Financial Planning

Basic and simple steps of financial planning

A financial plan can be a budget, a plan for spending and saving future income. This plan allocates future income to various types of expenses, such as rent or utilities, and also reserves some income for short-term and long-term savings. A financial plan can also be an investment plan, which allocates savings to various assets or projects expected to produce future income, such as a new business or product line, shares in an existing business, or real estate.

Mediclaim

It protects your savings when you are admitted in hospital and by submitting medical bills/doctor’s certificate, you can easily claim with the medical insurance company.

Recently, they started to issue cashless cards and it’s easy for patients to get admit in listed hospitals.

- You are safe as the expenses would be taken care by medical insurance company


Insurance

It’s not an investment, yeah! It’s only for your life safety coverage.

In your absence, your family would get the insurance claim amount and I suggest for “term insurance” where the returns would be very low however the insurance coverage would starts from 25lakhs. For more details on insurance coverage and how it’s work, click here

- You are secured with the basis insurance coverage with minimum premium amount.

Savings

There are lots of products available in the market with different assets classes like bonds, equity, mutual funds, real estate, gold, currency and portfolio management services (PMS)

Keep your portfolio with 20:30:50

It’s simple calculation, liquidity (emergency or short term funds 20%) - balanced (Medium term funds 30%) - equity (Long term funds 50%) it’s suits for the person who is within/around the age of 30 and for others who crossed the age of above 60, it’s vice versa.

- You have basic financial planning for your earning.

For more details, please get in touch with your nearby financial planner

Agriculture

Agriculture is the production of foods thru’ farming and the key development that leads to rise of human society.

It creates food to run routine works of human and some extent to animals. Without having food, people cannot serve up with their works in both physically and mentally. Not only in terms of people, it keeps earth naturally.

It’s one of the oldest trades in our world from where barter system was in. It won’t stop today or tomorrow and the trade would be there till the last breath of human. Agriculture in India has a long history dating back to ten thousand years.

India has their own land to do agriculture with lot of natural resources where we can produce more foods thru’ farming.

Till today, India ranks second across the world in farming and output. It contributes 16.5% of total GDP in 2007 and 60% of people were active in farming and it’s one of the largest economic sectors in India.

Currently, the people’s contribution in agriculture is getting reduced and the most of agri people shifting their occupation to higher earnings like construction, textile and others.

To promote agricultural activities in India, the govt. of India regularly provisioning subsidies and other incentives in every budget. But the real problem lies in its implementation. Because most of the schemes are not getting reached properly.

Government has to come up with new ideas to streamline on how to reach the subsidies properly to the right person.

The growth of the agriculture sector in forthcoming days would be in top when compare to other sectors in India since some of the top private players has plan to keep their feet in agriculture.

Start to buy agriculture land or start to invest in agri lands wherever possible.

Goal for Gold

Gold once you hear the sound, it will come as no surprise to you to says that the gold is real money. Why? Because it fulfills your requirement and easily convert to real money whenever you want. The demand of the gold is always in high and the exchange rates are very attractive.

As you know that the growth of the gold price is getting tremendous and one of the best way to buy gold is thru’ systematically by every month, if possible every week.

Start to keep goal for gold by decent investment on a monthly basis, that is, start to buy at least a gram per month.

Now we will see the historical price of gold, every 25/5 years

Year - Price
1850 – 18.93
1875 – 18.94
1900 – 18.96
1925 – 20.64
1950 – 34.72
1975 – 160.86

1980 – 615.00
1985 – 317.00
1990 – 383.51
1995 – 383.79
2000 – 479.11
2005 – 601.74
2010 – current price
2015 - ???

Do simple homework,

12 months: 12 grams
36 months: 36 grams
60 months: 60 grams (I.e. five years)

Plan for long period such as 25 years

12 months X 25 years = 300 grams

Imagine the gold rate of one gram after 25 years from today.

Start to buy at least a gram per month in demant account, where you can keep your gold in your account, that is, not in real gold in your hand.

If you go out with your family to restaurant, shopping, movie or sightseeing, you have spent 1000 INR average. Try to avoid any one in a month and try to buy a gram, hope it is not costly to you and do not disturb this investment for 25 years.

Near future, gold plays a vital role across the world, as I have received lots of comments on my earlier post “Currency” that the global currency may be a gold!

Plan for your goal for gold now!

Unique Identification (UID) Number

The task is an initiative by Indian government to make a national identify card for every Indian with the purpose to improve the security level and e-serve to their citizen.

Some of the highlights are,

• Will obviate need for multiple documentary proofs
• Facilitate easy verification
• Facilitate easy availing of government or private services
• Help welfare programmes reach intended beneficiaries
• Serve as basis for e-governance services
• Cost effective
• Fake identities

• 
  

The project is in under control of Nandan Nilekani, a former co-chairman of Infosys Technologies.

The estimate cost to complete the project is 100 crs (US$30.9 billion) and will be rolled out to all Indian residents above the age of 18.

By initiative of this project will create 100000 new jobs in country and increase the business opportunities in domestic and international level.

After mid of this year (I.e. Aug 2010) the first UID numbers will be issued by our Indian government. (Days are very near)

Unique Identification (UID) Number is one where we can gather all kind of information about a citizen. Easily track their information like bank transaction, investment details, loan details, and payment of his telephone/electricity bill.

After the implementation of unique identification (UID) number, Indian government has a plan to link databases such as voter ID, passport, ration card, licenses and border area ID cards.

The union labor minister has on hand to link employee provident fund (EPF) database of 42 million citizens as the first database to be integrated into the unique ID system.

Wrong selling

It’s a commitment specified to the client by the intermediates without company’s knowledge or company itself to sell out their product to the customer, which is not available in their product.

Most of the companies do not wrong sell their product as it’s affects company brand name in the market and it’s difficult to be in market or to do business.

There is an agreement between the company and the intermediates to sell their products and other commission details. By agreeing to sell the product, intermediates need to specify the product information, use of the product, insuring, returns for their capital or coupon rate for their deposit.

One more scenario, the intermediates may chance to misunderstand about the product, result or returns due to lack of knowledge or language problem. Before appoint intermediates, company needs to check the intermediates experience and his/her skills.

Training to the intermediates would be provided fully and need to understand whether the intermediates were aware of product information thoroughly.

Also there is a situation, to earn more commission or to go to next slap of percentage, the intermediates may do wrong sell or provide information, which is not related/not true about the product.

An example:

There is an investment company, they wants to sell their product thru’ intermediates by paying commission based on their achievements.

Investment Company offers to public that “investment of your money will deliver an average returns of 15-20%/pa for 5 years and above, and the money will be invested in stock market, also there is an risk that if market goes down your investment may come down below your capital.

Company offers commission slabs to their intermediates as 5% if collection below10 millions and 7% between 10-25 millions and 10% above 50 millions.

To get the maximum percentage of commission, the intermediates may sell out the company’s product to the customer by assuring above 40% or investment of amount would be in double for a period of 2-3 years from the date of investment.

Before going to sign up with the investment plan, customer needs to read the information kit, which is provided by the company while signing the application form or get in touch with company directly (thru’ call center) or access information by visiting their site.

Permanent patient

The growth of medical field in past 20 years was fantastic and forthcoming days are in the way of rose. We were in research of new formula and used deal with new medicines for new diseases. The rises of new diseases are due to lack of exercise, environment and other sources.

You must aware that doctors are having their own side business (or) having good relationship with medical shops, scan centers, lab to get commission. Some of them are charging high fees and getting commission by prescribes costly medicines, scanning and testing bloods.

By prescribing medicines (more dose) like this, they are becoming permanent patient to their clinic. Doctors are comfortable by getting regular fees from their patient every month.

Medical companies are selecting doctors and take them in the name of survey to foreign (for sightseeing) and booking accommodation in star hotels. The total expense for these trips will be taken care by medical companies to prescribe their medicines by the doctors. These companies are ready to spend millions to the doctor as they must aware that they can earn more profit from patient thru’ these doctors only.

Recently, associations of medicines were announced rules not to avail benefits like this from medical companies and I do not know how long these rules will be in force or active or followed by the doctors.

Dubai

One of the countries that were affected due to recent recession is Dubai.

Dubai government allowed to spent a lot of money to built resorts in sea. To build almost most of the civil engineers across world was appointed.

Opening of the resort was one of the biggest functions that turns other people in other countries towards this opening and spent lot of money on this to attract foreigners.

Top VIP’s across world were invested in real estate in Dubai that includes Hollywood artiest, businessman, international real estate owners and cine artiest across world.

Dubai identified some 10 years back that the oil would become dry in next 20 years so they planned to divert tourists towards their resorts so they invested lots of money in real estate.

As recession was hits almost all developed countries. The visits of tourist become lower and other skipped to do investment in resorts in Dubai.

Dubai expected that the resorts would sell out while under construction but the investment in real estate getting lesser due to recession.

Due to this, real estate companies are sending out their staff and most of the affected builders were from India, Colombo, Philippines and Thailand.

Intermediate

Will you like to buy any product? Would you like to see your project?

In this case, role of intermediate is essential one to buy/sell products.

It means, “Taking place between two extremes, or a bridge connect both sides"

In some circumstances, by paying little amount to them, we can get it done some works instead of direct presence of ours.

In finance sector to market their product these intermediates perform a vital role.

Even though advertisement is one of the good weapon to attack customers thru’ media, a customer requires a personal touch to do trade.

For instance, a company having service center in Chennai and they are serving customers around 10 million, if it’s so, they must have at least 100 staff to do service only.

To appoint 100 staff under service center in Chennai, the company needs to pay salary as huge and other benefits too. By appointing intermediates with little fee, the transaction will be completed and after service would be taken care off as per agreement between company and intermediate.

In between, intermediate would work more and more to get more fees and it’s successful to get market share.

Requirement of intermediates are based on the demand of the product in market, vice verse.

After your age of 60

What I have to tell about our life after 60 :-)

Do we feel comfortable at this age? Do we feel satisfy our life at this age?

Do we face again and again the same financial problem?

Of course, we require sufficient financial support and moral support from our family.

You will get support from your family based on your activities of now and even though if you get good support from your family, you need to depend on them for moral support if you hospitalized.

But financially, you need to start up your financial planning now. Do not worry about your past and still you had sufficient time in your hand.

One of the cheap financial planning for long term and my own is term insurance and SIP investment in mutual fund.

Just for an example:

Now you are at 25 yrs of old

You have to invest 20000INR per year, that is,

Term insurance: 8000/pa
SIP in mutual fund: 12000/pa

You will get insurance coverage around 25lakhs till your age of 60 and you have to invest 8000INR per year for next 35 years. You will get your investment amount and with slight interest, that is, after 60. So your life is covered with basic insurance.

Next, your investment amount of 12000INR/pa would be in diversify scheme in mutual fund thru’ systematic investment plan, that is, 1000 per month for next 35 years.

So you will get these two benefits by investing simply 20000INR/pa. Do not feel that 20000INR is such a big amount to invest. May be for next two years it will be difficult after that the real value of 20000INR will be lower. If it is so, what's the real value of 20000INR after 10 years from now.

Also you need to revise life cover and SIP investment in mutual fund based on your salary every 5 years.

Your investment will increase currently based on your present age and your necessitate life coverage.

Further details on this, please get in touch with your financial planner.

At last and final one, do not discontinue your investment in between.

Garbage recycling - Unbelievable

Garbage recycling - Unbelievable information

Even though it’s garbage, we can try to recycle it to keep our green earth naturally.

Day by day, we are wasting lot of used materials, which we can easily use to recycle for some other work. Without doing recycling, we are just going for new one.

You can find lots of garbage in both sides of railway tracks. Did our govt. noticed? Or did you noticed?

Visualize about railway tracks, there are more than 23000 kms of railway tracks in India, if we maintain properly, we can easily decrease our garbage by 15-20%.

We will see a simple calculation below.

It’s time for you to visualize, start now!

1547 train runs per day and more than 10000 railway stations in India.

Average 7 trains Arr/Dep in platform per second, if it is so, shops in railway station sells around 150 tea/coffee per train.

150 cups per train * 1500 trains average per day = 225000 disposal paper cups per day!

One more shocking information to you that you will get around 2500 disposal cups from a tree, it mean that, we need to cut 100 trees per day to make 250000 disposal paper cups.

Before buying paper materials, please do think that % growth of trees getting down day by day.

Suggestion from my side – Govt. can place tenders to business people to clean up the area and use for recycling.

RTGS & NEFT

Real Time Gross Settlement and National Electronic Fund Transfer

As you must aware that finance plays a vital role to scale their economic growth in all the countries. If you take any kind of trade, currency is the essence of trade and it’s not possible to find out whether the trade is resulting with profit or loss.

In India, RBI (Reserve Bank of India) is issuing and controlling the flow of currencies and they route thru’ banking channels to distribute the currencies to public. As you must aware that RBI has started their work to introduce polymer currency with denomination of 10INR soon.

Also I used to see the clearing section (cheque processing section) in banks some couple of years back that they kept on checking account holders cheque to process an account holders instruction by transferring amount from one account to other account with in bank or with other banks in locally or nationally.

It takes minimum of two days to get funds cleared for local cheque and a week for outstation cheque with collection charges paid by account holders.

As a development, RBI had come up with normal transaction and high transaction, which says below 100000INR as low value transaction and above 100000INR as high value transaction and recently there was a change in process of high transaction from 100000INR to 2500000INR.

Finally, RBI had decided to eliminate the high value transaction thru’ cheques from January 1st, 2010 and RBI promotes online transfer, that is, NEFT (National Electronic Fund Transfer) which stands for 100000INR below and RTGS (Real Time Gross Settlement) which stands for 100000 and above INR transaction thru’ online transfer by using net banking.

RTGS takes to transfer funds immediately within the cut off time and NEFT takes a day within the cut off time.

Bio-Petrol

The most expecting fuel for our next generation is Bio-petrol!

Yes!

Seeing that, this bio-petrol will available in low cost which is lesser than three times of the cost of normal petrol (currently using) and the result of bio-petrol is five times better than our normal petrol (currently using)

Imagine the usage of bio-petrol!!!

Before coming to market, there were lots of researches doing analyst to see the result of bio-petrol in different situation across world.

If the result of bio-petrol comes up with positively, there will be vast changes in machineries across all the sectors.

The usage of machineries, motors and heavy vehicles were adept with petrol that we are using presently.

As well, there are some of disadvantages if we use bio-petrol.

We need to wait till the solution comes.

Yes, am waiting!!!

Advanced debit card

Advanced debit card

At first, banks used to provide three different types of card to their account holder, that is, ATM card, Debit card and Credit card.

Days passed, banks were issued ATM cum debit card to magnetize customers.

If one have account with different banks, each bank offers card and it’s very difficult for the account holder to keep or maintain or by memorized PIN for all the cards.

In addition, banks are forced to increase the count of ATM to provide service to account holder, due to this, you can find 3-4 ATM’s in one complex.

Finally, Reserve Bank of India (RBI) advised banks not to aggressive to open new ATM’s and come up with new regulation that an account holder can withdraw money from other ATM, that is, where the account holder does not account with the bank.

With the new regulation, account holders are withdrawing their money by using other ATM’s frequently and it hit banker’s profit.

Further regulation by RBI is account holder can withdraw their money by using other bank’s ATM up to five free transactions.

Am expecting RBI may come up with facility that account holder can have account with any banks in India and a common debit card can provide and that service can offer by RBI, as it’s not necessary to memorize PIN for each and every card also all the transaction can be monitor by RBI under direct control.

Blue-ray disc

Blue-ray disc (Next generation's disc)

What is Blue-ray disc?
What is the use of Blue-ray disc?
Why we need to use Blue-ray disc?
How economic by using Blue-ray disc?
What are the advantages of Blue-ray disc?

Hey, for all the above questions have single answer and the answer is next generation’s disc! (I.e. Blue-ray Disc)

Yes, you can store your file between 25 GB and 350 GB based on type of layers in Blue-ray disc.

Start to calculate, how many films you can store in one Blue-ray disc! Wow!

In near future, we can access our system without hard disk and with lot of packages. Programmers were started to research and analysts blue-ray disc about the advantages and disadvantages.

World leading consumer electronic, media and personal computer companies like Apple, LG, Panasonic, HP, IBM, Samsung, Philips, Dell, Sharp and Sony were started to use blue-ray in their product in different types to attract their customer.

At first, due to demand of the blue-ray disc, the cost will be much higher vice versa it will be cheaper when there is no demand like current CD/DVD with 650MB.

Am expecting blue-ray product that will place in mobile and camera soon, will see our future that is very near, start to count down!

Export and Import

Ample growth in Export and Import business

It’s one of the least number of participants in this business when compare to other developing countries.

In recent data, only 0.01% of total population in India was participated in this business and has ample growth in next 10-15 yrs of time frame.

One needs to start in minimal transaction in domestic or international trade. By gaining these experiences, can do huge level of volume turn over per day.

As we know that our Indians were settled and working across world, by using these links, easily start their business.

There are lot of subsidiaries were announced in recent years to participate more people to do more trade in this business.

Without exporting goods from India can earn a lots by Re-export, that is, buying goods from one country and redirecting to other countries.