Creative: I’m looking to invest in MFs. Please suggest what are the different types of plans & which one to choose?

Answer: It completely depends on the strategy of the concerned scheme, but broadly speaking, there are 3 different categories: one is a dividend plan that gives a regular payment of dividend to the investors. Another one is a re-investment plan where these dividend are reinvested in the scheme itself. One more kind is growth plan where no dividends are declared and the investor only gains through capital appreciation in the NAV of the fund. For you to buy for yourself, it completely depends on your investment objective, which are again dependent on your age, income, your risk taking capability and your financial expenses as well as tax status. It depends on your needs like, a retired government employee will definitely look for monthly income plan while a youngster like you can go for growth plan. Have more queries? Feel free to write to us.

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Creative: Since, I am planning to start investing, can you please tell me, what is better, PPF or ELSS?

Answer: Public provident Fund (PPF) is a popular scheme with long term investment option available backed by Government of India which offers safety with attractive interest rate and returns that are fully exempted from tax & ELSS is Equity Linked Savings Scheme offers you an opportunity to gain from the potential of Indian equity markets and at the same time provides you tax benefits too. ELSS comes with more benefits like being a diversified equity  Mutual Fund (MF), it offers tax-exemption under section 80C of the Income Tax Act and rate of return is generally 14-16%. There are benefits of capital appreciation along with tax benefits that can be availed by any investor. Other than this, the lock-in period of ELSS is of 3 years where PPF matures in 15 years. Have more queries? Feel free to write to us.

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Everybody has a financial balance sheet neatly dividing up their assets, liabilities and income from various sources. When you add up the income and assets, and subtract the liabilities, you get the actual wealth of an individual. If properly managed, this amount can prosper effectively with time. If not, the person could end up wasting the precious financial resources. This is exactly why you need to avail of the wealth management services in India.

What is wealth management?

You do plan out some budgeting for your monthly groceries, your eating out expenses, your mobile bills etc., don’t you? That is wealth management too, but on a smaller scale, over a shorter period of time. When we talk about wealth management, we clearly mean  long-term financial planning that manages and amplifies your savings.

What wealth management services in India do is give you a customized assortment to manage your financial goals¬ – short-term and long-term. Their fees will be negligible, considering the kind of returns generated through multiple investment avenues, keeping your costs down.

What services do they provide?

• Financial Risk Profile Assessment: It assesses your personality, what your assets & liabilities are, and what are your long-term goals.

• Investment Portfolio Analysis: It analyses where all have you invested, how much it can cost you, and what are the rates of return from various investments.

• Portfolio Adjustment: Your investments are juggled to reach your short, medium and long-term goals with minimum pain.

Through the above services, there’s constant re-evaluation and decision-making process that wealth management services do for you for a fee. The worries are off your head now. So sit back, relax and plan a king size lifestyle.

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There are four kinds of Budget personalities: The Go(al)- getter; The Automater; The Busy Bee; The Avoider. Find out which one are you.

Everyone plans their monthly budget differently, but you probably fall into one of these four ‘budget personality’ categories. Find out which one describes you best:

The Go(al)- getter: You set all your short-term and long-term goals, chart out a good financial plan and then make it happen. Being focused and disciplined, you achieve all that you have planned for the life, now and later.

Tip: Awesome, you manage your finances so well. But we hope you are not forgetting to keep aside money amounting to 3-6 months’ expenses aside as an Emergency Fund. After all, there will be a time your car will break down or someone in family will fall ill. 

The Automater: You’re the kind who fills up your life with friends, family and work. Life’s on an auto mode and money management is one topic that doesn’t bother you. Your bills are paid automatically from your account, your subscriptions are automatically updated, insurance premiums are paid on time, and EMIs are met with directly from the savings account.

Tip: Great that you’ve taken care of all the expenses and it’s all sorted. But take a look back at your expenses and a keen look into your account. Are there expenses you can do away with? Are there financial opportunities you are missing out on? You may be failing to create additional wealth!

The Busy Bee: You’re the one who is always on the go. Your life’s commanded by the calendar alerts on your phone. Every hour is marked with a different colour on the work calendar that’s synced well with your smart phone. Every pop-up and notification decided what you’re doing next. There’s of course no time to plan or execute a financial plan, or even to take a look back at the savings account.

Tip: With the advent of numerous Mobile Apps, life’s sure become simpler. You pay your bills and premiums there, buy movie tickets in a jiffy, even shop for most expensive gadgets on the go. But stop right there! You must wait and think where you want to be in next 5, 10 or 20 years! Have you made a financial plan for your future? Even though you don’t have time to think what may happen in next week, but it’s important to make time to plan for a similar lifestyle when you retire.

The Avoider: For you, money is a worry, so much so that you’d rather avoid thinking about it. You miss out paying off bills on time and taking financial decisions until they become late notices or missed opportunities! Your budget is an ‘approximation’, instead of exact ‘math’ of what’s coming in and what’s going out.

Tip: Start small and create a budget. Keep a track of your expenses and start saving. The next step of course is looking for investment opportunities to create wealth.

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When you want to make money, your approach to your finances has to be disciplined. If you run after get-rich-quick schemes, then the odds are that you will get poorer than if you hadn’t bothered to invest at all. So, is there a process to fiscal discipline? Yes, there is. Wealth Management Services in India can help you imbibe this easily.

Just answer these three questions before you think of investing:

• How much can you invest: What is the extra cash in hand once all your needs and liabilities are met? How much risk can you afford to take on this sum?

• Where should you invest: What are your financial goals? What kind of assets would you invest in? There are multiple product categories of each asset. Then, there are choices of different investment options. Figure out the choice that suits you the most.

• What are the taxes and exemptions: What use is a good investment if the gains are all given away in taxes? Read the documents carefully to see what exemptions you can avail of by investing in that product.

Fiscal Discipline is nothing but this three-step process, followed by constant monitoring and review of the performance of your investments. However, if you are too busy to devote time to this process then contact any of the companies that offer wealth management services in India. They will follow the process to ensure that your finances are always in good shape. They do the investing; you do the money-counting.

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There are two kinds of people in this world: Those who have dreams, and those who have goals. Dreams seldom come true. Goals, if properly planned for, are always attainable. You are working not just for your present welfare, but to secure your future too. If you do not measure your expenditure and savings today, you will be forced to live an austere life in old age. So, be sensible in how much you save and how you invest.

But is there a method to calculate the necessary savings and find the best investments? Yes, there is. It’s called Financial Assessment.

Financial Assessment in India is carried out by Financial Services companies, mostly. But, any qualified finance professional can easily chart up your financial history, your future goals and give you the options of financial decisions that you need to make.

Technically speaking, what financial assessment entails is:

• Cash Flow Management: Managing your cash requirements for your fixed and variable expenses in such a way that you   save regularly.

• Investment Analysis: Discovering the investment avenues which maximize your returns while minimizing tax outgo.

• Future Planning: Your savings, investments and expenditures shall be rationalized according to your future goals - house, vehicle, retirement plans etc.

Remember the story of the grasshopper that did not plan for winters, making merry in summers while the ant toiled? Be the ant. You’ll be happier in old age. Get a financial assessment done.

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