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Credit Card – do I have the freedom?

Credit Card

I still remember the day, final month of my post-graduation, and we have these credit card chaps standing outside the gate. As would be, I went ahead & applied for the card 😉

My job is three months away, and here I have this plastic card, which gives me the freedom & cash, and within no time, I used up 50% of my limit, without any income in hand. All in the premise that first series of pay, I will knock off the outstanding.

Start of my Job, and again in no time, I guess 6 months, I am running an outstanding of more than 2 lacs and major portion of my salary goes in part-payment, with a fat interest. Each month I commit myself on reducing same, which happens to some extent… but this cycle never stops.

For next four years this cycle continued, where I would have payed these credit card companies, more money in interest than the actual outstanding. Finally, one day I took the courage & took out my scissors, & chopped the card into pieces.

Though after some time, I applied for a credit card again… Not for availing the credit, but towards cash-less payments. I have not paid any interest since then, as I repay my entire outstanding every month now.

Let me now highlight two dangerous points on credit card:

High Interest Payment:

Usually, this is upward of 36% annually or 3% every month on outstanding amount. Say for instance, you have an outstanding of 50k, you have to pay 1500 as interest, for the month.

Best way to explain; if you give money to bank, towards FD, they will offer you 6% to 9% annual interest. But on credit card, they will charge you 36% or higher… it’s a criminal waste of money.

What’s the way out; either delay your purchase & save, or if it’s a must requirement, take a personal loan, which should come around 12% to 16%, based on your salary, ITR & duration of employment.

They block you from pursuing other Goals:

We are earning & saving money for our dreams or future goals, like buying a car, house, kid’s education, retirement, etc. By using credit card, paying part payments, which includes interest cost, you are in-short delaying your savings & future goals.

It’s a known fact; that early saving rewards you with higher returns than late savings… Power of compounding works better for long duration. Read my blog – Link.

If credit card is so bad, what is it good at:

Cash-less working:

Credit card helps you transact, offline & online without cash. You don’t have to bother about withdrawal or deposit of money today. Even your utility bills & household payments can be done thru the cards easily.

Emergency funds:

Credit card comes handy, or acts as a hedge towards any emergency or unplanned requirement of money. You have a preapproved limit and same can be used, whether to transact or even withdraw, when the requirement or emergency strikes.

Finally, it’s all about your discipline on your spending or when to use. People say, they don’t have control when they have card, and end up spending more. My logic is all about having a discipline. If in case you cannot control your urge, use debit card instead.

Happy Savings!!!

Financial Planning Report – too complicated!


We are living in a world where “complicated” sounds great than “simplicity”. As “complicated” contains big data, fancy graphs, unheard terms & jargons, multiple pages and finally a confused look on our face. What do I do now? On the other hand, when we have “simplicity”, usual remark… I can do it myself. 😉

I am referring to a customer’s “Financial Planning Report” or a “Wealth Management Report”.

Whether you have seen one or someone trying to show you one (sell)… believe me, it’s like reading a multi-page research report and finally you asking this question again, what do I do now?

Idea of any report is to make you take decision, and when it comes to financial report, that too on your hard-earned money, it should be able to answer same in simple language, like whether they will have enough money, and if not what should they do about it, or on what next?

I guess, our dear friends, the financial planners,have been hoodwinked into believing that “complicated” is good.Part their fault, & part customer mind-set, as “simplicity” means, I’ll do it myself. It’s also ridiculous to think that they can accurately forecast each item of income and expenditure for the next 10, 20 or even 30 years.

My understanding; what one sees or gathers from these complicated reports, can be easily delivered thru a couple of simple excel spreadsheets and a hand-held calculator, which can create lifetime cash-flow models with numbers pretty close to those churned out by these complicated reports.

My logic of a report; to convey the meaning in the most simplest way, such that one can take an informed decision. I as a customer doesn’t want to see tables & data, one can keep same as annexures (as its required), but show me analysis & graphs, which I can relate & act upon.

When we started, our only challenge was to bring simplicity to the world of complicated investing, financial planning or even wealth management.

To know how a customer thinks, read my blog: “client priorities – client first”

Women’s day – Let’s Stop “Girls Can’t Do” Stories


International Women’s Day (IWD), originally called International Working Women’s Day, is celebrated on March 8 every year. In different region’s the focus of the celebrations ranges from general celebration of respect, appreciation and love towards women for their economic, political and social achievements. (as per Wikipedia)

Benetton, known for its wacky campaigns, has come out with a thought provoking campaign again, why ask or cry for equality with men, just go and grab it yourself lady. Similar stories are now emerging on age old fairy tales, where princess is waiting for a prince for upliftment or change, and our little girl is asking, why she has to wait? & why she cannot do it on its own?


#*X – The most dreaded three letter word


I know what you are thinking. STOP. I am talking about TAX 😉

It is, as a matter of fact, the most dreaded word currently, since demonetisation. But from our parlance, where most of us fall under the mass-market or mass-affluent or even higher category, why worry?

We should only look at, how much more can one save, against annual earnings. Here again, it’s so simple that we run to CA’s or Tax consultants to understand same & decide.


Client Priorities – Client First

Customer priorities

In a recent study by Investor’s Research Inc., clients were asked what their priorities were with their financial advisor***. Here were their top six priorities:

1. Understand my situation
2. Educate me
3. Respect my assets (no matter how small)
4. Solve my problem – don’t sell me product
5. Monitor my progress
6. Keep in touch

*** From the book, Story selling for financial advisors, by Scott West & Mitch Anthony

Very simple & heartfelt.
I guess, most of us fall in the same line.

It’s no surprise and a great honour for us at today. Why?
As we have designed & built our platform, process & advisory based on above philosophy.


Why a term insurance policy is the best life cover option?

Life Insurance

Gautam, a 28-year-old IT professional, has got married recently. His parents are financially dependent on him. He saves Rs.15,000 each month. He thinks his insurance requirement would be Rs. 50 lakh. For the term insurance plan that his relationship manager is recommending, his annual premium will be Rs. 10,000, payable over 30 years.

He thinks a term insurance is a bad choice because he will not get any ‘returns’ on it. It seems unprofitable to him, as he is unlikely to get back the amount he pays as premium. Is term insurance really a waste of money? Should Gautam consider an insurance cover which provides a good ‘return’ at the end of the tenure instead?

First, Gautam needs to be educated about the concept of insurance and the purpose of buying it. The only way to do that is for him to imagine how his family would fare, if he were to pass away tomorrow. Wouldn’t it make things difficult for his wife and parents?


Ask what else (ELSS) – for tax savings schemes (80CC)


One can look at “else” or “ELSS”, for various tax saving schemes.

Where ELSS stands for “Equity Linked Savings Scheme”. These are Mutual fund schemes, which qualifies towards 80CC tax saving investment and offers one of the best returns & liquidity in the market, compared to any other schemes available.

Whichever way one wants to look at, i.e. First, “what else” or options one has on tax saving schemes? and Second, “what ELSS”, or how good they are?


How freelancers can save taxes? or Freelancers’ Guide to save taxes

Tax saving guide freelancer

It’s tax season, and as the salaried hurry to meet the deadlines to submit proof of investments and claim benefits, for freelancers, the scenario is quite different.

Unlike salaried individuals, they don’t have employers to lay down rules and roll out facilities for them.


2017 – I Wish


Finally, we have made it… with Modi’s demonetisation and Trump’s victory, last quarter had been the most shocking, surprising or rather adventurous for an average Indian, as well as for entire globe.

Like any start of new year, we have high hopes, we write resolutions, promises & look forward to a great year. I don’t want to spoil the party by being negative or projecting some fancy numbers, growth etc. Also, I don’t want to be an analyst today.


Demonetisation effect


With demonetisation almost nearing its completion & 80% of the old notes back with the banks, most of us are questioning, what next?

Well, to start with, we are moving in the phase where quite a lot of individuals & families have either declared or will start operating with white money now. In short, we have more people having white money in hand going forward, which will soon start demanding white investments.

Real estate & gold, which used to be the main source for black-money, now will (more…)

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