Financial Fate: Bringing Clarity to the Future

After going through the demo of FinancialFate software, I am completely bowled over. Here is a software which doesn't stop at monthly budgeting or organizing your portfolio and it actually helps you forecast and plan for the future.

This makes sense to me as financial planning is a dynamic exercise and it's important to visualise the various "what-if" scenarios. For example, if I enter a big amount for my entertainment expenses, there's this immediate warning that I'd go bankrupt after "n" years. The choice is mine, of course!!

The software is intelligent. After I entered my stocks portfolio, the software suggested an asset allocation plan based on my risk profile that I entered earlier!!

My wishlist for Monty would be a customized version for Indian users with Indian currency and customized to Indian tax laws.

Monty Hothersall, Co-Founder, Financial Fate, took out time to answer some of my questions. Here are Monty's answers:

1. What is FinancialFate?

Financial Fate is in-depth, long-range financial planning software designed for the do-it-yourselfer. It enables people to forecast and plan their personal finances and long-term cash flow projections.

2. People generally avoid Personal finance. What makes you think they will take to cash flow management and scenario mapping?

Eleanor Roosevelt once said, "It takes as much energy to wish as it does to plan." The problem is people had much rather plan a vacation than plan for retirement and college expenses. But a certain segment of the population, such as people that read your blog, are much more inclined to realize the importance of planning in order to achieve goals and spot problems on the horizon so they can be managed. People are always told to "crunch their numbers" or "do the math" when it comes to planning, but without a quality tool that provides realistic results, this extremely important advice is difficult for people to follow. And since cash flow is the lifeblood of personal finance, we created Financial Fate.

3. Everybody needs financial planning. What are your targets for the software downloads?

We expect hundreds of thousands of downloads over the next year or two. We might not get there, but it really helps when bloggers such as yourself are interested.

4. The software is Free! How do you make money? By providing financial education?

The software is free and will remain free for the consumer. Financial Fate will eventually generate revenue through three sources: an online version that is ad-supported, an online version that we co-brand with financial institutions, and a desktop version that we sell to financial planners. These revenue plans are scheduled to start around 2010.

5. What will it take to customize it for Indian tax framework?

Financial Fate's default assumptions are set using the U.S. tax code and the U.S. Social Security & Medicare programs. However, the user can adjust these assumptions in the software to closer resemble their own country's rules and regulations. It will not be perfect, but the user can view the output reports and make adjustments as needed. And eventually we plan to develop versions for other markets around the world.

6. What is the technology that you have used for this software?

The software is Java based which will give us the flexibility to create future online and desktop versions.

7. What are your strategies to reach out to the US consumer?

Public Relations. People are more likely to download software if a trusted blogger, journalist, professor, or employer tells them it's a relevant product and it's a need-to-have vs. a nice-to-have. In addition, many financial planners are currently using Financial Fate to help their clients plan. As for the future, we hope to distribute through co-branded platforms with banks and other financial institutions.

8. Do you plan an international version too?

Yes. An international version will require changes to the assumptions and currencies as well as some structural changes regarding the tax codes. These initiatives are slated for the 2010-2011 period.

9. Will you add more features like recording your portfolio, calculators in the software?

Definitely. We will add features that our customers desire. For instance, many have already requested more graphs to compliment the data reports. We appreciate this feedback and have it on our list of future enhancements.


10. You talk about financial education as means to achieve your goals. How do you propose to do that?

We will continuously improve Financial Fate's intuitiveness and ease of use. But we recognize that users will always need more regarding financial education and advice. We think online user forums may be one of the best ways to accomplish this.

All the very best, Monty.

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India's first online weekly on Personal Finance

Personal Finance Tracker Software for Indian Users

Measurement is the first step of Management. So we need to measure/track our Income & Expenses and Investments to manage it in a better way.

Trawling on the net, I did find some interesting softwares that helps in managing your money.

MyIris Plus provide a powerful desktop application & RupeeX have an awesome web based Money powertool. I intend to take a test drive for both of them and review them here.

In the meantime, I built this personal finance tracker on Zoho Creator which is for newbie users like me.

The idea is simple and they are:
# Manage & Track your assets and portfolio in a simpler way
# Filter & View your Portfolio on the Investment Categories and periodicity
# Create alerts and reminders
# Links to your choicest Financial Calculators
# Create your favorite bookmarks on personal finance which you may want to revert back again and again.

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India's first online weekly on Personal Finance

Eko: Financial Azaadi for the Unbanked Indian Population

From CGAP's Focus Notes 47:

• But in the same way that access to clean water is more than being able to buy a bottle of water, access to finance is more than being able to get the occasional loan.
• Access to finance really involves being connected to a national payments system, much like the national electricity network.
• Once I have a transactional account in a “payment grid,” I can receive and repay loans, save up and withdraw from a savings account, and use the proceeds to pay for what I need.
• This transactional account is my gateway to a range of financial services, it gives me a financial history, and it is the basis from which I can manage my financial life.

Eko's objective is to connect the vast untapped & unbanked Indian population to the Financial Services industry with the ubiquitous mobile phone.
Really impressed with their work, I shot off an email to Abhishek Sinha, CEO requesting his thoughts on Eko, future plans and using ICT for making financial education available to one & all.

Thankyou, Abhishek for your prompt response and it's reproduced below the fold:

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About Eko: I used to run a mobile value added services company before doing Eko. We did some mobile commerce projects in my previous company and what came across blatantly was the fact that there was no mobile commerce for people who used cash and did not have bank accounts or credit cards. This germinated the idea behind Eko though it has evolved to a great extent.

Future Plans: Today, Eko has evolved and will continually evolve into a very low cost infrastructure for financial services. We are working towards extremely low cost of transactions and servicing while making the model rapidly scalable. Any financial product should be able to ride over it and reach the unreached. In a very similar thought process, we are looking for a scalable model for financial literacy / awareness.

About ICT: As far as ICT is concerned, I am in total agreement with you. Even in Eko we try and look at ICT for most of our problems as apart from the solution it ensure efficiency and low cost. We have adopted mobile as a channel as we see a mobile phone as a low energy consuming, always on IT device which should be used to connect to the customer. Mobile has breached geographic boundaries as well as customer segments.

While using mobile, we leverage a lot existing behavior associated with mobile. This video should explain this more.

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Thankyou, Abhishek and all the very best.

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India's first online weekly on Personal Finance

BankBazaar.com - India's first Interactive, Realtime Online Loan Market

Personal Finance space is slowly but surely getting the attention it deserves. I have chronicled some of the efforts in this space and you can also see all the posts under the personal finance websites category

Another hot start up in the personal finance space is BankBazaar. They provide an interactive online platform that helps the user procure loans. The entire loan seeking process takes place online and can be completed in 15 minutes flat, while the process of comparing interest rates across banks can be possible within 2 minutes.

They offer instant interest rate quotes that matches the applicant's credit profile. Even before he shares his contact information, he would know the loan amount, tenure and interest rates he is eligible for and all this in just 2 minutes before he begins his loan application process, which is also completely online, with no phone calls needed. BankBazaar claims that this kind of personalized interest rate comparison is the first of its kind in the world.

I am waiting for them for rolling out all the remaining financial products which include insurance, credit cards, all other loan products including LAP, business and education loans.

I also had the opportunity to ask Adhil Shetty, CEO, a few questions on the opportunities and the challenges of working in this space.

Adhil Shetty, Founder & CEO, BankBazaar.com, prior to relocating to India, lived in New York City and managed Deloitte Touche Tomahatsu's US East alliances with the world's leading Information Management Company. Earlier in his career, Adhil worked with Cisco Systems as an engineer in Bangalore and San Jose. Adhil has a Masters degree in International Relations with a specialization in International Finance and Business from Columbia University in the City of New York, and a Bachelors degree in Engineering from the College of Engineering Guindy, Anna University.

Q1. What do you think is the size of the market?

Adhil: In 2007-08, retail lending in India was over 140K crores, and general insurance premium collected was over 90K crores. A significant portion of this retail loan and insurance distribution can be channeled online- Bankers in India believe that a fourth of total disbursements can be channeled online over the next 24 months leveraging web 2.0 technologies. Given the trend that one is increasingly booking flight tickets online, paying electricity bills online and even finding their respective life partners online, I am convinced that the benefits of instantly competing real time loan offers online will find acceptance among the Indian audience.

Q2. What are the challenges in the Indian online scene?

Adhil: Building awareness of our innovative and differentiated product amongst Consumers is a key challenge. We offer a far superior customer experience from the low-value loan aggregation platforms that are in vogue today. Here is how loan aggregation platforms work: they merely generate leads for banks i.e. they sell users' contact information to bank agents. These agents then call the customer and try to market their product. So customers still need to provide their detailed information to each of these agents individually to receive customized quotes, they still need to bargain with each of these banks and they still have trouble comparing the complex offers they are being given. The www.BankBazaar.com model adds significantly higher value to the consumer as it offers an end-to-end solution i.e. the consumer gets to do everything online, right from getting customized rate quotes, comparing the offers and applying online directly to the bank.


Q3.What are your marketing strategies?

Adhil: BankBazaar.com is using online marketing strategies to build awareness of the site among the online population. We also believe in the power of word-of-mouth recommendations. Once the customers experience our offering, we are confident that they will find it attractive, especially as we make it easy for them by saving time and money.

Thank you, Adhil and all the best! I'll be awaiting the roll out for insurance, credit cards, all other loan products including LAP, business and education loans.

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India's first online weekly on Personal Finance

Making New Beginnings On This Diwali

While Deepavali is popularly known as the "festival of lights" and "triumph of good over evil", a more appropriate significance is "the new year of luck and wealth". At least for me!

Especially since there are a lot of ideas that needs to be implemented in the coming year. For example, we have started building/designing modules for personal finance education. We are also building a Personal Finance Discussion Forum & a Financial Products Database

Personal Finance education is a relatively untouched area. And let me give you some dope why it's a bad idea to ignore it. Personal Finance looks at how an individual’s money and future is managed.It involves analyzing their current financial position, predicting short-term and long-term needs, and recommending a financial strategy. This may involve advice on retirement planning or pensions, wealth creation through stocks and mutual funds, children’s education, home loans, life insurance, and other investment.

So, don't you think it's a good idea to start building those modules for personal finance.

Wikis provide the tools for online collaboration and so we set up a wiki on this Diwali day to help us collaborate on this project.

We welcome your feedback, articles and suggestions to build the modules on personal finance. If you want to contribute by writing articles on a relevant subject, you are more than welcome.

Happy Diwali!

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India's first online weekly on Personal Finance

Personal Finance Forum on PhpBB

On Sunday, I installed PhpBB Forum software on a subdomain of my personal finance website.

Though I am pretty satisfied with the theme/layouts, the success of the forum depends on users.

I don't really know if this forum will be actively used. I'm hoping it is.

Do take out some time and register. And then, share, discuss and ask personal finance questions & issues. Thanks

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India's first online weekly on Personal Finance

Systematic Approach to Saving, Investing and Spending

IdeasMoney has an interesting post on Saving/Investing Regularly

It's a story about a guy who got a car ( worth almost 7 Lakhs) out of just 70,000 which he invested a decade ago and left with some good money too!!On the contrary lets look at a person who buys a car on EMI. he pays almost 15% as interest. By making money work for you ..you tend to gain in the long run. But this requires tremendous patience and a systematic approach.

India's first online weekly on personal finance

Top Personal Finance Websites Review

Here's a review of the top personal finance websites from a top PF Blogger

Wesabe is a personal finance site that provides budgeting tools, personal finance tips, and a lot of discussion forums, plus compared to the competition, it has the most secure data policies as well - you don’t have to actually give them your account information.

When they first launched, I was fairly critical of them in two respects: their privacy policy wasn’t clear (even though I respected how they actually handled the data) and it was difficult to browse the other content on the site. The very first commenter on the post was Marc Hedlund, one of the cofounders of Wesabe, who explained what was going on and basically pledged to do exactly what I requested. Lo and behold, within just a few months, they had done exactly that.

Later on, when I compared Wesabe to Quicken Online and Mint a few months back, I gave the most positive nod to Wesabe (though I didn’t fully endorse any of the three). In fact, Wesabe was the only one of the three that continuously drew me back to poke around, even though I didn’t actively use their budgeting tools. I often poke around their discussion forums and other areas.

When will we have such personal finance websites in India? It's a big opportunity waiting to be tapped. Read my own "Success Mantras" for this space.

My web channels are rolling out

After I posted about my Internet Assets, I have started paying more attention on a few of them. As part of the attention, I have to request you to check them out.

New ULIP Launch by HDFC Standard Life Insurance

FIIs and MFs have divergent vies on Sensex

Time to increase your Gold Portfolio

Startup Stock Exchange

Gold ETFs: A primer

Why bother Managing your own Money

There are more important things to worry about than bothering about managing your own money. Like how the Finance Minister is handling the Nation's budget. Saving where he should spend and spending where he should save!

Or how RBI is managing the monetary policies for the country. Or the Subprime mess that is raising a stink in the US (and worldwide).

And if you are done with that, you need to worry about your Company's finances. Whether the capital is enough and accounting ratios are on the right track. And we have complex financial statements and models to keep us informed about the financial health of the company.

So where does handling my own money stand in the pecking order? You need to answer that for yourself. And that's why it's called personal finance, I guess!

And there's nobody to teach you anything on "managing your own money". Especially when you see advanced courses in Economics and Business Finance vying for your attention.

However, there's some initiative beginning to happen in this space. This course, for example

Or my own 6 modules on handling your finance

How to succeed setting up a Personal Finance portal

Only two days have gone by after I wrote about the personal finance space gathering momentum, and there's another portal PaisaWaisa that has been launched!

PaisaWaisa offers comparison and expert advice in diverse areas like Tax filing, Loans, Insurance, Credit cards, Banking and Real Estate.

Tax filing looks to be an attractive option where a lot of web start ups are trying their hand.

But again, while the entry barriers are very low, the execution remains the key to success. I saw this sad story on Pluggdin, where FilemyReturns, an online tax filing company which has even raised VC funds, has a shoddy user experience. Not even the login is working properly!

This leads me to think on what are the "essentials" on succeeding in this space. Here's a list (WIP)

1. Knowledge: It's easy to be attracted to the personal finance space by the numbers and the potential of earning millions. But unless you have real knowledge of this space,the initial enthusiasm can drift to lack of motivation to carry through.
   
2. Team: The managerial team should have the passion to succeed as well have some experience in building web portals
3. People: Once you get the Beta launch right, it's time to build people who will have to execute. You need trained people to look after Accounts, Sales, Business Development, CRM, HR, etc. This really is the key. I would make this part the most important one.
4. Distribution: Some of the personal finance portals might have a model on selling products. They need to have a pan India presence and have Advisors / Financial Planners as Affliates all over the country.
5. Financial Literacy: The financial literacy levels in India is abysmally low. The portals can do well to make an effort in educating the people on the importance of holistic management of their money. The target market has to be developed so as to succeed in this space.
6. Kaizen: Since this is a new and fast maturing market, continuous review and research on what they are doing right/wrong is important. You need to constantly measure and evaluate your customer response and look at ways on improving them.
   

It's a WIP list and I'll add/ update when I have more thoughts. What are your thoughts?

Personal Finance Space in India gathering momentum

Suddenly the personal finance space in India is getting some attention it deserves from Web companies in India. Check out my previous posts with the label of pf websites

Two days ago, Alootechie blogged about InvestmentYogi and then on StartupDunia, I saw some good words for iTrust

InvestmentYogi (The name looks inspired by Deepak Shenoy's Moneyoga) aims at building a community of learners who share their experieces while growing their money. And so their tag line is Learn. Share. Grow. They have some cool videos too! And a Portfolio Manager. (Why they have a feature (coming soon) of sharing your portfolio beats me! Who would share his real one in India!?!)

iTrust ....making finance as simple as 1 2 3.. claims to be a personal finance company for the modern Indian consumer who wants honest and independent service. They are basically selling Mutual Funds, Home Loans, Insurance, Real Estate, all under their umbrella.

I wish them all the best. After all, execution is the key here. (Which brings me to apologize to my readers of my personal finance website for not being able to update regularly :( )

Another guy working on this space is Raag Vamdatt. Visit his site for articles on personal finance. He also has a Business Directory, if you need one.

Meet Ramit Sethi of IWillTeachYouToBeRich.com:

I am a big fan of Ramit Sethi's blog on personal finance (banking, saving, budgeting and investing) and personal entrepreneurship. And I was delighted to be able to meet him in person while he is on a vacation to India.

Ramit is a graduate of Stanford, where he studied technology and psychology. He's the co-founder & VP of Marketing for PBwiki, a wiki startup in Silicon Valley.

We chatted up on many things included the ghee filled wedding food, bargaining/negotiation skills of Indians and how even poor people are happier here compared to USA and the Dharavi tour. I suggested him to take a local train ride to understand the spirit of Mumbai!!

I also got a lot of insights on how to be a better blogger and I want to share some of those.

• Understand your reader: Have we ever thought of or tried to find out what kind of readers are coming to our blog. We need to know the audience. Some kind of research/ poll should tell us about the visitors to our blog.
  
• Write with that reader in mind: Writing for a techie or college grad would be different from writing for a guy who already has 4-5 years of work experience.
• Have a tag line that people can identify you with: There should be a small but distinct description of what you write or who you are. It's like describing a brand that you are or want to become.
• Focus on content and telling stories: The best way to talk about personal finance is to tell stories and how it is related to other interesting things like food, losing weight , etc.
  
• Find out where you want to see your blog in 3-5 years.
  

Thanks Ramit.

India's first eBook on personal finance

A lot of people feel "threatened" when dealing with money and most people phase out when money/ savings/ investing/ tax/ stocks/ insurance/ funds are discussed. After tackling them over the last one year on my blog and website , I hope to construct an easy-to-digest, friendly e-book that people want to read and understand!

This e-book is only 21 pages and will not take more than an hour to go through. No matter who you are and what you earn, my feeling is that this one hour can help you understand money and change a lot of things for you, for the better!

Personal Finance is about managing your own money. There are scores of books and courses to manage the finance of your business or a Company. Then there are books on finances of the Government (Monetary, Fiscal Economics).

But are there enough for managing your own finances? Which is equally, if not more, important for all of us. And moreover it's simple and not rocket science!

Download the eBook

AllTop: Aggregator of the best websites & blogs

Guy Kawasaki has done it again! With the internet exploding with information overload, here comes an aggregation that classifies information from the best and popular sites focusing on a particular niche.

For example for personal finance, check out the AllTop on Personal Finance

AllTop helps you explore your passions by collecting stories from “all the top” sites on the web. They’ve grouped these collections — ”aggregations” — into individual Alltop sites based on topics such as environment, photography, science, celebrity gossip, fashion, gaming, sports, politics, automobiles, and Macintosh. At each Alltop site, they display the latest five stories from thirty or more sites on a single page.

Hoping to see my website on that list!!

India's first online weekly on personal finance

Search & Filter Financial Products in India

There are thousands of financial products. Over 700 Mutual Fund schemes, more than 2500 stock scrips to choose from, over 300 Insurance schemes, plenty of Debt/Bond products (Government:NSC, KVP, Corporate Bonds)

There are lakhs of financial advisors and they are a very fragmented group. Most of them have limited knowledge of personal finance. To my knowledge, less than 1% of this huge number are certified financial planners having a holistic view of your personal finance decisions. Rest of them sell selected products without having much knowledge of the other products available.

As individuals, we have to take the blame for being lousy with our personal finance decisions. We need to do a bit of research and find out the best suited products for ourselves. But where to start?

Is there a database which will give me an overview of the products available? Under various categories like Mutual Funds, Stocks, Insurance, etc. And can I look at the sub categories like Open ended & close ended Mutual funds, for example? Can I have a view of the products available for a particular company, say LIC?

Moving beyond the product listing, can I have a summary of the products that interests me? Is there some database which lets me take a look at the costs, benefits and the USP of a particular product?

Do you have more questions? Your question will help me in building a better and more informative database.

India Personal Finance Websites and Portals

Sramana Mitra says that the Personal Finance is one of the top segments that draws online advertising dollars and Personal Finance is an important vertical as

• 61% of the Internet users use the internet to research stocks or check their bank accounts and
• around 73% of the Internet users’ research sources for investments, mortgages and insurance.

That might be true in the US with exciting websites like Yahoo! Finance, Google Finance, ETrade, Fool, Seeking Alpha MSN, CNN, AOL, and Marketwatch.

But in India when I searched for "Personal Finance websites in India" My PF site ranked No.1 on Yahoo search, ahead of Yahoo Finance India! I rank 3/4 on Google too!! This makes me very happy but also reflects on the fact that there are very few good sites in India which covers the personal finance sector in its entirety. As Mitra says in one of her comments, the segment is wide open in India.

Yes, there is MoneyControl and PersonalFn provide good information and tools for managing one's finances. But there's a lot of potential for more websites that offer research, community features, directory of financial advisors, portfolio management tools and comparison tools.

This post will be a sticky one and I intend to review personal finance websites in India in detail here. It will be a longish post and I intend to keep it updating and chip-chopping! (using the power of blogs)

Before that, let me categorize personal finance websites (PFW) in two broad categories:

1. PFW providing opinion and reviews designed to provide information and/or selling a financial product. PersonalFn for example, gives excellent review and information and also doubles up selling financial planning to readers. They survive with advertising money like print media. They can be unbiased and independent. But there aren't many in India right now. That probably explains why my 4 month old site appears on page 1 when you search for them!
2. PFW providing selective information designed to sell a financial product. Like an Insurer's website will provide information on their own insurance products and not on competitors or other financial products. Also the information is selective, i.e. designed to sell the product and all positives will be mentioned.

Category 1 Websites: (All rounders, Mutual Funds, Blogs, etc)

All rounders:

• To my mind the best PFW in India is PersonalFn. Their tag line is "Money. Simplified" and they live up to that. They have well researched articles and provide financial planning services which appears to be honest and ethical. I called up their numbers and got a good initial response. But I did not really get any follow up calls :( . There SEO also needs some optimization so that whenever you search for personal finance in India, you should land up to their site first.
• PersonalFn is a wholly owned subsidiary of Quantum Financial Services and they have an excellent Stock Research site at EquityMaster. They have a very informative Year Book 2008 of 200 top Indian companies which is a must read for any stock investor. I have had some sneek peeks at their research reports and I found them lucid and insightful.
• MoneyControl, a TV18 initiative, has the tagline of being India's No. 1 Financial Portal. They are very strong in Stocks news and analysis. I would like them to offer comparison tables for financial products too as they are trying to do with consumer goods at CompareIndia
  

Mutual Funds:

• ValueResearchOnline is the complete guide to Mutual Funds in India. It is independent, unbiased and has a very efficient method of rating the MF schemes under varios categories and manged by various AMCs. Best in class, no doubt about it. But I wish they could be more interactive. My numerous mails and questions go unanswered. And a bit uncluttering of the site would be my personal wishlist for them.
  

Coming next is Financial services wise websites (Insurance, Mutual Funds, etc), personal finance Blogs and more!

To be continued....