I answered a Quora question every day for the past 30 days.

While it is gratifying to get upvotes and thousands of views to some of my answers, the intent behind this experiment was to improve my writing skills and hopefully help someone along the way.

This post is a compilation of questions I had the most fun answering

Personal Finance

How much should one be saving for retirement per month if they want to retire comfortably in their mid-late sixties?

Assuming you are in your early 30s, a simple rule of thumb is to save as much as your current monthly expenses till retirement.

If your current monthly expenses (if you were to retire today) are INR 40000, you should be saving at least INR 40000 every month for a comfortable retirement.

This is a conservative approach that assumes your investments grow in line with inflation. That means your first month of saving is exactly equal to the inflation-adjusted expense in your first month of retirement.

One could argue that saving 1x your expenses is too high, as we expect our investments to grow at a much higher rate than inflation. But if your goal is a comfortable retirement, then this is a fool-proof way to go about it.

What are some financial tips for middle-class people in 2022?

Here are some basic personal finance tips that cover 90% of your financial well-being, irrespective of the year. Listed in order of priority

• Avoid/ Pay off High-Interest Debt. Education and Home loan are the only exceptions.

• Take Health Insurance, if not already provided by your employer.

• Take Life Insurance (Term Plan Only), if you have dependents.

• Emergency Fund – Save 6x your monthly expenses in a savings account/fixed deposit

• Spend less than you earn.

• Focus on increasing income. Invest in yourself. Upskill, get multiple income streams, etc.

• Invest your surplus income in 50% index mutual funds and 50% bank fixed deposits.

• Plan and prioritize your financial goals. Retirement/Child’s Education/ Home Purchase etc.

• Implement and monitor your progress towards these goals.

• Once your income, investments, and goals are on track. Start SPENDING the rest of your surplus for pleasure.

These might seem too simple and basic, but you’d be surprised how effective they are if followed religiously.

How does compound interest work in mutual funds?

Compound interest, in theory, works only in a fixed deposit, where you get to invest a principal amount and then start accumulating interest on interest.

It doesn’t work the same way in a mutual fund, as the fund NAV does not move in a linear fashion. It is volatile and there will be upward/downward movements regularly.

What most people mean when they talk about compounding in Mutual Funds is actually the benefit of long-term investing. Over and above investment horizons of 7 to 10 years, equity mutual funds have mostly shown a +ve annual growth rate. (10% + in India)

Extrapolating this growth over a 20 – 30 years period will show you a huge corpus with most of the growth happening in later years. And this is what you read everywhere mentioned as compounding in mutual funds.

What is the best way to invest Rs 1 lakh and forget about it for the next 10 years?

The best and simplest way is to invest 50k in an Index Mutual Fund and 50k in a bank fixed deposit.

10 years is a long enough horizon for index mutual funds to beat inflation, at a low cost with better tax-adjusted returns. The FD will give guaranteed returns and protect you from market volatility.

Once invested, avoid tinkering with this plan till the end of the 10 years. Most often, our own irrational behavior prevents us from being successful investors.

How do I calculate the retirement kitty manually?

You will need either an excel or a financial calculator to estimate the retirement corpus. Here is a stepwise breakdown on calculating your retirement kitty (along with sample assumptions).

Step 1: The Assumptions

Time till retirement: 30 years ( A 30 old planning to retire at 60 )

Expected life in retirement: 25 years ( Life expectancy till 85 years )

Investment returns in retirement : 7% p.a ( Debt dominant investments )

Expected Inflation: 6% p.a (Over the entire lifetime)

Current annual expenses: Rs 600000 per year

Step 2: The Calculations

Expected annual expense at age 60 = current expenses * (1+inflation)^(time till retirement) = 600000*(1.06^30) = Rs 34,40,000

Inflation adjusted returns in retirement = (1+return)/(1+inflation) – 1 = (1.07/1.06)-1 = 0.94 % p.a

Step 3: The Retirement corpus

Now you calculate the corpus that will ensure you receive 3440000 at age 60 and then grow yearly at an inflation-adjusted rate of 0.94 % p.a for the next 25 years.

This is done using the PV formula in an excel or financial calculator.

PV (rate, nper, pmt, fv, type)

rate = inflation-adjusted rate of return

nper = no.of periods

pmt = cash flow required per period

fv = value at the end of the period

type = 1 for the beginning of period cash flows, 0 for end of period cash flows

So the retirement corpus required is

PV (0.0094,25,3440000,0,1) = Rs 7,70,41,872

Fitness

How can vegetarians get 140g of protein a day?

I do strength training and here’s the vegetarian meal plan that gets me to around 140g of protein per day.

Most of these are Indian foods, but you can switch them for alternatives within your preferred cuisine

Breakfast – 250ml milk + 1 scoop protein powder + 1 Fruit + 4 Almonds

Lunch – 250g Rice + 200g Dal(Cooked Lentils) + 50g Cooked Vegetables + 150g Yogurt

Snack – 250ml milk + 1 scoop protein powder + 1 Fruit

Dinner – 4 Rotis (Indian Bread) + 150g Paneer(Cottage Cheese) + 50g Cooked Vegetables + 150g Yoghurt

You can use online calculators like Fatsecret or MyFitnessPal to get the exact protein content in your meals.

Is gym the best way to work out?

The best form of workout is anything that you enjoy doing and hence have a better chance at staying consistent with it over the long term.

If you like lifting weights, then it’s the gym.

If you’re an outdoors person, running it is.

Like dancing? sign up for Zumba classes. etc

Unless you plan on competing in a powerlifting/bodybuilding show, the gym is just one of the many possible workout options.

What are BCAA’s and how long should they be taken for muscle growth?

BCAA’s are overrated and have been scientifically proven to be ineffective for muscle growth.

A high protein and moderate/high carb diet will give you all the supposed benefits of BCAA’s.

If you follow a high protein diet, BCAA’s are unnecessary.

Chess

How do you choose your chess openings?

I first started playing chess at the age of 30 during the first covid lock downs. In the past two years, I went from a 600 rapid rating to 1800 on Chess.com and 2000 on Lichess.org

The openings that helped me the most in my rating climb had the below common traits

• Easy to remember with not more than 3–4 mainline variations
• Tricky, the opponent has to know the perfect response to avoid blunders
• Smooth transition to a middle game where the plans are straightforward

Here are a few examples

• Vienna Gambit
• Lucchini Gambit
• Fried Liver Attack
• Stafford Gambit
• Italian Opening
• Dutch Defense
• Englund Gambit etc

Also, I learned at least one tricky opening line against all the popular openings. My other advice would be to avoid complex theoretical openings like the sicilian, grunfeld, najdorf etc.

Just because the top players are using them doesn’t mean everyone should.

How should a 1300-1400 chess.com player push to 1600-1700?

I started playing chess in 2020 and went from 600 to 1700 rapid rating(chess.com) in 1.5 years.

Going from 1300 to 1700 on Chess.com requires you to have a disciplined approach to learning chess.

Here are some tips that helped me in my rating climb

• I played only 2 rapid games and 2 blitz per day but would analyze them thoroughly. Specifically on where did I lose the game? Was it openings, tactics, or endgame? Then I would drill down on that particular mistake.

• Openings – I would stick to one opening with white and one with black, with a specific focus on all the tricky lines and responses to all the popular openings. You’d be surprised to know that people fall for wacky gambits even at the 1800 level on Chess.com 

• Tactics – At this level, I’d attribute tactical alertness to 80% of your wins. It’s all about who identified the tactical pattern first. So practice tactics and solve puzzles every day

• Endgame – This is where I disagree with the popular opinion that you’d have to learn the popular/complex endgame positions. In most of my rapid games, both I and my opponent would be low on time by the time we reached the end game. So I would only learn/relearn those endgame patterns that lost me the game. More often than not, these were simple endgame patterns and mistakes.

I have been struck at 1700–1800 for a while now, but these tips will definitely take you from 1300 to 1700. All the best !!!

CFA

I don’t get much time after my job, should I think to go for CFA?

The CFA program demands 1000+ study hours to complete at the very least. So the question for you is why you’d want to do it.

If you find the field of finance and analytics interesting and are looking for a challenge to upskill, then I’d say go for it. If you don’t have a strong “why” you can’t endure the challenges that come with this program.

But if your main goal is a career break or a higher salary, then I’d advise against it. Completing CFA does not guarantee a better job/salary.

Your reasons for doing it have to be internal and personal to you. Any external validations as motivation will not work given the amount of time commitment involved.

Is it possible to complete all CFA levels in one year? If not, what is the least time required to ace this exam?

Theoretically, passing all 3 levels in 12 months is possible. But it is a high-risk strategy that requires machine-like commitment from you.

Looking at 2022–23 exam cycle, this is how you could’ve completed CFA in 12 months

Feb’22 – Level 1

Aug’22 – Level 2 (6 months)

Feb’ 23 – Level 3 (12 months)

Do note that it takes an average of 1000+ study hours to complete the CFA program. How you can fit that study time within a year is up to you.

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