Let us look at an example to simplify the word ‘CAGR’
What is CAGR and What does it mean for your long term investment?
Let us look at an example to simplify the word ‘CAGR’
The vacation has taken a new meaning all together for children as well as for the olders. It’s a festivity. When fun-frolic stay at its best, it also can be utilised by the parents for inculcating some good habits in the children which go a long way, no less than their life time to be honest. Habits learnt in childhood stays long life. The small but important training may not always ensure the best results, but it definitely sows a seed of discipline.
Money management is fun thing. It’s a learning process and we can take it up anytime, may be this summer while teaching the kids, we end up learning some good habits and enjoy it too!
To maximise the benefits, you should ask your insurance agent to pass on some cash benefit to you by paying first two premiums. This is a negotiable deal you can broke with the agent.
Kindly note that endowment plan should be bought only for long term like 20 years and above. Endowment plans attract heavy penalty on missing due dates for premium, surrender pre-mature and may close the policy if policy-holders consecutively misses premium payments. Also, it is an illiquid inveatment as one cannot withdraw the investments before its maturity or policy-holder’s death. If one doesnt continue paying premium upto atleast 3 years, the investors will not get any return on the investments. Also, this may give very low or no inflation adjusted return given India’s average inflation rate is about 5%.
The shocker was too much for the investors, leading to a short-term fall in the market. The finance minister tried to tame the anger by keeping a grand-father clause applicable till 31st Jan 2018. Now the point is what is this grand-fathering clause and how is it going to make any difference to the investors?
The Grandfather clause is applicable to domestic investors for equity and mutual funds investments on LTCG.
grand-father-clause-in-equity-LTCG, Long term capital gain
So, take few steps and varify –
5. Call on that toll-free no. – It takes few minutes. Whichever financial product you are buying, in the brochure you will find a customer care no. Call up and verify the commitment s your broker made it you. Tally the benefits. If it suits you and if it completely match, you are quite safe.
Also, Mutual Funds will levy 10% dividend distribution tax on dividend options under various equity schemes.
(Short term tax on equity and equity based mutual funds stand at 15%)
Investment
|
Investment amount
|
Entry date
|
Exit date
|
Gain = Amount – Investment
(Hypothetical)
|
Tax applicable
|
Net Profit
|
Stocks
|
1,00,000
|
1st Jan 12
|
1st Mar 18
|
3,00,000
|
None
|
3 lakh
|
Stocks
|
1,00,000
|
1st Jan 12
|
1st Mar 22
|
6,00,000
|
10% of 5 lakh
= 50 thousand
|
5.5 lakh
|
Equity MF
|
1,00,000
|
1st Jan 12
|
1st Mar 18
|
2,50,000
|
None
|
2.5 lakh
|
Equity MF
|
1,00,000
|
1st Jan 12
|
1st Mar 22
|
5,00,000
|
10% of 4 lakh = 40,000
|
4.6 lakh
|