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                    [post_content] => 2017-02-14                                   (This article has been published in Finsight- February 2017)

Gone are the days when homemakers were solely tasked with the running and maintenance of the household. Today, they are equally involved in the investment-making decisions of the household.

Some of the common investment choices preferable to homemakers include:

 Trivia: A study conducted by DSP BlackRock Investment Managers depicts the relationship of working and non-working women with financial investments. According to their study, 92% of the working women and 84% of the non-working women made financial investment decisions. Among this 84 % of homemakers, 10% were the sole decision-makers when it came to making a decision about a financial investment while the remaining 74% were joint decision makers.

-Rupanjali Mitra Basu Founder and Chief Training Enthusiast at FinProWise

[post_title] => Homemakers and Investment [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => homemakers-and-investment [to_ping] => [pinged] => [post_modified] => 2017-02-14 16:43:16 [post_modified_gmt] => 2017-02-14 11:13:16 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.fisdom.com/?p=4170 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [1] => WP_Post Object ( [ID] => 4166 [post_author] => 1 [post_date] => 2017-02-13 15:49:22 [post_date_gmt] => 2017-02-13 10:19:22 [post_content] => 2017-02-14 (2)                             (This article has been published in Finsight- February 2017) The two news-worthy pieces this month have been the Union Budget on 1st Feb and monetary policy on 8th Feb. Both were noteworthy for what they didn’t announce than what they did! The Union Budget shied away from any major changes in personal, corporate or capital gains taxes. But it also stayed clear of any populist giveaways ahead of the state elections, choosing fiscal prudence instead. The uncertainties around recovery from demonetization and impending GST roll-out could be major reasons for the modest budget. The RBI, in its monetary review, decided against cutting interest rates. It cited the need to further control inflation. It also signaled that it was unlikely to cut rates in the near future, by shifting its monetary stance to ‘neutral’. This indicates the RBI believes that current rates are low enough for economic / investment revival. We need to see if the future bears this out. The relatively radical moves in the budget include a cleaned up political funding through electoral bonds and more powers to the taxman for search-and-seize and property confiscation of absconders. Yet, the Finance Minister shied away from more bold moves - bringing agriculture into the tax net, changes to service tax thresholds/rates, banning of participatory notes, bringing down overall tax rates or announcing a universal basic income. The government has made the realistic projection of its revenues and set a good fiscal deficit target of 3.2%. We expect buoyant government coffers this year, which could increase public expenditure, especially towards affordable housing and infrastructure development. We believe more changes on the indirect tax side could kick-in once GST is rolled out later this year. On the whole, we share the market’s relief that there are no more giveaways and freebies in the budget. The fiscal deficit target and the RBI’s hawkish stance indicate strong commitment to keeping macro-fundamentals stable. This makes us positive on the Indian economy and equity markets in particular. [post_title] => What was the union budget and monetary policy meet all about? [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => union-budget-monetary-policy-meet [to_ping] => [pinged] => [post_modified] => 2017-02-14 16:50:43 [post_modified_gmt] => 2017-02-14 11:20:43 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.fisdom.com/?p=4166 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [2] => WP_Post Object ( [ID] => 4161 [post_author] => 1 [post_date] => 2017-02-13 16:13:42 [post_date_gmt] => 2017-02-13 10:43:42 [post_content] =>

2017-02-14                                   (This article has been published in Finsight- February 2017)

LIC Jeevan Akshay VI has been a heavily advertised product in the insurance space. This is an immediate annuity scheme (the one where you pay a lumpsum amount and receive a regular income stream for a definite period or life) with multiple payout options and tenures. The LIC Jeevan Akshay VI scheme offers an annual return between 6.9%-7.4%, with a return of principal, - where the rate offered is higher for older investors. For instance, if you have saved Rs 50 lakh towards retirement and invest this in Jeevan Akshay VI, you can expect a monthly payout of Rs 26 thousand pre-tax. But if you have other retirement income as well and fall into the 20% tax bracket, your post-tax income could fall close to Rs 21 thousand per month. We believe this is a poor return: Thus, our verdict is that this is a poor product. If you have a retirement corpus and want a monthly income from it, you are better off investing it in a Monthly Income Plan (MIP). As shown in the illustration, a MIP has the potential to give the higher return. Since 15% of it is equity-linked, it can also deliver a higher return over the years to protect you against price-rise. [post_title] => Is LIC's Jeevan Akshay VI as good as it sounds? [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => lics-jeevan-akshay [to_ping] => [pinged] => [post_modified] => 2017-02-14 18:42:25 [post_modified_gmt] => 2017-02-14 13:12:25 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.fisdom.com/?p=4161 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [3] => WP_Post Object ( [ID] => 4159 [post_author] => 1 [post_date] => 2017-02-13 16:17:19 [post_date_gmt] => 2017-02-13 10:47:19 [post_content] => 2017-02-14                                 (This article has been published in Finsight- February 2017)  Personal income tax has been a major area of tinkering in budgets historically. This time too, expectations were high and multi-faceted: ideas of increasing thresholds, reducing slabs, bringing part of agricultural income into the net and imposing long-term capital gains on equities were doing the rounds. Compared to expectations, the changes in Budget 2017 were modest and fiscally prudent with no major giveaways. There’s been a bit of the Finance Minister’s trademark Robin hood strategy of minimizing the tax liability for brackets to 5% (for taxable income between Rs.2.5 lakh – Rs.5 lakh) and partially offsetting it through an additional surcharge levy on high income earners – 10% of tax liability, for an annual taxable income from Rs.50 lakh to Rs.1 crore. Following is an illustration of how your tax liability computes for different levels of income under the new taxation regime:
Taxable Income (Rs) Proposed Tax Liability (Rs) Savings compared to earlier slabs (Rs)
2.5 Lakh 0
3.5 Lakh 2,575 2,575
5 Lakh 12,875 7,725
10 Lakh 115,875 12,875
40 lakh 1,042,875 12,875
50 Lakh 1,351,875 12,875
75 Lakh 2,336,813 (199,563)
1 crore 3,186,563 (276,813)
1.1 crore 3,701,563 14,806
  Possibly to avoid shaking the boat further on an economy recovering from demonetization and bracing for GST, the Finance Minister has avoided other radical moves on agricultural income and capital gains. However, he has wisely avoided narrowing the tax base further by increasing thresholds – he has instead opted to reduce the lowest slab rate to 5% and provide relief. There have been a few tactical moved – interest on all home loans is deductible only to the extent of Rs 2 lakh per year. The time horizon for treating gains on property as long term is now two years instead of three. But on the whole, it’s been an incremental and stable personal tax regime from the budget. [post_title] => Personal income tax and the budget effect [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => personal-income-tax-budget-effect [to_ping] => [pinged] => [post_modified] => 2017-02-14 16:42:47 [post_modified_gmt] => 2017-02-14 11:12:47 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.fisdom.com/?p=4159 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [4] => WP_Post Object ( [ID] => 4134 [post_author] => 1 [post_date] => 2017-02-10 17:26:18 [post_date_gmt] => 2017-02-10 11:56:18 [post_content] => 640x380_1 An NRI has many avenues to invest. Out of that, we have already discussed the fixed income investment options like the various types of Bank Fixed Deposits, investment in Government Securities and Bonds, Certificate of Deposits and NPS. Now, we will discuss the other investment options with an element of risk with a higher return. Tax implications are same for both NRI mutual fund investors and resident investors. However, the tax is deducted at source (TDS) for non-resident investors. Any long term gains (>1 year) on equity mutual funds do not attract any tax. Short term capital gains of equity mutual funds are taxed at the rate of 15%. In the case of debt funds, short-term capital gains (<36 months) are taxed as per the individual’s tax slab and long-term capital gains are taxed at 20% with indexation. Investing in mutual funds, especially through a systematic investment plan, is a prudent action to build long-term wealth. Tax treatment for NRIs investing in direct equity is same as that of resident individuals. However, the tax is deducted at source (TDS) for non-resident investors. There is no tax on long-term capital gains in equity. And, short-term capital gains are taxed at 15%. However, investing directly in equity can be a double-edged sword- you can either earn exponentially with a right decision but there are equal chances to lose exponentially if you take a wrong call. For a typical NRI with limited knowledge and time to invest towards tracking and monitoring the stock market, a mutual fund route to investing is advisable.  In a case of sale of property, a tax is deducted at source by the buyer at 20% for NRIs. Long-term capital gains are taxed at 20 % and short-term capital gains are taxed at 30%. However, NRIs are allowed to claim exemptions on long-term capital gains under section 54 (investing in another property in India to the extent of proceeds) and section 54EC (if proceeds are invested in certain bonds).  The TDS and incidental capital gains tax makes investing in real estate an unimpressive decision for an NRI. In case you missed out, you can read about the other options by clicking here - Options for NRIs to invest in India - Part 1. [post_title] => Options for NRIs to invest in India - Part 2 [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => options-nris-invest-india-part-2 [to_ping] => [pinged] => [post_modified] => 2017-02-13 14:18:16 [post_modified_gmt] => 2017-02-13 08:48:16 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.fisdom.com/?p=4134 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [5] => WP_Post Object ( [ID] => 4132 [post_author] => 1 [post_date] => 2017-02-10 17:20:46 [post_date_gmt] => 2017-02-10 11:50:46 [post_content] => 640x380 India with its booming economy offers many attractive options to investors. India is growing economic power has been well noticed by foreign investors including non-resident Indians which make it a preferred hub for investments. Weakening rupee makes it even more attractive for them to flow their money to the home country. The government is also encouraging NRIs to invest with its simplified rules and regulations to boost the inflow. Here are some the investment options for NRIs in India: There are various options available to invest. However, it should totally be dependent on the individual’s financial goals and risk appetite. For NRIs, it’s even important to know the tax treatment before investing to get an idea of post-tax return. Read on to know the options: It is a good investment option for NRI investors seeking safer investments and is comfortable with lower returns. It is advisable to invest in government securities through gilt mutual funds to ensure easy transactions and tracking. While this is a good option for short-term goals, the returns are relatively low and the process to invest is complex. However, NPS is practically locked in till the age of 60, after which 40% has to be compulsorily converted into an annuity. There are quite a few other areas of investment which an NRI can explore. Click here to read Options for NRIs to invest in India - Part 2 [post_title] => Options for NRIs to invest in India – Part 1 [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => options-nris-invest-india-part-1 [to_ping] => [pinged] => [post_modified] => 2017-02-13 14:18:50 [post_modified_gmt] => 2017-02-13 08:48:50 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.fisdom.com/?p=4132 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [6] => WP_Post Object ( [ID] => 4093 [post_author] => 1 [post_date] => 2017-02-07 13:22:12 [post_date_gmt] => 2017-02-07 07:52:12 [post_content] => 640x380 With the ban on 500 and 1000 rupee notes, demonetization literally emptied our wallets. For a few weeks of the cash crunch, it was troublesome getting or making the simplest of payments. Happily, the world of investing has not been affected – it has always been cheque/digital based, with no cash. As part of the digital transformation, several payment options are now becoming mainstream rapidly as seen in the chart below. Let’s take a look at some of these options, and see how they work: growth2 Options which are not linked to your bank account Options which links your transactions to your bank account [post_title] => Digital alternatives to cash [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => digital-alternatives-cash [to_ping] => [pinged] => [post_modified] => 2017-02-09 13:21:08 [post_modified_gmt] => 2017-02-09 07:51:08 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.fisdom.com/?p=4093 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [7] => WP_Post Object ( [ID] => 4089 [post_author] => 1 [post_date] => 2017-02-07 11:24:03 [post_date_gmt] => 2017-02-07 05:54:03 [post_content] => 640x380 A sound financial plan is not the one which does well in good times, but the one which is the least affected by the complex market conditions. Diversification and asset allocation are the two most important aspects of investment planning. As different assets perform differently time frames and market conditions, asset allocation is one of the best ways to ensure that you reduce the risk associated with your investment portfolio through diversification across various asset classes. The percentage of investment in various asset classes will depend on your individual goals, risk appetite and time horizon for investment. Mutual funds are one of the most preferred investment options for investment for investors wanting to invest in equity as they offer diversification and thus reduce the risk associated with a single security. But it is a myth that mutual funds only invest in equity. You can also invest in gold, debt and real estate through mutual funds. Let us look at the various types of mutual funds and how one can take advantage of this: Equity Mutual Funds:  Though equity is a risky asset class, but in the long run, this asset class has given huge returns. Investment in equity funds should be made keeping in mind a minimum investment period of seven to ten years. A higher percentage of equity in the portfolio is ideal if you do not have any liability in the short or medium term and have the willingness and ability to take the risk associated with the equity market. Debt Mutual Funds:  A common practice amongst investors is that they tend to invest their surplus funds in equities but when it comes to investing in safe havens they still resort to Bank FDs. This is one of the main reasons that debt mutual funds are not so popular in India. However, banks are currently sitting on a huge surplus of cash, mostly all banks have already lowered the interest rates and are likely to do it again in future, making the returns generated on FDs negligible. By investing in debt funds an investor can invest in such fixed income securities and earn stable returns even in the low interest rate regime, as the bond prices tend to go up and give the opportunity for huge capital appreciation. One can safely look at investing in debt funds without having to take the risk of equity funds and enjoy the safety of traditional debt instruments at higher returns. Gold Mutual Funds: Gold has been one of the most favored asset classes amongst Indians not just for investment but also for the ornamental value. As an asset class, gold is extremely volatile. However, in times of uncertainty, it is considered an excellent hedge against inflation. Whenever there is volatility in the equity market, people often resort to investing in gold or debt funds. Investing in physical gold carries an inherent risk of safety and storage and now that the government has restricted cash purchases of physical gold, one is better off investing their money in gold through mutual funds to diversify their portfolio without any physical custody of the same. Real Estate Mutual Funds The real estate market is considered to be the biggest storehouse of unaccounted money in India. Post demonetisation there is a slowdown in the secondary market in residential space, the commercial properties are largely unaffected and lower interest rates are likely to prove beneficial for this sector in the long run.  To invest the huge amount in real estate directly is not possible for everyone, but after the recent announcement by SEBI, allowing mutual funds to invest in REIT funds you can diversify your mutual fund portfolio in real estate. REITs are funds which invest the corpus collected in income generating real estate. One can enjoy the returns generated by high yielding real estate properties without having to invest a huge corpus in the same. One should look at investing your hard-earned accountable money through organized investment channels and mutual funds are by far the best investment option available to investors who do not want to invest in asset classes directly as they come under the strict regulation of SEBI and offer professional management of funds at a very nominal fee. [post_title] => Understanding the different types of mutual funds [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => understanding-different-types-mutual-funds [to_ping] => [pinged] => [post_modified] => 2017-02-09 12:53:48 [post_modified_gmt] => 2017-02-09 07:23:48 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.fisdom.com/?p=4089 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [8] => WP_Post Object ( [ID] => 4084 [post_author] => 1 [post_date] => 2017-02-07 11:09:09 [post_date_gmt] => 2017-02-07 05:39:09 [post_content] => 640x380The demonetization move by our Prime Minister had three major effects. First was the strapping down of black money. The second was the subsequent cash crunch and third was the increase in digital transactions. Mobile wallets and plastic money (credit and debit card) were the heroes saving the day. E-wallets experienced their highest growth following demonetization. While internet had become a preferred choice of many even pre-demonetization, post the implication of the rule, the internet became the lifeblood. Whether you talk about basic groceries or even your LPG cylinder, everything can now be booked online. Cool, isn’t it? Where do mutual funds stand in this scenario? Are the existing distribution channels still prevalent or has the market moved to new and improved modes of mutual fund distributions? Currently, the mutual fund distribution channel looks like this: What’s new? The Securities Exchange Board of India (SEBI) is proposing new distribution outlets for mutual fund schemes.  With demonetization here to stay and India moving to a digital age, these new channels of distribution are expected to increase the popularity of mutual fund schemes. Three such propositions, with a move to democratize mutual fund distributions, are as follows: If SEBI’s plans materialize, leading e-commerce companies would soon be allowed to sell mutual fund plans to their customers. So, while you earlier visited e-commerce platforms to buy apparels or trendy gadgets, with the new move, you can find answers to your investments too at the same portal. SEBI is in the process of finalizing guidelines to facilitate a sale of mutual funds through e-commerce websites. Two benefits are expected from this move:
  1. Mutual fund penetration would likely increase as e-commerce platforms are extremely popular among shoppers, and
  2. Customers would be able to buy mutual funds with lower charge structures as the commission payable to such e-commerce websites would be lower than those paid to brokers.
Limited variety of funds, namely balanced funds, and ETFs, would initially be launched for sale on such websites for testing the waters. On receiving a favorable response, other variety of fund schemes would also be available online. In yet another proposition, similar to the earlier one, SEBI is also intending to allow you to buy or invest in a mutual fund through digital wallets. While earlier you used your debit/credit cards or net banking facilities for buying or making your SIP payments, with the new proposition, you can use your e-wallets for the same. The benefit would be the ease and convenience of making payments using e-wallets and also a faster payment gateway with minimal errors. The next time you visit a popular e-commerce giant for buying your mobile don’t be surprised if you find a mutual fund scheme advertised therein! With the prospect of mobile investing getting close to reality by the day, what are the odds that the government sponsored UPI / BHIM concept remains on the sidelines? With SEBI working on the regulatory front for mobile investing, the BHIM app/ UPI seems almost ready to jump on the mutual fund distribution bandwagon. One major plus for BHIM/UPI is the fact that it seamlessly integrates your bank account with your mobile number. This makes life easy for the regulator in terms of tracking and auditing transactions. This can easily be likened to investing straight from your bank account. India is going digital and internet seems to be a solution for every query, product, and service. Mutual Funds already feature in almost every individual’s portfolio and with SEBI’s new efforts of widening their existing distribution channel they are set to become more popular. [post_title] => Mutual fund distribution in 2017 [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => mutual-fund-distribution-2017 [to_ping] => [pinged] => [post_modified] => 2017-02-08 20:16:52 [post_modified_gmt] => 2017-02-08 14:46:52 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.fisdom.com/?p=4084 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [9] => WP_Post Object ( [ID] => 4082 [post_author] => 1 [post_date] => 2017-02-07 11:07:26 [post_date_gmt] => 2017-02-07 05:37:26 [post_content] => 640x380As we age, we are said to gain experience and wisdom. Aging also changes our perspective towards life as our life goals change. When we become financially independent, we plan our finances to provide for important milestones of our life. But when we hit the golden period (50s) our investment goals change. Retirement planning is more emphasized in this phase. When it comes to building a substantial corpus for our retirements, we make various investment choices. But are the choices correct? Are we approaching investments in a practical way? Investing is always a tricky ball-game and if you flounder, you compromise on the yield. So, here are some investment tips for investing in your 50s so that you achieve the maximum possible returns on your investments. Retirement is no longer a distant goal. You would need a retirement corpus after 8-10 years. Have you thought about the amount of corpus which would be sufficient to meet your lifestyle expenses? No? Its time you do it. After all, what good would come out of your investments if they are not done with a clear absolute goal? When you are building a retirement corpus, the investment risks, ideally, should be low or minimal. Since you are already in your 50s, you have limited years on your hand to work and earn. Since your earning capacity is limited, your investment horizon is limited too. As such, you cannot afford to take high risks. So, if you are investing in risky investments, it is time to go slow on such investment. So more debt, less equity or real estate. Annuity is a series of regular payments which is paid every month, quarter, six months or year as chosen by you. If you choose to receive a monthly annuity after you retire, you can ensure a steady source of income even post retirement when your actual income stops. While a long term investment is always advised upon, your investment tenure should match your retirement age. When you retire your income stops. In such a situation you need funds for meeting your expenses. So, choose an investment which matures when you retire and contribution does not continue even after retirement. Investing when done with these tips in mind help you match your investment objectives. If you are wondering which investments would help, here is an indicative list of investment solutions for your 50s: However, the pension plans category has yielded very low returns barely matching up to inflation rates. An MIP is a debt mutual fund scheme which invests a small part of the funds (15-25 per cent) in equities. It offers regular income in the form of periodic (monthly, quarterly, half-yearly) dividend payouts. Due to the presence of equity, MIP returns can be higher than regular debt funds. An MIP is the ideal balance for those seeking regular income or for a conservative investment avenue. An SWP will fund your retirement well if invested in the right mutual fund. Retirement can prove to be a golden phase of your life if you plan for it properly. The years before retirement play a crucial part in ensuring that you have a comfortable life post retirement. In these deciding years it is imperative that you invest properly and in a prudent manner. So, follow these tips when you invest after attaining 50 years of age and meet your life’s last goal – retirement planning, efficiently. [post_title] => Investing in your 50s: Practical Tips [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => investing-50s-practical-tips [to_ping] => [pinged] => [post_modified] => 2017-02-08 19:20:45 [post_modified_gmt] => 2017-02-08 13:50:45 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.fisdom.com/?p=4082 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [10] => WP_Post Object ( [ID] => 4071 [post_author] => 1 [post_date] => 2017-01-31 13:15:14 [post_date_gmt] => 2017-01-31 07:45:14 [post_content] =>

640x380 (9)This article has been published in "THE ECONOMIC TIMES" on 30th Jan 2017

Lakshmi Vilas Bank has tied up with fisdom, a Bangalore-based fin-tech startup, to launch financial planning and wealth management services based on Robo advisory platform. The platform called Mission FINFIT will also include services like getting the KYC done, investing money in various platforms, viewing the account summary, withdrawing the invested money, etc.

“Going cashless and digital is the way to the future and hence our bank has introduced this online platform to our retail customers. We recently launched our mobile app which has been a huge success and with this collaboration with fisdom, the bank will enhance its bouquet of banking products and services offered to its customer base. In this partnership, fisdom will be our product and service delivery partner,” said AJ Vidya Sagar, President Retail Banking, Lakshmi Vilas Bank. Subramanya SV, CEO and Co-founder, fisdom stated, “We are delighted to partner with Lakshmi Vilas Bank to offer Mission FINFIT to more than 30 lakh customers of the bank across the country. While we are a startup, the accreditation to be partners with Lakshmi Vilas Bank is a fantastic achievement. This will help us offer digital and smart investment options and advisory to a very loyal base of customers”.   [post_title] => Lakshmi Vilas Bank, fisdom tie-up to launch Robo-advisory platform [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => lakshmi-vilas-bank-fisdom-tie-launch-robo-advisory-platform [to_ping] => [pinged] => [post_modified] => 2017-01-31 15:33:16 [post_modified_gmt] => 2017-01-31 10:03:16 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.fisdom.com/?p=4071 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [11] => WP_Post Object ( [ID] => 3981 [post_author] => 1 [post_date] => 2017-01-18 15:45:16 [post_date_gmt] => 2017-01-18 10:15:16 [post_content] => 640x380 (6) Can an investment / SIP lose value? Yes, there can be occasions when a systematic investment (SIP) loses value. This usually happens in the initial few months of starting. This is because a SIP is an equity investment, and all equity investments are volatile in the short term. For instance, if you started a SIP in September 2016 when the Nifty (market index) was at 8900, then you might see a small notional loss in January 2017 since the Nifty is now at 8400. This is the nature of all equity markets, and you should not panic or withdraw. My investment / SIP seems to have lost value – why? Even the best performing mutual funds are subject to market risks. Markets have been volatile in the last 2-3 months, given the short-term growth concerns post demonetization and the US Presidential transition. Your investments might have outperformed the market, and yet lost a bit of value. This is of no major concern and you should not panic. What should I do now? The worst thing you can do now is to stop your SIP or withdraw your money. If you do that, you book your loss and leave yourself no chance of recovering it and earning good returns. The best thing to do is to stay invested and continue your SIP. The SIP has a wonderful design – you automatically get more units (i.e. buy more) now when the market is low than when the market is high. For instance, if you have a SIP of Rs 5,000 running, your fund may have been at NAV of 20 in September 2016, and your SIP would have got you 250 units. Now when the NAV has dropped to 19.6, the same Rs 5000 SIP earns you 255 units. That way, you buy more when the market is cheap and less when the market is costly. So you earn more returns in the long term. The medium to long-term prospects of the Indian economy remains strong. The effects of demonetization are almost over, and a friendly budget is expected. A larger formal economy and improved tax collections can only benefit the markets in the medium to long term. This will have a hugely positive impact on your returns prospects if you stay and continue to invest. Why do markets fluctuate? How can I minimize risk to my money? Markets by definition are volatile. They respond to various positive and negative news and events on a daily basis. The graph below shows how the market has been volatile, and yet delivered strong returns for long-term investors. image For instance, it fell sharply in the downturn between 2008 and 2009, and yet regained all the losses by end of 2010. Fortunately, there’s an easy way to minimize your risk – that is to stay invested only for the long term i.e. 5 years or more. That way, your risk of capital loss becomes negligible and you can benefit from the higher returns of the market. Let’s see some simple statistics from 2001 onwards: That’s the reason we only recommend long-term investments. [post_title] => Fluctuations in your portfolio [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => fluctuations-in-your-portfolio [to_ping] => [pinged] => [post_modified] => 2017-01-18 15:45:16 [post_modified_gmt] => 2017-01-18 10:15:16 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.fisdom.com/?p=3981 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [12] => WP_Post Object ( [ID] => 3942 [post_author] => 1 [post_date] => 2017-01-05 17:03:12 [post_date_gmt] => 2017-01-05 11:33:12 [post_content] => [vc_row][vc_column][vc_single_image image="3943" img_size="full" alignment="center"][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]It was back in 2015 but still seems like yesterday. We started fisdom with the vision of simplifying financial advice and making financial investments accessible to everyone. We spent 6 months building fisdom before beta launching it on 4th Jan 2016. We were taking baby steps in this adventurous journey and our initial aim was to build a product that customers  love to use (VCs call it product market fit!) Let me share some more details Evolution of the Product Imagine the transformation of a silkworm to a beautiful butterfly. Yes, that’s what defines the first and the current version of fisdom. fisdom made its impact in the industry felt with its pioneering digital onboarding experience, something that the rest of the industry soon followed. Imitation is the best form of flattery But we really weren’t done yet. Over the next 12 months, we launched features such fund selection, fund description, reporting and algorithmic redemption. And 2017 promises much more on this front Strategic Partnerships It’s a different level of high when Banks bank upon us. We are a proud wealth management partner of Bank of Baroda and will redefine the digital investment experience for their 6 crore retail customers. Stay tuned as we shall announce another partnership with a leading private sector bank in the next few weeks. We are happy to share that India’s top corporates like Wipro, Tech Mahindra, Genpact, Quess, Indecomm, have chosen fisdom as the preferred advisor to their employees. Team From 5 passionate employees, we have grown into a strong family of 35 rockstars spread across Bangalore and Mumbai covering the engineering, operations, and marketing functions. Our commitment towards building a great product is reflected in our employee mix. We are probably the only financial services company where the engineering team is bigger than the operations team! We have a strong engineering team that has worked in places like Uber, Redbus, Tata Elxsi, Tesco, Borques etc. Capital raising and external recognition: Saama Capital (a leading early stage venture capital firm that has backed PayTM and Snapdeal) has backed fisdom along with several other Angel Investors. We shall be using this investment in building a product which you would love to invest your time and money with! We have had several pats on our back in this short journey. We were awarded the best Fintech Startup at the IBM Fintech Startup challenge. Our customers became our biggest advocates as we were recognized as one of the top performers in the mutual fund segment by Bombay Stock Exchange. Roadmap for 2017 2016 has been an eventful year for the global economy. With Demonetization, Brexit, US elections results, it didn’t leave any stone unturned to surprise us at every juncture. Such is life, full of strange turns and uncertainties. Under such unpredictable times, we resolve to safeguard the financial interests of our customers by helping them make sound financial decisions to keep their long term goals intact. We are working on a product roadmap which shall culminate in a host of features to make your financial life simpler. Our objective for 2017 is to transform fisdom into a holistic wealth management experience for our customers. On behalf of everyone at fisdom, I thank you once again for the trust invested in us. Every member of our company is aligned towards rewarding the trust that you have put in us, by working for you in building your wealth. We look forward to serving you better in the coming years.[/vc_column_text][vc_raw_html]JTNDc2VjdGlvbiUyMGNsYXNzJTNEJTIyY3RhJTIyJTNFJTBBJTA5JTA5JTNDZGl2JTIwY2xhc3MlM0QlMjJyb3clMjIlM0UlMEElMDklMDklMDklM0NkaXYlMjBjbGFzcyUzRCUyMmNvbHVtbnMlMjBzbWFsbC1jZW50ZXJlZCUyMG1lZGl1bS04JTIyJTIwc3R5bGUlM0QlMjJkaXNwbGF5JTNBJTIwZmxleCUzQmFsaWduLWl0ZW1zJTNBJTIwY2VudGVyJTNCJTIyJTNFJTBBJTA5JTA5JTA5JTA5JTNDZGl2JTIwY2xhc3MlM0QlMjJjb2x1bW5zJTIwbWVkaXVtLTUlMjB0ZXh0LXJpZ2h0JTIyJTNFJTBBJTA5JTA5JTA5JTA5JTA5JTNDaW1nJTIwc3JjJTNEJTIyaHR0cHMlM0ElMkYlMkZ3d3cuZmlzZG9tLmNvbSUyRndwLWNvbnRlbnQlMkZ1cGxvYWRzJTJGMjAxNiUyRjExJTJGaVBob25lLTYtUGx1cy5wbmclMjIlM0UlMEElMDklMDklMDklMDklM0MlMkZkaXYlM0UlMEElMDklMDklMDklMDklM0NkaXYlMjBjbGFzcyUzRCUyMmNvbHVtbnMlMjBtZWRpdW0tNyUyMHRleHQtbGVmdCUyMiUzRSUwQSUwOSUwOSUwOSUwOSUwOSUzQ2gxJTNFQ2FycnklMjBmaXNkb20lMjB3aXRoJTIweW91JTIwb24lMjB0aGUlMjBtb2JpbGUlM0MlMkZoMSUzRSUwQSUwOSUwOSUwOSUwOSUwOSUzQ2RpdiUyMGNsYXNzJTNEJTIyYXBwLWxpbmtzJTIyJTNFJTBBJTA5JTA5JTA5JTA5JTA5JTA5JTNDYSUyMGNsYXNzJTNEJTIycGxheS1idG4lMjIlMjBocmVmJTNEJTIyaHR0cHMlM0ElMkYlMkZwbGF5Lmdvb2dsZS5jb20lMkZzdG9yZSUyRmFwcHMlMkZkZXRhaWxzJTNGaWQlM0Rjb20uZmlud2l6YXJkLmZpc2RvbSUyMiUyMHRhcmdldCUzRCUyMl9zZWxmJTIyJTNFJTNDaW1nJTIwc3JjJTNEJTIyaHR0cHMlM0ElMkYlMkZ3d3cuZmlzZG9tLmNvbSUyRndwLWNvbnRlbnQlMkZ1cGxvYWRzJTJGMjAxNiUyRjA3JTJGZ29vZ2xlLXBsYXkucG5nJTIyJTNFJTNDJTJGYSUzRSUwQSUwOSUwOSUwOSUwOSUwOSUwOSUzQ2ElMjBjbGFzcyUzRCUyMnBsYXktYnRuJTIyJTIwaHJlZiUzRCUyMmh0dHBzJTNBJTJGJTJGaXR1bmVzLmFwcGxlLmNvbSUyRnVzJTJGYXBwJTJGZmlzZG9tJTJGaWQxMDk5MTQ4MTE1JTNGbXQlM0Q4JTIyJTIwdGFyZ2V0JTNEJTIyX3NlbGYlMjIlM0UlM0NpbWclMjBzcmMlM0QlMjJodHRwcyUzQSUyRiUyRnd3dy5maXNkb20uY29tJTJGd3AtY29udGVudCUyRnVwbG9hZHMlMkYyMDE2JTJGMDclMkZhcHAtc3RvcmUucG5nJTIyJTNFJTNDJTJGYSUzRSUwQSUwOSUwOSUwOSUwOSUwOSUzQyUyRmRpdiUzRSUwQSUwOSUwOSUwOSUwOSUzQyUyRmRpdiUzRSUwQSUwOSUwOSUwOSUzQyUyRmRpdiUzRSUwQSUwOSUwOSUzQyUyRmRpdiUzRSUwQSUwOSUzQyUyRnNlY3Rpb24lM0U=[/vc_raw_html][/vc_column][/vc_row] [post_title] => A look back at 2016 [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => look-back-2016 [to_ping] => [pinged] => [post_modified] => 2017-01-06 16:49:19 [post_modified_gmt] => 2017-01-06 11:19:19 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.fisdom.com/?p=3942 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [13] => WP_Post Object ( [ID] => 3814 [post_author] => 1 [post_date] => 2016-12-30 19:55:38 [post_date_gmt] => 2016-12-30 14:25:38 [post_content] => 640x380 (5) The news of the arrival of a baby is one of the happiest moments in the life of any couple. Parenting sure is a huge responsibility and each of us wants to give the best to our children. While we all try to be the super parent in our own unique ways and strive to give the child our best, one must remember that becoming a parent is not just restricted to changing diapers, feeding or dressing up the child or sleepless nights. Another aspect of parenting which each of us are aware of and yet unprepared is that raising a child calls for huge financial preparedness. Many of us decide to start a family only after we feel we are financially ready to support the child. However, financial preparedness for a child is not just about reaching a certain income level; it is much more than that. One has to start planning, have a savings plan and also look at investing and building a corpus for the future needs of children. One has to also look beyond the regular monthly extra expenses which come with the arrival of the child and start planning for those bigger milestones of life such as higher education, marriage or even not so pleasant medical emergencies. Financial Tips for a Super-Parent: Here are few tips, which can be extremely helpful financially for new parents or parents-to-be on the block:   Any easy thumb rule to follow is to save at least 15% of your family income, every month.   Term plans can be bought online and can give you a large life insurance protection at a very low premium. Even if you have a group cover in office, it helps to take a separate personal family cover. You can look at investing in a mix of products like equity either directly or through mutual funds, fixed income products, and other child-centric investment plans specifically designed to meet these specific goals and help ease off the pressure later. [post_title] => To-be-parent: What should you be prepared for to be a super-parent? [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => parent-prepared-super-parent [to_ping] => [pinged] => [post_modified] => 2016-12-30 19:58:45 [post_modified_gmt] => 2016-12-30 14:28:45 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.fisdom.com/?p=3814 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [14] => WP_Post Object ( [ID] => 3714 [post_author] => 1 [post_date] => 2016-12-27 19:14:15 [post_date_gmt] => 2016-12-27 13:44:15 [post_content] => 640x380 (3) The much talked about Goods and Services Tax or GST can be implemented anytime from April 1, 2017, to September 16, 2017, as it is a transactional tax and not income tax, it can be implemented at any stage of the financial year. Ever since the decision to implement GST was passed in August this year, there has been a lot of uncertainty regarding GST and how it would affect the common man as and when it will be implemented. Before talking about the impact of GST, let us understand the basics of the proposed GST structure. The Good and Services Tax is by far the biggest tax reform in the country which will replace a plethora of indirect taxes which exist currently such as Central Excise Duty, VAT, Octroi, Entry Tax, Luxury Tax and other such taxes to be replaced by GST. Given the diversity and income disparity in India, the government has rolled out a 4 tier rate structure of 5%, 12%, 18% and 28% so as to keep inflation in check and subsidize essential commodities and a higher tax rate for luxury items and sin goods. There have been constant debates and discussions about the implications of GST on the pocket of a common man. Here are the few major implications of GST on the common man:  In short, GST will be a mixed bag for the common man where essential goods will become a little cheaper and availing services would be a tad more expensive and the tryst with luxury and sin goods is sure to get very expensive. [post_title] => Goods & Services Tax (GST) and common man [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => goods-services-tax-gst-common-man [to_ping] => [pinged] => [post_modified] => 2016-12-27 19:14:15 [post_modified_gmt] => 2016-12-27 13:44:15 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.fisdom.com/?p=3714 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [15] => WP_Post Object ( [ID] => 3079 [post_author] => 1 [post_date] => 2016-11-25 17:14:33 [post_date_gmt] => 2016-11-25 11:44:33 [post_content] => Is cash really the best way to save money? Cash Worries Following the government’s demonetisation move, we have received several queries from panicked customers who had been saving in cash every month, for several years, perceiving it to be a ‘long-term saving’. The irony is that these are salaried households with no real need for storing or dealing in cash at all. For instance, a home-maker saves Rs 2000 every month from the household budget for almost the last 10 years, hoping to save enough for her daughter’s higher education. The most common reason we hear for saving it as cash is that – ‘keeping it in a piggy bank / locker will avoid unnecessary short-term spendings’. The good news is that these salaried families need not worry. The government has promised not to harass genuine / honest individuals when they exchange their currency. But the bad news is that their money has already lost substantial value over the years anyway. For instance, the woman in the anecdote above has slightly over Rs 2 lakh of cash saved today. But its value today is less than half of the value when she saved it over the years. Price-rise has eaten the rest away. Instead, if she would have invested the money in a recurring deposit or a mutual fund, she would most likely have well over Rs 4 lakh today. If you are saving for your child’s education, remember that higher education fees are increasing by ~10% every year. Unless your money is earning that much, you will fall way short when you need it.

Risks of storing cash:

What are your options? There are several, but the best is to invest the same monthly saving into a mutual fund. If you dislike equity markets, there are always income mutual funds that only invest in bonds and provide a steady return. Mutual funds are well regulated and are the best way to store and grow hard-earned money. The fisdom app now offers you a simple way to do this. No paperwork to do! From the comfort of your home and through your phone or computer, you can now start this investment. The money is available for withdrawal anytime on the phone itself. Just tap on ‘withdraw’ and money gets credited to your bank account next day. If you are concerned that this money will get mixed with the rest of your budget or get spent prematurely, fisdom app has a ‘goals’ feature. You can set your ‘child’s education’ as a separate goal and start saving towards that. That way, you can always track how you are doing towards this goal and avoid using this money for other purposes. Still have questions? Call us at +91 80 3040 8363 or write to us at ask@fisdom.com. [post_title] => Cash Savings- Is It Actually The Best Way? [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => cash-savings [to_ping] => [pinged] => [post_modified] => 2016-12-09 14:57:40 [post_modified_gmt] => 2016-12-09 09:27:40 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.fisdom.com/?p=3079 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [16] => WP_Post Object ( [ID] => 2915 [post_author] => 1 [post_date] => 2016-11-16 15:48:24 [post_date_gmt] => 2016-11-16 10:18:24 [post_content] => Receiving a salary bonus is definitely a pleasant event. Here are 5 tips for you to put it to the right use. bonus happiness The annual performance bonus is an important component of one’s salary. If you’ve very recently received your bonus or are due to receive it in some time, today we are going to discuss 5 ways how you can use your bonus amount better to fortify your financial castle and create a corpus for your financial goals. So, read on...

Tip #1: Buy the right insurance covers

Many times, insurance purchases are held up during the year because of want of sufficient funds. Not having basic insurance covers like life, health and disability insurance are crucial gaps in the portfolio. Annual bonus gives you once in a year opportunity to purchase these covers and also to re-think on your insurance requirements to check if a particular cover needs to be beefed up.

Tip #2: Pay off your outstanding liabilities

Make a list of your outstanding liabilities. As far as home loan prepayment is concerned, it can wait as you get tax breaks on it every year. But the real liabilities you would want to kill with your bonus are things like credit card outstanding, personal loan and car loan. While closing a loan, don’t forget to obtain a closure letter from the bank to avoid any future issues.

Tip #3: Add bonus to your contingency fund

Most people forget to create a decent emergency fund which can come to use in case of a job loss or a medical emergency. So, use your bonus to create an emergency fund which is not less than 6 months of your fixed monthly obligations in the form of your monthly expenses + any loan EMIs. Invest this money in liquid plans of mutual funds which carry negligible risk and do not impose any exit load.

Tip #4: Invest for your future

Your financial success to a great extent depends on how much you can delay the gratification into the future. While a common excuse for not investing all through the year is that expenses are so high and all that, investing a good part of your bonus for your financial goals can bridge this gap and help create a good nest egg over a long period of time. Given its low-cost nature and high flexibility, you don’t need to look beyond mutual funds for your investments. So, this time, invest a good part of your bonus for your financial goals & see your money grow.

Tip #5: Invest in your career:

One of the most important aspects of your financial planning is your “income”. In the long term, your income depends on the amount of value you create for your company and clients. This value-add depends on your knowledge, experience and skills. So, this is a good time to identify the gaps in your current skill profile & use some part of it towards taking some certification courses that can enhance your prospects and further your income. Click Here to know more about what you can do to put your increment to right uses.   [post_title] => Bonus Tips: 5 Ways To Make The Most Of Your Bonus. [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => just-got-bonus-5-tips-put-good-use [to_ping] => [pinged] => [post_modified] => 2016-12-09 14:50:06 [post_modified_gmt] => 2016-12-09 09:20:06 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.fisdom.com/?p=2915 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [17] => WP_Post Object ( [ID] => 2787 [post_author] => 1 [post_date] => 2016-11-03 17:36:14 [post_date_gmt] => 2016-11-03 12:06:14 [post_content] => Equity is the go-to asset class if you are looking at long-term appreciation. equity growth As a young investor or someone starting his investment journey, the biggest conflict you may face is where to invest. Financial planners suggest starting early & building a strong equity portfolio. In this article, let us discuss some compelling reasons why you must consider having an equity exposure in your portfolio and how it can help you achieve your goals in a comfortable way.

 #1: Equity has proved to be the best performing asset class in long term:

Statistically, equity returns over the long-term horizon are way above other asset classes like debt, real estate and gold. For example, had you invested a lump sum on Jan 1, 2000 in Franklin Prima Fund, which is an equity oriented mutual fund, you could have earned an annualized return of 20.36%. This is way more than other asset classes and could have helped your wealth creation goal in a big way.

#2: Returns from equity beat inflation

India has historically had a history of moderate to high inflation. Our inflation has hovered in the range of 5-8% and has proved to be a silent killer for investors who had not looked beyond fixed income in their investment portfolio. In this scenario, as a prudent investor, before selecting an asset class for investment, one must see the “real” return. Real Return is nothing but the nominal return less inflation. For example, if you invest in a bank FD which earns you 7% after tax whereas inflation stands at 8%, the FD is not creating but destroying your wealth.

#3: Compounding can help magnify the returns from equity

As per the legendary Albert Einstein, compounding is the eighth wonder of the world. When we speak of the benefits of higher returns from equity as an asset class, it may be noted that the benefits get magnified over a period of time as they are compounded. For example, Rs. 5,000 invested every month for 25 years in a fixed deposit yielding 8% will generate Rs. 47.55 lacs at the end of 25 years whereas the same amount, if invested in an equity mutual fund that earns an annualized return of 15% will create a corpus is Rs. 1.62 crores, and that is a whopping 341% over and above FD returns.

#4: Equity can help you start small towards your financial goals

The best thing about equity is that the investment amount one requires to achieve a financial goal is pretty low. This is mainly due to the long investment horizon. For example, let us assume you wish to plan for your daughter’s marriage in the next 25 years. Let's assume inflation @ 8%. The sum required after 25 years is Rs. 68 lacs. Now, if you plan to invest monthly for this goal in a recurring deposit that yields 8% p.a., you will need to invest Rs. 7,153 per month. However, if you plan to invest it in an equity mutual fund, you can do so by investing only 2,085 per month, which is a good 70% lower.


Equity returns may be volatile in the short run. However, equity will also be the best asset class for you to invest for your long-term financial goals. Start early, invest systematically and stay invested for long periods. Click Here to know more about us. [post_title] => Equity - 4 Reasons Why It Outperforms Other Asset Classes In The Long Run. [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => equity-best-long-term-investment [to_ping] => [pinged] => [post_modified] => 2016-12-09 15:17:53 [post_modified_gmt] => 2016-12-09 09:47:53 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.fisdom.com/?p=2787 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [18] => WP_Post Object ( [ID] => 2731 [post_author] => 1 [post_date] => 2016-10-19 17:52:53 [post_date_gmt] => 2016-10-19 12:22:53 [post_content] => Financial planning an often overlooked but critical process for creating a secure financial future. financial planning balance Have you just started working? If yes, how much of your salary have you already spent? Or planning to spend on meeting your daily expenses? On getting gifts for your family? And yes- buying yourself the latest gadgets and apparel as a reward for a job well done? This is where financial planning makes its debut. While it is okay to splurge during the initial working months, it is also important to realize that the earlier you start planning for your future, the better it will be. Disciplined investing and prudent financial planning is the only way to meet your financial goals and ensure financial security. During financial planning, it is essential to understand the three fundamentals which will majorly define your financial future- compounding, taxation and inflation. Hence, it is important to realize the power of compounding and start investing at the earliest to beat inflation and build your wealth exponentially over the years to come.

Start investing with just Rs. 500  GET STARTED

[post_title] => Financial Planning for Freshers - Why and How? [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => financial-planning-fresher [to_ping] => [pinged] => [post_modified] => 2016-12-09 15:51:00 [post_modified_gmt] => 2016-12-09 10:21:00 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.fisdom.com/?p=2731 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [19] => WP_Post Object ( [ID] => 2452 [post_author] => 1 [post_date] => 2016-10-13 14:52:05 [post_date_gmt] => 2016-10-13 09:22:05 [post_content] =>

640x380 This article has been published in “DNAINDIA” on 11th October, 2016

Gone are the days of predominantly government jobs which assured a regular monthly pension after retirement. The government has also moved away from 'defined benefit' pensions for those who have joined post-2004. And, of course, those of you in the private sector have no such luxury anyway. People working in the private sector need to plan their own pension. The moment income stops, the effect of rising cost of living becomes devastating. You may retire today at 60 with a house of your own and think ?15,000 per month would suffice for your needs. By the time you are 80, you would need about ? 1 lakh per month in order to maintain your standard of living. In this context, it is unfortunate that there are no good annuity products in India. Rather than accept a lump sum, most annuities force you to contribute for several years as that's where brokers and insurance companies make more money. The few pure annuities that are out there are very poor in terms of their returns - a meagre 6.7%. Even the humble fixed deposit in a public sector bank would give you around 7.5% if you are a senior citizen. The first lesson from this analysis is that you need to avoid any annuity product readily available in the market. The second takeaway is that while the fixed deposit is far better than an annuity product, it still doesn't protect you from rising cost of living. To protect against this situation, you have no option but to keep a small portion in equities, which can deliver a boost to your returns. So, what's a good alternative? A type of mutual fund called the 'monthly income plan' (MIP) is a good option to create your own pension. It invests 70%-80% of its money in very safe debt – like government securities. This portion often yields 6%-8% in the current environment. To provide a returns boost over the long term, it invests the balance 20%-30% in the equity market. MIPs are offered by practically all leading mutual fund houses such as ICICI, HDFC, Birla, Kotak, SBI, etc. The MIP is a great retirement product that can provide regular income for 20-30 years of retired life. By choosing an appropriate option, you can have withdrawals set monthly, quarterly, yearly, or simply when you want. The word 'monthly income' in the product doesn't mean you necessarily need to draw a monthly pension from it. The tax treatment of MIPs is superior to fixed deposits. If you hold an MIP for over three years, capital gains are taxed at 20%, with the benefit of indexation. Here is an illustration of 10-year returns earned if you had invested ?10 lakh in 2006 – in a good MIP versus a fixed deposit. Clearly, the MIP has the potential for better returns and better protection from inflation in your retired life. [post_title] => Why MIPs are better than annuity products? [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => mips-better-annuity-products [to_ping] => [pinged] => [post_modified] => 2016-11-15 18:55:27 [post_modified_gmt] => 2016-11-15 13:25:27 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.fisdom.com/?p=2452 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [20] => WP_Post Object ( [ID] => 2430 [post_author] => 1 [post_date] => 2016-10-12 13:07:06 [post_date_gmt] => 2016-10-12 07:37:06 [post_content] => 640x380_hi_i A medical insurance is a simple but powerful product. It reimburses all your expenses if you or your family members are hospitalized due to an illness or accident. You can cover all your family members in a single ‘floater’ policy and pay an annual premium to keep the policy active. There is a wide range of options and plans available to buy your medical or health insurance. Here are a few of the most common mistakes one makes while buying a health insurance. Myth #1: Young and healthy people need not buy health insurance A popular belief among the youth is that they are healthy and are not going to benefit from health insurance. While age may be on their side, ignoring the future and associated health ailments is going to lead to an unprepared financial and mental shock. Given the modern lifestyle choices, quite contradictory, the youth today are more vulnerable to health ailments. Moreover, health insurance covers accidents also, which can obviously impact people of any age. It is always wise to start early while healthy to benefit from lower premium and optimum coverage. Myth#2: All plans are the same Quite often, people tend to buy a health insurance which their relative or friend may have bought. Does one size fit all? If no, why would the same health insurance plan be optimum for all? It is very important to buy a health insurance according to their situation and need. The most important factors are – number and age of family members, pre-existing diseases (if any), and if the coverage has any limits on expenses. Myth #3: It is best to buy the lowest premium plan Of what use is a health insurance which costs a low premium but does not offer adequate coverage? Low coverage is as good as no coverage. Imagine a scenario where one suddenly contracts a serious ailment and then gets to know that, despite paying the premium for years now, he/she is not covered for that particular ailment. This is not a good situation to find yourself in. It is always advisable to compare plans and coverage before choosing the health insurance. Myth #4: My employer offers group health cover, so I need not buy one Many organisations offer a group health insurance cover. However, it is in your interest to buy a personal cover for your family as well. For one, you may not continue in the same job forever, so you do not want to have the uncertainty of continued cover if you switch your job. Secondly, the earlier you start your personal cover, the lower the premium and wider the diseases covered. If you start late and have a pre-existing disease by that time, many of those complications will not be covered. Myth#5: My agent recommended plan X; might as well go with that An agent works for a particular company and has incentives tied to the plan he sells. Is it not obvious that he/she will try to sell a plan that gives him highest incentive irrespective of how much it would benefit you? Another issue would be the lack of options as there might be a case where the company, which the agent represents, does not have a plan to suit your needs. A smarter approach would be to compare plans across various insurance companies in an online portal and choose the plan that suits you best. [post_title] => 5 myths related to medical insurance [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => 5-myths-related-medical-insurance [to_ping] => [pinged] => [post_modified] => 2016-10-17 19:16:05 [post_modified_gmt] => 2016-10-17 13:46:05 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.fisdom.com/?p=2430 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [21] => WP_Post Object ( [ID] => 2388 [post_author] => 1 [post_date] => 2016-10-04 13:29:32 [post_date_gmt] => 2016-10-04 07:59:32 [post_content] => Are ULIP products the best to invest in? Find out. ulip or mutual funds Thanks to a lot of sales push, you must have, at some point, been coaxed into buying a unit linked insurance plan (ULIP). As the super-friendly insurance agent would tell you, these plans combine the best of both worlds by taking care of your insurance as well as investment requirements. And don’t we as busy people always yearn for that quick solution? In this article, let us see how good this bundled solution is for your finance & whether better solutions exist.

What is ULIP, how does it work and its limitations

A ULIP is an insurance product that has an investment clause too. So, say you pay Rs. 10,000 as an annual premium for a ULIP policy. Here, Rs. 1,000 will go towards “mortality charges” (i.e. charges for your life insurance cover) and the rest Rs. 9,000 will go towards investment in an in-house mutual fund of the insurance company. Sounds good till now, however, following are the limitations of a ULIP policy: So, long point short: the product design of ULIP product is such that it fails to address any of your requirements properly be it insurance or investment. In this context, the question is: Is there a better alternative to ULIP for investing your hard earned savings?

Term Insurance + Mutual Funds: A better option

Answer is YES! Instead of bundling your requirements in a ULIP, you can decide to keep insurance and investments separate and follow the below given approach:

Always remember:

There are some things that just don’t go together. Insurance and investment are like that. Mixing them through ULIPs is not such a great idea. Buy large enough pure term insurance for your life insurance requirements. As for your savings, invest consistently in good mutual fund schemes. Click here to learn more. [post_title] => ULIP or term insurance + mutual fund investment: Which is Better? [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => ulip-term-insurance-mutual-fund [to_ping] => [pinged] => [post_modified] => 2016-12-09 16:03:09 [post_modified_gmt] => 2016-12-09 10:33:09 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.fisdom.com/?p=2388 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [22] => WP_Post Object ( [ID] => 2352 [post_author] => 1 [post_date] => 2016-09-27 17:40:08 [post_date_gmt] => 2016-09-27 12:10:08 [post_content] =>

What you need to know about NCD .

ncdThis article has been published in "THE FINANCIAL EXPRESS" on 22nd September 2016

With the recent stir created by the DHFL Non-Convertible Debentures (NCD) issue being oversubscribed by 6.33 times, fixed income investors seem to be eyeing NCDs as the next shiny object. For those who are still wondering what an NCD is, here’s a gist of the concept. It is almost like a fixed deposit offered by a company (as against a bank). A debenture is a type of debt instrument which offers a fixed rate of interest for a specified tenure. Simply put, debentures are loans taken by the companies from the general public. A debenture can be classified as either convertible or non-convertible. A convertible debenture can convert into an equity share of the company, thus giving it rights to participate in the company’s profit. However, such debentures usually yield lower interest rates. An NCD on the other hand, does not have the option to convert into equity and hence, yield relatively higher interest rates. An NCD typically has a credit rating to reflect the expected credit performance of the company. A secured NCD isfurther protected by assets collateralized. Usually, companies that have a lower credit rating offer higher interest on the NCD. Often, issuers offer a higher interest rate to the company’s shareholders or senior citizens. Tax implications on NCD are same as Bank Fixed Deposits if held till maturity. Interest is taxed as ‘other income’ and charged at applicable tax rates. However, if you sell the NCD in the open market before maturity, the capital gains/loss will be taxable as per standard taxation for capital gains. The following table illustrates the comparison between a 3 year SBI Fixed Deposit and 3 year DHFL NCD, considering annual payout and same initial investment for both.
SBI Fixed Deposit DHFL – NCD August’16
Amount Invested (Rs) 1,000 1,000
Period 3 years 3 years
Rate of Interest/Coupon p.a. 7% 9.20%
Annual Payout (Rs) 70 92
The higher payout of the DHFL NCD simply reflects its higher risk compared to SBI.

Should you invest

Market interest rates are on the way down – for instance, 10-year government bond yields dropped by almost 0.5 percent points in the last 3 months. This means interest rates on fixed deposits and small savings could come down soon. In such a scenario, it is sensible to invest a portion of the short-term savings into NCDs and lock in a high-interest rate. It is, of course, important to stick to highly rated companies or secured NCDs so that the risk is mitigated. Equities or equity mutual funds are preferred options for long-term investments. This is since they have a better chance of delivering higher returns and beating inflation. NCDs are most useful as a shorter term option to complement bank fixed deposits or liquid funds. [post_title] => Non-Convertible Debentures: What To Know [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => ncd-non-convertible-debenture [to_ping] => [pinged] => [post_modified] => 2016-12-12 17:33:24 [post_modified_gmt] => 2016-12-12 12:03:24 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.fisdom.com/?p=2352 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [23] => WP_Post Object ( [ID] => 2270 [post_author] => 1 [post_date] => 2016-09-06 17:19:20 [post_date_gmt] => 2016-09-06 11:49:20 [post_content] =>

Often underestimated, but understanding the right way to buy a life insurance can go a long way.

life insuranceThis article has been published in "The financial express" on 18th August, 2016

Due to poor awareness and an abundance of mis-selling in the market, many people make some big mistakes while taking a life insurance policy. Everyone recognizes that life insurance is a must-have. Yet, due to poor awareness and an abundance of mis-selling in the market, many people make some big mistakes while taking a life insurance policy. Given that such policies are expensive and cover a long period of time, such mistakes are costly and almost impossible to undo. The following are the most common mistakes, and suggested ways to avoid them. Mistake 1: Not taking enough insurance The insurance industry talks in terms of premiums. This is great for the insurance companies and the brokers who make their money from premiums collected. But what you as a customer should worry about is the amount of insurance cover. An unmarried person without dependents should aim for a life cover that is 5 times her annual income. A married person or one with dependents should aim for a life cover 10 times her annual income. Most people fall far short of these numbers, and hence end up under-insured. The rationale for these thumb-rules is simple. The idea is for the family to approximately maintain the same lifestyle if the earning person is not around. Mistake 2: Mixing insurance and investments This is probably the biggest mistake of all – trying to take a single plan that offers both investments and insurance. In the process, you end up having much less insurance than necessary, and the investments give very poor returns. For instance, most endowment and whole-life policies give less than 5% return – even lower than the humble fixed deposit! Such combined plans are popular only because they offer the broker more commissions. As a discerning customer, it is wise to stay clear of these schemes. A term insurance (pure insurance product) would serve the purpose better. Term insurance products have a very low premium. For instance, a 30-yr old can get a Rs 50 lakh life cover for as low as Rs 6,000 per year. Contrast this with an endowment policy which will cost over Rs 1 lakh per year of premium for a similar life cover. Mistake 3: Buying through brokers or banks, without comparison The vast majority of insurance brokers, agents and banks sell insurance of only a single provider. Thus, you as a customer are deprived of the benefit of comparing premiums of different providers and deciding the cheapest plan. Term life insurance is a simple product, and you should have the benefit of comparing premiums of all the plans in the market. The difference is not trivial – it can be as high as 50 per cent. Since this premium is locked-in on day one, you can end up with a more expensive product for life, if you do not do your homework. Fortunately, there are several online sites available where you can compare premiums and buy the best (cheapest) plan. Secondly, buying direct or online is a lot cheaper than buying through brokers or banks. Broker commissions are often 30 per cent-40 per cent of your first year premium, so you can save that by going online. In any case, all service thereafter is provided by the insurance company directly, so the broker is of no value to you.

Mistake 4: Insuring the wrong person(s)!

This may seem like a trivial point, but it’s surprising how many insurance policies have children and retired persons as the life insured. This is often due to lack of awareness among the customers, and agents pushing them the wrong products. The earning member should be the policy holder. Other family members can be nominees. The idea is that life insurance substitutes the earning potential of the policy holder, in the case of any unfortunate event. Since children or the retired are not earning, by definition life insurance in their name is a waste. [post_title] => Common mistakes in life insurance and ways to avoid them [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => life-insurance-avoid-mistakes [to_ping] => [pinged] => [post_modified] => 2016-12-26 12:11:22 [post_modified_gmt] => 2016-12-26 06:41:22 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.fisdom.com/?p=2270 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [24] => WP_Post Object ( [ID] => 2241 [post_author] => 1 [post_date] => 2016-09-01 18:05:19 [post_date_gmt] => 2016-09-01 12:35:19 [post_content] =>

Fixed Deposits may be your preferred choice, but is it really a wise choice?

640x380debtfunds2This article has been published in "The financial express" on 25th August,2016

As against a case where bank penalizes early exit from FD (generally 1%) if you close it early, the beauty of liquid funds (a category of debt funds) is that there is no exit load on withdrawal. Fixed deposits (FDs) are a perennial favorite among Indians given the certainty of return and a near zero risk of losing money. However, with time, a new and better product category has emerged which does the same work but in a much more tax efficient and flexible manner. Welcome to debt mutual funds. In this article, let discuss some reasons why debt funds are better than FDs & you should consider them in your investment portfolio. 1: Debt funds are more tax efficient As per the Income Tax Rules, interest earned from FD is treated as “Income from Other Sources” and it is taxable every year. Hence, in case you are in the 30 per cent tax bracket, your effective return from FD is only 70 per cent of the total interest paid out by the bank. In case of debt funds, the gain, which is taxed under “Income from Capital Gains”, becomes taxable only at the time of the sale of units, rather than every year. If you hold a debt fund for more than 3 years, the tax rate is 20% with the benefit of indexation. This effectively brings down the tax rate to below 10 per cent. Another point is that in case of resident Indians, the bank will deduct TDS @10 per cent on FD interest if it is greater than Rs 10,000 in a financial year. In case of debt funds, there is no such hassle. So, long point short: given the tax angle, a debt fund helps you get a bigger bang on your buck as compared to FD, and is highly recommended option for high earners in the 30 per cent tax bracket. 2: No penalty for early withdrawals As against a case where bank penalizes early exit from FD (generally 1%) if you close it early, the beauty of liquid funds (a category of debt funds) is that there is no exit load on withdrawal. This means, you have the freedom to redeem your units whenever you need the money, without worrying about penalty costs. 3: Debt funds often provide higher returns Returns on fixed deposits (except for senior citizens) are often lower than well performing debt funds. This is because the bank retains for itself a fat margin of safety for providing you the ‘assurance’ of a return. For example, 1-year fixed deposits in most reputed banks today yield 7-8 per cent. Most debt funds (income funds, liquid funds) have yielded over 8 per cent in the past year. While this is of course not a guarantee of future returns, you can often expect debt funds to do better than fixed deposits in most cases. 4: Debt funds are easier to manage Think about this: every time you save money, you create an FD. At the end of a couple of years, you will be saddled with 10 different FDs with differing maturity dates and interest rates. When you need the money, you may get confused as to which FD you should redeem first. Add to that, there is an ever present hassle of tracking the FD renewal date. Debt funds do not suffer any of these disadvantages. Just open one folio and start investing. When needed, take out the exact amount required and it gets credited to your bank account next day. Simple! Conclusion Many of us still carry the legacy of our parents forward and invest in fixed deposits but do not realize that given the dynamic financial landscape, there are better options available now. Debt funds are a perfect mix of flexibility, tax efficiency and convenience and hence a much better alternative than fixed deposits. [post_title] => Fixed Deposits v/s Debt Funds: 4 Compelling Reasons to Switch [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => fixed-deposits-or-debt-funds [to_ping] => [pinged] => [post_modified] => 2016-12-26 14:24:48 [post_modified_gmt] => 2016-12-26 08:54:48 [post_content_filtered] => [post_parent] => 0 [guid] => https://www.fisdom.com/?p=2241 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [25] => WP_Post Object ( [ID] => 2183 [post_author] => 1 [post_date] => 2016-01-04 17:03:15 [post_date_gmt] => 2016-01-04 11:33:15 [post_content] => Tax optimisation and taking care of the exit load is crucial to your portfolio. Read on to understand more. tax optimisationIn India, tax rules vary by type and tenure of investment products. They are also often tweaked and modified from year to year in Union budgets. As things stand currently, stocks / equity is taxed leniently: 15% if sold within a year and 0% if sold thereafter. All types of bonds (barring a few identified tax free bonds) are taxed at 30% if sold within 3 years or 10% if sold thereafter. This makes tax optimisation an important concern. To minimise your load and ensure tax optimisation, our investment philosophy usually works as follows:
  1. Money you need for emergencies or within a few weeks / months is invested into what are called liquid funds. These often yield as much or better than fixed deposits, but are easily breakable without load.
  2. Money needed within a year is put into shorter term bond (debt) funds. Most of these do not have loads if you exit more than a month after investing.
  3. Money needed over the longer term is put into stocks / equity or longer term debt funds to maximise their returns potential.
  4. If you need some money urgently, our algorithms work to sell those products that minimize your tax / load outflow.3
[post_title] => Tax optimisation and load planning methodology [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => tax-optimisation [to_ping] => [pinged] => [post_modified] => 2016-12-28 12:38:08 [post_modified_gmt] => 2016-12-28 07:08:08 [post_content_filtered] => [post_parent] => 0 [guid] => [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [26] => WP_Post Object ( [ID] => 2181 [post_author] => 1 [post_date] => 2016-01-04 17:01:20 [post_date_gmt] => 2016-01-04 11:31:20 [post_content] => Research Criteria and Methodology. Read to know more about how we select the best funds for you. research criteriaWe have a robust and tested research methodology to recommend the best set to you. We cover a range of factors:
  1. Minimum 3-5 year track record
  2. Performance and returns over multiple time horizons: 1yr, 3yr and 5yr (additionally 6m for debt)
  3. Performance in bull and bear markets, and during upward and downward movement of interest rates
  4. Performance of fund manager in other schemes, and over time
  5. In case of equity, diversified portfolio with limited exposure to mid and small cap stocks (which are inherently more risky)
  6. In case of debt, funds with limited or no exposure to private sector corporate debt (especially real estate and construction, but also other sectors like paper, logistics, FMCG, NBFC, etc). Other than sovereign debt, we usually only consider funds with banking and / or PSU debt in the portfolio
  7. In case of debt, less or more exposure to the yield curve, based on the tenure of the investment
  We usually exclude products like Unit Linked Insurance Plans (ULIPs), stock trading, derivatives, post office schemes, etc. These products only enrich the broker and not the investor. The products that are generally most suited to long-term investing are mutual funds, PSU bonds (e.g. NABARD, Indian Railways, Power Finance Corporation), blue-chip stocks held long term, PPF and New Pension Scheme. 2 [post_title] => Research Criteria & Methodology : Synopsis [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => research-criteria [to_ping] => [pinged] => [post_modified] => 2017-01-16 17:22:10 [post_modified_gmt] => 2017-01-16 11:52:10 [post_content_filtered] => [post_parent] => 0 [guid] => [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [27] => WP_Post Object ( [ID] => 2173 [post_author] => 1 [post_date] => 2016-01-04 16:59:09 [post_date_gmt] => 2016-01-04 11:29:09 [post_content] => Investing with a goal is very important. Read to know why. investing goal-based Your goal / objective form the starting point for all our research and algorithms to rally behind. Through a couple of simple questions, we learn from you the timing and amount of the goal. This allows us to compute what investments would make most sense, to minimize your monthly investment towards the goal. Having said that, it is perfectly legitimate for you to not know the exact timing of a goal – for e.g. overall ‘wealth building’ is a goal. We use heuristics to determine the best allocations in such situations. A couple of guiding principles enable us to determine the best products:
  1. The farther away the goal, the more risk you can take to try and earn a higher return. Conversely, a goal that is near requires investing in safe instruments
  2. Goals that are far away are affected by inflation – for e.g. it would be difficult for you to estimate what your toddler’s higher education would cost 15 years from today. We again use heuristics to estimate what the goal could look like in today’s terms (i.e. after adjusting for inflation)
We then help you invest one-time or monthly amounts towards this goal in the best instruments chosen. Our reporting then helps you monitor progress towards achieving the goal. 1   Click Here to invest to build wealth and achieve your goals. [post_title] => Goal-Based Investing - How Does It Work? [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => goal-based-investing [to_ping] => [pinged] => [post_modified] => 2016-12-28 11:22:02 [post_modified_gmt] => 2016-12-28 05:52:02 [post_content_filtered] => [post_parent] => 0 [guid] => [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [28] => WP_Post Object ( [ID] => 2159 [post_author] => 1 [post_date] => 2016-02-23 15:10:17 [post_date_gmt] => 2016-02-23 09:40:17 [post_content] => NPS - is it the best you can do with your money? Know more... nps How do I withdraw money? In a Tier-I account, if you decide to withdraw before the age of 60, you can only take out 20% of the amount. Rest has to be converted into an annuity that pays monthly pension. After the age 60, you can withdraw upto 60%, and convert the rest into an annuity. At the time of withdrawal of your pension (when you are 60 years of age), 60% of your money invested can be withdrawn as lump sum and the remaining 40% is converted into annuity. Tier-II accounts can be withdrawn at any time. What are the tax benefits of NPS? Tier-I NPS contribution enjoys the same tax benefit up to Rs 1.5L under Section 80C, along with other instruments like PF, PPF and equity linked savings schemes. In addition, another Rs 50000 contributed to the NPS in a year is tax-exempt. This saves you an additional Rs 15,500 if you are in the highest tax bracket. Currently NPS falls under Exempt, Exempt, Taxable (EET), meaning that investing in NPS and the interest earned is exempt from tax. But you are taxed during withdrawal of your pension. There is a proposal to make withdrawal also exempt (like it is for PPF), which will make NPS much more attractive.   Conclusion We look at the verdict on NPS based on 3 parameters – returns, ease of transactions and tax efficiency. On returns, NPS equity schemes have delivered around 9.2%-9.5% since inception in 2009, compared to a Nifty return of around 9.7%. Thus, they haven’t really outperformed the market, the way several mutual funds have. But they have been superior to the PF. On ease of transactions, NPS fares quite poorly, requiring paperwork to open an account, withdraw, etc. There are steps being taken to make it easier, but there’s a long way to go to make them comparable to mutual funds. That said, NPS is much superior to the PF in this dimension. Tax exemption on withdrawal will make NPS on par or better than mutual funds. As of now, they are inferior to both mutual funds and PF. In summary, your money is far better kept in the NPS than in the PF. But mutual funds are probably still the best place for your money, all things considered. Click Here to understand the best way to build your wealth and save tax at the same time. [post_title] => NPS - Should you invest in national pension scheme?- Part III [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => nps-3 [to_ping] => [pinged] => [post_modified] => 2016-12-28 13:05:43 [post_modified_gmt] => 2016-12-28 07:35:43 [post_content_filtered] => [post_parent] => 0 [guid] => [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [29] => WP_Post Object ( [ID] => 2157 [post_author] => 1 [post_date] => 2016-02-19 15:07:15 [post_date_gmt] => 2016-02-19 09:37:15 [post_content] => nps How to enrol and operate? Several public sector banks, a few private sector banks like Axis and ICICI, and a few other intermediaries like HDFC Securities are empanelled distributors for NPS. The enrolment process has largely been offline so far, consisting of filling a form, submitting proofs of identity & address, and a photograph. This gets you a Permanent Retirement Account Number (PRAN) in about 20 days. For some inexplicable reason, an enrolment (know-your-customer or KYC) done for trading accounts or banks or mutual funds is not automatically valid for NPS and has to be done again. NSDL has proposed an Aadhar-based online enrolment system, which works in paperless form if you have your mobile number linked to your Aadhar. This is yet to be fully operationalized. After the initial paper enrolment, several intermediaries allow you to make your contributions through online transfer / ECS, and also view your account online. What are the account and scheme options? There are two types of account Key features:
Particulars Tier I Tier II
Minimum contribution required at the time of Account opening Rs. 500 Rs. 1,000
Minimum individual contribution Rs. 500 Rs. 250
Minimum amount balance at the end of financial year Rs. 6,000 Rs. 250
Transaction charges 0.25% of contribution 0.25% of contribution
Minimum number of contribution required in a year 1 1
  In terms of schemes, there are 3 to choose from – E (equity) being the more risky but potentially more rewarding, G (government securities) being the safest but lowest yielding; and C (fixed income other than government securities) being an intermediate option. You can opt for active choice, wherein you can put between 0-50% in E, and the rest in C or G. You can also let the pension fund manager decide it for you, based on your age – ‘auto choice’. You can choose to have your account managed by one of 7 pension fund managers. Click Here to plan your wealth better and achieve your goals accurately. [post_title] => NPS - Should you invest in national pension scheme?- Part II [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => nps-2 [to_ping] => [pinged] => [post_modified] => 2016-12-28 13:47:34 [post_modified_gmt] => 2016-12-28 08:17:34 [post_content_filtered] => [post_parent] => 0 [guid] => [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [30] => WP_Post Object ( [ID] => 2146 [post_author] => 1 [post_date] => 2016-01-03 14:58:33 [post_date_gmt] => 2016-01-03 09:28:33 [post_content] => Fixed Deposit schemes are offered by various institutions. It is very important for you to choose the best. Read on to know how. fixed deposit Which fixed deposit should you go for? In fixed deposits, safety is paramount – not half or 0.75 percent of extra interest. The slightly higher rate of interest doesn’t really matter in the larger scheme of things, while an unsafe FD can give you sleepless nights later.Convenience and good service would be the second factor to look for. We therefore advise going for a nationalized bank or one of the larger private banks – ICICI, HDFC, Axis or Kotak. Slightly less safe are deposits in cooperative banks. Corporate fixed deposits can be quite unsafe– it really depends on the company you are investing in. Many companies tend to advertise their deposits and lure you with higher interest rates, so beware! What term should you choose? Fixed deposits longer than three years are not useful. The returns they give are poor, and often lower than inflation. For long term investments, you would rather go for equities, which can give better and inflation beating returns over the long term. On the debt side, PPF and public sector bonds (like NABARD or Indian Railways) are better for long term investments. Below three years, the tenure you should go for really depends on when you think you need the money. Since there is a penalty for premature withdrawal, you might as well choose the tenure so that you are unlikely to break the deposit midway. Click Here to learn more. [post_title] => Fixed Deposit : Choose the Best Option [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => fixed-deposit-best-option [to_ping] => [pinged] => [post_modified] => 2016-12-28 11:17:13 [post_modified_gmt] => 2016-12-28 05:47:13 [post_content_filtered] => [post_parent] => 0 [guid] => [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [31] => WP_Post Object ( [ID] => 2144 [post_author] => 1 [post_date] => 2016-03-21 14:50:54 [post_date_gmt] => 2016-03-21 09:20:54 [post_content] => 640x380_fixeddeposits3 Does fixed deposit give you the best returns? Usually, no! FDs are the best only if you fall in the lowest tax bracket or are a retiree. While bank fixed deposits are undoubtedly safe, their returns are poor. In fact, over a long period of time, they tend to return lower than inflation – so your purchasing power actually reduces if your money is stored in fixed deposits over long periods of time. Fixed deposits are useful only if you need the money within the next three years. Over the long term, there is no alternative to equity if you want to stay ahead of inflation. You can either directly invest in stocks, or, if you lack the time & expertise, take the mutual fund route.  Conclusion Fixed deposits give assured returns. So, traditional investors have parked their savings in FDs. However, three things which need to be considered: At present, interest rates on fixed deposits are between 6% to 8%,depending on the time period of investment.Retirees, persons in the lower tax bracket or those needing money within 3 years can opt for fixed deposits. [post_title] => Does fixed deposit give you the best returns? [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => does-fixed-deposit-give-you-the-best-returns [to_ping] => [pinged] => [post_modified] => 2016-09-21 11:07:42 [post_modified_gmt] => 2016-09-21 05:37:42 [post_content_filtered] => [post_parent] => 0 [guid] => [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [32] => WP_Post Object ( [ID] => 2134 [post_author] => 1 [post_date] => 2016-02-02 20:22:33 [post_date_gmt] => 2016-02-02 14:52:33 [post_content] => NPS (National Pension Scheme) - Is it worth the hype? nps What is NPS? This is a government supported pension scheme. As with other such schemes, the idea is that you contribute regular sums of money in your working years. This continues to earn returns, and is finally made available to you to take a pension / annuity when you retire. Unlike the so-called defined benefit schemes that government employees enjoyed earlier (where the pension was funded by government and was linked to seniority, last drawn pay, etc), the NPS is funded solely by your own contributions. The genesis of the this scheme was a realisation that the Provident Fund (PF) was woefully inadequate to meet the retirement / pension needs of a vast majority of people. Two major welcome departures of the NPS from the PF are: In the equity segment, NPS has given a return of 9.20% since its inception in 2009   Who can enrol for the for the National Pension Scheme? You can enrol if you are Click Here to put your money to the best use. [post_title] => NPS - Should you invest in national pension scheme ? [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => nps [to_ping] => [pinged] => [post_modified] => 2016-12-28 13:52:28 [post_modified_gmt] => 2016-12-28 08:22:28 [post_content_filtered] => [post_parent] => 0 [guid] => [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [33] => WP_Post Object ( [ID] => 2131 [post_author] => 1 [post_date] => 2015-11-05 20:18:56 [post_date_gmt] => 2015-11-05 14:48:56 [post_content] => Creating a  family budget is very crucial and doing it right is even more. family budget We need to have a family budget. How many of us will like to travel in a train without knowing where it’s heading?  Not having a family budget is like riding your financial life without a destination. Many of us have a hard time finding enough surplus funds. Most of the time is spent balancing income and expenses. Preparing a budget is fairly a simple activity and may be done once or twice a year. A budget is nothing but a statement of your expected income and anticipated expenses.  Most of us will have a good idea of the income we may have during the year and similarly we know where the money is going under heads like food, housing, utilities, transportation, clothing, insurance, EMIs, entertainment and so on. This statement shows at the end of the year how you are placed financially; what kind of surplus or shortfall you may have at the end of the year. This will then give you a good status on your financial state and how well or bad you are faring. The personal budget helps in plan our income and expenses better and create scope for that little something that we can save or invest. All you need to do is to record them on a regular basis. This will not only help you monitor your expenses but will also help you in identifying your wasteful expenditure creating the much needed surplus for investing. Discipline yourself to live within your budget plan. If you do not prepare a personal budget, you would not be in a position to meet your long term financial goals. Even if your incomes rise in future, it is likely that your expenses will outpace your income. This way you will always be on your toes to manage your income and expenses. That surplus money for investment will always remain an illusion. If you are struggling to meet your expenses from your sources of income, the objective of your budget is to find ways to generate enough surpluses for investment. For this try to fix a cap for each type of expenditure that you incur. Cut down your incidental expenditure and find ways to minimize others. This will be a difficult task at the beginning but your efforts will start giving fruits by generating a surplus out of the fixed corpus. Set yourself a target to save 10-15 per cent of your monthly income every month. If you already have surplus income after meeting your monthly and annual financial commitments, you may still want to minimize your unnecessary expenditure and start generating a larger surplus.Your target now should be increasing your monthly saving potential to 20-35 per cent of your monthly income. Here is when you can start allocating your surplus funds to work for your long term goals. Click here to not just plan, but also to achieve all your financial goals. [post_title] => Family Budget : It Is More Important Than You Think! [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => family-budget [to_ping] => [pinged] => [post_modified] => 2016-12-28 11:12:15 [post_modified_gmt] => 2016-12-28 05:42:15 [post_content_filtered] => [post_parent] => 0 [guid] => [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [34] => WP_Post Object ( [ID] => 2129 [post_author] => 1 [post_date] => 2015-11-05 20:16:57 [post_date_gmt] => 2015-11-05 14:46:57 [post_content] => Savings, though of immense importance, is often neglected to a great degree. Read on to know why it is so important. savings When we save we store up for our future. Saved money when invested earns for itself. Take the farmer for example. Out of the bountiful yield he receives from months of hard work he keeps aside some seeds for sowing in the next season. What would happen if he and his family merrily ate up all the harvest? What he could have afforded out his own produce now he would be forced to buy for a cost. Saving is akin to that. But we need to save much more than seeds! In fact due to the eroding effect of inflation a sizeable chunk of earnings might have to go to your savings kitty every month. However a quick reminder of why maintaining a healthy savings rate is important, might change your outlook of savings from probably being an imposition activity to be avoided or minimized to one that you will be glad to do. Need for adequate savings There are only two reasons why you need to have enough savings. The first is that someday, years down the line, your monthly cash inflows will stop as you retire from work. You would require funds from a different source to keep you and your spouse going for the decades to come. Second, certain needs that are expected to come up along the way are too bulky to manage with just monthly or even annual income. Unless you planned and saved for them you would be forced to resort to loans. For instance you cannot buy a house or a vehicle like you’d buy things from the grocery store. Or you cannot enroll your child in a college unless you have arranged the funds. Sure you can borrow without saving and repay from your monthly inflows but this would leave you with less money in hands to spend for your regular needs. How much savings is enough? Your ideal savings rate depends on how much money you require in future for lifestyle needs as well as for fulfilling the big liabilities. Of course nobody knows the future and it might not be possible to accurately plan for every single rupee of your future goals but you can estimate the amount based on your current lifestyle. Thus your ideal savings rate depends on your 1. Life-stage, that is whether you are single, married or have kids to support etc and 2. Financial liabilities, that is if you are paying off loans, paying rent etc. Going from a merry single to being married, having kids and paying home loan EMIs, your savings rate would lay between 15% and 50%. How much you earn is not important; if you just somehow manage to save at the appropriate rate your future needs will be met comfortably. The earlier you start, lesser will be the monthly amounts you’d have to keep aside for future goals because you have more years to save and get there! Budgeting and tracking of expenses is one simple yet effective tool to achieve your targeted savings rate. How do I achieve my monthly savings target? Now this is the million dollar question. Being able to maintain a healthy savings rate does not mean you would be pushed to live a miser’s life. But depending on your current lifestyle you might have to cut down a bit here and there. Since we are talking long term, say 15-20 years away, even small cut-downs can add a lot more than you would imagine. If you happen to be one of those who think that in your situation getting to the ideal savings rate is next to impossible, think again. There are many practical ways of cutting down on spending without losing the fun of spending. For instance buying groceries and other provisions in bulk can make much difference. Making use of public transport or better still walking (depending on distance, of course) instead of private vehicle will be good for your purse, health and the atmosphere as well! You might find it useful to remember the distinction between saving and spending- though it might sound like a silly thing. But sometimes it’s difficult to distinguish – what is buying a house? What about buying a car? The latest model LED TV?   It is important to distinguish between needs and wants. It a useful habit you need to cultivate to have a balanced financial life in the long term. Needs are the basic necessities you can’t do without. When you have identified your needs like rent, telephone, utilities you will know how much you have left to spend on wants. Wants are basically desires you’d like to spend on.   It is not wrong to satisfy your wants but just remember not to do it at the cost of your needs or the likely consequence is – you will fall in debt. If you want to succeed in living happily within your means don’t dress up your wants as needs. Click here to know more. [post_title] => Savings : Why is it important to maintain an appropriate ratio? [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => savings-important [to_ping] => [pinged] => [post_modified] => 2016-12-28 11:02:14 [post_modified_gmt] => 2016-12-28 05:32:14 [post_content_filtered] => [post_parent] => 0 [guid] => [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [35] => WP_Post Object ( [ID] => 2127 [post_author] => 1 [post_date] => 2015-11-05 20:14:07 [post_date_gmt] => 2015-11-05 14:44:07 [post_content] => While a marriage is said to bring two individuals and their family closer, there's much more to it. Marriage also calls for tying the financial know as well. marriage When planning your wedding, you may think of the flowers, the invitations, and finding the perfect outfits for your big day. However, some couples make the mistake of thinking more about the wedding than they do about the marriage. A wedding lasts one day and a marriage is supposed to last a lifetime. Marriage introduces changes in a new couple’s financial situation that will affect all aspects of their life together. Everything from personal financial goals to credit card debt could bring challenges to the relationship. Finance is one of the most critical key components of a marriage. Tying the Financial Knot For your marriage to succeed, you have to agree about the role money will play in your marriage. Open communication about money is the key. Once you’ve decided to tie the knot, discussions about money shouldn’t be far behind.  Finance questions before marriage may help you and your future spouse understand where you both stand financially in the relationship.  It can be hard, but it is important to discuss marriage and money before you decide that you want to spend your lives together. It may seem like a silly reason to not get married, but if you start out on the wrong foot, things are going to be so much harder than they have to be.  When you get married, you take on not only your loved one’s emotional baggage, but all his or her financial baggage as well. You need to know just how heavy that baggage is. Talking about Money Once you’re married, your partner’s finances will be your finances, for better or for worse. After you’ve had a few initial discussions about money in general, initiate a discussion about your respective financial situations. Figure out whether either of you have any of the following: Maintaining separate and common accounts The first rule of personal finance is to avoid ceding total control of your finances. They are your responsibility and if you let go off the reins you may find yourself with a number of extra problems. The best and wisest thing that a married couple can do is to have three different types of finances; two for each individual person and one as a unit. As two unique individuals you have needs; and by maintaining your own personal finance, you take responsibility for your needs. Combining marriage and money cannot be avoided either. Although you may keep separate accounts and may both have jobs of your own, you are always going to have to work together on money issues.  You may share responsibilities of paying for bills, utilities and other necessities. Spender v/s  Saver Tension can develop to the breaking point in a marriage when one person wants to spend and the other wants to save. Spenders often marry savers, so this is a common issue. If you’re a saver and you open the credit card statement to find that your spouse has bought several thousand rupees worth of home accessories when you were planning to use that money for some much needed auto repairs, an argument is almost inevitable. When there’s a saver and a spender in a relationship, you have to come to a compromise you can both live with if you want to avoid constant arguments or unspoken resentments over money. Plan an Affordable Wedding How can you keep your wedding costs under control? First of all, do a budget. Make a list of everything you can think of that you’ll need for the engagement ceremony, wedding ceremony and reception and your estimate of what each item will cost. Refine your budget as you get price quotes, and identify the things that are most important to you. Small compromises can often add up to big savings. The biggest factor influencing your costs is the number of guests that attend. Calculate average cost for food, drink, transport and other things you have to rent. Inviting just the people who really matter can save you ten thousands of rupees but for many people weddings are the occasion to flaunt wealth. As a young and single man/woman you have a unique chance to bless your future spouse by setting aside just a little money every month to enable you to provide some much-needed security at the outset of your marriage. Click Here to plan your post-marriage finance better. [post_title] => Marriage - About The Couple, Family and Finance [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => marriage-finance [to_ping] => [pinged] => [post_modified] => 2016-12-28 10:57:58 [post_modified_gmt] => 2016-12-28 05:27:58 [post_content_filtered] => [post_parent] => 0 [guid] => [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [36] => WP_Post Object ( [ID] => 2124 [post_author] => 1 [post_date] => 2015-11-05 20:11:41 [post_date_gmt] => 2015-11-05 14:41:41 [post_content] => Retirement is a phase where usually the income tub reduces to droplets. Build a reservoir to stay financially hydrated. retirement Picturing yourself with sparse hairs, in a rocking chair, newspaper in hand and toddlers at feet is a task next to impossible, when your career ball has just got rolling. But as much as you hate to think about finances for your grey days (or golden days, if you prefer) you should remember that the only way there is, is to walk through it. If you are adequately prepared financially, there are more chances of your retirement being jolly and stress free. However the best thing is if you start now, your retirement finances will be neatly done, without having to sacrifice your present little joys! Tell me how to start If you are a 25-something you have 3 cool decades to stack up resources.  In case your knowledge of personal finance products begin and ends with FDs and RDs, no worry, we will help you identify the right products. But even before you begin you must resolve to use these funds only after your pack up and not dig into them to buy the next trendy smartphone, bike or anything else. The first step towards your goal is the most challenging one- save enough. The next question logically is how much is enough? If you observe in your Ideal Single Lifestage Report, you should manage savings of about 40%. This is assuming you are debt-free. More on savings is covered in Do Not Spend All Your Salary. Best products for retirement Since retirement is such a long term goal, your retirement funds should go in growth assets. Of the growth assets, equity mutual funds are an excellent tool for retirement planning. If you invest in a good diversified equity mutual fund, your money will grow along with the markets, well beyond inflation’s reach. This is something that cannot be achieved with income assets like FD, bonds etc. So pick up one of the best long term funds and start a monthly SIP in it. For instance if you plan to save and invest Rs 10,000 every month, about Rs 6,000 can go to one of the large cap equity funds. Don’t succumb to the temptation of withdrawing funds at market fluctuation, just keep to your SIP, as long as the fund you have chosen continues to be among the best ones. Only move them to less risky products systematically by the time your approach retirement (read on this after 2 decades). And remember to pump up your investments as and when income rises. When retirement dawns on you, there will be enough funds at your disposal. Earlier the better- Albert Einstein If you’re still not motivated to start retirement investment from now, here is a classic illustration of why those who start earlier turn out to be smart. Take the case of 2 buddies Lazy Lakshman and Smart Sanjay who start off career at age 25 yrs. Lazy Lakshman is the squandering type and never took investments serious in the early days. Smart Sanjay had his share of fun but was more disciplined from the start, so he invests Rs 6,000 every month in a good long term mutual fund for 30 years. Assuming 15% returns from the fund, at the end of 30 years he’d have a nice Rs 3 crores corpus to live on. Suppose on turning 35 yrs, Lazy Lakshman starts investing a similar Rs.6,000 per month at a 15% assumed rate. By the end of 20 years- at the age same as Smart Sanjay, Lazy Lakshman will have a corpus close to only Rs.74 Lakhs, which is a clear loss of 75% or almost Rs.2 crores plus! Delay in SIP Now, what if Lazy Lakshman also aims at creating a corpus of Rs 3 crore in 20 years for his retirement? Guess how much would he have to invest, assuming the same return rate? Hold your breath- Rs 25,000 every month! Okay let’s assume he got disciplined at about 30 yrs and wishes to create the same corpus in 25 years. In this case his job would be done with an investment of Rs 12,000 a month. Being the person that he is, do you think Smart Sanjay would not have increased with investment amount with time? Assume he added 10% to his investments every year. Not only would he have a king sized corpus for retirement, he would also be in a position to meet all his other financial goals- buying home, kids’ education,  marriage, etc without taking loans! Do the numbers look astounding? Credit it to the power of compounding. Albert Einstein called it the ‘Eighth Wonder’.  He also observed that ‘he who understands it, earns it; he who does not, pays it’. So go, make use of the power of compounding through SIP and without pinching your pockets create a decent retirement corpus. Click Here to know the best way to invest and build wealth for your retirement. [post_title] => Retirement Money : You Have To Start Building Now! [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => retirement-wealth [to_ping] => [pinged] => [post_modified] => 2016-12-28 10:52:33 [post_modified_gmt] => 2016-12-28 05:22:33 [post_content_filtered] => [post_parent] => 0 [guid] => [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [37] => WP_Post Object ( [ID] => 2121 [post_author] => 1 [post_date] => 2016-03-07 20:07:03 [post_date_gmt] => 2016-03-07 14:37:03 [post_content] => Build Wealth today. There is no time better than now. build wealth Who doesn’t want to build wealth over the years? It’s just that we don’t know where to start. It is fairly obvious that the best chance to grow wealth is when we are earning. But the process just seems so daunting – sparing some money after all the expenses, planning how much to save, doing paperwork, etc. As a result, we don’t start at all. Instead, we just focus on earning and assume money will take care of itself. Worse, we occasionally go on a guilt trip and buy some random product recommended by a distant cousin or banker – an endowment, a ULIP or a ‘child plan’. A famous Chinese proverb says: ‘A journey of a thousand miles begins with a single step’. Now, we’ve made that single step very easy to take. With no paperwork, it can be taken anywhere and anytime right on your mobile phone. You start a simple systematic investment or SIP on your mobile, with as little as 500 per month. Consider this: if you had started investing 500 per month in 2001 and continued for 15 years, you would have had 5.5 lakh by now. If you started just one year later, your wealth would be less by 1 lakh today! So it’s important to start early with whatever little you have, rather than wait for that perfect time and money to start. So what are the hurdles to build wealth today? If you think about it, none! So, start today to make your money work for you, rather than watch your peers getting ahead and regret the delay later! [post_title] => Shubharambh: Build Wealth [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => shubharambh-to-building-wealth [to_ping] => [pinged] => [post_modified] => 2016-12-28 12:33:25 [post_modified_gmt] => 2016-12-28 07:03:25 [post_content_filtered] => [post_parent] => 0 [guid] => [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [38] => WP_Post Object ( [ID] => 2119 [post_author] => 1 [post_date] => 2016-03-07 20:04:34 [post_date_gmt] => 2016-03-07 14:34:34 [post_content] => Liquid funds is a basic substitute to saving accounts, just with extra returns. liquid funds Here’s a simple idea that earns practically every one of our customers anywhere between 2,000 and 30,000 extra every year. You don’t need to make any special effort, or take risk. Just check out how much average money you are holding in your savings account. Find it difficult to estimate an average? Just look at the ‘Interest capitalized’ credit column in your account statement. There are usually 2 entries – one in end-September and one in end-March. If it is anything over 2,000 in a year, you are leaving too much money idle in your savings account. If you hold multiple bank accounts in the family, the idle money just multiplies. The problem is simple – money in your savings account earns a measly 4% a year. Some banks offer 6%, but put so many caveats that you still end up with only 4%. This money can easily earn you ~8% a year, without taking any risk. That means, if you have an average of 1 lakh lying idle, you are losing 2,000 interest every year for nothing. A rule of thumb is that you should be earning double the interest shown in your pass book every year. Why do we still let money lie idle? Usually, it is because we want flexibility – we aren’t sure when we would need the money. It seems too much of a hassle to carefully keep track of the balance and do paperwork to move the money. Worse, we fear it will take too much time to retrieve the money when we need it. Now, thanks to improvements in technology and regulation, all this has changed. From the anytime-anywhere comfort of your mobile, you can move money into what are called liquid funds. Liquid funds are basically mutual funds that park money in papers issued by government or banks. They do not deal with the stock market, and are practically as safe as your savings account. Currently, they earn you about 8% a year. The best part is that when you want money, you just put an order on the mobile app. The money gets credited to your bank account next morning. Now, you don’t hear about this in advertisements because your bankers / brokers don’t make any money from this – only you do! We have customers using this to optimize returns quite well. For instance, Rajesh gets his salary credit on the first of every month, and his home loan EMI is due on the 20th. He uses liquid funds for the intervening 20 days, and finds he earns an additional 150 every month. Even if you don’t want to get to this level yet, you can start in a simple way by moving excess cash from your balance to liquid funds. Download the fisdom app, and click on ‘Invest surplus’ to start earning! [post_title] => Liquid Funds : Earn upto 4% more. [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => liquid-funds [to_ping] => [pinged] => [post_modified] => 2016-12-28 12:59:30 [post_modified_gmt] => 2016-12-28 07:29:30 [post_content_filtered] => [post_parent] => 0 [guid] => [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [39] => WP_Post Object ( [ID] => 2117 [post_author] => 1 [post_date] => 2016-03-08 19:59:56 [post_date_gmt] => 2016-03-08 14:29:56 [post_content] =>

Personal Finance is something women are shifting focus to. Read on to know what exactly do they want.

personal financeThis article has been published in "Deccan Herald" on 13th June, 2016

We have observed that less than a fourth of our customers are women. Even among the active account holders, it is common for women to have their father or husband manage their money for them. Is this a reflection of the fact that, in India, historically men have been the main earners and have also taken on the role of managing family finances? Or is it a mind-set issue that women prefer not to get actively involved? After all, of the 5 largest banks in India, 3 are headed by women! Global studies on women versus men in finance have thrown some interesting findings*. Yes, women do seem to be more conservative (i.e. take less risk) than men on finance. But this seems to be because they profess to be less knowledgeable about finance than men. In other words, women self-report that they know less about money, while men appear to over-estimate their knowledge of finance. After adjusting for financial literacy, these differences disappear. In fact, women’s portfolios tend to perform as well or better than men’s over the long term. There are two other interesting differences. First, women are better at saving with goals in mind – for instance, retirement or a child’s education. Men, on the other hand, tend to think in terms of absolute performance of investments. Second, men tend to excessively trade / churn their money. What does personal finance mean for women managing their money? First, financial security and the understanding of personal finance is an integral part of a woman’s independence, irrespective of her age and family status. Thus, her being interested and involved in basic personal finance is a necessity, not an option. A good starting point is to make sure all family assets – bank accounts, property, lockers, trading accounts, PPF, mutual funds, etc – are either in joint names or have proper nomination. In today’s digital age, it is important all passwords are known to both spouses and there is a spread-sheet containing list of all assets. Second, all earning members of the family need to take life (term) insurance in their individual names. This obviously includes earning women, who, in fact, get policies cheaper than their male counterparts. Third, given the above differences in attitude, it is useful for women and men to plan their investments jointly. Women can ensure important goals are identified and budgeted for. They can also curb any tendency in men to take excessive risk or trade. Given the time horizon of the goals, they can appropriately choose their products to get adequate returns.
* Studies on behavioral finance of women versus men by Prudential, Barclays and TD Bank [post_title] => Personal finance: what women want! [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => personal-finance-women [to_ping] => [pinged] => [post_modified] => 2016-12-28 10:48:24 [post_modified_gmt] => 2016-12-28 05:18:24 [post_content_filtered] => [post_parent] => 0 [guid] => [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [40] => WP_Post Object ( [ID] => 2109 [post_author] => 1 [post_date] => 2016-03-10 19:52:50 [post_date_gmt] => 2016-03-10 14:22:50 [post_content] => Fixed Deposit - Is Interest Taxable? Absolutely. Read on for more. fixed deposit Is interest on fixed deposits taxable? Yes! Interest on fixed deposit is taxable, and is added to your total income of the financial year. So, depending on which tax bracket you fall in, interest too will be taxed at that rate. If you fall in higher tax bracket, a 7.5% FD actually ends up being just over 5%. So you might as well avoid fixed deposits altogether and opt for debt mutual funds. If you are a retiree or otherwise fall in lower tax bracket, your liability may be low. Note that you are liable to pay tax on fixed deposit interest every financial year, irrespective of when the deposit matures. This is true even if you have not withdrawn the interest from the account. So, if you have a fixed deposit that pays all interest only the end of the term, you still need to pay tax every year, on the interest that was due to you that year (from your own pocket). Though often ignored, the tax element attached to interest from fixed deposit makes a whole lot of difference to the income you really receive after tax.

Is there Tax Deducted at Source (TDS) on fixed deposits?

Yes. The government is increasingly tightening TDS norms on fixed deposits. While creating a fixed deposit, estimate your tax bracket for the year. If it is high, provide the Bank with your PAN so that they can deduct TDS. Make sure you collect the TDS certificate at the end of the year, and account for it while filing tax returns. If you fall below the tax bracket and are unlikely to have tax liability for the year, fill form 15H at the Bank and hand it over. This way, they will not deduct TDS on your interest. Click Here to know more about how to put your money to the best possible use. [post_title] => Fixed Deposit Interest - The Tax Story [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => fixed-deposit-interest-tax [to_ping] => [pinged] => [post_modified] => 2016-12-28 10:43:33 [post_modified_gmt] => 2016-12-28 05:13:33 [post_content_filtered] => [post_parent] => 0 [guid] => [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [41] => WP_Post Object ( [ID] => 2107 [post_author] => 1 [post_date] => 2016-08-23 19:43:36 [post_date_gmt] => 2016-08-23 14:13:36 [post_content] =>

financial planningThis article has been published in "The financial express" on 11th August, 2016

leading a financially successful life is a lot easier than you think, no matter how much you earn. You just need to ensure you save adequately, and make sure the saved money works for you over a long period of time.  For those in India’s vast and growing middle class, it seems to be a lifetime balancing game between the ever-increasing financial goals (and associated expenses) and income. Many have ambitions of owning a nice home, a fancy car and the latest gadgets – but wonder if it’s possible with their income. Our years of experience with money and wealth management suggest that this is very much possible – if one adheres to 3 simple rules: Rule 1: Lead an ‘appropriate’ lifestyle Needless to say, wealth can be managed, only if surplus money is created in the first place! This needs an ‘appropriate’ lifestyle – but what is appropriate? A few thumb-rules can help you decide if the lifestyle you lead is appropriate or not. -Save adequately -Keep track of (major) expenses – it’s easier to budget and cut down, only if you know where the money is going in the first place -Avoid credit cards or EMIs – they encourage you to spend more than you can afford -Avoid loans, except for assets like home and education. Avoid personal loans, auto loans or loans for buying electronics Rule 2: Prepare for uncertainties Everyone faces uncertainties in life. But there are simple things you can do to make sure your financial boat isn’t sunk by one of them: Take a (term) life insurance The ‘term’ insurance policy is the only useful policy there is – it has a very low premium. All other ‘endowments’ or ULIPs or whole-life plans only enrich the broker, not you! -Ensure you have a life cover 8-10 times your annual income, if you have dependents – Take a life cover only on the earning member(s) of the family – not on children or the retired -Take a family medical policy -Use the ‘family floater’ medical insurance to cover all members of the family in a single policy -A cover of between Rs 3 lakh to 5 lakh is usually appropriate -Ensure money equal to 6 months of expenses is kept in a place that’s easy to take out when needed Rule 3: Beat inflation You may save a large amount of money, but you grow wealthy only when the money works for you. This happens when money earns for you, more than what inflation (price-rise) eats away. The only products that beat inflation over a long period of time are equity (or equity mutual funds), real estate and gold. Everything else – from bank deposits, PPF, post office schemes to insurance policies – returns less than inflation and hence destroys your wealth over a period of time. Of these, equity is the best place – it allows you to start small and invest regularly, has the lowest tax rate and also makes withdrawal very easy. But given the risk involved, you need to take care of a few things: Invest only for the long term (>5-7 years), never trade Summary In summary, leading a financially successful life is a lot easier than you think, no matter how much you earn. You just need to ensure you save adequately, and make sure the saved money works for you over a long period of time. To give an example, say you had invested Rs 10,000 every month from Jan 2001 till end of 2015 (i.e. Rs 18 Lakh in all over 15 years). Your money in any good mutual fund today would have been worth over Rs 1.2 crore! In contrast, it would be only a third of that amount in PPF or in a fixed deposit. [post_title] => 3 Rules To Successful Financial Planning [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => financial-planning [to_ping] => [pinged] => [post_modified] => 2016-12-26 16:01:56 [post_modified_gmt] => 2016-12-26 10:31:56 [post_content_filtered] => [post_parent] => 0 [guid] => [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [42] => WP_Post Object ( [ID] => 1933 [post_author] => 1 [post_date] => 2016-08-12 14:01:17 [post_date_gmt] => 2016-08-12 14:01:17 [post_content] => wealth Who doesn’t want to build a tidy sum of wealth over the years? But you probably are unsure where and when to start. The simplest product gives the highest return It’s easy to get confused in the din out there – ULIPs, ‘child plans’, ‘pension plans’, chit funds and even the neighbourhood ‘aunt’ peddling an LIC policy. These complex products are poor investments. There is no better wealth creation engine than the equity market. Equity markets give 15%-18% annual returns over the long term. And a mutual fund is the best vehicle to invest, for those who don’t understand the markets. A monthly automatic investment in a mutual fund (called SIP) ensures you put away money regularly for the future. You can start as low as Rs 500 per month. Technology allows you to provide a bank mandate and automatically transfer money on a fixed date every month. The money, should you need it, can be withdrawn online at a day’s notice. The time to start is now! If you had invested Rs 5K every month starting 2001 right through 2015, you would have invested Rs 9L in all. Can you guess what this would be worth today – Rs 75L – that’s over 8X growth! If you had delayed starting by just a couple of years (2003 instead of 2001), your wealth would be less than Rs 35L. In other words, the punishment for starting late is severe.   [post_title] => Not yet thought about building wealth? Start your SIP now at as low as Rs.500! [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => build-wealth [to_ping] => [pinged] => [post_modified] => 2016-12-27 10:10:16 [post_modified_gmt] => 2016-12-27 04:40:16 [post_content_filtered] => [post_parent] => 0 [guid] => [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [43] => WP_Post Object ( [ID] => 1923 [post_author] => 1 [post_date] => 2016-08-12 14:10:39 [post_date_gmt] => 2016-08-12 14:10:39 [post_content] => Put your money to work to earn more. img2640x380 Here’s a simple idea that earns practically every one of our customers anywhere between 2,000 and 30,000 extra every year. You don’t need to make any special effort, or take risk. Just check out how much average amount you are holding in your savings account. Find it difficult to estimate an average? Just look at the ‘Interest capitalized’ credit column in your account statement. There are usually 2 entries – one in end-September and one in end-March. If it is anything over 2,000 in a year, you are leaving too much money idle in your savings account. If you hold multiple bank accounts in the family, the idle money just multiplies. The problem is simple – money in your savings account earns a measly 4% a year. Some banks offer 6%, but put so many caveats that you still end up with only 4%. This amount can easily earn you ~8% a year, without taking any risk. That means, if you have an average of 1 lakh lying idle, you are losing 2,000 interest every year for nothing. A rule of thumb is that you should be earning double the interest shown in your pass book every year. Why do we still let money lie idle? Usually, it is because we want flexibility – we aren’t sure when we would need the money. It seems too much of a hassle to carefully keep track of the balance and do paperwork to move the money. Worse, we fear it will take too much time to retrieve the money when we need it. Now, thanks to improvements in technology and regulation, all this has changed. From the anytime-anywhere comfort of your mobile, you can move money into what are called liquid funds. Liquid funds are basically mutual funds that park money in papers issued by government or banks. They do not deal with the stock market, and are practically as safe as your savings account. Currently, they earn you about 8% a year. The best part is that when you want to withdraw, you just put an order on the mobile app. The amount gets credited to your bank account next morning. Now, you don’t hear about this in advertisements because your bankers / brokers don’t make any money from this – only you do! We have customers using this to optimize returns quite well. For instance, Rajesh gets his salary credit on the first of every month, and his home loan EMI is due on the 20th. He uses liquid funds for the intervening 20 days, and finds he earns an additional 150 every month. Even if you don’t want to get to this level yet, you can start in a simple way by moving excess cash from your balance to liquid funds. Download the fisdom app, and click on ‘Park money safely’ to start earning! [post_title] => Put idle money to work – earn up to 4% more! 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640x380_bonusThis article has been published in "The Tribune" on 8th August, 2016

It’s that time of the year you look forward to – appraisals, followed by a bonus and / or an increment. You feel entitled, and rightly so, to splurge some of the hard-earned money. Kids’ summer holidays are around the corner, and you have probably already made plans for a vacation. Now is also time to think smartly about how to make that extra money really count. Bonus After you have done your party and vacation, it’s time to put the rest of the bonus to good use. The worst thing you can do is leave it idle in your bank account. Rs. 1 lakh left in the savings account costs you Rs. 500 in lost interest every month. That’s a family dining-out opportunity lost, every month! If you think you need the bonus money within the next 3-5 years – say you are planning down-payment for a house – then you can put the money away in income funds. These are debt funds and carry no stock market risk. At the present time, they earn ~8% a year. If you don’t have any immediate plans for the money, it’s even better. You can invest the money in equity mutual funds. Over the long term, these are by far the best products. Historically, equity markets have returned above 15% year-on-year. The risk is minimal if you stay invested longer than 7 years.  Increment The best part of an increment is that you haven’t yet got used to spending the extra money! A great way is to use this to start a systematic investment (SIP) in a tax saving scheme. You hit several birds with one stone:   Wondering how to go about all this? The Fisdom app allows you to do all the above in a completely electronic, paperless way. You can also get specific recommendations for the funds to invest in, for each case – bonus or increment. [post_title] => Make your bonus and increment work for you [post_excerpt] => [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => make-your-bonus-and-increment-work-for-you [to_ping] => [pinged] => [post_modified] => 2016-10-12 12:47:30 [post_modified_gmt] => 2016-10-12 07:17:30 [post_content_filtered] => [post_parent] => 0 [guid] => http://wordpress.fisdom.com/?p=1841 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [45] => WP_Post Object ( [ID] => 1759 [post_author] => 1 [post_date] => 2016-08-06 07:30:34 [post_date_gmt] => 2016-08-06 02:00:34 [post_content] => ELSS is definitely the solution to your tax woes. Know how. elssIt is common among the salaried community to go through a rush for tax-saving around Jan-Feb each year. Company HR sets deadlines for submitting investment proofs. Some make a rushed investment in anything that carries a ‘tax-saving’ tag, others miss the bus altogether and regret later. Here’s a way to hit not two, but three birds with one stone – avail tax benefits on the investment, earn great returns on your money, and even have the returns entirely tax-free. Of all the tax saving options out there, the equity linked savings scheme (ELSS) is far and away the best: Best of all, the ELSS is available as a monthly investment (SIP), to avoid the last minute rush that happens in Jan-Feb. From the comfort of your phone or laptop, you can now setup a monthly investment in the ELSS that takes care of your returns and tax-saving in one go.

How much?

You can invest upto Rs 12.5K every month from April through March to avail the full tax benefit. Click Here to know what's exactly the best way to go about with ELSS and Tax-Saving. [post_title] => ELSS : Why Wait For The Year-End Scramble To Save Tax [post_excerpt] => It is common among the salaried community to go through a rush for tax-saving around Jan-Feb each year. [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => elss-save-tax [to_ping] => [pinged] => [post_modified] => 2016-12-28 10:27:25 [post_modified_gmt] => 2016-12-28 04:57:25 [post_content_filtered] => [post_parent] => 0 [guid] => http://wordpress.fisdom.com/?p=1759 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) [46] => WP_Post Object ( [ID] => 1756 [post_author] => 1 [post_date] => 2016-07-21 07:29:08 [post_date_gmt] => 2016-07-21 01:59:08 [post_content] => 640x380_how_womanA woman’s best protection is a little money of her own – Clare Boothe Luce When it comes to investing, equations are very different for the female gender in India. As per DSP Blackrock Study, only 18% of single working women make their own investment decisions. In this article, let us talk more about this subject and understand why and how women can become better investors. Positive investing traits of women When it comes to behavioral traits, women have certain general traits & in some ways they have an edge over men. These include the following: Why women need to be pro-active about their investments There are several reasons it is no longer an option, but a necessity for women to be more pro-active w.r.t. their investments: Strategies to help women become better investors Following are some strategies to help women become better investors: Conclusion It is imperative that women break free from the society’s traditional mindset and start learning more about saving and investing for their financial goals. Technology is a strong enabler to help women invest from the comfort of their home without compromising on their other family priorities. The fisdom app has been designed in a simple and jargon-free manner to help, among others, non-finance people manage their money intelligently. [post_title] => How women can become better investors? [post_excerpt] => When it comes to investing, equations are very different for the female gender in India. As per DSP Blackrock Study, only 18% of single working women make their own investment decisions. [post_status] => publish [comment_status] => open [ping_status] => open [post_password] => [post_name] => how-women-can-become-better-investors [to_ping] => [pinged] => [post_modified] => 2016-09-06 18:00:23 [post_modified_gmt] => 2016-09-06 12:30:23 [post_content_filtered] => [post_parent] => 0 [guid] => http://wordpress.fisdom.com/?p=1756 [menu_order] => 0 [post_type] => post [post_mime_type] => [comment_count] => 0 [filter] => raw ) ) [post_count] => 47 [current_post] => -1 [in_the_loop] => [post] => WP_Post Object ( [ID] => 4170 [post_author] => 1 [post_date] => 2017-02-13 16:04:40 [post_date_gmt] => 2017-02-13 10:34:40 [post_content] => 2017-02-14                                   (This article has been published in Finsight- February 2017) Gone are the days when homemakers were solely tasked with the running and maintenance of the household. Today, they are equally involved in the investment-making decisions of the household. Some of the common investment choices preferable to homemakers include:  Trivia: A study conducted by DSP BlackRock Investment Managers depicts the relationship of working and non-working women with financial investments. According to their study, 92% of the working women and 84% of the non-working women made financial investment decisions. Among this 84 % of homemakers, 10% were the sole decision-makers when it came to making a decision about a financial investment while the remaining 74% were joint decision makers.

-Rupanjali Mitra Basu Founder and Chief Training Enthusiast at FinProWise

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