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Showing posts from September, 2014

Importance of a financial plan

We all have dreams and ambitions in life. A desire to achieve many things- from purchasing a home or even dreams with regards to where we want to see our children placed in the future. To transform these “goals” into reality, apart from the individual effort, financial resources play a key role. To effectively manage the financial resources so that they are properly utlised to fulfil your life’s goals, planning comes in handy. Planning makes life simpler and brings a systematic approach in decision making. Overview of Financial Planning Financial planning is all about preparing a series or set of actionable plans to achieve your specific life goals . A road map, it guides you in making financial decisions- on investing, financial protection through insurance and building a corpus. It assesses the inflow and outflow of your resources, income, assets and liabilities. The Importance of having a Financial Plan Having a sound financial plan comes with advantages galore. Here is what

How to invest in mutual fund?

Mutual fund is increasingly getting popular since last few months. Mutual funds are a fund that invests investors’ money in various companies. Since the investment is in a set of companies, any upside or downside in a few companies is compensated by the reverse in other companies. This is what makes mutual funds attractive. It makes sense for individual investors to invest in mutual funds. Investment rationale in mutual funds As explained earlier mutual funds invest in a set of bonds and stocks depending on type and target investors of the fund . It essentially minimizes the risk because of investment in various assets. Any fluctuation in one or few assets is usually offset by reverse gains and losses in other set of assets which are part of mutual fund. Let me illustrate with an example. Say XYZ equity fund invests in approximately 40 companies. The possibility of shares of all the firms going down at the same time is very remote unless there is huge disaster in the economy. H

70 percent of Indian parents want to invest for their child’s education: HSBC study

Seven out of ten Indian parents say that planning for their child’s education is the best investment they can make , according to a HSBC study called ‘value of education - springboard for success’. The research explores parent’s attitude and behaviors towards children’s education. Suresh Sadagopan of ladder7 financial advisories agrees with the findings and says that many clients have two major goals – child education and retirement. He suggests financial advisers to keep education inflation in mind before recommending any products. “ Typically, education inflation is much higher than CPI and WPI. Also, if parents aspire to send their children abroad, advisers should factor in currency risk. It’s better off to recommend a combination of equity funds, debt funds and term insurance plan which covers equal liability. Child plan offered by insurance companies are expensive for your clients .” “In India, parents feel funding for their child’s education is one of the major respons

Financial planning and its importance for women

Have you ever wondered how a simple housewife, from any society, can manage her household in whatever budget she has? Why do banks and micro finance institutions lend money to the woman in the household? Simple, women have inherently been better money managers on a small scale. Yet, many women, including working women, seem comfortable leaving their long-term finances and retirement planning to their fathers or husbands. On the occasion of Women’s Day, it will be worthwhile to take a look at simple measures that women could take to plan their finances for a secure future. The first and most important step is to understand her financial needs and develop a suitable plan . For this, a good start would be to calculate the inflows and expenditure and the level of savings possible. As many personal finance managers recommend, she must keep emergency funds in the form of ready cash to the tune of 3-4 times her monthly salary/ allowance . When this level is achieved, she can then take the ne