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Direct Investment In Mutual Fund: Now if you are investing in mutual fund schemes directly, you will be charged less management fee by mutual fund. Therefore your returns in direct plans will be slightly better than the investments you make through an agent. That is why this question arises. Should I invest directly in mutual fund or through an agent? Mutual Fund Agent Vs Mutual Fund Advisor: Before proceeding further on investing through an agent or directly, we need to understand the difference between mutual fund agent and mutual fund advisor. Mutual Fund Agent facilitates the mutual fund transaction and provides you after sale/investment services like regular reports, supports when you withdraw… We will discuss more about these services later. For providing these services Mutual Fund Agent is not supposed to charge any fees, because he gets a decent commission / brokerage from mutual fund companies. On the other hand, Mutual Fund Advisor provides advice on your mutual fun...

It really hurts to see a large pie of the salary cut towards tax. So the obvious question in everyone’s mind is ‘How do I reduce my tax?’. Every year we are forced to invest in something which reduces our tax liability. It may be NSC…it may be PPF…it may be ulip…it may be Mutual Fund ELSS. Tax Planning: A New Perspective These tax saving investments are at times taken based on advice from colleagues or friends. Generally investors tick the scheme if it helps to reduce tax liability. Apart from reducing tax, there are some other questions to be asked. What is the risk involved? Are the returns from the scheme taxable? Do I need to make investment in this scheme every year or just a one time investment? Does it support my financial goals? Apart from tax saving investments is there anything to be considered in tax planning? Tax Planning in your Financial Planning: Tax Planning is also a part of your overall financial planning. When tax planning is done in your financial planning...

An investor will prefer to invest in mutual fund through a power of attorney under some special situations. Let us see a few examples of those special situations: • When you are a frequent traveler, • When you are not well, • When you want your investments to be managed by your spouse or a well wisher, • When you become an NRI. Giving Power of Attorney: You need to give power of attorney only to a right person. It is generally not advisable for an investor to give POA to his mutual fund agent. In many situations, the mutual fund agents have used this POA to their advantage. So you need to be extra cautious about selecting the right person to give POA. You can give restricted POA. That is you can specify that the POA holder can only transact in mutual fund and not in any other assets. Some of the older format of POA will not have the signature of the POA acceptor. It will carry only the signature of the POA giver. This format of POA without the signature of POA acceptor is ...

Where do we invest our long term money? Where can I get better returns which can beat inflation? The answer for both the questions is investing in stock market. Once you decide to invest in stock market, you have got two options. The option one is to invest directly in stock market and the option two is to invest through mutual funds. Which Option to Choose? Each of the options has got its own pros and cons. Depending upon your requirement and situation, you need to choose the right option. The following points will enlighten you on both the options and will also help you understand and check the factors to be considered before choosing the right option. Knowledge and Expertise: Investing directly in stock market definitely demands a good amount of knowledge and expertise. You should know how to read a balance sheet, analyse a company, choose a right company to invest, analyzing the sectoral trends, constructing a portfolio, stock valuation… If you are comfortable doing a...

Director bala’s Paradesi is brilliant; Based on an English novel Red Tea (Eriyum Panikadu in Tamil) by Paul Harris Daniel, the story is about the life and struggles of the exploited tea-plantation workers. Set in 1939 the film begins in salur a village in Madras presidency where we are introduced to Raasa (Athrava) who doesn’t have a job just roams around telling information regarding the happenings, incidents of the village. Angamma (Vedhika) is attracted to Raasa they fall in love and as usual her mother doesn’t like their romance and she calls for a panchayat. Raasa now searches for a job so that he can marry Angamma, at this juncture he meets Kankani (Jerry) a supervisor from tea estate who promises the villagers job, shelter, money and convinces them to sign bonds. The entire village goes along with him in search of greener pastures with lots of dreams & hopes about their prosperous lives. Little do these innocent people realize that they are going to be treated as ...

Risk management plan is an integral part of any financial plan. Creating a financial plan without risk management plan is like starting a journey without doing any preparation for the vehicle such as checking the stepney, break oil level and other conditions of the vehicle. Not doing all these can make your journey towards a destination halt in between. Life Insurance: The amount of life cover you need to take will be decided, depending on your income earning capacity and the financial goals you have. When we say life cover, we don’t mean traditional policies like endowment or money back where you will get only 5% to 6% return p.a. and also we don’t mean ULIP policies where there is a heavy front loaded charge up to 40%. We are looking for life cover and not investment. Insurance is different from investment. When we say life cover, we mean life cover through pure term insurance policies. Of late, online term insurance policies are better because they are cheaper by 50% to 70 %...

The motive behind creating a financial plan is to have a route map to achieve your financial goals. A plan that tells you what are all your realistic goals and what are all your unrealistic dreams. A plan that tells where you will be financially 5 years from now, 10 years from now and 20 years from now. A strong foundation is important for a long lasting construction. Similarly when we are constructing a financial plan there are some basic things to be given more attention. Current Savings and Investments: We need to take into account what are all the current savings and investments you have. It could be cash in hand, cash at bank, investments in financial assets, real estate investments and other investments. However, this will not include assets which we are keeping it or maintaining for our personal use like personal jewels, self occupied house, car etc. This exercise of assessing our current savings and investments is done in order to understand and realize “where do we now ...

Though debt funds have got their own advantages, they are mostly ignored by common investors. Debt funds have got a unique place in your portfolio. Here are five simple situations, in which debt funds can be used by prudent investors. 1) To meet short term goal: If you have got a goal, which you are planning to achieve in a short term like one year or 2 year, then debt funds are the ideal place to invest. Debt funds are less volatile when compared to equity funds. Also you will have predictable returns. You also have a choice of different debts funds which can be matched to different short term horizons like 1 month, 6month, 9months, 1 year, 18 months and so on. You can’t take risk and invest your short term money in stock market. You need ensure safety and liquidity as far as short term investments are considered which is very much there in debt funds. 2) Any Time Money: Under some circumstances, you may not know when the need for the money will arise. But when the need aris...