Are your parents soon be retiring? Here are some tips:

Parents are generally not comfortable discussing their retirement plans with their children because, for them, it might mean admitting to their shortcomings or simply because they do not feel it is time to disclose their true financial worth. That is why you need to approach this subject with sensitivity and more importantly with practical plans in place.

1. Understand their expenses: 

Ask your parents what is their monthly expenditure and how do they intend to meet them, after retirement. Let us start with some basic questions like:

Where would your parents like to live after retiring? Are they willing to stay with you or in their respective homes? If the latter, how close are they towards owning the property?

Does it need any alterations, repairs? Is there money set aside for such things?

Would they need any monetary contributions from your end?

2. Plan for income streams: 

Start with the common questions:

Are they likely to receive any pension from their days of service, if yes, how much? How can they create alternate revenue streams, from their Fixed Deposits or other types of the corpus that they have created over the years? For example, if they have multiple smaller FDs, it might make sense to put them all in fewer and more manageable debt funds or FDs to take care of their monthly expenses.

3. Assess existing investments: 

Once you have figured out your parents’ monthly expenses, you can discuss options to meet these. You can also discuss their existing investments, and help them organize the investments to meet their expenses. If an insurance matures close to the time of their retirement, can you help them reinvest this sum, and where?

4. Pay off loans:

 If your parents wish to stay in their personal home, but have taken a loan for it, it is advisable that this loan, paid off before they retire. The same goes for any other loans. You can offer to help with these loans as well. Inquire about the amount that are yet to be repaid and the time remaining for the same.

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Stock Market Investing

High Volatility
The stock market subjects investors to high levels of volatility. This means sometimes the market goes up and sometimes the market goes down. Investors do not mind volatility to the upside, but downward volatility can damage wealth. For example, when the stock market dropped in July 2008, the market lost over half its value in less than a year, as indicated by the S&P 500 stock index.

Not Suitable to Provide Retirement Income
An individual at retirement age may not want a large proportion of retirement assets in the stock market. A retiree needs regular income and many stocks pay little or no dividends. To provide money for living expenses, shares of stock would have sold, reducing the portfolio and incurring commissions. A major drop in the market will reduce the total capital the retired person has to generate income. Since a bear market--defined as a time when security prices are falling--comes along on average every six to eight years, having most of a person's retirement assets in the stock market will eventually lead to some tight finances.

Large Number of Choices
The large number of choices may discourage investors that want to invest in the market. The Wilshire 5000 stock market index covers the entire U.S. stock market and includes over 6,000 stocks. There are over 4,000 stock mutual funds. It can take a lot of time, education and effort to research the market and select an appropriate stock portfolio. The size and complexity of the stock market makes it difficult for an individual investor to meet investment goals successfully.

Risks of Ownership
Owning stock owns part of a corporation. If the corporation declares bankruptcy, the owners or shareholders are last in line to receive any proceeds from the corporate breakup or reorganization. In most cases if a company goes bankrupt the shareholders, receive nothing for their shares. Very large and well know companies have gone bankrupt. The list includes General Motors in 2009, Lehman Brothers in 2008 and Enron in 2001.

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Do not step forward without proper advice: A couple’s horrifying tale

Nothing looks sweeter but a couple, who got into each other since college days and ended up getting married. Travelling under the night sky, stars blinking billions of light years away, and head rested on his shoulder, silent look into each other’s eyes with no one to bat eyes on them. Automatically a rendition of soulful piano and violin starts playing inside – a story about two young adults as they grew up together making memories. Ranjan, a banker married Tia, a digital marketing executive and are happy when a blessing news wrapped the couple in felicity. Tia was pregnant and she had plans for their future. Let us get into the accounts of one of her horrifying tales.

“I knew that having our first child meant that getting life insurance should be a top priority for both me and my husband. We researched policies, got a quote for an affordable term life insurance policy and had our medical exams. Imagine my surprise when, a few weeks later, the agent called me back and told me my new adjusted rate.

The cost of my policy had gone from a reasonable monthly fee they had quoted me—to nearly four times that amount. The reason, he said, was that my cholesterol levels were high. I called my doctor in a panic. Cholesterol levels always spike during pregnancy, she reassured me, and they probably will not be back to normal until a few months after you give birth.

After doing some research, I found that it is nearly always better to get a life insurance policy before you get pregnant to avoid potential price hikes brought on by temporary conditions during pregnancy. While some companies account for the fact that I gained weight due to the pregnancy, factors like higher blood pressure or postpartum depression can also affect your ability to get the best rates.

Now my daughter is three months old, and I am still waiting for my numbers to dip before starting again. I really wish I had known to start this process when trying to conceive instead.”

A blunder can harm people so much, maybe a lifetime. Therefore, it is better to take an advice before vouching for personal choices. Contact, Moneymindz, the best free financial advisory services. An advice should pass rather than keeping to oneself.

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Simple examples of investments with refer to some Big shots’ life mantra

Tennis is the toughest sport and completely depends on hard work. There is no way around the hard work so aspirers have to embrace it. The mantra is we have to put in the hours because there is always something we can improve. We have to put in a lot of sacrifice and effort for sometimes little reward but we have to know that, if we put in the right effort, the reward will come. Same thing works for an individual, who, does not necessarily have to work hard but need to discuss about what kind of investment they have keen. Looking for something befitting and rewarding, one must strive to achieve it.

“Laziness is not merely a physical phenomenon; it is about being a couch potato, stuffing your mouth with fries and watching television all day. It is a mental thing, too, and that is where I have never aspired. In the world of creativity, laziness translates into an inability to be rigorous enough to create fearlessly. It makes us plagiarise or water our creativity down to make it more acceptable to the public “a renowned Indian film star quoted. He is now the richest Indian superstar and joined the ranks of others in world’s top 20.

Therefore, the reason to quote this is to rectify people with laziness who thinks of investments only in top companies without having practically any knowledge. People are too lazy to learn and gain financial literacy rather they depend upon top-notch agents from big companies.

Compared to other talented players in his generation, his early life was a struggle through state and junior cricket teams when he finally accepted in the national team. Later as a Captain of the Indian National Team, he would profoundly be honoured for his successes and alternatively vilified for his failures. The secret of his ability to keep moving on through the ranks to ultimate success without falling prey to over confidence and criticism lay in his ability to step back and analyse what went right and what went wrong each time.

The only difference between this quote and me saying is Moneymindz will struggle to get you the perfect investment. Never fell prey to overconfidence and depend on some multinational or renowned company for investment. Play safe and swiftly.

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Life Change? Update Your Life Insurance Policy

                           

Many types of insurance are present in the market and very difficult to choose with one insurance scheme in India. The cheapest form of life insurance offering the death benefits to the beneficiaries of the policy holder is known as the term life insurance.

Need For Term Life Insurance:

People must have browsed through various kinds of life insurance. Term life insurance is way above the rest. In India slowly people are showing signs to take up this Term life insurance. People in India live on a limited budget, for a particular time period.

Types Of Term Life Insurance:

There are various kinds of term life insurance available in the market. Some of the interesting concepts of the term life insurance are as follows:

Guaranteed Level Term Life Insurance:

In simple English, a guaranteed level term life insurance is insurance product/services offering the insurance protection for a particular time. Available in 10,15,20,25 year term periods.

Annual Renewable Term Life Insurance:

A unique kind of term life insurance, where in the plan/policy can be renewed on a yearly basis. As the insured person gets aged, premium will rise over the period of time.

Return Of Premium Term Life Insurance:

A unique term life insurance having a condition, playing a vital role in refunding the life insurance premiums, when the term period ends is known as return of premium term life insurance.

Decreasing Term Life Insurance:

A spectacular life insurance, offering death benefits, getting reduced at a pre-determined rate is known as the decreasing term life insurance.

Modified Term Life Insurance:

A unique policy using various alternative payment structures to normal life insurance, offering the same level of protection is the modified term life insurance.

Advantages of The Term Life Insurance:

Major advantages of the term life insurance are given below as follows;

• Premium of the policy will be definitely lower than normal type of insurance. 

• Very easy to analyse and understand. 

• Required to meet the specific financial obligation, like repayment of loan. 

• Many term policies can be converted to cash value insurance, if the insurance plans and the policies change. 

• It is said to be very flexible, and can also select years ranging from 3 years to 10 year options.

• This kind of insurance is very less expensive, compared to normal insurance. 

• Superb plan for young and single families in India. 

• Helps in offering peace of mind, without putting any pressure on your wallet

Disadvantages of The Term Life Insurance

Some of the disadvantages of the term life insurance are given below as follows:

• Term life insurance is offering coverage for limited period of time. 

• Renewals of term policies are rare. 

• Premium rates are guaranteed until the end of the term like 5,10,15,20 years.

• If you are experiencing health issues, term life insurance is not your cup of tea. 

Hence I would recommend people in India to have a good term life insurance.


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Limitations of Insurance Certificates

Policyholders mainly depend on certificates of insurance to prove that insurance coverage exists. However, in reality, the certificate of insurance has limited functionality as evidence of insurance coverage. While it may alleviate the potential for additional audit premiums, it is misused and over-valued and can easily leave the recipient with a false sense of security.

Limitations of these certificates:

There are, however, certain issues and limitations with certificates:

1) Possibly compromised limits: 

The limits of liability shown on the certificate of insurance are the exact amounts as shown in the insurance policy when issued. What you will not see is any reduction resulting from a claim and the reduced limits. A certificate is never adjusted to reflect any reductions in limits because of any claims.

2) It does not reflect subsequent changes: 

The certificate contains information on the date of issuance. The next day, either the first named insured or the insurance company could make changes and there is generally no legal obligation on the part of the insurance carrier or its legal representative to provide any notice of changes or cancellations. Some of the changes can be quite significant including: cancellation due to non-payment, at the insured’s request, for underwriting reasons or the exhaustion of the policy limits; reduction or removal of certain coverage or limits from within the policy; or the removal of additional insured status, waiver of subrogation, or primary and non-contributory.

3) Policy terms, conditions limitations or requirements: 

Every insurance policy will contain terms, conditions, limitations or requirements that can cause major coverage defects if not known or properly handled. As a certificate holder, you may not know if your required endorsements, which were properly added or what the requirements are for you to have status as an additional insured. It is imperative to have some understanding of these from another source, as they will most likely not appear on a certificate.

4) Other states coverage:

 Workers compensation insurance is state-specific and the certificate may not list all the states for which coverage is required and afforded. This can become an issue in dealing with claims, audits and liability exposures.

5) Coverage confusion: 

Agents and brokers may indicate that certain coverage or provisions, provided when, in fact, they are not. This can result in a denial of a claim by the insurer. A claim dispute can consume time and money and whether or not you will prevail is subject to many factors, such as jurisdiction, applicable state laws and court interpretations.

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How to Invest safely on Stock Market?

                    

Stock markets are a complex system comprising of indices, primary and secondary markets, IPO, etc. which is a long trench consisting of vast information, a single person might find difficult to understand. Investing in the stock market is a way to make more than just a little extra cash. In fact, with the right approach and the right skills, investing even a little in the stock market can put you on the road to earning millions. Becoming a stock market millionaire is not an easy task and it will not happen overnight. If you want to become a stock market millionaire then here are the most proven tips to reaching your goals and the earnings you have always wanted.

1) Focus on Hot Stocks Hitting New Highs - 

Do your research, look into their patterns and place your focus on stocks that are already growing. As you get started with your stock market dreams, make sure to focus on hot stocks wing as you plan to stick with them until they reach new heights. Do not look to stocks hitting new lows.

2) You Can Buy and Short Sell -

There are some people who think they need a bull market to get rich. This is not the case. Do not ignore short selling. You do not have to hold on to a stock for a long time to earn a profit. Just look at the success some day traders have; they are the epitome of earning off short selling.

3) Chop Your Losses Quickly - 

If you want to be successful in the market, take your ego completely out of the situation. If you face a setback, cut your losses and move on fast. Do not dwell on your failure, but instead look to the future. You are going to fail, so be prepared and just be ready to move on.

4) Do not Be Afraid to take profits either half or completely - 

The thing about your earnings is that - they are not really profits until you take them. Do not be afraid to take partial profits or take profits too quickly. The market changes fast; it is OK to get out when you feel it is right and take the profits that you can.

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Car Insurance: Two-wheelers can either lift up your spirit or fix your spirit for terrorizing

                                     

                                

The winter made the evening darker and gloomier. The valley, filled with mist, thicker and denser, seemed made it deeper and darker. The moisture got into everyone’s throat nostrils and most of the children came down with fever.

Haggard’s crossing in the valley is a cold and unfriendly place. It is a four point crossing where tired travellers stopped to take rest. However, this place in the valley was not comfortable as most of the people avoided it due to unfortunate circumstances happened before. The deep and dark valley filled with dense mist obliterated the serene beauty. The local people narrated that some horrific road accident happened at a winter night at Haggard’s crossing and the spirit of the deceased still rambles on frightening travellers who pass-by.

Joy lived at the head of the valley alone. He is an exceptional guitarist, stayed all by him only except when the neighbours called for supper or asked him for a glass of wine and play the guitar. His old friend Arun and his wife for a celebration asked once Joy to come over to play the guitar and have supper. He assured whether anyone in his locality will be going as the valley was not safe at night and he needed lift. Everything sorted; Joy reached on time and started tuning on his strings, consumption of food and drinks happened to be in vast quantity while energized guests kept on dancing. When, joy rose up from the floor it was past midnight and his companions were gone leaving him alone. He felt heavy on his head and waved a drowsy farewell before leaving for home. There were two roads leading to his home, one being the avoided Haggards crossing. The other road saw a landslide and Joy was left with no option other than taking the shorter and dangerous route. By the time he reached the crossing, he seemed fresh. The cold winds have robbed him off his drowsiness. Adding to that, he spelt a chill down his spine when he started hearing voices.

Now, the villagers say they are literally afraid of taking the road as everybody can see two forlorn figures on a moonlit night.

Get unbiased advice how to Insure your car and drive safely. Joy did not have a vehicle but the person killed there was a drunkard, driving. Have some responsibility because we do not expect you to frighten people by becoming some wandering spirit. The premium paid for car depends on Insured Declared Value.

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#SPEND #SAVE #AND #INVEST_SMARTLY

How to use a Credit Card Wisely?

One has seen the latest smart phone or a laptop and the desire is to purchase it right now. Paucity of funds is a problem and one does not know what to do. Buy now spend later is the need of the hour. Credit is the name of the game. It is at this time that one remembers plastic money. A rectangular plastic card with a magnetic strip at the back and the name of the owner printed on the card famously called a credit card. With this card in ones hands all one’s wants can be fulfilled. Time to shop?

What is a credit card?

A credit card enables one to borrow money from the issuer of the card mainly a bank .One pays for a product or a service using the banks money and has to repay these amounts over a period of time .Since the bank pays the amount one does not have to pay right away and can purchase an item even if he has no immediate cash. One has to pay for the use of the banks money which is basically someone else’s money by repaying the amount with interest after a period of time just as in a loan. The bank sets a credit limit which is a maximum amount one can spend on the card. This could be 2-3 times ones monthly salary .It could also depend on the number of loans one is servicing which might impact the credit score. It mainly depends on the debt burden ratio which is the sum total of all EMI’s being serviced divided by the monthly gross salary. One obtains a statement on a monthly basis which lists the number of transactions made as well as the amounts paid using the card .One can pay by submitting the credit card at the cashier and the account is validated by the merchant with the bank .If all conditions are satisfied with the bank such as one is within the credit limit then the transaction is processed and added to one’s credit account. In order to accept credit cards the merchant has to pay a fee to the banks and the bank which issues the credit card collects these amounts as revenue.

What happens if one slides back on his payments?

The idea of using a credit card is all about the grace period. One would not be charged interest during this period. It is advocated that the least one can do is make the minimum payments on the credit card instead of the full amount. The problem with this approach is that the outstanding amount increases until it becomes a severe burden on oneself and his family. This pulls one in a debt trap. If one were to default on the repayments his credit score would be badly affected. Cibil a credit rating agency monitors one’s credit card usage and assigns a score on a scale between 300-900.Too many cards or a consistent late payment might affect this score. One would find it very difficult to avail a car or a home loan if the credit score is poor .When one falls into a debt trap it is not easy to recover. The never ending cycle continues and one can find it very difficult to escape from this vicious circle .Balance transfer is an option which can be explored in order to escape from this cycle of debt.

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Tax scenario after demonetisation...

The Central Board of Direct Taxes has cracked down on 18 lakh people who made suspicious deposits of over Rs 5 lakh during the 50-day demonetisation period, as part of its Operation Clean Money. Here is how taxmen are expected to further investigate these possible cases of black money and tax evasion.

Individuals

1. Individuals are exempt from verification for deposits of up to Rs 2.5 lakh (other than minors). No verification required for deposits of Rs 5 lakh for those over the age of 70 years.

2. In case of cash receipts from exempt income such as agriculture, officials will verify these against earlier returns. They may also seek information on land holdings, etc.

3. I-T may seek bank statements to cross-check individuals' bank withdrawals.

4. Those claiming cash receipts from third party as 'gifts', may be asked to pay tax.

5. No need for additional information for those in business if cash holdings are lower than level at the end of March 2016.

Businesses
1. Assessing officer will verify if cash transactions are in line with normal practice by seeking data on monthly sales, stock register entries, bank statements.

2. Investigators will look at abnormal jump in cash sales during November-December 2016 and tally it with sales history.

3. More than one deposit of scrapped Rs 500 and Rs 1,000 notes closer to Dec 30 deadline may trigger attention

4. Non-availability of stock or attempts to inflate stocks by introducing fictitious purchases will also attract scrutiny.

5. Transfer of cash deposits to another entity or account which is not in line with earlier history may invite queries.

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A Husband-Wife conversation.You will be shock to know what happens Next!!

Aritra and his wife Simran are discussing their financial plans. Aritra is convinced about buying a term plan while Simran is not sure how it will help. She sees it as an unnecessary expense, especially because there is no maturity benefit. Let us see how the discussion goes: 

Aritra (bleak face): simran, I have learnt about #term_plan from Moneymindz – the best financial advisory service In India . Term plan is broader in form and suitable for our #financial_protection. It offers a large cover for a small premium. I think it makes a lot of sense. 

Simran (Quizzical): What does that even mean? Say, if you invest Rs. 20,000 a year, how much money will we get back and when?
Aritra (mild): Let me clarify that a term plan is a pure protection plan, which means that I pay a premium for a fixed number of years, say from now until my retirement age, and get a life cover for that tenure. Suppose, if something happens to me, you will get the cover amount. Otherwise, once the term ends, we will not get anything.

Simran (sardonically): Did you mean that we pay for 30 years, which means about three lakhs, and then not get anything back? Let us put the money in a fixed deposit or a recurring deposit at 8-9% return so that we can get back at least some money after 30 years!

Aritra (alluring): I understand how this looks to you. You must always think in long-term. Imagine that even if we get back the entire premium after 30 years what we will buy with just three lakhs, which will not even last for 3 to 4 months! On the other hand, a term plan will pay you the promised money in case of my demise, anytime during the entire policy term. This means that even if I die after paying a single premium of Rs. 10,000, you’ll get the assured entire sum of one Crore. Now how does that sound?

Simran (deadpan): Why do you always talk like that? You are fit and healthy. Nothing will be wrong with you.

Aritra (pouting): Well, of course darling, I am healthy today but life is uncertain. What if something happens to me and I do not want to leave anything to chance. With a term plan, I can die peacefully as I have assurance that even if I am not here, you will have enough money to take care of yourself. Besides a term plan is not very expensive and once we avail the plan, the premium does not change for the entire term. Besides, never consider it as an expense, it provides us worth much more than a few thousand rupees a year. A suitable cover will help you meet all types of expenses - from household expenses and rentals to EMIs and school fees for our kids.

Simran (smiling): I understand this now. I always knew you were smart.

Finally, Simran understood that #insurance is not an expense but a safety net. It is incomparable to any investment, as it needs a different measure.

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Importance of depositing money in Banks

     
                                           
1. Liquidity:

Liquidity is an important principle of bank lending. Bank lend for short periods only because they lend public money, which are supposed to be withdrawn at any time by depositors. They, therefore, advance loans on the security of such assets, which are easily marketable and convertible into cash at a short notice. A bank chooses such securities in its investment portfolio, which possess sufficient liquidity. It is essential because if the bank needs cash to meet the urgent requirements of its customers, it should be in a position to sell some of the securities at a very short notice without disturbing their market prices much. There are certain securities such as central, state and local government bonds, which are easily saleable without affecting their market prices. The shares and debentures of large industrial concerns also fall in this category. However, the shares and debentures of ordinary firms are not easily marketable without bringing down their market prices. Therefore, the banks should make investments in government securities and shares and debentures of reputed industrial houses.

2. Safety:

The safety of funds lent is another principle of lending. Safety means that the borrower should be able to repay the loan and interest in time at regular intervals without default. The repayment of the loan depends upon the nature of security, the character of the borrower, his capacity to repay and his financial standing. Like other investments, bank investments involve risk. However, the degree of risk varies with the type of security. Securities of the central government are safer than that of the state governments and local bodies and the securities of state government and local bodies are safer than those of the industrial concerns are. This is because the resources of the central government are much higher than the state and local governments and of the latter higher than the industrial concerns. In fact, the share and debentures of industrial concerns are tied to their earnings, which may fluctuate with the business activity in the country. The bank should also take into consideration the debt repaying ability of the governments while investing in their securities. Political stability, peace, and security are the prerequisites for this. It is very safe to invest in the securities of a government having large tax revenue and high borrowing capacity. The same is the case with the securities of a rich municipality or local body and state government of a prosperous region. So, in making investments the bank should choose securities, shares and debentures of such governments, local bodies and industrial concerns which satisfy the principle of safety.

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Functions of stock market

Markets go crawling up, fortunes are built, and fortunes are lost. Just name it as people have seen it all.

As everybody might expect to stay profitable over the years, traders have studied the markets and followed trends very carefully to devise the right methods and strategies to make consistent profits through trading.

Whenever a company wants to raise funds for further expansion or setting up a new business venture, they have to take a loan from a financial organization or they have to issue shares through the stock market. In fact, the stock market is the primary source for any company to raise funds for business expansions. If a company wants to raise some, capital for the business it can issue shares of the company that is part ownership of the company. To issue shares for the investors to invest in the stocks a company needs to be listed to a stocks exchange and through the primary market of the stock exchange they can issue the shares and get the funds for business requirements. There are certain rules and regulations for being listed at a stock exchange and they need to fulfil some criteria to issue stocks and go public. The stock market is primarily the place where these companies are listed to issue the shares and raise the fund. In case of an already listed public company, they issue more shares to the market for collecting more funds for business expansion. For the companies, which are going public for the first time, they need to start with the Initial Public Offering or the IPO. In both the cases, these companies have to go through the stock market.

This is the primary function of the stock exchange and thus they play the most important role of supporting the growth of the industry and commerce in the country. That is the reason that a rising stock market is the sign of a developing industrial sector and a growing economy of the country.

Of course, this is just the primary function of the stock market and just an half of the role that the stock market plays. The secondary function of the stock market is that the market plays the role of a common platform for the buyers and sellers of these stocks that have a listed at the stock market. The secondary market of the stock exchange constitutes of retail investors and institutional investors buy and sell the stocks. In fact, these stock market traders raise the fund for the businesses by investing in the stocks.

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How to invest in Mutual Funds

It is never too early or too late to review the basics of investing with mutual funds.

1. How to Start Investing With Mutual Funds

Before a person start investing in a mutual fund, they may want to try beginning with a balanced fund. People will also want to ask questions: How are trying to fulfilling their wish with the savings they have? Do they have specific goals? Are they saving for retirement, or do they have some broadly defined set-up, such as the accumulation of wealth for the general purpose of strengthening their financial security? What is their probable time horizon or speculation? It must be either a year, five years or ten years which we call as short-term, medium-term and long-term.


2. Know Your Risk Tolerance


Before choosing funds, the said person needs to have an uncluttering idea of how much risk they can tolerate. Their risk tolerance is a measure of how much fluctuation i.e. Volatility - Vicissitudes or market risk they are able to handle. For example, if A, an investor gets highly anxious when his Rupees 50,000 account value falls by 15% (to Rupees 42,500) in a span of one-year, their risk tolerance is relatively low or in simpler words, they cannot tolerate high-risk investments.


3. Determine Your Asset Allocation


Once they have built the ability to determine their level of risk tolerance, they can assess their asset allocation, which is the mix of investment assets—stocks, bonds and cash, which comprises their portfolio. The asset allocation when properly executed will reflect their level of risk tolerance, which can be described in three categories as 1) aggressive (people having high tolerance for risk), 2) moderate (having medium risk tolerance) and finally 3) conservative (person with low risk tolerance).


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