Personal Finance Online Resources for Indian Users

Rupee Cost Averaging – Get More Value for Your Buck

Wed, 11 Nov 2009 03:58:06 +0100

Sameer is a common investor. He wants to invest in the stock market, but is worried that the market will fall after he invests as the market has run up too much too fast. But at the same time he is worried that the market may continue to rise without a meaningful deep correction as it has being doing so since the last 2-3 months and he might miss the rally and the potential gains that he would make with it. Sameer is in a dilemma whether he should jump into the market immediately at the current level or continue waiting for the correction which refuses to come. In short here Sameer is trying to time the market which lot of common investors try to do. Many a times common investors get it wrong when they try to time their market entry and have burnt their fingers due to the market fall post their investment. Or many a times many investors have been left on the sidelines watching the markets go up, waiting for the correction endlessly which never comes through when required. Concept of Rupee Cost Averaging The simple solution to the problems of people like Sameer is Rupee Cost Averaging. It is very difficult for a common man to predict the day to day movement of the stock markets. Hence it is best to start investing on a staggered basis by making regular monthly investments. This helps the investor to spread out his investments evenly over a period of time. This process of making regular monthly investments over a period of time at various market levels is known as Rupee Cost Averaging. It is not always possible for an investor to buy at the lowest point and sell at the highest point. Rupee cost averaging helps the investor to reduce this risk of timing the market to a great extent.

An Introduction To Equity Linked Saving Scheme (ELSS)

Wed, 11 Nov 2009 03:50:35 +0100

There are different types of mutual funds available in the market. Based on the style of investing the 3 well known types of mutual funds are: 1. Equity Mutual Funds: These mutual funds invest a major portion of their corpus in equity shares and equity related instruments. The aim of this type of mutual fund is to generate long term capital appreciation for the investor. This type of mutual fund is suited to those investors who are looking for high returns and have a high appetite for risk. 2. Debt Mutual Funds: These mutual funds invest a major portion of their corpus in debt instruments like Government Bonds and Securities, Corporate Bonds, Fixed Deposits, Money Market Instruments etc. The aim of this type of mutual fund is to generate regular income for the investor. This type of mutual fund is suited for those investors who are looking to generate regular income for themselves without taking much risk. 3. Balanced Mutual Funds: These mutual funds invest a major portion of their corpus in a mix of equities and debt instruments. The distribution may be in the ratio of Equity 70 and Debt 30 or 50:50 or any other ratio as specified by the mutual fund. The equity component aims at generating long term appreciation and the debt component aims at providing stability and generating regular income.

Introduction to Financial Planning

Tue, 03 Nov 2009 04:36:28 +0100

Financial Planning is a roadmap to realise and achieve financial goals in life. The process of financial planning involves identifying the financial goals in life, based on the person’s financial position and risk profile charting out a feasible plan to a achieve those goals. Financial Planning includes identifying goals, making the plan, allocating resources and regular review. Common Financial Goals that Every Person has in Life: Everyone has various financial goals in life. Through proper Financial Planning a person can achieve various financial goals in life. Every Financial Goal revolves around a Number. Sample this…….. · Will Rs 20 Lacs be enough for my son’s MBA 15 years down the line? · Will Rs 9 Lacs take care of my daughter’s wedding 3 years from now? · Will I be able to buy a house worth Rs 35 Lacs 7 years from now? · Will I be able to enjoy a vacation with my family once in every 3 years? · How do I retire with an Rs 1 Crore retirement fund?

Human Life Value – How Much Are You Worth?

Tue, 03 Nov 2009 04:18:39 +0100

A popular advertisement in media which most of us must have seen says “There are some things that money can’t buy, but for everything else there is MasterCard.” Ask people in which category does human life belong and without a second thought they will agree that human life is priceless and no amount of money can compensate for the value of a human being. But insurance advisors/agents will differ. To arrive at the amount of insurance cover that a person should take they assign a monetary value to human life which they term it as Human Life Value (HLV). Through Human Life Value (HLV) we try to measure the economic value of a person. A person has different values like emotional value, social value, spiritual value, economic value etc. Human life value measures how much the person is worth in monetary terms. So what exactly is HLV?

Ten Important Things About Money & Life

Sat, 31 Oct 2009 02:00:00 +0100

Over the past three years, I’ve had countless opportunities to reflect not only on my own personal finance and life journey, but that of thousands of readers who have contacted me over the years with questions and stories. Along the way, quite a few principles for personal and financial success began to appear. These same features pop up again and again in people’s stories and comments – and I find them to be deeply true in my own life as well. The single most important part of personal finance is truly knowing yourself. Why do you buy the things that you do? Why are you worried about this situation? Why do you feel this way about this product? Why do you respond to guilt in this way?