COCODrive by DHFL GI offers Comprehensive CAR insurance, tailor-made for individual needs

November 17, 2018May 6, 2020

COCODrive by DHFL GI offers Comprehensive CAR insurance, tailor-made for individual needs

Offers a-la-carte #Comprehensive Car Insurance with 19 add-on covers to choose from

Vehicle insurance is the only insurance in India which is mandatory. Whether you understand it or not, by default your Car dealer will push you to an insurance agent for buying a car insurance policy, the moment you buy a car. It is almost an automated process of signing the dotted lines without understanding the need, requirement and viability of that product and services. The mandatory third-party insurance doesn’t cover many facets, hence a comprehensive Car Insurance is recommended for the unique need an individual may have.

Though insurance companies provide #Comprehensive Car insurance, it may or may not cover the requirement which suits your need.

In its bid to provide car owners with best possible solution, COCO by DHFL General Insurance identified the unique needs of the customers and recently launched their comprehensive four wheeler insurance called COCODrive, using Artificial Intelligence, machine learning and various other underlying technologies. With an hyper-customisation approach, they have come up with a slew of 19 add –on covers depending on the set of unique requirements an indvidual may have, depending on the vehicle model, the usage, location and individual priorities. Unlike other insurers, COCODrive doesn’t offer 6/7 add-ons bundled in an ad-hoc manner inorder to complete the buying process reduced into a a few minutes affair and neither does COCO encourage third party dealer led sales that leave customers confused.

Use your old phone effectively

With an A-la-carte approach, COCO by DHFL GI encourages customers, vehicle owners to buy this online Car Insurance taking some time understanding the product and how one can take maximum benefit out of it. The personalized car insurance product encourages car owners to understand each add-on one can choose from under this comprehensive car policy and also the common exclusions under vehicle insurance which helps customers get the best deal for the best cover. The aim of the insurer here is to simplify the insurance process and making it an engaging and customer friendly experience, along with reducing the chance of issues when it comes to claim settlement.

To make the process easy and hassle-free, the claim settlement process has been made simpler. A customer can click a few pictures of the damaged car and initiate the claim –settlement process himself/herself.

Listing down the 19 add-on features one can choose from. The choice can be made as per your requirement. These are too informative to not mention here in this post.

This CAR Insurance is definitely a life-saver as the add-ons include – Zero Depreciation insurance (recommended for new cars upto 5 years), Key & Lock Replacement (recommended for expensive cars), New Car for Old Car, Tyre Replacement Cover, Consumable Expenses as well as Engine Protect option (recommended for flood prone area).

The insurer knows that its not only the car, because an accident costs much more than that for an individual/ familyr. COCODrive has introduced EMI Protector, Outstanding loan protector, Accident Hospitalisation costs, Enhanced Owner Personal Accident, Enhanced Paid Driver Personal Accident Enhanced occupants cover, Hospi cash, Personal Belonging Protector etc. The damage a family may suffer due to an accident may be very painful, but the insurer is aiming to provide a 360 degree coverage to protect the customer from an unforeseen tragedy.

COCODrive also provides other additional, non-standard add-on covers which may be equally important for some – The personal beloning cover, Road side assistance, daily conveyance, emergency travel and hotel stay, NCB Protector for non-metalic repairs and NCB protector cover etc.

Finally, I came across as a product which would have answer for every query and a solution for every worry a car owner may have. A thumbs to COCODrive by DHFL General Insurance by MyMoneyStreets

You can visit their website at: www.dhflgeneralinsurance.com

November 3, 2018May 6, 2020

6 Ideas for your Diwali Bonus – Diwali Wishes

MyMoneyStreets team wishes you a Very Happy Diwali and Prosperous New Year (Samvat 2075)

Have you checked the car insurance papers?
Diwali is just 2 days away, one of the biggest festivities of India, and You might be in a Diwali shopping spree. This is a time to brighten up homes, lighten up streets, wear bright clothes, distribute sweets, visiting relatives, burning firecrackers and buy new things.

India INC celebrates this occasion, distribute sweets, gifts and most often distribute annual employee bonuses around this time. The little lamps are lit in every office, houses, the desks are decorated with Maa Laxmi Idols to celebrate the festival of lights . As we worship Laxmi Maa on Diwali, the Goddess of Wealth and prosperity, this occasion celebrates wealth too. It is an apt occasion for some good beginnings on money learning too. To make it crisp and put it to context, I have made a list of five things which you can use to put your Diwali Bonus to good use.

Diwali Bonus, generally a variable income for many, organisations generously share their profits with emploees, lucky ones fetch more than a year’s salary some time, some get a month’s salary, few gets a token money. However, receiving money on Diwali is ‘Shagun’, a token of good luck. Depending on the amount you recieve as Diwali Bonus, here are a few things you can consider looking at.

1. Pay-off loans – Many of us literally live on EMIs – Car loans, home loans, credit cards etc. Though these are ultra-convenient tools, it comes with a cost “interest”. Its prudent to pay off some of your loans with the bonus money, to reduce the load on your monthly budget. If you have multiple loans, consider paying off the credit card as it is the costliest loan, followed by personal loan, followed by Car Loans and the Home loans and i that order. For rest of your year, you will feel lighter on your budget.

Did you know “Addiction” costs one half a million …

2. Put in Tax saving instrument – Seldom people start planning tax saving beginning of the year. Monthly budget many a times doesn’t leave us with much money for tax saving saving instrument, consider paying insurance premiums/ PPF/ ELSS etc with the money. Your target for tax saving will be taken care of.

3. Annual purchase of furniture/ Television/ Electronic gadgets – Year long people wait for Diwali Bonus especially to do a Diwali Shopping – buy gifts, home furnishings, decor, electronics etc, if you hate paying EMIs, Diwali bonus can be used for these annual purchase of the Consumer durables/ furnitures you long for. The festivities also brings lot of discount deals from Retailers and E-tailers.

4. Buying Gold certificates/ Jewellery – Diwali is considered as auspicious time to buy Gold. If you like Gold Jewelery, Silver Coins etc. Do consider using bonus for buying this asset. If you are not into Diwali shopping, you can still consider buying Gold ETF, Sovereign Gold Bonds (Offer 2.5% interest – payable half-yearly) which has a 8 year maturity period since launch. You may consider buying from secondary market – trading platform, as the SGB is not offering new bonds now.

5. Gift for family and friends – Diwali is a festival of connecting with people. As a custom people visit each other with gifts like Sweets, clothes etc, depending on the relationship you share. Do consider buying gifts for loved ones, the smile on seeing the gifts on their face is priceless!! isn’t it??

6. Joy of Giving – Last but not the least, there is nothing more joyful than joy of giving. There is a big part of society who are not as privileged as we are. There are Kids, Old people, Undernourished underprivileged lot. Do consider donating to them, buying them a few clothes or even donating your old ones will make a lot of difference to their lives.

Wish you a very Happy Diwali.

Hope you find this post useful. Share your comments and feedback.

October 29, 2018May 6, 2020

10 things you can do with your old phone

Car insurance is as important as the car itself
The other day, I was just checking the exchange value of a two year old HTC phone, perfectly functional, never went for a repair, all functionalities intact. To my surprise, Nokia offered me Rs. 1450 for that phone. I must say I checked online. So, there were nobody checked my phone and its condition, a random price popped up, yet as I was searching the deal on internet with the phone, AI ensured that the deal was for the same phone and model number I was checking for. I was impressed by the technology Nokia used to confirm my handset detail. However, disliked the fact that my careful handling of the device didn’t fetch me a fair price. I took it upon myself to find out how well I can use this phone as a spare handset, and if it would be value for money deal for me. And here are my findings, many of the functions don’t even need internet connection.

After re-checking the functionalities, I have noted down the things I will be able to do which will not only be beneficial, also will save me good money.

1. Calculator – In a daily mundane work, you need calculation every now and then. Be it calculating for grocery buying to checking the compounding effect of your long term investments. This function come handy all the time.

2. Digital Note book – if you have a habit of forgetting or you suddenly remember some important work, you just scribbled it down in the digital note. It may not be an exact function, you may use gmail, Microsoft word etc. as an option. The point is you have a handy digital note book.

3. Calendar and Organiser – From an alarm to health tracker, it can do a lot for you. The phones are unanimously voted as the most important material object in one’s life. With the functionality of the smart phones, its even more. If you have an android phone, google pull all the data from gmail and other apps make a note in your calendar, if you have not noticed that yet, check it out. Additionally you can put reminders for meetings, alarm to wake up etc. It works like your personal assistant without a visible reccurring cost.

4. Extra files and folders – for saving photographs, important scanned documents. After data, storage is next more important thing in life. The phones more than functionalities priced on the amount of space it provides. So, if you have a smart phone, it will come with some memory. So the memory itself is the value for money option for saving your important data files, photographs etc.

5. Browser – A smart phone is equal to mini laptop/ work station. If your old phone doesn’t have any technical issue, you can use it for your daily browsing needs. Research says, on an average millennial spends a significant waking hours in web surfing. So put your old phone to task, give some rest to your new phone.

6. Camera – Data, storage and camera are top priority while buying a phone. If your old blessed with twin camera, with over 5 – 8 mega pixel configuration, please dont sell your phone. It can be used for taking selfie and other photography.

7. Radio and musical device – are you a music buff? Most of the phone comes with an inbuilt radio. Just put o the headphone, it will work like an antenna. Additionally if still have a spare sim, you can definitely diwnload the music app of your choice and listen to as many hours as you want.

8. Personal theater – with Amazon Prime, Netflix, YouTube need I say more that it is your personal theatre. You can also save movies in video formats and watch online. The best part is you dont have to fight for the remote, adjust with family members or roommates for keeping TV on for longer hours etc. Infact, many are opting phones over Television set for binge watching.

You can also watch recreational and educational videos among others.

9. Shopping assistant – The days are gone when people used to plan for grocery and home shopping for weekends. You just can keep bunch of apps on your phone like Grofers, BigBasket, FlipKart, Amazon, FreshMenu and Myntra. Then shopping out is just a choice or option not a neccesity.

10. Spare phone – Last but not the least. It is your fall back option if your phone faces some technical issue or lost etc. To sum it up an old phone still holds a lot of value, think before you opt to exchange it for a small money to buy a new phone.

There are many cool way of saving money, it need not be boring and stressful. Saving money is fun and makes one responsible. For the journey of Financial freedom, saving money is a first step.

October 28, 2018May 6, 2020

Did you know “Addiction” costs one half a million rupee in 10 years on an average!

You can cusomize your car insurance
Saving money is not attractive to many of us. For a few, it is old school. Being spend thrift and a shopoholic is a in-thing, it is a difficult challenge I am urging my millenial friends to try. Its cool to spend on recreation, food, travel and shopping etc. But if somebody maintains a minimum discipline in the way they manage their money. For starters, let us look at few things we consume can be expensive for our pocket

Cigarettes – A life-threatening addiction is quite common. A stick with an average cost of Rs. 15 per piece, 10 cigarette a day costs Rs. 150. A month supply costs about Rs. 4500. And year supply? A whopping Rs. 54,000. Without calculating interest loss or inflation on cigeratte prices, a 10 year supply would cost about Rs. 5,40,000, more than half a million rupee!

Alcohol – Another unhealthy habit, some term it as a social “thing” comes expensive on pocket. Even one is a weekend drinker, ends up spending 1000 per week per person, the hangover led laziness costs extra on ordering fast food. If one is a regular on it, even in moderation, costs nothing less than Rs. 4000 per month, makes it Rs. 48000 a year.

So, now the point I am trying to make here is the reducing and ending these addiction and channelizing these addiction to something constructive. Let us look at 5 good things we can do with a sum of money 48-54 thousand Rs.

Gold – with saving money, one can buy about 14 gm of Gold, Rs. 32 Thousand for 10 gm, .

A trip to GOA for 2 – mind you a good one with return air tickets from Mumbai and 4/5 star accommodation for 4 days and sight seeing.

Buy LED TV / Furniture – often these products come within Rs. 50000. And many ends up taking a EMI option or Credit card deffered payment route. It costs a high interest rate. It can be easily paid by cash and ease burden by just maintaining a healthy lifestyle and keeping addiction away.

You can buy grocery for 4 with this moneey for 3 months, and the list can go on. The point here is putting money to a constructive use, may make your life happier.

Take up a challenge of Cigarette fasting for a month, every time you get the urge of smoking, put that Rs. 15 in a piggy bank, and lets see saving that money have what kind of effect on you.

Keep Saving. Have a good life

October 2, 2018May 6, 2020

What a dollar can buy you in India? Wish I had Dollar shop!

Well Folks! ‘Dollar’ is the “New Gold”, skyrocketing at 72-73, Dollar -rupee relation is strained at an all-time high, the imports are under watch, RBI is stressed, price of diesel and petrol giving the citizens nightmare. But, my post, as usual, will focus on the positive side of the story. India is witnessing a high remittance, means, the NRIs are sending money home! If we have an NRI relative or, for some reason you have accumulated some ‘dollars’ in your pocket, let us see the things you will be able to buy with a ‘Dollar’ in India. Just making lists under various heads which are part of our daily lives.

I divided it in ten heads focused on the daily living habits –

1. Reading

Amazon e-Books – You get host of them from different genres and different authors! you can get physical versions as well. Top best seller e-books – Bahubali – Rise of Shivgami, Chetan Bhagat’s collection of 7 books, Speed Reading, all these come well below 1 dollar. Isn’t that cool! you can read all of them on your phone or a Kindle Reader. Saves space and keeps your books with you all-time!

2. Hygiene –Hygiene is the most important part of our day to DAY living, we need to buy many things to keep ourselves neat and clean. Items like tooth brush, tooth paste, coconut hair oil, hand sanitizer. Detergents, Toilet cleaners all from renowned brands etc within a dollar.

3. Groceries and snacks – The daily pantry supply we need at home can run into a big list.Cow/ Buffalo Milk come for less than a dollar, Dozen of eggs, raw veggies like – Potato, onion, cabbage, cauliflower, tomato etc all come in a decent quantity.

In the ready to eat segment, our ow Indian Bhelpuri, Maggi, Egg Roll, Pani Puri for 2, Veg Patties, Mc. Donald breakfast burgers, and lot many options.

4. Recreation and Entertainment – You can get a Ludo board game, Cards, UNO Set, Mini Chess boards from neighborhood stores within a dollar. You can also play online video games and watch premium Video content in a dollar.

5. Transport

Pubic Transport in India is affordable. You can take the luxury rides in a dollar here. Ola/Uber/AC Taxi ride – For about 4 kms you can ride within dollar. Ride in an AC Bus – Well in Mumbai You can travel a good distance within a dollar. Ride in AC Train – Churchgate to Mumbai central costs you less than that. Even, you zoom past between from Ghatkopar to Varsova (Mumbai, India) in AC Metro train in less than a dollar. Isn’t that dearth cheap in one of the largest and expensive cities in the world!

6. Health and wellness – Health and wellness doesnt have to be expensive, Band-aid, Borolonene, basic OTC medicines and nutrient supplements,

7. Beauty and grooming – Beauty and grooming – Amazon has lot to offer within dollar 1. from make-up blender sponge, glue for artificial eye-brows, Himalaya Kajal pencil and lot more

8. Jewellery and Accessories – If you are getting crazy with my post, let me tell you I have curated this list after browsing throw Amazon shopping, neighborhood shops, D-mart Supermart, Train hawkers. And feel proud to say that India has lot to offer you in 1 dollar.

In a mood for a long bike ride, get this @Rs. 62 at Amzon India

You get many items in the handy accessories, Amazon really surprised me with the list it offered, I still feel its overpriced at Amazon, but, the point is – even Amazon have products below Dollar 1.

9. Gardening and home decor

Are you a garden enthusiast? You can buy various seeds of your choice from Amazon store. You can also get fertilizers and sprinklers below dollar 1.

Besides, you can buy a mini rose bouquet for a Dollar, you can buy some small show-piece from roadside hawkers. And You can try some DIY decor ideas within this budget and using some re-cycled items.

10. Office stationary

Last but not the least. Hey! I am not boring, the office is almost my second home. Spending 9 productive hours of the day, Office desk/ Work station is important part of our life. So let me tell you the list of things I found we can buy for a dollar. Guess what, plenty of office stationary we can purchase in a dollar, in-fact we can buy many items together in a dollar. A Stapler, Parker Pen, A5 – 150 page note book, A box of pencil, a pair of scissors and the list goes on.

September 16, 2018

What is CAGR and What does it mean for your long term investment?

Hi, this is especially for existing mutual funds investors and the aspiring investors. The two things which come into our mind when we talk about equity or equity mutual fund investments are disciplined long-term investment and high-return over the long term. To promote the mutual fund schemes, AMCs showcase the past performance by CAGR. We often dont know what is CAGR return or how to verify the company claims. It is a simple calculation with help of square root calculator, you may check the square root of numbers with help of online calculators as well.

Let us look at an example to simplify the word ‘CAGR’

The below-mentioned chart shows a comparative study of CAGR return.

But we need not always depend on charts to calculate the year on year return.

#CAGR or #Compound Annual Growth Rate is the average rate at which an investment grows over time assuming that it was compounded (re-invested) annually (periodically). CAGR has nothing to do with the value of an investment in the intermediate years as it depends only upon the value in the first year and the last year of the investment tenure.

(Source – cagrcalculator.net)

CAGR = [{(Final NAV/ Initial NAV) to the power 1/n (n = no. of years)} – 1]*100

Let us consider 3 years back we bought a mutual fund scheme at NAV 100, and now the NAV now is at 200, then the CAGR would be –

CAGR = [{(200100)}to the power 1/3 – 1]*100

= [Cube root of 2 – 1]*100

= [1.2599 – 1]*100

= (0.2599)*100

= 25.99/100 or 25.99%

3 years CAGR return is 25.99%

Hope, next time you will calculate the CAGR return on your own.

August 27, 2018

Planning to rent a house? 10 things you should keep in mind

Planning to buy a car? Consider this too

Home is a place we grew up from a child to an adult. Home is a place where we build a family and raise children. The home is a feeling of belonging which begins at finding a house, creating our comfort corner.

Lucky are those people who are privileged to stay at Parent’s or has earned enough to buy on their own. For those who are yet to find a own house, this post is to help you get the next best option – ‘Renting a house – and make it a home’. Renting a house is not an easy task, a dream home is not easy or may not be pocket friendly or commute friendly. It takes amount of research, negotiations and hard work. 🙂 Here I am listing the critical points which will help you find the best home. I am taking Mumbai as a case for this, as I call the city my home.

1. Broker or no-broker?

Mumbai is a huge metro city, finding a rental home without a professional help is difficult. You may consider taking brokers list from neighbourhoods. The online help at JustDial listings or even property websites like 99 acres, Magic Bricks, housing.com etc is also a great help as they also provide the sample pictures of the property along with the broker coordinates. Brokers generally take down the criteria from you as in budget, location and property and help you with options. Incase you dislike third-party involvement, there are websites like nobrokers.com, purely listed by owners can get you property with no brokerage. However, in these cases, assistance in registration, background of the owners etc is difficult.

2. Location and neighbourhood – the list of a preferred location can be long with neighborhood, market, hospital, railway station, bus stand – A big city comes with a few advantages as well as disadvantages. According to me, commute time to workplace should be the first criteria while searching a house, a smart planning will help save you cost as well as time.

3. Rental amount – Rent of a house will depend on multiple factors like age of the property, locality, society, proximity to local facilities like hospitals, schools, multiplexes, shopping malls etc. You need to decide a rent budget basis your net income, saving goals and other liabiities (like ongoing personal loans, car loans etc.) Ideally a home expenses like rental, and bills (electricity, water, telephone bills) should not exceed one-third of net monthly income. If you can keep it lower than that, would be better for you. Also, pre-decide the hike in rental with home-owner if you are planning to make multi-year contract.

4. Home owner – The house you are planning to make your home is somebody else’s property, the legal contract of the house will be between renter so knowing the owner in person would be a good idea. Have a conversation with your requirement to agree upon a mutually convenient contract.

5. Documentation requirement – As rental document is a legal contract, it follows procedure such as police varification, you would need to provide copy of Adhaar card, Pan Card, Passport size photograph, cancelled cheque leaf etc. Ensure the documents are attested with date and purpose (mention – for rental agreement).

6. Brokerage – In mumbai, the brokerage is generally a month’s rent, don’t agree for more even if you doing multi-year agreement. Broker’s primary job is to list down your various criteria and take you for online and physical visit to the properties. The broker should be able to provide you with registration assistance and helping with a conversation with the owner. You are not liable to pay any fee untill the broker is able to complete the deal. Many a times if a broker doesnot find a suitable option in his designated geography, he/she may reach out to other brokers who may have properties which meets your demand, in these cases they often ask and negotiate for bigger brokerage, you shouldnt agree to this unreasonable demand.

7. Rental Agreement – This is the legal document for you and your home-owner. You need to check the document carefully to ensure your interest is protected. Often times there is a clause of minimum lock-in period, which means incase either party wants to end the contract may have to shell out a pre-decided amount to the other party. Check the document, clarify with the owner, broker as well as the registration official on any doubts. Keep a copy of the agreement safely. It will be needed for many official use including dealing legally with the owner if need be.

8. Amenities – There are some basic and important requirements of every individual in a home. Figure out if you would like to use pre-owned amenities or you would like to rent a house which has some basic fixtures. Basic amenities would include Gyesers, exhaust fans, ceiling fans, electricity connection, water connection, cooking gas connection etc. You should keep these factors in mind while chosing the house and negotiating the rental.

9. Furniture – This is the second most aspect of a home after the basic ameninites. If you pre-own furniture, you can be sorted with a un-furnished house, but depending on requirement and your current possessions you may look for semi-furnished or fully furnished hones. The semi-furnished home may come with a bed, modular kitchen. A fully furnished house may include a sofa, dinning set, TV cabinets etc.

For furnitures, you also have many options – buying brand new or second hand from platform like OLX, Quikr. You have additional option of renting your furniture from websites like Fabrento, Rentomojo, Pepperfry etc., they also provide packages for bed room, dining room, living room etc. The renting and owning is a personal choice, may be will write another post on that!

10. Maintainance – The rented flat/ apartment should be properly registered with the building/housing society. Society maintenance cost is home-owner’s responsibility. But you need to ensure you get a spik n span house with colour, window mesh, pest control and furnitures and other amenities repaired and you will be expected to return the house key in the same manner when you leave the house.

Make checklist as per your requirement to help you make the shifting a smooth affair.

Advantage of renting a home – my passion is calculation. With a basic reseach I found the concept of renting is much convinient on pocket than buying a new property. Renting is a super cool option unless you have deep pocket and have the capacity to buy a house with existing savings without going for an EMI. Rent saves money, you have a option of staying in the house as long as contract permits, stay in the locality you want in about 1/4th of a owned house (EMI+maintanance). India is obsessed with owning house, wouldnt want to debate too much here. But do some google and sone excelsheet, you will understand my viewpoint. Hope this article will be useful fir renting a home in mumbai. See you soon with my next article!

Happy saving, Happy Investing and Happy Renting!

May 17, 2018

Seven Money Lessons for your kids this summer vacation!

Indian summer is here in its brightest best. Its mid-May, most of the schools have declared Summer holidys, and rest will declare in coming few days. The vacation which lasts for 1-1.5 months for the kids, also means double activities for the parents. Addressing unending-demand list of kids become a daunting task for parents. The schedule for travel, signing up for summer camps, short hobby classes visiting grand-parents and relatives tops the list in this country. While my childhood summer holidays memory is all about relatives and grand parents, things have changed a long in last two-decades in India. Besides spending time with family, a trip abroad or a trip to hill station in India has become a must.

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.

Though the topics could vary individual to individual, my post would talk about the lessons of financial discipline we can impart on our kids this summer vacation. We may chart out a activity calendar secretely and follow it slowly to achieve our goal. Financial discipline cant be taught in a crash course, but introducing during a holiday season will ensure it gets enough mindspace of your child, which can be practiced over the year. I have penned down 7 points you may consider doing, even achieveing 3 would be a good start.

1. Take your child to bank branch

On your next visit, consider taking your little one to the bank branch. Show him around. Show the deposit slip and introduce basic terms used in banking like demand draft, fixed deposit etc. Make him write your cheque book if you need to withdraw money. If your child is little older like 10 years, you can also show how bank statement looks like. What is a credit and debit.

2. Show them a mutual fund return calculator – This is easily available in mutual funds and personal finance website. You can show them the benefit of compounding, how a small sum each month could make a big amount in few years.

3. Make them pay electricity bill/gas bills – This mundane task will ensure that he /she is aware of household responsibility. A teenage kid can be introduced to this, be it manual submission or through online payments. It will give them an early introduction to their responsibilities

4. Fill up your health insurance form with your child by your side

If your child is older than 10 years please consider this. You can make your child sit through this process, you already have a winner. In this process, you can introduce them to the importance of insurance, kind of insurance, what you should not hide don the insurance company.

5. Help them set financial goals – your kid may have various demands time to time. Buying a new cycle, guitar, games, travel etc. You may introduce him to the concept of “saving to buy”. You may give him a piggy bank to save from their pocket money to sponsor their object of desire. It may or may not fully sponsor, but idea of ‘saving first’ will be sown in the young mind.

6. Reward them on reaching goals – keep your promise and reward them with some goodies, a small treat to encourage their efforts however, don’t overspend on the reward. Remember the idea is to teach them financial discipline

7. Teach them the small joys of life

This is an important aspect to be taught to the kids early in their life. The life priorities should be aligned with the financial habits. Being frugal, disciplined, organised has its own benefits.

To introduce this aspect, you may give them live examples of recycling clothes, plastics. Cooking at home together is as much fun as dining out. Life is all about balancing. Teach the kids to enjoy the small joys of life.

Remember – they will follow your action more than words

Teaching kids good manners is a priority for parents. But, kids follow your action more than your words. They take up from visual cues more than verbal instructions. Overshopping, unplanned expenditures in household will be observed and absorbed by the young ones faster than you think!

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!

April 16, 2018

The good side of the endowment plans which can be used smartly

I would like to call myself a rational person who likes to be without bias and greed. Well with a bit too much of rationalistic approach, I found myself actually biased towards ‘being rational.’ I can call myself rationally biased towards my investment choices, aggressive allocation of equity on portfolio and staying away from debt heavy instrumemts, especially the fixed deposits for short term amd endowment plans for long term to be specific. Well, that fits well with my current age, but that is not the only way to look at long term investing. Endowment plans fits perfectly for a set of investors based on their risk profiles, investment objective, personal choice and priorities. Endowment plans stand out in long term debt investments.

Though I like aggressive equity allocation for long term, with all humility I will accept that endowment as on today stands equal with the other long term debt products in various ways. Endowment plans have always have been a popular insurance cum savings product in India, credit goes to the hefty commission the insurance agents receives from the insurance companies for decades. My personal opinion have been rationally biased against it because of its lack of transparency on asset allocation, high agents commission, low coverage and low returns. The fact which bothered me the most is the “miss-selling”. You may think, if I have so many rational points against the endowment plans, why I am even writing this post and what is my agenda? You will come to know.

source – Wikipedia

With my first job, I joined the bandwagon of mutual fund investing, as the mutual funds investments were just picking up at fast pace, SIP was gradually getting introduced as a disciplined way of investing, superior tax-free return over long term was very attractive. And I hated the Endowment plans. I do have a active policy, I bought this one before I signed my first joining letter. Every time I paid the premium, I felt irritated about what a waste of my hard earned money until… until the ‘D’ day 2018-19 union budget struck hard on my equity dreams. Levying 10% tax on my artistically built equity portfolio on long term capital gains hit hard on my mind. It wasn’t that the few other factors were not coaxing me to have a rational look at endowment plans and completely reject it, but the budget day nailed it. Budget not only introduced tax on long term capital gains, it also introduced 10% tax on dividends of equity and mutual funds. The equity dreams came crashing momentarily for many of us.

I recalled my father’s advice, my boss’s suggestion, inflation numbers and newly introduced Long-term-capital-gain-tax. In a whole it did push me to give a thought about taking a rational look at the cost and return analysis.

While my view of equity being the best investment for long-term capital growth remains the same, endowment plans have made a special space for itself. Here is the list of things you get as benefits of endowment plans.

1. Life cover, as per IRDA regulations, insurance companies have to give a minimum 10 times life cover of annual premium, so at given point during the policy term you have a life cover, which is upto 20 times incase of endowment plans. For a 10 thousand yearly premium, you will be covered for about Rs. 2 lakh. The maturity value will be the accumulation of premium and interest earned from various instruments as the insurance company deplys the same to generate return.

2. Income Tax benefit under section 80c. This product gives you tax benefit under income tax, the yearly premium can be calulated to reduce the income tax burden.

2. Loan against insurance at a minimum interest rate – This is an interesting benefit which mutual funds, ULIPs or term insurance plan can’t provide you. This instrument can be used as a collateral for an emergency loan if required, the loan amount and eligibility will depend on how long are you invested in the policy. Few people in my circle were immensely benefitted during medical and business emergencies.

3. At the current interest rates, the return of 4-4.5% tax free is equivalent to the post tax fixed deposit returns. Also,there are no long term fixed deposit schemes over 10 years tenure in India. Over the years, India is moving towards low tax regime, which means in coming years the interest rate could go well below 5%. Endowment plans could give equivalent returns.

4. Tax-free return of accumulated corpus. This is a bonus. Given the recently launched LTCG, very few instrument like PPF and Life insurance.

This option is ideal for individuals above 45 years of age, as financial planners suggest reducing the equity exposure gradually and look for fixed income options. This option is also applicable for people in the highest tax bracket, as the post tax return on Fixed deposits are equivalent to the maturity value of a long-term endowment plans.

This is a viable option for somebody who dont like equity investments, above 45 and looking at saving a corpus for retirement. Individuals with 30% tax bracket bracket can also consider the same as a long term FD with a provision of getting loan and tax exemption at maturity with life cover. However, One should keep a low exposure given its low return. For savvy investors, Term insurance and ULIP are good product which has a low cost structure and puts your money to good use maximising your profits.

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%.

THIS POST IS FOR EDUCATIONAL PURPOSE, AND NO WAY I AM PROMOTING ENDOWMENT PLANS AS TOP CHOICES FOR INVESTMENT FOR EVERYBODY, THIS IS APPLICABLE TO SELECT SET OF INDIVIDUALS, THIS ARTICLE IS JUST A RATIONAL LOOK AT ENDOWMWENT PLANS. TAKE A CALL ANALYSING YOUR FINANCIAL POSITION

April 3, 2018

How to invest in IPOs online

While fixed deposits, mutual funds, ULIPs remain top investment options for Indian Investors, if you have an understanding in direct stock investing, Equity IPO is an option too.

Investing in IPOs are getting increasingly popular amongst the retail investors in India. IPO market in India has given big returns in the year 2016-17, IPOs like Avenue Supermart, CDSL, BSE, Salasar etc has helped investors get a listing gains above 50%. The websites like Chittorgarh and IPO central tracks IPO market very closely, listing of IPOs – current IPO, Upcoming IPO, IPO allotment dates, etc. They also provide reviews on IPO shares. For a new investor, it will be a good idea to check these websites to get an idea of the upcoming IPOs and look for IPO reviews as one of the parameters to decide to buy new IPO. One must check few IPO reviews, read the company details carefully before investing.

What is an Equity IPO?

Many retail investors in India who have exposure in equity investments and mutual funds are unaware about IPO investments.

An initial public offering (IPO) is the first time that the stock of a private company is offered to the public. IPOs are often issued by smaller, younger companies seeking capital to expand, but they can also be done by large privately owned companies looking to become publicly traded.- Wikipedia

IPO (Initial Public Offering) helps the equity shares to be listed on stock exchanges BSE and NSE. Once listed, investors can buy from any trading platform freely.

How IPO works for retail investors?

For the new IPO, Companies in consultation with book running lead managers come up with price band for the issue. The issue is then divided into lots. Investors can get the information on current IPOs and Upcoming IPOs in newspapers and business channels. The crucial details like price band, IPO opening date, closing date and lot size are key factors to look at. For example IPO issue of company A is opening on 15th April, 2018 with a price band of Rs. 95 – 100 and lot size of 150. An investor will be able to bid for a minimim quantity of 150 shares and multiples. Generally in normal IPO the minimum investment quota is Rs. 15,000 and the upper limit for application for individial investor in any IPO is Rs. 2 lakh.

How to invest in IPO online?

To invest through online method, one has to have an internet banking enabled Banking account. Trading account with a registered equity broker/platform and demat account with CDSL/NSDL which comes by default with a trading account.

Online IPO follows a process called ASBA, ASBA (Applications Supported by Blocked Amount) is a process developed by the India’s Stock Market Regulator SEBI for applying to IPO. In ASBA, an IPO applicant’s account doesn’t get debited until shares are allotted to them. (Source – Wikipedia)

For test case, lets take Axis Bank online banking.

Step by step guide to buy IPO online –

1. Login to your internet banking

2. click on Investments, go to the Online IPO section

3. One clicking the Online IPO Tab, (it will take you to a registration page, which will ask for Client Id (trading account) and depository ID. On submitting them, Bank will generate an OTP to complete online IPO registration) it will confirm the demat details and you can click on equity and debt IPO.

4. This post is dedicated to Equity IPO. Hence, click the Equity IPO tab. It opens up the next page with list of equity IPO. Once the IPO name is chosen it moves on to the next page where you have to choose the bank account and investor type, for Indian individuals, you may chose the highlighted option and go to the next page which lists the details of the IPO including IPO lot size, price range etc.

5. Submit the bid – chose the lot size and multiples you would like to apply for and confirm your bid. The Bank will generate OTP to conclude the transaction.

Following the procedure, bank will send a confirmation message. After closing date, you will have to wait for the allotment date. Depending on the application no.s, electronically allotment takes place, the bank will deduct the money only if you are allotted the shares.

The following day, the company gets listed on the stock exchange, and many retail investors likes taking advantage of high listing price and sale it for listing gains.

#IPO #current IPO #Upcoming IPO #personal finance