Financial Planning

Sensex crossed 29000, What Next ?  Every time sensex crosses new numeric level, the same question arises in everyone's mind, right? At 9000 sensed level suddenly we all feel, it will go to almost zero and heard someone saying market will get close one day, but it didn't happened ? Right ? Same way now at 29000 level, people feel it will cross 30,000 and then cross 1,00,000 soon ? Really ? Can you predict the same ? Businesses do not stop like that. So how this numbers really comes from ?

Savings Vs Goal Mismatch Here we will converse about Your Financial Goals Vs Kind of Saving Required, Goals can be classified as :-  • Emergency money planning  • Buying a house • Buying a car • A holiday abroad • Retirement Planning • Education & Marriage Planning for Kids • Any other Financial Goal (owning / starting your own business) etc.,

Middle-class Indian family needs advise,which is completely different than the affluent Investors. Middle-class families has been hit sometimes by job cuts, too much on inflation side, as the housing prices are too high in India, Rent is getting more costlier, basic lifestyle is even getting costlier as inflation is over 9%, day to day things are getting costlier which are need based. High food inflation, Electricity Prices getting high day by day, Petrol prices are higher, auto rickshaw fare, vegetables and so on.....for them......list never ends...

1. Protect Yourself & Family: - Take Family Floater Mediclaim Policy :-  we come around lots of people who claim that their companies are paying premium and covering whole family under group insurance, I fully agree with the same but what if you change the job ? what if you start a business ? Rethink the same. 2. Take A Term Policy: - many people say / believe that money paid on the term don’t      comes back, but the fact is when you buy a term policy & put rest of the money in PPF or VPF (voluntary PF) / mutual fund sip. This will be a good combination then going for a Ulip or an Endowment Plans, Separate your Insurance & Investments. 3. Build an Emergency / Contingency Fund – the fund should be 6 to 8 months Expenses, you can park either in Bank FD or in Mutual Fund’s Liquid funds (now a days you can withdraw money with a single click / sms / visa debit card from mutual funds) also tax efficient.  

7 - New Year Financial Resolution :- 1.    I will Insure my Family & Property: - We work hard to earn, now is the time to protect your family & properties you owned, buying a medical for any medical disaster. Make sure its adequately insured. 2.   Emergency money Planning:- A very commonly given financial advice, but not so commonly implemented across. generally, 6 to 8 months monthly total expenses/spending(total expense include all expenses including loans and credit cards payments, household bills etc.,)

PPF Eligibility- Individuals, individuals on behalf of minor  Min- Rs 500 per annum in multiples of 5 Rs 1,00,000/- per annum (wef from : 1 st Dec,2011) Duration- 15 years, can be extended for one or more blocks of 5 years. Account can be discontinued but the repayment of subscription and interest will happen only  after 15 years. Rate of Interest – 8.6% pa, credited in the account on the 31st of march and calculated on the minimum balance between 5th Day and the end of the month. Loans – During the third to sixth year the account holder can avail the facility of loan of an amount not exceeding 25% of the balance standing to his credit at the end of the second financial year immediately preceding the year of loan application. The principal amount of loan under the PPF scheme is required to be paid either in lump sum or in monthly installments within a period of 36 months. After the principal amount is repaid the interest is to be paid in not more...

RBI is constantly raising interest rate since a year. Inflation has become so scary for middle class people, and if one is paying a housing loan EMI under a floating rate, the EMI’s are going up too creating a picture scarier. Some suggestions to cope up with this issue are:- As Festival seasons are around like Diwali & Christmas thereafter, look at your family budgets and actual expenses occurred or going to occur, cut down on unnecessary expenses, this is the right time to write your expenses and record it on daily basis. There are so many offers and discounts offered by Consumer good companies and electronic companies this festive season. (If not necessary) Try to get out of this mouth watering offers on LED’s & changing your old car to the newer one as it will increase the burden on your Monthly Budget by paying an EMI towards it. Pay by Cash / Cheque or by Debit Cards Instead of Credit Cards, this will automatically limit your expenses ...

Spending Money (Everyone’s Favorite Activity)   STOP SPENDING MONEY –  We will here talk about spending money….Spending that too when we don’t have to….we are talking about the psychology of managing money/cash, and the amount of cash spending started by India’s youth now a days. We actually don’t realize that spending cash i.e. purchasing products or services are purchased under different reasons, most of the time whatever things/products or services we buy….its just because of our feeling (a feel good factor within us). This type of feeling & satisfaction on spending, leads to short fall of CASH. Sometime spending too much on unnecessary products & services don’t allow us to pay off our debt…or in other words “we don’t get debt free”. We all have rainy days; a lot of people among us feel so empty and feels low self-esteem because sometime we spend a lot on unnecessary things. Once we truly follow this and understand the emotions ...

Check your Employees Provident Fund (EPF) Balance Online  http://epfoservices.in/epfo/member_balance/member_balance_office_select.php For transferring the Provident Fund account of a member from one establishment to another establishment covered under the act / scheme http://www.epfindia.com/downloads_forms.htm m2(money.manage) manan mankad

Effect of 1% hike in your Housing Loan Interest:- Calculation of Loan Amount Rs. 35,00,000 @ 9% Interest Rate   Loan Tenure EMI Total Interest Total Principal Total Paid 10 Years 44,337 18,20,382 35,00,000 53.20 Lacs 15 Years 35,499 28,89,879 35,00,000 63.89 Lacs 20 Years 31,490 40,57,698 35,00,000 75.57 lacs 25 Years 29,372 53,08,314 35,00,000 88.11 Lacs Calculation of Loan Amount Rs. 35,00,000 @ 10 % Interest Rate Loan Tenure EMI Total Interest Total Principal Total Paid 10 Years 46,253 20,50,330 35,00,000 55.50 Lacs 15 Years 37,611 32,70,012 35,00,000 67.70 Lacs 20 Years 33,776 46,06,181 35,00,000 81.06 Lacs 25 Years 31,805 60,4...