M. Pattabiraman's Blog, page 5
July 30, 2025
Low Tracking Error Doesn’t Guarantee Index Fund Return Matches Benchmark Return
There is a misconception, even among experts, that a low tracking error for a passive fund (index fund or ETF) implies the fund’s returns closely match the benchmark. This is not true. What is a tracking difference? This is the fund return minus the benchmark total return over a period. This will typically be a...
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July 29, 2025
How investments gave me the confidence to return to Bharat
Last Updated on July 30, 2025 at 8:12 am In July 2023, we shared an interesting reader story about Shankar (not his real name), who had been burdened with debt for several years. He is now debt-free and rapidly building his equity portfolio. This was quite a different journey compared to an earlier story: My...
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July 28, 2025
The hidden risk of early retirement
Financial Independence, Retire Early has revolutionised the way a generation approaches work and finances. But as more parents achieve financial freedom in their 30s and 40s, a troubling question emerges: What happens to our children when they grow up watching us live without traditional financial stress? This isn’t about leaving kids financially unprepared. It’s about...
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July 27, 2025
How can I plan if my goal deadlines are after retirement?
Typically, retirement is the last and most important financial goal for most families. Before retirement, the kids would have started working and sometimes married too. However, this dynamic is fast-shifting because normal retirement is no longer at 60. It is now 50- 55. Additionally, more and more people are getting married and becoming parents late....
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July 26, 2025
How much do I need to retire in 2025?
We determine the corpus needed for a 50-year-old to retire immediately if monthly expenses are Rs. 1,00,000?” Let us compute this using the freefincal robo advisor tool. This provides an accurate estimate compared to approximate calculations using spreadsheet formulae. The robo tool can also include three post-retirement income streams. It also offers suggestions on how...
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July 25, 2025
How should I invest my retirement corpus of Rs. 5 Crores
A reader wants to know how to invest a retirement corpus of Rs 5 Crores. Age: 55; wife’s age 56; Annual expenses are about Rs. 8.4 Lakhs. This includes health insurance costs. This corresponds to an initial withdrawal rate of less than 2% (8.4L divided by 500L). So a comfortable retirement can be safely planned....
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July 24, 2025
My Stock Portfolio Analysis: July 2025
This article compares my stock portfolio with an equivalent investment in a Nifty index fund and the Nifty 100 Low Volatility 30 TR index. We post this comparison each month. Before we begin, it is essential for new readers to understand the context of these investments. Update: We recently added a new tool to the...
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July 23, 2025
Ignore the 4% withdrawal rule for retirement planning and do this instead
The 4% withdrawal rule for retirement planning assumes excessive equity allocation (50-75%), which makes it impractical. To make this worse, the 4% rule is often misunderstood and misapplied, so it is not a useful tool for retirement planning for most people. Here is an alternative idea. What is a safe withdrawal rate? The safe withdrawal...
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July 22, 2025
Review: SEBI’s Draft Circular on Revised MF Categorization Rules
In this article, SEBI RIA Abhishek Kumar reviews SEBI’s Draft Circular on Revised MF Categorisation Rules. About the author: Abhishek is part of a freefincal’s curated list of fee-only financial advisors and a fee-only India member. He can be contacted via his website, sahajmoney.com. If 8 out of 10 stocks in your funds are the same, are you diversified or...
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July 21, 2025
What is the formula to determine the corpus from a Step-up SIP?
Last year, when we published the Unified Pension Scheme vs National Pension Scheme Calculator, many readers were surprised that we used a single formula to determine future NPS corpus by treating it as a step-up SIP. Since then, several users of that tool have asked us to explain the formula. So here are the details....
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