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RupeeCase notes . Topic

Personal finance and tax

SIPs, loans, insurance, emergency funds, goals and the tax lines (exemptions, cliffs, lock ins) that decide what you keep.

  • 24notes in this topic
  • 6to read in order
  • 3questions answered

01Read in this order

Six notes that carry the idea.

  1. 01Emergency fund first, risk profile second5 min .
  2. 02What the lock in costs you11 min .
  3. 03Prepay or invest: the schedule decides11 min .
  4. 04All in now, or drip it in10 min .
  5. 05A loss you do not book is a rebate you do not claim8 min .
  6. 06Goal based investing: the goal picks the vehicle6 min .

02Every note

24 notes, newest first.

  1. What the lock in costs youAcross ELSS, NPS and PPF the return argument is worth about Rs 54 lakh over twenty years and the NPS annuity clause moves Rs 40 lakh, decided by a paragraph nobody read. . 11 min
  2. Prepay or invest: the schedule decidesA Rs 5 lakh prepayment in month 12 of a Rs 50 lakh loan kills Rs 21.04 lakh of interest, and investing it still wins by about Rs 6 lakh at a post tax 9.36 percent. . 11 min
  3. The flat SIP shrinksRs 10,000 a month buys about Rs 7,473 of 2021 purchasing power after five years at 6 percent inflation, and a 10 percent annual step up doubles the twenty year corpus. . 7 min
  4. A loss you do not book is a rebate you do not claimBooking a Rs 60,000 short term loss against a Rs 1 lakh short term gain cuts the tax from Rs 20,000 to Rs 8,000, and unused losses carry eight years if you file on time. . 8 min
  5. All in now, or drip it inVanguard's 1926 to 2022 data across seven markets shows a lump sum beat a three month drip about two times in three, and stretching the drip lowers the odds. . 10 min
  6. A nominee is not an heirThe Supreme Court held in 1983 and 2023 that a nominee only receives; without a will, Rs 80 lakh to a sole nominee wife is owned one quarter each by four Class I heirs. . 5 min
  7. The Rs 1.25 lakh you forget every AprilBooking about Rs 1.25 lakh of long term gains each year and rebuying cuts the exit tax on a Rs 96 lakh corpus from Rs 10.65 lakh to Rs 7.68 lakh. . 5 min
  8. The clause that shrinks your health coverA room at twice the policy's 1 percent daily cap settled the whole linked bill at half, turning a Rs 5 lakh cover into about Rs 2.5 lakh on the day it had to work. . 5 min
  9. The minimum due trapPaying only the minimum on a Rs 1 lakh card balance takes 341 months and Rs 3,72,861 of interest, because 3.5 percent a month plus GST is 4.13 percent a month. . 6 min
  10. Rent vs buy: the two numbers the dead money line skipsMore than 80 paise of a first year EMI rupee is interest, rent runs about 3.5 percent of price against an 8.5 percent loan, and the down payment has an opportunity cost. . 5 min
  11. The flat rate trapA 10 percent flat car loan on Rs 6 lakh over five years costs Rs 1,35,000 more than a 10 percent reducing balance loan, a true rate near 17.3 percent. . 4 min
  12. Emergency fund first, risk profile secondTwo people with Rs 12 lakh hit by a Rs 2 lakh bill in a 30 percent fall end Rs 85,714 apart, because one sold equity at the trough and one paid from cash. . 5 min
  13. The first crore is the slowestA flat Rs 10,000 SIP at 12 percent takes about 20 years to the first crore, 5 more to the second and 3 to the third, with 72 percent of the final pot arriving in the last decade. . 5 min
  14. The lever you control beats the one you chaseTwo extra points of return over 25 years adds Rs 82 lakh to a Rs 10,000 SIP; stepping the same SIP up 10 percent a year adds Rs 2.35 crore. . 4 min
  15. The cost of waiting: start small, start nowA saver who invested Rs 10,000 a month from 25 to 35 and stopped ends with Rs 4.6 crore at 60, ahead of one who invested from 35 to 60, because time did the work. . 5 min
  16. SIP vs lump sum: time in the marketPutting Rs 12 lakh in at once beat dripping it over a year in about two of every three historical windows, because markets rise roughly two years in three. . 5 min
  17. Lifestyle creep: the raise that never reaches the portfolioBanking half of every increment lifts a savings rate from 20 to 35 percent without a felt cut and ends Rs 21.5 lakh ahead over a decade on the same income and returns. . 5 min
  18. Goal based investing: the goal picks the vehicleA college seat three years out and a retirement twenty two years out are a debt problem and an equity problem, and a Rs 20 lakh seat is Rs 63.4 lakh at 8 percent inflation. . 6 min
  19. Term insurance: ten times income is the brochure ruleThe present value of a 35 year old's remaining earnings is about Rs 6.5 crore, not the Rs 2.5 crore a ten times income rule gives, and the extra cover costs about Rs 55 a day. . 6 min
  20. Gold: read the door before the metalRs 1 lakh of gold held eight years nets Rs 1,85,579 through an SGB bought at issue, Rs 1,56,985 through an ETF and Rs 1,34,804 as jewellery, so the vehicle decides. . 5 min
  21. NPS, PPF, ELSS: the order matters more than the rateThe Rs 50,000 NPS slot under 80CCD(1B) sits on top of the 80C ceiling, so a rate led picker leaves Rs 15,600 a year of saved tax on the table at the 30 percent slab. . 5 min
  22. Emergency fund: six months is the rule, the vehicle leaksSix months of expenses in a savings account at 3 percent loses to inflation, while a three tier split of savings, sweep FD and liquid fund earns 5.58 percent with the same liquidity. . 5 min
  23. Day 364 vs day 366: the two day tax cliffRedeeming a Rs 10 lakh lump sum two days after the year mark removes the exit load, drops STCG to LTCG and opens the exemption, worth Rs 40,225 on the same units. . 5 min
  24. Prepay the loan or invest: the ITR decidesWith the Section 24 deduction and LTCG stripped out, the prepay or invest call lives in the gap between the post tax loan cost and the post tax equity return. . 5 min

03Go deeper

From the notes to the course, and to the cards.

Learn path 5The free Learn course on the same ground, with a certificate at the end. 18 index algosEvery RupeeCase strategy, model back tested, in your own demat. All eight topicsBack to the hub: reading paths, search and the latest notes.

04Questions, answered with figures

Three questions readers ask about personal finance and tax.

Should I prepay my home loan or invest?

On a Rs 50 lakh loan at 8.5 percent, a Rs 5 lakh prepayment in month 12 removes Rs 21.04 lakh of interest. Investing it for 19 years still wins by about Rs 6 lakh at a post tax 9.36 percent, but only for someone who holds for 19 years. Read the note: Prepay or invest: the schedule decides

What is the Rs 1.25 lakh LTCG exemption worth?

Rs 15,625 of tax a year at 12.5 percent, and it expires every April. Booking about Rs 1.25 lakh of long term gains a year and rebuying cuts the exit tax on a Rs 96 lakh corpus from Rs 10.65 lakh to Rs 7.68 lakh. Read the note: The Rs 1.25 lakh you forget every April

Does naming a nominee settle who inherits?

No. The Supreme Court held in 1983 and again in 2023 that a nominee only receives; succession law decides ownership. Without a will, Rs 80 lakh to a sole nominee wife is owned one quarter each by four Class I heirs. Read the note: A nominee is not an heir

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