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August 21, 2020August 21, 2020

Term Life Insurance PMJJBY पीएम जीवन ज्योति बीमा योजना – security for all

Who should buy this insurance? Why should anyone buy?

पीएम जीवन ज्योति बीमा योजना – लाइफ कवर

Pure term insurance plan (टर्म इंश्योरेंस स्कीम ), with low premium option can help many families in difficult times. If one doesn’t have any other life insurance policy, if one cannot afford a premium over Rs. 350/- a year, have income less than Rs. 15,000 a month, can begin with this term life insurance policy, as this insurance will cover 1 year salary incase of any unforeseen events. This is an Indian government initiative.

Have you asked your driver, cook, maid, caretaker, security guard, office peon if they have insurance? Its never too late – help as many as you can, take an effort – choose to walk them to nearest bank branch if required.

Covid19 pandemic has caught the whole world off-guard, more so for people at lower income and people with a lot of financial obligations. People who are financially fit, will find it easier to sail through the tough time, they always do.

Every one needs an insurance, but due to expensive premium and complex procedures, it wasn’t possible until year 2015. In the year 2015, government of India launched 4 important financial product aiming at financial inclusion.

– PMJDY – Pradhan Mantri Jan Dhan Yojana

– Atal Pension Yojana

– PMJJBY – Pradhan Mantri Jeevan Jyoti Bima Yojana

– PMSBY – Pradhan Mantri Suraksha Bima Yojana

Under Jan dhan se Jan suraksha program, Prime Minister launched this in May 2015. This is under government’s social welfare schemes. In this post, will discuss about the Pradhan Mantri Jeevan Jyoti Bima Yojana and Pradhan Mantri Suraksha Bima Yojana. Both these insurance products are aimed at including all sections of society. These insurance products are affordable in all big private and public sector Banks, listed here in the post. Lets get to the details first.

प्रधानमंत्री जीवन ज्योति बीमा योजना

PMJJBY – Pradhan Mantri Jeeevan Jyoti Bima Yojana – is life insurance scheme, a protection plan, renewable from year to year, offering coverage for death due to any reason and is available to people in the age group of 18 to 50 years. Important for every working member of the family. For enrolment banks have tied up with insurance companies. Participating Bank is the Master policy holder.

Important points –

Life cover of Rs. 2 lakhs is available for a one year period stretching from 1st June to 31st May at a premium of Rs.330/- per annum

One can enter at the age between 18 years to 50years, renewable upto 55 years

A person can join PMJJBY with one Insurance company with one bank account only

Individuals who exit the scheme at any point may re-join the scheme in future years by paying the annual premium and submitting a self-declaration of good health

It offers tax deduction benefit under Income tax section 80C

Exclusion – Suicidal death is not covered under this scheme

Note – This scheme doesn’t offer any maturity benefit, insurance without any savings or investment component. It only covers death benefit of the policy holder in during the policy term uptill 55 years. The amount of Rs.2 lakh will be passed on to nominee on such unfortunate situation, helping the family through the tough times with financial support.

Links

Form of application and claim settlement is available here in Hindi, Bangla, Gujarati, English Kannada, Telegu, Tamil, Oriya Marathi – https://www.jansuraksha.gov.in/Forms-PMJJBY.aspx

Pradhan Mantri Jeevan Jyoti Bima Yojana Eligibility – Any Indian citizen who is between 18- 50 years old and has a savings account can enroll for this scheme through the participating banks. (List of Banks listed below)

One must have an Aadhaar Card

How to enroll to Pradhan Mantri Jeevan Jyoti Bima Yojana?

PMJJBY is managed by LIC and other private life insurance companies. One may apply through their Banks – Public sector Banks, Private sector banks, co-operative Banks, as per LIC website, about 1000 banks are associated with PMJJBY as nodal agency or Banking partners

Ask your Bank they offer if they offer PMJJBY or check online, will put a list of big Banks who does offer the scheme

You need to mention nominee (wife/ children/any other legal heir)

How to claim the insurance amount? कैसे उठाएं प्रधानमंत्री जीवन ज्योति बीमा योजना का लाभ?

Claim can be made by nominee incase of death of the policy holder.

Nominee has to approach the Bank, referring to the savings account which is attached with the Jeevan Jyoti Policy

Nominee needs to collect the claim form

Submit the claim form duly filled along with – Death certificate, cancelled cheque of the nominee’s bank account,

In next steps, Bank will verify the claim form. Along with the aforesaid documents of nominee, Bank will forward the claim to insurance company within 30days of submission.

Insurance company will verify all the documents of the policyholder, nominee details, within 30 days of receiving the claim, Insurance company needs to disburse the claim amount in favour of the nominee.

List of Bank partners

State Bank of India

Punjab National Bank

Union Bank of India

Bank of Baroda

Canara Bank

HDFC Bank

Federal Bank

ICICI Bank

South indian Bank

Allhabad Bank

Many other Banks are partnering in this scheme. Please speak to your home Bank branch or nearest Bank to get more details. If you have any observation, suggestion or queries do share in the comment box.

Look forward to come back with a informative blog post.

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August 16, 2020August 16, 2020

This equity MF offers steady returns in volatile times

No negative return on this equity mutual fund category in short term, NFO launched, Arbitrage Yojana.

Mahindra Manulife Mutual Fund launches Arbitrage Yojana

You read the headline right, no catch there at all. I have seen this fund category earlier too, but there is not much conversation about this fund in India. I just bumped into this NFO of Mahindra Manulife Mutual Fund’s news scheme – Arbitrage Yojana. And got an excuse to share it with you about this product category.

Recently I had mentioned about Bharat Bond Fund, safer than other debt funds. Though I can’t draw a product category parallel with the Arbitrage Yojana, but there is an interesting similarity of onething- that is the safety quotient.

Do you want to know – How to invest in Arbitrage Fund? Are Arbitrage Fund Good for individuals? Is it better than Liquid Fund for retail investors? Why to invest in arbitrage Funds and who can invest in Arbitrage Funds?

Arbitrage, an investment strategy that takes advantage of price difference of an asset in various scenarios. In this post, we will look at MahindraMMF’s Arbitrage Yojana which is an Equity Fund, it invests in equity and related market securities like other equity Mutual Fund. But, this category has a twist which is not discussed.

Let us discuss this category with help of Arbitrage Yojana NFO launched by Mahindra Manulife Mutual Fund. An Indian Arbitrage Fund, Arbitrage Yojana’s main focus is generating consistent returns from equity market through positioning trades to leverage the price difference between shares and derivative instruments, its focus is to locking-in profit, whether market goes down or up, this scheme category generates income in any market scenario. It uses four kinds of equity arbitrage opportunities – Exchange arbitrage, cash and carry Arbitrage, Basket of stock and corporate action driven arbitrage opportunity.

Like all other Equity Mutual Fund category, this mutual fund also follows an Index to compare its returns. For Arbitrage Funds, the Index is Nifty 50 Arbitrage Tri Index.

The focal point of the fund is hedging risk and generating consistent income. The strategy can be explained through the illustration below.

Exchange Arbitrage – The stock prices of same company can have a small difference in BSE and NSE platforms, in this case scheme, buy in one exchange and sell in another. These trades are often done in pre-set prices to maintain profit margin.

Cash And Carry Arbitrage – This strategy is implemented closer to contract expiry dates, (Ex Nifty has weekly derivatives contract expiry and stocks has monthly derivate expiry). In this strategy, Scheme place in trades to gain in from the price difference between Future contract and stock prices.

Basket of stock Arbitrage – For example, in this strategy, the scheme buys Nifty stocks in equal proportion as the nifty constituents of a certain value and sell the Nifty Futures for equivalent value.

Corporate Action Driven Abitrage – These are rare occurrences, when there is a visible and considerable difference in price available in case of big corporate action as mentioned in the illustration.

I have pulled out some information from the NFO document for easy illustration.

Mahindra Manulife Arbitrage Yojana

NFO Open date – 12th August 2020

NFO Closing date – 19th August 2020

Minimum application – Rs. 5000

Type – Open Ended Fund

Minimum SIP Amount – Rs. 500/-

To invest or to know more about the fund – Click here

Arbitrage Fund category –

Risk – Moderate

1 year average return 5.5 %

Who can look at buying Arbitrage return – One who is looking at steady high post tax return in short term, who needs to keep some fund which doesn’t get affected by market volatility, one who is looking for an all season fund. Whatever the equity market condition may be or interest cycle movement, Arbitrage Fund offers a cushion from uncertain market movements. This investment is ideal for parking cash for short term horizon, it earns better post-tax returns compared to fixed deposits, risk is much lower almost nil compared to equity funds for short term investing horizon of 1-2 years.

Besides stability, it’s tax treatment is what makes it more attractive, as it deals more than 65% Equity, it gets tax treatment of an equity Fund.

About Mahindra Manulife Mutual Fund

This is a joint venture of Mahindra & Mahindra Financial Services Limited and Manulife Investment Management (Singapore) Pte. Ltd. brings together Mahindra’s domestic market strength and track record of successfully building businesses focused on meeting customer needs and Manulife’s global wealth and asset management capabilities and richness of experience in servicing the needs of Asian consumers across developed and developing markets. They are aiming to offer wide variety of investment solutions pan-India, with focus on semi-urban areas.

Our take

This is indeed an interestingly safe and good mutual fund category, which offers fixed income like return and taxed like equity. The best part about this category allows investor to earn profit of 5-7% yearly, an average fund generates about 5.5 -6% return in 1 period horizon. Interestingly, for short term profit booking, within a year, it is taxed at 15%, and in long term the return is taxed at 10% above the 1 lakh equity profit threshold. While the debt funds are taxed as per income tax slab upto 3 years. (Can have a tax burden of 34%)

You may visit the Mahindra Manulife Mutual Fund website for checking out full offer document and fund details.

Among others in this category, there are Nippon India Arbitrage Fund, Edelweiss Arbitrage Fund, L&T Arbitrage Fund, Kotak Equity Arbitrage Fund, you can check Valueresearchonline or moneycontrol for more information and insights in this fund category

This post is for sharing information and insight, it should not be considered as recommendation to buy, and one should consult their financial advisor before taking action.

August 2, 2020August 2, 2020

Book Review – Easy Money, triology on brief history of money

In one of his rare interviews, Vivek kaul said, ‘I write for my mother’, implying that he tries to keep his writing style as simple as possible so that people with no economics background can understand it, I must say he has remained true to his words in his books.

Easy Money Triology is written by the renouned Indian columnist, Vivek Kaul, writes in many esteemed publications in India. In this blog post, I will be taking you through the second book – Easy Money, I happened to read this one first, jumping the row 😉

Easy money is available in Amazon in Hard copy, , Amazon Kindle and Amazon Audible app.Easy Money – the second book of Easy Money Triology, written by Vivek Kaul, Published by Harper Collins India.

‘The Evolution of The Global Financial System to the Great bubble burst’. The Book captures, how the global financial system evolved aftermath of the first world war, stretched economies of Europe, rise and rise of United States and leading upto dot com crash of 2001 and real estate bubble burst of 2008 and beyond.

Written in 10 chapters, this is a handbook captures economics of currency war, rise of Hitler, softening of European economies through ‘2nd world war’, the relationship of paper money with Gold. This book captures the economic evolution between early 20th century and early 21st century in view of major world currencies in the backdrop of Gold, petroleum and modern international trades. It meticulously cover the nuances of evolution of stock and bond market, interest rate movements leading upto easy availibility of money in Wall street leading to tech bubble burst and eventually real estate collapse.

Absorbing and grasping tale of history of modern global financial system is a must read for those who likes economics, finances, a fan of world history or an complete outsider of the subject. The narration is story like. It uses quotes extensively by economists and historians which makes the book very relatable. A perfect read for people who cares for financial literacy. This is a book on history of modern financial system or history of modern finance. The book elaborates on the major role played by the economists and politicians to acquire the resources and livelihood means for their countrymen to make their lives easy, striving to improve the living conditions and gradually supporting lifestyle.

Vivek Kaul’s trilogy on money unfolds the economic history to us detailing the important historic events and decisions which led to the current global economic situation. The subtle and structured narration takes readers through the ever evolving relationship of Gold and the ‘paper money’ of the countries, the journey of Yen, Rubble and how dollar navigated through the twists and turns of discovery phase of essential commodities of gold and crude oil through earth’s surface. How the gold and oil mine discoveries changed the relationship across Atlantic. It also takes us through the America’s relationship with middle east countries, Japan and Russia apart from the major European forces . The book is based on well researched facts. It takes extensive references from many classics written by world economic historians. The book shares a grasping tale of world economy with unbiased narrative. It’s focus remains the first world countries, India doesnt find a mention in the book. However, his third book Bad Money, captures the evolving NPA situation and its possible impact on Indian economy.

Chapters of the the book

Chapter 1 – Coup De Whisky

Chapter 2 – The Great Depression (1929 and beyond)

Chapter 3 – The Men Who knew too much

Chapter 4 – Hitles Falling, Dollar rising

Chapter 5 – Exhorbitant Priviledge

Chapter 6 – The American Promise

Chapter 7 – The Man who would be King

Chapter 8 – When a Tokyo Palace Became more expensive than California

Chapter 9 – Irrational Exuberance

Chapter 10 – But a pin lies in a wait for every bubble

The books quoted in the book are – Wealth of Nations, Paper Money, Extreme Money. It is a must read for economics and history enthusiast, an awesome account of history of Global Financial markets written by an Indian Author.

Book 1 – Easy Money: Evolution of Money from Robinson Crusoe to the First World War

Book 2 – Easy Money: Evolution of the Global Financial system to the Great BubbleBurst

Book 3 – Bad Money – Inside the NPA Mess and How It Threatens the Indian Banking System 2020

August 1, 2020August 1, 2020

At 7.1% is PPF a good Tax saving investment in FY 2020-21, tax saving debt option

7.1% is the PPF Deposit rate for FY2020-21 (sep 2020), lowest in it’s history since 1986. This government guaranteed investment was launched in 1968 by ministry of finance for Indian residents. One of the popular tax saving instrument under section 80C, Public Provident Fund, is facing the wrath of low interest regime in India. So is PPF still a good tax saving option? Is PPF better than ELSS Mutual Fund? Can you invest in PPF Online? Is PPF better than Tax saving ELSS, let us have a quick low down on this investment instrument. Let’s address each question one by one.

What is PPF and how to invest in it? PPF is a fully government guaranteed investment option for resident Indians. One can open a PPF account in Public Sector Bank (PSB) like – State Bank of India, Bank of Baroda, Canara Bank etc also in private sector Bank like ICICI Bank, HDFC Bank, Axis Bank etc and designated Post Offices. PPF account can be opened with a minimum sum of Rs. 500. It has a maturity period of 15 years. One can transfer the account to other branch but not to any other Bank/ post office during its tenure. One person can open only one PPF account in own name at a time, however, one can open separate PPF account in the name of wife/husband or minor child (contribution cumulatively can be upto Rs. 1.5 lakhs for availing tax deduction). In a financial year one can invest between Rs. 500 to Rs.1 lakh 50 thousand according to Income tax law (Income tax act Section 80C) in India.

PPF account can be opened by visiting Bank branch with documents like Pan card and Aadhaar Card, also you can invest in PPF online through internet Banking. You can make direct transfer in PPF account from other Bank account through internet Banking.

Features of PPF Account

Though it has a fixed maturity of 15 years, incase of medical emergency, one can avail loan after 3 years and upto 6th year. One can make partial withdrawal beginning 7th year, however amount will be capped to 50% of 4th year balance. One can also close the PPF account after 5 years if needed. It has nomination option, one can nominate two person. However, to enjoy the compounding benefit, its recommended not to make partial withdrawals.

Benefits of Public Provident Fund account

It offers higher interest rate than bank fixed deposits. This is the only investment option which offers complete tax exemption under Section 80C, no conditions attached, during investment, accumulation and maturity withdrawal. One can make flexible deposit in this account every year, with deposit requirement of only Rs. 500 in a year and can deposit upto Rs. 1.5 lakh depending on investment requirements. This is a good long term debt option, it can be used for long term wealth creation because of the compounding effect and tax benefits.

How many time you can invest in PPF in a year?

One can make multiple investments and of any sum starting Rs. 500. PPF account remains active even if someone misses payment in some financial year.

Is PPF it better than NPS? Should you buy PPF?

These two financial products should not be compared. NPS has higher investment horizon (more than 20 years depending on entry age) as one can realise benefit after retirement, and it is designed to be used like a pension scheme, with partial withdrawal benefit on maturity, while PPF has fixed tenure of 15 years, can be extended for 5 more years but it has lumpsum withdrawal on maturity. NPS and PPF should not be mutually exclusive, one should have exposure in both as long term wealth creation/ funding retirement kitty.

Is PPF better than tax saving mutual Fund (ELSS)? How much to invest?

PPF is a high interest paying fixed income product which enjoys EEE tax benefit. ELSS enjoys minimum taxation of 10% on realised profit (above Rs. 1 lakh) every financial year. PPF gives a predicted return with compounding benefit. ELSS being a equity product has a potential of higher return over long term period, but all ELSS scheme doesn’t provide same returns. So, under section 80C – one should ideally divide investment in 4 options – ELSS, PPF, Term protection plan (Life insurance) and ELSS to maximise the benefits .

Is PPF Better the Fixed deposits?

PPF enjoys full tax benefits under incom tax section 80C is a long term product, enjoys higher return compared to Bank fixed deposits but, it is not useful if sudden money requirement arise. Fixed deposit interest are fully taxable (above Rs.10,000) as per tax slabs, but useful for emergency funds, can be withdrawn whenever needed. Also one can take over draft facility of 80% of the FD amount with only 1-2% interest rate more than fd rate. PPF partial withdrawal and loan facility available but not easy to avail. So, for short term requirement upto 1-2 years, FD/ liquid mutual fund is a good option. But if your PPF maturity is near, say between 1-2 years, you can invest more money in PPF as you ll get all returns tax free with higher interest income.

Fixed deposit is an one time investment, but PPF is designed like a bank account which has limited withdrawal option and only keeps accumulating upto maturity.

If you have further queries on PPF investment option, write in the comment box. You can post your queries in debashree.ad@gmail.com

Want to make finance easy for you – read these books –

1. Let’s talk Money – Monika Halan – https://amzn.to/37lTpIs 2. Rich Dad Poor Dad – Robert Kiyosaki – https://amzn.to/2Y170kk 3. Cash Flow Quadrant – Robert Kiyosaki – https://amzn.to/2MRd4Xr

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July 28, 2020July 28, 2020

Do you need a health insurance to cover for Covid 19?

Covid19 asymptomatic patients get insurance benefits? Which insurance policy will cover Covid 19 patients with pre-existing medical condition? Will Corona Rakshak Cover a patient of 70 years? Will Corona Kavach cover a patient who has a travel history to Dubai? What if I dont get get hospitalised but because of home quarantine I cant go to office wrestling in salary cut?

There are two new insurance policies launched in India namely Corona Kavach and Corona Rakshak, specific to combat the ongoing coronavirus pandemic. this blog aims to analyse usage of these policies. Do we really need Covid insurance or health insurance is adequate.

The two covid19 policies have different purposes. While Rakshak works like a health cover, covering actual expenses, Kavach works like indemnity cover, incase of Covid19 diagnosis and atleast 3 days of hospitalisation of the policy holder. Many Indian insurance companies have launched the two products. This post is to do a quick analysis on how effective these two policies are to fight coronavirus disease in India. Do we need to buy Covid Kavach or Covid rakshak or relook at our health Insurance policies to understand the benefits we have with our health policies.

Kavach covers expenses, Rakshak offers lumpsum payout

What does Covid Kavach offers?

This is short insurance comes in two categories Corona Kavach Individual policy and Corona Kavach for family. As per IRDA direction, Insurance companies (like HDFC Ergo, ICICI Lombard, Universal Sompo, Reliance General, Max Bupa etc) have launched this plan. The Covid Kavach plan is for people between 18 years – 65 years only. A child of 1 day onward can be covered under this plan.

Tenure – 3.5 months, 6.5 months and 9.5 months only

Cover – 50 Thousand to 5 Lakhs

Coverage – Hospitalisation, home-care cost, Ayush Treatment (Ayurvedic, Homeopathic treatment etc)

Age of policy Holder – 18 – 65 years

General Exclusion of Covid Kavach policies

Treatment taken for any pre-existing disease
Travel to any restricted countries
Diagnosis done at unauthorized testing centres
Diagnosis/Treatment taken outside India
Expenses incurred on Day Care & OPD Treatment
Claims related to COVID where the diagnosis prior to policy start date
Dietary Supplements and Substances purchased without prescription
Expenses done for Unproven Treatments which lacks significant medical documentation

In conclusion, Covid19, which attacks harder to elderly people and people with pre-existing disease, Covid-Kavach may not be useful. Moreover, even the diagnostic cost to determine the disease is not covered under this policy.

What does Corona Rakshak Policy Offers?

Under the guidance of IRDA, Insurance companies have launched Corona Rakshak Policy- an indemnity policy which pays out a lumpsum amount on diagnosis of Covid 19 and upon 3 days or 72 hours of continuous hospitalisation. Few Banks or Credit Cards are offering special insurance bundle for their customers.

Coverage – 50k – 5 Lakhs

Premium – Rs. 900 – 6,000 (varies from insurer to insurer)

Tenure – 3.5 months, 6.5 months, 9.5 months (first 15 days is not included)

General Exclusions of Corona Rakshak

Treatment taken for any pre-existing disease
Travel to any restricted countries
Diagnosis done at unauthorized testing centres
Diagnosis/Treatment taken outside India

Incase of payout, the policy will cease to exist.

This discussion should be based on the two scenarios

You have a health insurance
You don’t have health insurance

If you have a health insurance policy –

This is the best possible situation. Independent of your age and pre-existing conditions and family members, the health insurance policy is obligated to cover healthcare expenses as per the policy contract document, though every health insurance cover comes with some differentiation, it is obligated to cover 24 hours hospitalisation, medicine expenses, doctor consultation charges etc. The point here is to look at the waiting period, pre-existing covers, sub-limits and exclusions. If your policy is running for more than 2 years, you have already crossed the many waiting period and pre-existing disease clause.

This pandemic has taught us the importance of life insurance and health insurance. After checking a few insurance policy details of 5 health insurance company, I found that many expenses related to covid related illnesses will be covered by a comprehensive health insurance.

“Argument arises on the expenses which is not covered under the basic health insurance policies and sublimits of room rent, nurse charges, PPE kit etc”

In a nutshell, a comprehensive health insurance policy will well cover the Covid19 related complexities including co-morbidity, waiting period with a full year coverage, mostly better than short term corona health policy. It will also cover the diagnostic expenses which is not covered in Corona Kavach. You will be covered for the hospitalisation expenses on all health insurance policies. There may be a some additional expenses like PPE its etc, which is not covered under health insurance policies will not need too much attention as country is working hard to increase the supplies and the cost of PPE kits are likely to go down and not up. Given most healthy people between 18-60 years don’t require much of medical attention in case of Corona and Corona Kavach doesn’t cover in case of Pre-existing disease and people with travel history, this is not a compelling option

Corona Rakshak in other hand is a different kind of policy which can be used as it offers a lumpsum Sum Insured benefits in case of 3 days + hospitalization, as it may end up covering some costs of other expenses and cover contingencies.

A comprehensive health insurance is a must buy, a cover of 10 lakh is ideal. And Corona Rakshak can work like a cushion incase of non-adequate cover or no-health insurance at this point.

In Ideal scenario, would suggest to buy a comprehensive health insurance ( with minimum or no sub-limits, minimum waiting period and maximum coverage on pre-existing conditions) + critical insurance cover and Term life insurance plan. That is best for everyone. This should be for long term, renewed regularly to enjoy a healthy and peaceful life.

Tip: Check with your Bank and credit card Relationship manager, they have various group plans customized for their customers, offer good coverage and plans

July 26, 2020July 27, 2020

Sunday Book review – Rich Dad Poor Dad by Robert Kiyosaki

“Rich Knows savings are only used to create more money, not to pay Bills”

Published in year 1997, Rich Dad Poor Dad is a book, which will inspire you to think differently about money, employment and entrepreneurship. Robert Kiyosaki, the author uses a beautiful narrative of his childhood experience and real life learning of financial education from his ‘Rich Dad’ (his Friend Mike’s dad) and smoothly navigate through the journey of his own Dad whom he refers in the book as ‘Poor Dad’.

The book is about 9 hours audio book in audible, or less than Rs. 300/- available in Amazon, is a bestseller book in its category. A handy book, uses easy language and story like narration takes the reader through the sensitive topic of financial literacy, financial education without using any jargon or any financial product. The intriguing narrative nudges the reader to think about how one perceives money and wealth. The book questions the mindset one have on earning, job, employment, retirement, financial planning. Rich Dad should read with a pencil and a paper. This book aims to set the reader free from the poor or middle class or negative mindset about money. It encourages us to think money to be more like an ally.

It aims at answering eternal questions like – why rich get richer and poor gets poorer?

The seven chapters, each title of the chapter is a lesson in itself – Rich dad poor dad summary short form, in chapters itself

These are also mentioned as Rich Dad Principals-

Chapter 1 – The Rich Don’t work For Money

Chapter 2 – Why Teach Financial Literacy

Chapter 3 – Mind Your Own Business

Chapter 4 – The History of Taxes and the power of corporation

Chapter 5 – The Rich Invent Money

Chapter 6 – Work to Learn – Dont Work For Money

Chapter 7 – Overcoming Obstacles

Rich Dad Poor Dad book ideally should be read with a reading partner. This book is just not an one time read. To get a crash course on financial literacy, You should make a Rich Dad Poor Dad Book Summary, make a list of Do’s and Don’ts and practice the lessons in real life.

In conclusion, Rich Dad Poor Dad is a must read. This book has the ability to set one free from financial misery.

Best Lines I read –

“In the long run, It is not how much money you make, its how much you keep, and for how many generations you keep it.”

“If You want to be rich, You have to be financially literate”

“Pay yourself first”

Robert Kiyosaki has written many other books similar to this one. Each of his books are dedicated to financial literacy. Sunday Book review posts will include – Rich Dad Poor Dad – ‘Cash Flow Quadrant‘ and ‘Fake’

July 24, 2020July 24, 2020

What is the Best Debt Fund Category to invest in 2020

When to invest in a debt fund and how to invest in debt fund is a tricky one. Fixed income can be pretty volatile.

What are the ever green Debt funds? or how to ensure, you are always above the yield-curve? How to earn some extra interest income from debt funds?Are debt funds really safe now? Which debt fund will give best returns? How to choose a debt fund? What is ‘interest rate risk’? What is the safest debt fund? This post is very relevant to July 2020.

After Equity Mutual fund, debt MF has managed to catch the fancy of retail investors. Besides the popular Bharat Bond ETF and liquid mutual fund category, retail NCD issues have also made to our homes very actively in past few years. Especially with higher interest rates compared to Bank Fixed Deposits, it is indeed irresistible.

In this post, I intend to share some factors on debt market investing and how to navigate through it. To achieve the right context, I will use some real life examples to make this topic more relatable.

Bharat Bond ETF Series II IPO is very fresh in our memory with over-subscription, so let’s begin with that. Launched in 14th – 17th July,2020 – the 7 years ETF with 5 years maturity offering 5.46% and 11 years maturity ETF yield is at 6.54%. So, this very safe (almost Government backed) Bond Fund/ Bond ETF is offering a little bit higher interest than SBI Fixed deposit (approximately 5.3% between 5 years – 10 years) So, the interest rate offered by Bharat Bond ETF Does look attractive comparatively and it is.

But, let us assume a scenario, – This is a hypothesis, for explaining how debt instrument works – In 2021, RBI Monetary policy scheduled in the Month of April RBI decides to increase the interest rate by 50 basis point or 0.5% followed by in 2022 April, another 0.5%. Again in April 2023, 0.5%, as a Bank, SBI will have to pass on this rate to the depositors, and the fresh deposit rates are 6.75%. So, a savvy investor is likely to close the deposit now, and book a new deposit with higher interest.

Similarly, this will trickle down in bond market, the new bonds which comes in market, will offer a higher interest rate. So, the bonds issued during low interest regime (we are now in a low interest rate regime) will be sold for higher yielding bonds, and it will cause the bond rates fall, so in this scenario, if anyone sells the ETF unit, likely to earn less interest than the maturity yield or interest income.

In low interest regime, it is a good idea to invest in liquid funds, ultra-short term debt funds. These category funds have no to very low interest rate risk. If someone wish to opt for debt funds replacing savings or fixed deposits, these funds are low risk ones. Because these funds invest in money market instruments, treasury-bills, ultra-short term government securities, so these debt assets have a low maturity and dont get affected by interest rate up or down.

If you want to make a little extra money and ready to study a little more, it is a good idea to check the Banking and PSU funds, check out the secondary bonds in the market. They are the next best options.

If you wish to earn good interest on debt, you should wait for higher interest circle, and buy debt fund or AA+ and AAA rated bonds, if you choose to stay invested for longer term.

In current scenario, of low interest rate, buy debt for shorter terms, and stick to funds like Bharat Bond ETF, liquid funds or Ultra-short term debt fund and review portfolio every quarter.

Yes, unlike equity Mutual Fund, Debt investments like Mutual Funds or Bond should be reviewed every quarter. Debt as an asset category is risky for long term. Unless you are able to lock-in for a really attractive/ high interest rate, investment horizon should not be more than 1 year or should reviewed periodically.

I am not a SEBI registered advisor. This blog is based on my understanding on the subject. This should be interpreted or used for making an investment decision.

July 12, 2020July 12, 2020

5 Reasons you should you invest in Bharat Bond Series II

Should I invest in Bharat Bond ETF NFO? Is the Bharat Bond Fund is safe? Is it a good idea to invest in Bond Fund ETF? What is the ideal time period for investing?

Let us discuss few more questions here – Does your trading account have cash lying without any interest? Your Fixed Deposit not earning interest? You are looking for safe and better returns without tax implications?

Bharat Bond – It is an Bond Fund ETF (Exchange traded fund) people who donot have a trading account, can invest through F-O-F route, (Fund of Fund). Government in a bid to raise money as debt, issues various bonds for its PSU Companies. This ETF is a route created for investors so that they can buy a bouquet of bonds at one go, without having to choose each one separately. The fund has a target maturity date, so once the ETF investment matures, you will get the money back in your designated Bank account, while you are free to withdraw funds whenever you wish to and you may choose to partially withdraw funds if you wish to.

Bharat Bond ETF invests in PSU Bonds, all with highest credit rating, in layman language as good as a State Bank of India fixed deposit, only with no-lock in period. You can buy today, sell tomorrow, quite like a Savings Bank account earning the interest on money for the period. Even if it is one day. As the bonds are of high grade PSU Companies, it is a safe option. As the demand in these Bonds remain high, the return is quite stable. The fund is passively managed with minimal interference, it follows the Bharat Bond index and replicates the return.

This is the second tranche II of Bharat Bond ETF, the New Bharat Bond series details-

Details of the NFO (New Fund offer) – Two Bharat Bond ETF NFOs to open from 14 July.

NFO Period – Launch – 14th July – Closes on – 17th July

Options – It has two options

1. April 2031 maturity period (11 years) – yield to maturity – 6.54%~

2. April 2025 Maturity (5 years) – yield to maturity – 5.46% ~

Investment Manager – Edelweiss Mutual Fund

How to invest – If you are comfortable with online transaction, and like doing yourself. You can apply for both FOF and ETF

Visit here TO INVEST Online – https://www.bharatbond.in/ (Invest Now section)

Minimum Investment – Rs. 1000/- and multiple of Rs. 1 thereafter.

Modes of Payment – Net Banking and UPI

Lock in period – No lock-in period, as soon as it is listed, it can be tarded on exchanges. Incase of F-O-F, it will have 0.10% exit load till 30 days, post which no exit load will be there.

Risks – Debt mfs have four prominent risks – Price Risk, Credit Risk, Reinvestment Risk and Liquidity Risk. The risks are mitigated by a few initiatives claims the ETF Managers.

Price Risk: If you buy the NFO now and hold on to it till the maturity, you would get a return as mentioned above. But if you transact in secondary market, (Buy/ sell) price risk will remain. Credit Risk – The Bonds are triple rated securities by PSUs, the risk is almost Nil. Liquidity Risk – Anyone can sell/ buy the ETFs at stock exchange NSE, and as it is considered safest debt instrument, demand likely to be there always. Reinvestment Risk: The income generated as interest will be invested in assets similar to that of existing portfolio.

The details of the Bharat Bond ETF – Series I

Bharat Bond Series I – as on July 12, 2020

This Fund invests in short term, medium term and long term debt papers, maturing before the Fund maturity date. As the interest rates have plunged in 2020, since the last Bharat Bond-Series I launched in 2019 , the bond prices went high on the secondary market, pulling the yield curve low. If you wish to invest in this, it would be a good idea to invest in the second series and NFO in particular to lock-in the best return on your investment.

So to say, if you wish to buy the existing Bharat Bond ETF. This one also has target maturity date, if you invest now and keep it till maturity, you are likely to get approximately above mentioned return

Reasons why you Should Invest in Bharat Bond ETF series II

It is a good investment option for an investor/ trader, who want to park the idle cash lying in trading account to earn some interest, as it wont generate any income lying idle on the trading account. If you put the money in this investment option, you will earn some extra cash till you plan how to use the money.
You need to consider a few factors while deciding what to invest in. This fund can be used as liquid money for contigency/ regular use you may require. Investing this category is ideal for 1 – 2 years horizon, and can also sell whenever you wish. This could be part of you short term goals, for unplanned expenses in near term.
You are not yet sure of how ETF works or Equity/ MF trading works, this is your time, you can simply put some money and try out yourself without risking
This money is liquid, more than large Bank FDs, and offers at least 1% extra return compared to your FDs in SBI/ HDFC Banks.
If you keep the money for more than 3 years, the tax implication is very low, with Long term capital gain benefit with indexation on Debt Funds.
As mentioned above, Bharat Bond-Series I is trading higher as Bond prices went high on the secondary market, pulling the yield curve low, so if you wish to invest in this, it would be a good idea to invest in the second series and NFO in particular to lock-in the best return on your investment. The New fund offers higher yield compared to series I

ETF cost is very very low, Fund of Fund has comparative high price but still it is negligible.

For more article on Personal Finance, Visit – www.mymoneystreets.com

I am not a SEBI Registered investment advisor, I write based on my own understanding and for the passion in financial literacy. Take your own call basis your judgement/ your advisor. You may also consider the review on websites like Value research and other sites too.

July 11, 2020July 11, 2020

How to teach online in India – Home based jobs in Covid times

What are the best online teaching jobs in India? Are they genuine options? DoI need to pay to register in the teaching platforms? Do I need to share my contact details? Can I teach painting and pottery online? Can I teach chess online ? Can I teach French online in India? How do I get student online? Is it tiresome job to upload my profile? Do people take paid online classes in India? Are these education sites genuine? How to search for students online?

The list can be longer 🙂

As promised, this is part of online/ freelance job options series. Teaching and learning goes hand in hand, it is said, teachers learn more while tutoring the students more than reading their own. There are many online platform operating in India offering teaching jobs. Besides online teaching, these platforms provide offline options as well. Many of them have teaching apps as well.

To become a good teacher is evolving process and experience. Now, apart from being the subject matter, one need to upgrade online skill to continue teaching students. Covid19 Pandemic has brought all academicians on digital platform whether savvy or not, be it a formal school or private tutorial. While full-time job holders have least say in the matter, it is a matter of choice for the private tutors, if they want to improve their student base, teahing skills etc. If you want to be part of the changing world and continue your passion for teaching, you may need to consider the digital ways too. As you start your entrepreneurship journey, read up a few books which will help you along the way.

Here is some tips on learning how to prepare of teaching online as well as a few aggregatig sites which are active in India as online teaching platform

How students select online teachers

Private tutoring is a serious business. The satisfaction of your client, here students, will determine your success of your career here with the help of your qualification and relationship with your students. The online reviews play a very important part in getting more leads. Every student can be your brand ambassador.

You can begin with a Youtube channel or taking a few online class for your existing student base to begin with.

Make your own course set

This would be to help you set up your base, you may choose to teach on youtube, blog or a online teaching platform, if you set up a course for the topic, you will be one-step up for starting your online coaching class.

Do some dummy practice

It is a good idea to do a dummy practice on friends/ colleague and near ones to polish the rough edges on content and presentation. You may video record dummy classes and in the process you edge up your skills in digital communication, a must for online teaching jobs. You need to be willing to learn the ropes distance teaching.

Good internet interphase

A phone with good memory, microphone, tripod, laptop arrangement, some software (advantage but not necessary) and seamless internet connectivity will smoothen your process to help you quickly start the process

It will be a good idea to register in few sites at one go to test which ones suits you the best. You will get an idea about the membership fee, and leads they are providing.

www.superprof.co.in

Superprof launched in 2013, in France as a project, over 7 years, it has become a a community of 11.5 million teachers across globe. It offers classes on academics, arts and craft, Computer scene, Health and well being, music, sports a wide range offering. The best part of the website is, it gives you a teaching platform for hobbies you may have pursued for years without any hope of making a career out of it. This may be a learning curve to you and step for the next career move or step-up promotion from current scenario. You can register in this website in 10 simple test, choose your specialisation from the option. Choose from individual class or a group class.

Make a simple advertisement entry with the subject and age-group of students, make a small CV to upload, a sample video course if you like and a few additional details, in all its a 30 minutes step. Write down your fee, upload your picture and you are done. It is a free registration, but you can boost your profile visibility by a paid membership. An example – If you like drawing, say you have multi year experience, passionate about it, you may be thinking about teaching others and earning some money too. But, you dont know where to begin, here is your chance, you can easily signup to the website as a teacher and access the student across globe, who is looking for a teacher.

Register – https://www.superprof.co.in/new-advert-subject.html

Vedantu

It is an academic platform, it offers high school courses and academic entrance exams, like – JEE, NEET, NDA etc. Vedantu is Co-founded by Vamsi Krishna, Pulkit Jain and Anand Prakash, it is their 2nd entrepreunal journey after Lakshya launched in 2006 and sold to MT Educare in 2012. They have great experience in teaching in India. If you aspire to be a teacher here, you have to fill one page form which will take about 15 minutes, remember to make a resume, it will be useful in applying in these options.

Registere here to be a teacher – https://www.vedantu.com/become-a-teacher

Urbanpro

This site boasts of 6 lakhs registered teachers and 25 lakhs+ students registered at their platform. It is widely featured in media.

This I had an hands on experience. This super professional website has a turn around time of less than 2 hours. I had applied for a course, within 3 hours, I was contacted by 3 qualified teachers from vicinity. This one has wide range of variety including online, home tuition and tuition at teacher’s place. It offers classes for high school students, BTech,, CA Coaching, Competitive exams like UPSC, IBPS, SSC etc. It offers language classes like – Italian, German, Spanish and list is long. Do check the website to find out more. You can register yourself as a teacher filling an easy form, which will take about 15 minutes. Register here – https://www.urbanpro.com/tutor-teacher-trainer-job-registration-india/134847

UDEMY

It is an international aggregator website, popular in India.This is an advanced academic aggregator platform and provides online courses and certification of variety subjects and ranges. It collaborates with teachers and institutions to build courses which students can learn without live teacher interface – mostly through recorded videos, written material followed by quizzes and online examination. You can upload your profile easily. Visit https://www.udemy.com/teaching/?ref=teach_header to register as a teacher.

Freelance jobs/ self-employement is liberating with a sense of independence. But to make it a success, one needs to be committed and continuously update oneself to stay relevant and grow. Entrepreneurship is a beautiful journey. Wish you all the best.

Do share your views and suggestions in the comment box.

July 1, 2020July 11, 2020

Find jobs during lockdown – 6 skills will help you

Prepare for dream job during lockdown in step by step method

How to get a job during lockdown? What are the ways to prepare to improve your chances of getting a good opportunity? Can we get some work from home opportunity during lockdown phase which can help our career? How to search the job? How to work online? Are there really work from options available? Can we get a job sitting at home? Can college students get part-time jobs for experience? A lot of questions like this I hear from college students and young professionals. The answer is ‘YES’ You can get a job, online work from home. In this blog will share the tips and tricks to take steps to build a career utilizing the lockdown period.

In end of the blog you will find –

List of books to enhance the practical business knowledge

List of websites for freelance jobs

It has been more than 100 days, India is under lockdown, metro cities showing no sign of relief, the cases are increasing rapidly. It is not unknown that it has disrupted the whole socio-economic order of the Country. There has been job losses across world and India is affected too. The situation is vulnerable with everything is locked down impacting millions of job directly or indirectly, yet luckily we are living in in the best times, with basic academics one can have access to immense job potential.

With high retrenchment in media sector, financial services, start-ups, layoff across sectors and verticals has caused much gloom. Also, there are stop-work order/ pause in vendor or gig assignments. The ongoing socio-economic situation is unprecedented and it will be difficult than ever for the new job aspirants. The corporates are taking a hiring pause or atleast slowed down the hiring spree. The hiring is only happening on prior commitment and need basis. The new job aspirants in the other hand often face dilemma to choose the right career options for them.

This lockdown is an opportunity to breathe, think, taking an account of situation and analyse the right career move. It is a difficult time to focus as well in absence of the deadline, exams and pressure, it is easy to get distracted.

With some amount of thought, research and discussion with various groups like colleagues, college students and other professionals, found that the usually human emotion of fear plays the biggest obstacle, everything thing else has a rational solution . Before trying enough, people are accepting failure or taking a pause in trying. This is the time to turn issues into opportunity. This is the time to choose an online course over a netflix sitcom, educational video over binging on entertainment content. This is the time hone the skills which is closest to you. This is the time to turn your hobbies and interest into a career option. Only lucky people get to earn by doing what they love to do. This is your chance. Sieze it.

‘Have the irresistible, killer attitude’ – Life is too small to be afraid, too long for regrets

Find jobs during lockdown – 6 skills will help you, not only now, in the long term too

Broaden knowledge base – Absorbing information which can be applied in practical life. Reading Books, newspapers, various research reports, Wikipedia pages will broaden your horizon, increase curiosity, and generate interest of application. For example, I learnt about world history by reading Sapience and Wealth of nation, more than my cumulative boring school study in history.
Think like an entrepreneur – Get interested in getting rich and influential. The mindset will define your career path. The more focus one have on finding business opportunity, more you will identify. Even when you are applying and interviewing for jobs, focus on value you will be able to generate and provide as an individual as professional. List down the qualities you have which will help in reducing time, efforts and investments. Focus on improving softkills like communication and negotiation with various stakeholders in your professional life.
Perseverance – Don’t take a NO – Try, and try and try until you are master of it. ‘Rome was not built in a day’, many small steps when taken in a particular direction one after another and with intent, focus and dedication, many miracles are possible. Giving up is easy, but a little efforts everyday to not give up will help achieve all dreams.
Ethics – Be ethical, disciplined and focused. Everyone wants to be associated with reliable, predictable and diligent person. Whatever the profession may be ‘Ethics’ makes every journey worth it. Not only it helps make decision making process easy, it also earns friends from every quarter and people return in kind. Person without ethics is easily identified and in long run no one wants to keep more than a transactional relation incase they can’t avoid the person all together.
Networking – Human is a social animal. We work in group, we like working with known people, we try to work with unknown people only they get reference and recommendation by someone known. In every field, every profession having a good network helps. You can begin with keeping in touch with like minded people, proactively helping others, providing genuine support to colleagues and associates takes a long way. Joining various groups in professions, hobbies and interest, participating in community work, participating group projects may help in better networking and better bonding with people. Many job and project opportunities are passed on in groups like these. You can also make groups based on common hobbies or interests.
Apply your knowledge – The subject you are specializing in your school/ college, try applying it in real life scenaios, case studies, blog, internships and through volunteer work. Working knowledge on any subjects add a lot of value to the existing theoretical knowledge. There are many freelance job opportunities available in technical, specialized as well as general subjects. Try them.

Five life changing books