Real-Life Finance Case Study: ₹1.5L Salary, Family Costs & FIRE Plan
Published: 2025-04-17
Status:
Available
|
Analyzed
Published: 2025-04-17
Status:
Available
|
Analyzed
Predictions from this Video
Incorrect: 8
Prediction
Topic
Status
The speaker predicts the individual will have 1.5 crore rupees for retirement by age 35.
"by the age of 35, you will probably have a cr 1 and a half crores for your own retirement."
Pending
The individual's retirement savings target is 1.5 crore rupees by age 35.
"by the age of 35, you will probably have a cr 1 and a half crores for your own retirement."
Pending
The individual plans to retire in their native place due to lower expenses.
"Because I wanted to move back to my native so their expenses will be very low for me."
Pending
The individual hopes to become a 'karodpati' (millionaire) within the next five years.
"next five year I'm hoping for it. Yes sir. You'll become a karoti"
Pending
The real estate investment doubled in value within six years.
"This real estate investment seems like it was a good investment. You've doubled your money in how many years? I think almost six years now. Yeah. Six years."
Pending
The calculated emergency fund requirement is 6 lakhs, exceeding the individual's initial estimation of 3.5 lakhs.
"your emergency fund should be six lakhs but you've said you only need three and a half lakhs which is not correct"
Unrated
The individual's initial retirement savings goal is 1.5 crore rupees.
"and then 1 and a half crores for your own retirement. How do you calculate this one and a half cr?"
Pending
The individual plans to work for 13 more years and then retire in Bihar.
"You plan is you will work for 13 more years and then retire and go back to Bihar."
Pending
It is recommended to aim for 50% higher than the initial retirement target of 1.5 crore.
"mathematically if your number turns out to be 1 cr 50 I would suggest you aim for 50% higher"
Pending
The retirement savings target is revised to 2.25 crore rupees.
"going back to this Okay so let's make this 2.25 25 crores then"
Pending
The individual is overly diversified with 42 stocks, making them difficult to track and manage.
"You are extremely overly diversified. 42 stocks I don't know how do you really track and manage."
Correct
The individual has 23 mutual funds, which is considered excessive. The purpose of mutual funds is to select from a vast number of stocks.
"you've got 23 funds. 23 mutual funds. I don't know and I keep telling a lot of people the reason why you invest in a mutual fund is because there are 5,000 stocks listed."
Pending
Investing in 750-1000 stocks through 23 mutual funds will prevent the individual from achieving good investment results due to over-diversification.
"If you're going to stay invested in 7 750 or 1,000 stocks through the 23 stock uh 23 mutual funds that you've invested in, you are never going to be able to do a good job."
Incorrect
The individual should reduce their mutual fund holdings to only four or five funds.
"Seriously need to come down on your uh mutual fund holding to as low as only four or five funds. That's it."
Pending
A recommended equity allocation is 33% large-cap, 33% mid-cap, and 33% small-cap.
"I am somebody who believes that you should have 33% large cap, 33% midcap, 33% small cap."
Pending
Certain factor funds, including a Nifty 100 Quality 30 fund, have underperformed the Nifty, falling 18% and 21% respectively.
"one of the factor funds has fallen 18%. Nifty 100, quality 30, huh, is down 21%."
Incorrect
Index funds are considered momentum funds, and factor funds are theme-specific requiring careful timing based on market conditions.
"These are themes. Index in itself is a theme. In my opinion, index is a momentum fund, right?"
Incorrect
Midcap index funds are considered expensive, suggesting that actively managed midcap funds might be more effective at finding undervalued stocks.
"The problem in midcap investing is that you will always have expensive index in the midcap space."
Pending
Actively managed funds are predicted to perform better than index funds during market downturns.
"Whenever markets fall whenever markets fall an active fund will definitely do much better than than an index fund."
Incorrect
Index funds are expected to perform slightly better than actively managed funds during market upturns.
"when the markets are going up right you will typically see an index do slightly better than the actively managed funds."
Correct
With a projected savings of 6 crore rupees, there is an opportunity to save for children's education and marriage.
"you have 6 crores. So let's do one things because you can save 6 crores we can actually save up some money for your kids education and kids marriage."
Pending
After allocating funds for retirement, there are 10,000 rupees left, and the projected need for children's education in 20 years is 2.3 crore rupees.
"So now you have still 10,000 rupees left. Now let's understand for your kids's education you need 2.3 cr 20 years later."
Pending
A recommended monthly investment allocation is ₹47,600 to the Indian market, ₹6,800 to US equity, ₹6,800 to FDs/bonds, and ₹6,800 to gold.
"you need to follow this 47,600 rupees per month going to Indian market 6,800 rupees per month to US equity 6,800 rupees per month to FD and bonds and 6,800 rupees per month to gold."
Pending
The ideal asset allocation is projected to be 64% in the Indian market, 10% in the US market, 18% in FDs/bonds, and 9% in gold.
"you need to have 64% in Indian market, almost 10% in the US market, 18% in FD or bonds and 9% in gold."
Pending
The ideal number of individual stocks to manage is between 8 to 10, significantly less than the current holding of 42.
"42 stocks I don't know how do you really track and manage 42 ideal number is not more than 8 to 10"
Pending
Holding 750-1000 stocks through 23 mutual funds will lead to poor investment performance.
"If you're going to stay invested in 7 750 or 1,000 stocks through the 23 stock uh 23 mutual funds that you've invested in, you are never going to be able to do a good job."
Correct
The number of mutual funds should be reduced to four or five.
"Seriously need to come down on your uh mutual fund holding to as low as only four or five funds. That's it."
Incorrect
A balanced mutual fund allocation involves 33% in large-cap (flexi-cap), 33% in mid-cap, and 33% in small-cap funds.
"33% large cap, 33% midcap, 33% small cap."
Incorrect
A comparison shows that NPS might yield 55 lakh rupees at retirement, while mutual funds could yield 85 lakh rupees.
"NPS ended up giving you only 55 lakh rupees at the age of retirement versus a mutual fund a well you know invested mutual fund corpus uh has given you 85 lakh rupees"
Pending
Even after taxes, mutual funds could result in 73 lakh rupees, whereas NPS might leave 54 lakh rupees, with a portion being taxable.
"Even after paying taxes you are having 73 lakh rupees but in the case of NPS you have 54 lakh rupees out of which only 32 lakhs is taxfree the 21 lakh rupees you will have to pay tax"
Unrated
NPS investments are capped at a maximum of 75% in equity.
"at no point in time you are allowed to invest more than 75% in equity"
Correct
Investments in NPS are unlikely to achieve index-level returns due to the equity limit.
"on your 100 rupees of investment, you will never be able to make index kind of returns always understand this"
Correct
NPS primarily invests in large-cap stocks, limiting exposure to faster-growing mid-cap companies.
"NPS majorly invest in large cap mutual funds or large cap stocks. So you will not get a lot of exposure in midcap companies"
Incorrect
If salary increases by 7%, it translates to a significant income rise, while a 7% SIP step-up might only be ₹3,500, indicating a potential to increase savings more than 7% if expenses don't rise proportionally.
"If you can increase your salary by 7% let's say so 1 lakh 50,000 becomes like how much one it increases by almost 78,000 right but if you are saying that your savings will also increase by only 7% that is just 3 and a half,000 potential is to increase by 7,000"
Correct
If expenses do not increase at the same rate as income, there is significant scope to increase SIP investments.
"if my expenses don't go up at the same pace, I have a huge scope to increase my SIP."
Pending
A 7% salary increase on ₹1.5 lakh results in a substantial income boost, while a 7% SIP increase is much smaller, indicating a substantial opportunity to increase savings beyond 7% if expenses remain stable.
"if you can increase your salary by 7% let's say so 1 lakh 50,000 becomes like how much one it increases by almost 78,000 right but if you are saying that your savings will also increase by only 7% that is just 3 and a half,000 potential is to increase by 7,000"
Correct
Working for an additional five years could potentially lead to accumulating 6 crore rupees.
"Then increase it by five more years. Work for five more years because then it becomes very easy because if I do that then boom you have 6 crores."
Pending
Tax should not be a barrier to exiting underperforming investments; it's merely a delay of the inevitable tax payment.
"So please don't consider tax as a problem to get out of an investment where you've understood that you've made a mistake. tax to anyway you will have to pay at the end of the day whether you want it or not you're just delaying the tax"
Pending
Midcap index funds tend to be expensive, suggesting that actively managed funds might be better for finding undervalued midcap stocks.
"The problem in midcap investing is that you will always have expensive index in the midcap space."
Correct
Actively managed midcap funds are expected to outperform index funds during market downturns.
"Whenever markets fall whenever markets fall an active fund will definitely do much better than than an index fund."
Incorrect
Index funds are likely to perform slightly better than actively managed midcap funds during market upturns.
"when the markets are going up right you will typically see an index do slightly better than the actively managed funds."
Pending