EPF passbook updation

It is good that now we can see our EPF passbooks on line at http://members.epfoservices.in/
But is the passbook going to be upto date every month? I see that the pass book is not updated with latest contributions from my employer after I accessed it for the first time.

Types of Spending

I think spending can be categorized as

• Essential
• Improving Quality of Life
• Entertainment
• Ego/Showing Off

Essential:  Food, Clothes, Living Space, Education etc

Improving Quality of Life:  These expenditures can be of type enhancing the spending above it (Essentials) or the type covering the basics of spending below it (Entertainment). Eating Sonamasuri rice enhances food taste but would you eat basmati rice every day? Having a car is nice but which car? Vacation but how often and to where? You see, there are no questions for essential expenditure. But now the expenditure planning needs answering questions, deciding what you can afford and what you need. Generally expenditure in this segmentcan be avoided but makes life difficult. You need to strike a balance between your networth and what you spend here.

Entertainment: This expenditure also involves both categories above and below it. If you or any of your dependants are fans of music, buying a good music player and speakers can be part of either improving quality of life or entertainment. How much you spend on that will decide which category you want to keep it in. Having a basic phone is improving quality of life. Having a smart phone which can do everything and you don't use those features is entertainment. Having the higher end of a smart phone when your real requirement is talking or texting is showing off. Buying jewellary is entertainment. Buying some thing which you can't afford but must buy as your neighbour or relative has it is showing off.

Ego/Showing Off: In your inner mind you know this category even if you try to rationalize the expense. Going for a vacation taking a loan or worth 3L when your networth is 10L is showing off. This category can be strictly avoided. There are some exceptions on making networth to expenditure comparisons. If you are starting in your career, you may be starting with zero networth but if you are highly qualified your potential networth might be high like say for a doctor. So you may go for a big vacation but even there, spending on a loan should be absolute no no.

All these categories are subjective. I think a tata nano is entertainment where as some body else might think Honda City is improving quality of life (I am sorry no car can be essential but there is nothing wrong is spending to improve quality of life). May be it will help to keep tabs on these categories individually. Like spending not more than 5% of your cash flow in showing off, 10% on entertainment and 25% on essentials and improving quality of life. Unfortunately the essentials cost very less than the second category and so on with showing off costing the most.

Conversations with Relationship Manager

Today I got call from my Citi Bank relationship manager and the conversation went like this.

RM: Sir, we had fixed a meeting with you but could not meet. Can we reschedule the appointment.
Me: Actually I talked to your representative on phone and we decided that you don't have anything to offer me so there is no point in meeting.
RM: Sir, I have a few plans to discuss..
Me: I have adequate term insurance. I am not interested in any plan that has insurance component.
RM: May be some mutual funds
Me: I invest directly with AMCs and with the introduction of direct plans I can't even think about a distributor
RM: May be a children plan
Me: I dont want any insurance
RM: But a children plan is more than that. It creates a corpus for your kid's education and ..
Me: But mutual funds I am investing also create a corpus right
RM: Then I can create a core portfolio for you without insurance component
Me: Does than mean only mutual funds?
RM: Yes
Me: I told you I invest in the direct route
RM: Ok sir, I will get back to you when I have some thing interesting for you. Thank you for your time
Me: Thank you and bye

I am sure he will not get back to me. But I feel for him. the moment some body asks for non-insurance plans, they have nothing to offer. But may be people like me are very few and even I took one endowment policy and an ULIP in the begining of my career. I am lucky in a way. Some people realize after a dozen insurance policies and some people happily take as many policies as possible and till the end of their lives think they did very well in terms of decision making. So may be there is nothing to feel sad for the relationship manager.

Why am I blogging. again

I was always fascinated by numbers. So anything about numbers I read. Most of the times I read about numbers, I realise that I already did this some time back but did not document. And after some time if I want to look for it again, as I am very poor with book marking, it is very difficult to get the information again. This blog is going to be a place where I keep all my number simulations, some information I would require later like tax rules, and fund experiments as well as any of the other readings on web that I want to bookmark.