An Interesting Data !!!

An interesting perspective, I received this on my WhatsApp last week….
US By 1999, 49% of Americans Owned Equities, this Percentage was just 3% in 1980. These  20 years was also the Time when Warren buffet, Paul Tudor Jones, George Soros were Created.
In 2017 only 3% Indian owns Equities..
In 1979, the BSE Index was 100
Today it is over 33,000
That is a return of over 17% per annum.
If we were to add back dividends received and assume that they were to be reinvested in the BSE-30 Index, then the return is nearly 20% per annum
Over the past 37 years, the Indian economy has grown by a real rate of GDP of 6.3% on average, 
Inflation, as measured by the CPI, has been in the 8% range
Add the two together and you get 6.3% + 8% = 14.3%
Let’s round that down to 14%
This is the approximate rate of growth of activity in the overall economy, taking into account the level of prices of various goods and services at that point in time. This is also called the nominal rate of growth in GDP.
So, the economy grew by 14% per annum for the past 37 years and the BSE-30 Index grew by 20% per annum. 
Now if, over the next 33 years, the Indian economy is to grow by, say, 6% per annum and inflation is to be, say, 5% per annum then the nominal rate of GDP for the next 33 years will be = 6% + 5% = 11%.
 If a 14% nominal rate of growth in the economy between 1980 and now resulted in a 20% average per annum growth in the Index over the past 37 years, then what should a 11% per annum growth in nominal GDP result in over the next 33 years – till the year 2050?
Sensex 4,076,470 doesn’t seem extraordinary now, does it?
“If the bull market journey is from Mumbai to Delhi, we have probably reached only Borivali” –
Rakesh Jhunjhunwala

From where to Start ???

From the couple of months I was worrying to change the look of my blog. I was planning to give awesome experience to all visitors of my blog. Thanks to my new vendor for his wonderful job but my job of writing awesome articles has been stopped for couple of month between this shifting. Well today I’m feeling relaxed and want to start my job again with one short article which will guide you and give you some awesome experience.

From where to start ???

The answer of this small question might be challenging for new investors with worrying and thinking for their future, same problem I’m facing today to write this article. Ha ha ha ha…..

There’s no secret formula for where to start your investment journey but some basic steps will help you to start and will guide you to create wealth in future.

Bill Gates once said, “Television is not real life. In real life, people actually have to leave the coffee shop and go to jobs.” The majority of people fail to achieve their financial goals because they waste their time and energy chasing rainbows, seeking shortcuts, and hoping for good fortune. Wealth builders take action to change their future by expanding their capabilities, gaining new experience, and pursuing new challenges.

How you can do this ?

Knowledge and Discipline Investing requires a series of reading in an ever-changing world of investment and finance. Each choice has an element of risk that all or a portion of the investment will be lost, will return less than expected, or will return less than other investments that might have otherwise been chosen. Learning when to hold ’em or fold ’em is the skill every successful investor must learn, sometimes at significant cost. For discipline you have better option of SIP, just follow it. You don’t have to do anything for become disciplined investor.

Keep It Simple – Keep your financial life simple, don’t make it complex because simplicity will make your life awesome. I always call SIP (Simple Investment Plan) because it is much simple than any financial products. So one can start his financial journey with getting good knowledge and keeping it simple. If you think there’s much knowledge is available on internet, I’ll say only getting good knowledge won’t make you smart investor. So conclusion is ACTION, start taking action is necessary in your life.

Money Lessons must to follow in year 2015

Just one week to go in year 2014 and everyone is ready to warm welcome year 2015. Every year we learn some lesson from our life experience and we try to improve it. Today I want to share some of my experiences what I learnt from my life, out of these some you may read it or some you may hear it. But I think it will surely help to build your financial life in better way in coming year.

Lesson #1

“Do not depend on single income. Create a second/third source of income”

Small start of second income will surely help you, so commit to start it. Every person has some skill with the help of it, you can start it. Share your special skill with the world and slowly it will convert in to income steadily. First things you have to search that skill in YOURSELF and make it your project of creating income for the year 2015.

Lesson #2

“Hold the vision of wealth creation”

Do not hold personal finance with worry; hold it with vision of wealth creation. Holding such a bigger vision can help you to create a better wealth in your financial life. Take this lesson very sincerely will give you direction in your life. As an investor if you want to live awesome life convert this lesson in to project of wealth creation for coming year 2015.

Lesson #3

“Read good personal finance book”

I strongly recommended you to start reading books because my own experience says books are great way to learn new stuff and ideas. “Good books, like good friends, are few and chosen; the more select, the more enjoyable” One book every investor must read 11principle to achieve financial freedom. It will surely change your relationship with money. You should make small library at your home and can start working on this lesson very soon.

Lesson #4
“Make new friends and help them”
I can say helping people to manage their MONEY is my true job as an advisor. But I learnt lot of stuff from making new advisor friends. I have many advisor friends with whom we share ideas with each other. As an investor you can share knowledge with your friends like helping to surrender traditional insurance plan and take term plan. You will also gain knowledge indirectly during this process. If you’ve surrounded yourself with good friends, they’ll remind you of your goals. I think this is best lesson to work in action in coming year.

Lesson #5
“Pay your outstanding”
This lesson written in last by me but it is first step to take in action by you. If you have any outstanding loan like personal loan, car loan, credit card then repay it first. However if you are paying your EMI for home loan, education loan or business loan it is good because it is good debt with the help of such loans you can increase your wealth in future. So decide your good debt and bad debt first and then pay if it’s bad debt and start to invest same amount for your goals.

After reading all above lessons start to practice it and you will feel the high level of liking in your life.

Follow 4 simple steps before you invest in any Financial Instrument

This article was actually inspired by one small quote “Everything has a purpose, why your investment hasn’t” The word PURPOSE itself is very essential for every investor who wants to invest for his retirement or for any other goal. Today I want to share very basic steps of financial instruments.

My perception is to say you want to start small RD (recurring deposit) you must have purpose. Don’t rush and invest in any financial product, think twice and start slowly but whatever you invest you must have purpose. When any investors come to me and ask me I want to invest and say that where to invest now? I ask 4 simple but important questions to investors. There are 4 basic steps to follow before you go for any product.  I call it SIMPLE theory because whenever you think investment in any financial instrument your mind will start to answer below 4 questions.

# Why you want to invest (Goal of Investment)?

# What RETURN you are expected?
# How much RISK you can obtain?
# TIME horizon of your Investment (tenure)?
It always helps to know why you are doing something. Think about why before you go for any investment plan. Are you hoping to build up your retirement fund? Do you want to accumulate amount to pay down payment on a home? First determine why you want to invest. Being able to point a specific reason for investing can help you set the right goals and can provide you with a way to stay motivated as you move forward. Second thing your return will be better than normal investment because you have best knowledge of risk involved in that investment. Third most important thing you ideally know when to exit from that investment because you know your time horizon.
You should plan your investment on the basis of these 4 small steps. Planning always help to me as an investor so recommended to all my blog reader.

Students can also save from their Pocket Money

Last week I went to meet my Investor at his home whose son is collage going guy aged 22 year. During some conversation with him he shares me his own story of POCKET MONEY. He spends Rs. 8000/- every month and after hearing this amount I got shocked. But Slowly he told me that he also want to save some amount from his pocket money. He shared his worry of higher expenses on Electronic, Gadgets, Mobile bills (Voice and data charges) and online shopping are on priority list.

However every student got his fixed amount as pocket money, but some students can’t manage their monthly budget. Today I want to share some secrets which can minimize expenses of students and also start habit to save some from this PM (pocket money). This article is for all the students who earns nothing but want add value to their student life.

1. Open Saving Account
Rather than going for regular saving bank account, look at specially designed student saving account. Some banks offer zero balance facility, free demand draft for exam fee etc. Check all this stuff on bank’s website before applying for saving account.

2. Fund for Crisis or Opportunities
Since students don’t have any fixed source of income, it is must to have fund for emergency requirement. Rather than borrowing from friends, making some adjustments, such as avoiding movie at multiplex can help you prepare for both opportunities and crises.

3. Monthly Budget
Don’t afraid from word budget, you just need simple plan in excel sheet or any good apps in your mobile. The basic idea is to keep track of your monthly expenses and stop any unnecessary spending.

4. Plan Your Shopping
Make simple list before going for any shopping. Buying books often flame a hole in your pocket. Instead ask your friends to chip and buy them together. Cutting down your expense by Rs 500/- hundred every month would have saved you Rs 1000/- in just two month.

5. Party at Home
Rather than spending thousands of rupees in restaurant, take permission from your parents to organize a party in your backyard. You can order good food to have fun at half rate.

6. Value Your Hobbies
As a college student, baking was a hobby for Sonani Sinha, till her friends suggested that she turn it into a side business. The 22 year old began by putting up stalls in college fests and taking order from classmates. Last year she managed a profit of 1.90 lakh and has recently turned it in to a full-time profession. The bottom line is “If you have talent, turn it into a trade”

7. Part-Time Jobs
You can start a part-time job to supplement your pocket money. There are various profiles such as BPO executives or opt for unusual roles like a city tour guide or recruitment agent. You can also take advise from your college placement cell on part time job.

Every student can start small as per their size of pocket money and transform their initial financial life slowly. I wish all the students reader will surely get benefit from this small article. Happy student life……….

All about Small Banks and Payment Banks

Recently RBI drafts norms for setting up small banks and payment banks. The main objective of this banks are to push financial inclusion in rural and urban areas and helps to small businesses, unorganized sector, low income households and for farmers. In the regulation, the guidelines with the conclusion that the move is positive for micro finance and telecom companies but it is unlikely to attract large NBFCs. You can Check below all details about Small and Payment Banks.

Payment banks

Following are some of the conditions which are common to both the banks as collated by Motilal Oswal.

  • The Minimum capital requirement would be Rs 100 crore
  • Promoter’s initial minimum contribution will be at least 40% with a five-year lock-in period and excess shareholding should be brought down to 30% bye the end of 10 year and to 26% within 12 years from date of commencement of business of the bank
  • Foreign shareholding in these banks will be as per current FDI policy
  • Voting rights to be line with the existing guideline for private banks

  • Entities other than promoters will not be permitted to have shareholding in excess of 10 per cent
  • The bank should comply with the corporate governance guidelines, including ‘fit and proper’ criteria for Directors as issued by RBI
  • Operations of the bank should be fully networked and technology driven from the beginning

Small Banks

  •  The purpose of the small banks will be to provide a whole suite of basic banking products such as deposits and supply of credit, but in a limited area of operation
  • The objective for these Small Banks is to increase financial inclusion by provision of savings vehicles to under-served and un-served sections of the population, supply of credit to small farmers, micro and small industries, and other unorganized sector entities through high technology-low cost operations
  • Resident individuals with 10 years of experience in banking and finance, companies and Societies will be eligible as promoters to set up small banks. NFBCs, micro finance institutions (MFIs), and Local Area Banks (LABs) can convert their operations into those of a small bank 
  • Branch expansion: For the initial three years, prior approval will be required
  • The area of operations would normally be restricted to contiguous districts in a homogenous cluster of states of union territories so that the Small Bank has a ‘local feel’ and culture. However, if necessary, it would be allowed to expand its area of operations beyond contiguous districts in one or more states with reasonable geographical proximity
  • The bank shall primarily undertake basic banking activities of accepting deposits and lending to small farmers, small businesses, micro and small industries, and unorganized sector entities. It cannot set up subsidiaries to undertake non-banking financial services activities. After the initial stabilization period of five years, and after a review, the RBI may liberalize the scope of activities for Small Banks
  • The promoters’ other financial and non-financial services activities, if any, should be distinctly ring-fenced and not co-mingled with banking business
  • A robust risk management framework is required and the banks would be subject to all prudential norms and RBI regulations that apply to existing commercial banks, including maintenance of CRR and SLR
  • In view of concentration of area of operations, the Small Bank would need a diversified portfolio of loans, spread over it area of operations
  • The maximum loan size and investment limit exposure to single/group borrowers/issuers would be restricted to 15 per cent of capital funds
  • Loans and advances of up to Rs 25 lakhs, primarily to micro enterprises, should constitute at least 50 per cent of the loan portfolio
  • For the first three years, 25 per cent of branches should be in un-banked rural areas
Payment Banks

  • Objective of payments banks is to increase financial inclusion by providing small savings accounts, payment/remittance services to migrant labour, low income households, small businesses, other unorganised sector entities and other users by enabling high volume-low value transactions in deposits and payments/remittance services in a secured technology-driven environment
  • Those who can promote a payments banks can be a non-bank PPIs, NBFCs, corporate’s, mobile telephone companies, super market chains, real sector cooperatives companies and public sector entities. Even banks can take equity in Payments Banks
  • Payments Banks can accept demand deposits (only current account and savings accounts). They would initially be restricted to holding a maximum balance of Rs 100,000 per customer. Based on performance, the RBI could enhance this limit
  • The banks can offer payments and remittance services, issuance of prepaid payment instruments, internet banking, functioning as business correspondent for other banks
  • Payments Banks cannot set up subsidiaries to undertake NBFC business
  • As in the case of Small Banks, other financial and non-financial services activities of the promoters should be ring-fenced
  • The Payments Banks would be required to use the word ‘Payments’ in its name to differentiate it from other banks
  • No credit lending is allowed for Payments Banks
  • The float funds can be parked only in less than one year G-Secs

Investment Habits You Should Follow

Investing is a great way to make your money work for you and you don’t need any special degree to learn. Great Investors follow some habits which can help to you live great financial life. Not everyone grows up learning about investing, saving, and money matters, but if you want to learn more, here are some great investment habits from other successful investors. Write down this one line in your wealth journal- “A little thought and a little kindness are often worth more than a great deal of Money”.

Plan for the Worst Situation
Tragedy can happen at any time in your life. You can get ill or fired from job or the value of your favorite stocks might go down. You might even die and leave your dependents (I hope such situation you will never face in life).  So, you need to plan for the worst situation. First, before you even think of investing your money, make sure you have an emergency fund, which should cover your monthly bills and expenses for at least 6 months. Second, you need to have a good medical insurance plan that protects you and your dependents. Finally, you need a life insurance (Term Plan) policy if you have people who depend on you. The sum insurance of the policy should be relative to how many dependents you have.
Ask for Advice from Experts
You can learn many things by reading books and blogs, but sometimes, talking to someone is much better. A certified financial planner, advisor, or other expert may be the best option to help you figure out your situation. They can give you advice based on their experience or laws and regulations regarding financial instruments. Even if you have to pay them a small fee, at least you know you will be getting real, solid advice.
Keep Working
If you are young and energetic, the best advice for you would be to keep working. Keep working for as long as you can because you have the best asset of all time. The longer you work, the more money you have to invest. If you don’t plan to have any retirement income then you need to work as long as you can, so you can build up your retirement fund.
Invest in the Long Term
If you have watch movie Wall Street where the main characters are on the trading floor on Wall Street, buying and selling and making millions at the turn of a hat. However, the truth is, unless you had a lot of money, skill, and time, you can’t make a lot of money with individual stock purchases. However, something that has been proven is the power of long-term investing. If you invest now in good stocks from reliable companies (or in an index fund) and leave it there for 20 years (Long Term), you can have enough time to ride out any dips and still come out on top.
Help People, but Carefully
Helping people through charities and other organizations is a great thing. These organizations give great service to the society and they help those who cannot help themselves. However, you must take care as well. Do not give up all your money, and before you do decide on a giving plan, make sure you have yourself covered first.
Invest in What You Know and Love
During the famous Dot Com boom of the late 90s, People asked investing maven Warren Buffet why he didn’t invest in tech stocks and start-ups. His answer was simply did not understand how they worked and how they made money. While many people think him old fashioned for not getting in on the Boom, this was ultimately what saved him from the impending crash. So, before you invest in individual companies, think of it as investing in a real business. Study the company and how they make money. And if you like the company and actually spend your money buying their products and services, then this could be a bonus.
Don’t Forget to pay Taxes
Any income you earn—including that from selling shares or even other ways, such as payments from when you buy a structured settlement—is taxable. That’s why before you sell any shares or take out money from your retirement fund, make sure you have enough money for the taxes so that your gains will not be wiped out by taxes alone.

If You Like this article, you can comments or share with friends……….

5 Smart Tips to start saving for future planning

I think this is exactly RIGHT time to start something amazing towards savings because new financial year just started and one can plan for coming FY 2014-15. Any decision related to MONEY should be simple and easy to take action. Today I want to share smart tips (just like smart phone) to start your savings. 

Start with Saving Account
Use money in ACTION which lying in your saving bank account. This is first and easy steps every one must take with starting utilize your saving account fund through Internet banking and invest in ultra short term fund (liquid funds). You can also try for purchase through SMS (mobile) which one timemandate and very much convenient for investing in such fund.

Recurring Deposits
Start recurring for short term goals like Vacation planning, Home renovation expenses or Buying mobile phone. This is simple yet powerful product for all types of investors who want to accumulate small funds for their expenditure. You can start your recurring deposits (well known as RD) with any Banks or with Post office as per your convenient. It is easy to start online recurring account through login into net banking page of your bank. You just have to select amount per month, total tenure and the date you want the money debited from your bank account.

Monthly Budget

Before you start any investment make monthly budget and share it with family members. This small exercise will create immense picture of your future planning and will also control on families unnecessary expenses. Change your approach of saving money, first save your money from income than go for expenditure. 

Complex Product
Don’t hurry to take decision related money in any new products. Just don’t jump and start investing complex products like junk food which is not necessary for you. So take enough time to select product like Child Plans, Endowment Plans, ULIPS, Unit Linked Health Plans, NFO, FMPsetc. Thinks twice or ask to Financial Advisor before take any investment decision in such products.

Promise to Start Action  
Promise to yourself that I will start my action today. Give priority to these smart tips and save minimum amount every month from your income. Create some system that will work like smart phone. But all action must start from your heart and remember this quote – “Action is the foundational key to all success”

Wish you best of luck and don’t forget to share comments here….

E-book on Personal Finance for Mr. Busy

There is massive information available on internet if you search on Personal Finance but value is most important for such topic. Personal finance is essential subject for any individual investor. I would like to share a very excellent and valuable E-book everyone should read is “Personal Finance for Mr. Busy” written by Rohit Shah, Smitha Hari & Vidya Kumar.

This E-book covers the following contents
  • Can’t afford financial Planning? DIY with these resources
  • All about Retirement Planning
  • Smart Tips to buy your Life Insurance
  • Smart Tips to take your health cover
  • So what’s the right way to invest in Equities?
  • Top 5 Investment Mistakes to Avoid
  • Smart Ways to Deploy your Surplus Money
  • How to leverage your Salary Structure to minimize Tax Liability
  • Everything you wanted to know about Estate Planning
  • Tips To Come Out Of Liquidity Crisis

Further it is published in both Hindi & English for all types of readers. Download it Now ! 
Please let me know how is the E-book and If you are finding any difficulty in downloading it. Also feel free to share it with your Family and Friends.


3 Ideas can change your Financial Life

By RJ Advisory

Before starting I would like to share thoughts from 3 Idiots in my today’s article. If you had watch movie 3 idiots the main character of film were joined Engineering college without any proper goal except Amir Khan who guide to all others, I fully agree with the story of movie and want to share same concept
here. If you have passion like Amir Khan and want to become a Great Investor start with these 3 idiots and feel immense change in your financial life.

1. Term Insurance

Term Insurance is one type of insurance plan which is very low cost and useful Insurance product. If you are young and only earning member of your family, just think about your family’s future in absence of you? Term plan must be your first priority to protect your family against uncertain event. While planning for such insurance ensure you cover your all liabilities as well. One can use Human Life Value (HLV) to calculate adequate insurance requirements for you or take help from Financial Advisor. 
2. Health Insurance
Typically known as a Mediclaim Health Insurance cover your hospitalization expenses which are increasing drastically in today’s age. You should check you’re your medical reimbursement provided by employer because such benefits shall discontinue when you left job or retire from company. Then it’s too late because no one will give you due to your age. So it is better to select Family floater as your early age and cover to your family under single health insurance plan.
3. Investment through SIP
A simple and best way to invest is to start a Systematic Investment Plan (SIP), which is like starting a Recurring Deposit. Want to know the beauty of return, you can choose SIP as a finest option for your portfolio over long term horizon. My personal suggestion to all individual must commence with SIP to make better wealth and undergo the real taste of Financial Life.
Finally take away lessons from this article don’t buy any Insurance for Investment Perspective only. I like to encourage your comments on this article.