My cash flows and investment plans in 2019

The start of a new year is always full of excitement and hope. There are new opportunities to explore and you hope for a lot of significant events to take place in the year, irrespective of what may ha e happened in the earlier one. In my previous posts I had outlined how 2018 was a fairly poor one both for my own active income generation as well as for the markets. In this post let me talk about my plans for 2019.

One must always start with the cash flow outlook for the year. Fortunately, with both my children becoming financially independent of me now, courtesy their careers, my major head of cash outflow is gone now. Currently their college education fees are all done and even though Ronju may get into a B school sometime in the future, we can always look at it through Education loans. On the flip side our expenses on travel are ever increasing due to the number of trips as well as the way we travel. Last year we had 2 vacations outside India, 2 full vacations in India as well as several shorter trips for leisure or family issues. 2019 looks similar as we already have a planned visit to Phuket in March. Our children are fortunately staying with us now though that may change through the middle of the year. Based on all these I am looking at cash outflow in these terms :-

  • Regular household expenditure likely to be in the range of 6 lacs
  • Travel expenses can be estimated at 3.5 lacs to be on the safe side.
  • Family support will be in the region of 2 lacs.
  • Rent for our Hyderabad apartment is around 3.5 lacs.
  • So overall cash flows required will be in the range of 15 lacs

Against these the cash inflows I am expecting in 2019 are as follows :-

  • Interest from Tax free bonds, InvIT funds and POMIS will be about 4 lacs
  • Dividends from Stocks and Equity MF schemes will be about 4 lacs
  • Capital gains from FMP redemption will be about 3 lacs
  • Rental income from our Chennai apartment  will be about 3.6 lacs
  • Income from Debt funds and stock trading will be about 1 lac

The above looks good but what if the markets continue to do badly and the dividends dry up? Well, as a backup plan I have the PPF accounts of both me and my wife. At present it earns about 5 lacs in interest per year and I can dip into it if needed. Another way could be to redeem some of my Debt MF schemes, to the extent I need the money. A final option will be to sell some stock that is doing really well but I do not feel this will be needed.

What about investments then? Well, in my present stage of life I am not looking at too much investment obviously. Even then, I had started a secondary stock portfolio in 2018 and have invested about 7 lacs in it so far. My idea is to let this portfolio grow and also do selective trading in it, something I have wanted to do for a long time. I do not want to do this on my primary stock portfolio where the plan is to have it for the really long term. Based on all of these the new investments I plan to do in 2019 are as follows :-

  • 3 lacs in the two PPF accounts that we have.
  • Put all FMP redemption money in Hybrid funds – this will be about 10 lacs in the year 2019. Part of this may also be used in my secondary stock portfolio.
  • Build the Secondary stock portfolio to at least 10 lacs by putting in a minimum of 3 lacs in this year.
  • Look at any interesting NFO themes as they become available.
  • Keep adding to my Primary stock portfolio based on available money.

Where will the money for this come from? Well, what ever income I have from my Consultancy services will all be invested in above avenues as my passive income is adequate to take care of my cash flow needs.

So things look rather good right now, hoping that the markets will recover this year !!

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2018 in perspective – life and finances

What with one thing and another, I have not written any blog post for quite a while now. At such times, when I feel lazy to pen down something, it is invariably the responses from the readers that gets me going again. Human ego is an amazing thing and just the feeling there are enough people to read your post is itself quite gratifying in many ways!!

2018 has been a very interesting year and I was looking at it in different perspectives in the last week. As I have written in several of my blog posts, one must look at life events and lifestyle choices in a holistic manner and plan for them – finance is a way to support these events and choices, so it necessarily plays a supporting role and not a determining one. In simpler words, availability of money and investing for the same is important but the key issue is what you are needing it for. It is this need for money that is unique to each individual, yet we often disregard this fundamental aspect. Viewed in this context, it makes sense to review the major life situations first and then look at the finances next.

To begin with, professionally the year was not really a very satisfying one for me. I had begun an assignment with an SME company under certain understanding but the owner of the company did not stick to his part of the deal. While I am sure these things happen from time to time, it was a first for me and to that extent a disappointing experience. A good learning will be to choose engagements more carefully next year. In terms of the venture idea I have been toying with, I did manage to get some ideas formulated and it is in a good spot to move ahead now, lot to be done next year. Overall though, both in terms of the activities and active income generation the year was not as good as I had hoped it would be.

On the personal front however, a lot of good things happened in 2018 and it was probably one of the best years for our family. At our stage in life a lot gets defined by how well the children are doing and this year both of them have excelled in their careers. My daughter Rinki completed her MBA from XLRI and has joined a company of her choice, where she is doing rather well. My son Ronju is in his last internship as part of his course work in BITS and he has already got a job offer. In effect, both of them are financially independent and do not need my financial support any longer. As a family, we were also staying together after a long time as both my children worked in Hyderabad for the past few months. 

Travel has been a constant theme for both Lipi and me, this year was no different. We started off with a trip to Khajuraho in February, went to Goa for a week in March with our children, visited Purulia in West Bengal for two short trips, had a family vacation to Bali in May, celebrated our silver anniversary with a Mauritius trip in September and wound up the year with an absolutely delightful trip to MP in December. As you can well imagine, all of this were rather expensive and my travel budget shot through the roof. Be that as it may, all the travel was great fun and I will do it again if I get half the chance !!

On that note, let me transition to my finances for the year. Despite my relative shortfall in active income, the cushion I had with my passive income was good enough for all my expenditure. The bulk of my cash inflows came from the below sources :-

  • Interest from Tax free bonds, InvIT funds and POMIS.
  • Dividends from Stocks and Equity Mutual funds.
  • Capital Gains made through maturity of FMP schemes.
  • Maturity proceeds of an LIC policy.
  • Rental income from my Chennai apartment.

Of course, there were other passive income such as from PPF and Debt funds but I have just let them grow as usual. Unless absolutely needed I do not want to utilize any of these for the next decade or so. For this year my passive income from part of my portfolio was enough to take care of my expenses with enhanced travel and even let me do some new investments in a secondary portfolio of stocks.

So far so good then, but what about the 2019 plans and beyond? Well, let me write about it in my next post.

Financial independence or retirement – A template

I have been asked by many readers as to how they should be organizing their money in retirement so as to get a regular income that stands the test of inflation over a long period. In recent times I am also asked the same question by people who want to be financially independent at an earlier age and are keen to set up a passive income stream that will last their lifetime. The interesting aspect to be noted here is that the solutions are pretty much the same, though the amount of corpus will necessarily differ.

Let me explain this a little. The whole idea of retirement, early or at 55/60 years, is to get some cash inflow from the money you have invested in different financial instruments or in other assets such as a house etc. This cash inflow should be able to take care of the cash outflows that your aspired lifestyle requires. Assuming that most people retire at 60 and can expect to live till 85 in today’s context, their corpus needs to last them 25 years. Now if you decided to take an early retirement at 45 then your corpus will need to last you 40 years. The key to this is also whether you are earning any active income in early retirement. For example, many of us earn some income through consultancy or other means and this will help. However, for the purpose of this post, let us assume that a person takes an early retirement at 45 and expects to live till 85.

At a very basic level you need to understand the following calculation:-

  • Assume an expense of 10 lacs per year at present without accommodation and any children related expenses.
  • For a period of 40 years assume zero real rate of return – this means your corpus invested in various instruments will grow at the same rate as inflation.
  • With the above assumption in place the required corpus is simply a producr of your annual expenses and the number of years. In this particular instance it will be equal to 10 lacs x 40 or 4 crores.
  • So if you are 45 years old and have an amount more than 4 crores and are unlikely to spend more than 10 lacs annually, you can take an early retirement.

What if you do not have this amount but are still interested in retiring earlier than the normal age anyway? Well, there are a few alternatives you can consider in the above example that we are dealing with :-

  • If you work for another 5 years the amount of money needed annually will grow to 13.38 lacs due to 6 % inflation and the amount needed will be 4.68 crores for 35 years. This may sound fantastic but is true – reason is your money is growing for less years and your expenses have increased.
  • Take this futher to 10 years working. Now your expenses annually will be 17.91 lacs and corpus needed for 30 years is 5.37 crores.
  • Before you are worried with these figures let me also give you the good news. Suppose you are 45 and had a current portfolio of 3.2 crores. Now you cannot retire at 45 but decide to work 5 years more. At 10 % growth in 5 years your portfolio value will be 5.15 crores.
  • With a time period of 10 years the portfolio will amount to 8.3 crores.
  • Bottom line is you can retire quite peacefully in either 5 years or 10 years.
  • Apart from working longer there are two more strategies you can look at – one is to believe that your expenses will reduce when you retire. In my experience this is rather tough to achieve and therefore you should ideally not aim for this.
  • The final one is to generate a real rate of return for your portfolio. This will ensure you need a corpus less than 4 crores to begin with. If you deploy your money well, this should be quite possible to achieve.

Let us take the limiting condition where you do have 4 crores and need to deploy it in a fashion so as to last for 40 years. For the sake of simnplicity I will assume that expenses double on an average every decade. In effect you spend 20 lacs per year in decade 2 etc. In such a situation how should you deploy your money? But before we get there let us see the cash outflows and strategy of withdrawal.

  • You need 1 crore in the first decade – this should be largely from interest from PPF/VVY/SCSS  or capital gains from debt funds.
  • Your 2 crores in the second decade should largely be funded by redeeming your Debt investments.
  • Your 4 crores in decade 3 will be mostly through SWP from Mutual funds.
  • Your 8 crores in the final decade will be through redeeming both MF and stocks.

Finally let us talk of the allocation now :-

  • 60 lacs for you and your spouse in VVY and SCSS, 40 lacs in PPF.
  • 1 crore in Debt funds so that you get returns of roughly 8 lacs a year.
  • With the above 2 crores your first decade cash flows are assured.
  • In the second decade you can redeem the debt investments and still have enough surplus to take care of some indulgences.
  • Out of the original 4 crores, put 1.5 crores in equity MF and 50 lacs in Blue chip stocks which are likely to give stable returns.
  • Your MF portfolio will grow to 10 crores in 20 years even at 10 % returns.
  • Spend 4 crores out of this in decade 3 and let the rest be invested.
  • In decade 4 you will have much more than 8 crores in MF itself.
  • Your stocks are really a bonus – leave it as your legacy by donating it to worthy causes.

So when do you want to retire and will you have enough when you do? I think this post has provided a good template for this. Apply it to your own situation and see how it wotks out for you.

Taking stock of my FI state

Many of you who follow the blog will have an idea about my journey in life so far, but let me summarize for new readers. I was born and brought up in Durgapur ( West Bengal ), studied in St Xavier’s school, Jadavpur university and IIM Calcutta, worked till 2014 end in corporate world with 14 years plus at CXO level. Since then I am working in my own Management Consulting practice. I have 2 children who are doing Post graduation ( Rinki is in XLRI and is an Engineer from BITS Hyderabad) and Graduation ( Ronju is doing a dual course in BITS Goa). I have been financially independent since 2014 and thought it would be a good idea to share the stock taking which I did recently.

The interesting fact is that the last four calendar years 2014 through 2017 have been progressively the most expensive years of my life. This flies in the face of conventional wisdom which will tell you to be conservative on spending when you are no longer doing a regular job etc. When I took the plunge in 2014 end, my thinking was as below:-

  • My total expenses in 2014 was equivalent to 200 units in some scale.
  • If I left out children’s college education, the travel to Australia which we went for in October 2014 and my apartment rent in Hyderabad then the expenses would be equivalent to 100 units.
  • Now, my rent was getting covered by the rent of my Chennai apartment, I had a separate fund for my children’s graduation expenses and we would obviously not go for an Australian vacation every year.
  • Based on this it seemed reasonable that my expenses annually would be in the range of 100 units.
  • As my financial assets would generate more passive income than 100 units, I concluded I had achieved the holy grail of financial independence.

At the end of 2015, I was surprised to see that my overall expenses were in the range of 225 units. A closer examination revealed the following :-

  • Education expenses were higher as I had to pay two semester fees for my son instead of the one in 2014.
  • Expenses otherwise on my children were high, courtesy their being typical college students now. Also, Rinki took up a course for her MBA entrance preparations.
  • However, my other expenses were still below 100 units and this was managed easily through my passive income stream.
  • It thus seemed that my assumptions held true for 2015.

2016 was a completely different story though. My overall expenses shot up to 400 units and change. Analysis of this figure showed up the following:-

  • Educational expenses were very high in the year as Rinki got into XLRI and, after a long deliberation, I decided to fund her first year expenses. We could have taken a loan for the entire expenses but this seemed a better idea for us.
  • Other expenses of children continued to grow. I am fine with their having a good time in college as long as they have the right priorities.
  • Our travel increased a lot in the year – we took more vacations and also traveled a fair bit for Rinki’s admission process.
  • With the declining interest rates the cash flows of my parents got impacted adversely. I chipped in with a greater amount than normal this year.
  • We upgraded our timeshare and there was a one time cost of 1.7 lacs for this.
  • Furniture replacement with a new sofa set, Dining table and balcony chairs were an expense this year.
  • Purchasing a new Android tv, new internet connection, new phone for my wife and a recording set top box also happened during the year.
  • In summary, it was a year with great experiences and they often come at a fairly high cost !!

So what was the conclusion I arrived at from all of this? Well, 2016 was definitely not a typical year and I did not think it will ever repeat in our lives. With Rinki getting the rest of her course done through bank loan, asset purchases not really there except for a Fridge and lesser travel the 2017 expenses will be much lower.

The reality was quite different though. We did not spend 400 units in 2017 but it was still close to 250 units. A closer look revealed the following:-

  • As is their practice, BITS again increased the fees by 12 % and my children’s college expenses continued to rise. I have been rather indulgent on this as I believe one should have a fun college life.
  • As I was earning a pretty decent Active income, I thought it would be good to part pay the Term 4 fees of Rinki. She chipped in with some of her internship earning and this has resulted in the loan amount being only 6.5 lacs.
  • Even though we had not planned for it, Lipi and I went for a vacation to Italy in May for a week. It was a great trip and I was quite happy to pay for it.
  • We also upgraded our Timeshare once again to a one bedroom unit and this too was an unplanned expenditure.
  • Travel within India too was more than we had anticipated. We went to Kumarokom in February, Vizag and Aruku valley in June, Goa in August, Durgapur in September for Pujas and finally Konkan beaches in November. While all these were expensive they created great memories and was totally worth the effort and money.
  • Other than the above, most of our expenses were the regular ones. We did exceed on the Entertainment and dining out part but not alarmingly.

At the same time, the experience of 4 years now set me thinking as to whether I should look at financial independence and retirement cash flows differently. After a lot of reading and deliberation I came up with a better model. You can read about it in this post

I am also working out my likely cash flows in 2018, based on the above model. Should be writing a post on it this week.

Cash flow planning is key to a good financial plan

Many of my readers keep asking me as to why I do not have different portfolios allocated to different goals of mine. I have explained this in other posts so will not repeat the basic arguments here. Suffice it to say, multiple portfolios will most likely lead to sub-optimal returns and I do not look upon it as smart financial planning at all. In fact if you really look at how you go about your life and the finances you need ta take care of your plans, the most important aspect is really cash flows.

While cash flows are kind of implicit in goal based planning – we are asked to redeem our financial investments to cater for the expenses linked to a goal – it is important to understand the true nature of it. In a recent discussion with a friend it struck me that most people do not have a clear idea about it at all and do not understand how to go about it. When I was thinking of how to explain this to my readers, I thought of how we use water in our daily lives. This is an analogy I have used in one of my earlier posts and can be used well here.

Let us assume a normal middle class household in India where we have different types of expenses such as listed below:-

  • Regular monthly expenses such as food, groceries, utility bills, transportation etc.
  • Quarterly or biannual expenses such as school or college fees.
  • Annual expenses such as Insurance premiums, TV subscription etc.
  • Irregular expenses such as clothing, purchases of personal discretion.
  • Large expenses such as White goods, Vacations abroad etc
  • Goals such as College admission, marriages etc.

To personalise this example let me relate it to you as a reader. For the next 12 months, list out all possible cash needs you have out of these categories. For example you may have something looking like this:-

  • Monthly household expenses @ 40000, Annual costs = 4.8 lacs
  • School fees @ 10000, Annual costs = 1.2 lacs
  • Insurance premiums, TV service etc, Annual costs = 1 lac
  • Vacations, White goods, Annual costs = 1 lac
  • No large goals in next 12 months.

What does this really mean? In cash flow terms, your outflow will be to the tune of 8 lacs. So if you have got 8 lacs and more from your salary or business you are fine, right? This is unfortunately not true at all – understand that your outflows on large goals are not there now but they will occur at some point in time. When it does you have to spend and that amount may not be possible from your normal cash inflow. Let us say your son will go to a college that costs 5 lacs a year for 4 years. If this amount can be catered for through your active income, you are home and dry. If not then you must invest in the years before he gets to college so that when the time comes you have access to the money. Similarly you need to plan for your retirement – at that time you have no active income but your household expenses remain there. So, you must have some alternate source of cash inflow so that you are able to sustain your expenses.

Where does cash inflow come from? Well, there can be several sources, but some of the more common ones are as follows:-

  • Salary from your job
  • Income from business or profession
  • Income from hobbies or other interests ( blogging etc)
  • Interest income, dividends
  • Rental income
  • Capital gains from selling an asset
  • Redeeming financial instruments

Where does the water analogy come in? Well, you can think of regular cash flows as the water that is supplied to your house every day by the City corporation. Most of your needs are met by that. However, you also store some water for an emergency that may occur. In case you are planning to clean your house thoroughly, you will plan to arrange for availability of water etc. What happens if you are having a big function at your house and you need to have a lot of water? Well, in case you have stored it in a tank etc you can use that. Alternately you can get some water tankers to get water for you. This is similar to redeeming financial instruments for a large goal. You can also stretch the thought process to look at these tankers as a loan – in that case you have to pay back the water just as you pay back through EMI for the loans.

The bottom line is this – your cash inflows either in term of current income or income from past investments or loans must match your cash outflow needs at all points in time. With the water analogy we have to look at running water, water stored earlier or water obtained from external sources such as tankers to take care of our needed consumption.

Pretty simple really, if you think of it a little and then the entire financial planning just becomes an exercise in cash flow management. How do we factor in investments into this? Well, I will cover that in another post as this one has already got quite long.

Travel by air can be a smart option

I have always been fond of travel whether it is for business or for pleasure. A visit to new places within India and outside it is always an exciting event for me. Fortunately this interest is shared by my wife and our children too as they have been to several places over the years.

When I was younger and traveling alone, it hardly mattered as to how I did so. Normally train and specifically the AC 2 Tier coaches would be the medium. As the family grew and time became a premium courtesy my demanding corporate job, I had to look into air travel within India. If one went by air it was possible to take a break even with a 3-4 day time window. Part of it was of course lifestyle creep too, as it was way easier to get my wife to go on such short trips if we were going by air. With the options being more today and there being the probability of tickets being reasonably priced, this makes sense in many ways.

I have a very simple way to decide as to whether we should go by train or air. In case the journey can be done by an overnight train, typically in less than 10 -12 hours, I prefer to take the train. The romance of train journeys has stayed with me since childhood but  even though the spirit is willing, the flesh is definitely weak as far as longer journeys are concerned. So, if I am going on a personal vacation I am quite happy to take the train between Hyderabad and Chennai or Bangalore or Pune. Of course, if I were going on business I would go by air. On the other hand travel to Kolkata or Delhi or Mumbai from my city Hyderabad would always be done by air.

As many frequent travelers will know, the price of air tickets vary greatly depending on the time you buy them. In general, the earlier you buy the better are the chances of getting a good price. However, if you are planning to go around the school holidays or some festival or a long weekend, the prices will normally be always high. The second element is waiting for an airline sale etc and taking advantage of the cashback and discounts that some credit and debit cards offer. If you plan early and take these into account by using the mobile apps from different travel sites, you can get a rather good deal.

Let me give some examples of the air ticket purchases I have done this year, so that the readers can get the point easily:-

  • We are leaving for Kumarokom tomorrow for a week’s vacation. I wanted to book an air ticket as trains were few and the journey time exceeded my benchmark.
    •  I looked at a few sites and decided on Make My Trip site. It had reasonable prices and good options though it charges convenience fees of 175 per ticket.
    • However with the MMT site Citibank was running a cashback offer of 1200 Rs which I utilized along with some MMT points.
    • The overall price after the cashback came to about 8000 Rs, which was not much higher than the AC 2 tier fare.
  • I also booked air ticket for my son as he wanted to come in mid semester for a couple of days. While there is a train and regular Volvo buses between Goa and Hyderabad, those were not convenient for a 2 day trip.
    • As the overall price was coming to less than 5000 Rs the ICICI or CITI cashback was not working for this ticket.
    • I booked with Ease My Trip as that is a site which does not charge convenience fees for booking tickets.
    • A round trip ticket came to about 4000 Rs, which is only about 20 % more than an AC 2 Tier round trip ticket.
  • The third trip is to Kolkata in October. We have not been there for a long time during Durga Pujas and wanted to do so this year.
    • In this case the tickets were priced at levels where it made sense to break up the purchases in order to maximize the cashback.
    • For the onward journey I used ICICI debit card in the MMT application. Despite the convenience fee the 1500 cashback was worth it.
    • For the return journey, I used the same MMT application with my CITI credit card. The cashback available was 1200 Rs.
    • The overall price of the trip came to about 12000 which is the least I have paid in  years.

Note that these were normally booked without an ongoing sale etc. My experience in that has not been too encouraging and these eventual prices were pretty good. If you are of the opinion that air prices are much higher than train prices think again. With air prices in a competitive situation and train fares increasing greatly in the last 2-3 years, it makes much more sense to look at air travel than ever before.

Of course, traveling by air at short notice is a terrible idea as the prices are astronomical. This is not something which you should ever look to do.

My spending in 2016 -expensive but smart

The regular readers of the blog would probably be aware of my spending philosophy by now. I am definitely not frugal but neither am I extravagant or reckless. I do believe that experiences matter most in life and many of these experiences require money to fund them. 2016 has been a year where we have ended up spending a great deal and I have tried to see that much of it is smart in the execution.

To begin with, most of my expenses are done through credit cards for a very long time now. In fact except for the few things where cash is needed like some domestic services, we do not pay through cash at all. Wherever possible, we use credit cards and for large value transactions we use direct bank transfers. In fact, we have rarely used our check books for the past few years too. This helps out in many ways – gives us a free credit period, provides credit card reward points, helps keep track of the spending and also offers many other benefits linked to travel etc. The key thing is to pay off all your credit card dues in full when they are billed – anything else will simply end up being a disaster.

Coming to the 2016 spending, let me start with the regular spending first :-

  • Buying from the Supermarket is commonplace now and we normally buy from Spar, close to our home. Apart from the normal discounts, we also received some non-stick cookware as gift this year as we spent more than 20000 Rs between July and September. Last year we had got an Induction cooker.
  • We go to the movies very often, catching most of the good Hindi movies and the occasional English one. Fortunately, ticket prices in Hyderabad are quite reasonable and it is made better through Bookmyshow, which allows me to get two tickers for the price of one when I use my Citibank card. Through this year we must have seen about 40 movies and the savings have been about 6000 Rs.
  • We eat out quite often and it has become more expensive over the years. Our credit card reward points help out to some extent here. Just last week we had lunch at Mainland China and I was able to pay by vouchers for 1000 Rs. I had got these by redeeming the Reward points of my HDFC bank credit card. In most years we get about 5000 Rs worth dining vouchers from the multiple cards we have.
  • I normally do not buy clothes much, it is clearly a necessity for me personally. This year though, I needed to buy some trousers. The overall list price was amazingly about 6000 Rs for 3 – Pantaloon first gave a discount of 2000 odd, loyalty vouchers from Max Bupa covered another 2000 and finally there was another 1000 covered by my credit card reward points. In all, I had to pay 1000 Rs for the 3 trousers and we got a bed sheet free in the bargain too.

Let me now look at some of the other purchases I made in the year, which were of a higher value. In general, I prefer buying online due to the many deals which are on offer and this year was no different.

  • I had bought a Micromax phone for Lipi in 2014 and she got acclimatized to it pretty quickly. So much so, that the limited memory and storage of the phone was proving to be an issue. This year I bought her an Asus Zenfone. The list price was 11,000 odd, Snapdeal was giving it at 8000 and I got a further 1600 off through the Citi card. At 6400 Rs that I paid, it was a very good deal.
  • I had bought a Sony Bravia LCD TV in 2006 when the price was about 1 lac. I wanted to replace it for a long time but for various reasons it kept getting postponed. This year I did the rounds of some stores where I liked the Android TV version by many manufacturers. However, these stores refused to give more than 2000 for my old TV which was working fine. Flipkart provided just the deal I was looking at. The Sony Android TV with a list price of 67000 was being offered at 60000, I got an exchange price of 8000 for my old TV and finally another 3000 Rs as cash back from Citibank. In effect I paid 49000 for the TV which was a great deal.
  • We also bought some Balcony furniture from Amazon, the discounts and cash back were not huge there but we still managed to save about 1000 Rs from a physical store purchase.

How can you spend smart in the next year? Well, here are my thoughts :-

  1. Use credit cards for everything possible. Have multiple credit cards, just make sure you pay off in full whenever you get the bills.
  2. Accumulate reward points and redeem them for things which are useful to you. There are several categories, choose what you like.
  3. Always check any consumer durable from a physical store but buy it online.
  4. Choose sale periods, you can afford to wait for a TV etc.
  5. Forget frugality, you have only one life to live after all 🙂