What's Marriage?

             
     What's Marriage?


     Answer-    
      MARRIAGE Is The 7th Sense of Humans, 
     that Destroys All The Six Senses and 
     Makes The Person NON Sense..!
Share:

Income Tax on Equity and Debt Mutual Funds in India..!

Income Tax on Equity and Debt Mutual Funds in India

April 2016
Share:

Monthly-Income-Plans (MIPs) Mutual-Funds-Portfolio


Monthly-Income-Plans (MIPs) Mutual-Funds-Portfolio

April 2016 

Share:

What are Debt Mutual Funds?

What are Debt Mutual Funds?
Income funds, dynamic bond funds, ultra short funds, yields, credit downgrades…for a newbie investor (and for many seasoned ones, too!) the world of debt mutual funds can be a confusing place.
Explaining everything there is to know about debt mutual funds makes for a very long article, so we will take it in stages.
We’ will look at the types of debt mutual funds that there are.
What they are?
Companies borrow for various purposes – to meet working capital requirements, to fund expansion, for capital expenditure, and so on.

 Similarly, the government also borrows for its own spending needs. These entities issue instruments for these borrowings – bonds, debentures, treasury bills, commercial papers, certificates of deposits, and such.

 These debt instruments carry a specific interest rate and maturity period (tenure). They are also called fixed income instruments. Maturities can range from a few days to a few months to a few years.


In the case of government securities, it can go up to several years. Generally, short-term instruments are less risky than long-term ones for the simple reason that the uncertainties linked to a company’s fundamentals are higher over the long term.

Debt investments carry 2 types of risk.The first is that interest rates change over time. If interest rates move lower, new debt instruments issued will consequently have lower interest rates.
But, then the older instruments that are already issued still carry the old interest rate (called coupon).
They however, adjust to the new interest rate scenario by way of change in their price.
Thus, the bond prices traded in the market move in line with change in interest rates. This relationship is captured by what is called the ‘yield’ of the bond. We will discuss more about it in another article.
The second risk is that the borrower fails to meet payments. Companies are graded on their credit-worthiness or / their ability to meet interest and principal repayment obligations on time.
This grade is termed its credit rating. A high credit company is safer than a low-quality one, and will, consequently, pay a lower interest rate. While risk is higher in poor-quality company, rates are also higher as it is forced to pay a higher price in order to borrow.
Debt mutual fund types

Debt mutual funds invest in a combination of debt securities  short or / long term, corporate bonds, bank debt, gilts, high-quality papers, low quality papers, secured and unsecured bonds, and so on.

There are, at all times, several instruments to invest in with varying interest rates and maturities. Debt funds actively juggle these instruments in their portfolio based on the interest rate movement to deliver returns. The type of debt fund it is depends on the average maturity of the instruments in its portfolio or then the kind of strategy it follows.

The longer the maturity period is, the higher the risk, and thus higher the return.
Liquid funds hold instruments of extremely short maturities.

By rule, they can not invest in instruments whose maturities are more than 91 days.

Typically, liquid funds hold instruments that mature in a matter of days. These can be commercial papers issued by companies (CP), certificate of deposits issued by banks (CD) or government treasury bills.
These are collectively called money market instruments. Liquid funds also stick to instruments of the highest credit quality.

The short nature of these instruments, the high quality, and the lack of volatility in their NAV make them very safe investments. They have no exit loads and you can redeem investments very easily in these funds. For these reasons, liquid funds are the perfect alternative to savings bank accounts, which carry the lowest interest rates. Money left idling in your savings bank account, therefore, can be shifted into liquid funds to get higher returns.
Ultra short-term funds are a step above liquid funds in terms of the maturity of the instruments they hold. That is, while they hold CDs and CPs, they go for corporate or bank bonds that are a bit longer term in nature of up to one year, or /  maybe a little longer. Therefore, they require a holding period of around a year.

Currently, the average maturity period of ultra short-term funds is around 9 months. Most ultra-short term funds invest in high-quality credit. They are good parking grounds for surplus money that you don’t need immediately but may require a little later on. They deliver higher returns than liquid funds.

Short-term debt funds go for longer maturity periods than – yes, you guessed it –ultra-short term funds. They invest in corporate bonds to a greater degree, and rely far less on CD and CPs.

They may also have some holding in short-term government securities. The average maturity periods of the portfolios will typically be around 2 years or a maximum of 3 years. They require a holding period of around 2 years.

Long-term debt funds (you’re now a pro!) invest in much longer-term debt of 3 years and more. These funds require holding periods of at least three years and should form a part of every long-term investment portfolio. Think of both short-term and long-term debt funds as an alternative to your normal go-to option of fixed deposits.

Short-term and long-term debt funds may take a call to invest in instruments of low credit quality companies. Because such instruments carry attractive interest rates, the portfolio’s yield moves higher and returns jump, though the risk also moves a couple of notches higher.
Mutual funds that explicitly (by mandate) follow such a strategy of identifying companies with poor credit and high interest rates and lending to them are called credit opportunity funds and are among the highest-risk debt funds.
Some short-term and long-term debt funds are also called income funds due to their strategy.

These funds hold bonds to maturity and primarily aim at earning interest income (or in finance-speak, an accrual strategy) across rate cycles.

They do not try to predict or play the interest rate cycle. Such funds primarily hold corporate bonds as that’s where rates are higher and fluctuations in bond prices lower.

Gilt funds are funds that invest entirely only in government securities (or gilts, for short) and try to benefit from changes in bond prices as interest rates change. There can be both short-term and long-term gilt funds.

These funds are akin to sector funds in equities – they require careful watching and timed entries and exits and are thus the highest-risk category of debt funds.

All the above are open-ended debt funds. This apart, you have close-ended debt funds called Fixed Maturity Plans (FMPs), which have a fixed tenure. Your investment is locked for this period. Tenure can be a few months to a few years.

They invest in money market instruments, bonds, and gilts. FMPs usually match the maturity profile of the portfolio to their mandated maturity period.

To recap, the risk and return levels from lowest to highest are in order of explanation above – liquid, ultra-short, short, long, gilt.
You are now well-versed in the categories of debt funds! Next week, we’ll look at how returns are generated for debt funds and why the risk levels are as mentioned.


Share:

Mr. Money Mustache Interview - Early Retirement Made Easy

Mr. Money Mustache Interview - Early Retirement Made Easy mad fientist 

http://www.madfientist.com - In this episode of the Financial Independence Podcast, I talk to the original Mustachian himself, Mr. Money Mustache!
Share:

How 'Mr. Money Moustache' Retired at Age 30..!

How 'Mr. Money Moustache' Retired at Age 30..! ABC News 


The family man behind the popular financial blog shares his secrets to living frugally.
Share:

How to Retire Early: The Shockingly Simple Math..!

How to Retire Early: The Shockingly Simple Math Video School Online Enroll in the FREE Personal Finance Principles course: http://courses.videoschoolonline.com/...


How to retire early - let's break down the steps to early retirement.
Share:

What Is The 4% Rule? How Much Money Do I Need To Retire?

What Is The 4% Rule? How Much Money Do I Need To Retire? Enroll in the FREE Personal Finance Principles course: http://courses.videoschoolonline.com/...


In this video, I want to explain the 4% rule. This is also known as the Safe Withdrawal Rate - or basically
Share:

How to plan for Retirement? by Mr. Ramalingam K, Holistic Investment Planners Chennai

How to plan for retirement? by Ramalingam K Src: Holisticinvestment.in


How to Plan for retirement? Important things to do before you retire.
Share:

Direct Income Tax Collection Tamilnadu 4th Place

Direct Income Tax Collection Tamilnadu 4th Place

Maharashtra contributed the biggest chunk of direct taxes at Rs. 2.78 lakh crore in 2014-15, the latest year for which data is available. 

The state's share was nearly 40% of the total Rs. 6.96 lakh crore collected in direct taxes that year. Delhi came next with Rs. 91,247.90 crore, followed by Karnataka (Rs. 60,595.22 crore). Gujarat contributed Rs. 35,912.46 crore...
Share:

REAL ESTATE SHOW IN USA - JUNE 4 to 12, 2016


REAL ESTATE SHOW IN USA - JUNE 4 to 12, 2016

The 9th edition of Indian property show in USA will be held in Fremont, CA, Portland and Seattle during June 4-12, 2016 Organised by Chennai based Priya Publications, property developers from various Indian cities will showcase a wide range of options to NRIs during the show.

NRI investment advisory services and investor conferences would form an integral part of the show.

Priya Publications,
No 26/21, South Mada Street,
Sri Nagar Colony,
Saidapet,
Chennai - 600 015
Tele    91-44-42043857, (+91)9176627139
Email  id :  priyapublications@gmail.com,
            priyapublications@yahoo.com
Share:

30 things to do before Sensex hits 30000

30 things to do before Sensex hits 30000

1. Begin investing, no matter how small the amount

2. Invest, not just save, but to help yourself beat inflation

3. Brush your teeth twice a day to make sure your dentist earns less than you do

4. Set goals and objectives, have a different investment portfolio for each one of them

5. Rebalance your assets periodically, move from equity to debt as you get closer to your 
goals

6. Play the change in the interest rate cycle by investing in dynamic bond funds for the next 2-3 years

7. Shower more often, even if it means lesser profits for the deodorant industry

8. Invest systematically for the long-term to benefit from the power of compounding

9. Be kind and generous, gift your best friend subscriptions of Mutual Fund Insight and Wealth Insight

10. Don't judge anyone, everyone has their stories and reasons that you wouldn't know about

11. Invest in ELSS funds for tax breaks, tax-free gains and long-term wealth

12. Opt for the diversification, convenience and tax efficiency of equity mutual funds

13. Begin with balanced funds

14. Eat healthy, sleep well, workout regularly, laugh boisterously

15. Don't frown when your better half takes the 57th selfie of the same type

16. Have a certain part of your portfolio in equities, no matter what your age, to help you protect the worth of your capital over time

17. Diversify across not only sectors and capitalisations, but across geographies and economies as well

18. Appreciate, respect and encourage a lot more

19. Shun sectoral and thematic mutual funds

20. Avoid ULIPs, fulfil your insurance needs with a low-cost term cover

21. Make sure you have adequate life and health insurance as well as an emergency fund before dabbling in equities

22. Spend less time in front of gadgets and more time in front of real people

23. Do fewer tasks but do all of them to a tee

24. Opt for the direct plans of mutual funds if you can, lower expenses means higher returns

25. Spend more time with your children, even though they might not remember it when they grow up

26. Don't chase recent performance, choose funds with a long and credible history

27. Buy gold only if you need to consume it, don't treat it as a long-term investment

28. Take a picture of your friend holding up the book you lend them, it's important to have proof for future reference

29. Timing the market is never fruitful, investing in lump sum should be a big no-no


30. Don't let the market's ups and downs influence your long-term investments
Share:

Determining Financial Goals For Women & Steps To Planning Their Finances..!

Determining Financial Goals 

For Women & Steps 

To Planning Their Finances..!

From PersonalFN

Many women successfully handle the demands of a family, career, and household. In fact, they are the “Chief Financial Officers” of their household, however when it comes to managing their own finances, 
they take a back seat—due to the lack of awareness on personal finance.  

Financial independence is vital for everyone, including women. Dependence on state, parents, and partner should be avoided as much as possible.

Goals differ as names differ. However, in today’s article we are concentrating on 3 important financial goals that every woman should focus on and the vital steps to plan their finances:

Goal # 1 Financial Independence: 

There is possibility that a woman may be  self-reliant  at some point of time, due to divorce, becoming a widow, choosing to marry later in life or not at all.

Moreover, a woman is more likely to put her career on the back-burner to manage family responsibilities—leading to lower career earnings and decreased contributions to recognised provident funds. 

This makes it even more important to hone the skills to manage their own financial affairs.

Goal # 2 Become debt-free

Dave Ramsey, a US based financial coach says,  “The decision to get into debt alters the course and condition of your life. You no longer own it.

You are owned.”With the advent of plastic money, affordability isn’t the question. You like it, swipe a card is the solution to the gap between the object of your desire and money in your savings bank account

According to Dave,“responsible use of credit card does not exist.”  It is no rocket science to understand that it makes financial prudence to live within your means.

If you are already in the pink of your financial health, creating a budget, using additional sources of income, and renegotiating with creditors could be some steps that you should follow to repay your debt at the earliest.

Goal # 3 Pension:

Apart from handling responsibilities at home and work, they seldom ignore planning for their golden years. It is the number one priority for every individual. Studies show that women tend to live longer than men making it possible for them to save more for a longer retirement. 

So, it is important to start early and allocate a portion of your earnings to a diversified equity fund. With the passage of time and the magic of compounding, you’ll be able to build a sizeable retirement corpus.

Let’s move on to the steps that you need to follow to achieve your financial goals.

Step # 1 Create a Budget:

According to Dave Ramsey,“A budget is telling your money where to go, instead of wondering where it went.” Making a budget seems unromantic and mundane. But it stops you from going overboard. 

Housewives have mastered this skill. They are not the bread winners, but they know the monthly family expenses and work out an action plan around it.

If you haven’t prepared a monthly family budget, flip through all of your financial documents and get real with yourself about how you’re spending money, your current spending habits, and what you consider necessities.

Here’s an example to know your cash flow:

Cash Flow statement for the month of
Cash Inflows:
Rs

Salary


Bonus


Rental Income (if any)


Dividends


Other Income


Total Cash Inflow (a)

Cash Outflows:


Household


Lifestyle


Medical


Travel


Contribution to Parents


School Fees


Equated Monthly Instalments (EMIs)


Insurance Premiums


Total Cash Outflow (b)


Net Cash Flow (a-b)


Note: The above table is for illustration purpose only
(Source: PersonalFN Research)



Knowing how you spend, better equips you to set your long term financial goals and track your spending, which should culminate to help you achieve your financial goals.

Step # 2 Build an Emergency Fund..!

An emergency fund acts as a hedge against life’s uncertainties. Financial Planners suggest allocating 6 to 12 months of your expenses to an emergency fund. Make use of liquid funds or sweep-in-fixed deposits to invest your emergency funds.

Step # 3 Write down your financial goals..!

“A goal is a dream with a deadline.”—Napoleon Hill. When you write down your financial goals, you know exactly what you want to achieve and utilize your money wisely. Break down your financial goals based on the time frame to achieve them. 

The table will help you stay focused on what you really aim to achieve.

Your Personalised Goal Tracker
Short Term Goals
(under 3 years)
Estimated
Cost
Target
Date
Action
Steps
1)



2)



3)



4)



Short Term Goals
(under 3 years)
Estimated
Cost
Target
Date
Action
Steps
1)



2)



3)



4)



Short Term Goals
(under 3 years)
Estimated
Cost
Target
Date
Action
Steps
1)



2)



3)



4)



Note: The above table is for illustration purpose only
(Source: PersonalFN Research)


No matter what your age is, you need to get a grip on finances and become financially savvy. Professor Annamaria Lusardi, Director of the Rand Financial Literacy Center says,“One reason that women might be better financial decision makers, despite displaying, in general, lower literacy than men, is that women know what they do not know.”

Watch this space as we unravel topics on investments, insurance, retirement and estate planning for women, making it your own!




Share:

How Women Should Go About Planning Their Investment & Insurance Needs..!

How Women Should Go About Planning Their Investment & Insurance Needs..!
From  PersonalFN
Women are stepping out of the stereotypical roles that traditional society had yoked them with. In the corporate world, women still earn less than men; not because they are less competent, but because a patriarchal system runs it.
For women, this automatically transpires into less money in the bank and in government or company sponsored retirement funds.
        Women live longer than men. Living longer means that women need to save more for a longer retirement and consider the impact of long-term health care costs.
        Women are expected to take a break from their careers to start a family, care for the young and the elderly. This can translate to lower total career earnings and decreased contributions to  retirement plans.
       Women are prone to health related conditions than men. Diseases like Ovarian Cancer, Breast Cancer, Uterine Cancer, Ectopic Pregnancy and Endometriosis etc. are health related issues faced by women. With rising health care costs, it would be wise to purchase a health insurance cover at an early stage in life.

Now that we have looked at the reasons, let’s see how we can go about planning.

For starters, invest at least 20% to 30% of your income every month. This would be a good starting point to achieve your financial goals.

A prudent practice to live within your means and become a wise investor is to trim your expenses, based on the amount you are left with after investing a portion of your income towards investments. Avoid getting into debt wherever possible and stay out of  credit card debt  always!

Follow the  guru-mantra:

“Don’t save what is left after spending, but spend what is left after savings”
—Warren Buffett

Income – Investments = Expenses

The amount so saved can be invested based on the following matrix for your long term financial goals (7 to 8 years horizon)
 
Asset Allocation Strategy
Risk Profile
Aggressive
Moderate
Conservative
Age
Equity
Debt
Gold
Equity
Debt
Gold
Equity
Debt
Gold
20 to 30
75
15
10
65
25
10
40
55
5
31 to 40
75
15
10
60
30
10
40
55
5
41 to 50
60
35
5
50
45
5
35
60
5
51 to 60
40
55
5
30
65
5
25
70
5
Note: The above table is for illustration purpose only
(Src: PersonalFN Research)"



This is a simple matrix for you to optimize your returns and acts as a good yardstick to evaluate your current portfolio.

If your investments are more inclined towards debt or you haven’t considered  gold  as part of your portfolio, it’s time to call your financial planner to check if your current asset allocation strategy is in sync with your financial goals.

As you pay attention to your investment needs, make sure you don’t ignore your insurance needs either.   you will be able to calculate the amount of life insurance you need based on your requirements. Term insurance policies offered by HDFC Life (Click 2 Protect) or / ICICI Prudential Life Insurance (iProtect Smart Term Plan) are some of the good options under the term insurance domain.

Similarly, opt for a  mediclaim policy  now, if you haven’t got one already. Apart from a Family Floater policy, consider purchasing maternity health insurance coverage offered by Bajaj Allianz, Religare Health Insurance, and Star Health Insurance, etc.

Always bear in mind to keep your investment and insurance needs separate. Insurance is a tool to cover life’s uncertainties. Most people fall for the sweet talk of a Relationship Manager trying to sell a traditional insurance policy. A traditional insurance policy offers low returns vis-à-vis other investment products and poor insurance coverage vis-à-vis term insurance policies too. Stay away from them.
Share:

Topics

Blog Archive

நிதி முதலீடு

ADVT

Recent Posts

Latest Posts

Find us on Facebook

NRI INVESTMENTS