Krea SIAS Finance Club Talk hosted a virtual talk titled, 3 money hacks to build your wealth by Neil Borate, Deputy Editor and Head, Personal Finance, Mint on 12 November, 2024.
A seasoned financial journalist, Neil Borate currently leads the personal finance team at Mint, one of India’s leading business publications. With over ten years of experience in the finance industry, Neil has made significant contributions to financial literacy through his work with reputable platforms such as Value Research, RupeeIQ, and Paisabazaar. Specialising in mutual funds, insurance, and taxation, he has consistently provided insightful advice to help individuals navigate the complexities of personal finance. Neil’s dedication to empowering investors is evident in his co-authored book on the legendary investor Rakesh Jhunjhunwala, cementing his role as a thought leader.
Here are some key strategies Neil has shared for wealth building:
Hybrid Funds for Tax-Efficient Fixed Income
Hybrid funds combine equity and debt components, making them a versatile tool for investors seeking both growth and stability. Neil emphasised the importance of understanding their structure and optimising their use for tax efficiency.
Strategies:
- Understanding hybrid fund structures: Grasp the mechanics of equity-debt allocations in hybrid funds
- Tax implications: Learn how the equity and debt portions affect taxation, including the long-term capital gains (LTCG) tax benefits
- Optimising investments: Strategies to choose the right hybrid funds based on investment goals and tax advantages
- Real-world examples: Case studies that demonstrate successful tax-efficient hybrid fund strategies
The Swiss Army Knife strategy
This strategy is Neil’s approach to building a diversified portfolio that performs well in varied market conditions. It focuses on blending different asset classes, sectors and techniques to create a balanced, resilient investment portfolio.
Strategies:
- Asset allocation: Techniques to distribute investments across asset classes for stability
- Sector rotation: Tactics to shift investments between sectors based on market cycles
- Risk management: Using hedging strategies to minimise downside risks
- Portfolio rebalancing: Maintaining an optimal asset mix through periodic adjustments
Takeaways:
- The critical role of diversification in reducing risks and enhancing returns
- Identifying asset classes that provide balance and growth potential
- Crafting a resilient portfolio framework to withstand market volatility
- Real-world examples that highlight successful diversification strategies
Calculating Your FIRE Number
Financial Independence, Retire Early (FIRE) is a movement gaining traction among individuals aiming to achieve financial independence and retire at a younger age. Neil’s approach simplified the process of calculating your FIRE number and crafting a roadmap to reach it.
Strategies:
- Define goals: Identify what financial independence and retirement mean for you
- Assess requirements: Evaluate your current and future expenses and income needs
- Calculate your FIRE number: Use various methods to estimate the corpus needed to sustain your lifestyle post-retirement
- Develop strategies: Create actionable steps to achieve financial independence
Takeaways:
- A deep understanding of the FIRE movement and its principles
- Personalised approaches to determine your FIRE number based on unique financial goals
- Comprehensive financial planning to align current resources with long-term aspirations
- Tips to overcome common challenges in the journey toward financial independence
A report by Dhruvi Dombe, Integrated MBA Cohort of 2028, IFMR GSB
