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Mutual Funds Guide to Millennial


Akash just completed his MBA and landed a six figure salaried job in IT company. The shift from small town to city with its fast lifestyle made him ecstatic as his dreams came true. Work hard and party harder became his life. At the same time, he fulfilled his family obligations by taking care of his parents. His girlfriend born and brought up in city had a problem of plenty. Living life today was the mantra. But a sudden economic slowdown and many of these young generation had no saving to fall back on. Welcome to the millennial generation of urban India.

The generation born between 1980-2000 is demanding, ambitious, tech savvy, entrepreneurial and socially conscious. At the same time, they are stressed due to need for recognition and instant success. They want to be financially independent soon and like to fulfill their passion for travel, adventure, priced possessions at early age. Whatever maybe the goals, one needs to provide for it and earn more returns so that dreams come true sooner. Mutual fund investing fits the bill as professional managed investments, track record, ease of access, daily update and returns matching the risk all go well with the millennial generation. A good financial planner can help them to invest in high returns scheme to fulfill their dreams. Higher savings at early age can help them to achieve short term as well long-term goals for the young generation. Mutual funds are preferred over traditional investment options like real estate and gold due to stagnant returns and higher investments required. Direct investments in stocks requires in-depth and continuous study which all may not be inclined and often lose money in greed for short term returns. There is no doubt that Mutual fund will replace traditional form of investments as more millennial choose it as the most preferred option. 

Mutual Funds Name Change, Category consolidation – how does this affect me?

Mutual Funds Name Change

“What’s in a name? that which we call a rose by any other name would smell as sweet.”
― William Shakespeare, Romeo and Juliet

Most Indian mutual fund managers won’t agree with the above quote. SEBI has instructed Mutual fund companies to distinguish different schemes in terms of asset allocation and investment strategy. The aim is make it easier for the investor to compare the products. According to the regulator, AMCs use these names as marketing tools to attract customers and many of the new buyers may not fully understand the scheme. This makes sense if one has to choose from around 1998 mutual fund schemes (AMFI March 2016 newsletter) that have raised funds till date.

The regulator mandated fund houses to categorize all their existing and future schemes into five broad categories and 36 sub-categories. The five broad categories are – equity funds, debt funds, hybrid funds, solution-oriented funds and other funds.

The categorization and the related name change will make life easier for the investor. It will give clear understanding in which category the investments fall and returns generated by similar fund products. Secondly it will bring clarity of various terms that are defined by each fund as per their investment strategy (e.g. Large cap, Mid cap etc). Various rating agencies will now be able to rank the fund in the broad categories defined by SEBI. The investor can make more informed decision based on the expert analysis provide by various funds. This change however needs to be explained to investors in simple form by the mutual fund industry as name change might be misunderstood by lay investor as change of scheme or asset class.

Financial Planning for Defence Personnel

Financial Planning for Defence Personnel

The recent news of 23-year young Captain who laid his life while fighting on the border moved my heart. Their patriotism and the willingness to risk life for the nation is commendable. This emotional fervor for them last for few days and then the reality of life dawns on their family. As a financial planner I was wondering about their families and whether they plan their finances.

The soldier life is very demanding, not only for themselves but also for their families which involves long duration of time away from family or frequent moves from one place to another. Since they are driven by strong sense of patriotism, everything else including finance takes a back seat. In such a scenario, it their family who needs actively support in financial planning while the soldier is away on duty.

Since the defence life starts early, the best solution is to invest the savings in your Provident Fund or Defence Services Officers Provident Fund. This is the most secure option which will build up the necessary funds during retirement or in case of any calamity. The next option is to set aside some savings for the family needs. As the government takes care of the housing and medical needs of the defence person as well as his family, the surplus left should be invested in investment options with moderate risk and higher than FD returns. This could provide funds for education, health and housing needs of the defense person and his family. The corpus available on retirement along with regular savings can help a soldier live a life of financial independence. A good financial planner can help to balance their income with risks and future needs.

Financial Planning for Pilots


Our international flight landed at Mumbai airport and I heaved a sigh of relief. I was irritated by Long sitting hours, headache, temporary deafness due to air pressure, booming noise, turbulence and last but not the least-fear of crash. While exiting the plane, a passing thought came to my mind- if air traveler goes through all these what about the staff especially the Air pilot who do their job day in day out!

Beyond the excitement of driving the plane, a Pilot’s career means odd working hours, medical issues, mandatory retirement age and job uncertainty due to airlines going bust.

Just as flight is planned and every contingency thought and taken care of, a pilot needs a financial plan. A financial plan brings the future into the present so one can take action now. It also makes life more certain and a plan is the single most powerful tool for accomplishing a goal.

A good financial planner needs to take into consideration their high earnings along with reduced working years due to health issues. They also need to convince their clients about providing for retirement planning apart from providing for other life goals like marriage, estate, education, health etc. All this can be built over a period of time with systematic investments.

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Reducing FD rates, a concern for retired


Mr. Joshi, a senior citizen is worried man today. His income from FD has been getting less by the day and on other hand monthly expenses have been rising. To add to the worries are the rising medical expenses. For the generation that has retired in last few decades, retirement pension or interest income from FD was the income support in old days.

Changing times call for different approach. A good mix of fixed income and market linked products is the answer to ensure optimal investment returns. Investing Rs 15 lakh in Pradhan Mantri Vayu Vandana Yojana provides assured return of 8% with monthly income of Rs 10,000.

Investments in debt and balanced funds schemes can give higher returns and better protection of capital. These investments are tax efficient if invested over three years. A small exposure to equity mutual funds over 3-5 year horizon can provide for capital appreciation. The increased returns should also be used for having adequate insurance cover to meet medical expenses. A small sum in liquid fund for emergency needs can take care of any contingency.

Are your bank FD safe with PSU banks?


The recent news of Bank scams and huge losses incurred by banks are making the common man jittery over the safety of one’s hard earned savings. Bank FD is the most natural option used by salaried class to park their savings to provide for the future needs. One, because the nationalised banks are owned by the government and its was indirectly a guarantee that your funds are in safe hands. Whenever there has been a doubt about the viability of a Bank, RBI has stepped in and ensured safety of investor deposit by merging of weaker banks with the stronger ones. Let’s have a look at the regulatory provisions to know how safe your deposits are.

Bank deposits in value terms are insured by the Deposit Insurance and Credit Guarantee Corporation of India (DICGC), a wholly owned subsidiary of the RBI. The deposit insurance covers all commercial banks, local area banks, regional rural banks and cooperative banks. You should be aware that only Rs 1 lakh of your savings is insured. This limit has not been revised since long. As an investor you should also know the worst-case scenario in case something untoward happens.


Merchant Navy – Life at Sea, wealth at home, really?


Quote from a merchant navy sailor: *
“If one has a bucket list, sailing on a merchant ship should be on it. It gives you the perspective of what is it like to witness the spectacular grandeur of 3/4th of our planet in a ship’s setting. The experience is very humbling.”

Sounds exciting… but other than missing the family life, there is a big-gap in terms of financial planning, investments& execution. More so with the fact that, half a year (or more) they are sailing, without having any access to the advisors, markets or simply, how to manage their finances?

Aashish, a 42-year-old merchant navy captain, currently navigating a LNG vessel, somewhere between Korean& Russian ports, says: “One day I sat down to calculate my last 12 years of earning, and wondered where all that money had gone…”.

Merchant navy or mariners, enjoy non-resident (NRI) status, if they are sailing for more than 6 months, hence their income becomes tax-free. The job involves high-risk, with high compensation; but with a peril of possible physical injuries, resulting in end-of-career & future earnings. Common FAQ.

Once they are back (on vacation), they would want to catch-up on investments & options available. Where most of the time, their financial planning or investments, are influenced by the family members or Bank RM’s, without involving plans or data-driven advice.

Therefore, Merchant Navy joiners need, a true hand-holding with advisors, who are not just selling financial products, but first creating plans based on their lifestyle & future. And the crucial area which needs coverage, involves advisory access (online & offline), wealth management and execution services, all under one umbrella.

*Quote Link:

MWP Act – Married Women’s Property Act 1874- INSURANCE TERM PLAN


One interesting & great legal tool in hand, but hardly been pushed by anyone.

What it means; at the time of initiating (buying) a term insurance policy, one should also sign this document. This document legally ensures that, post the policy holders demise, only wife will receive the policy cover value and not the creditors (policy holders outstanding with others) or relatives.

We take Term-Plan, to ensure the well-being of our family, specifically wife and children in case of any unforeseen events. Therefore, ensure that you sign this document.

Once a policy is availed under the MWP Act, it may not be attached by courts for repayment of your debts. Only your wife and children will be entitled to the Sum Assured in the event of your demise.

Market Meltdown: Shall I Invest or Wait?

Market Meltdown

“Alice: Would you tell me, please, which way I ought to go from here?
The Cheshire Cat: That depends a good deal on where you want to get to.
Alice: I don’t much care where.
The Cheshire Cat: Then it doesn’t much matter which way you go.
Alice: …So long as I get somewhere.
The Cheshire Cat: Oh, you’re sure to do that, if only you walk long enough.”  – Lewis Carrol, Alice in Wonderland

Every time the stock markets react, I’m reminded of the above dialogue. Firstly, many who look upon stock market as source of wealth creation have not decided their financial goals. Secondly it is important to sit back and understand the event that lead to fall or even rise, instead of reacting. Let’s look at each of the above points further deep.

Achieving a financial goal means deciding with clear time and resource target. Financial planning is the most talked jargon but little understood. In simple words, one should have clarity of how much wealth is required to live and monetary and non-monetary goals in life. There are few financial planners in Mumbai /India who can guide you about it. Once the goal and resources are known, the direction becomes clear.


Frequently Asked Questions (FAQs) – Taxation of Long Term Capital Gains (LTCG)

  1. What is the meaning of long term capital gains?
    Long term capital gains mean, gains arising from the transfer of long-term capital asset. The Finance Bill 2018 proposes to provide for a new long-term capital gains tax regime for the following assets:

    • Equity Shares in a company listed on a recognised stock exchange;
    • Unit of an equity-oriented mutual fund; and
    • Unit of a business trust.

    The proposed regime applies to the above assets, if the assets are held for a minimum period of twelve months from the date of acquisition.

  2. When will the tax be levied?
    The tax will be levied only upon transfer of the long-term capital asset on or after 1st April 2018.
  3. What is the method for calculation of long-term capital gains?
    The long-term capital gains will be computed by deducting the cost of acquisition from the full value of consideration on transfer of the long-term capital asset. (more…)
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