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August 9, 2021

5 Thumb rules for Investing

Have you ever played any sport? There is one thing in common in each of them; each has its own rules and techniques. Following these methods, one is set to win, provided he applies his minds and keeps practicing on his shortcomings. Investing is much similar to this. It has its own set of rule and techniques. Today, we will talk about some of these thumb rules that make our investing easier.

1.Rule of 72, 114 and 144

Here, we have combined three rules for easier understanding. These rules tell you how fast your money can grow. If you want to see how fast your money will double, divide 72 by the expected rate of interest on the security. Similarly, if you wish to see how much time it will take to triple or quadruple your corpus, divide 114 and 144 by the expected rate of interest.

Example: If you invest INR 10 Lacs at a 7.2% annual rate of interest, the amount will double itself in 10 years (i.e.,72/7.2)

2.Rule of 70

This rule signifies the purpose of making an investment which is avoiding inflation. Rule of 70 requires one to divide the number 70 by the current rate of inflation. The resultant is the numbers of years, after which your wealth will be worth half of what it is today.

For example: If you have INR 40 Lakhs and the current rate of inflation is 5%. After 14 years (i.e.,70/5) the worth of your corpus will be just INR 20 Lakhs.

3.Emergency Fund Rule

In 2020, around 12.2 Crore people lost their jobs during the coronavirus lockdown. Situations like these are the reason why the creation of an emergency fund is necessary. Keeping aside a 6-to-12-month expense fund aside is said to be a good practice. Putting this idle money into liquid funds can be considered a wise decision. While calculating this fund; one should calculate all the expenses that he will need to pay for even in your worst times. The amount includes EMIs, electricity and water bills, food bills, rent, etc.

4.10 Percent for Retirement Rule

Many people consider saving for their future when they are in their 30’s or 40’s. While there is no better time to start saving than today, planning for investment in the 20’s is the best thing one can do. Thanks to the power of compounding, even a meagre amount can turn up to be a corpus. As a rule, one should invest at least 10% of his monthly income.

For example: If one earns INR 30000 per month and invests INR 3000 per month (10% of INR 40000) and steps it by 10% every year, after 35 years at an expected rate of interest of 10%, this amount shall become a gigantic corpus of INR 3.4 Crore.

5.100 Minus Your Age Rule

This rule is concerned with the allocation of your funds. This rule says that considering that you live a 100 years lifespan, 100 minus your age should be the percentage that you should invest into equity & the rest in debt. This rule suggests asset allocation on your risk. When younger, one has a high risk-taking capacity which reduces, as one grows older.

For example: If you’re 25 years old, 75% (i.e., 100-25) should be invested into equity-oriented stocks, rest should be invested in the debt market.

Conclusion:

Rule of thumbs are an easy way approach to learning things. However, they should not be adhered to strictly rather used as a suggestive tactic of doing things and managing your investments.

November 23, 2020

4 Tips For Planning Your Retirement

Planning a retirement is not always easy. It’s the biggest decision you’ll ever make and a lot of things have to be considered before it can be made. Regardless of age, whether you’re 25 or 55, investing in retirement planning is always a wise financial plan. Everyone will face a time in their life when retirement is just around the corner, either by necessity or by choice.

Whether you need to catch up with the Joneses or want to better prepare for your later years, there are many options available to you in the form of investment strategies, saving strategies, and even tips for early retirement. There are also plenty of guides and articles written on the topic of retirement, including the essentials on saving, investing, and creating wills.

Great Retirement Planning Tips

For many people, saving and investing for one’s retirement day will not be an easy process. The goal is not to have the most money that you can, but to have enough to support your family and keep living comfortably until retirement. It is important to realize that, while saving money is a vital part of any retirement planning, investing money is not the only step to take. You also need to have the knowledge to determine when to invest your money so you don’t spend too much and lose it all.

These are four tips for saving for your retirement that anyone can use.

Diversify

First, make sure to diversify your investments. Diversifying your portfolio is the single best thing you can do for your retirement. Once you have a solid portfolio that covers a number of different markets, you can start to look into which investments are safe. Choose safe investments in order to protect your money from losses and to allow it to grow gradually over time.

Save

Second, set aside some money to save. You’ll need money to invest in your savings account. It can be as small as $100 every single month, if you wish. Put that money aside for when you need it, whether it’s for unexpected medical bills, or a vacation down payment on your next home. This money will serve as a buffer against the effects of inflation, and any other emergencies that may occur.

Budget

One of the most important things that you have to do when planning for your retirement is to create a budget. There are a lot of things you have to consider when you’re dealing with your finances. You also have to look at your expenses and see if they’re reasonable. If they’re not, then you have to be honest about them and decide whether they can be adjusted accordingly.

Be aware of your spending habits. You may be tempted to spend more than you earn, but you’ll also need to consider that this will eat into your income. Budget your money and set aside enough for your future living costs.

You should be conscious of how much money you have now, and how much you are going to make for your future. You should also have a clear idea of where you want to retire, because it has to be planned long before it happens. If you plan out the whole thing in advance, then you’ll be able to handle all kinds of situations that can arise during your retirement years.

Get Professional Help

To help you plan your retirement, it’s important to choose a firm that can help you sort out what’s necessary for now and what’s needed for the future. This step may be simple for some. For others, they may not need to work with a personal finance expert that can help you choose the right option. You’ll need to make a list of your priorities, and go with the one that best meets your needs, be it a bank, or a private investment company.

If you prefer a more hands-on approach to investing, or if you just want to be more knowledgeable with your money, you may find an e-book a helpful tool. Even a good retirement calculator can be helpful in determining how much money to invest or save. With all the resources available on the internet to teach you regarding your retirement, be careful about scammers that are only out to take your money.

Conclusion

Planning a retirement is the same as planning your life, because you have to strategize so you can live comfortably and successfully. No one wants to be caught off-guard down the road. There are so many questions to be answered and so many details to be taken care of. Do yourself a favor and begin that process now. Research the variety of ways you can save or invest. Talk to someone about diversified accounts and early retirement plans. Check out all your options so that you may live out the rest of your days in comfort and security.

December 8, 2019May 30, 2025

5 Reasons you need a Financial Advisor

Health is wealth. Good health is not just the absence of any illness, but complete physical and mental wellness of an individual. In this blog, we’ll discuss why you need a Financial Advisor

In today’s world, stress affects both physical and mental health, and one contributor to stress is the state aof n individual’s finances.

We all have financial goals we want to reach, and savings just don’t cut it. It’s important to invest. While we invest, how do we know we’re doing the right thing for our goals?

Here’s where your financial doctor, or advisor, comes into the picture. Just like you need a doctor for your physical or mental health, you need one for your finances, too.

So, how can your financial doctor help you?

1. Understand your financial health –Your financial advisor will work with you to assess your current financial health – your assets, liabilities, income, and expenses. He/she will also consider any expected future obligations (insurance, taxes, other long-term expenses) and sources of income (pension, gifts, etc.) to get a complete picture of where you stand.
2. Assess your goals –Once your advisor maps out where you stand, he/she will understand your investment goals, time frame, and risk appetite. An understanding of risk appetite will allow your advisor to determine your asset allocation. He/she will also assess your retirement needs at this stage. Invest now
3. Build the financial plan –The next stage is where your advisor charts out a comprehensive financial plan for your goals. This plan will include details such as where to invest, how much to invest, and for how long to invest. He/she has the expertise to understand how all these products will work in tandem for you to achieve your goals. The plan will also look at your retirement plan, your projected withdrawal rates during retirement, and have the best- and worst-case scenarios for your expected lifespan. If you’re already investing for your goals, your advisor will review your current habits and suggest a course of action. If you’re investing without goals in mind, your advisor will help you allocate your existing investments for your goals. Read why goal-based investing is important here. Once your plan is ready, it’s on you to implement it.
4. Help you understand where you’re investing –When building your financial plan, it is important to understand the products you’re investing in. The pros and cons, how it fits in your portfolio, what it can do for you – your advisor will help you with this.
5. Regular reviews and adjustments –It’s a good idea to revisit your investments regularly to check if you’re on track, review what you’re doing, and see if you need to adjust your plan to incorporate new goals or modify/remove existing ones. Depending on your needs, your advisor will suggest changes to take you closer to your goals.

Financial advisors are the doctors you need for your financial health. With their expertise, you can get the best out of your investments.

December 8, 2019November 27, 2024

7 bonus ideas you need in your life!

It’s the end of another financial year, and many of you will be receiving your annual performance bonus. Exciting time, isn’t it? I bet you’ve got fantastic plans of how to splurge it. I’ve got them too, with a little boring, but necessary checklist I thought I should share.

I hope that maybe it helps you too. Without further ado, here’s 7 bonus ideas you need in your life.

Pay off debt:Credit card bills, student loans, vehicle or home loans, you could have any of these. It might be a good idea to pay these bills and also set aside some money for any future loans you may be considering. This will minimise the principal amount you owe and you can save on hefty interest payments.
Add to your retirement fund:Your retirement may be a long way off, but no one tells you it’s one of the first goals you should start saving for. Why? Look at cost of living today. If you spend 30,000 a month today as living expenses, 20 years down the line assuming inflation is at 6%, you’ll be spending 1.72 lakhs a month. Start putting aside a little by little with a Systematic Investment Plan in mutual funds to build wealth for your retirement. You can also invest in NPS and PPF for relative safety. Use a retirement calculator to figure out how much your SIP amount should be.
Build an emergency fund:Life is unpredictable. So, isn’t it a smart move to be prepared? You may lose your job, or your company isn’t doing well and can’t pay salaries, or for some reason, there is little or no income. It’s ideal to have at least 6 months of expenses saved in an emergency fund. Do not touch this unless it truly is an emergency. Consider a liquid fund for this. Frivolous purchases are not emergencies and can be planned.
Invest for longer term, big ticket goals: You’ve got a lumpsum in hand, why blow it all up now? You may want to purchase a car in the future, make the down payment on a house, fund your child’s higher education, or even start a business. Whatever your goal may be, no matter how far, start setting aside funds today for it. You can even start a SIPin mutual funds. Time and compounding will work for you.
Get insurance: Ever considered who will take care of your family should anything happen to you? Get a term plan to secure your family financially in case you die. The earlier you get it, the lesser the premiums cost. Don’t delay this until next year.
Buy health cover for your family: Health is wealth, and when your bonus can help you secure your family’s health, why not? There could be a time when your employer’s health cover may not be enough to cover all expenses. Consider purchasing a family floater health plan.

Invest in yourself: An investment in yourself is the best investment. Take a course, learn a skill, join the gym, read! Meet people, socialise, and don’t forget to have fun. You’ve earned it.

December 4, 2019November 27, 2024

Breaking Down Debt Mutual Funds

Debt mutual funds are those that invest in fixed income instruments – such as corporate and government bonds, overnight securities, corporate debt securities, money market instruments etc. These funds are ideal for investors who are averse to risk and seek to generate regular income.

Debt funds are a good tool to use if you want steady income with low volatility and higher than bank returns. They also come with greater tax-efficiency than these products. We’ll address the advantages of debt funds and compare them with similar products in another article.

Let’s look at how SEBI has categorized debt funds.

Overnight Funds

These funds invest in overnight securities having a maturity of 1 day. They are the least risky of all debt fund categories, and this low risk comes with low returns. How these funds work is that at the beginning of each day, the AUM is invested in overnight securities, and since they mature the next day, the fund manager can buy fresh overnight bonds the next day using the principal and return earned. NAV of this fund will increase little by little over time. The advantage of this is that changes in the RBI rate, credit rating of the borrower do not affect your investment.

Liquid Funds

Liquid funds invest in debt and money market securities such as treasury bills, government securities, call money with a maturity of up to 91 days. These are a good tool to use to park surpluses and to build an emergency fund. These can also be used to transfer that surplus to an equity fund using a Systematic Transfer Plan (STP). What’s interesting to note is that some liquid funds even come with an instant redemption facility.

Money Market Funds

Money market funds invest in money market instruments such as commercial papers, certificates of deposit, treasury bills, repo agreements of the highest quality with a maturity of up to 1 year. These are suitable for investors with low risk appetite and an investment horizon of at least a year.

Corporate Bond Funds

Corporate Bond Funds invest in debt instruments issued by companies. These instruments comprise of the highest rated bonds, debentures, commercial papers and structured obligations. Minimum investment in corporate bonds by these funds is 80% of the AUM. They are suitable for investors with an investment tenure of 3-5 years.

Credit Risk Funds

Credit-risk funds are debt funds that invest at least 65% of total assets in papers rated less than AA (not of the highest quality). As these funds take on more risk than most other debt funds, they come with the ability to generate higher returns too. It is suitable for investors who can assume high risk and have an investment horizon of at least 3 years.

Banking and PSU Funds

Banking and PSU debt funds invest at least 80% of their corpus in debt instruments of banks, Public Sector Undertakings and Public Financial Institutions. They come with low risk and are suitable for investors who have an investment horizon of 1-2 years.

Invest now

Duration funds

Duration funds invest in debt and money market instruments that have different maturities. Based on the maturity of instruments, they are classified into ultra-short (3-6 months), low duration (6-12 months), short duration (1-3 years), medium duration (3-4 years), medium to long duration (4-7 years), long duration (7+ years). The longer the tenure of the fund, the higher its ability to take risk. Investors in these funds should invest if the maturities are in line with their investment horizon as the fund will take this time to give an investor his principal and the interest owed to him (Macaulay duration) for investing in the fund.

Dynamic Bond Funds

Dynamic bond funds invest in instruments with varying durations. These are actively managed funds and are suitable for investors who find it difficult to judge interest rate movement and have an investment horizon of 3+ years. This is because these funds hold securities with reducing portfolio maturity when interest rates rise and increasing portfolio maturity when interest rates fall.

Gilt Funds

Gilt funds invest at least 80% of their total assets in Government securities (G-secs). These are issued by central and state governments across various tenures, both long and short. They usually have no default risk as these are government backed. They do come with higher interest rate risk for instruments with higher maturities. These funds are suitable for investors with an investment horizon of 3+ years and benefit the most in a falling interest rate environment.

Gilt Fund with 10-year constant duration

Gilt funds as discussed earlier invest in government securities. In the case of funds with a 10-year constant duration, assets held in the fund have a Macaulay duration of 10 years and are suitable for investors with this investment horizon in mind.

Floater Funds

Floater funds invest a minimum of 65% of assets in floating rate instruments and the rest in fixed income securities. Floating rate instruments are those that don’t have a fixed interest. If interest rates rise, the interest from these funds also rise immediately. These funds invest in securities that have medium to long-term maturities.

Fixed Maturity Plans (FMPs)

FMPs are passively managed close-ended funds, where investments are held to maturity. These can be considered as an alternative to FDs as they have the potential to deliver FD beating returns. Another advantage they have over FDs are that they come with better tax-efficiency. We will discuss tax-efficieny of mutual funds in another article.

May 2, 2019

Best Ways to save and Invest Money for Newly Married Couples

When two people decide to stay with each other, there are many responsibilities which come together. Including Changes in Living or spending money on different choices. Sometimes Not planning proper finance Destroys the flow of happy living. Many Wealth management Companies also advises how can people plan the finance if they don’t have enough money to invest.

There are some ways by following them any one can lead to happy married and wealthier life. These are some points which can help any couple to plan money making.

Opening a Joint Account– Couples should start saving money firstly by opening a joint account. It will help them in saving money, And planning their future needs. All the experts suggests that opening a joint account in which the couple invests n saves money from their salaries, definitely will be beneficial in future.

Budget making- When we enter in new phase of life it is sometimes difficult to maintain the budget. People are unaware of their partners habits, and don’t have an idea about what they prefer and in which things they love to spend money. So it’s better to make budget for maintaining the flow of funds.

Planning in tax saving Funds- When couple earns jointly, the amount of tax which lend on them is also increases. So for avoiding and decreasing the amount of tax, they can save and invest into various insurance schemes. These insurance schemes can not only save the taxes, also give you security for your future.

Planning Smartly- for every newlywed their are some sort of responsibilities which they need to manage. Like buying their own house, Buying a car, planning for future emergencies and so on. So it is important to plan smartly and wisely for future financial success.

March 29, 2019

Why Finance Planning is Necessary For Everyone

Financial planning a need for today

Financial planning in simple term means to plan your money wealth for future. in Today’s world when everything is so expensive, the expenses without planning becomes a burden. If you will not plan the amount of money and finance you are going to spend in future, then it is gonna be trouble for you. If you run a business and you have the huge amount of money for your company’s funding in that case it is very necessary to hire a financial planner. There are many Certified Financial planner.

If you are a person who works in a company or have a job then too it is very important to do financial management and money planning. You can Invest your hard earned money in several Investment plans according to your amount and suitability. You can invest money in mutual funds, SIP mutual Fund investment, Bonds, Fixed Deposits. You can secure your future as well as your family and children’s future by taking Insurance policies.

Planning and investing your money can also be useful in saving the amount of taxes. There is a rebate in paying tax when you invest your money. So investment saves your money in many ways.

Financial planning should be started by everyone in early age. The more early you will plan your finance and start investing, the more benefit you will get in your future. Planning of finance gives you a security and leads you to live a better livelihood. It can give you to live your life more freely without worries of the changing financial situations. Financial planning also gives you a protection against any adversary.

You can contact best Financial Advisory firms in Delhi to plan your financial decisions. There are many Wealth Management Companies in Delhi NCR which provides many financial solutions. VSRK Wealth is the Fastest Growing Financial Services in Delhi. Which provides best financial products for all type investors. So start planning your Finance now.

March 8, 2019

What is the difference between Financial Planning and Financial Management

Financial Planning And Financial Management Are two different terms. People think these are similar, although the objective of both are same but still there is a difference between them. We have find out the difference between Financial Planning and Financial Management after talking over with the Best Financial Planners in Delhi.

Financial Planning– Financial Planning Is the process of planning your finance for Future. Financial Planning is the task of managing that how a business or individual will afford it’s finance, complete its future goals and Objectives. It is the process of determining that how an organization will achieve it’s financial aims. For planning your finance it is not necessary that you should have finance or money at the time of planning.

Objectives of Financial Planning-

Financial planning is done to achieve the following objectives-

Financial planning helps in ensuring the requirements of funds whenever they needed.
Financial Planning helps in controlling the wastage of funds in unnecessary resources.
Financial planning reduces the risk of uncertainties in changing market trends.
Financial planning helps in obtaining the right financial Schemes for those resources which will be beneficial in Long-term.
Financial planning helps in Delivering the funds at the right time at the right place.

Financial Management– Finance And Money is the Vital need of any business and Organization. The source of finance is always limited. So therefore it is very important to manage finance in a right manner. Financial management is the process of planning, organizing, controlling and managing financial resources, with the aim of achieving all financial goals of organization.

Objectives of Financial Management-

The financial management is generally related with procurement, allocation and control of financial resource. The main objectives are-

Financial management helps in ensuring the regular supply of funds to the related concern.
Financial management ensures the optimum utilization of funds.
It helps in investing in safe areas, so that the great R.O.I. can be achieved.
Financial management helps in planning a good Financial Structure. There should be maintained a fair balance between the debt and Equity Capital.
Proper finance management helps in Maximization of Wealth and profits.

Difference between Financial Planning and Financial Management- Although Financial Planning and financial Management are very similar. But still there is a difference. According to Financial Business Planner in Delhi The main Difference between Financial Planning and Financial Management is that you can plan your finance and financial goals for future, whether you have not money or finance at that time, but for financial management you should already have wealth and money to manage.

VSRK Wealth Creator is one of the Best Financial Distribution Company in Delhi. For effectively planning your funds and Finance you can also consult mutual fund services.

January 25, 2019May 21, 2025

How are Fintech Companies creating disturbance in Banking Sector?

Times have changed and the technology has also challenged the status quo of the Financial Sector. The bombardment of mobile payment apps, online shopping, investments, mobile to mobile banking has made a tilt shift of 180 degrees in financial arena. The Banking System has been confronted by this new idea of Fintech Companies which are spreading its roots in India. People now-a-days to avoid paper formalities and finding ease of access through the internet, are switching from Banks to these Fintech Ventures.

Mobility has played a vital role in financial revolution. In this fast-paced World, one needs all the information and services on their smartphones. Financial Services traditionally needed an infrastructural setup (branches) and fixed assets to raise their entry for customer retention. While technology advancements now allow Fintech startups to virtually operate to deliver complex financial solutions. The digital transformation coupled with mobility gives the ease of excess to their clients who initially were forced to wait in long queues for making a deposit, requesting a check-book or conduct trades. That’s where these Fintech Companies earn trust and credence from the public at large giving flexible and adaptable options to their customers.

Ways how Fintech is creating disturbance in Banking Sector

Fintech venture opens the door to choose between various and multiple schemes which are available in market. Whereas, mostly bank can only promote their own products. Fintech not only offers numerous plans like mutual funds, pension plans or insurances but with the help of various tools and artificial intelligence draws a comparative analysis chart for the customer which eventually aids them to choose the right plan/scheme for their financial goals.

These Fintech Giants have incorporated the pop of online transactions and use of digital wallets, which eventually has made our life trouble-free than those times where we use to trade goats for wheat. Old fashioned banking transactions have been losing its charm. Today these e-wallets allows anybody to transfer funds from any place on the planet to any person having a mobile phone. This provides a faster, cheaper and more reliable way to transact than conventional banking system. Customers like to experiment with new methods offered by Fintech players which aids them track their payments, passbooks and account balance more transparently on their smartphones. In recent years we have also seen a rapid growth in block-chain, crypto-currency which has taken toll in the financial world by providing a swift way to transact.

Fintech players also empower customers with mobile applications which time to time notifies Portfolio Insights, Tracking of Goals, etc. This contributes customers to get information about their investments and holdings. The inheritance of Mobile Application embodies a platform which personalizes with each and every customer which mostly Bank fails to deliver. With all the statistics and data on one’s fingertips, customer is always updated. Neobanks are a very refined example for the same. In this digital sphere, Fintech endeavours from customer support chat-boxes, machine learning algorithms and biometric fraud analysis which attracts customer’s confidence.

Fintech ventures also promotes machine-learning through artificial intelligence which keeps a track of money laundering. These security software alerts while making any fraudulent payment or any virus attacks, which aids in check and balance of every transaction. Biometrics, facial recognition, iris scans and voice pattern adds a layer to the security system which increases the authenticity and reliability.

– This article has been contributed by Swapnil Aggarwal, Director, VSRK Wealth Creator

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