SET UP AN EMERGENCY FUND - VERY IMPORTANT

If you had to come up with a lakh in 24 hours, because of some emergency, could you do it?

Here’s an action plan that will make sure you’re not left hanging if such a situation does come up.

How much is enough?

Usually, it is best to save up 6-months’ worth of your expenses as your emergency fund. If you don't track expenses - make this number 4 months of your take home salary. A large round defined number, such as Rs. 1 lakh is a good target too.

How do you go about doing it?

If you are saving up for a lakh, set aside Rs. 8,000 every month for a year (12-months x 8,000 = Rs. 96,000). This will typically be 20-30% of your salary. If your salary is lower, don't worry. Even if you save just half, viz. Rs. 4,000 every month, you will take at most 2 years to reach your goal amount.

Where to keep it?

Don't leave this money in your savings account where you could accidentally spend it. Move it out of your savings account into an RD or, even better, into a debt mutual fund. This will help you get to your goal even faster, with earnings from your investment.

Keep in mind that instant liquidity is the need of the hour in any emergency situation. There are specific debt mutual funds that also provide you with an instant withdrawal, and sometimes even a debit card for you to withdraw your money at any time. After all, emergencies can strike anytime.

Keep it safe!

Try not to touch this SOS fund for any reason other than an actual emergency. This will be your parachute - and a parachute must be intact to be useful.

Note: The latest fashion accessory is NOT and emergency :)

Start creating your emergency fund now. Set a target amount and start saving up for it.

Financial Freedom For Women

Financial Freedom For Women

Men and women have been created as equals and have equal rights. Unfortunately, for most of us, the financial and social status of women in India comes second to men. The women around us - be it daughters, sisters, mothers or our better halves, have a special place in our hearts and our lives. But many of them are likely to "not" be financially sound, literate or independent.

In today's world, where society is undergoing a big change, women continue to be most prone to financial crisis and are financially most vulnerable. We believe that it is very essential for women to be financially literate and independent, for many reasons like...

The average life of a woman is more than the average life of a man.There is a growing number of single women. This may occur anytime due to career choices, divorce or death / disability of husbands.In absence of earning male members, females often carry the burden of the family.

The work life of women is less than men because of various reasons like raising a child, family problems, health issues, etc. Generally women also receive less pay than men.

Women are more likely to come under pressure /influence of others in financial and inheritance matters.Financially literate and independent women can be of great support and financial help to their families, especially husbands. Women have been known to be smart savers and money managers at home.

One needs to look at the numerous examples before judging women as not being smart enough to handle financial matters. A financially independent woman can today support herself and her family with income. Such a person would have good control over finances and would attempt to shape the financial future for the betterment of all.

Most women are totally dependent on their husbands and families, not only for their day to day expenses but also for their financial future. Women generally don't have any clue about their family finances and are left totally dumbfounded in case of an emergency. Irrespective of how much money is the father or husband making, you are never fully financially independent without your own money. Being economically independent will boost your confidence, taking decisions for yourself, will increase your risk taking ability. You can satisfy your whims with your own money and might be the bread earner for your family in times of need.

Women generally have a different work life than men. Some are freelancing or working part-time or the hours of work are lesser or are more prone to taking leaves and sabbaticals. All these head to small savings for women. Clary Boothe Luce said "A women's best protection is a little money of her own". However, if not properly managed and directed into the right investment channels, these hard earned small savings will be futile.

What to do?
Proper savings and investments can help you become financially independent over time, even if you are not earning. The following are the steps that one should take...

Learn about money: Never feel shy or hesitant to learn more about money - savings, investments, investment products, mutual funds, etc. In case your family is not supportive, you can always reason with them. It is better to know about the financial holdings /assets /insurance policies and bank/demat accounts in your family to be ready for any emergency.

Be Active: The idea is to get more engaged in financial matters of your family, with the support of your spouse. Open your own bank account or have a joint account with your husband. You can also have your own credit card / debit cards for managing your regular expenses. Also start a demat & trading account with which you can make your investments.

Get Covered: Most often we find that the women, not having financial earnings are neglected when it comes to insurance coverages. This is a wrong perspective to adopt as every girl /woman has to be adequately covered with insurance.

Start Saving: The first step is to start saving and then investing those savings. The easiest way to save for long term wealth creation is by starting an equity mutual fund SIP. You can start with a very small amount, say R500 every month. Invest small savings in mutual funds through SIP and see your savings grow. You can also increase the amount of the SIP with the increase in your savings / income. Plan for your goals: You may have many short-term or long-term financial goals. Try to invest for your goals through mutual funds which offer different types of funds which will easily match your investment objectives and horizon. The investment horizon can range from few days to double digit years.

Old Age: A regular inflow of funds or a huge corpus is necessary for your maintenance in your old age. Just imagine being at the mercy of your son /daughter-in-law in future in absence of your husband. We don't even want to imagine that! No matter how much you love your family and children, you should not leave to fate what you can prepare for your tomorrow by investing smartly.

Emergencies: As the pillar of your family, women are likely to find themselves in emergency situations like accident, ill-health, loss of income, etc. of their husband or other family members. Having some money saved for emergency can prove to be be immensely helpful and you would not be forced to beg for money from others. Keep aside some liquid investments for emergencies only.

Conclusion:
Every person has an equal right to dignity, respect, freedom to pursue own dreams and independence, including financial independence. Financial independence and empowerment of women can not only bring great benefits to a family but also to the entire community and country at large. Let us work towards ensuring this, beginning first at home.

Nurture Investments
Rajiv Kapoor FCS
Kanpur
98390-34761

PRIORITISE TAX PLANNING

Few more days to go when the current financial year would end. Sensex is depressed right now. For those who do not follow investment discipline of SIP it's right time to consider investing in ELSS Funds to save tax under section 80C. It would go a long way if one can look at his tax planning as an opportunity of investing.

Prioritise Tax Planning

Tax planning is more than Section 80C. It is more than fixed income instruments such as the Public Provident Fund, or PPF, and the National Savings Certificate, or NSC.

Good tax management can go a long way toward enhancing your return. But, the decision needs to be made in conjunction with your overall portfolio and not in an ad-hoc fashion. For instance, if you have no equity exposure in your portfolio, you should consider an equity linked savings scheme, or ELSS, which is an equity mutual fund that offers benefits under Section 80C. Most investors, in a crazy dash to meet their Section 80C requirement, will opt for unit linked insurance plans, or ULIPs, and endowment plans and often end up with a portfolio heavy with insurance products that do not suit their need.

Most individuals rarely think about tax planning from an investment point of view. Hence one finds that they do not approach an investment with a perspective of whether or not it fits in with their overall portfolio. The approach is often just grabbing up investments that will give them the tax break, irrespective of whether or not it will help them reach their determined financial goals or fit into an overall investment strategy.

Tax planning investments are no different from conventional investments. Hence, it is imperative to obtain an in-depth understanding of all investment avenues available which offer tax benefits and choose suitable ones that will help save tax and achieve goals.

It's right time NOW.

Rajiv Kapoor
FCS
98390-34761

YOUR FIRST MUTUAL FUND INVESTMENT

Useful, simple to understand and easy to execute. Those should be the qualities that your first fund investments should have.

For beginners, these requirements are generally best satisfied by tax-saving funds or balanced funds. Here's why. When you start investing in mutual funds, it makes sense to invest in a fund that invests mostly in equity. The reason for this is that you are likely to have no equity investments at all. Investors at an early stage of their investing life generally have bank deposits, PPF and other fixed-income investments. Since equity is the best form of long-term investment, and mutual funds the easiest and safest way to invest in equity, it follows that the type of fund you choose must be an equity fund. There are two types of funds that are uniquely suitable as beginners' funds. These are Tax-Saving Funds and Balanced Funds.

Tax Savings Funds: Tax saving funds are also called ELSS funds as their formal name in the tax law is Equity-Linked Savings Scheme. They are basically all-equity funds, investments in which are eligible for tax exemptions under Section 80C of the Income Tax Act. Under Section 80C, you can invest up to R1.5 lakh in a set of investments, one of which is ELSS funds. Since they are equity funds, one should invest in them for long-term. This long-term imperative is compulsorily enforced because under the tax laws, investments made into these funds are locked in for at least three years. Because of this lock-in, investors tend to have a good experience of getting reasonable returns from these funds. Moreover, the tax-break acts as a natural boost to returns.

Balanced Funds: Balanced funds, also called hybrid funds combine equity and debt investments in a certain ratio. In order to maintain this ratio, the fund manager will typically disinvest from holdings that have gained more and invest in holdings that have gained less. This, of course, is asset rebalancing.

Effectively, the gains that are made in equity are protected by debt. The great advantage of balanced funds is that they are inherently safer than pure equity funds. They gain well when the markets gain but when the markets fall, they fall less sharply, thus protecting the gains that were made in the good times.

RAJIV KAPOOR
FCS
9839034761
rajivfcs@gmail.com

6 Money Mantras for 2017

Money isn’t everything but everything needs money. With a lot of aspiration and hopes, we have entered in 2017. You must be looking for good Money Mantras to elevate your financial life. I am here with 6 Money Mantras for 2017. 

I am sure that these money mantras will defiantly improve your financial life in 2017.

6 Money Mantras for 2017

1. I will Plan for Income tax saving in advance

Every year we rush at last minute to save tax and end up making bad investments. This year take a pledge that you will start income tax planning exercise in advance. Advance tax planning will surely help you in taking an informed decision.

2. I will establish the second source of Income this year

The next money mantra of 2017 never depends on the single source of income try to generate a second source of Income. Distributed income source always helps you to reduce a risk. Start with part time online or offline business to establish the second source of income.

3. I will save more money for future

Money saves the money saver keeping this thought in mind the next mantra is saving more money for the future. You should challenge yourself by throttling your saving level.

4. I will adopt a rule of pay myself first

If you want to be rich adopt a rule to pay yourself first. This means before you spend any money on groceries, entertainment or household expense allocate an amount for yourself into your saving.

5. I will maintain discipline while making investment

The next money mantra for 2017 is maintaining a discipline while making an investment. The best way of maintaining discipline is SIP. You should atomize your investment via SIP route.

6. I will assess my portfolio regularly and make changes as per requirement

The last money mantra for 2017 is regularly reviewing your investment portfolio and making changes as per requirement.

Rajiv Kapoor
B.Sc, LLb, FCS
9839034761
rajivfcs@gmail.com
rajivfcs.blogspot.in

3 Stages Of Retirement

The 3 Stages Of Retirement

Have you thought about and tried answering these questions?

What will I do after retirement?

Do I have enough money to take care of my retirement?

How will I maintain the same lifestyle once I stop getting regular income?

Retirement is an important aspect of life. With increasing longevity, one cannot stress enough that one has to plan finances for it so that life goes on comfortably.

3 Stages of your Retirement
Retirement can be divided into three phases and the financials are a little different for each of the phases. Let us look at the three phases and how we should manage our personal finance for it –


Active Retirement Phase
This is the phase when you have just entered retirement. You have just retired. You had a regular income which has stopped now but you might have got funds in terms of gratuity, superannuation fund etc.

If you were in a business, you might have cashed out your share. You might have looked forward for retirement so that you have time for yourself, your loved ones and your interests.

This is the time when you can invest time and energy in these aspects of life. You might be starting on or looking for another phase employment or income stream or a business.

You should ensure that you know how much you need to fund your retirement and how much you have accumulated. You should revisit your investment portfolio and tweak it to match the current financial situation.

You might have to reduce some of your aggressive investments and increase allocation in conservative investment options.

You will not have employer insurance and ensure there is arrangement for the same. Check if you have about 6 months of living expenses as cash in hand and cash in bank which can cover emergencies.

Your spending will increase in areas such as medical expenses, hobbies and travel. It can decrease in areas of commute, taxes and office wear. If you have not drafted your WILL yet, it is a good time to do so.

It is better to go for a medical checkup to assess your health and take the necessary precautions. This will help in not being caught off guard on the health front which can cause imbalance in the personal finances.


Slow Go Retirement Phase
This is the second phase of retirement wherein you are used to your retired lifestyle.
Your children might have got married, settled in different homes and cities. You will find a pattern for your daily life that keeps you comfortable and secure. It is important to keep yourself mentally and physically active.

There might be some physical limitations as you are ageing.
Your medical expenditure might rise. Expenses like home renovation, tax payments and financial support for children will reduce.

It will be better if your investment portfolio is more conservative as at this stage in life compared to the earlier stages as your financial losses will have too much of a negative impact to bear or you will take a long time to recover the lost money. Check your will and make changes if necessary at this stage.


Inactive Retirement Phase
In the last stage of retirement, you slow down your activities. You might need support in terms of finances, physical health or psychological health.

You may not be earning too much at this stage. It is important to manage the funds in a manner that takes care of your basic necessities, your comfort and your medical expenditure.


There are non-financial aspects of retirement too that one has to prepare for.

Prepare psychologically – You have to prepare yourself to be at home post retirement. Your life will be less busy. You may not get as many phone calls and emails as you were getting when you were working.

How to keep busy and active – Decide on some hobbies and interests that you want to pursue post retirement. After retirement, ensure you have some activities so that you can be mentally and physically active and life would be more enjoyable.

Family should be ready – You and your family members should be prepared to spend more time together if you are going to be at home.

Identity – You would have always be know as ‘Director of Operations’ or ‘Professor’. But now it will be different. You should be prepared to lead a life outside your profession.

Retirement is an important phase of life and retirement planning should not be neglected.

It is good to be aware of the different stages in retirement and have some plan to manage finances for each stage.