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While my current plan and asset allocation are on solid ground, I wondered what will happen as I continue to increase the allocation to equities in my portfolio (which I am doing via dollar cost averaging). So in this test, I compare my current asset allocation with Fidelity's recommendation ...

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I have been noticing this interesting trend on cost of labour in India. I am not referring to the usual information technology cost of labor arbitrage that is now a norm for any IT organization. I am talking about regular labour costs for administrator / janitorial labour. Let me illustrate with an example, we bought a car about a year ago and we are paying a monthly outgo of Rs 5000.00 for the car. During that time we hired a driver for the car and we paid him Rs 3500 per month. That in itself represents about 70% of the cost of the car. Well that was the going rate for drivers at that time. A year passes and its time for a raise and we end up paying him Rs 4000 Per month now. This is now 80% of the cost of the car. At this rate, we will be paying him the cost of the car in two years from now plus other additional 'bata' that we pay him for over time.

This came as a revelation to me since I have seen the cost of labour being extremely high in developed nations leading to economic models where buying a new product is cheaper than getting an existing one fixed due to the cost of labour required to fix it. It looks like we are also moving in the same direction. How would the middle class indian society adopt to this kind of change? I am not sure. Maybe they will become more self reliant and move away from the hired help model? That I am afraid would actually reduce the number of available job opportunity which could mean a bad thing.

Whatever be our evolution path, I think that labour costs are going to raise to very high levels in the future and we need to learn to cope with it in new ways than what we have done before. Maybe the world of kaamvalis will be gone for good.

This post lists the reasons behind my choice of ship, along with detailed cost. Let me start by saying that my wife and I are pretty frugal in most aspects of our lives: We don’t have cell phones or premium cable, and my wife is a fanatic for clipping coupons ...

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Based on responses to my earlier posts, it's clear many readers feel strongly about their index funds, as I do my managed funds. These comments demonstrated depth of knowledge -- and shall I say -- no shortage of enthusiasm :) While I am generally pleased with my current investment plan ...

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Recently Morningstar published an article titled "Model Portfolios for Retirees." The article presents five asset allocation options, ranging from preservation to aggressive...

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The chart below shows 1, 3, 5 and 10 year returns for: - Morningstar's Balanced Portfolio - Morningstar’s Growth Portfolio - Dodge & Cox Balanced

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In Step 1, I selected Morningstar's Growth Portfolio for retirees. Now it's time to choose the funds...

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Is D&C Balanced a fluke, or have other funds demonstrated similar consistency of performance? Using Morningstar’s fund screener, I went looking for funds with characteristics and performance similar to my D&C Balanced...

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Plan to retire early? Have you figured out how you’ll maintain medical coverage until reaching Medicare at age 65? If the answer is no, this post may interest you...

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Thanks to everyone who has already contributed to the index fund debate. I believe many readers, myself included, are benefiting from your comments. Pro-indexers are building a good case for indexing long-term investments -- but what do you recommend for someone facing retirement, with a need to live off their ...

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Today the index fund debate continues with two posts: One clearly pro-index -- and this from Fidelity Observer -- asking pro-indexers for their response to new factors that make managed funds more compelling. Any takers?

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Today the index fund debate continues with two posts: One posing new questions for pro-indexers -- and this -- featuring the writings of John C. Bogle of Vanguard fame. If, like me, you invest in actively managed funds and have not yet studied Mr. Bogle's findings, you owe it to ...

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Over time, are all actively managed funds a loser's game? Are investments in index funds -- like the S&P 500 -- really as smart as pundits lead us to believe? Answers to these questions impact my pocketbook. And after viewing reader's thoughtful comments to my original posts on this topic ...

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Several readers posted comments to my recent: Why I no longer own an S&P 500 index fund. Most comments pointed to the benefits of index funds and asset allocation. And a number of comments challenged the thinking behind my preference for actively managed funds. At risk of sounding like Tom ...

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I read this post on Being Poor yesterday and I wanted to share it. It's an emotional reminder that some people don't have the luxury of putting away that extra dollar a day. Frugality is not a lifestyle choice --...

A review of The Millionaire Next Door Long after I started getting responsible with my finances, I thought that in order to achieve real wealth, I needed to earn an extraordinary amount of money. At a certain level, that's true....

In the latter half of the '90s I had an S&P 500 index fund, which I exited as the market went south. This post lists the rationale behind my decision to -- at least for now -- avoid S&P 500 index funds. Note: The S&P 500 index represents approximately 70 ...

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The news the last week has focused on the disaster left in Hurricane Katrina’s wake.  While we may be safe from hurricanes in Minnesota, there are many small, personal disasters that happen each year to individuals and families here and around the country.If you are able to, please donate to one of the many charities working to help the victims on Katrina.  While you are making that donation, please do not forget the charities that help our fellow Minnesotans.  While they may not get the headlines, they need help too.

In our household, my wife has taken the leadership role in terms of providing relief to hurricane victims. Here are a few things she’s doing I thought worth sharing: - We are donating used clothing and personal items to a local church that will transport them to victims. - Today ...

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As I was getting out of debt and began to accumulate some money that I actually wanted to save, I came across some banks advertising their APR (annual percentage rate), and some their APY (annual percentage yield). Not having a...

The suffering caused by disasters like Hurricane Katrina have an ironic way of bringing out the good in people. It reminds us that we're all in this world together. If you want to help, there are charities that have organized...