Need of a Financial/Wealth Planner

Unlike in western countries, most of us don't devote enough time to growing wealth. Trying to analyse as to why we don't mind working extremely hard to earn money but feel lazy, even careless, in growing the same.

In today's materialistic world, its highly doubtful if caste hierarchy can keep a person from growing wealth.

Another reason can be our social system of family bondage, which calls for making provisions for old age or unforeseen circumstances.

If a son or daughter is going to take care of parents, why not invest in them in terms of education or seed capital for business etc.

So the question arises of how can we ignore the changing face of society. Around us, we see hundreds of parents being neglected by their children.

The concept of maintaining financial independence should motivate people to exercise financial planning and take good care of wealth.

Thankfully, the Indian economy has been fertile enough to ensure the seeds thrown randomly grow very well. Random investments in real estate, gold, equity etc, have grown to fetch handsome returns in an inflationary era.

However, this doesn't really make sense as the bulk of financial investment remains in fixed income securities, generating returns at just around or below the real rate of return.

Another probability may be that people are not materialistic enough to focus on money.

Again, this doesn't make sense as one sees them working hard to generate income and, hence, there is no reason why they shouldn't be motivated to work hard for growing their wealth.

People might have apprehensions over scams and procedural issues like bad delivery, broker defaults etc, for equity investment.However, all these have become a thing of the past. Our financial system infrastructure is as good as that of the developed world.

While these may have been issues decades back, they should not be a hurdle now. Maybe the experience of investing in equity markets has been very bad for investors and, hence, people don't care about financial planning or growing their wealth from equities.

In a market where the Sensex has multiplied about 180 times over the last 31 years, how can investors not make money?

Indeed, if an investor has not made money in a steadily rising market, the need for financial planning should be felt much more. It can also be that they are so confident of themselves, they don't need advise from any third party and, hence, a need for financial planning is not felt.

However, when one sees the allocation savings tilted towards fixed income schemes, the claim of expertise becomes suspect.

In today's world, where financial independence is required for everyone, it makes sense to go to a financial planner just like one goes to a doctor, lawyer or any other professional for taking advice.

So go ahead to your perfect financial planner, wealth planner and take his advice on growing wealth for a better future tomorrow.

Source: http://www.rediff.com/business
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Key Points of Retirement Planning

Possessing necessary resources to guarantee a pleasant and financially secure retirement relies on thoughtful personal financial planning which should begin long in advance of your retirement. However, focusing on something that is a long time out frequently will get diverted by a lot more urgent financial plans and necessities, for example purchasing a house or having to pay for kid’s education.

So when it is best to start preparing for retirement? Despite the fact that it is never too early or too overdue to think about retirement, the sooner you begin, the smaller amount of money you will need to put away every month and lower investment risk you are going to take.

A number of various kinds of investments are at your disposal in order to finance your retirement. Certain investments may fulfill equally your present plans and also your retirement targets. For instance, should you be considering purchasing a vacation house and also have decided on locations you like to retire, you may think about buying a place that will function  either as a vacation house at this time and a retirement residence later on. As retirement gets closer, it is typical with regard to investment programs to get somewhat more conservative.

On the other hand, you must not neglect the impact of rising cost of living. Inflation steals from your retirement money its purchasing power; until you prepare for it sufficiently and deal with it correctly, inflation could weaken a properly designed retirement plan. Because of this, you need to invest a part of your cash in the stock market which in the past has been effective inflation hedge and which may provide an increasing amount of revenue. Considering that interest rates typically climb as the cost of living go up, you also have to remember do not commit your entire funds in fixed income investments which mature simultaneously. Acquiring fixed income assets of diverse maturities, either short term or long term, will help you retain the ability to cope with shifting interest rates.

Naturally, make sure you reduce or get rid of high risk investments which could deteriorate your retirement capital, especially when you are approaching retirement and have by now achieved your retirement financial objectives. Should high risk assets suffer a loss at the same time your retirement date is many years off, you could have a chance to regroup. However, in the event that investments miss the targets once you are 62 years old, you might not have sufficient time to recover your losses.

In conclusion, diversity of your respective investments continues to be extremely important. Not placing all of the eggs in a single basket cuts down the possibilities of real danger having to deal with disastrous cuts in your retirement funding.

You should never consider retirement as a phase of the entire life that could basically look after itself. It is necessary that you look at retirement planning in particular and personal financial planning on the whole as an essential, frequently difficult process that you really need to pursue energetically along with all the forethought as you possibly can.

Source : personal-financial-planning.org

Financial planning makes loan repayment comfortable

Buying a home is a major financial commitment for an individual. Usually, a homebuyer stretches financially to purchase a house, and in most cases, borrows the funds from a bank.

These loans are large amounts and in the light of the volatility in interest rates, it is advisable to spend a good amount of time on financial planning in order to avoid a debt trap in the future. The interest rates have been quite volatile since the last 10 years. There have already been a couple of cycles of soft and hard interest rates.

There are three types of home loan schemes - fixed rate scheme, floating rate scheme and mixed rate scheme (also called teaser rate scheme). Under the fixed rate scheme, the interest charged on the loan amount remains fixed for the entire loan tenure.

However, these days most banks have stopped offering the fixed interest rate scheme. A few banks offer a fixed rate at significantly higher than the prevailing rates and that too the agreement has a clause of variability based on time or under certain conditions.

In a floating rate scheme, the interest rate varies with time based on the market conditions. In the teaser rate scheme, the bank offers an attractive fixed interest rate for the initial few years and links the loan to a floating rate thereafter. There are many variants of such schemes available. They suit the needs of different borrowers. Therefore, it is very important to analyze such schemes based on your financial condition before getting into a particular scheme.

Usually, a home loan is a long-term financial commitment as the tenure goes for more than 10 years in most cases. Therefore, it is important to think about various personal milestones and plan for regular monthly outflows before taking a loan.

Regular payments of EMI is very important and an essential part of a home loan. The payment history of an individual goes a long way in deciding future loan disbursements. Therefore, it is important to keep in mind that one should be regular and prompt in paying EMIs. It is advisable to discuss with your bank in case of any difficulties in paying the EMIs and work out a solution. You can look at prepayment, part prepayment or foreclosure of the loan to reduce or stop the EMI dues.

Source :ET

Financial planning: 7 questions to ask yourself

Here are some questions to ask yourself to help determine whether you're on track to a financially secure retirement:

1. How much will I need to retire?

A rough guideline is that you'll need to replace 75 to 85 percent of your pre-retirement income in order to maintain the same lifestyle.

2. Am I saving enough?

Guessing isn't good enough. Think how much are you saving for your future.

3. How much can I withdraw during retirement?

The 4 percent rule advocated by many financial planners holds that if you withdraw no more than 4 percent of your portfolio in the first year of retirement and then increase that amount for inflation each year, your money should last at least 30 years. That rough guideline takes into consideration the role of expected earnings on your portfolio as well as inflation.

4. Am I burdened by too much debt?

Make it a priority to pay off your mortgage and any other major obligations before you retire. But if you're paying more than about a third of your pretax income on all debts, you've probably borrowed too much. Consider how you can cut back to increase savings.

5. Do I have the right mix of investments?

A long-held rule of thumb is that you should subtract your age from 100, and put that percentage of your savings in stocks and the rest in bonds. But with lifespans increasing, many advisers say that's too conservative and leaves you at risk of falling behind inflation and running out of money. Some suggest subtracting your age from 120 instead.

6. Do I have an estate plan?

Long before retirement, everyone should have an up-to-date estate plan with a will, beneficiaries for all accounts, a durable power of attorney, a health care proxy or living will and possibly trusts for any minor children.

7. Am I properly insured?

An unexpected setback could derail your plans. Make sure you're up to date on life, disability, homeowners and liability insurance. And consider getting long-term care insurance in your 50s or early 60s.

Source : timesdispatch

Men behind top Indian tycoons' success - Ravi Nedungadi - He complemented Mallya's vision with a feet-on-the-ground approach, focusing on financial basics

  

     Ravi Nedungadi

In mid-2005, when the UB Group made a Rs1,300-crore offer to buy out rival Shaw Wallace, it came down to few small details. When the offer letter had to be given to sellers Kishore Chabbria's wife and daughters, the lawyers had drafted a complex document. Nedungadi, who is simply Ravi to boss Vijay Mallya, realised that this could raise suspicions. Mallya had been engaged in a bitter war with Chhabria's family for over a decade. To allay any suspicion, Nedungadi handwrote a three-page offer letter, which set the ball rolling. Mallya then mooted the idea of a public offer for minority shareholders, which finally sealed the deal and catapulted United Spirits into the big league. It made the liquor business profitable, attracted investors, and helped Mallya acquire Whyte & Mackay, start an airline and buy another. He complemented Mallya's vision with a feet-on-the-ground approach, focusing on financial basics.

Source : Rediff Business

TIPS FOR FIRST TIME MANAGERS

How Not to Blow It : You need a vision and a strategy  to execute your work skillfully. Otherwise, you'll find yourself turning into the new bumbling fool. Here's how to succeed as a new manager.

 Don't judge the holdovers, at least not initially. Instead, give everyone a clean slate, no matter what you've heard. Remember, all your reports will be on their best behavior initially. You represent a fresh start; they want to be seen in the best light. So give them plenty of one-on-one time early. Learn about their history and aspirations. Watch them in action to

SET OBJECTIVES

You have their attention: Capitalize on it. Set ground rules and expectations early. Outline your short-term and long-term vision for the department. Identify what's mission critical, why, and how everyone's roles contribute to the end result. Set goals, but keep them relatively short, unambiguous, and achievable.

MAKE A MEMORABLE GESTURE

Want to make an impact in your first weeks? Strip everything down and simplify. That's right: Take them back to basics. Determine what's holding them back, such as a bad apple or redundant paperwork. Take a dramatic action to send the message that times have changed.

HAVE A DEPARTMENT PLAN

  An idea is doomed to failure without a plan behind it. After meeting with stakeholders, draft three- and six-month plans. Set targets, replete with starting and ending points (and the steps in between). Hold yourself accountable by evaluating progress weekly and making adjustments as circumstances evolve. At minimum, your job is to get your team members on the same page and level, and foster an environment where they can excel. Without a plan and a dedication to executing it, they will inevitably drift, gradually losing sight of their potential and value.

DEVELOP EACH PERSON

Start with recognizing each person's strengths, goals, and areas for improvement. From there, establish individual plans, no different from your department plan. Seek out opportunities where they can learn and contribute (and move out of their comfort zones). Check in regularly on their performance. Face it, your reports won't all stay in their jobs forever. Know where they want to go; motivate them by helping them get there.

Source :ET

Did you know about the Art funds?

An Art Fund works much like a Mutual Fund, the difference being that the former invests in Art. The funds aim at investing in diversified portfolio of select works by leading artists and providing investors with the opportunity to profit from leveraging the fund's pooled purchasing power. Art funds are a fairly recent phenomenon in India, and are cumulatively estimated to command AUM of 239 crore under management according to the India Wealth Report .

Art funds forms one of the alternative assets in which the individual investors invest; you can also check out the the break–up of the amount of wealth under each sub-category of Alternative assets by taking a look at the India Wealth Report.

Hearty Congratulations!!!

We are glad to announce the winner of India Wealth Report contest, Congratulations Mr.Vineet Parolia for being the first one to come up with the correct answer & Win a Free Comprehensive Financial Plan from Karvy Private Wealth.

We would like to tell everyone that we are going to have many more such contests in the coming days.


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Karvy Private Wealth
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Q: Out of the overall individual wealth in India what is the percentage of total Individual wealth that is invested in Direct Equity according to the India Wealth Report? (Click on this link -> India Wealth Report  to view the report)
 

Mail us your answer to privatewealth@karvy.com along with the following information:
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Legendry investors of all time!

It becomes very imperative for us to know about some people who have taught the world great things, who have made a difference, most importantly, who have sent many examples to inspire thousands and beyond. Here’s presenting to you some of the greatest financial guru’s of all time.

1.Warren Buffett

Warren must be the most famous of them all because he is currently still running his own company and buying and selling investments.He is one of the world’s richest men who only wishes that he works past 100 years of his lifetime.

2.Jim Rogers

Jim Rogers is a hedge fund manager who co-founded The Quantum Fund in the 1970s and subsequently made 42 times the investment in the next decade. His fame however didn’t rise until after he retired in 1980 as he made bold calls such as predicting China’s huge growth, the rise in commodity price as well as the credit crisis months before the gigantic collapse of the market in October of 2008.

3.Peter Lynch

Hired initially as an intern at Fidelity Investments, Peter Lynch eventually turned the Magellan Fund from $18 million under management to more than $14 billion. His most famous investment philosophy is “Invest in what you know” which is very easy to understand for the retail investor.

4.Benjamin Graham

Perhaps more an educator than an investor, Benjamin Graham is considered one of the first to teach about value investing. His students include the likes of Warren Buffett and was very influential in providing his students with a sound investment framework. In fact, Warren Buffett described Graham as the second most influential person after Buffett’s own father.

Source:investorschool.com

Word of the Day: Derivative

Explanation: A security whose price is dependent upon or derived from one or more underlying assets. The derivative itself is merely a contract between two or more parties. Its value is determined by fluctuations in the underlying asset.

The most common underlying assets include stocks, bonds, commodities, currencies, interest rates and market indexes. Most derivatives are characterized by high leverage.Derivatives are generally used as an instrument to hedge risk, but can also be used for speculative purposes.

Could Markets move out upwards from the current range???

The indices crept up at the end of another flat week, with the Sensex finishing 0.98% or 175.16 points higher, and the Nifty 1.02% up. The CNX Midcap Index gained just 0.34%.

Tata Steel was the biggest winner among index stocks with a 5.3% gain. The other index stocks to go up included Hindalco, Bharti Airtel, Sterlite Industries and Mahindra & Mahindra with gains between 5.2% and 3.8%. Hindustan Unilever was the biggest loser among index stocks with a 1.7% loss. The other index stocks to go down included Maruti Suzuki, Cipla, Jaiprakash Associates and Reliance Infrastructure with losses falling between 1.5% and 1.4%.

INTERMEDIATE TREND: The market remains in an intermediate uptrend. The Sensex would now have to fall below 17,825 to enter a downtrend. The equivalent for the Nifty is 5,350 and that for the CNX Midcap is 8,300.

The indices have flattened out in the last two weeks, but this uptrend could still turn out to be a substantial one. This is because the preceding downtrend had resulted in a relatively small correction of just over 500 Sensex points, instead of the 2,000-odd point falls that accompanied the three preceding downtrends.

A handful of global markets are now in intermediate uptrends, and this could lead to a global uptrend soon. Our market was one of the first to enter an uptrend.

LONG-TERM TREND: Our market has not been affected much by global declines in the last two-three months, which is why the uptrend here could be a significant one once a global uptrend develops. An upward breakout from the long-running sideways range would then take place.

Most global indices have falling intermediate tops and bottoms, and are below their 200-day moving averages - indicating that a global bear market is on. However, the phase has been one of mild declines. Some of the global indices are now quite close to climbing above their last intermediate tops, and the global long-term trend could also turn up again.

Source : Economic Times

Five quick ways to stay financially fit:

1. Get Paid What You're Worth and Spend Less Than You Earn :

No matter how much or how little you're paid, you'll never get ahead if you spend more than you earn. Often it's easier to spend less than it is to earn more, and a little cost-cutting effort in a number of areas can result in big savings.

2. Stick to a Budget: You need to make yourself understand, “This is the budget for a month and I’m going to stick to it no matter what”. It is always advisable to have a budget whether you make thousands or hundreds of thousands of dollars/rupees a year.

3. Keep Good Records: If you don't keep good records, you're probably not claiming all your allowable income tax deductions and credits. Set up a system and keep it handy to use it all year.

4. Pay off Credit Card Debt: Credit card debt is the number one obstacle to getting ahead financially. Despite our good resolves to pay the balance off quickly, the reality is that we often don't, and end up paying far more for things than we would have paid if we had used cash. Constant reality check is required here.

5. Invest! : If you're contributing to a retirement plan and a savings account and you can still manage to put some money into other investments, all the better.

Source : about.com

photo : www.tatafin.com

Must See Destinations in South Africa!

The best places to visit in South Africa include the stunning coastal towns of Hermanus, Cape Town, Knysna and Durban. Enjoy the mountain air in Hogsback and the Drakensberg. Settle back with world class wines from the Cape Winelands and enjoy a safari in the oldest and best Wildlife Park in Southern Africa -- Kruger National Park. No trip to South Africa would be complete without a visit to a township, and Soweto is the largest and most vibrant of them all.

It's easy to travel around South Africa with several low-cost airlines operating throughout the country and excellent roads which makes it convenient to rent a car. You need 3 weeks to take in all the best sights listed below.

Cape Town is a highlight of any trip to South Africa. The natural beauty of Cape Town makes it one of the most attractive cities in the world. Cape Town boasts beautiful beaches as well as the impressive Table Mountain right in the heart of the city. The restaurants are world class, and so are the wines. Cape Town is also one of the most culturally diverse cities in Africa and has reputation for social tolerance.

Source : Goafrica.com
Photo : forbes.com

iPhone 4 - It can't get any better

The new phone is powered by an A4 CPU (the same chip used in the iPad) and sports a 3.5-inch screen with 960×640 resolution, dual mics, and an upgraded camera system that will include HD video recording and editing capabilities.

Here are a handful of specs we’ve learned so far:

* 9.3mm thick, 24% thinner than current iPhone
* 3.5″ display, same as current iPhone
* 326 ppi display, 4 times the previous iPhone’s pixel density
* Case uses stainless steel and glass, including a glass back for the device
* Powered by the A4 chip
* Larger battery means 7 hours of talk time, 6 hours of 3G browsing, 10 hours of WiFi browsing, 10 hours of video, 40 hours of music and 300 hours of standby
* 7.2MB download and 5.8MB upload speeds, depending on carrier capabilities
* Gryroscope in addition to accelerometer
* 5MP camera with 5x zoom, tap to focus and LED flash
* HD video recording, and iMovie for editing video on the iPhone
* Front- and rear-facing cameras for FaceTime, the new video chat app
* iOS will allow for multitasking

Rumors about the latest iPhone, which has often mistakenly been called the iPhone HD have been flying around since early this year. At the end of March, the most substantive rumors were posted by John Gruber. Many of those features are included in the final product.

One of the most anticipated features of the new iPhone is iPhone 4.0 OS, or iOS. The new operating system supports multitasking, video chat, better file management and folders, iBooks, the new iAd platform and the Apple Game Center.

Current iPhone owners who have an iPhone 3G or iPhone 3GS can also upgrade to the new iPhone OS 4.0, but only third-generation iPod touch, iPhone 3GS and iPhone 4 owners will be able to take advantage of multitasking.

The new iPhone is available in black and in white, with storage capabilities of 16 and 32GB. The device will be available starting June 24 in select countries. Pricing starts at $199 for the 16GB model with an AT&T upgrade and 2-year contract. The 32GB device starts at $299.

Source: www.mashable.com
photo : www.apple.com

Most Expensive Umbrella !

When Italian Formula One mogul Flavio Briatore and designer Angelo Galasso partnered up to create Billionaire Italian Couture, the “first international couture line exclusively for men” (according to their website), nobody could have foreseen this—the world’s most expensive umbrella.

Made of high quality and, shockingly, water resistant crocodile skin, this umbrella will certainly help you stand out in a crowd. Just to make the umbrella more exclusive, Briatore and Galasso have made sure that each one is full of individual details. Best of all, the crocodile skin most likely guarantees that the umbrella won’t turn inside out on a windy day.

The most expensive umbrella in the world is available at Billionaire Couture’s flagship store in London at a price of $50,000. For a price like that, it ought to come with a tracking device in case you leave it in the theatre.

Remember, ladies, the Billionaire Couture Umbrella is exclusively for men.

Source :most-expensive.net

It all comes down to the comman Man

The government’s decision to raise fuel prices has left the common man to reassign his monthly budget. An LPG cylinder would now cost Rs 3.50more; diesel and kerosene would cost Rs 2 and 3.50 respectively. This increase has taken serious toll on the common man who is already suffering because of the increase in food prices.

The government has also removed all controls on the price of petrol. Which means people will have to pay more for petrol whenever international crude prices go up. The hike in fuel prices is likely to affect the prices of essential commodities, with families already worrying about the immediate impact on their monthly budgets.

The cause of concern here is the upper and middle classes will manage but how the lower middle class will deal with it remains a question.

Saif Ahmed, 35, manager at Bose Electronics, rushed to the petrol pump as soon as his wife informed him about the increase in prices. He said, "Subsidies on basic items like petrol and cooking gas are crucial. The government should use tax money carefully. So much money is being used for the Commonwealth Games, but they will still cut into our budgets.'

Source :TOI
Photo : www.blog.taragana.com

Rains bring their own set of challenges for your Wheels!

The monsoons have arrived in India! A time for joy and regeneration. But the rains don't combine well with our roads and the quality of our driving. Rains bring their own set of challenges for the car and the driver. Not being monsoon-proofed can prove treacherous for you and your family.

We present tips on how to enjoy the rains to the fullest in your car without inviting its pitfalls. Read on:
Checking the car

1.Start with the basics. Check the general condition of your car. Pay close attention to your the tyres, brakes and wipers (an often neglected accessory but which is critical in the rains. Good visibility largely depends on the quality of the wipers). Replace if you have the slightest doubt.

2.Your tyres must have enough tread left (at least 2 - 3 mm). The quality of tyres is critical to the handling, performance and grip of your vehicle. They should not be either over or under inflated. It is wise to keep to the manufacturer's recommendations, even if your mechanic tells you otherwise. They are usually arrived at after days and weeks of testing before the vehicle is launched. Trust the car maker's judgement.

3. Ensure that your headlight beams are focussed optimally. Ensure that all other lights, especially the parking lights are functioning as they should.

4. Another neglected item is the foot pedals. Mostly the runner covers are worn out or totally missing. Change/replace them at once. In the rains, a slip while braking or changing gears because of wet footwear could prove costly or even dangerous.

Source :www.autos.in
photo :utvet.com

Keep yourself Warm this Monsoon

Monsoon season is a time when you have a lot of rain and so there is usually a chance if having your clothes getting soaked in the rain and getting damaged. There are some specific kinds of clothes that you will benefit from if you wear them. This article gives you a list of the kinds of clothes that you will benefit from if you wear them in monsoon.

Length of the cloth:

You should make sure that the length of the clothes that you wear should be short so that they do not get wet in the rain. The other reason for wearing shorter clothes is that if you wear them, then they will dry more quickly even if they get wet in the rain.

Kids clothes for monsoon:

Kids love different kinds of clothes and as a parent, you should make sure that you have the right kind of clothes for them. The kids should have some clothes that protect them from the chill weather that is associated with the monsoon. There are some clothes that kids will like no matter what as they love to be comfortable. So comfort is more important as far as children are concerned. There are many monsoon clothes shops that will have a regular supply of these monsoon clothes and they will be useful for you.

The footwear:

The footwear that you use in the monsoon should be something that is durable. The reason for this is that in monsoon, the footwear that you use is either made of leather or suede and these can get spoilt very easily. So you have to switch over to the other kinds of footwear like rubber ones that do not absorb the water. Open sandals are much better method of coping with the monsoon, rather than having shoes as they can get wet and it will take a long time to dry out.

Make up in monsoon:

If you have to wear make up in monsoon, then you should make sure that ou have to keep it really light. The reason for this is that if you have a heavy make up in the monsoon season, it is sure to get damaged even in a light rain and your face will look a mess. It is best to have your natural beauty showing during monsoon.

Women's clothes:

The clothes that women wear in monsoon should be very short, so that they do not get wet in the rain. As you wear a short dress, you should also remember that you would do better to wear clothes that are dark colored as they will be able to mask all the dirt that can get on to the clothes that you wear. There are various printed dresses that you can wear. These can be colorful and bright, but make sure that you never wear white in the monsoon..or you are asking for trouble!

Source :saching.com
Photo : farm4flickr

Monsoon rains 11.1 pct below normal - sources

India's annual monsoon rains, vital to the trillion-dollar economy's farm output and economic growth, were 11.1 percent below normal for June 1-23, sources at the weather office told Reuters on Thursday.


"We are still hopeful of an improvement in rainfall by June end," a senior official at the India Meteorological Department, who could not be named as he is not authorised to speak to the media, said.

On Wednesday, the Met office said India's annual monsoon rains were 9.4 percent below normal for June 1-22 and countrywide rainfall was at 93.2mm against a normal 102.9mm.

Weather experts said the double-digit deficiency in rainfall hinted at a slow progress of the monsoon, but such weak phases were not unusual.

Policymakers are hoping good rains, after last year's drought, will help rein in inflation, currently at more than 10 percent, and provide room to ease curbs on rice and wheat exports.

Source : Reuters