12 Rules to Invest Wisely
July 30, 2015
( and reap benefits in any market conditions)Rule 1: Invest regularly Rule 2: Start investing early in life (and get the power of compounding to work for your Investment ) Rule 3: Never try and time your investment basis tips, market trends or economic outlook Rule 4: Inflation and Taxes will eat into your returns. Therefore know your actual returns in hand Rule 5: Diversify your investment, across asset classes, to spread your risk Rule 6: Balance and re-balance your investments as you age Rule 7: Expect reasonable returns from your investments and sell, once you have got the returns you seek Rule 8: Get over your mistakes and losses. Learn from them Rule 9: Never invest or sell in
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Portfolio Ideas: Managing the risk of high inflation
July 29, 2015
Unexpected increase in prices can mess up your life goal. Inflation risk is the risk of higher-than-expected increase in prices that leads to failure of your life goal. Let’s suppose you are saving for your child’s college education. You assume that tuition fees will increase by 10 per cent. Based on this estimate’ you decide your savings rate and allocation between equity and bonds. But at the end of the time horizon, you find that college fee has instead increased by 15 per cent. So’ you have ₹1.3 crore in your portfolio’ but you need ₹1.5 crore to meet education costs. You have a huge shortfall of 20 lakh between your cash requirement and how much your portfolio generated. This
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NPS: Pension regulator to pitch for favourable tax treatment for NRIs
July 29, 2015
Indian policymakers are wooing Non-Resident Indians (NRIs) in a big way so that they could park their surplus in local financial assets here. On the heels of allowing NRIs to invest in NPS, pension regulator Pension Fund Regulatory and Development Authority (PFRDA) has decided to pitch for a favourable tax treatment on the same footing as those available for NRI investments in other government schemes. The aim is to ensure that NRIs are not discouraged from investing in National Pension System (NPS) due to tax reasons at the withdrawal stage. NRE accounts The PFRDA plans to soon approach the Central Board of Direct taxes (CBDT) to clear the air around taxability of NPS monies invested out of Non-Resident (external) (NRE)
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How much health insurance do you need?
July 29, 2015
The penetration of health insurance in India is very low. Of the country’s 1.25-billion population, less than a fifth is covered under any kind of health insurance. Even among those covered, the average sum insured is less than 2 lakh, according to data from the Insurance Information Bureau of India. Given the high cost of medical procedures today and the double-digit inflation in healthcare costs, buying adequate cover is very important. Not having enough health cover could force you to forego some medical procedures due to insufficient funds at your disposal. Else, you may have to use up your hard-earned savings that were originally intended for children’s education or marriage. But the importance of health cover notwithstanding, our conversations with
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Too many energy have-nots
July 27, 2015
Recently, the Centre made a request of sorts. It asked well-off people to give up the subsidy on LPG gas. A web piece notes that some ministers have renounced the subsidy. The government’s exhortation precipitated angry reactions amongst a section of people on social media. Messages asking MPs to give up the various subsidies they get abound on social media sites. The reactions are a symptom of the passion with which people regard their cooking fuel, LPG. PC Maithani and Deepak Gupta’s book, Achieving Universal Energy Access in India; Challenges and the Way Forward, deals with sources of energy which are part of our daily lives — and which many among the middle and well-off classes take for granted. Cooking
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