What is Direct Option in Mutual Fund?

Mutual fund is a preferred investment product to achieve the long term goals. It also constitutes the major part in one’s investment planning strategy. Mutual fund investors have an option to invest in MF schemes through direct route wef 1st January, 2013. Investor can buy units directly from the AMCs and there is no need to approach distributors, agents etc for buying MF schemes through Direct option.

Basics of Insurance Planning

Insurance is a form of risk management and it is used to transfer of risk of death, cost of medical treatment, risk of bodily injury by accidents, theft of house hold articles etc by paying certain amount known as premium. Two types of insurance are available, life insurance and general insurance. General insurance covers health, motor, fire, marine and other non traditional insurance. The contracts of general insurance are for one year whereas life insurance contracts terms are more than a year.

Financial Planning at different Life stages

WHY DO YOU NEED FINANCIAL PLAN?
Life changing events, sometimes for the good such as getting married or joining a new job and sometimes for worse such as loosing the bread winner of the family or damage to the home by natural calamity will have financial implications on personal finance.

A professional financial planner can help to analyze the implications on your financial decisions and make a prudent financial plan to achieve your life’s goals. The goals may cover areas such as buying a house, meeting lifestyle expenses, educating your child in India or abroad, meeting marriage expenses of your child, planning a dream vacation abroad or creating retirement corpus.

Managing Difficult times : Financial Planning

Abhay is worried a lot now days. The family budget has gone out of control due to rising costs of grocery, vegetables and other household expenses. The annual vacation to the native place near Bhubaneswar  during Durga Puja has to be abandoned this year. The EMI of the home loan has increased by 20% since last  year due to hike in interest rates by his bank .The school fees  for  the son Subodh and  daughter Malini has gone up by more than 18% this year. 

Fee Based Financial Planning

Fee Only Vs Commission Based Financial Planner

When deciding on choosing a financial planner, you should understand the difference between fee only financial planners and commission based financial planners. By definition, a fee only financial planner charges fees for their advice on financial plan. Unlike fee only financial planners, commission based financial planners earns from the financial products that you buy.

Why invest in Gold ?

Pravin and his wife Sudha are debating over the last one week whether they should buy token gold ornament this Diwali or they should invest in gold. They approached a Financial Planner and sought his advice. The Financial Planner enquired about their goal and ascertained that they want to save for the marriage of their daughter, Mitali who is 6 years old now. He analysed the asset allocation and found that percentage of gold is very low in their portfolio and recommended that they should hold at least 10% gold in their portfolio. On being asked about the reasons for investing in Gold, the Fee Only Certified Financial Planner reasoned the following factors favoring investing in gold for long-term.

Lessons from Citi Bank fraud

Fraud is defined as “Deceit, trickery or breach of confidence, perpetrated for profit or to gain some unfair or dishonest advantage.”Whereas misselling is defined as “Ethically questionable practice of a salesperson misrepresenting or misleading an investor about the characteristics of a product or service. In an effort to make a sale to a potential customer, a financial products salesperson could leave out certain information or describe a financial product as something the investor urgently needs, even though sound financial judgment would come to the opposite conclusion.”Indian Financial Services sector are replete with instances of fraud and misselling which occur time and again.

A family typically has various needs. A regular income & a house to live in alone is not enough.There are other needs like providing for good education & future needs to children, going for vacations and finally leading a financially secured retired life. The risk to the family arises when there are uncertainties in meeting any of the needs.Inflation, high cost of education, increase in longevity & consequent long retired life and high medicare expenses have added to the financial burden of the family. But how many ponder over what would happen to their family in case they pass away?  

Life insurance covers the risk of death; health insurance covers the risk of sickness; where as personal accident insurance covers the risk associated with accidents. If the life assured is seriously  injured in an accident and disabled either temporarily or permanently, he/she will not able to work and earn. To minimize the financial hardship of the life assured and his/her family members, the personal accident insurance provides the financial support. It’s an important component of insurance planning; hence personal accident insurance is very essential. Life insurance cover without personal accident cover is inadequate from risk management point of view.

Prasad ’s Financial Plan

Prasad (42) works with Indian Railways as an engineer and his spouse Subhra (35) is a home maker. Prasad has all along been posted in project areas away from urban centres. They have two daughters Vaishna (11) and Vaidehi(5).They are staying in their official  accommodation and have rented their owned  flat. Besides the  regular savings in EPF,PPF,NSC,KVP and Life Insurance policies, the  surplus income has been invested in landed properties. They do not have exposures in equities and mutual funds.

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