Let’s Talk Money by Monika Halan – Book Summary

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The book Let’s talk money is one of the essential books that one must surely read regarding the personal finance that is based on the Indian Markets. As there are not lot of Personal Finance book available for Indians.

Monika Halan’s books lets talk money covers complete personal finance from money management to retirement planning. Personal finance is one of the topics which is mostly not discussed among the Indian which leads to illiteracy. At times this causes bad financial decisions. The book lays down financial planning in simple, Jargon free plan. 

The Money Box order

Creating Money Order
Creating Money Order

One of the major problems in saving is the cash spent on the expenses and after which hardly any money is left to save. To understand this we need to understand the psychology behind it, that is whenever we see money lying in the bank account the brain thinks that it is free that can be used for expenditure. Hence to have savings we need to have a system in place to start saving.

The first system mentioned by Monika is to create three different accounts – Income account, Spend-It account, Invest its account. As per the name, the same is the function of the account. Every month the money is credited in the salary account then transfers the money in respective accounts within 30 mins.

At times you may even get the call from the relationship about not to transfer funds so rapidly from the salary account because they have their deposit targets to be achieved. Now start tracking your monthly expenses with various money tracking apps.

Rule of caution Never, I repeat ever transfer the money from Invest-it account to Spend-It account. The first aim should be to transfer at least 10% of the total salary amount in the Invest-It account. In cases, this may not be possible to start from 1 % and gradually increase it.

A general thumb rule to follow 50 (living cost)-30(EMI payouts) -20(Savings) Once these accounts are set -up you need to set-up funds for emergencies, this can be used only in unplanned emergencies.

So how much do you need??

  • Emergency money (funds)  should have at least your 6 months living cost.
  • If a single income with a dependent parent has 1-year living cost.
  • If double income with no dependents then 3 months of living expenses.

Invest this money by creating several FD so even if one FD is used up the interest on the rest amount is not lost. Invest in Flexi-FDs or even short term debt funds.

Building up the Financial Security

Most of us don’t view insurance products as life cover but as an investment which defeats the whole purpose of insurance. Most Indians think that health insurance plan provided by the employer is sufficient but that is a major misconception. If you lose the job you also lose out on the medical insurance from the company.

Smiling women

Always have insurance to protect your savings, the medical expenses also depend upon the type of hospital and the type of rooms used. The author mentions that as a thumb rule 3 lakhs for small towns and fewer facilities, and around 15 lakhs for the metro cities with posh facilities.

For an insured family, one must opt for a family floater which includes Father, mother, and two kids.

The next step is getting insurance for the family if there is a loss of the breadwinner in the family. For that, one must have a life cover. The common misconception as per author is that people think if they get nothing back it is a loss. But the purpose of the insurance is to provide financial stability when there is a loss of the bread earner in the family.

How much amount should be insured, a basic thumb rule is to have around 8 to 10 times the annual take-home income. You should buy this insurance when you have dependents or the possibility arises.Learn about things to consider when buying insurance

Understanding Investing

Most of you resist investing in the long term this is because to keep some money liquid for the emergency. At times people resist investing because of a lack of knowledge in investing.

Most people think that the share market is a sort of gambling and think it needs a huge amount of money to start investing and postpone it to a later stage. A basic investment can start from a bare min of Rs 1000.

A lot of people invest but fall prey to inefficiency, low returns & high cost. The first main point is understanding investment and also creating investment goals around the. Understanding financial terms is an important way to kill the confusion. The less you understand the more chance that you can be cheated.

Any planned expense that occurs in the next 3-5 years is termed as a short term investment. Anything more than 5 years is a long term investment. Expenses that can be deemed short term is buying a car.

Investment asset classes are

Debt – A financial product that is based on borrowing (Debt Mutual Funds)

Equity – Is ownership of a business that bring along the risk directly ( stocks ) or indirectly ( Mutual Funds)

Real Assets – Includes all tangible investments like gold, real estate.

Let’s Start Investing

nvesting in debt, the role of debt is to provide money in short notice and to provide stability to the long term investment made. Then why not invest all the money in debt you may ask ??

The aim of debt investing is to provide stability for ongoing cost and not growth.

Investing in gold (Real asset) – Monika mentions that investing in gold should not be more than 10% of the portfolio value as a gold sovereign bond which is backed by the government and fetches yearly interest of 2.5%. The disadvantage of holding physical gold that value depends on the purity and making charges hence drops the value for it around 10-30% at times.

Real Estate (Real Asset) According to this book, people see real investment as a good option because they see it from point to point investment i.e a house purchased at INR 50 Lakh and the end sell it for INR 1 Cr. But people forget about the maintenance charges or the property taxes associated with it. This averaged out gives a return of about 12% on real estate.

Money in equity gives out profit through capital appreciation. Investing in equity is not like gambling on the street once you understand the fundamentals of stock markets.

FDs provide lower returns and destroy the purchasing power due to inflation. Gold does badly because it goes through ups and downs and eventually loses the steam when compared to equity on long terms.

While investing in the market, holding the investment for a longer period is key to get good returns on the investment. Investment should be easy to exit, cheap, and easy.

Mutual funds are one of the best ways to expose to equity.

Quote By Monika Halan From book Let’s Talk Money

Understanding Types of Investment Funds

Mutual Funds– AMC company that has experts who continuously study the share market and work towards making profits for the investor and charge some percentage for it. These AMC companies create their own mutual collection of shares in the funds.

Debt Mutual Funds – A company needs money for both short-term and long-term needs. It issues bonds. A bond will pay regular interest to the lender, and then at maturity, it will repay the principal. There are different kinds of bonds according to the time that the money is lent for.

Investing in different funds is called risk diversification. we reduce our risk by increasing the number of products we hold.

Liquid Funds – Liquid funds buy short-term bonds. Therefore, the money you have to put in a liquid fund must be money you need in the short term.

Ultra Short Funds -.These funds invest in bonds that have an average maturity of about nine months. They buy debt papers that mature in a week to eighteen months.

Remember the debt funds are not risk-free you need to watch out for credit risk.

Gold Fund – These are funds that invest in gold. They buy actual gold and track the price of gold in real-time. The product is called a gold exchange-traded fund (ETF). We’ll understand ETFs in just a minute, but for the moment it is enough to know that instead of buying physical gold, you can buy gold that is held by the mutual fund through a gold ETF.

Investing in Equity Funds

If you’re starting out new it is always better to buy in regular equity funds because this will not affect the peace of mind of buying the wrong funds. As the regular funds are managed by the active my fund managers. While investing in the funds lookout for the exit load & expense ratio lower it is better.

The performance of the fund manager largely depends upon the fund manager skills of selecting the right stocks. While there are also passive managed funds that are investing in index funds.

Investing in passive funds is the more sound option right ?? but the Indian market still has some left alpha in the market. It is the additional returns that are achieved over the market index.

Putting the Money Box together

The book Let’s talk money at the end section teaches how to create a simple portfolio When buying an investment product, always look into the cost of purchase for it. Sometimes buying a product can end up having 42% commissions in the pockets of the salesperson. Next is looking for the administration charges or the expense ratio that have the ability to significantly eat up your profits from the investment.

Remember that even if the funds have a loss the fund manager still makes money through expense ratio. Exit Load is the cost associated with exiting the funds from the funds and taking care of the formalities. If you leave the fund in the middle at times you are charged heavily.

Calculating returns always try to benchmark it with the bank FD. Always look at the returns for about 3,5,10 years and compare with the other in the category. Stay away from products that give you returns in absolute numbers – Rs 1 lakh will become Rs 5 lakhs. This does look like a return of five times, but when you understand that this is over thirty years, the return works out to an unimpressive 5.5 percent a year.

Lock-in period – A lock-in means that you cannot withdraw your money for a certain period of time. Traditional plans don’t have a lock-in, which means you can stop funding the policy whenever you want, but the policy tenure could be ten, fifteen, or even thirty years. Don’t confuse the premium-paying term with the policy tenure.

Taxes – Mutual funds have two types of taxes that are short -term capital and long term capital gains. Short term capital gain is charged when the equity is sold off within one year and charged with a 15% tax. Long term tax is charged for 10%.

Always diversify the investment to reduce the risk. Investing in equity and debt a thumb rule is 100 subtracted by your age, Eg 100 – 30 ( if your age is 30 ) then invest 70 % in equity and 30% in debt and as you age start increasing the amount in debt and reduce inequity.

Investing according to terms as per the author

  • 2-3 years holding period = 25% money in equity and rest in bonds.
  • 5-7 years   = short-term debt funds and conservative hybrid mutual fund
  • More than 7 years holding period = hybrid mutual funds and diversified equity funds.


Targeting too large a number, making compromises on lifestyle today, and having too little is not something we want to think about. So how much is enough?

Retirement Planning
Retirement Planning

At age, twenty-five save 25 % of your post-tax income, at age thirty save 30 % of your post-tax income. At age forty save 40 %. This formula works if you don’t have a single rupee saved towards your retirement. The first step is to use a simple future value calculator to see how much you will need today. For example, if your current annual expense is Rs 6 lakhs at age thirty, and we assume an inflation of 6 %, in thirty years, at age sixty, you will need Rs 34.46 lakhs a year.

You need to target eighteen to thirty-five times your annual spending at sixty for your retirement. In this case, you are taking a multiplier that is halfway between eighteen and thirty-five or, approximately, twenty-six.

Retirement Milestones

  • At age forty, you should have three times your annual income as your retirement corpus already.
  • fifty year, you should have six times your annual income.
  • At age sixty, or at retirement, you should have eight times your annual salary.


This book is aimed at all those who want to understand personal finance in India. The book gives in very well tips for safe investing along the way helping you complete investment goals. This book is not for those who are looking in for cash in big returns for investing. This books cover all topics right from how to start save up-to creating the dream life for your retirement.

One-Line Take Away

  • Always invest in the product according to the financial goals
  • Longer you stay invested in the market the safer is the investment
  • Early you start bigger is the return corpus

About the Author

 Monika’s goal is a fair marketplace for all participants in India’s retail financial sector.She is Consulting Editor with Mint, India’s second largest business daily. A Certified Financial Planner. She has public policy experience working with the Government of India as an advisor to the Swarup Committee in 2009. She has served as a member on the Ministry of Finance Committee on Incentives (Bose Committee) and is a member on the Sebi Mutual Fund Committee.

Book Recommended

This book should be read by every person who is looking to understand the personal finance and want start investing. Every person who is looking understand personal finance in simple words and dont want to do heavy reading about investing.

Score – 8/10



Roopesh Bhosle is an author at Hackedwits and writes on summary for books from Business and Finance. A Project Manager at day and content writer at night. Love to learn new things, to connect dots in life. Connect with me on LinkedIn for collaboration on project or Guest Post

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1 Response

  1. October 6, 2020

    […] of us think that if we want the financial freedom mutual fund is the option but then the question comes which one to select as there are too many options […]

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