I was looking at some personal finance website in India, like this one and this one. Its appalling to see no worth-while content in the Indian scene vs great tools like Mint and Wiki-Invest on this side of pacific.

Anyways i think that this is a great time to take stock of one’s financial health. The stock market and various other financial instituions around the world are facing a grim crisis. If you are a believer magic free market even in face of un-controlled and bottomless stock markets, then its a really great time to invest. However the big question is where to invest? Which stocks to pick and oh yes do you make up your portfolio in these times. Over the next few weeks i plan to address this very issue.

To make a modest start I’m ruling out any form of option trading, as the markets are really volatile, and i’m also going to rule out any chance of investing more that 40% of my savings in the cheap stocks.

Now once we rule out that. With a modest budget of $800 per month what can one do? The strategy i want to pick is buy stocks which were ridiculously high at one point and are dirt cheap (prefarably $1) now. However i’ll only pick companies how have _real_ assets and a _positive_ revenue in this mix. So what are these companies? F?

What do I do with rest 60% well, the dollar to rupee conversion rates are substantially high these days (possibly highest in last 3 years), so i’m going to try and send that money back home to India. I’m not sure though if i want my father to invest that in stocks. He is stock broken full time and has tendencies to over do it. So i’m going to cap that may to 20% stocks and rest as cash. Lets see though, it has to work THE man.

I had blogged earlier about the personal finance tools available on internet. But after a long bout of finance management failure, I’m going to try and experiment by publicly doing my finances (of course some numbers are fuzzed but are close). I want to be able to get my net worth to a million dollars in seven years, is it possible?

With about $2000 of Cash flow every month what sort of rate of interest should i aim for ? So for this saving to become 1million i need a rate of return equivalent to 45%, as this calculation shows!!

So short question, can I achieve a consistent rate of of 45%? Is very unlikely! Which implies that i should increase by savings! This takes me to saving almost about 65K a year!!! Lets see!!

Next in this line of thought I want to see what my current rate of return is. I know its less than 1o%!! So point number one is something needs to be done about this poor investment strategy!

The bigger point and most import is budgeting! Is my money doing what i want to do? I’m I using money to buy things which will improve my quality of life? Or am i buying products or services which are improving my quality of life? Clearly i spend a lot on following items:

• Climbing gear – 2000$
• Camping gear – 1000$
• Cycling gear – 1000$
• Motorcycle – 1000$
• Eating out/ drinking – 3000$

However i dont spend enough on the following

• Travelling
• TV, Computer or other electronics
• New Car

So how should one divide the quadrants of quality of life so one can balance budgeting for better life versus being frugal to have more money to invest wisely!