Blog

Are you being over-charged by Financial Advisors like Us?

There have recently been many advertisements promoting ‘direct’ plans of mutual funds, giving out your ‘losses’ if you invest in regular plans of mutual funds as opposed to direct plans. Some officers have discussed it with us since they’re confused as to what is the truth. We would like to clarify the air about it. First, we found that not all of those calculations put out in these advertisements are correct - most are highly exaggerated. The truth is that Direct plans will always be cheaper than regular plans simply because there is no Advisor fee built into it.  But we do want to tell you why direct plans may not be as rosy as these advertisements make it seem. What is a Regular and a Direct plan in mutual funds? In Direct Plans, you buy directly from the mutual fund company. Hence, you select the funds yourself, balance the ...
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financial planning for your earning child

Financial Planning for your earning child?

‘I hope my son doesn’t manage his money like I did when I was his age!’‘ Don’t think my daughter knows that there’s life beyond 20s too…she at least spends so and has saved maybe Rs 10,000 in the past four years that she’s been working.’ ‘I’ve given up Sanjeev. My kids have categorically told me not to talk to them about saving anything from their salary. When they need any money, I’m their ATM…and mind you, they earn almost as much as me, with no responsibilities.’ While we’re not going to dwell on the parenting aspects of your life, we can definitely give you some idea of how your children should go about their financial lives and end up much better than where they seem to be headed now. Ease it in gently into your children and we’ve seen some good results come in even from ‘hopelessly-given-up’ parents!! A ...
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Real estate insights

What’s happening in residential real estate and Why? An Insights

‘See Sanjeev, I have the money since I’m recently retired, property is actually very cheap now and I don’t have too many liabilities. Then why the fxxx are you not letting me buy a good property?’ ‘But Sir, why real estate of all the things!’ ‘Everybody knows that property only goes up, you get good rentals and you can even take a home loan and save so much of tax!’ ‘Sir, the property has only moved downwards in the past 4½ years, rental returns are traditionally only 1½ - 2% of capital value, and you save 30% tax on the home loan interest paid but you pay the balance 70% more too to save this 30%. How is it a good investment?’ And after this conversation and more, the senior officer went ahead and invested in a residential property with most of his retirement corpus!! As far as I know, ...
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Mutual funds

Invest in SIPs and take control of your Finances

Albert Einstein is supposed to have remarked: *Compounding is the 8th wonder of the world - one who understands it, earns it; one who doesn’t understand it, pays it!!* Compounding as a benefit of Mutual Fund is been a very talked about subject. But as a layman not many know how does it work. Compounding is simply an activity in which the earnings of the original investment also earn the same rate of return as an original investment. Now in the case of Mutual Funds let's say you invested in the fund when the NAV is Rs. 20. Now assume NAV goes up by 25%, in that case, the New NAV will be 25. Again markets go up by 20%. Now the new NAV will be Rs. 30 which is 20% above Rs 25. If there were no compounding than the return would be 20% over Rs 20 which was ...
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union budget insights

What’s in it for you in 2018?

Finance Minister Arun Jaitley presented the Union Budget 2018 yesterday, a month ahead of the usual date, in the backdrop of a strong stock market rally in 2017, high equity valuations, rising crude oil prices, dropping bond prices and an expanding current account deficit. As expected, the Budget has a populist stance, given the upcoming state and General elections in the next 9-12 months. The budget has doled out a series of measures for alleviating farmer distress and boosting the rural economy and ongoing support for broader Infrastructure development. While a lot of technical and financial jargon can be written on what all the Budget has, we would give out here only the salient aspects that concern you and your investments. Anybody interested in knowing more can refer to the 102 pages long Finance Bill 2018 (as the budget is called in official jargon) which is available at lots of ...
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Don’t lose Big time by not commuting the Additional Pension

Additional Commutation of Pension

Dear Friends, I had written a series of two articles some time back comparing Commutation of pension Vs Non-Commutation, and recommended that everybody should commute pension due to the reasons outlined there. Now, for the officers who have retired on or after 1st Jan 2016, the Govt has given an option to further commute the additional basic pension accruing due to the 7th CPC (Central Pay Commission) recommendations. In this article, I will deal with this dilemma whether the officers who have retired on or after 1st Jan 2016 should opt for further commuting their additional basic pension or not. Rather than writing a lot of words, I have taken the indicative data of four officers of the ranks of Lt Gen, Maj Gen, Brig and Col, all of whom have superannuated on 1st Aug 2016 at their respective ages of 60, 58, 56 and 54 years of age and ...
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Is this Diamond worth your money

Is this Diamond worth your money?

Life Insurance Corporation of India (LIC) is aggressively marketing its insurance policy, LIC Bima Diamond Plan, as a ‘Diamond for Life’. Let’s see if this ‘Diamond’ is worth your money? LIC Bima Diamond Plan is a typical non-linked, with-profit, limited premium payment money-back life insurance plan. Non-linked means it is not ULIP or your money will not be linked to equity market movements. With-profit means, it is like investment product where you get returns on your investment based on the product feature. Money back means at a different interval of the policy term, you will receive some money from this policy. Highlights of the policy It is a fixed tenure insurance policy. There are three tenure options - 16 years, 20 years and 24 years. The premium paying term is less than the tenure of the policy e. g. for a 16-year policy you have to pay only for 12 years.Money-Back (Survival Benefits)every 4th year. The premium rate ...
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How you can nurture a culture of wellness

How you can nurture a culture of wellness

The culture or the environment of an organisation has a significant impact on employees' productivity, and likewise, employees' productivity has a great impact on the growth of the organisation. Organisations these days are increasingly realizing that their actions in the workplace can positively affect the health and well-being of their employees, and so they are finding ways to improve and nurture the culture of the workplaces. Many organisations implement wellness programs but they may or may not create a true culture of well-being. But what will surely work is a positive outlook to bring about few simple yet impactful changes in the workplace. The workplace should be inspiring – Although remote working is on the rise, workplaces are still considered as the productive places to get work done. But unfortunately, many employees describe their workplaces as least inspiring. Organisations should always aim at creating well designed as well as inspiring ...
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How to find the right person for your organisation

How to find the right person for your organisation

Like most job responsibilities, hunting for the right kind of talent for your organisation can be overwhelming as well as baffling. To fill your cubicles with people who will contribute their best to the organisation is something you cannot predict beforehand. But all you can do is take rounds of interviews to test and re-test their potential. Now, there seems to be a lot of different strategies and opinions on what works best. However one point everybody will agree: If you get talent recruitment wrong, it can be very costly! So what’s the strategy for not going wrong? For managers to hire the right talents for their team today, they have to unlearn everything they know about hiring from past experience and reconstruct the objectives, approach and measurements to hire the right people for the team from scratch. Here are few key points to take note of when finding and ...
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Kitna Mileage deti hai- Financial Planning, humfauji.in

Kitna Mileage deti hai?

Sir, I’ve told him that he has a 80% Debt and 20% Equity portfolio where safety has been given more importance as this is his retirement corpus, but he insists that he won’t accept anything less than 15% annualized returns since the markets are now booming!” -I could make out my hapless young financial planner was at her wits end. “Sanjeev, what is this yaar? My overall portfolio returns are 25% CAGR (Compounded Annualized Growth Rate) but this one stupid fund is stuck at 17% and my planner is just doing nothing about it!”, ranted one of our aggressive customer. One of our bigger investor has moved almost 50% of his life’s savings to a well-known Portfolio Management Service (PMS) because his initial ‘test-drive’with their 100% equity portfolio produced great results in these rising markets. We routinely get calls from prospective clients who ‘haggle’ with us on ‘returns’ – if ...
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Micro-learning Initiative by Hum Fauji