Archive for the ‘Financial planning’ Category
Know the basics of Education loans!
November 26th, 2009
Mukesh Dedhia
The cost of education, especially for graduate and post graduate courses, has been increasing steadily in the last couple of years. With the rising inflation, parents, students and professionals alike, are finding that funding higher education in India or overseas is not as easy as it used to be.
However, a ray of hope is seen with the availability of educational loans from various banks, which can fund an individual’s higher education. As these loans are not one of the ‘mainstream’ loans such as home loans or personal loans, people are hesitant or mostly unaware of such options.
Live life on your own terms, but plan it right with pure-risk insurance cover
July 28th, 2009
Mukesh Dedhia
THERE exists a small, but smart, lot of insurance buyers that subscribe to pure risk, term insurance products . These products are non-participating in nature, meaning there is no investment component in them; the buyer gets nothing on maturity and they provide only a death benefit. The crux here is purchasing a bigger sum insured at a relatively small amount of premium. For those who need to buy a term life insurance for themselves, there is good news. Thanks to competition in the life insurance vertical and rising life expectancy , the premium payable on term insurance plans has gone down. Buy term and invest the rest is a mantra in many developed insurance markets. However, there are a few things you have to keep in mind while purchasing a pure risk plan. Here are they:
Entry load for mutual funds (MFs) – How SEBIs move positively impacts you
July 23rd, 2009
Mukesh Dedhia
In a welcome move, SEBI has totally abolished the entry load charged by mutual funds (MFs) effective August 1, 2009. Read on to know how this impacts you. This applies to all MF units purchased after 1st August, and in any form: Purchase of units in an existing MF scheme where you don’t hold any units already Purchase of units in an existing MF scheme where you already hold some units. Switch over from one MF scheme to another New MF schemes Systematic Investment Plans (SIP).
So, why is this so great for you? Read on.
The Perils of Timing
July 8th, 2009
Mukesh Dedhia
Equity mutual funds are not equity and fixed income funds are not fixed-income. Many mutual fund investors don’t understand this and end up using funds in a way that is harmful to their investments. There’s a lot of difference between the ingredients of a dish and the prepared dish itself.
As per Nilesh Shah, who is the chief investment officer of ICICI-Prudential Mutual Fund one of the problems with the way many investors approach funds is that they keep moving in and out of equity funds but they stay invested in the same type of fixed-income fund for a long period of time. This is the opposite of what should be done.
Double Income Double Dhamaka
July 1st, 2009
Mukesh Dedhia
For a hassle free retirement life, DINKs must start financial planning at an early stage of their relationship
A STITCH in time, it is said, saves nine. For the serious business of managing one’s finances — whether it is for individuals, married couples with dependent parents and kids or couples with two incomes and no kids — there can be no better motto than this English proverb.
In this week’s issue of the Investor’s Guide, we suggest savings tips for those referred to as DINK (double income no kids) couples. Being prudent planners ourselves, we’ll include suggestions for double income single kid (DISK) couples.
Should You Refinance Your Mortgage When Interest Rates Drop?
June 25th, 2009
Mukesh Dedhia
It’s not a bad idea to consider refinancing your mortgage when interest rates are low. Since the interest paid on a mortgage is one of a homeowner’s biggest expenses, it makes sense to look for ways to reduce it. But there are some ups and downs to refinancing a mortgage in a low-interest climate, and even some special refinancing programs that can be particularly beneficial for those who qualify.
Should You Consider It?
Low interest rates can create a refinancing frenzy in the marketplace, but consider the details of your unique situation to determine if a refinance makes sense for you.
How Much Risk Should You Take?
June 24th, 2009
Mukesh Dedhia
Do bumps in Sensex send you into sweats, or to the trading room floor? An understanding of your risk tolerance is an important step in managing a healthy portfolio. Most investor’s I’ve encountered concentrate solely on investment returns and ignore investment risk. Because the level of investment risk primarily determines investment returns, we need to apply a more rational approach to determining the appropriate level of investment risk in our investment portfolios.
One size doesn’t fit all - Large cap, mid cap and small cap stocks
June 23rd, 2009
Mukesh Dedhia
This article talks about the categorization of stocks into large cap, mid cap and small caps. It also describes the characteristics of each class, and guides readers about investing in each.
In the financial press and on business TV channels, we often hear terms like market capitalization (market cap), and also references to companies as large cap, mid cap or small cap.
Let’s understand what these terms mean, and what each class of stocks has to offer you.
Taxation Regimes - EEE EET ETE TEE – What do these mean?
June 22nd, 2009
Mukesh Dedhia
There are different systems for tax exemption / deduction of investments, and for taxation of the income earned from it, like Exempt – Exempt - Exempt (EEE) or Exempt – Exempt -Taxed (EET). What do these terms mean? What impact does it have on you? Read on.
We often hear about different taxation systems in the media. For example, there is a debate currently going on between the Exempt – Exempt - Exempt (EEE) and Exempt – Exempt -Taxed (EET) systems.
What do these three-letter combinations mean? And why are there three letters? Let’s find out.
Are Money Back Policies productive?
June 16th, 2009
Mukesh Dedhia
Save a little money each month and at the end of the year, you will be surprised at how little you have’ – Ernest Haskins Confused??? Aren’t you….. Time and again, financial advisors have propagated the rewards one can reap by saving little by little. And here, we are contemplating otherwise!!! Well, you need not be Ernest Haskins to believe the truth behind this aphorism. Simply analyse the returns likely to accrue from the money back (insurance) policy you have invested in, and the above adage would flash like a golden truth, literally.
Money back policies are one of the most traditional insurance cum investment policies and have been widely promoted and distributed by the insurance companies. Unlike a regular endowment plan, where the policy amount (sum assured) is receivable either on death or at the end of the policy term, money back policies ensure that the survivor receives a certain percentage of sum assured regularly during the term of the policy. This ensures periodic cash inflows in the hands of the survivor to meet various financial needs that might crop up with time.