TVK Financial Planners

Will we learn from MLM Scams. The history of ponzi schemes. Source:quezi.com

2011-06-15T12:26:00.000+05:30

Charles Ponzi

In the recent times all news channels, news paper in Kerala is filled with news about the investors who lost money by investing in so called "RICH QUICK" investment options. Tycoon international, Bizzare, RMP....... the list goes on. Few years before, there was a magic product which will double your money in one year. The company is LIS. I know many highly qualified people, people working in banks, teachers invested in this product.Now no one knows what has happened to the promoters and investors. Most of the malayalam channels were showing the ads and these ads been done by smart creative people. If you use your common sense no creative ad can take your money away. Just do a simple calculation on how much you earn if your money doubles in a year.

100000 invested will become 102 crore in 11 years does that make sense. But then how new schemes able to collect money. No need to blame the promoters

All Ponzi schemes are based on maintaining the illusion that profits are being generated, when the “profits” are really new money being invested into the scheme. Therefore, the Ponzi scheme depends on a constant influx of new members, or of new money from existing members. When the flow of new money dries up, the scam collapses.

Some Ponzi schemes start out honest. The organizer is under pressure to keep the profits coming, and if profits drop can be tempted to start paying out “profits” from incoming capital. After this has been done for a while, collapse becomes inevitable. Even if profitability returns, there are no longer enough funds under investment to generate the necessary payouts.

Sometimes the scam continues unabated for years or decades. The perpetrator keeps going, often under the delusion that things will somehow “come right” and enable the scam to be unwound. The scheme may only collapse when the funds run out completely, by which time there will be nothing of value left that can be recovered by the investors.

Ponzi scams are named after Charles Ponzi. His was not the first such scheme; no doubt these schemes have been played out many times over thousands of years. Indeed Ponzi had worked for Banco Zarossi, a failing Montreal bank that was funding its interest payments using the capital deposited by new investors.

In early 1920 Ponzi noticed that International Reply Coupons (which can be exchanged for a postage stamp anywhere in the world) were being sold so cheaply in Italy that he could theoretically make a profit by buying them there in bulk, sending them to the US, exchanging them for US postage stamps, and selling the US stamps.

Ponzi sought backers to exploit this, and raised funds from his subscribers. But the overheads of trading in the IRCs were high, and Ponzi instead paid his subscribers from the capital of new investors. Because this seemed to be working, the number of new investors continued to grow and, despite a few setbacks and suspicions, Ponzi kept the scheme growing, “making” millions for himself.

The US Post Office announced that the IRCs were not being bought in quantity, so any rational investor could have seen that it was a scam. But people are not always rational, and the scheme ran for almost a year before it collapsed suddenly when Ponzi’s publicity agent, James McMasters, sold the inside story to a newspaper. Ponzi was arrested and it was all over.

, investors greed will never end.

Regret Aversion.

2011-06-05T18:03:00.000+05:30

Who do you think feels worse, Ramu or Shamu

Scenario 1
Ramu owns 100000 INR worth of stock in Reliance. A trusted friend suggests that Ramu sell it and buy 100000 of TCS stock. Ramu does not sell, and over the next year Reliance share price drops 30%, turning his 100000 INR holding into a 70000 INR investment

Scenario 2
Shamu owns, 100000 INR worth of TCS stock. During the same period, a trusted friend suggests that he sell his shares and buy 100000 INR worth of Reliance. he does this,and over the next year Reliance share price drops 30%, turning Shamus 100000 INR investment into a 70000 INR investment stake in Reliance.

Who do you think feels worse, Ramu or Shamu

Planning for your children education and marriage.. Facts you must know about children plans in the market.

2011-05-18T13:53:00.001+05:30

The market is flooded with children plans. The goal of every parent is to give their kid the best education no one is ready to compromise when it comes to their children. Whatever we didn't get when we were child we need to give that to our kids that is the top priority.Education is getting costlier day by day. If we do a bit of number crunching the picture looks bit scary!

Here the companies selling the children plan has got a huge potential to do "emotional blackmailing" they use all marketing gimmicks to sell the product." If god forbid you die what will happen to your child future, how your dreams will come true" any parent hearing this will get scared. On the other side the agent is curiously waiting to close the sale and complete his target which will make him qualify for a fully paid trip to Thailand :) Then the conversation goes like this normally.

Agent : Sir, i hope you now understood how good is our product. Can you pay by cheque or cash (A typical sales closing question)

Parent : How much i need to pay? what is the minimum in your scheme??

Agent : Sir, i recommend you pay 50000 Rs p.a. so that you get a good life coverage and other benefits.

Parent : No no.. i already have many policies i can pay only 25000 p.a.

Agent : Ok sir lets do one thing, we will invest 25000 half yearly, you can give standing instruction to the bank so that you don't have to worry about paying premiums. Is that ok.

Parent : Ok, agreed, He signs the cheque and hand it over to the agent. Back of the mind he feels proud, investing a hefty amount for the kids future. Same time also bit concerned about the huge commitment he has made. Decided to put in extra effort in work and bring in more incentives and overtime pay so that all commitments can be met on time.

So far the story looks good. Have you experienced the same, i am sure few of you would have undergone the same experience. The agent might be your friend, a relative who is highly concerned about your well being. Now my request to all is if you have bought a policy just go and check out what is the current status of your investment. What all benefits is been disclosed in the policy document. If still you are happy kudos to the person who have sold the plan. Or else....

Important things you need to know

The life assured is the parent . If something happens to the parent sum assured will be paid. Because the parent is the earning member, and insurance can compensate financial loss alone.
If you don't have a sum assured (Death benefit) of at least 20 times of your annual income you are not safe.
If you are not going to continue the plan for the entire term,You will loose most of the benefits.( unfortunately these plans are miss sold as 3 year plan).
Most of the plans ( except single premium) if you have not paid premium for the first 3 years, the whole amount paid till date will be forfeited. No money will be paid back.
Don't fall prey for fancy names. Children plans are normal endowment plans or ULIP with few ad on benefits.

Do post your valuable comments. The next article is about the viable investment options for children education planning.

Life before marriage and after marriage:) in terms of personal finance....

2011-05-02T23:59:00.000+05:30

This article is dedicated to all my readers who is going to get married soon and got married recently like me :). based on survey on spending patterns and saving patterns.( This is a general perception. There are exceptions, if you belong to the exception you might be lucky or unlucky depends on how you look at life)

Life before marriage

Commitments are limited.
Salary or income that we earn will be spend for things what we like more than what we need.
Friends and fun will be the top priority.
We love plastic money.
We take credit as far as our salary slip or form 16 supports.
We are not interested much in saving. Will be very bad in maintaining financial discipline.
Will be willing to stretch EMI for the dream car.
If i am a successful in my career the flat that i own will prove that, because thats how society look at things, result more EMI.. Because now a days for getting married you need to submit your resume, more assets you own more chances for you to get a partner.( When you get more assets unfortunately your EMI becomes fatter and at times will exceed what you can afford)

Life after marriage

I am looking forward for comments from readers on how life after marriage will look like in this kind of scenario.Do give your view points so that we will reach a conclusion.

Facts about Gold. ( source: world gold council 2009-2010 numbers)

2011-04-12T16:00:00.000+05:30

India is the largest market for gold jewellery in the world, representing a staggering 440 tonnes of gold in 2009. All evidence suggests that 2010 will exceed that figure.

Indian consumers are actively engaged in considering their next piece; 75% of women say they are constantly searching for new designs. Whilst over 50% of gold jewellery is bought for weddings, the wedding anniversary has now become the most aspirational occasion for receiving gold today, extending a couple’s relationship with gold beyond the marriage ceremony.

The festival of Dhanteras, the most auspicious day in the calendar just before Diwali, has traditionally created a strong seasonal surge in sales. However, the strategic development of the Akshaya Tritiya festival in May, together with leading trade partners, has seen phenomenal recent success; sales during that period grew over 28% in the last year.

India’s culture and mythology embrace gold. And India’s traditions of unparalleled craftsmanship and skill are exemplified by the country’s gold jewellery manufacturing, with the majority of pieces still made meticulously by hand. Each region’s symbols and designs are reinterpreted in gold which is overwhelmingly high in caratage.

I Earn, I Spend, I cant Save...

2011-04-11T23:59:00.000+05:30

I earn I spend I can’t save. It’s true for most of us. India as a country is in its best growth phase, the country having the demographic advantage. More youngsters making big money that their parents couldn’t dream off, buying cars in their late twenties, buying home in their 30’s, exotic foreign trips. But the sad part is most of us (not all) are not happy. Even when driving the new car, sitting in the balcony of apartment there is something haunting our mind. The biggest “Satan” is the EMI commitment for next month. Then comes the credit card bill, have been paying minimum due for last few months credit card company is happy so are we. We use top notch brand products, let it be perfumes, there are many like Hugo boss or Davidoff with a price tag of 3k plus. Even underwear people has become brand conscious. Nothing less than a jockey is considered cheap.

Is this for good? The answer is everything is good as far as it doesn’t put you in a debt trap. Irrespective of the income let it be 5000INR or 500000 INR a month it’s not difficult to spend. The urge for spending more than your income is due to the phenomenon called “instant gratification”.

Gratification can be explained as “the pleasurable emotional reaction of happiness in response to a fulfilment of a desire or goal”. And instant gratification is what we want; we want right now not ready to wait. It is human tendency and it is very difficult to control instant gratification. When we go to shopping mall or any big retail outlet we tend to buy more than what is required, with lot of discount sale. For buying 1 shirt we end up buying 3 by paying for 2. Good deal. Was there a need for the 2^nd shirt?? We ourselves don’t know why we bought it. Another good example, once we get a job with few payslips in hand we are ready to buy our first car, why? because everyone around us are doing the same. Get some money borrowed from parents or if the pay cheque is fat enough use that to fund 10% of on road price of car.. rest is simple, sign few documents within hours the loan will be disbursed by your banker.

Now let us look into a different scenario, what if you could delay your gratification. Preparing a proper plan and budget before shopping. Instead of buying the car immediately make investments for 3 years or so to build a corpus to fund the first car. Even 10% of income channelized to the right investment avenues like mutual fund in a systematic way can make wonders. The power of compounding can do wonders. Few things that you need to keep in mind to ensure u not making a hole in your wallet.

· Just because credit is easily assessable don’t leverage too much
· Have a proper planning and budget before shopping.
· Restrict the use of credit cards. Use in time of emergencies not for your day to day expenses.
· Understand wealth can be created in long run only.
· Not more than 25% of your income must go for EMI.
· “Deserve before you desire” it’s a harsh statement but valid create a corpus and just don’t start leveraging your pay slip or ITR.
· It doesn’t matter how much you earn 5k or 5 lac a month if you cannot control your spending, it’s all same.
· We all live in an uncertain world, a job loss or loss in business may also happen. Have an emergency fund in place.
· Investment in equity fund SIP can help to take advantage of power of compounding. Eg: 2000Rs invested in HDFC top 200 in last five years would have grown to 212622Rs. Invested amount 2000x60 = 120000 current value = 212622.

Do plan your finance, control your expenses, have a happy and healthy life ahead. CheersJ

"Start Writing your family budget" A Good article by STEVEN FERNANDES in fpgindia.org

2011-04-06T13:12:00.000+05:30

Start Writing your Family Budget

by STEVEN FERNANDES on APRIL 5, 2011

Shreekant & Geeta had been married for 5 years now and from the constant franctic calls that I had started getting recently from Shreekant, I figured out that something was amiss on the personal financial front. Both had decent salaried jobs and nearly a year back they purchased a home in the distant suburb of Mira road, near Mumbai, by availing a home loan of around 20 lakhs. They had a kid who was just 3 years old and was being looked after by a full time maid.

I felt that it would be better to meet this couple at the earliest and conveyed the same to them. Both Shreekant and Geeta met me on a Saturday evening at my office with all their personal financial papers.

After the initial discussion and on further probing, I realized that this couple did not have any form of budget in place. They could tell me how much net income they earned but could not figure out how the entire income got exhausted month after month, sometimes forcing them to use their credit cards excessively to meet the shortfall.

I suggested them to prepare a simple cash flow statement which contained Income on the left hand column and expenses on the right hand column. Expenses were further broken into Fixed and variable. I explained them that expenses such as Home loan EMI, Car loan Emi, rent, school fees, maid salary, etc are fixed expenses where the amounts did not change month on month, while groceries, utility bills, petrol/ travel, medical, etc would form the variable expenses since these amounts would change every month.

I could see the couple sweating it out to figure out the various expenses since they had never taken the trouble to make a note of it on a day to day basis. After nearly half an hour they were able to fill the monthly expenses details. I further suggested them to break up all the one time annual or half yearly expenses such as Insurance payments, vacation etc into monthly so we could get an idea of the exact monthly outgo.

After some debating and arguing between the couple they were able to write down the complete monthly expense breakup. Now things were clearer and we were able to figure out the exact monthly expenses. It was now time to do a simple subtraction of expenses from income and surprisingly we discovered that there seemed to be some surplus too. But we figured out that due to non budgeting of expenses and frequent use of credit card, most of the time the minimum balance on credit card was being paid which resulted in the card issuing bank charging them high interest and thereby leaving them with no surplus at all. A few months of monitoring of the expenses would help them to arrive at the exact figures and enable them to plan better.

Shreekant shared with me that when he was a kid; he remembered his father would hand over a sum of money from his monthly salary to his mother who being a housewife would manage the entire household expenses within the money provided and in spite of the fact that there was only one earning member in the house, still all the basic requirements of the family were met comfortable. Today things which were luxuries earlier have become necessities and there are so many expense heads which if not tracked and monitored, would land a majority of the couples in a similar situation as of Shreekant and Geeta.

Geeta realized the importance of the above simple exercise and promised me that both of them will commit themselves to writing their monthly budget from here on. They also understood that it was more prudent to withdraw the required budgeted cash from the savings account in the beginning of the month, thereby avoiding frequent and unmanaged withdrawals during the entire month.

Though Budgeting is a not a very exciting activity but it is the most basic step of financial planning. It is also advisable to review your budget on a regular basis to make sure you are on the right track. So like Shreekant and Geeta, let the budgeting begin!

Budget sample

*Items*	*Per Month*	*Per Annum*
*Items*	*Rs.*	*Rs.*
*Salary {Net)*
Mr	40000	480000
Mrs.	20000	240000
Total Income	60000	720000

*Fixed Expenses*
Home loan EMI	20000	240000
Any other EMI	0	0
Kids School fees and school bus	1500	18000
Life Insurance Premium	6667	80000
Health Insurance {Cancer Policy}	833	10000
Scooter insurance	100	1200
*Total Fixed Expenses*	*29100*	*349200*

*Variable Expenses*
Food & Groceries	7000	84000
Clothing / Personal Care	833	10000
Electricity Bill	1200	14400
Cell & Telephone Expenses	1500	18000
House Maid/ServantsExpenses	2000	24000
Cookiing Gas Charges	400	4800
Cable Charges	475	5700
Dependent parents	0	0
Medical Expenses	1000	12000
Basic Traveling Expenses	2000	24000
House(Society) Maintenance Expenses	1500	18000
Vehicle/ White goods repairs	500	6000
Vacation	2500	30000
Entertainment	1500	18000
Miscellaneous	2000	24000
*Total Variable Expenses*	24408	292900
*Total Expenses*	53508	642100
*Surplus*	6492	77900

Who is your nominee

2011-03-10T22:54:00.000+05:30

Whenever we fill up application form for any thing related with money there will be a space for filling up the details of nominee.Most of the time our brain will be interested more with number crunching with respect to expected returns from the investment than thinking about what to fill in the nominee space.Sometimes the person who is selling the product will ask you who to nominate and fill it up by himself or sometimes the place is left blank. Do not forget to nominate your near and dear for all your investments. The nominee has the rights to accept the proceedings from your investments in case of your demise. The next question is who can i nominate? the answer is simple you can nominate any person you like. Even your friend can be your nominee.

Lets take an example Mr X who is married has an investment in SBI fixed deposit and he nominated his friend Mr.A in the application. Mr X met with an accident and died. Who will be eligible for the money in the bank, Mr A or Mrs X???. Most of us believe that Mr A being the nominee has rights in the money, but the reality is as per law even though Mr A being the nominee has no rights in the proceedings from the bank. He has got right only to accept the proceedings. If their are legal heirs, only they can claim for the money. The nominee has got only rights to accept the proceedings but cant use it if their is a legal heir. In case of dispute the matter will be taken to court and if the heirs submit legal heir certificate the proceeds will go to legal heirs and not to the nominee in this case friend of Mr X.

Few tips while filling the application form.

Never forget to fill in the nominee details
Its better to nominate your legal heir
In case of minors a benificeiry has to be appointed.
Change the nomination to spouse from mother once you married if required.
If you have to nominate more than one person you can add more by defining the percentage of share for each nominee.

its always good to be optimistic, in case god forbid something happens to me, my family must not suffer because of me being careless. Better i fill the nomination details and keep it updated. One more important thing, its my responsibility to inform the nominee about the investment and ask the nominee to safe guard the investment documents.

Unrest In Middle East what to expect in GOD's Own Country "Prevention is better than Cure".

2011-03-10T12:56:00.000+05:30

Kingdoms are vanishing in recent times, unrest in middle east as a result what will happen to Kerala. Many people will not show keen interest in talking about Kerala at this juncture. But the reality is far different. Is gulf country depending on Kerala? Or Kerala depending on Middle East? The answer is obvious Kerala depends on gulf. Now the competition is stiff, there are plenty of qualified personnel available from across the globe to work in Middle East. The sad part the Benz, BMW,AUDI, Jaguar and what not that runs in Kerala roads is fuelled by gulf money. The flats with all facilities including a facility for landing a helicopter (still can’t justify myself how in palazhi calicut people come home by helicopter.)

Back to basics. Few do's and do not's

Maintain an emergency fund which will help you to meet at least 3 months expenses. If not maintaining start saving today for creating the fund
Spend after you earn. It sounds silly but in the present world of plastic money irrespective of earnings we spend. Maintain savings of at least 30% of your income.
One task that you need to do now itself is go and check all your investment documents you have made so far. Maintain a folder for your investments. Try to understand the products. Research proves that 90% of insurance and mutual funds investors are not aware of the product in which they invest.
If time is a concern select a qualified financial planner who can help you out.
Understand what you are investing for, keep end in mind or else it does not make sense. its like you in railway station without knowing where to go.. So any train is ok for u... u may end up reaching Mumbai or may be trivandrum.
Keep your spouse informed about the investments you make.
Do not buy things that you do not understand. There are smart sales people around who can sell anything by confusing you.
Do not invest just by looking at name. Most of the children plan is not meant for children. Do not fall into Jargon trap and emotional selling.

Even though we started with gulf crisis nothing more on that is discussed here. The idea is to make readers understand the importance of financial planning. If you plan properly irrespective of the economic conditions crisis or recession you will be safe and secured.Your comments are valuable do share your views.

on a lighter side.. Fun and financial planning

2011-02-26T16:03:00.002+05:30

Suze orman youtube posting . 156962 views. Just go through the comments

2011-02-26T15:45:00.000+05:30

It happens not only in India Part 2....Sad story of a insurance customer.

2011-02-26T15:30:00.000+05:30

How bank executives take your money for a ride..

2011-02-26T15:12:00.003+05:30

What banking system.. Interesting and shocking story from ICICI. Poor depositors.

2011-02-26T15:07:00.000+05:30

Who is responsible for wrong selling of financial products?

2011-01-11T13:29:00.002+05:30

All of us want to create wealth, have to enjoy a good lifestyle and everyone agree that money is an integral part for a joyful life. The sad part is when it comes to investing money people are not open for options, open discussions and clear communication. Investors widely have a perception that if the person who is selling the product comes to know that investor doesn’t have much knowledge about the product its shame. So the investor will restrict his questions with his advisor and make investments. The other category of investor is who feels that he knows everything about finance and investment and doesn’t require any advisor. In which category you belong to? Both this options will lead to wrong selling. Let’s see how?
Who is an advisor? What is his job? Why should he come to you? If you can answer this question half of the job is done. An advisor is a qualified person (HUMAN), His job is to sell products, and He is coming to you to make money for his living, and working under pressure from his boss. If you don’t ask questions you are giving him an option to sell u a wrong product which doesn’t suit your requirement but he is getting more commission and chances for a foreign tour from his employer.
If you invest by your own methodology and using your advisor as a courier boy you may miss some good opportunity or product which you may not know. In mutual funds there are almost 3000 schemes to choose from, in insurance there are several companies offering various products. For a normal person it will be difficult to find time to understand all the products, all of us has our own work tensions and a person working in software will be expert in software but not always expert in personal finance, so it’s always better to have a professional to support in achieving your financial goals. Do keep this in mind.

Ask your advisor how much he earns by selling the product
Don’t be in a hurry. Wealth creation is a long term process.
Don’t sign blank documents
Avoid signing power of attorney to your broker
Always keep in mind wealth creation is a long term process. No shortcut available.
Never invest in a product by its name( Children plans in reality is a normal endowment plan)
These are few things you need to keep in mind before making any investment decisions. I believe wrong selling can be avoided or restricted only if the investors are educated. The mantra is the person who is selling is here to make his living better you ensure that you live and let him live his life.

I travel in economy class: Ramalinga Raju

2010-11-23T12:44:00.000+05:30

the same media gives stardom

2010-11-23T12:43:00.000+05:30

good or bad media gets viewers

2010-11-23T12:36:00.001+05:30

The bubble decade: Lessons to remember

2010-11-23T12:36:00.000+05:30

Not only in India it happens in US as well.. Check out the video to know about your friendly advisor

2010-08-13T20:40:00.000+05:30

When to start saving for retierment

2010-08-10T00:42:00.001+05:30

Lot of people have a mindset that planning for retirement has to be done just before retirement, does it make sense? how about planning for retirement from day one you start earning money.. sounds funny right, its true in our country people has started earning in a younger age, thanks to India Inc. But how many save for tomorrow.Start early and get the advantage of power of compounding. The below table gives you a clear understanding. Initial investment is Rs 100 @ 20% returns it has grown to 9540!! tats the power of compounding. So for a happy retirement start saving today so that you can built the required corpus for retirement.

At end of Year	5%	10%	15%	20%
1	Rs105	Rs110	Rs115	Rs120
5	Rs128	Rs161	Rs201	Rs249
10	Rs163	Rs259	Rs405	Rs619
15	Rs208	Rs418	Rs814	Rs1541
25	Rs339	Rs1,083	Rs3,292	Rs9,540

ULIP Demistified... the hidden charges..

2010-08-09T00:33:00.003+05:30

You got a call from an agent assuring you 0% allocation charges and 200% guaranteed returns think twice.. you may be in a hurry to file your tax returns. In real sense paying tax might workout cheaper than investing in a wrong product.Who have to make a change its you the investors be ready with your questions, dont fall for jargons which you may not understand. BE WILLING TO PAY A FEE FOR ADVICE. Lot of groundwork is happening to avoid miss selling with swaroop committee recommendation in place if amended that will open doors for quality advice. The video gives a better understanding on the issue. Do post your comments.

Are you a NRI Beware you will be the next target....

2010-08-01T17:22:00.000+05:30

I have a NRI Client based out in Singapore, how he became my client is quite interesting.. He has come from Singapore to India on vacation, as all NRI have the habit of generously helping the relatives and friends my client also belongs to the same category. He went to meet his old friend unfortunately his friend has somehow started a investment consultancy business, a sub broker-ship to deal with equities, distribution of all mutual fund products and an agency from one of the leading insurance company. My client earns good money being a NRI but keep his money in NRE account and do some investments in property not much aware of share market investments. When he met his friend he offered him big ideas of wealth creation talked everything about India growth story how markets has performed and how people are DOUBLING their money in no time.. he gave a detailed story about how much you loose if you keep your money in bank ac, how inflation is eating his money and so on... My client being a normal human also started thinking to look out for options to double the money and to take some small risk. His friend advised him to invest 15lac in one single retirement plan of the insurance company which he has taken the agency, and told him you have to be invested only for 3 years in which your money will be doubled.. you can use this just like a sb account and so on. The client was also happy he invested the money in few days he got his policy document and there ends the transaction.

Here comes the twist. .. my client got a new project and have to move to Nigeria. To send few soft copies of some documents to the new employer he went to a cyber cafe which is very next room to my office unfortunately the shop was closed.. he came to my office.. he saw me working in my comp and saw the printer fax all in one in my table. As his requirement was urgent he asked me for help and requested me to scan and send those copies, i agreed and we had general conversation. He asked me about the kind of work i do and he also told about the recent investment he made in the insurance product. I asked him about the amount of premium he told 15 lacs.. i was shocked!!! i asked in detail about his understanding about the investment he made, he told the money will be DOUBLED in three years and it just works like sb account. I asked him are you aware of the charges he told no, i asked him did he go through the policy document he said no, i looked at his face and told him you are cheated. His initial response was not good, he didn't like me telling about his friend, i told him just to go through the policy document and if you need any support do call me or else no issues...

The very next day morning 10 clock he dropped in to my office with policy document bit confused.. the charges of the product is 9% for first 2 years and 3% through out the term. 9% is 135000 which is gone from his account and it will happen for first 2 years. Who is getting tis 9% is his friend as commissions. He gave me the document and told me somehow you help me to come out from this i am ready to pay what ever fees i charge... he was damn sure my fees is not going to be more than 1.35lacs. He was lucky enough that his policy has not crossed free look period first 15 days so can be easily cancelled, i helped him in getting the policy cancelled, .. his friend called me and told that i am a fool and dont know about investment market and how to do business. I was happy that the client is saved and off course there was a selfish motive behind helping him that i get a big HNI NRI client and more reference.

Dear NRI friends people over here (not all but few) believe for NRI'S money is not a problem even they make loss what big deal they will go back and mint money. Beware there are friends, relatives and your own personal banker or relationship manger who may screwup your hard earned money. Ask yourself few questions before giving your hard earned money to some one.

Why should he recommend this investment avenue
Be open in asking him about the benefit he is going to get.
Its business and not charity
Be ready to pay fee for advice rather than saving 15k and loosing 15lac.
Every product is good but not always for you.

Cheers! happy investing NRI'S

Its good to say i smoke i drink...

2010-08-01T09:53:00.000+05:30

If you say yes i smoke.. i drink and disclose the quantity of consumption you are safeguarding your life. Yes insurance company is not against tobacco or alcohol but if you don't disclose your personal habits your claim may be rejected. If you have disclosed the company might have charged an extra premium and issued the policy.Not only the personal habits but also your previous medical history is very much taken into consideration. Mostly non disclosure is not done intentionally the person who sells the product will fill up the application and ensures that the policy get issued fast and he gets his commission forgetting about the long term consequences of non disclosure of material facts. Why the sales person have to do this is because if you disclose that you have undergone a surgery last year before issuing the policy the medical test that has to be taken will be strict, will take more time. The company may ask to pay extra premium which is again tough for the sales man to go again and ask to cut a cheque.. So the next time you take a insurance don't forget to fill up the form in full by yourself and disclose everything with integrity. If not when need arise that is in your absence your loved ones will not be given the claim... so be cautious after all its your hard earned money honey!!

What to ask your Insurance agent or Personal banker

2010-07-20T13:31:00.000+05:30

Do remember to ask these question before taking a insurance policy.

Ask the seller to analyse the life cover (what family gets if you die or disabled) required.
Ask the seller WIFU (what is it in for you) why you so eager about my family... how much you get paid as commission for this.
Tell the seller that you need insurance and not investment..