Turn Festive Lights into Financial Might: Boost Your SIPs this Diwali!
The Emotional and Financial Peace with SIPs
Festivals like Diwali aren’t just about material joys; they’re about securing long-term well-being for you and your family. A SIP brings financial security and peace of mind without the need to constantly track the markets. With disciplined, regular investments, you can simply sit back and watch your wealth grow over time.
Why Start or Increase SIPs This Diwali?
- Financial Stability: Like decorating your home with lights, starting or increasing an SIP can bring financial security to your family. You can even gift an SIP in the name of your children or spouse, or on birthdays and anniversaries as social gifting, ensuring a brighter financial future for them.
- Flexibility: SIPs offer convenience with automatic contributions and the flexibility to adjust, based on your financial needs.
- Power of Compounding: The earlier you start, the more you benefit. Even a small SIP can grow significantly over time. For example, refer the below table.
Points to be Considered:
Children’s SIP : Secure your child’s future education or marriage with a dedicated SIP.
Spouse’s SIP: Give your spouse a thoughtful Diwali gift by starting an SIP for shared dreams like a second home or retirement.
Diwali is the perfect time for new financial beginnings. By starting or increasing your SIP, you can build wealth and secure your family’s future.
Just as we fill our homes with light, let’s ensure our financial plans are bright and strong too!
(Contributed by Abhinandan Singh, Relationship Manager, Team Arjun, Hum Fauji Initiatives)
The Psychology of Momentum: Mindset and Discipline
In the world of investing, understanding the psychology of momentum can help investors make smarter decisions. There is a thin line that segregates herd mentality and momentum-based decision-making in investments. Research and analysis, is the thin line that segregates both of them.
A portfolio based on research can make a big difference. Instead of getting swept up in short-term trends, focus on the long-term potential of your investments.
Momentum investing is based on the idea that assets that have done well in the past are likely to continue performing well in the near future. Investors who recognized such trends timely and invested in these trending assets have generally achieved substantial benefits.
However, it is important to emphasize that past performance is not the only indicator of future outcomes, and a disciplined research-based approach is crucial to managing risks effectively.
The momentum often leads to a peak at a certain point of time and the securities become overvalued. This is the time when an investor actual needs to be cautious as investing in the overvalued securities is like purchasing the property at the highest bid in the auction.
The assistance of a good financial planner helps you to sail through the tides/risks in the ocean of investments. By recognizing how emotions can impact decisions and focusing on a long-term strategy, you can better navigate today’s unpredictable markets and work towards your financial goals.
(Contributed by Mausam Gupta, Relationship Manager, Team Prithvi, Hum Fauji Initiatives)
Securing Your Family’s Future: The Vital Role of Nominees in Estate Planning
Everyone dreams of a peaceful and happy family, both during their lifetime and after they’re gone. However, the unexpected passing of a loved one can bring not only emotional pain but also financial challenges, making life difficult for the remaining family members.
Investments and life insurance are essential tools in estate planning that help your family recover from emotional loss and maintain financial stability. These measures ensure that your loved ones can live stress-free lives even in your absence. However, there’s another crucial element that should not be overlooked: nominee registration.
In today’s technologically advanced world, while our lives have become more comfortable, inter-family conflicts have also risen. Clear estate planning can prevent these conflicts from disrupting family harmony. A nominee is the person or entity you designate to receive your assets when you pass away. It’s important to understand that the nominee acts as the caretaker of your assets, ensuring they are managed properly until they are distributed according to your wishes.
Registering a nominee for all your investments and insurance policies is a simple yet effective way to streamline your estate planning. This step, combined with a well-documented will, guarantees that your assets are transferred smoothly to your loved ones without unnecessary delays or disputes. If you haven’t created a will yet, it’s highly recommended to do so. A comprehensive will clearly outlines how your assets—such as mutual funds, stocks, real estate, and fixed deposits—should be distributed, providing clarity and peace of mind for your family.
By specifying nominees and drafting a detailed will, you ensure that your family’s financial future is secure and that your legacy is preserved without causing additional stress during a difficult time. Take the proactive step today to protect your family’s tomorrow.
Please find the attached link for the steps to create a will and the will format for your reference : https://humfauji.in/writing-of-will-and-a-sample-format-by-hum-fauji-initiatives/
(Contributed by Anjali Tomar, Financial Planner, Team Prithvi, Hum Fauji Initiatives)
What Did Our Clients Ask Us in the Last 7 Days?
Ques: I plan to send some money from the US to my parents as also my sister in India during these festive times. Are there are any tax implications for either me or them?
Answer:
Remitting Money to India: Tax Implications for Gifting to Your parents
If you’re a foreign resident looking to gift money to your parents as also any close relative like your sister in India, you’ll be pleased to know that such transfers typically come with no tax implications for either of you.
Here’s what you need to know:
1. Tax-Free Gifts: Under Indian tax laws, gifts received from specified relatives, including siblings, are not considered taxable income. You can transfer any amount without triggering tax liabilities.
2. Documenting the Transaction: To avoid scrutiny from tax authorities, maintain records that demonstrate the genuineness of the gift. This may include correspondence or documentation of the funds’ source.
3. Account Options: You can transfer the gift directly from your NRE or NRO account to your parents’ account or even transfer directly from abroad.
4. Loss of Ownership: Remember that once you gift anything, you relinquish any claim to them. Ensure this is communicated clearly to avoid any misunderstandings.
5. Income Tax on Earnings: While the initial gift is tax-free, any income generated from the gifted funds in India will be subject to taxation. Your parents should be aware of this if they invest or earn interest on the amount.
By following these guidelines, you can smoothly remit money to your parents or specified close relatives in India while minimizing any potential tax complications.
Happy gifting!
(Contributed by Team Vikrant, Hum Fauji Initiatives)
