A Financial Tip:  The Coveted Yellow metal: GOLD

Some facts to ponder:

·         Accumulations of Gold is no longer considered "Modern"

·          Reasons to buy Gold : to pawn to raise money; to bring financial discipline in the house hold; can be used anywhere in the world.

·          Need not be treated as a default first choice.

·          Hold only 5% to 10% of your total wealth because investment in gold only used to cover extreme situations.

·         They do not generate any income. 

·         Very expensive to hold.

·         Jewellery comes with steep costs in the form of making charges /damages; you lose a portion of value every time we transact.

·         Prices move up just like any other growth asset; Gold price hikes when gripped with uncertainty.

It is bought to hide money from the TAXMAN!

Finally “It remains a curse that parents in many parts of the country marry off educated girls capable of generating long term solid string of future income and think Gold as SECURITY”..Uma Shashikant, 2017

Source: ET Wealth

A Financial Tip

Tax Saving scheme: LIC Insurance Premium:

·         Traditional Life Insurance sell as Hot cakes in the Month of March every Year.

·         These policies yield 5% to 6% return only, assess whether you are willing to accept.

·         It is a multi year commitment made in haste without understanding its implications….avoid if possible.

·         When closed prematurely the policy holder takes a hit; buying them for the wrong reasons.

·         Avoid buying in a hurry; assess your need for LIC cover.

·         Asses your ability to service premium full term before deciding to invest.

·         Better to stay away from life insurance policies that combine triple benefits – life insurance, investment and savings.

·         Insurance policies worth buying may be pure protection plans --- these cover risk of death and have low premium.

·         In your haste to meet the dead line of tax savings, do not sign the dotted lines of forms presented by Insurance agents, because you may not know what boxes are ticked for you by the agent.

·         Insurance policies may have worked well for your parents but in this century such policies become milestones around the neck of the buyer. In the past century investment options were less.

·         Never buy policies from an agent who is your relative or friend, it is better to help such agents with cash than commit for 15- 20 years in the policy.

·         Avoid investment in policies offering twin benefits of insurance and investment.

·         Avoid guaranteed returns policies; it comes at a higher price; PPF or Voluntary PF may be a better option.

·         In Health Insurance policy below Rs. 5 lakh, the buyer is not put through a medical test; but has to submit a health declaration. For higher amount Medical check is required.

·         Finally: “Experts say that strictness of the claim procedures is inversely proportional to the leniency of the undertaking.”

Source: ET Wealth 13-3-2017

Sharing A Financial Tip:
Every investor wishes to have in his portfolio is an instrument that can help build wealth and save taxes at the same time. PPF, NSC, and tax-saving fixed deposits are some such options that ensure capital appreciation and allow tax exemption through Section 80C of the Income Tax Act. However, the one that has an edge over all these investment instruments is Equity Linked Saving Scheme (ELSS) mutual funds.

Merits and demerits of ELSS funds:
• ELSS funds are diversified mutual funds with most of the corpus invested in equities.
• These funds typically attract higher returns when the stock market fares well, but also carry all the risks of investing in equity.
• The minimum amount that can be invested in ELSS is Rs 500; there is no cap on the maximum you can put in.
• These investments come with a three-year lock in period and can be withdrawn completely on completion of the stipulated time.
• Any investment towards this fund up to Rs 150,000 is eligible for tax deduction under Section 80C of the Income Tax Act.
• The returns received on maturity of the plan are not taxable as well; because no long term capital gains tax on equity investments,
• ELSS funds have both dividend and growth options. In the dividend option an investor is entitled to dividends even during the lock-in period. In case of growth funds, the investor gets a lump sum once the lock-in period is over.
Advantages of ELSS funds
1. Tax deduction can be claimed under Section 80C on any investment of up to Rs 1,50,000 made towards the scheme
2. According to the CRISIL-AMFI ELSS Fund Performance Index in December 2016, the ELSS funds have returned 3.35% last year, 16.64% in the three years and 17.71% in the last five and 10.61% in 10 years.
3. The three-year lock-in period is much lower than Public Provident Fund (PPF), National Savings Certificate and bank deposits.
4. The ELSS maturity amount is tax free
5. ELSS allows high capital appreciation in a short period of time..
6. The dividend funds fetch gains during the lock-in period and the dividends on equity investments are tax free.
7. ELSS encourages investors to stay invested over long time to see best results.
Investment in ELSS:
• Investment in ELSS can be done through one-time investments and SIP.
• The SIP route allows you to invest in amounts as small as Rs.500 each month.
• It also reduces the volatility resulting from market movements and makes tax planning more disciplined.
• ELSS funds are suitable for investors who have a relatively high risk appetite and are looking for ways to save a good deal of taxes in the long run.
**Source: Financial Express

A Financial Tip:
"Keeping things simple is the key to making the right investment decisions. Simplicity is not just a useful characteristic, it is absolutely mandatory".....Dhirendra Kumar

Quotes March 2017

Dhoni's traits for Financial Planing

Mahendra Singh Dhoni winning traits that all investors could imbibe to become more successful with their money.

1. BUILD ON SMALL BEGINNINGS
When it comes to your money, systematic investment plans are the small beginnings that could lead to big earnings over the long-term, thanks to the magic of compounding. The important thing is to start, keep at it and believe that even the biggest goals can be met. 

2. STAY CALM IN TURBULENT TIMES
Many times has Dhoni taken his team out of crunch situations.It's all because of his calm and collected nature. Being as composed during times of financial instability can be tremendously helpful. Whether it's a stock market crash or a medical emergency or a sudden loss of income, panicking will only make matters worse. What we need to do instead is stay calm and tackle the situation with a clear head in order to make the right decisions.

3. LEARN CONTINUOUSLY
He never stopped learning. He studied the game closely and worked on improving himself in every aspect of it. Similarly, most of us know enough about money to earn and spend it, but not enough to make it grow. Even some basic knowledge can make a world of difference here.
Learn how the economy functions, understand insurance, figure out investments, and once you know that, learn a little bit more. In finance, learning can translate into earning. Constant learning made Dhoni one of the greatest cricketers of our times. While we might not become one of the greatest investors, constant learning can definitely make us more successful in reaching our financial goals. 

4. HAVE FAITH IN WHAT YOU BELIEVE IN
Dhoni had faith in Joginder Sharma he delivered. Investors should also stick to their guns if they believe in something.  Everyone around you might have an opinion contrary to yours, but if you're convinced about an asset, sector or financial product then you should go ahead and put your money where your belief is. Remember, very few people go against the herd but those who do often turn out to be the biggest winners.

5. BE HUMBLE
One of Dhoni's most remarkable qualities is his humility despite his stupendous achievements. He never allowed his success to go to his head. As investors, we cannot afford to get carried away by the successes of our investments either. Things can easily go wrong if we lose sight of our goals. 

Our investments are dependent on a lot of factors, some of which we cannot control. That is why we should be happy about an investment that has done well but not be complacent. 

**Source: ET Wealth

Risk Differences