Beruflich Dokumente
Kultur Dokumente
- For Godrej
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Program Objectives
To understand what is financial planning Why is it important What is inflation What is the process of financial planning What is risk appetite What are the different avenues of investment What is asset allocation how to go about retirement planning, estate planning and tax planning More than anything, how to go about making your and your familys financial future secure
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Course content
What is financial planning The need for financial planning Financial planning process - How to get started What is your risk appetite Basic elements of financial planning Time value of money Disciplined and regular investing Impact of inflation Build your wealth with savings and wise investing Planning for life events Childrens education and marriage Retirement
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Course content
What is asset allocation Importance of asset allocation Different avenues for investment
Insurance Mutual funds Equity Fixed deposits Gold Real estate
Tax planning Cash flow management Retirement planning How much real estate should you own? Use your credit card smartly How to spend wisely
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Lessons of life
Life is full of uncertainties. Future investment earnings and interest and inflation rates are not known to anybody. However, I can guarantee you one thing... those who put an investment program in place will have a lot more money when they come to retire than those who never get around to it. Noel Whittaker
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Financial Planning ?
Financial Planning is not some esoteric concept. It is for everybody who has financial goals to achieve or financial challenges to meet Personal Financial Planning is the process of determining whether and how an individual can meet life goals through proper management of financial resources. Financial Planning goes beyond advice on investments. It is the development and implementation of an integrated, co-ordinated plan for achieving overall financial objectives
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Financial Planning ?
Therefore, Financial Planning is a process aimed at identifying all needs of an individual namely Buying a home Saving for their childrens education/marriage Protecting their family through insurance Investing their hard earned money Managing debt Planning for retirement
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Why Should You Develop a Personal Financial Plan? To help you understand and achieve your financial goals. To help you achieve financial independence. To help you understand where all your money is spent. To help you support those that have supported you.
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Financial Planning
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Why are goals the cornerstone of a financial plan? Goals keep the future in mind by reminding you of the rewards. Goals provide measurable targets Goals entice you to keep the plan in effect. Goals provide tangibility for the question, Why?
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Ideally, your debt to income ratio should not be higher than 30% as this means you are straining your income. This means you should not be spending more than 30% of your income on paying loans / interest on loans.
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Ideally, you should be saving at least 20% of your monthly income to save and invest.
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Contingency Reserve
You should set aside 6 to 24 months of living expenses as a contingency fund to be used only in times of emergencies. This should include any EMIs that you may have. Once you implement these simple rules, you will find that your finances are more in your control and manageable.
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Financial quadrants
The four important financial quadrants are incomes (existing & future), expenses, assets and liabilities. Money tends to flow between the above quadrants your income will fund your expenses and will take care of the full or part purchase of any assets you may buy. Part purchase of assets can be supported by taking on liabilities. Your liability payments are in turn again funded by your income. Thus, the most important way to generate wealth is to live within or preferably below your means by keeping an eye on your existing and future money flow. For this, you need to first be aware of what your means are and what you are spending your money on.
The use of a personal budget is the simplest and quickest way of analyzing whether you are a spender, or a saver.
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Liabilities
Step C - Liabilities Keep track of your Liabilities The main Liabilities that people can have are: Home Loan (the biggest and longest EMIs you will ever have to pay) Education Loan Car Loan Personal Loan Credit Card Payments
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Remember it is better to first invest, and then spend out of what is left, rather than to first spend, and then invest out of what is left.
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Savings rate
Savings rate = Savings/Income Exercise: How much are YOU saving ?
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Step 2
Classify financial goals based on their priority and proximity Short term (less than 3 years) Medium term (3 to 5 years) Long term (more than 5 years )
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Standard calculations
Present value of a perpetuity is an infinite and constant stream of identical cash flows. Future value is the value of an asset or cash at a specified date in the future that is equivalent in value to a specified sum today. Future value of an annuity (FVA) is the future value of a stream of payments (annuity), assuming the payments are invested at a given rate of interest.
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Power of compounding
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Power of compounding
You know now that the higher R you can earn and the longer N you can invest for, the larger will be your Future Value of money. Lets see an example with different rate of return (R) and different investment horizons (N). Assuming your Present Value i.e. the sum you can invest is Rs.1,000:
The above table indicates that for the longer N, equity is a better investment than a fixed income instrument. It is not prudent to let your wealth lie in a low return instrument when your investment horizon is long. Also while over small time periods, the difference due to higher rates of return is not very huge, it is over longer time periods that the impact is very significant
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Scenario 1
Mr. Gupta has a 6 year old daughter. He plans to send his daughter to college for graduation at age 18 and post graduation at age 21, for which he will spend Rs.10 lakhs and Rs.25 lakhs respectively. What corpus does Mr. Gupta need to accumulate for his daughters education goals? Assuming that inflation in college fees is approximately 10% p.a: If Mr. Guptas daughter goes to college at age 18 i.e. in 12 years, college fees at that time will be approximately Rs.31.40 lakhs. This is the amount Mr. Gupta has to accumulate in 12 years to send his daughter for the same standard of college education available today at Rs.10 lakhs. Similarly, for his daughters post graduation, in 15 years Mr. Gupta needs to accumulate approximately Rs.1.04 crore to give the same level of post graduate education available for Rs.25 lakhs today. This is the effect inflation has had on college education fees.
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Scenario 2
Mrs. Kapoor is currently 30 years old and wants to retire early by the age of 50. On retirement, she wants to maintain her current lifestyle. She is currently spending approximately Rs.20,000 a month on household expenses, and approximately Rs.3 lakhs per annum on travel, medical and discretionary expenditure. What corpus does she need to live her life post retirement? In order to maintain her current lifestyle, and assuming her post retirement life expectancy is another 35 years, Mrs. Kapoor will need Rs.13 crores to sustain her current lifestyle.
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She can invest this Rs.13 crore corpus into safe debt instruments and earn a 5.50% post tax interest on the amount. Both principal and interest will go towards sustaining her lifestyle for 35 years post retirement. At her 85th year (assuming 85 years life expectancy) there will be no money left at all. This is assuming a simple 7% rate of inflation on household expenditure, and a 10% rate of inflation on other expenditure.
This is the effect that inflation can, and will, have on your financial life.
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Impact of inflation
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Effect of inflation
Lets take a figure of Rs.10,000. Assume an inflation rate of 10% and take a time period of 20 years. In 20 years, you will need a figure of Rs.67,275 to have the same purchasing power as your Rs.10,000 today. You have 3 choices of where to invest your Rs.10,000 today
the bank savings account, a debt mutual fund, and an equity mutual fund.
Lets see how each one fares against an inflation rate of 10%.
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Impact of inflation
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Why is investment important when you are young contd. Equities have the potential to deliver better than other avenues over longer time frames Young investors have time on their side and should consider investing a significant portion of their portfolio on equities, while older people may look at fixed income securities Mutual funds offer a better option as they have a variety which are suitable for different risk appetites.
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Retirement planning
To plan your retirement, you need~ Time Start early. Use the power of compounding that can make even a small amount add up to a substantial one. Start channeling a small amount of your investments to a suitable pension option. ~ Commitment This needs discipline. No matter what your expenses, there should be a regular outflow towards your goal till you retire. This is often easier said than done because your immediate needs may seem stronger than a future requirement.
~
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Adjustment Prices will rise by the time you retire and continue rising post your retirement. Account for inflation because it will affect you as long as live. Your standard of living might change. In fact, it would have constituted a major increase in your expenditure pattern rather than inflation, over the last few years. ~ Detailing When accounting for base expenses for your retirement, don't forget to include all expenses currently being reimbursed by your company. Medical or travelling expenses may not pinch you right now, but they will at a later stage, since you will bear them yourself post retirement
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Retirement Planning
Retirement doesn't mean stoppage of work, it means freedom from compulsion to work for money Financial freedom. Why? To maintain same life style even after retirement Life expectancy is increasing. 80+ age not unusual. Female spouse will live 5 years more then male. Inflation will make difficult to maintain same level of living standard. You & your spouse may not like to remain dependent on children. We dont have govt. social security scheme.
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How Much?
If retirement <10 years away 250*Existing monthly expense If retirement between 10 20 years form today 350*existing monthly expense If retirement > 20 years from today 500*existing monthly expense + Add provision for pending financial goals (children education, marriage etc.)
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How?
Start early - Retirement planning starts the day you get your first income. Invest regularly Small amount invested regularly. Stay invested. Power of compounding. Best options are P.P.F., Pension schemes of insurance co., Equity mutual fund & Real estate.
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Asset allocation
Maximum equity allocation in % = 100-age in years. As your retirement time comes near shift to debt schemes. 10-20% in floating rate scheme for emergency expenses.(2-3 months expenses). Up to 15 lac in senior citizen scheme for 9% assured regular income. P.P.F. 20% for 8% tax free return. MIP 20% & Balanced scheme 20% for regular income + capital appreciation. 10-30% in Equity scheme for wealth creation.
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He has assumed his life expectancy as 85 years. His children are already educated and he has no other goals. He is adequately insured and has created a contingency corpus of 12 months of living expenses and is maintaining this corpus in liquid funds and partly as cash in the bank. As he is nearing retirement, Mr. Roy is worried about how much corpus he is going to need and whether or not he will be able to build this corpus in his remaining 10 working years.
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So now Mr. Roy knows he needs to achieve a corpus of Rs.4.58 crore to maintain his lifestyle in his post retirement period. The next question in Mr. Roys mind is to how to achieve this corpus. He is expecting to get gratuity of Rs.25 lakhs and expects his EPF maturity to be Rs.48 lakhs. Over and above this, keeping retirement in mind he has invested Rs.12 lakhs in mutual funds (current value) so far and has allotted his ancestral property of Rs.50 lakhs (current value) to his retirement goal. He also has Rs.35,000 surplus savings per month that can be invested towards his retirement. How much will his total achievable corpus be at retirement?
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Finally coming up with the corpus you would need at the retirement.
Corpus needed = (Monthly Expenses)/(interest expected )
Calculating how much you should save per month. (based on CAGR)
You figure out how much you can save Then you find out how much return you need to generate . Then you decide where to invest to generate that return
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Solution
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Solution
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An investment of Rs.5,700 approximately (every month) or Rs.73,500 (every year) will help Mr. Jack achieve his sons graduation corpus. An investment of Rs.25,000 approximately (every month) or Rs.3.20 lakhs every year will help Mr. Jack achieve his sons post graduation corpus. When investing for both goals, Mr. Jack has to keep in mind that he must invest into the right investment products for his personal risk profile. When planning for any goal, it is important to invest based on your risk appetite and goal time horizon. It is essential to understand the risks associated with equity investing.
When a goal is drawing nearer, the goal corpus can be de-risked to protect it from equity volatility and invested into debt to provide fixed returns and capital safety.
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Calculators
This site gives various widgets which can be downloaded on to your computers and can be used for various calculators like SIP Insurance Retirement corpus etc.
http://www.investmentyogi.com/retirementcalculator.aspx
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For ex. if NTI after availing all deductions is Rs. 10,000, your tax liability will be computed as under
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Illustration
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Example
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Other factors
Financial goals The financial goals which one sets in life, also influences the tax planning exercise. So, say for example your goal is retiring from work 5 years from now, then your tax saving investment portfolio will be also less skewed towards marketlinked tax saving instruments, as you are quite near to your goal and your regular income will stop. Likewise if you are many years away from the financial goal, you should ideally allocate maximum allocation to market linked tax saving instruments and less towards those instruments (tax saving) which provide you assured returns.
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Risk appetite
Your willingness to take risk which is a function of
your age, income, expenses, nearness to goal, will be an important determinant while doing your tax planning exercise. So, if your willingness to take risk is high (aggressive), you can skew your tax saving investment portfolio more towards the market-linked instruments. Similarly, if your willingness to take risk is relatively low (conservative), your tax saving investment portfolio can be skewed towards instruments which offer you assured returns, and if you are a moderate risk taker you can take a mix of 60:40 into marketlinked tax saving instruments and assured return tax saving instruments respectively.
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Thinking beyond 80 C
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Example
Mr. A aged 35 years earns Rs. 12 Lakhs p.a. spends Rs. 2 Lakhs p.a. for his personal consumption. Therefore, he saves Rs. 10 Lakhs p.a. for the family welfare, net of his personal expenses, which can be used by his wife and children for household expenses, savings and host of other things they want to do. Now assuming he will retire at the age of 60 years and earn a return of 6% p.a. on the amount invested, so to have Rs. 10 Lakhs p.a. as income for next 25 years (60 35) at the rate of 6%, the total insurance requirement as on today comes out to be Rs. 1.35 crores.
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Example
Mr. A aged 35 years earns Rs. 12 Lakhs p.a. and he spends Rs. 2 Lakhs p.a. for his personal consumption. The age of the spouse is 30 years and her life expectancy is 80 years. Yearly expense of the family is Rs. 6 Lakhs, so the net family expense excluding his personal expense comes out to Rs. 4 Lakhs p.a. Assuming an interest of 6% p.a. on the amount invested and the inflation at 5% p.a., Rs. 1.60 crores of insurance cover is required in order to meet the expense requirement of his spouse for the next 50 years i.e. till her life expectancy.
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LIFE INSURANCE
The types of life insurance policies are as follows: 1. Term Insurance (Pure Insurance) 2. Endowment Policy (Savings based) 3. Money Back Policy (Savings based) 4. Unit Linked Insurance Plan (ULIP) (Savings based, market linked)
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How much?
Income based calculation. 10 times your annual gross income. Need based calculation. 200*Monthly home expense + Loan taken + Pending Financial goals - Current value of your financial assets (excluding your residential premises). You must take Term insurance = Loan taken.
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A thumb rule
In the opinion of Insurance Companies, (and correctly so), the higher age, the higher the probability of death and higher the cost of insurance. Take a simple case of a person who is 20 years old and another who is 40 years old. The 20 year old pays a annual premium of Rs. 5450 for a 30 year policy for Rs. 25 lacs, whereas the 40 year old pays an annual premium of Rs. 16925 for a similar policy. Both the calculations are for a product called Amulya Jeevan offered by the LIC of India
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A simple method to calculate amount of insurance required Divide number 240 by your age. If your age is 20, the division is 12. If your age is 30, it is 8, for 40 it is 6 and so on. Now this division multiplied by your annual gross income is the cover required by you! Suppose you are 30 and your annual income is Rs. 6 lacs, then you need a cover of around Rs. 48 lacs. (The division of 240 by your age is 8 and 8 multiplied by your annual income is 48).
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Any specific fund needs and other financial assets need is to be used for correction in similar way. Insurance is ideally done the day after you land up your first job. But then the annual income needs a correction.
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Property risk insurance. (1) Business assets. Damage may be due to Natural calamities, fire, theft. (2) Vehicles Comprehensive cover. (3) Personal assets Householder Policy. Insurance against damage to Residential Property.
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Liability Insurance
Liability Insurance Professional Indemnity insurance. Third party insurance for Vehicle. Term insurance equal to loan amount.
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Cash Flow Management Income Business Expense = Take home cash. Take Home Cash Home expense - Taxation - Interest & Installment payments on loan taken = Saving ( cash available for investment) Cash Management, Options : Cash Management, Options (1) Investment in Income generating assets. (2) Investment in Expense generating assets ( ? Liabilities).
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Investing in bonds
Bonds are fancy IOUs Bonds can provide a worry-free stream of income however they include a wide array of instruments with varying degrees of risk and reward. So, You can lose money in bonds. Bond prices move in the opposite direction of interest rates. A bond and a bond mutual fund are totally different animals. Don't invest all your retirement money in bonds. Pay attention to total return, not just yield. If you want capital gains, go long. If you want steady income, stick with short to medium terms.
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Some definitions
Net Asset Value (NAV) NAV is the sum total of all the assets of the mutual fund (at market price) less the liabilities (fund manager fees, audit fees, registration fees among others); divide this by the number of units and you arrive at the NAV per unit of the mutual fund. Simply put, this is the price at which you can buy / sell units in a mutual fund.
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Some definitions
Compounded Annual Growth Rate (CAGR) It means the year-over-year growth rate of an investment over a specified period of time. Mathematically it is calculated as under:
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Some definitions
Absolute Returns These are the simple returns, i.e. the returns that an asset achieves, from the day of its purchase to the day of its sale, regardless of how much time has elapsed in between. This measure looks at the appreciation or depreciation that an asset - usually a stock or a mutual fund - achieves over the given period of time. Mathematically it is calculated as under:
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4 good reasons for investing regularly Light on the wallet through SIPs as low as Rs. 250 per month
Makes market timing irrelevant Power of compounding
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All these factors together make gold an attractive investment as a store of long-term value, particularly during uncertain economic environment and a way to protect wealth during high inflation.
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Remember that there are no income-oriented payouts such as dividends or interest, hence the investor is totally dependent on price rise for returns
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Portfolio allocation:
Do not have a very large portion of overall portfolio allocated to gold Gold is primarily a hedge, hence maintain a 510% allocation and that too via gold exchangetraded funds. Since Indians have been traditionally been investing in gold, most families would have some amount of gold jewellery and other physical gold. Check the value of your physical gold and add on only if required.
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Risky investments
High
Risk Investments Investments in Equity Oriented Mutual Funds Investments in Properties Very High Risk Investments Contribution to Property Mutual Funds Contribution to Private Equity Funds for unlisted companies Share Market Direct Investments or derivative products like Futures and Options Commodity Futures
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Asset Allocation ?
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Whats Your Risk Appetite? Whats Your Risk Tolerance? Risk profile is made up of two components your risk appetite and your risk tolerance. Risk appetite simply refers to how much risk one is willing to accept. Risk tolerance on the other hand indicates how much risk your finances can handle. The two might be very different.
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Asset Allocation
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Expert opinion
"Asset allocation is key. Have around 10-15 per cent of your portfolio invested in gold, as it is an effective hedge during uncertain times Don't buy physical gold - use exchange traded funds (ETFs). Allocate another 15 per cent to relatively safe debt funds. Cash can command 10 per cent. The balance is to be invested in equity, not in a lump sum but in a staggered manner through SIPs. Through the mechanism of SIPs, which essentially immunizes you against market turbulence, discretion goes out and discipline walks in.
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All assets have a cycle and trying to enter and exit based on its cycle is time consuming and often volatile One property must be held primarily for ones residence. Other properties can be held for investment Consider taking a loan to buy property in case funds are not sufficient Remember principal and interest on home loan are eligible or tax deduction.
Interest is deductible from income up to Rs. 1,50,000 under section 24(b) Principal amount upto 1,00,000 is deductible under www.centumlearning.com 80C
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Under the NPS, individuals can open a personal retirement account with the government through the PFRDA and can set aside and save a pension corpus during their work life to meet financial needs post retirement. There are various investment options available for the investors who wish to subscribe to the National Pension System. The amount invested in the scheme earns returns depending on the investment options selected by the investor. At the time of withdrawal (When the investor retires) the subscribers have to invest 40%of their accumulated pension money under the Scheme to purchase a life annuity from an IRDA regulated life insurance company and the balance may be withdrawn in full. The amount the investor can withdraw and the timeframe after which it can be withdrawn are subject to certain conditions.
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Highlights
Any Indian citizen will be able to start a New Pension Scheme account and can start investing any amount up for a pension. Open to all citizens aged between 18-60 years Exit age for new pension scheme will be 60 years. Attractive investment schemes to choose from Professional record-keeping and fund management Technology driven, Transparent fee based system Withdrawal facility as and when you wish, under Tier II No entry and exit loads Multiple fund managers Multiple investment options Minimum Contribution per installment: Rs 500 Minimum Contribution per year: Rs 6000 Minimum Contributions per year : 1
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2. The Central Record Keeping Agency (CRA) The record-keeping, administration and customer service functions for all subscribers of the New Pension System will be centralized and performed by the CRA. The CRA will, on the basis of instructions received from subscribers, transmit such instructions to the appointed Pension Funds on a regular basis. The CRA will also provide periodic, consolidated PRAN statements to each subscriber. The National Securities Depository Limited (NSDL) has been appointed as the CRA for the NPS. NPS allows you to choose from any one of the following six entities as PF to manage your pension fund: 1. ICICI Prudential Pension Funds Management Company Limited 2. IDFC Pension Fund Management Company Limited 3. Kotak Mahindra Pension Fund Limited 4. Reliance Capital Pension Fund Limited 5. SBI Pension Funds Private Limited 6. UTI Retirement Solution Limited 7. Annuity Service Provider (ASP)
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3. Pension Fund Managers The money deposited by investors is invested into a pension fund which is managed by designated fund managers. There are a few leading professional firms that have been appointed to act as the Pension Fund Managers. They invest the subscribers money into various schemes like equities or bonds etc for further investment. The Pension Funds are required to invest strictly in accordance with the guidelines issued by the government and PFRDA. The NAV of each and every scheme in the Pension Funds would be communicated to the CRA and the investors regularly.
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4. Annuity Service Providers The Annuity Service Providers are responsible for delivering a regular monthly pension to the investor after they attain their retirement age of 60 yrs. The PFRDA is in process of appointing the Annuity Service Provider(s) for the NPS accounts. Upon appointment of the same, you will be able to select any Annuity Service Provider for your account as per your choice at the time of withdrawal of contribution from your NPS account or on attaining 60 years of age.
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Trust & Trustee Bank (TB) The Trust established under the NPS, is responsible for taking care of the funds under the NPS and is the registered owner of all NPS assets. The trust holds an account with as the NPS Trustee Bank, i.e Bank of India. NPS Trustee Bank facilitates fund transfers across various entities of NPS system which include, PFM, Annuity Service Providers, subscriber, etc. The NPS Trust is being administered by the Board of Trustees, as decided by the PFRDA.
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Point of Presence (PoP) PoP is the first point of interaction between the voluntary subscriber and the NPS architecture. The PoP is responsible for performing functions relating to registration of subscribers, undertaking Know Your Customer (KYC) verification, receiving contributions and instructions from subscribers and transmission of the same to designated NPS intermediaries. How to invest in NPS? The PoP is the entity through which an investor can invest into the National Pension Scheme. The Investor who wishes to subscribe to the NPS can contact the PoP and become an investor in the Pension Scheme.
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In the Active Choice you can select how much of your money will be invested in the different classes with a cap of 50% in Class E. Now, there are pension funds that will manage your money, and in either of these options you have to select the fund manager who will manage your fund. So even if you select the Auto Choice, you still have to tell them which fund manager you want to manage your money.
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Under NPS there is no fixed rate at which your money will grow
When you open the NPS account you will be asked to select a fund manager and your money will be invested by this fund manager. You will also be asked whether you want to choose an Ultra Safe, Safe or Medium approach, and based on your selection the fund managers will spread your money between debt and equity instruments. The rate of growth will depend on the performance of the fund managers and the choices you make, so to that extent its not like a bank fixed deposit where they tell you that you will get 8 or 9% interest regardless of anything else.
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How to spend wisely Spend in line with budget Track expenses Dont succumb to impulse spending Beware of credit cards- use them wisely
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In Cricket and Financial Planning - Play to WIN! Get a strong head start! Have a balanced team! Have a Safety Plan in case of a bad over! Pace yourself! Know Where You Stand! Have a good coach!
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By starting just 10 years later, you have to invest 4.5 times the amount, to get the same end corpus.
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Balanced team
But when equity is sitting it out, where would we be without Yuvraj, Bhajji and Zaheer to take those wickets. Its the debt and gold in your portfolio that will perform when market conditions cause equity to wait its turn.
Depending on your age, time horizon to your goals and your risk appetite, you should arrive at the right mix of equity, debt and gold that will balance your portfolio.
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Pace yourself!
At the beginning of the match, we need to be aggressive. After all, we have wickets in hand. Similarly, if youve got more than 10 earning years left until your goal, then the investments for that goal can go more into equity (up to 75%), and less into debt and gold (25%). But when were almost out of wickets (earning years, the ability to take risks), we need to be
cautious, play carefully, dont try anything too wild.
Go for a higher exposure to debt and gold, Minimize the risk to the portfolio by minimizing the equity component.
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Remember, its not just a game, its a sport. Just like achieving your life dreams is not just a question of investing, its a question of having the right Plan. You need to know your goals, your team (your investment options), the pitch and playing conditions (the market scenario), pace yourself (consider how many years till your goals arrive), and above all, let your Coach help you to do the very best you can do.
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Know the Asset Class, not just the name of the product Have a Purpose dont just invest because you have the money to spare Know the Costs of the Product AND the Remuneration to Your Adviser!
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Value of time
Time is a valuable asset and you should make the most of it. You should still follow the process of Financial Planning when building wealth for your familys and your life goals. If you have a goal that is less than 3 years away, for example buying a house or a car, or sending your child for higher studies, then the corpus should be invested in safe instruments and should not be exposed to market risks i.e. no equity exposure. For a goal that is 3 to 5 years away (medium term), your exposure to risky assets (equity) should be low, and your primary exposure should be to debt (think more MIPs, fewer balanced funds).
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For goals that are 5 to 10 years away, your equity exposure can be higher, with lower exposure to debt, as the time horizon will enable you to weather any market volatility that comes your way. For goals that are 10 years away or more, you can be primarily invested into equity, with some exposure to debt. At all times, remember to have your contingency fund stashed in a safe place (liquid plus funds, a sweep in flexi deposit with your bank) in case of an emergency. Your contingency fund should be 6 to 12 months of your familys and your monthly living expenses.
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Conclusion
Conclusion Investing is not Rocket Science. Keep it simple. Start investing early in life. Save & invest regularly, systematically. Stay invested for long term till your goal achieved. Stick to asset allocation. Monitor 3-6 monthly. If necessary take expert help. You have worked hard to earn money, now make the money work hard for you.
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Disclaimer
While I thank you for your attention, I need to stress that I am not a qualified CFP or Mutual Fund Distributor. The views expressed are borne out of my personal experience, and my readings Please consult your advisor before investing
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