Frequently Asked Questions About
Personal Finance.

Most frequent questions and answers

A. Financial planning is nothing but managing present and future cashflow.

A. It helps you to get the ‘diagnostic’ report of your financial health as of now as well as of future (based on certain assumptions).

A. Asset allocation is nothing but diversifying your investment into different asset classes which have little or no correlation between them.

A. It can help you to get somewhat steady return throughout.

A. Risk management can help you or your nominee to face a risk financially without burning a hole in the pocket.

A. I have no authority or expertise to comment on that. I can only share my experience here.

Children can be grouped as per their age, and accordingly types of money lessons that they can be taught, can be decided.

Below the age of 10 years , not much effort need to be taken. Let them only observe us and the surroundings. We must remember that practicing good money habits by us is going to be far more effective for our children than preaching the same to them.

Within 10 to 15 years , we can start taking effort to teach them at least 3 important lessons – (1) money has to be ‘earned’ (2) It’s a limited resource, if not handled carefully we’ll have nothing to spend (3) how banks work as well as the basic knowledge of loan, credit card, tax, inflation and insurance.

Above 15 years , children can be taught the following – (1) how money can grow through savings and investments, the power of compounding, time value of money etc. (2) how businesses work, how it affects us all and where do businesses get funding from (3) how bonds and deposits work, how interest rate get affected, credit quality of bond issuers etc.