Increase your happiness Index in 2015

“Financial independence is prerequisite for  good  health, emotional security, social security and quest for spiritual peace” thus said Deepak Chopra in his blog recently.

Many have planned for new year vacations but very few plan their personal finance.The irony is that many work hard for 35 years to earn money but rarely do they manage their personal finance properly.As a result,they end up with buying toxic financial products which does not match their needs .By the time they realise their mistake, it is too late.

However you can  pause now, take stock of what you want  to achieve in life , what you have done till 2014 &  lay a  road map  in 2015 with  course correction and  improve your happiness index .Here are some of the areas for your review;


Buy the right products for Tax Planning

The Union Budget, in July 2014, increased the Income Tax section 80C limit from Rs1 lakh to Rs1.5 lakhs and home loan interest limit under section 24 from Rs1.5 lakhs to Rs 2 lakhs for the year 2014-15.In the meantime distributors have been aggressively approaching to sell their products for availing the increased limits under 80C.

Firstly, before you start rushing to buy any products for the increased limit, we suggest you to do some numbers crunching on the following;

  1. Estimate your annual contribution to EPF/PPF/Voluntary PF if any
  2. If you have a home loan, estimate the breakup of repayment towards principal and interest separately. You can approach your Bank for this breakup.

The maxim “higher the risk higher the return” is getting replaced by “lower risk and higher return” in financial behavior of many investors.Look at the large amounts mobilized under ponzy schemes like sharada. The business models of some ponzy schemes are simple; Deposit Rs1,00,000/- lumpsum and get 10% every month. After 2/3 months, the office is closed. Many believe they can not be taken for a ride like this. But rarely one has evaluated packaged financial products. Ready-made financial products packaged for a specific need can be disastrous!!!

Look at endowment pension plans of Life Insurers! They are  bought for retirement planning. Many plans  in the category offer negative real rate of return and is a cause for wealth erosion in  post retirement phase. We do not try to understand that the Insurers can not offer higher return

Optima Restore

Optima Restore

An innovative Health Insurance Policy

Innovations in the  Health Insurance sector are the order of the day now a days to take care of  the changing  needs the consumers .Optima Restore is an  innovative healthcare plans introduced by  Apollo Munich Health Insurance.


Optima Restore plan offers a unique Restore benefit that automatically reinstates the basic sum insured in case you exhaust it in a policy year. First, it restores basic sum insured if insured person exhausts his limit during the policy year. The restored sum insured can be utilized against some other illness not claimed earlier during the policy period. In case of family floater policy, the restored sum can be used by some other person insured under the floater policy. For instance, if a person extinguishes sum insured of Rs 5 lakh during first policy year, the policy reinstates entire

Have you planned for your child’s education?

The cost of education is rising every year. Educating a child has become quite expensive now days. Warren Buffet says “The perfect amount to spend on children is  enough money so that they would feel they could do anything, but not so much that they could do nothing.“ Spending on children’s education is an investment. Many parents do not have an idea about the surprise and shock they may get if funding for children’s education are not planned in advance. It  always pays if one starts saving and investing early. We have made estimation on the funding cost of the newly born child for the future school and college education with the following assumptions;

  1. The schooling cost is taken at Rs 60,000 pa (current cost).
  2. The coaching fee for 11th & 12th standard has been taken at Rs 2 lacs pa(current cost).

Lessons on spending and investing!

(Blogged by Adam Khoo, Singapore's self made youngest millionaire)

Some of you may already know that I travel around the region pretty frequently, having to visit and conduct seminars at my offices in Malaysia , Indonesia , Thailand and Suzhou (China). I am in the airport almost every other week so I get to bump into many people who have attended my seminars or have read my books.

Recently, someone came up to me on a plane to KL and looked rather shocked. He asked, 'How come a millionaire like you is traveling economy?' My reply was, 'That's why I am a millionaire. ‘He still looked pretty confused.

Are you a victim of Insurance misselling?

I received a mail from a friend of mine who attended a seminar on “The Ombudsman system in Insurance” in which the Insurance Ombudsman was the chief guest. The mail (edited a little) goes on like this ; Quote “The Ombudsman's position is a unique one: his decision is binding on the Insurance company. He cited certain examples, which I feel is very important for everyone to read and understand.

1. It seems 26% of the complaints concerning life insurance were against a certain group of companies. Surprisingly, this company has a market share of only 2%! He didn't tell us the name of the group. 

Shailesh  is employed in an IT Company in Mahape and provided with group health insurance cover of Rs 3 lakhs  by his employer. He has realized that the cover is not adequate for meeting the increasing hospitalization expenses. He is also concerned that the current cover will not be available if he opts for a job change.Employers provide health insurance to employees under the group insurance. Group insurance is advantageous for excluding preexisting illness unlike the individual covers. But due to higher claims ratio faced by insurers, premiums are getting revised upwards or deductibles are being imposed during renewal of the policies. The deductible is the amount of expenses that must be paid   out of pocket before an insurer pay the claim. This has made employees vulnerable from both sides; the deductibles and ever rising   medical and hospitalization expenses.Faced with this situation, many employees have started taking additional individual/family floater health insurance policies without realizing that the health insurance policies are indemnity policies and the multiple insurers will share the claims in proportion to their sum assured. The premiums get aggregated and cost increase, but the sum insured does not get aggregated.

Mr Krishnan aged 28 years is a software engineer and is employed in an  IT Company at Bangalore for the last four years. He got married two years back and is blessed with a daughter who is six months old. He faces financial difficulties. Mr Krishnan is not alone in this situation and there are many like him in other IT Companies who faces difficulties in managing their personal finance.

What has gone wrong?

He like many of his friends used to get weekly compensation and got no guidance what to do with the good amount of money. Saturdays and Sundays being weekly holidays provided enough time to spend the amount along with the collegues.The attraction was the local premium bar located in the street corner.The weekly net compensation gets emptied out in two days. Wonderful times!

How to reduce your electricity bill?

How to reduce your electricity bill?

Households are confronted with rising electricity bills. The higher bills are due to;

  1. Higher consumption of units
  2. Rising unit rates charged by the distributor(s)

At individual level, we can not do anything about the unit rates being charged by the distributor(s), which is beyond our control. But we can analyse on the consumption and take steps to reduce the bill amount. The first step is analysis on the monthly consumption pattern and comparing the consumption to same months of previous years. It is natural that the consumption will be higher in the summer months of April and May. In case of very high bills in any month, it should be taken up with the distributor for any mistake in billing. The next  step is to educate the family members about the need for switching off lights/fans/AC/geysers etc when not in use.The next one is to have a look at the appliances. This is because the types of bulbs we use. You must know the types of bulbs used and their efficiency.

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