Vijaibabu's Blog - Personal Finance Guide for Financial Freedom

Commandment One: Pay all credit card bills on due date in full In case you do not pay the entire bill amount on the due date, interest is charged from the date of spending, and not the due date for payment. That factor alone can push up credit rates to over 40% per annum; and this makes it probably the most expensive form of credit. Kill the credit with a personal loan if required -- and follow the discipline of no more rollover of credit henceforth. Commandment Two: Close all unnecessary bank accounts How many of us open new bank accounts with each new job, and haven’t even checked the balance in the dormant ones in the past one year? Commandment Three: Keep a maximum of one month’s expenses in the bank account As you may have realized, the bank pays interest on your savings bank account at a rate lower than that of inflation. That’s not to say that the rest needs to be invested for the long-term: I am only stating that you can earn a bit more through fixed deposits or sh

Do not open new accounts rapidly:  Opening new accounts frequently attracts suspicion.  Do not frequently close unused accounts:  Longer lines of credit always positively impact creditworthiness.  Responsibly maintain credit cards:  Credit card payments must be made on time. Do not obtain additional credit cards to increase available credit. Do not make enquiries when unsure of borrowing.  Pay down debt and on time:  It is extremely important to pay down debt, and do so on time. Customers believe that moving balance equates to paying off debt. On the contrary, moving balances need to be settled in a timely fashion to maintain good credit behavior.  Frequently check credit reports:  It is important to frequently check credit reports to remain informed about discrepancies. Rebuilding credit history is a slow and patient process. Given the advanced practices adopted by banks in lending decision making, it is important, as a customer, to remain informed and consistently monitor credit

Following are few Basic points that will help KYF (Know Your Financial Status). Do’s ü Always try to maintain 6 months salary amount in your Savings A/c – to meet Emergency & Liquidity. ü Maintain 2 Savings A/c atleast with different banks with 50:50 or 70:30 Balance of your Liquid Fund. (Jus to meet any ATM withdrawal or server issues) ü Do not keep idle funds more than Rs.1 Lac in your Savings A/c as the ROI is only 4% ü Park short term funds in Fixed Deposits of upto 90,180 Days or above based on your requirement as the ROI is between 7-9%.(Online FD placement and closure is available) ü Start investing in Mutual Funds – (Diversified-medium risk) in Systematic Investment Plan (SIP) with as little as Rs.1000 per month with long term like 3-5 years ü Take adequate Term Insurance of 6-10 times of your annual earnings. Remember in Term Plan premium will be low and benefit will be for your legal heirs(only in case of risk the sum assured is given) ü Alwa

Is Financial Management necessary for me? Financial Management is for every one who cares for money. It is  nothing but transformation from being needy to rich and from rich  to wealthy. Tips on Personal Financial Planning/Management   If you have EMI commitments,  bring down total loan EMI (housing, vehicle) commitment to a level of not more than 25% of the total income Basic life insurance cover need not be more than 100-150 times of normal   monthly  expenses. If your family has unearned income (interest income, dividend income, rental income etc) which is substantially more than normal family needs, you may not really require insurance. Choose insurance plans   with flexible options  to take care of children's needs/ health care needs/ retirement in future. You can take a simple term insurance policy or Health Plus Life combo policy to cover risk and healthcare.. Even floater health policies for all family members (even upto 80 years) are now available with term insurance

I got this message from one of my bank and thought of sharing with you all. As per Reserve Bank of India guidelines with effect from 1st January 2011, banks will solely rely on the account number details (name of the beneficiary’s bank and the branch, IFSC code number of the beneficiary’s branch, account type and account number) provided by the remitter for the purpose of affording credit in the RTGS/NEFT/NECS/ECS credit products. Name and account number information of the beneficiary will not be matched for affording credit. Responsibility to provide correct beneficiary account number details rests solely with the remitter. Hence customers are requested to furnish the correct account number details of beneficiary in the remittance instructions/Challans and through the online / internet delivery channel. Bank shall not be held liable for wrong credit because of incorrect account number details of beneficiary, furnished by the remitter in the application form/Challan or through the o

An MIP, as the name suggests, provides investors with a monthly income. Well, almost.   MIP is similar to your bank deposit with a monthly interest option, but unlike a fixed deposit where interest rate is known before you invest and the capital is repaid to you when you close it, neither the returns nor the capital is guaranteed in an MIP.   MIPs are typically suitable for investors who want to largely play it safe. They are for conservative investors who might be investing for the first time and are eyeing marginal exposure to the equity market.  These investors don't mind taking a little risk in order to increase the potential returns that pure income/debt funds or fixed instruments will provide. Also, MIPs are better for investors who are nearing retirement, do not have any other substantial source of regular income and do not mind a marginal additional equity risk.  In MIPs, typically a large portion (75-100 %) of the fund is invested in debt and money market instru

Age, many believe, is crucial to investing. Logically, the younger you are, the greater must be the equity exposure. One’s goals,investment horizon and risk tolerance should also be the determining factors. So there is no blanket rule. Given here are five different portfolios targeted at various profiles. Check to see which one suits you most. Consider these as guidelines to help fine tune your portfolio. AGGRESSIVE GROWTH This portfolio is meant for you: If wealth creation is your agenda If young and starting a career The riskiest portfolio of all, it has the capability to generate high returns. Your aim must be to build wealth. Age is on your side and you have almostzero financial liabilities - no dependents or loans to serve. Money saved in these years of your life will contribute the most to your overall wealth. GROWTH This portfolio is meant for you if you: Want to diversify your assets and already have an investment base Are fairly young or just married