The Mahabharata, Investments and Lord Krishna

The Mahabharata, needless to say, is one of the greatest epics. Though essentially a narrative of a war between the Kauravas and the Pandavas, it is known to offer valuable lessons on life, relationship and success – the good and the bad; the virtuous and the vile.

One of the excerpts of which I clearly remember from Mahabharata is of Draupadi being dragged into the court room by her hair. Draupadi due to no mistake of her own was embarrassed and insulted.

If we look at the situation closely, Shakuni wasn’t the only one to be blamed. To give it a different perspective, the Pandavas were lured.  They did not assess the risk of losing out. Even Dharamraj Yudhisthir could not see the fallacies in the scheme.

The same applies to Investments

Investors are lured by the high returns offered by Ponzi schemes. They are so lost in their dream wins that they do not assess the risks involved in such investments. Even the most risk averse investors get lured seeing quick and easy money making schemes.

When Ponzi schemes are exposed, millions of Rupees are lost of innocent investors. Ponzi schemes are blamed. But my friend, Ponzi schemes exist because people get lured by easy and quick returns. They do not do a background check. They risk everything for nothing.

Risk comes from not knowing what you are doing.

This applies to every financial decision taken by you or financial products bought by you without assessing the requirements, risk appetite, benefits of product, cost of product, opportunity cost, etc.

For example, Buying endowment Insurance policies, crypto-curencies, tip-based trading, tip-based investment in equity, investing in random / top rated mutual fund schemes, investing without Goals, etc.

the great battle of Mahabharata

The Kauravas had the Ruling King, greater Army and most of the greatest warriors on their side. They had Shakuni as their Advisor.

The Pandavas and their Army were comparitively less in strength. They had just returned from Exile. However, this time, they had Lord “Krishna” as their advisor.

Krishna not only helped them to see the truth but also guided them to the right path by overcoming their emotions. He did not participate in the battle but helped the Pandavas to Win. Krishna was NIMIT (a medium) to their Success. This is the true Role of an Advisor, isn’t it?

In your investment journey, you will take many decisions. Some of these may not be beneficial / in your interest. Even with lesser resources you can Win great battles, when you have Krishna by your side.

Happy Janmashtami!

CA Nitesh Buddhadev
CA Mitsu Buddhadev
Nimit Wealth Management

You may reach out to us at info@nimitwealthmanagement.com for any queries, suggestions or feedback.

Subscribe to the blog series by entering your email id. Add info@nimitwealthmanagement.com to your contact list to avoid our updates landing in your spams.

 

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Thoughtful Thursday #09 Who Moved My Cheese?

In this series of Thoughtful Thursday , we have covered Importance of Insurance, Inflation, Financial planning,  Goal based planning, Difference between Savings and Investments. We hope that you all are enjoying our blogs and have subscribed to it.

When I meet some of my clients and they are skeptical about investing in new products  / financial markets, a glimpse of the book Who moved my Cheese? flashes in front of me.

The story is about four characters, 2 mice (Sniff and Scurry) and 2 little people (Hem and Haw) who look for Cheese every day. One day, they find that their regular stash of cheese is gone! The mice and little people respond very differently.

There are mainly 4 lessons one needs to take away from story. These lessons apply to our Investments too..

Take away 1 : Change happens

Just like we have moved from Landline to Smart phone, from hand written letters to e-mails and so on.. Our Investments also need to change. In the earlier days, investments in Gold, Silver, Fixed deposits, PPF etc. were considered as the best investments. Today, these assets do not make good investments. Let’s see the returns from 4 assets classes for the past 39 years.

Take away 2 : Anticipate change

Those who Anticipate change are likely more successful than others. Similarly, in our financial journey we should always be in the quest for knowing new things and anticipating changes. Those who invested in Equity in the earlier years have gained much more than others. Click here to see the value of Rs 100 invested in the Share market in 1979.

Current Value of Rs 100 invested in 1979 is 38690 (Aug 30, 2018).

Take away 3 : Monitor change

Be alert and keep sniffing your cheese to know when its getting old. Which in our financial journey means that we should keep checking the market and discussing with experts in the field about new products, opportunities, etc. and keep abreast with changes happening in the industry and economy. One should not fill it, shut it and forget it.

Take away 4 : Adapt to change quickly

If you are not one of those who could anticipate change, you could at least be the one to adapt quickly. Currently, the mutual fund penetration in India is only 11% whereas for developed countries its way higher.

As seen in the table above, India has a long way to go in mutual fund market and the earlier you enter the market, the better it is.

Currently in India there are only 2 crores Mutual Fund Investors out of the total population of 134 crores.

As Warren Buffet rightly said.. “What the wise do in the beginning, fools do in the end”

It’s Never too Late to Start..

CA Nitesh Buddhadev
CA Mitsu Buddhadev
Nimit Wealth Management

You may reach out to us at info@nimitwealthmanagement.com for any queries, suggestions or feedback.

Subscribe to the blog series by entering your email id. Add info@nimitwealthmanagement.com to your contact list to avoid our updates landing in your spams.

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Mutual Fund Recommendation for FY 2018-19

“Change is the only constant thing in this world”

From “Mutual Funds are subject to market risk” to “Mutual Fund Sahi hai” there have been many changes in last few months.

Before we see the list of short listed mutual funds one can invest in this FY 2018-19, one should be aware of the changes which have taken place in last few months.

(Read till the end, you will not be disappointed :))

Changes due to ‘Categorisation and Rationalisation of Mutual Fund Schemes initiative’ of SEBI)

SEBI has specified 36 categories of mutual fund schemes in total. As per the new rules, the AMCs will not be allowed to offer two schemes under different names with identical investment mandates. One category of mutual fund will be permitted to sell only one mutual fund scheme. As a result of this mandate, the fund houses have now realigned their schemes and portfolios to classify them under the newly formed categories.

Changes in brief

Scheme name

Earlier, the mutual fund scheme names consisted of words like “opportunities”, “advantage” and “prudence” to make it look seemingly lucrative. However, the investor was unable to gauge the inherent risk while making an investment. After passing of the regulation, many scheme names have been changed in order to enhance existing disclosure.

Classification of Schemes

After the recategorization, SEBI has specified the entire universe of mutual funds to be classified under these 5 categories i.e. Equity, Debt, Hybrid, Solution oriented and others

Modification of scheme attributes

This includes the investment mandate, the benchmark and the investment strategy of each mutual fund scheme.

Changes in the Definitions

After implementation of the regulation, large-cap stocks would be the top 100 companies of the underlying benchmark in terms of full market capitalization. Mid-caps would be companies ranking from 101st to 250th and small-caps would be companies ranking from 251st onwards in terms of full market capitalization.

We note above, that almost everything has changed and the first thought is :

The past performance of many schemes are now irrelevant and so are the Mutual Fund Star ratings offered by various websites

Yes! You read it right, Star rating and Ranking for many schemes are now irrelevant as :

  1. To fall in line with SEBI mandate many schemes have been merged
  2. Fundamental Attributes have changed like some Midcap schemes are now Multicap and  some of the Multicaps are now in Focused categories.

Generally, Mutual Fund Star rating and ranking should not be the criteria to Select the fund.

Schemes Sub categories & its characteristics

Equity Mutual Fund Schemes

Sub Categories

Scheme Characteristics
Multi cap Min 65% in across Large, Mid & Small cap companies
Large cap Min 80% in Large cap companies
Large & Mid cap Min 35% in Large cap companies & Min 35% in Midcap companies
Mid cap Min 65% in Mid cap companies
Small cap Min 65% in Small cap companies
Dividend Yield Min 65% in Equities investing predominantly in Dividend yield stocks
Value Min 65% in Equities which should follow value strategy
Contra Min 65% in Equities which should follow contrarian strategy
Focused Min 65% in Equities (Maximum 30 stocks). Focus can be on large cap Multi cap, Midcap or Small cap
Sectoral Min 80% in stocks of a particular sector
Thematic Min 80% in stocks of a particular theme
ELSS (Tax Saving) Min 80% in Equity and Equity related instrument

 

Debt Mutual Fund Schemes

Sub Categories

Scheme Characteristics
Overnight Investment in overnight securities having maturity of 1 day
Liquid Maturity of up to 91 days only
Ultra Short Term Macaulay duration of the portfolio is between 3 months ‐ 6 months
Low Duration Macaulay duration of the portfolio is between 6 months‐ 12 months
Money Market Maturity of up to 1 year
Short Duration Macaulay duration of the portfolio is between 1 year – 3 years
Medium Duration Macaulay duration of the portfolio is between 3 years – 4 years
Medium to Long Duration Macaulay duration of the portfolio is between 4 years – 7 years
Long Duration Fund Macaulay duration of the portfolio is greater than 7 years
Dynamic Bond Investment across duration
Corporate Bond Min 80% in invested in Corporate Bonds
Credit Risk Min 65% in invested in Corporate Bonds below highest rated instruments
Banking & PSU Min 80% in invested in Debt instruments of banks, Public Sector Undertakings, Public Financial Institutions
GILT Min 80% in invested in Gsecs across maturity
Gilt Fund with 10 year constant duration Min 80% in invested in Gsecs such that the Macaulay duration of the portfolio is equal to 10 years
Floater Fund Min 65% in invested in Floating rate instruments

 

Hybrid Mutual Fund Schemes

Sub Categories

Scheme Characteristics
Conservative Hybrid 10 ‐ 25% in Equity related instruments & 75 to 90% in Debt instruments
Balance Hybrid 40 ‐ 60% in Equity related instruments & 40 to 60% in Debt instruments
Aggressive Hybrid 65 ‐ 80% in Equity related instruments & 20 to 35% in Debt instruments
Dynamic Asset Allocation/ Balanced Advantage Investment in equity/ debt that is managed dynamically
Multi Asset Allocation Min 10% investment in atleast 3 asset classes
Arbitrage Fund Min 65% in Equity related instruments which should follow Arbitrage strategy
Equity Savings Min 65% in Equity related instruments & Min 10% in Debt instruments

 

Solution Oriented Mutual Fund Schemes

Sub Categories

Scheme Characteristics
Retirement Fund Scheme having a lock‐in for at least 5 years or till retirement age whichever is earlier
Children’s Fund Scheme having a lock‐in for at least 5 years or till the child attains age of majority whichever is earlier

 

Other Mutual Fund Schemes

Sub Categories

 

Scheme Characteristics
Index Funds/ ETFs Min 95% in stocks of a particular Index
FoFs (Overseas/ Domestic) Min 95% in the underlying Fund

 

Do you still believe Selecting Mutual Fund schemes is simple? 😉

It’s not rocket science however, its not that easy to zero down on the specific scheme suitable to your requirements out of the thousands of Mutual Fund schemes available in the Market.

Have you come across any one who got super rich by Investing in some random 5 star or top ranking Mutual Funds or trading / investing in tip based Equity shares..??

Do you know what is Risk..?

“Risk comes from not knowing what you are doing”

You are investing your hard earned Money, please take informed investing decisions.

Coming to the subject of the Article…

Here is the list of…

Top performing Mutual Fund in India (It may stop performing anytime! Past performance does not Guarantee Future Performance)

Best Mutual Fund to invest in 2018 (There is nothing called Best in Personal Finance)

5 Star rated Mutual Mutual Fund  (Star Changes more frequent than you think, Don’t follow it blindly)

 

Shortlisted Mutual Funds to invest in FY 2018-19 by NIMIT Wealth Management 🙂 (July – Aug 2018)

(Well Researched. However, it may contain some Top rated, Best Mutual Funds or 5 star rated funds)

 

Equity – Large Cap

1) ABSL Focused Equity Fund  (Erstwhile ABSL Top 100 Fund)
2) Motilal Focused 25 fund       (Erstwhile Motilal most focused 25 fund)
3) SBI Bluechip Fund

 

Equity – Large & Mid Cap

1) DSPBR Equity Opportunities Fund        (Erstwhile DSPBR Opportunities)
2) Mirae asset Emerging Blue Chip Fund  (Earlier it was midcap scheme )

 

Equity – Multi Cap

1) ABSL Equity Fund
2) Franklin India Focused Equity   (Erstwhile Franklin India high growth co’s)
3) Kotak Standard Multicap Fund  (Erstwhile Kotak Select Focus Fund)
4) Motilal oswal Multicap 35 Fund (Erstwhile Motilal most focused multicap 35)
5) SBI Magnum Multicap Fund

 

Equity – Mid Cap

1) Franklin India Prima Fund
2) HDFC Midcap Opportunities Fund
3) L&T Midcap Fund

 

Equity – Small Cap

1) ABSL Small Cap Fund (Erstwhile ABSL Small & midcap Fund)
2) Franklin India smaller companies fund
3) Reliance small cap fund
4) SBI Small cap Fund

 

Equity – Value Oriented

1) ABSL pure value fund
2) HDFC Capital Builder value fund
3) L&T India Value Fund
4) Tata Equity PE Fund

 

Equity – ELSS (Tax Saving)

1) ABSL Tax relief’96 Fund
2) Axis Long term Equity Fund
3) DSPBR Tax Saver Fund
4) Franklin India Tax Shield
5) L&T Tax Advantage Fund
6) Reliance Tax Saver Fund

 

Hybrid – Aggressive (Equity Oriented)

1) ABSL Equity Hybrid ’95 Fund (Erstwhile ABSL Balanced ’95 Fund)
2) DSPBR Equity & Bond Fund (Erstwhile DSPBR Balanced)
3) HDFC Hybrid Equity Fund (Erstwhile HDFC premier multicap & HDFC Balanced)
3) L&T Hybrid Equity Fund (Erstwhile L & T India prudence fund)
4) Reliance Equity Hybrid Fund (Erstwhile Reliance Regular Savings Balanced)

 

Hybrid – Equity Savings

1) ABSL Equity Savings
2) HDFC Equity Savings Fund
3) L&T Equity Savings Fund

 

Hybrid – Dynamic Asset Allocation/ Balanced Advantage

1) ABSL Balanced Advantage Fund
2) ICICI Balanced Advantage Fund

 

Subscribe to our blogs and stay updated with Personal Finance & Investment articles.

PLEASE READ THIS :
  • Asset Allocation is a MUST.
  • Above is just a list of Shortlisted Funds based on our internal research.
  • Selecting scheme of Mutual Fund is only half job done. How much amount to Invest in which Scheme is very crucial.
  • Investment decisions depend upon your Goals, Investment horizon, Risk profile, Existing Investments and various other factors.
  • Investing is a Serious Business, Don’t do it randomly.
  • Review periodically & Rebalance as and when required.
  • Have a reasonable expectation of Returns on your portfolio. Over Expectations hurt!
  • When you invest in Equity, give it time to perform atleast that much as you give your Gold and Real Estate. 🙂
  • If required, Take help of Financial Advisor to achive your Financial Goals (Even Virat Kohli and Lionel Messi have coaches to guide them)

 

CA Nitesh Buddhadev

CA Mitsu Buddhadev

Nimit Wealth Management

You may reach out to us at info@nimitwealthmanagement.com for any queries, suggestions or feedback.

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Thoughtful Thursday #06 – Are you KYG (Know Your Goal) Compliant..?

As you all are aware, without KYC you cannot start your investment. I wish it was equally mandatory to have KYG (Know Your Goals) !

As we believe,  “People Don’t plan to fail but They Fail to plan..”

Everyone has their own list of Goals such as vacations, child’s education, child’s marriage, a bigger house, a holiday home, a dream car, a peaceful retirement, etc. All of these Goals, have a financial implication. To accomplish these, we either take a loan or make an investment or a combination of both.

Generally, following are the Goals as per human life cycle.

Definition of SMART Goals

Lets make it more Simple. Ask yourself following 4 questions for SMART Goal setting.

We will see one example of setting a SMART Goal.

Say, Mr. Kapoor has a daughter aged 3 years. One of the Goals he is considering in the Financial Plan is Child’s Education.

Goal Details Post Graduation
Fund Required at Today’s Cost  Rs 15,00,000
Child’s Age will be 21 years
Goal Year 2036
Inflation
(Education Inflation is considered @10% based on data available)
10%
Future Value (Corpus Required in 2036)  Rs 83,50,000

YES! You read it right, Rs 15,00,000 Today will cost you approx Rs 83,50,000 in 2036.

So, if the Goals are not appropriately set we may have to use our Retirement Corpus or other investments for this Goal and I am sure no one will allow their child’s education to suffer because of lack of funds. But what we will compromise here as our Retirement Corpus will also impact us in Future. So take caution in setting Financial Goals.

The SMART Goal here in the example is : Mr. Kapoor requires Rs 83,50,000 in 2036 for his daughter’s  Post Graduation. Now, Mr. Kapoor has 3 choices to achieve this Goal:

Particulars % in CAGR*
7% 10% 12%
Monthly Investment Required                  19,400               13,900                  11,000
OR
Invest Lumpsum             23,95,000             14,11,000               9,94,000

*Compunded Annual Growth Rate

This is one of the many Goals Mr. Kapoor will consider as a part of his Financial Plan.

Guys, Please Remember, its Personal Finance, always personalise it. Define your own Goals and get a customised Financial Plan for yourself. What may be applicable to one person may not be applicable to another.

We will help you to set your Financial Goals and Develop a customised Financial Plan for yourself. For more details contact us at info@nimitwealthmanagement.com

CA Nitesh Buddhadev

CA Mitsu Buddhadev

NIMIT Wealth Management

You may reach out to us at info@nimitwealthmanagement.com for any queries, suggestions or feedback.

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Thoughtful Thursday #02 The Other Side of Nomination – You Must Know..

In the last blog we discussed about Insurance. But generating assets and buying Insurance won’t be sufficient to protect your loved ones. One of the most important part is here is “Estate Planning“.

Estate Planning

Your estate is the combination of everything you own — your home and other real estate, current and savings accounts, investments, life insurance, car, furniture, personal possessions and so on. Estate planning fulfills your wishes by making a detailed plan of the division of your estate in advance (who, what, when, how and how much), amongst the ones you want to give after your demise.

  • It protects your assets from going into the hands of unintended beneficiaries like your relatives
  • Protects families with young children who are not ready to take the ownership
  • Eliminates the family mess after your demise.

However, estate planning is much more than just physical assets and also includes:

  • Name of the guardian and inheritance manager for minor children
  • Instructions for your care if you become disabled before you die
  • Protection of the loved ones during unexpected and unfortunate events of their lives
  • Minimize taxes, court costs and unnecessary legal fees

Most Indian Families don’t believe in Estate Planning. A few people also have a myth that doing a nomination would suffice. However, that is not true.

Nominee

A nominee acts like a Trustee. The Insurance company, Mutual fund or your Shares will be passed on to the Nominee, someone you trust, who can further help, in process of passing it to your legal heirs.

Otherwise, the legal heirs will have to go through the process of producing all kind of certificates like death certificate, proof of relation etc., The whole process is really cumbersome! So, to simplify, if a nominee exists, these hassles do not happen, since the company is bound to transfer all your money or assets to the nominee.

The company then goes out of scene & then, it is between nominee and legal heirs.

  • Generally, people have a notion that my spouse is a nominee and hence all assets will flow to him/her and I do not need to worry. Unfortunately, this is not true. As discussed above a Nominee is trustee. Though all assets will be transferred to your spouse, as per Hindu Succession Act – your siblings, parents, children can claim their share of assets from your pool of assets.
  • According to law, a nominee is a trustee, not the owner of the assets and will be legally bound to transfer it to the legal heirs.

 

Importance of Will

For most investments, a legal heir is entitled to the deceased’s assets.

A legal heir will be the one who is mentioned in the Will.

However, if a will is not made, then the legal heirs of the assets are decided according to the succession laws, where the structure is predefined on who gets how much. The succession laws are quite complicated and no one would want their families to go through lawyers and courts for the assets of their beloved deceased family members.

  • Nominee can also be one of the legal heirs. Nominee can be changed at anytime by informing the company concerned.
  • If the nominee is a minor, appoint adult as an appointee giving his full name, age, address and relationship to the nominee.
  • An investor has the option to register more than one nominee & specify the percentage of amount for each nominee. However, if the percentage is not specified, equal shares will go to each nominee.

 

General Rules of Nomination

  1. Nomination in Life Insurance

Nomination is a right conferred on the holder of a Policy of Life Assurance on his own life to appoint a person/s to receive policy moneys in the event of the policy becoming a claim by the assured’s death. The Nominee does not get any other benefit except to receive the policy moneys on the death of the Policy Holder.

Insurance (Amendment) Act 2015 has created a ‘beneficial nominee’ category which includes only close relatives of policyholders. Now if policyholder nominates his father, mother, spouse or children in an insurance policy, they become beneficial owners of claim proceeds.

2. Nomination in Employees Provident Fund (EPF)

In case of EPF also nominee is the person who will inherit the fund and not legal heir. As per rules, in EPF account one has to appoint his family member as nominee.

3. Nomination in Shares

Under the provisions of the Companies Act and the Depositories Act, Acts which govern the transfer of shares, the role of a nominee was different.

Reading of Section 109(A) of the Companies Act and 9.11 of the Depositories Act makes it abundantly clear that the intent of the nomination is to vest the property in the shares which includes the ownership rights there under in the nominee upon nomination validly made as per the procedure prescribed.

It means that if you have not written a will, anyone who has been nominated by you for your shares will be the ultimate owner of those stocks. The succession laws on inheritance will not be applicable but, in case, you have made a will, that will be the source of truth.

4. Nomination in Mutual Funds

Here nominee is a Trustee. While filling in the application form, there is a provision to fill in the nomination details.

You can also change nomination later by filling up a form which is available on the mutual fund company website.

Nomination in mutual funds is at folio level and all units in the folio will be transferred to the nominee(s).

If an investor makes a further investment in the same folio, the nomination is applicable to the new units also.

5. Nomination in Bank accounts and other investments

Section 45-ZA (2) (Banking Regulation Act) merely puts the nominee in the shoes of the depositor after his death and clothes him with the exclusive right to receive the money lying in the Account.

 

So next time, you get a mail from bank/ financial institution for updating Nominee.. Take Action.

 

CA Mitsu Buddhadev

CA Nitesh Buddhadev

Nimit Wealth Management

For feedback or suggestions, you may reach out to us at info@nimitwealthmanagement.com

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Busted! 7 Personal Finance Myths That Have No Truth to Them

“Humans live through their myths and only endure their realities..”

WHAT IS MYTH..?
A traditional story, especially one concerning the early history of a people or explaining a natural or social phenomenon, and typically involving supernatural beings or events (This is what Dictionary speaks)
In short MYTH means a widely held but false Belief or Idea..
 
Many MYTHS prevail in society and the topic of “Personal Finance” is no exception.
Below are a few MYTHS on Personal Finance and the REALITY..

 

Myth 1 :
Financial Planning or investment planning means less spending i.e. becoming miser and hence less enjoying our life.
Reality :
Following a financial plan or investment plan means making guilt free spending and hence enjoying our life more.
[ When we first make necessary investments and then spend… then that is called ‘guilt free spending’.]

 

Myth 2 :
Paying premium for term insurance (a life insurance policy where if nothing happens to policy holder, nominee gets nothing) is a wasteful spending.
Reality :
If we live up to the age of 65 years, then Investment [MF, Shares etc] will take care of our family’s financial future. And if not, then TERM PLAN will.
Insurance is not an investment product; it is a protection instrument.
Buying a Term Insurance is like buying a Fire Extinguisher.
1. You wish that you will Never have to use it.
2. You don’t ask for a refund when it expires.
3. If need be it will save you and your family in time of difficulty.

 

Myth 3 :
There are many investment products available in the market – some are good and some are bad. We should always invest in good products.
Reality :
An investment product can never be good or bad, it can only be suitable or not.
Some investment products can be suitable for short-term goals, but not for long term. The opposite is also true – a product which is perfectly suitable for long term goals, can be a horrible choice for short term goals.
Hence we must always look for ‘suitability match’ when deciding on a product.
Myth 4 :
Like shares, fixed deposit, property or gold – mutual fund is also an asset class.
Reality :
Mutual fund is not a separate asset class as such. It is actually a ‘well-managed container’ which can contain different asset classes in it.
There are mutual funds which only invests into certificates of deposit. Then there are funds which are known as real estate fund or gold fund. And of course there are equity funds as well and mix of Equity and debt i.e Balanced Fund.
So, mutual fund gives you the facility to invest into different asset classes through it.

 

Myth 5 :
If I want to secure my retirement, I should invest in a Retirement Plan or Pension Scheme. Similarly if I want to secure my child’s future, I should invest in a Child Plan.
Reality :
While investing for a goal, name of the goal is never important. Instead nature of the goal is important – like after how many years the goal is due etc. This is because –  mathematics only understand numbers, not names.
Never go for attractively named investment products. Instead always go for simple, generic, all-purpose products and tag it or link it to a goal by yourself.
Packaged investment products are often found costly, illiquid and restrictive..

 

Myth 6 :
If I come to know of someone who has earned good return by investing in a particular product – my job becomes easier. I should simply invest in that product.
Reality :
Unfortunately it is not that simple. Many things (in regards to finance) of the other person may not be same as yours. Such as – financial background, current assets and liabilities, dependents and their age, income – expense, nature of job / business, liquidity needs, insurance and so on. It is almost impossible that your situation will be exactly same as of the other person.
Investment should always be made keeping every aspects in mind. It should never be made in isolation or adhoc. Personal finance is after all – ‘personal’.

 

Myth 7 :
I have made investments as required. Taken adequate insurance also. I have done my part. Now I am feeling happy and relaxed.
Reality :
Congratulations for whatever you have done so far! But sorry to say – that is not enough. If your answers to all the below 3 questions are not ‘Yes’, then you have reasons to worry:
1) Have you kept all your policy documents, statements, certificates – physical or digital – systematically  in one place so that your spouse or children can find those quickly without your help?
2) Have you kept right holding patterns in all your investments, made nominations or prepared a Will?
3) Are you reviewing your investments and insurance at regular interval..?

 

Compiled and Edited by
CA Nitesh Buddhadev – NB
Nimit Wealth Management
nitesh@nimitwealthmanagement.com
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