Financial Planning

Since both VPF (as part of EPF) and PPF have long-term maturity periods, these are best-suited to act as retirement planning tools If you choose to invest additional sums in debt instruments, how do you choose between the VPF (Voluntary Provident Fund) and PPF (Public Provident Fund)? So, even though all of us (or most of us) know that having exposure to equity via mutual funds is advisable for long-term investments, this article simply focuses on the debt side and tries to help pick between PPF and VPF for the long term. The VPF currently offers 8.65 per cent annually, while the PPF offers 7.9 per cent. So, on an as-is basis, the VPF wins over PPF. But would the VPF offers more than the PPF always? An analysis of the historical interest rates shows that the VPF almost always gives higher returns than the PPF. When it comes to returns, VPF is the clear winner. Putting returns in perspective But we should never focus on returns alone. It’s always advisable to asse...

                        The SSY is a very illiquid product and should be chosen only if it suits the investor’s actual objective of accumulating savings for the girl child’s future. As a parent, saving for your children’s future is a big responsibility. And many times, and understandably, people are willing to sacrifice retirement savings for their children’s future. If you have a young daughter, then you would have come across the Sukanya Samriddhi Yojana (SSY) many times. But is it a good option? And does it make sense for everyone who has a daughter to invest in the SSY? Small savings, higher returns Being part of government’s small savings schemes, the SSY often gets compared with products such as the PPF (public provident fund). The SSY does give higher returns, of 8.4 per cent, than PPF (7.9 per cent).But ‘higher returns’ alone shouldn’t sway your investment decision.The SSY has certain in-built restrict...

Financial planning should really be a couple’s priority as soon as they come home from their honeymoon. Marriage does not only change a couple’s financial situation but as well as their outlook on all things money-related. There will be new financial considerations to attend to such as buying property like a new house, planning for children, spending habits, saving and investments and more. It is very important for newly married couples to be on the same page so as not to make their marriage suffer when financial matters get out of hand. Here are five effective tips on financial planning that newly married couples can use: 1. DISCUSS YOUR CURRENT FINANCIAL SITUATION You cannot just assume that your spouse will take care of everything or that s/he will assist you on your existing loan (the one that you got while you were still single). It is important to sit down and discuss where you are in your finances currently. The discussion should include your collectiv...

                                              What’s your retirement Plan? Let’s play a small game. Pick the odd one out: Home Vacation Car Retirement Education Dream Wedding Could you figure the odd one out? It is retirement.  You can take a loan for everything else but retirement. Hence, planning for retirement should be on everyone’s top of mind. Starting to plan for retirement as early as possible is the best way as you don’t have to stress about investing a considerable sum of the money in the later part your life.   Everyone’s retirement plan and needs are different. The size of the retirement corpus will not just depend on how much you save and invest, but also how you want to spend after retirement. If you’re going to live a frugal life, you may need to accumulate less than someone who wants to pursue expensive hobbies...

In the Kurukshetra, the battlefield of the epic war of Mahabharat, Lord Krishna was the charioteer of Arjun. Krishna, a great warrior himself, and a king of a very large state had decided not to pick up any weapon, and hence he chose to control the chariot of Arjun. This role of a  sarathi , a charioteer, is a very important one. He reins in the horses – a potent force (aren’t machines known by their horsepower, after all?), and in our scriptures, our senses have been compared to wild horses. A  sarathi  is needed to rein in our senses, the wild horses. Just before the battle, when Arjun develops cold feet, he is overwhelmed by the emotions, the  sarathi  plays his role. Lord Krishna delivers the most powerful message in the form of the Bhagwad Geeta, to explain Arjun what his duty is and the rest, as they say, is history. This is arguably the most profound explanation about the role of a guide. Even Arjun, the best warrior of his times, needed ...

Are you chasing returns? Focus on goals instead Tell anyone that you invested in mutual funds, and the first question they are most likely to ask is how they are performing, i.e. what are the returns. Returns are the first and probably the last thing on many investor’s minds. Chasing Mutual Funds Return But chasing returns is not a healthy option. Investing in a fund because it tops the charts of one-year returns is a wrong way to look at investing in general. It is seen that many investors keep jumping from one fund to another based on one year’s returns. While they may presume that it will help them to build greater wealth, but in reality, it is detrimental to their financial health. Investors forget to take into account the cost and taxation associated with exiting from one fund and investing in another. Also, the ranking of top-performing funds keeps on changing regularly. Chasing Top-Performing Asset Class The scenario is not just limited to mutual fun...

ELSS Vs PPF which Tax saving instrument is Better  “….. But in this world, nothing can be said certain, except death & taxes.” said by Benjamin   Franklin.  While we can’t be clever with death, we can be smart with taxes & save our hard-earned   money. One can save tax by investing in various instruments such as Equity linked saving   schemes (ELSS), Public Provident Fund (PPF), National Pension Schemes (NPS), Tax   saving Fixed Deposit etc.  Out of this tax saving options, ELSS & PPF are most popular. Investment of up to Rs. 1.5   lakhs in a financial year in these two options among others qualify for tax deductions under   Section 80C of Income Tax Act 1961.  Have you invested in PPF or ELSS? In this article, we will compare these two tax saving   instruments which will help you to figure out the right one for you. ·       Lock in Period: Bo...