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How To Plan For Your Retirement

This is a copy of my newsletter sent on 21-Nov-23 to my subscribers. If you want to register to receive my emails you can register in the newsletter form on this page.

I received a lot of emails in reply to the email sent on 20-Nov-23. The text of that email was:

This is just a general question.
Have you planned for your retirement?
How much are you saving and where and what kinds of returns they are making?
Do you invest in NPS (National Pension System)?

Reply and I will try to help you plan your retirement. This will also help me to write a good article on what Indians are doing for retirement – the mistakes they are making and how they can improve.


Here are some of the emails I received.

Email 1:

Dear Dilip,

How are you?

I have only a PF (Provident Fund) for my retirement and to secure my family I have taken a Term Insurance Policy.

I am now 53, please let me know if any better can be done at this age, I know I am late but I have my valid reason, but still, I also understand very well that reasons will have no weight, ultimately we have to have money which has to be the ultimate result, this is the reason I took trading even though it’s known to be risky, please guide me.

Thank you

Here is my reply to Toni:

53 is late – only 7 years to go for retirement.
Of course, you can take a private job till at least 65 years of age if health permits – then retire. This will help you to accumulate more money and be ready for retirement.
In the PF are you investing 1.5 Lakh a year (max limit)? If not please do it for the remaining time and try to extend it to 20 years for compounding to take effect. Real compounding will be in the last 5 years (15-20).

A term insurance policy is a good decision. Make sure to have at least 50 lakh term insurance.

You did not mention any health insurance. If you do not have one, then buy a health insurance policy for 5 lakh minimum for your family.
Once you retire take out all the money from your PF account and invest in a good short-term debt fund. These debt funds are safe and return 1% more than FDs.
In our old age, we must ensure that the money we made/got for retirement should be safe. Therefore I have recommended a debt fund and not an equity fund.
Redeem only what you need every month. This will become your pension.
Hope this helps.


Email 2:

Dear Dilip,

I have kept aside some money for retirement. Not sure if it is sufficient or not. Our family do not earn much. My wife is a homemaker.

For retirement, I have plans to do three things.

  1. Be a part of an NGO that looks after challenged girl children.
  2. Travel to at least one state in India every year.
  3. Make my home in such a way that my Children and Grandchildren will love to visit at least once a year if they are not staying with me.

I do not have NPS (National Pension System) since I am an NRI.

The above are answers to the specific questions.


My reply to Sony:

Sony as far as I know NRIs earn very well.
In any case, you can start investing whatever you can save.
If you do not know Non-Resident Indians (NRIs) aged 18 to 60 can invest in India’s National Pension Scheme (NPS) by adhering to KYC norms. The NRIs can make contributions to NPS from their NRO/NRE account.
If you do not have an NRO / NRE account kindly open one and start investing in NPS as soon as possible.


Note on NRO (Non-Resident Ordinary)/ NRE (Non-Resident (External)) Accounts

This table will help you to know the difference in these accounts:

Email 3:

Dear Sir,

I retired already a couple of years back. Planning was done while I was in service.


My reply to Gautam:

Thats good.
Do you get a pension?


I have still not received a reply from him but I guess since he was in some service he must be getting a pension. Or his company must have paid him a gratuity.

What is gratuity? Gratuity is an amount paid by an employer to its employees for rendering their services for equal to or more than 5 years. Gratuity is paid to an employee as part of his/her salary and is considered to be a benefit plan which is designed to help the employee during his/her retirement.

Please note that a Gratuity is paid 100% by the employer to the employee. There is no contribution required from the employee during the term of the service.

If you are also in service and your company has a gratuity program then my advice is that do not avail Voluntary Retirement Scheme (VRS) if you will miss out on gratuity. Some people retire early to get a higher-paying job. But you must do calculations of what you will miss if you retire early before deciding to retire.


Email 4:

Hi Dilip ji

Not yet…

Sachin Aggarwal

This email surprised me as Mr. Sachin has still not planned for retirement. Retirement and investment planning should be started from the day you get your first salary. The earlier you invest the greater will be returns. If you plan well early for retirement you can retire before the age of retirement.

So I replied to him, “What’s your age and why you have not started to plan for retirement?”


Awaiting his reply.


Email 5:

Sir, so far I have not planned for retirement.

Saving in FD, SIP.

I am 25 and want to retire by 45, working in a PSU bank as a clerk.

No investment in NPS (National Pension System) so far.

Thanks and regards,


Here is my reply to Anjana:

>>  Saving in FD, SIP

Continue and also invest in PPF. It can be opened in any SBI Branch.



Email 6:

Hi Dilip,

I have been actively concerned and investing for retirement from 2016 onwards. The plan was to at least build a 30X corpus of inflation-adjusted current expenses. For that, investing in index mutual funds (Nifty 50, Next 50, Midcap and Small Cap index) 1X of current expense in equity: debt ratio of 80:20 plus EPF (Employees’ Provident Fund).

Still, I am doubtful of achieving the goal. So the plan is to increase the investment by 10% every year.

Start a PPF (Public Provident Fund Account) as well.

Jijesh Janardhanan

Here is my reply to Jijesh:

Continue the other investments – do not break the SIP if the market falls.


His reply:

Yes PPF is also there, since the interest rates are low, I have stopped in between. Now whenever doing equity: debt rebalancing, will add to PPF (max 1.5L / year).

SIP is continuing.

Jijesh Janardhanan


I have given you a lot of advice in this post on how you should plan for retirement and why it is important to start as early as possible for compounding to take effect so that you can retire peacefully.

Hope you will start planning for your retirement soon.


Diwali 2023 is coming and you must be thinking what’s next? Here Are Some Simple Tips on Financial Management And Stock Investing

If you have done my course please continue trading options or futures with a hedge. If you have not done I suggest doing my course.

Here Are Some Simple Tips on Financial Management And Stock Investing You Can Follow:

  1. Avoid muhurat trading. In a short time, there is nothing you can do.
  2. If you still want to trade buy a good stock. Do not over-buy just because it’s Diwali. Do your research and invest.
  3. If you are a buyer of options kindly trade only intraday. Overnight options buying is dangerous as theta (time) decay will work against you even if you are right in the direction.
  4. If you are a seller of options or a future trade please hedge.
  5. Lastly, keep 5% of the margin blocked for the trade as a stop loss. Do not let the loss go beyond 5% of the margin. The target should be slightly above 5% – anything between 7.5 to 10% is good.
  6. Do not put more than 10% of your annual income into derivatives trading. This will keep your finances in check.
  7. Returning to No. 6 – if three years of your investment in derivatives trading (totalling 30% of three years of income) gives a negative return (you made losses) or is not above 12% return Year-Over-Year (YOY) then quit trading derivatives altogether.
  8. 20% of your annual income should go into stock investments. You can choose to divide this into mutual funds or direct investing. The best is 75% and 25%. 75% going into mutual funds and the remaining 25% into direct stock or ETF investing.

    For example, if your take-home salary is 50,000 a month then 20% of 50k is 10,000. 75% of 10,000 is 7500 and the rest 25% is 2500. You can invest 7500 in Four good and diversified mutual funds and 2500 directly in stocks. Stock investing via SIP is also a good idea to average out the price. Do not invest in more than 5-10 stocks otherwise managing them may be a problem.

  9. If you keep doing point 8 above for 20 years then even at a 15% return compounded annually the total corpus will be:
    Future investment value: ₹1,31,38,389.47
    Total interest earned: ₹1,07,38,389.47
    Total Deposits: ₹24,00,000.00
    Time-weighted rate of return: 1269.27%
    Suppose you started doing this at the age of 30, then by the time you are 50 years old, you will have enough to retire – all this by just investing 10k a month. Of course, with experience your salary will increase and you can invest more. I have not taken this into account. I assume this can go up to 2 crores of corpus by the time you are 50.

Follow the above rules and you will be a happy investor.


The US Is In Huge Debt And That Can Be A Problem

This is a copy of my email sent to my subscribers on Thursday, 02-Nov-2023.

In September 2023, the U.S. government’s debt was over $33.7 trillion. This includes debt held by the public and debt held by federal trust funds and other government accounts.

So what is the problem?

Because the federal debt is $33.7 trillion, just a 1 per cent increase in yields adds $337 billion to the annual cost of servicing the debt over time, as more of the debt is rolled over at higher interest rates. That adds to the Biden administration’s already large deficits so that higher interest costs grow the debt even faster. The Treasury is already spending an annualized $1 trillion to service the debt.

Why am I informing you this?

Because if the US sneezes then the world will catch cold.

So should we panic? Yes and No.

The U.S. government has spent more money than it takes in every year since 2001. This is the problem. For the last 21 years, it has been buying debt and spending money on social welfare schemes and running the country.

It does not look like Biden is at all worried.

What may happen?

Both debt and equity markets may fall.

But the US is sitting on a great advantage.

All its debt is in US dollars. The US is the only country in the world which can print money and buy stuff or pay salaries without creating a situation like Sri Lanka.

If you do not know Sri Lankan government started printing money to overcome monetary problems. In May 2023, Sri Lanka began printing money to promote business by pumping artificial rupee reserves into banks. However, this resulted in currency depreciation and exacerbated volatility. Things became so costly that there were no buyers.

Fortunately, the US can print money and yet will never see what Sri Lanka saw. Not sure why they are not doing and clearing all the debt.

If you are an economist reading this email, your valuable input will be welcomed.

I am sure the US markets know this and therefore we are not witnessing a great fall – but I just wanted to caution you.


This is a copy of my newsletter sent to my subscribers on Tuesday, Oct 31, 2023

Have you observed that most of the time the Put options especially the far-from-strike ones are costlier than the call options of the same distance? In this post, you will learn why it is so.

This is mainly due to volatility skew – the difference between the implied volatility of out-of-the-money, in-the-money, and at-the-money options. India VIX indicates volatility in the markers (high VIX means high volatility and low VIX means low volatility), however, every strike option has its implied volatility.

The further out-of-the-money options have larger implied volatility in terms of percentage.

This is the reason why the percentage of increase or decrease of the option premiums does not exactly match with India VIX increase or decrease.

Let us take an example.

When markets rise traders get optimistic and buy call options – but not many buy further out-of-the-money options because they want to capitalize on the moment knowing very well that profit booking may enter anytime soon. However, this is not the case with put options. When a stock falls traders know that an 8-10% fall is common. Most of them start buying further out–of–the–money options. Due to increased demand thenput options prices increase more than the call options of the same distance.

Here is a real LIVE example.

Date 31-Oct-23.  https://www.nseindia.com/option-chain

Current Nifty price:

NSE 31-Oct-23

Source: https://money.rediff.com/index.html

Expiry date: 30-Nov-23

For the Call option, I am adding 1000 points to 19100. 19100 + 1000 = 20100

Here is the price of 20100 CE – LTP is 13.20:

20100 CE NSE 30-Nov-23

For the Put option, I am subtracting 1000 points from 19100. 19100 – 1000 = 18100

Here is the price of 18100 PE – LTP is 27.40:

18100 PE NSE 30-Nov-23

Can you see there is a huge difference? 27.40 – 13.20 = 14.20. See that the difference is more than the price of the call option.

Check implied volatility also. Therefore put options are costlier than call options especially when the markets are normal and falling. However, the call options do not have such a huge difference when the market is rising.

This post has been long pending for many years. I must have received this question from many traders and I promised them that one day I would write an article on this and post it on my blog and also email it to my subscribers.

What a relief.

I hope you have learned why there is a difference in pricing between call and put options of strikes with the same distance from the stock.


What To Do When The Stock Markets are Falling

Do not panic when the stock markets are falling. Keep patience and wait for the markets to rebound.

From 20,192.35 on 15-Sep-23 to 18,877.20 on 26-Oct-23. Looks like a big fall right? Yes, it looks, but in percentage terms, it is just a 6.51 per cent fall.

NSE 26-Oct-23

In my opinion, it is not something to fear about. But in reality, see what is happening in the markets. Nifty VIX (a.k.a India VIX) has risen 9.70% today:

India VIX 26-Oct-23

If you do not know India VIX is the measurement of panic in the markets. It is inversely proportional to stock markets – not just in India but across the world.

You can read more about India VIX here:

Strangely, HNIs who have invested a lot in the markets do not panic in the fall – they make decisions based on fundamentals, not percentage fall. They will never invest in a company that looks weak in fundamentals. They see fall as an opportunity to accumulate more stocks. But they will add more only in fundamentally strong stocks. They leave the not-so-fundamentally strong stocks. They do not add more stocks.

They have the patience to hold.
My advice: Copy them. Do not sell your stocks in a panic.

This is not the first time stock markets have fallen more than 6 per cent. Every time it falls, it rebounds. So wait for that re-bounce.

Other things that you can do.

If you are an HNI you can do covered calls and make a monthly income during falls. There is a good way to do covered calls however since it is part of my paid course  I may not be able to explain here.

Or you can create a married put. You can read about married-put here:

Married put is a put option bought to protect losses from further fall of the stock. If the stock falls the put will make money.

Hedging is a beautiful tool to save huge losses in options, futures or even equities. Though my course is limited to Nifty and Bank Nifty options and futures hedging – once you learn hedging you will be able to trade anywhere like commodities, Nifty Finance, BSE Options and Futures, USD-INR pair trading etc. and create a hedge.

You can check my course fee here.


Good That US Government Avoided A Shutdown

This post is a copy of my newsletter sent to my subscribers on 02-Oct-23. You can also receive such emails by signing up the form above.

It is good that the US government avoided a shutdown. If this had happened then for sure our Stock Markets would have gone down by at least 6-7%.

Why the fall?

Events like the US shutdown affect foreign flows by Foreign Institutional Investors (FIIs) and Foreign Portfolio Investments (FPIs) into the Indian market, which is an important factor for Indian stock markets.

This may have had a cascading effect. What is the cascading effect? A cascade effect is an inevitable and sometimes unforeseen chain of events due to an act affecting a system.

Of course, 99% of retail investors will not know why the markets are falling. Those 1% of retail investors are either High Net Worth Individuals (HNIs) or Portfolio Managers (PMS). They will know and will start selling equities or will not buy new equities in the falling markets.

If there were no cascading effects the markets would have fallen by a mere 3-4% – but due to cascading effects, it could have fallen by 5-6%.

However, the bill has been deferred by 45 days until the 17th of November 2023.

Then what will happen no one knows.

What you can do?

If you are an investor – stay invested – do not sell your stocks in panic. They will rebound later.

If futures and options traders – just hedge. Do my course to learn hedging and keep your money safe.

Side note: India VIX increased to 12.86 on 28-Sep-23 due to this news only. But when the news was out that the US government shutdown would not happen now – it fell by 10.68%

Nifty VIX 29-Sep-23

That’s it. Keep your investments and trading simple and you will generate a good income. Trying to do anything extraordinary will take money out of your Demat account.

Trade safe.


This is a copy of the email sent to my subscribers on Friday, Sep 8, 2023. If you want to receive such emails you can subscribe in the form above.

Topic: Bank Nifty Weekly Expiry has shifted to Wednesdays – what will be the impact?

Bank Nifty’s weekly expiry day started on Wednesdays. The first Wednesday weekly expiry was on the 6th of September 2023 (Wednesday). You also know this. So why am I sending you this email?

Because there are certain things that you should know if you trade bank nifty weekly options.

Please note that weekly options will expire on Wednesdays but the monthly and quarterly contracts options will expire on Thursdays only.

If you do not know about the quarterly contracts – here is a short explanation:

Nifty Bank index options have three quarterly expiries – the last Thursdays of March, June, September & December.

Please note that monthly expiries and quarterly contracts are not different. They are the same option contacts – it is just that some traders want to trade farr-off options which are not very popular in India. So to make them popular NSE has branded them as quarterly contracts. Just to increase the liquidity in the capital markets.

For example, in September 2023 the Bank Nifty expiry days are:

1st expiry – Wednesday – 6th of September, 2023 (weekly expiry)

2nd expiry – Wednesday – 13thof September 2023 (weekly expiry)

3rd expiry – Wednesday – 20th of September, 2023 (weekly expiry)

4th expiry – Thursday – 28thof September, 2023 (monthly & quarterly expiry)

If Wednesday is a trading holiday, then the expiry day would be the previous trading session.

If Thursday is a trading holiday, then the expiry day would be the previous trading session.

What impact this will have?

Some traders hedge nifty options with bank nifty as the move is almost the same. This will end. They will now have to hedge bank nifty options with bank nifty options only. If you have done my course you will know that I discourage hedging options of one company/index with another.

For example, you cannot hedge HDFC Bank options with Axis Bank options – it will only get confusing.

So I think this is good. However, traders have a lot of ego. Those who hedge bank nifty options with nifty will still do it. They are willing to take a loss but will not change their strategy. It is unfortunate but this is what they will do. They might change after taking some big losses. But not sure why they let their ego come under way in trading. You at least do not let this happen.

Volatility in Nifty on the weekly expiry days (first three Thursdays of the month), will reduce as Banknifty has a lot of weight on Nifty. Both Nifty & Bank Nifty monthly options expire on Thursdays – so last week will be volatile.

Today is Thursday and see how Nifty is behaving:

The volume will increase on Wednesdays in Bank Nifty and Thursdays in Nifty. Expiry day intraday traders will trade bank nifty weekly options on Wednesdays and nifty options on Thursdays. On the last Thursday of the month, both Nifty and Bank Nifty will be volatile.

Moreover, there is news that the instant settlement of stocks is to come in by October 2024. I will write an email when all the details are clear.

Trade with strict stop losses and profit targets.

Wishing you the best always.


Low India VIX is Creating a Problem

This is a copy of my email sent to my subscribers on 04-Sep-2023. You can also sign to receive such emails directly in your inbox.

Low India VIX is creating a problem. The markets are in a strange situation neither is it volatile nor India VIX is getting on the higher side.

After so many years traders have seen this prolonged low India VIX for so many days. From April 2023, India VIX is below 15 making a tough call for option buyers as well as sellers.

For option buyers, this is a problem as slow movement kills the premium and for sellers, this reduces the profit and they get discouraged from trading.

If it is not volatile buyers of options will most likely lose money.

If the options premiums are lower, then sellers will make money but it will not be very satisfactory.

Therefore during low India VIX, the volume of trading gets reduced.

But my teachings have always been the FIRST RULE of what Warren Buffet has said:

Never lose money in stock markets.

My addition: Even 1 Rupee profit is better than losing money.

Here are his exact words:

The first rule of an investment is don’t lose money. And the second rule of an investment is don’t forget the first rule.

Here are some more very popular quotes from legendary billionaire investor Warren Buffett:

It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.

Be fearful when others are greedy, and be greedy when others are fearful.

If you have not lost money in stock markets you are very lucky. But if you have lost then ask yourself – which situation was better:

1. A profit of just Rs.1/- after paying brokerages and taxes, or
2. Your current loss.

Anyone would pick a profit of Rs.1/-, but when you were trading did you ever think of proper risk management so that you do not lose too much?

If you have still not lost too much then good. Still not lost too much is less than 5 lakhs. Anything beyond this is too much. I lost 7 lakhs.

Please do not do revenge trading – you will destroy more of your wealth.

Learn to be both a conservative trader and an investor. It will help.

How long will this continue?

Some major news has to come out which has to shake the markets. Once that happens India VIX will go up. And once India VIX goes up option sellers will join the markets. Once the sellers join the markets the volume will increase.

India VIX is good for option sellers as the likelihood of the profit goes up. But greed does not allow them to sell is a different chapter altogether.

If you are an option seller you can keep selling options. Your return on investments will reduce but the success rate will increase.

Please hedge and sell options as selling options is a huge risk. By hedging you reduce the risk.

You can learn option selling with hedging in my paid course.


Why You Should Not Invest In IPOs

In an Initial Public Offering, there are usually two components:

1. Fresh issue of shares from the company
2. OFS – Offer For Sale from its promoters. Through this OFS component, early investors, including the company’s promoters, can sell a portion of their stake to the public.

When promoters hold a significant percentage of a company’s shares, it shows their confidence in the company. Promoters will likely have information about the company’s operations, financials, and industry outlook.

Their decision to hold a significant stake in the company suggests they are optimistic about its growth potential. Conversely, if promoters sell their shares (OFS), or reduce their stake in the company, it may signal that they are losing confidence in its prospects.

Either way, both Fresh issues of shares and Offer For Sale (OFS) are best avoided. The reasons are given below.

Whenever an IPO hits the market we start getting emails/SMS from our brokers or other sources to invest in the IPO. This is the reason why almost all IPOS gets oversubscribed.

However, data suggest not investing in IPOs.

Here is a List of Recently Failed IPOs:

Zomato – Online food delivery company – IPO came in July 2021 – A known brand yet failed
Sona BLW Precision Forgings – Auto parts manufacturer company – IPO came in June 2021
Nazara Technologies – The mobile gaming company – IPO came in March 2021
UTI Asset Management Company – An asset management company – IPO came in October 2020 – A known brand yet failed
PayTM – Digital payments and financial services company – IPO came in November 2021 – A known brand yet failed

And some others:

Reliance Power – A known brand yet failed
RateGain Travel Technologies
Cartrade Tech
Krsnaa Diagnostics
SjS Enterprises
Kalyan Jewellers India – A known brand yet failed
Fino Payments Bank
Aditya Birla Sun Life AMC
Suryoday Small Finance Bank
LIC – A known brand yet failed

No doubt investors of all these IPOs must be ruining their decision to invest.

And do not forget that you cannot invest a huge amount in IPOs. It is somewhere between 10 to 15k. So even if you make 10% on the listing day, what will you do with One Thousand Rupees?

If you want to invest in an IPO then have a long-term view. IPO is just another stock. When you invest in a stock, you do research before investing, right? Similarly, you should do research before investing in any IPO.

Many good company stocks are available relatively cheap compared to their valuations – invest your money there not in a new company. Not much is known about a new company except what we hear from brokers or some business channels. It is better to avoid them altogether.

I hope this article will help you to understand why it’s not good to invest in an IPO.


Beginners Luck in Stock Markets

Have you heard about Beginners Luck? The stock market is a great place where everyone when they start trading or investing sees good profits. This lures them to trade more often and then within the next 6 months, they end up losing 6 times the profits they made in the first two trades.

Be cautious and keep writing your profit and losses in an Excel sheet so that you can check on your finances.

Learning to invest/trade doesn’t happen overnight. It takes time and effort to become successful at it.

You can either practise on your own or do my course or anything else – but you will not become a superstar overnight.

You should make a consistent income – however small it is should not bother you initially. Later when you get confident then scale.

Learning to trade is just like learning to drive a car. Initially, you need a trainer, then slowly you get into the driver’s seat with the trainer sitting beside you, then within months the trainer leaves and you start to drive but at speeds up to 40 kmph. You fear going faster than 40 kmph, then in the next 3-4 months you become more confident and can drive up to 80 kmph.

Well in any case it is better not to drive the car beyond 60 kmph unless it is a medical emergency. Start early so that you drive slowly yet reach on time, or if you started late still drive slowly to reach your office alive. Getting to your destination late and paying a fine is better than trying to get there too fast and never reaching there.

Stock market trading and investing are the same. Start slow – do not invest more than the minimum required for a trade. Keep a check. Respect your stop loss more than the profits. Keep your profits target double the stop loss target. Both should be reasonable. Try to be successful more than 60% of the time. If not you do something about it. Details of my course are here. See if it helps you then just do. If you have any questions you can contact me.