#Inspiring 🧵 on #personalfinance and how to manage finances - this is a story of my house help @sheroes who has been working in Bombay for the past 20+ years raised two kids.
1 - Created passive income wealth generating assets - 6 small houses - of which she stays in one and 1/
Rents the other 5 - generating rental income ( which is 4 times her monthly outflow of expenses)
2 - How was this created - worked as house-help and invested significant monies in chit funds - when asked isn’t this risky - it was earlier when she was investing in others funds 2/
Now she runs the Chit fund ( BC as she calls it) wherein all participants are of her circle of trust (credit risk managed). She draws the first chit - so makes most returns.
3 - my next q was where is this drawdown invested - immediate response is in known circles @ monthly 3/
Interest of 5% per month - I commented - higher the % higher the risk - what if the guy doesn’t pay the principle - she retorts - she lends only to someone who owns property - and retains property paper as collateral -with a promissory note in writing signed ( mortgage backed) 4/
4 - Earlier drawdowns from chits was drawn to create properties from which she is generating passive income - when monthly payouts towards drawdowns were getting out of hand - she did house help work during the day and worked in TCS as a Janitor - for 2 years 5/
In the night shift to augment earnings
5 - Now passive income in terms of rentals and interest from chit funds are in the range of 5 times monthly expenses.
6 - she is currently working as a house help to keep herself occupied ( we are one of the blessed families) 6/
6- I asked her is all her money invested around in chits etc - or does she also keep any cash in hand. She retains 5 to 6 months either in cash or bank accounts as liquidity (emergency fund).
7- she wants to take an insurance for herself - and I explained the concept of 7/
Term insurance - not LIC, she was fascinated about it
8. Asked her about her dreams -she is passionate about learning to drive an auto rickshaw as she is fascinated with it -that’s her next in her to do.
9-Elder son has just started a job -she ensured that first year earning 8/
Of 1.2L is fully saved and banked for whenever he wants to get married -

Take a bow lady ( told her I am writing about this - not taking her name per her request) So so proud !
@LarissaFernand @VidyaG88 @Sairee
Pls do read and share !!!

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More from @iam_balaji

25 Mar 21
#personalfinance #Debt #Realestate Thread on my experiences with real estate as a primary home and investment -
Always dreamt of living in a bigger house as I had spent the better part of my life till My late twenties in a 250 sq ft rented house in mumbai
Bought my 1st house in 2001 a 3 bed apartment 1395 in a good locality in Hiranandani - in Thane - with the power of leverage - got 100% of property value + stamp duty + registration and insurance term cover for loan amount fully funded by HDFC - did not have to invest a pie 2/
Power of a branded property to get this level of leverage - and also loan to CTC at that point was 500% - but did not seem risky as asset backed the liability (cant say the same in today’s times) Got possession in 2006 and moved in ( got married too a year prior) - 3/
Read 14 tweets
30 Sep 20
#personalfinance #debt #fingeekid Just wanted to share my thoughts on debt consolidation and how if managed effectively it can reduce the overall interest outflows.
When an individual has a couple of debts which is being serviced through multiple EMI’s, it's always advisable 1/14
to explore options to consolidate debt. This is possible mainly when one has taken a housing loan and has serviced a couple of years of debt or that the property has appreciated from the time it was acquired. 2/14
This is explained in the example below: Value of Property Purchased say is 1 Cr – Loan to Value is say 80% and 80L, a 20 Year EMI @ a Floating interest Rate of say 9% is 71,948, In addition to this this individual has a Personal loan of 6L and a Second-hand car loan of 3/14
Read 14 tweets
23 Sep 20
#personalfinance how to spend unexpected income #fingeekid Image
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11 Sep 20
#personalfinance #investing #fingeekid Impact of investing in different scenarios - Njce infographic series
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31 Jul 20
#personalfinance #investing #DebtFree - Thread on common personal finance mistakes which most of us could be privy to. @AdityaD_Shah @dmuthuk @invest_mutual @RichifyMeClub @Longterm_wealth Wanted to share my experience and corrective action taken. I had invested in a second
property as a pure investment (not to stay in) - with around 65% of the value being funded by a housing loan. I had loan equivalent amount invested in direct equities, and was convincing myself all along that as long as the returns on equity are higher than the interest rates on
housing loan, I had an arbitrage and hence continued paying EMI's ( another mistake in the bargain being - increasing the cost of acquisition of an asset class which was already giving negative returns). March'20 happened and 25% of my equity portfolio was wiped out - and I
Read 8 tweets
22 May 20
#personalfinance - Impact of covid on personal expenses. Defition of needs have surely changed - wanted to quote a few of my experiences - while the norm would have to be that it would be life with real basics - but outflows for basic groceries have drastically increased -
Maybe 1.5 to 2x times of normal expenditure. Stay in an building which has 100+ flats - have various sourcing groups r formed where we are sourcing everything from veggies to n varieties of fruits (not sure in normal scenarios sour fruits consumption would have been so high)
While initial groceries cost would have been on account of a stocking impact coz of potential unavailability - but replenishing seems to be happening at the same pace - the very mode of sourcing I guess post covid is going to change - with singinficant players in the supply
Read 6 tweets

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