Early Retirement Planning: How to Plan Early Retirement?

If you want to retire early say for example in your early thirties or forties than you should start your retirement planning early. The problem with many people is that, they want to retire early but they don’t want to accept the fact that they have to plan their retirement as early as possible in their life means now.

So How to do Early Retirement Planning?

- Take a Paper & Pencil: Well, the first step of your early retirement planning is to take paper and pencil without being lazy. It is best if you buy a separate notebook for it.

- Write down your goals: The second step is, Define your Goals for early retirement and write down on a piece of paper. Say for Example, at What age you want to retire and with how much Corpus? What is your Current Income & how much return on investment it will take to build the desire corpus. How much debt is outstanding?…etc…

- Analyze the Goals & Data: Once you have written goals and your current financial Status Information, You have to analyze those data. Say for Example you are right now 25 years of age and you want to retire at the age of 35 but you are in a deep student loan debt. So you have to think about the ways of increasing your Income.

- Make Objectives: Objectives means, what will you do to execute your goals? Say for Example, Retiring at the age of 35 years is your goal but getting out of Debt at the age of 30 years is your objective to fulfill the ultimate goal. An objective can be “Increase the Income by 20% year by year” or “Developing a Successful Business before the age of 30 years” or “Getting out of debt before the age of 30 years”…etc…

- Write Down the complete Early Retirement Plan: The retirement plan should not only contain the goals and objectives but it should also contain the various other things such as the details of Emergency Fund, Insurance & Mediclaim policies…etc…

- Start working on Objectives: Once you have written goals and objectives on paper than start working on Objectives. Work hard to complete your objectives. As you are going to retire early, don’t afraid of working hard because you know that after taking the early retirement you are going to enjoy a lot.

So follow the above steps one by one and Plan your early retirement effectively.

It is very important to check and compare the Premiums among various Pension Plans with Pension Plan Calculator before you buy any Pension Plan. There is no single Pension Plan Calculator available in India by using which you can check and compare the Premiums of various Pension Plans.

So Here is a List of all the Pension Plan Calculators available in India -

01) Reliance Life Insurance Pension Plan Calculator

02) Birla Sun Life Pension Plan Calculator

03) ICICI Pru Life Pension (Retirement) Plan Calculator

04) SBI Pension Plan Calculators -

- SBI Life Horizon II Pension

- SBI Life Unit Plus II Pension

- SBI Life – Life Long Pensions

05) LIC Pension Plan Calculator

So this is the list of Pension Plan Calculators available from various Life Insurance Companies of India.

SBI Life Insurance Company offers you variety of Pension Plans. This article is all about various SBI Pension Plans.

SBI offers 4 basic Pension Plans.

01) SBI Life - Horizon™ II Pension

02) SBI Life - Unit Plus™ II Pension

03) SBI Life - Lifelong Pensions

04) SBI Life - Immediate Annuity

You should carefully review the benefits offered by various SBI Pension Plans before choosing a Pension Plan for you. Each Pension Plan comes with different benefits. It is advisable that an Individual should first access his/her needs before buying any Pension Plan.

01) SBI Life - Horizon™ II Pension -

This Plan is available in 2 types. One is Pure Pension Plan & the other is Pension Cum Life Cover Plan.

It is a unique Unit Linked Pension Plan that will enable you to build a kitty good enough to enable you to spend a peaceful and financially sound Retired life!

SBI Life - Horizon II Pension is a safe and a hassle free way to get high returns! SBI Life - Horizon II Pension comes with the unique feature of Automatic Asset Allocation by means of which you truly, don’t need to be an expert to grow your money!

Key Features:

SBI Life - Horizon II Pension is the most simple unit linked pension plan; all you need to do is:

02) SBI Life - Unit Plus™ II Pension -

It is also of two basic types. One is Single Premium Mode and the other is Regular Premium Mode.

This is a unit linked pension plan wherein the policyholder chooses an investment period from 5 to 52 years for a vesting age between 50 to 70 years. You can choose to pay either single premium or pay regular premium for the entire policy term. Your contributions are invested into 5 fund options as per your choice.

Key Features:
- Choice to invest & control four different funds as per your risk appetite.

- Flexibility to choose between two options

• Pure Pension
• Pension cum Life Cover

- No medical required for Pure Pension, automatic acceptance facility.
- Flexibility to increase regular contribution.
- Top up payments: any amount, anytime.
- Customize your plan by adding riders.
- 15 days free look period.

Product type:

This is a non participating Unit Linked Pension product.

How does it work?
Choose your vesting age: Any age between 50 years - 70 years.
Choose premium frequency and premium amount

Choose plan option

Option I Pure Pension Plan (For age group 18-65)

Option II Pension Plan with life cover (For age group 18-60)

Benefits

Death Benefit: During accumulation phase

03) SBI Life - Lifelong Pensions -

Life expectancy is improving rapidly. People live longer. You cannot work throughout your life. You will have to retire from work. In the post retirement period you have lot of time for yourself. You would like to do things you have not done while you were working

You need to have a comprehensive plan to meet your post retirement financial needs ensuring complete peace of mind.

Key Features:

A maximum of Rs. 1,00,000 p.a . paid as a contribution on a pension plan is fully deductible from the taxable income (within the max. ceiling Rs. 1 lakh )

Minimum Guaranteed returns of 4% p.a. (compounded annually) on your Personal Pension Account (till 31st March 2010) + Vested bonus.

It helps you to accumulate enough savings to meet the old age needs and look for a reliable and enduring pension payment.

It is an extremely flexible plan:

04) SBI Life - Immediate Annuity -

SBI Life Insurance introduces SBI Life - Immediate Annuity Plan for Pension Policyholders. This product provides annuity payments immediately from payment of purchase price. It has been specially designed to cater to the annuity needs of our existing policyholders (SBI Life - Lifelong Pensions, SBI Life - Horizon II Pension, SBI Life - Unit Plus II Pension) at the vesting age.
All you need to do is choose the annuity option and pay a purchase price to commence the annuity for the required amount. We at SBI Life will calculate the amount of each annuity payments based on the purchase amount and life expectancy.

What are the Key Features?

You can opt for any one of the 6 Annuity options available and your annuity option stays the same throughout the tenure.

Option to choose the periodicity of your annuity: Members can choose the periodicity of the annuity depending upon their needs. The options available are Annual, Half yearly, Quarterly, and Monthly.

Annuity rates guaranteed for life: Attractive annuity rates due to group effect. Annuity rates decided at the time of entry are guaranteed for the rest of life for the given purchase price.

Age at Entry for member : 50 to 70 Years as on last birthday

Minimum Annuity will be Rs. 250 per month.

What are the Annuity Options* Available?

A variety of Options to choose from:

Life annuity at constant rate.

Annuity payable at constant rate throughout the life of the Annuitant with facility of receiving on death of the Annuitant a refund of purchase price less the sum total of  annuity already paid till date of death.

Annuity payable at constant simple rate throughout the life of the Annuitant with facility of receiving on death of the Annuitant 100% refund of purchase price.

Annuity increasing at the rate of 1% or  2% or 3% per annum as the case may be and payable during the life of the Annuitant

Annuity certain for 5/ 10 / 15 years as the case may be and for the life thereafter

Last survivor annuity, whereby upon the death of the Annuitant his/ her spouse* will receive a life annuity, which will be either 100% or 50% of the last annuity amount paid to the Annuitant, as the case may be.

Daily Systemic Investment Plan (SIP): Things to keep in mind

Systemic Investment Plan (SIP) is the globally successful product. The reason is, because it is proven and time tested strategy. In India, now fund houses are re-inventing the SIPs.

Few mutual fund houses have launched daily SIPs in India. It is much like depositing a penny in a piggy bank daily.

Here is a Pocket guide on Daily SIPs & things you must keep in mind before investing in it,

- Bharti AXA Invt & ING Invt are the first fund houses to introduce daily SIPs in the Indian Market. Sahara Mutual fund will soon introduce the daily SIP.

- SIP helps to do rupee-cost averaging in the long run and reduces your over all entry price in the market and thus higher gain.

- Daily SIP scores over the monthly one as it provides larger benefits of rupee-cost averaging.

- Daily Investment amount can be as low as Rs.99

- Before going for Daily SIP, check if there are any incremental transaction charges.

ING Investment Management Daily SIP -

ING was the first fund house in India to launch the Daily SIP. It is known as Zoom Investment Pack (ZIP). Under the scheme, Investor’s money was collected as a lump sum and allocated on regular basis (daily) in the market.

It requires a minimum investment of Rs.5000 and you can choose to invest Rs.99 per day.

Bharti Axa Daily SIP -

Here you are required to shell out a minimum Rs.300 per day that sums up to Rs.6000 per month (for 22 working days). It operated like any other mutual fund.

Sahara Daily SIP -

Sahara Daily SIP plans to raise money 365 days a year irrespective any holidays. The fund proposes to infuse the money on a daily basis in the market.

Recently you must have heard the name ‘Circuit Breaker’ in the news very often. On the back of the UPA government in India winning the elections, Nifty & Sensex touched their circuit filter of 10% within few seconds of opening and the trading was halted. In fact, the indices again triggered circuit breakers after the trading resumed and consequently the trading was suspended for the rest of the day.

So What is Circuit Breaker & How does it Work? -

Well, to avoid abnormal fluctuations in the share prices and index, circuit breakers are applied. According to the SEBI guidelines, stocks and indices can trade between a price band. During the day if prices of shares or the index fluctuates abnormally and touches either the high or low price bands, the trading halts.

This is how it works…

In case of the major indices – Nifty & Sensex – the duration of trading halt depends upon the quantum of the fluctuation and timing i.e. what time of the day such fluctuations take place. Circuit breakers apply in 3 levels – 10%, 15% and 20%. A fluctuation of 20% or above during the day in these indices halts the trading for the rest of the day.

A fluctuation of 15% before 1 pm halts trading for 2 hours. However, if it happens during 1 pm to 2 pm, trading gets suspended for the next one hour. But the trading halts for the whole day if either of the indices fluctuates by 15% after 2 pm.

In case either of these indices touches the price band of 10% till 1 pm, trading halts only for an hour. The trading recommences within half an hour if this happens during 1pm to 2.30 pm and there is no halt in trading if it happens after 2.30 pm.

These percentages – 10%, 15% and 20% – that trigger circuit breaker in the index are calculated on the closing value of the last day of the previous quarter.

As far as Individual stocks are concerned, price bands differ for different stocks and ranges from 2% to 20%.

Many people have a false belief that, low NAVs are cheap and that’s why they rush for NFOs (New Fund Offers) because they offer Rs.10 per NAV which people consider cheapest. Not only this but many people have false belief that, NAV of Rs.10 is the cheapest so it can’t go below it. But this is not true.

The fact is that, NAV price has nothing to do with the market. NAV can go below 10 also. The underlying market is the same stretched weather the NAV is Rs.10 or Rs.10,000. Here are the few mutual funds that have NAV below Rs.10. These funds have offered NAVs at Rs.10 to investors during the Bull run last year but after that their NAV plunge below Rs.10

NAV as on 09th March 2009

- JM Basic – Rs.6.93

- Taurus Infrastructure – Rs.4.66

- Magnum Midcap – Rs.8.26

- Principal Junior Cap – Rs. 6.94

- ING C.U.B. – Rs. 5.68

- Canara Robeco Emerging Equities – Rs. 6.76

- ING Contra – Rs.6.61

- Sundaram BNP Paribas Capex Opp Reg – D – Rs.7.52

Mutual Fund Investment should be based on the Past performance of the scheme and the fund management team’s past record. What we are looking in Mutual Funds is its Management and not the low NAV.

High Beta Stocks: Investors have paid off on this Bet

Top 100 stocks gain 32% More than Sensex in Last 30 days.

Around 1100 stocks with higher beta than 1, have given an average 20% more gains than Sensex. Conversely, around the same number of stocks have given an average 30-day return similar to Sensex.

What is Beta?

Beta is a statistical ratio. A Beta of greater than 1 indicates that the stocks’ price will be more volatile than the market. Beta less than 1 means the stock is less volatile and Beta = 1 means the stock is the mirror image of the Sensex. Say for example, Index Mutual funds have Beta of 1 because the portfolio of Index mutual funds is the mirror image of the Index.

Say for Example, if a stock’s beta is 1.2, it’s theoretically 20% more volatile than the market which means if market goes up 100%, the stock will go up 120% and vise versa means if market gives minus 100% return than this stock will give you negative 120 % return.

Following stocks have given over 50% excess returns than Sensex in last 30 trading sessions.

- India Infoline –Beta – 2

- Orbit Corporation – 1.93

- Unitech – 1.86

- IFCI – 1.71

- Everonn Systems – 1.69

- Hindustan Construction – 1.66

- Aptech – 1.62

Investors should stick to high-beta stocks with good fundamentals. With the outlook of equity markets changing and inflows turning positive, high beta stocks will continue to outperform.

Low-beta stocks which act as great capital protectors during a market downturn do not participate when the market starts up moving up.

Usually defensive sectors such as FMCG & Pharma have low beta values and hence it is no surprise to see following stocks giving even negative returns in the same 30 days period.

- Nestle – 0.32

- Elder Health – 0.36

- Asian Paints – 0.38

- Godrej Consumer – 0.40

- Hero Honda – 0.47

- Dr. Reddy’s – 0.51

Today my very good friend Tanmay Mehta has asked me,

“"Hi , Asav I have read your blog , its good BUT how you have calculated valuation for it. please guide me because I also want to calculate the same for my blog"

Well, Honestly speaking, right now there is NOT any STANDARDIZED Blog Valuation System that is worldwide acceptable.

I Personally Calculate the Valuation of “My Journey To Billionaire Club” by Technorati’s Blog Net Worth Software. Here is a Link. Go to this link and check the valuation of your Blog.

Why I consider this method FAIRLY accurate?

Well, because it is based on Tristan Louis’s Research method. This is the method by which AOL bought Weblogs inc., the two year old weblog network founded by Jason Calacanis and Brian Alvey, for a number that is rumored to be anywhere between $25 million and $40 million.

Weblogs Blog Network has been acquired by AOL for anywhere between US $ 25-40 Million and the valuation of weblogs was done by this method. So I consider this method a fairly valid method.

This is a Link to Value Method of Blog Valuation means how many links your blog receives from other sites. According to AOL, it is a perfect method for valuation and that’s why I personally use this method.

But Tanmay, Here I want to tell you that the above is accurate but not the complete Blog Valuation System. According to my study and analysis, Blog is a Business (Company) and its owner is CEO. So the Valuation of any Blog depends on the following criterias.

Read this post thoroughly,

The Twenty-Five Most Valuable Blogs

The above post is a very lengthy but if you are really interested in increasing the valuation of your blog than the above post will prove the wealth of Information for you.

Anyway, an Ideal Blog Valuation System should consider the following criterias.

01) Web traffic -

- Visitors (Average Daily & Monthly AND Unique Daily & Monthly Visitors)
- Page Views (Average Daily & Monthly)
- Detailed Analysis of the Web traffic [Direct, Referral & Organic (Search Engine) Traffic Analysis in detail]

02) Google Page Rank – 0 to 10

03) Alexa Traffic Rank -

04) Technorati Rank –

05) Google AdSense Revenue – Last 3-6 months statement

06) Detailed Analysis of Google AdSense Revenue -

- CTR (Click Through Rate)
- eCPM
- Daily & Monthly Page impressions of last 3-6 months

07) Other Income streams -

- Affiliated Marketing
- Amazon store
- e-book selling
- Any other Digital Goods or service selling
- Any other Income stream of the Blog (Such as Paid Reviews…etc…)

08) Feed Count – Reader Base

09) Twitter Count – Twitter Followers

10) Social -

- Facebook Groups
- Facebook Fan Page
- Orkut Communities
- My Space Communities
- Any other Social aspect of the Blog

11) Discussion Forum(s) associated with the Blog (if Any) -

12) Google Indexing – How many pages are Indexed with Google

13) Blog Archive Size – The size of the Content Inventory (Articles)

14) Number of Active Authors on the Blog Board

15) Demographic Study (Geographical Distribution) of the Web traffic – Google Analytics

16) Blog Reviews – Over all reviews about the blog in the Blogsphere and on the web

17) Technorati’s Net Worth of Blog – from Business-opportunities.biz blog

18) Brand Value of the Blog – Blog Popularity – How much popular the Blog is?

19) Average Number of Comments per Post -

20) Projected Revenue of the Blog -

21) Yahoo Back links -

22) Google Site Links – you can test it by typing Link:xyz.com in the google search box.

23) Value of Domain Name – In some cases, Domain Name itself is very valuable than the Blog itself. Such as the domain name loans.com sold for US $ 3 Million…!!!

24) Web Hosting Details -

25) Monthly Blog Expense -

- Web Hosting Expenses
- Expenses behind Authors
- Blog Advertising & Marketing Expenses
- Paid Blog Reviews Expenses
- Any other Expenses that incur every month
- Any other variable expenses

26) Original Owner Issues -

- Weather Original Owner will continue for some time on the blog or not?
- Weather Original Owner will provide a support to the new owner in running a blog or not? If yes than for how much time?
- How will the new owner run the Blog without the presence of the old owner?
- Weather the new owner has to higher the authors to run the Blog? And if yes than how much it will cost?

27) Valuation of Most Popular Articles – Most Popular articles are those which are search engine friendly and may rank on the first page of Google search result and are responsible for most of the web traffic. So the owner of the blog may want a Royalty (Premium) for these articles. And if yes than How Much?

28) SEO Articles Valuation – Sometimes a Blogger may have invested in SEO Articles by paying as high as $ 10- 20 per article to SEO writers. So these articles are also an Asset and their Separate Valuation is very necessary.

29) Valuation of EzineArticles Inventory (portfolio) – Some Blog owners also own a portfolio of Articles at reputed web directories such as Ezine Articles. These articles are the Asset because they not only send the huge web traffic but also provide the Back links to the main blog which improves its search engine ranking. So Separate Valuation of this Portfolio should be done.

Finally, the ideal Blog Valuation should consider all of the above criterias before a buyer actually buy a Blog. Otherwise the buyer may end up with loss of his Capital…!!!

If you have any suggestions on these Blog Valuation Criterias than please let us know by commenting on this post…!!!

Free Federal Grant Money: Be a Seller, Not a Buyer…!!!

Grants for Citizens

Recently I visited the above website - “Grants for Citizens”. In the recent past, the internet becomes full of Free Federal Grant Money. There are lots of websites, con artists and spammers all around the web who are offering “Free Federal Grant Money” Kits.

They offer these kits from anywhere between US $ 2-20 per Kit. And they promise you to give the detailed Information about various federal grants. The most common grants are as follow.

• $500 to help with your bills
• $10,000 to start your own business
• $100,000+ to start a large business
• $4,050 for college
• $2,000 for dental bills
• $150 a month for commute to work
• Free handyman services for seniors
• $277,000 to purchase a 2-4 family unit
• $6,000 to start up a hip hop magazine
• Free credit repair
• $48,000 to buy a mobile home
• $8,000 to train for a new job
• Up to $2,500 to finance an adoption

The above list covers most of the target people. Not only this but these websites also display photos of people who have received grants.

These people are claiming that, their grant kits are the perfect solution for those who need a grant. But if you ask me than, I really doubt about the worthiness of these types of websites and grant kits.

According to me, this is nothing but an idea to make lots of money. You may qualify for grant or not but the person who has sold you the grant kit will definitely make money by selling such types of grant kits to literally thousands of needy people like you.

So according to me, The Best way to make money is “Selling a Grant Kit rather than buying it and hoping to qualify for a Free Federal Grant…!!!”

American Premier League: The new Exotic Asset Class

IPL Cricket Teams: The New Asset Class

Few months back, I had posted the above post and shown that Why IPL Cricket teams are the new Asset classes? Owning an IPL Cricket team is exactly like owning any other asset class such as stocks, bonds, gold & real estate. It means that as long as you hold it, it will provide you a steady Income and when you decide to sell it, you will be benefited by Huge Capital Gains.

So after the great success of IPL-2, American Premiere League (APL) has been introduced in the country of Baseball.

APL has created 6 Assets (Cricket teams).

- Premium Americans,

- Premium Bangladeshis,

- Premium World,

- Premium Paks,

- Premium Indians &

- Premium Windies.

APL will start on 6th October 2009 and will be played twice a year. A large number of internation cricketers have already signed form tournament.

Controversy about APL -

- The American Premier League is a Twenty20 cricket league based in the United States of America. The league is scheduled to start on October 6, 2009 and is owned and promoted by Jay Mir. It is unsanctioned by the International Cricket Council, the sports world body, and as a result is regarded as a "rebel" league

- The American Premier League has been in contact with the USA Cricket Association but has not formally applied for approval. The International Cricket Council has issued a memo to member nations stating that the event is unapproved and warning nations not to released their players to the event.

In short, The American Premiere League is the highly controversial tournament. But if it somehow managed to complete its first tournament successfully, than all the 6 teams will be worth of millions of dollars. It means that Mr. Jay Mir has created new Assets (APL Cricket Teams) out of thin air only…!!!!

Success of APL means, there will be a long queue of Investors for investment in APL teams.

Financials of APL -

The inaugural series of the APL , which will take place twice a year, will be played out in New York from October 6 to 26 and the next one in April 2010 in Fort Lauderdale, Florida.

Like the IPL, the huge interest in the game has brought with it lucrative fees for the players.

The three South Africans have reportedly been offered two-year contracts with a payment of $50,000 per tournament, besides the money that bidders from the various franchises might spend and match money from the games. Players will also be contractually bound to participate in marketing campaigns across the US.

Bidding for the players in the APL sides will take place in the same way as that of the IPL, with players being sold to franchise holders with the highest offer.

Do you know anything more about the Financials of APL? Than comment on this post.

Life Insurance Corporation of India (LIC) offers several Pension Plans. This article is all about various LIC Pension Plans.

Here is a Complete List of LIC Pension Plan. Broadly speaking, LIC offers 4 Pension Plans.

01) Jeevan Nidhi

02) Jeevan Akshay VI

03) New Jeevan Dhara I

04) New Jeevan Suraksha I

Currently, LIC offers the above 4 Pension Plans. Here is a Basic Product detail of each LIC Pension Plan.

01) Jeevan Nidhi -

LIC's JEEVAN NIDHI is a with profits Deferred Annuity (Pension) plan. On survival of the policyholder beyond term of the policy the accumulated amount (i.e. Sum Assured + Guaranteed Additions + Bonuses) is used to generate a pension (annuity) for the policyholder. The plan also provides a risk cover during the deferment period. The USP of the plan being the pension can commence at 40 years.  The premiums paid are exempt under Section 80CCC of Income Tax Act.

On the death of the Life Assured during the deferment period of the policy, i.e. before the annuity vests, an amount equal to the Sum Assured under the Basic plan along with the accrued Guaranteed Additions, simple Reversionary Bonuses and Terminal Bonus, if any, will be paid in a lump sum to the appointed nominee, provided the policy is in force for full Sum Assured. Nominee will also have the option to purchase an annuity with this amount.

02) Jeevan Akshay VI -

It is an Immediate Annuity plan, which can be purchased by paying a lump sum amount. The plan provides for annuity payments of a stated amount throughout the life time of the annuitant. Various options are available for the type and mode of payment of annuities.

Mutual Funds are the best vehicles to do proper Diversification & Asset Allocation of your Money. So What it means by Diversification & Asset Allocation and why these are important?

What is Diversification -

Well, Diversification means spreading your money across the same asset class. Say for Example Equity. If you invest your money in some Equity Diversified mutual fund than your fund manager will spread your money across the different segments such as Banking, Metals, Technology, Textile, Automobiles, Consumer, Energy, Financial Services and many more….

The logic behind diversifying your money is that, Because different economic sectors will perform differently in different economic cycles. So diversifying your money will reduce the over all risk and improves the return.

You must have heard the following sentence often, “I have lost all my money in the stock market”. This is because they have put all of their money in one sector only and lost is.

What is Asset Allocation? -

Asset allocation means spreading your money among the different asset classes. Such as Stocks, Bonds, Gold, Real Estate, Art & Businesses.

As a rule, Asset allocation should be done among the asset classes which have negative correlation. The best example is Equity & Debt. Both have negative correlation means when the equity will be up, the debt will be down and vice versa. If you have done a proper Asset allocation than it means that, you have reduced the chances of risk.

Why Mutual Funds?

Mutual Funds are the best way to do proper Diversification & Asset allocation. Mutual funds are easy to manage and are professionally managed. So you can any time change your Investment Strategy also.

Say for Example if you have Rs.10,000 to invest in Equity than you can’t do proper diversification with such a small amount. Because a stock of Reliance Industries will cost you Rs.2000. So it is impossible to do Diversification with this much small amount. But instead of that, if you invest this much money in some good Equity Diversified mutual funds than the mutual fund has a portfolio that it has build from pulling the money of several small investors like you and me so it will be very easy and convenient to achieve the diversification with such a small amount of money.

So Mutual Funds are the best way to build your portfolio.

Reliance Life Insurance: First-ever Insurance IPO

Reliance Capital, Anil Dhirubhai Ambani (ADA) Group Company is planning the first-ever Initial Public Offering (IPO) by an Insurance Company in India by taking its subsidiary – Reliance Life Insurance Public.

The Company is looking to divest up to 26% in its Insurance arm through an IPO as well as by inducting a strategic Investor.

Reliance Capital is looking to divest 10-26% in its life insurance arm. This will be through a placement with a strategic investor as well by selling shares to the public. There will be a mix of a fresh issue of shares as well as sale of shares by the parent company.

This way, funds will be infused both into life insurance business and Reliance Capital. The process will be finalized in next 3-4 months.

While most Big insurance companies in India are joint ventures between foreign insurance majors and Indian partners, Reliance Capital had so far chosen to go solo. According to market rumors, Reliance Life Insurance would be valued over Rs.12,000 Crore.

Among the private insurance companies, Reliance Capital subsidiary is ranked fourth in terms of total premium behind ICICI, SBI Life and Bajaj Allianz.

Anil Ambani is very intelligent. He is an expert in taking Businesses public. He is very smart. By taking troubled Life Insurance Business public, he will raise the Capital for both the life insurance company as well as its parent company Reliance Capital.

Recently I have read the article by Mr.Maulik Vyas in the news paper, “The Economic Times”. The article was about “Affluent Gujarati families are now gifting Shares, Bonds & Mutual Fund Units to their daughters as a Wedding Gifts.”

According to the article, the Gujarati families are now diverted towards Bluechip company shares as a gift to their daughters as a wedding gift.

According to Maulik Vyas, At a recent wedding in the city, an indulgent father decided to break with tradition. Instead of gold and diamonds, he gifted his daughter 100 shares of Reliance Industries. Now that is Rs. 2,22,000 according to the today’s market price of Reliance Industries shares (Rs.2200/share).

Bhogilal Vanji, a Bhuj-based merchant , gifted 200 shares of Wipro, among other things, to his daughter on her wedding day. According to him, “When I started shopping for the wedding, gold prices were trading at record highs. The markets were still lukewarm and a lot of blue-chip stocks were available at throwaway prices. It seemed like a great idea to gift my daughter shares of some good companies which would stand her in good stead when the markets looked up.”

Not only this but the following financial products are also now considered as a Best Wedding Gifts.

- Bonds

- Mutual Funds

- Capital Protection Funds

- Gold ETFs

How much Tax will this attract?

Rs.50,000 received by an individual or a family (HUF) as a gift is exempt from gift tax. This also includes shares handed out as gifts.

My View Point -

Honestly speaking, I love the idea of giving shares (The most appreciating Asset in the long term) as a wedding gift. If a father gives 100 shares of reliance industries today to her daughter that is worth of Rs.2,00,000 today can become worth of crores after 20 years or so at a time of the college education of daughter's children.

Retirement Planning: Role of Mutual Funds in Retirement Planning

Recently government of India has introduced the New Pension Scheme (NPS) for people of India. Needless to say that, it has generated a lot of interest among people about retirement planning. Right now people of India are discussion daily about their retirement planning.

The market is full of financial products such as Pension Plans, ULIPs, Mutual Funds…etc… from various mutual funds and insurance companies. According to the advise of Finance Gurus, “Don’t sign up for any products with a ‘Retirement’ Tag.”

“Don’t go by the name of the product. Figure out weather the objective suits your purpose.”

The Problem with Retirement Plans (Pension Plans) is that, they are far conservative. Say for Example, NPS. New Pension Scheme will invest only a portion of your total fund in Equity for better returns and the lock-in period is 30 years and on the top of that, it will invest only in Index stocks (Sensex & Nifty) which will limit the number of stocks to 51 only.

NPS is so much safe that, it will allow very little space to your money to grow. Finance Gurus argue that, If you are going to invest for 30 years than why not invest all of the money in Equity? Second thing is that, if we have 30 long years to build the retirement corpus than why don’t invest in mid cap and small cap stocks for first 2 decades? Later on in the last decade we can gradually shift to large cap and debt oriented funds.

This is the reason, Financial Planners advise to invest in Mutual Funds rather than in Pension (Retirement) Plans. Because it is really easy & worth to build the extra ordinary Retirement Corpus with the Aggressive Mutual Funds, especially you have 20-30 years remaining for the retirement.

According to Finance Gurus, “When you have time on your side, you can bet on small and mid-cap stocks. They are risky but in the long run, the risk reduces and the chances of excellent return are more.”

Tips to Build Retirement Corpus by Mutual Funds -

- Use an Equity scheme to build the corpus

- SIP (Systemic Investment Plan) works the Best

- Bet on Blue chip if you want to play it safe

- Index funds work for passive Investors

- Small, Mid-cap schemes means high risk-return

- A Combination of schemes is also possible. Equity & Debt Fund can be the part of your Portfolio.

IPL – 2 (Indian Premiere League) became a success and it made money for both the BCCI & its owners. After the great success of IPL-2, the IPL team Kings XI Punjab, co-owned by Bollywood actor Preity Zinta, Dabur group’s Mohit Burman and Bombay Dyeing’s Ness Wadia, may offload 10-15% equity stake in the team.

According to the media sources, the team is looking for new investors. The team is in talk with various investors.

Right now it is not clear that if dilution of the equity will be done through stake sales by existing promoters or through the issue of fresh equity. But according to my logic and understanding of the finance, it will be through the sales by existing promoters.

In IPL-2, Kings XI has made a profit of Rs.26 crores this year. The co-owners of Kings XI, Punjab had acquired the team for US $ 76 million last year.

If the equity dilution plan will be executed, Kings XI will be the third team to consider a stake sale.

Rajasthan Royals had offloaded 11.7% stake in its to Bollywood actress Shipla Shetty this year. At the time of stake sale, Emerging Media had announced that the Jaipur based team was valued at US $ 140 Million, Emerging Media had acquired the franchise for US $ 67 million last year.

Knight Riders, owned by Shah Rukh Khan, Juhi Chawla and Jai Mehta is expected to announce a stake sale of 10-20%.

Deccan Chronicle, which owns this year’s champions Deccan Chargers, had appointed KPMG to find potential partners to pick up stake last year, but later deferred its plans by a couple of years.

My View Point about IPL Stake sale -

Have you ever think that, Why Mukesh Ambani who fully owns Mumbai Indians team is not looking for a stake sale? And why these film stars are looking for selling their stakes in the team? Is it because these film stars are more smarter than Mukesh Ambani?

No. It is not. The reason is because the Financial IQ of these film stars is much less than Mukesh Ambani, the world’s top 10 richest person and India’s richest person.

IPL teams have appreciated in its value during last year by over 100% even during the time of recession. As I have already told you before that IPL teams are Assets. Owning an IPL team is exactly same like owning any other asset such as stocks, bonds, gold & real estate.

Now Rajasthan Royals appreciated from US 67 millions to US $ 140 million this year. So What it means? Well, it means that this Asset has given you a return of more than 100% in just one year right?

Now what happens if you own any IPL team for 5 years? Well, at a 100% compounded return per annum, the valuation of Mumbai Indians will become US $ 3.5 Billion (Yes that’s B) which was bought by Mukesh Ambani for just US $ 110 Million in year 2008.

And at that rate the Valuation of Rajasthan Royals will be US $ 2 Billion which was only US $ 67 Million in its value in 2008.

Now just imagine that what will be the valuation of these IPL cricket teams after 10 years? We can’t imagine it. It will be worth of Billions right? And this is why Mukesh Ambani is not looking for selling or diluting his stake in Mumbai Indians. Because he knows this thing.

All the film stars want to sell or dilute their stakes for money because they are not as Financially Intelligent as Mukesh Ambani. They are seeing short term profit. They can’t see the long term enormous profit.

LIC (Life Insurance Corporation of India) introduces the new Unit Linked Pension Plan, name “Market Plus-I Pension Plan”.

Salient Features:

- Get the most out of the market through various fund options

- Critical illness benefit rides available

- Min. & Max. Age at entry 18 years – 80 years

- Min. & Max. Age at vesting of Pension 40 years – 85 years

- No surrender charge

The Premiums paid in Unit Linked Insurance Policies are subject to Investment risks associated with Capital markets and the NAV of the units may go up or down based on the performance of the fund and factors influencing the capital market.

Google Versus Indian Search Engines

Many Indian Entrepreneurs are now trying to compete the Google. They have made the Indian Version of Google means Indian search engines. Here is a List of Indian Search Engines. I know that, many of you will have never heard these names but these are active Indian search engines. Indian Search Engines are only for search in the Indian market only.

01) Guruji.com

02) Antya.com

03) Asklaila.com

04) 123khoj.com – One funny thing about 123khoj is that, it offers you 3 options. In first option they will ask for you R.250 per year for guaranteed listing in their index, in the second option they offer you top 10 ranking for one keyword and in third option, they offer you ranking in top 10 search results for multiple keywords. Right now it sounds funny. But let us see that what happens in the long run?

The main limitation of the Indian Version of Google is,

- Because of the lack of Infrastructure, Indian search engines don’t have a google like search engine techniques such as web crawlers and Page Rank systems.

- And that’s why Indian search engines operate manually means human team updates the Index of these search engines. This is the major limitation of Indian search engines. Google has a fully automatic system which downloads the web round the clock and keeps updated Google. But Indian search engines don’t have this technique.

- Another main limitation is, Google is so much Giant that, in whole the world, the word ‘Search’ is synonymous with the word ‘Google’. But in India very few people know about the above sites.

Microsoft & Yahoo are the great competitors of Google in the world. Now let us see that how these Indian Search Engines compete the Google…!!!

“I want to invest in mutual fund (Equity Fund) through SIP , I prefer SBI MF pls give me ur opinion abt this fund.
I would also like to know whether we should opt Dividend or Growth Facility , I prefer to invest on a long term basis pls suggest me "details regarding investment duration .I would als like to know which is the best fund SBI MF or UTI MF.”

Well, Here you want to invest in SBI Mutual fund because you think that SBI is a good mutual fund. And you have also asked me that which is the best fund, SBI MF or UTI MF.

Well, Here i want to tell you that, most of the people have a false belief that, they have to see the fund house for their investments. But it is not true. The fund house has nothing to do with the returns of individual schemes. If we talk about SBI MF than it has several Equity Schemes. But only few are effective. The same is true for UTI fund.

Basically we look for management team in any mutual fund scheme.

I usually prefer those schemes which have a proven past record of at least 3-5 years. Let me suggest you one best website which will give you all the details about Indian Mutual Funds.

Valueresearchonline.com

This site gives every mutual fund scheme, a star rating. 4-star or 5-star rated funds are the best choice for investment. They don’t only see the performance of the fund while rating any fund but they check literally hundreds of criterias before rating any fund such as fund manager, investment strategy, advanced portfolio statistics, fund beta ratio, alpha ratio, R, and many other statistical parameters.

Now let us talk about SBI MF.

In SBI MF, right now the following equity schemes are 4-star or 5-star rated.

- SBI Magnum Contra – 5 star

- SBI Magnum Equity – 4 star

- SBI Magnum Multiplier Plus – 4 star

So if you want to invest in SBI’s Equity Schemes than please invest in the above 3 schemes only. Because according to Valuresearch, not the all the Equity schemes from SBI are Investment worthy.

Now let us talk about UTI MF.

In UTI MF, following Equity schemes are 4-star or 5-star rated.

- UTI Equity – 4 star

- UTI Infrastructure – 4 star

- UTI Mastershare – 4 star

So you, me or anyone can’t comment on the over all fund house. Every fund house has few schemes which are 4-star or 5-star rated and only those schemes are investment worthy.

Here is a Full list of all the 4-star & 5-star rated Equity schemes from all the fund Houses by Valueresearchonline

So as a rule of thumb, “Start doing SIP in some good 4-star or 5-star rated equity diversified mutual fund of any fund house having past record of 3-5 years. Of course if the scheme is rated 4-star or 5-star than it must have a proven past record of more than 3 years.”

Every year review the fund rating and rebalance your portfolio accordingly. According to me, any portfolio’s core fund should be 4-star or 5-star rated Equity Diversified funds only. I do not prefer Sector/thematic funds.

Dividend versus Growth Option -

Well, Here are the 2 great informative articles that will solve your query.

01) Growth or Dividend? – This article is all about the basic difference between Growth, Dividend & Dividend Re-investment option. Actually Growth & Dividend re-investment are the same thing.

02) Growth Versus Dividend Re-investment – This is another informative article. Just read this article and you will get all the answers of your query.

Investment Duration -

You have also asked me for the details regarding the Investment duration. Well, no need to say that, “Longer is better.” This is because of the Compound Interest. Remember, Investment is not a game of money only. It is a game of money & time both. So unless you invest both of these elements in extreme proportions, you can’t be extremely wealthy.

So Invest Money & Time both vigorously. Do SIP with as much money as possible. And give as much time as possible (Such as 5,10,20,40 years or even more….!!!) to grow those investments.

“Should I go for Pension Plan or Mutual Funds? I think Pension Plan will be better and safe than Mutual Funds” – One of my friend asked me.

I asked in reply, “Why do you want to go for a Pension Plan & not the mutual Funds?”

He said, “Well, because they are safe & provides Life Insurance Cover”.

People simply Love Pension Plans because of this clause:

“On the death of the Life Assured during the deferment period of the policy, i.e. before the annuity vests, an amount equal to the Sum Assured under the Basic plan along with the accrued Guaranteed Additions, simple Reversionary Bonuses and Terminal Bonus, if any, will be paid in a lump sum to the appointed nominee, provided the policy is in force for full Sum Assured. Nominee will also have the option to purchase an annuity with this amount.”

But My argument is that, if you want a Life Cover than why not go for a Simple, Conventional Life Insurance Plan? Pension Plans are not for Life Insurance benefits, For Life Insurance, we have Life Insurance Plans.

My another logic behind going for Mutual Funds rather than Pension Plans is that, Because We have to invest in pension plans for 15, 20 or 30 years which is an ultra-long time horizon. If you are going for this much of long time horizon investment than why not go for Equity which is the Best Asset class in comparison to any other Asset class.

Historical Data shows that, Indian Equity has given 15-20% per Annum compounded annual return in the long run while your Pension Plan will give you just 6-10% per Annum return, may be less but not more. This additional 5-10% of Compounded interest rate in the long run can make a huge difference in your wealth.

Say for Example, if you invest Rs.1,00,000 today than after 30 years it will be Rs.5.74 Lakh at the rate of 6% Compounded Annually, Rs. 17.44 Lakh at the rate of 10% per Annum, Rs. 66.22 Lakh at the rate of 15% per Annum & Rs. 2.37 Crores…!!! at the rate of 20% per Annum. Than why not go for Mutual Funds?….!!!

Conclusion -

So in my opinion, rather than going for Pension Plans only for Life Insurance benefits, you should buy a separate Conventional Life Insurance Plan separately and invest rest of the money in good equity mutual funds systemically over 15, 20 or 30 years.

In the Long-run, Equity is the Best Asset Class to beat the Tax & Inflation Both….!!!!

Lottery Scam: UK Lottery Scam is the Hot favourite

Yesterday night when I was writing a Blog post at 12 o'clock night, My dad called me. Let me tell you that my home town is Ahmedabad, Gujarat, India & Right now I study at Kolhapur, Maharashtra, India. My dad told me that, He received the following SMS on his mobile phone.

“Congrats…!!!, Your Mobile has won GBP 10,00,000 in the 09 LOOMIS FIN INT Mobile Draw, To claim your prize contact harry on 447014225678 or E-mail lomis@live.com”

So my dad called me to e-mail this fellow to know that what is the fact? I told my dad that, this is a lottery scam and there are literally thousands of varieties of this types of scams. But my dad did not want to listen to me. He ordered me to mail this fellow to claim the lottery ticket.

I am sure that, many of you also must have won millions of dollars of lotteries of this kind in the past. Let me tell you that these are the scams. Once you will ask for the claim, they will ask for money usually few thousand dollars to complete the legal procedures & deliver the lottery check at your home. But believe me, these money will never come back.

Unfortunately, it is very difficult to explain and convince the victim (Here in this case My Dad is a Victim) that it is a scam and you have not won any lottery.

So How to convince the Victim?

- Educate the Victim First: If your friend, colleague or relative becomes a victim of such types of lottery scam than first of all educate him about these types of frauds. Let me tell you that How I educated my dad about these types of scams. I have send the following link to my Dad.

1400 Types of Lottery Scams from 419legal.org Forum

The above link can be very helpful to educate victims about the lottery scams of these types. You also send this link to your friends if you find that they are the victims of lottery scams.

- 90% of Victims are the pre-retirement age group: It is observed that the victims are mainly of pre-retirement age group. because they have built-up the sufficiently large amount of corpus to blow up. So if you are in the pre-retirement age group (50-65 years) than Be Alert. Don’t blow up your retirement corpus behind these lottery scams.

In short, the one and only solution of protecting your self by these scams is the “Education & Awareness”. So Spread the awareness about these types of modern scams.

Business: Advantages of Having a Business

I always motivate people to start their own Business as early as possible in their lives because having your own Business has several Advantages. This article is all about the advantages of owning your own Business.

The main advantage of having your own Business is, You have control over your Financial Future. You don’t have to struggle hard to get job in the economy. If you have worked hard to develop your own Business than it will become your Asset which you can sell or pass it to the next generation. But you can not sell your Educational degrees to anyone nor you can pass it to the next generation.

Not only this, But troubled & loss making Businesses can be sold but troubled degrees can’t be sold. Let me give you the example of my friend. My friend is a doctor and he had worked very hard behind his USMLE (United States Medical Licensed Examination). He scored outstanding in this exam. So his score card now became his Asset because with the help of this score card, he could now be a doctor in USA and earn millions of dollars. But somehow he did not get VISA to go to USA. So his Asset now became troubled Asset. He had worked hard for that outstanding score card but now that score card is of no value to him. So Now he can’t sell this troubled Asset.

But if he had worked same hard to develop some Business and if that Business was in trouble than he could easily able to sell that Business because the market is full of Investors who invest in troubled Assets for higher profits.

This is the main advantage of Business. It’s an Asset which you can sell or pass it to the next generations anytime. Even if the Business is in trouble and loss making, you can sell it. But your Educational Degrees, which of course are the Assets but you can not transfer, sell or pass it to the next generation.

Another Advantage of owning your own Business is ‘Tax Benefits’. For you (Individual), you have to pay tax first to the government and if anything left behind, you can spend, save or invest. But for a Business the Tax-laws are different. For a Business, every expense is Tax-deductible and if something remains at last, they pay the Tax. If Business want to Invest money for its expansion, it can invest it from pre-tax money but if you want to invest money, you have to invest it from your post-tax money. And that’s why Business owners get rich faster because the Tax laws are different for Individuals & Businesses.

So start developing your own Business as soon as possible in your life. I have started my Internet Business (This Blog) 1 year back, And today I feel more secure & comfortable than rest of my friends. Because I don’t have to be dependent on the Education System or on someone else for a Job…!!!

Here is a List of Youngest Billionaires of the world, 2009. Mark Zuckerberg was the youngest Billionaire in the year 2008 but this year, he is out of the list of Billionaires. So Here is a List of Youngest Billionaires of this world, 2009.

01) Prince Albert von Thurn und Taxis - Net worth: $2.1 billion ,Age: 25

German prince reclaims the title of world’s youngest billionaire as Facebook founder Mark Zuckerberg drops out of the billionaires’ club. First appeared on our World’s Billionaires list at age 8, but officially inherited his fortune in June 2001 on his 18th birthday. Attended high school in Rome, studied economics and theology at Edinburgh University in Scotland. Assets include real estate, art, a technology company and 30,000 hectares of woodland in Germany. This eligible bachelor tours with a German auto-racing league.

02) Sergey Brin - Net worth: $12 billion ,Age: 35

Google co-founder continues to dominate search business despite facing strong headwinds. Company’s stock is down 30% in the past 12 months, slicing $6.7 billion from personal balance sheet. Posted better than expected earnings in January; trimmed staff and employee perks. Professor’s son emigrated from Russia, met partner Larry Page in a computer science Ph.D. program at Stanford University. Duo dropped out in 1998 to start Google from a friend’s garage. Sales: $21.8 billion. Net margins: 19%.

03) John Arnold - Net Worth: $2.7 billion, Age: 35

The youngest billionaire in America keeps getting richer. Wunderkind’s Centaurus Energy hedge fund said to be up 80% in 2008. Energy trader diversifying into hard assets: power plants, storage facilities. Father was a lawyer, mother an accountant. Raised in Dallas, graduated in three years from Vanderbilt University. Became an oil trader at Enron in 1995; said to have generated $750 million of the firm’s profits in 2001. Founded Centaurus after Enron’s bankruptcy. Returns said to exceed 200% a year since 2002.

04) Larry Page - Net Worth: $12 billion , Age: 36

Professor’s son, heads Google’s product division. Met partner Sergey Brin in a computer science Ph.D. program at Stanford University. Duo dropped out in 1998 to start Google from a friend’s garage. Initial financing came from angel investors K. Ram Shriram, Andy von Bechtolsheim, professor David Cheriton. Venture capital firms Kleiner Perkins Caufield & Byers and Sequoia Capital pitched in $25 million; everyone made billions when Google went public in 2004. Fortune down $6.6 billion since last March after stock fell 30%.

05) William Ding - Net Worth: $1.1 billion , Age: 38

Founder of China’s No. 2 online game company, Netease. Was once China’s richest man. Flagship game, “Fantasy Westward Journey,” among nation’s top 10 downloads. Signed three-year contract with U.S. game developer Blizzard Entertainment to distribute “StarCraft II” and Battle.net to Chinese mainland. Netease’s U.S.-listed shares up 9% in past year. Enjoyed double-digit profit growth.

06) Sheik Mansour Bin Zayed Al Nahayan - Net Worth: $4.9 billion , Age: 39

Investor with hoards of cash is a member of Abu Dhabi’s royal family. Last September, he shelled out $300 million for soccer team Manchester City. One month later, he rescued British bank Barclays from possible nationalization with a controversial $5 billion cash investment. Wields major clout at home: chairs the state’s oil-oriented sovereign wealth fund; serves as minister of United Arab Emirates Presidential Affairs. Avid sportsman–enjoys soccer and endurance riding.

07) Kenneth Griffin - Net Worth: $1.5 billion, Age: 40

Founder of Chicago hedge fund outfit Citadel reeling from steep losses: Flagship Wellington Fund plunged 55% in 2008. Shut down Fusion, a $1 billion hedge fund of funds, in October. Net worth down $2.2 billion–60%–since September. Started trading stocks from Harvard dorm room; founded Citadel with $4.6 million in 1990. Today, firm manages $13 billion (down 35% from peak last year); accounts for roughly 10% of U.S. equity trading volume. One of five billionaire hedge fund managers to go before congressional panel last November. Bought Jasper Johns painting “False Start” for $80 million in 2006.

ICICI Bank Customer Education Series: Make the most of your Bank with Customer Care

- Convenient -

Customer Care Numbers are printed on the reverse of your Credit Card and Debit Cars. Please store your city’s Customer Care number on your mobile phone for use when needed.

- Safe -

Always use your card number and PIN on the IVR. This verification process is to safeguard your transaction.

- Cost-effective -

Familiarize yourself with the IVR options by selecting the IVR code directly to ensure speedy conclusion of your call.

- Wide Choice -

Get to know about the wide range of services being offered at Customer Care so as to fulfil your banking needs on a single phone call.

Many readers have asked me that, “When should I liquidate my Investment Portfolio?”

Well, according to me, there are few reasons and occasions when you need to liquidate your Investment Portfolio. Here are few most common reasons to liquidate your Investment Portfolio.

01) Your Financial Goals achieved or has come near -

This is one of the most common reason to liquidate your portfolio. Say for example, you have build an Investment Portfolio for your retirement needs and now you are near your retirement and you have build sufficient corpus for your retirement than it is the time to liquidate your portfolio.

02) Emergency -

You may encounter with an emergency money need such as critical medical illness than it is a time to liquidate your investment portfolio.

03) Asset Allocation -

The need to rebalance your portfolio if you have a set asset allocation model to which you would like to adhere, you may need to rebalance your holdings at the end of the year to get your portfolio back to its original state. In these cases you may need to liquidate and rebalance your portfolio.

04) Need a Tax Break -

If your portfolio has suffered significant capital losses and you need a tax break to offset realized capital gains of your other investments, you may want to redeem your investment portfolio to apply the capital loss to your capital gains. Say for Example, you have a Mutual Fund Portfolio which has suffered from a huge loss in the recent economic downturn and at the same time you have sell your Real Estate for a huge Capital Gain than you can use this strategy to save huge amount of Tax.

So the above are the few most common and genuine reasons to liquidate your Investment Portfolio.

All about Internet Banking

This article is for those readers who don’t know much about Internet Banking, how to use it & how safe it is? This Basic Article will teach you all the basic aspects of Internet Banking.

What is Internet Banking?

Internet Banking is a way to access your account without stepping into the bank. Here are the features that you can access with the Internet Banking.

- Check your Balances in various accounts

- View your account statement, One can also download the statement in desired form.

- Transfer the funds from your account to another

- Transfer the funds from your account to a third party account within the bank as well as other banks through NEFT/RTGS

- Pay utility Bills Online

- Request for Cheque Book

Is Internet Banking Safe?

Yes. It is absolutely safe. Internet Banking services are protected with 128-bit encryption – The highest level of security layer presently available.

How to apply for Internet Banking Facility?

Right now almost every reputed Banks around this world are offering Internet Banking Facility. All you have to do is, Download the Form from the website of your Bank and submit it to your nearest Branch. Within few days your Bank will send you User ID & Password for your Internet Banking Account. Once you get User ID & password, you can start net Banking right away.

What are Online & Offline Services?

Online Services include services that can be processed instantly.

- Funds Transfer
- Stop Payment
- Balance Enquiry

Offline services do not trigger transactions immediately. However, your request will be taken and implemented in a span of 7 days. In offline services, Your request (say a cheque book) goes to the Relationship Manager, who will get a cheque book prepared and send you the same via courier.

- Cheque Book Request
- Opening of Accounts
- Renewals of FD
- Request for Account Summary

Can I transfer the funds to accounts of any other bank?

Yes. You can transfer funds to the branches of other banks through NEFT/RTGS facility.

How to check your Mutual Fund Performance?

Many Financial advisors and planners will advise you to check your mutual fund performance every year or quarterly but they won’t tell you that how to check the fund performance? Not only this but many small investors don’t know how to check the fund performance?

Here are two easy techniques to check your mutual fund performance. You don’t require any high class knowledge to check your fund performance. Simply learn following two techniques and next time check your mutual fund performance by your self.

01) Compare your Mutual Fund Performance with the Benchmark -

Every mutual fund has an underlying bench mark index and the fund manager of any fund try to beat it. Say for Example, Sensex, Nifty, BSE 100, BSE 500, BSE Mid-Cap, BSE Small-Cap…etc…

This technique is very simple. You simply have to compare the performance of your mutual fund scheme with its underlying benchmark index. Say for Example, I have invested my money in DSPML TIGER Fund which is a large cap fund having benchmark as a Sensex.

Last year, Sensex has given – 55% return (Negative) while my fund has given – 50% (Negative) return. So it means that, my fund has outperformed the Sensex by 5%. So it is a good fund. Just 2 years before when Sensex had given 40% return, My fund had given 65% return during the same time. So it means that my fund is performing well both during the up and down market so no need to exit it.

02) Compare with Peers (Competitor) -

Another simple technique of comparing your mutual fund performance is, comparing its performance with peer fund. Peer funds means competitor funds having the same objective.

Say for Example, I have invested in Reliance Growth fund which is a Mid-cap fund. Now just two years back, The Mid-cap index had given 50% return while Reliance Growth had given me 65% return so it passed the test 1. i.e. it outperformed the Benchmark index.

After that i compared it with its peer, SBI Magnum Global fund which is also a mid-cap fund which had given 55% return during the same time. Now SBI Magnum Global fund had outperformed the benchmark but it did not outperform its peer (Reliance Growth). So my decision to invest in Reliance Growth was perfect. It had outperformed both the Benchmark index and the peer fund.

You have to remember that, you have to compare the peer performance of funds having same objectives only. Means you can not compare the returns of Large cap funds with mid cap funds. You have to compare the peer returns of Midcap to midcap and large cap to large cap funds.

So use these two simple Mutual Fund Performance Techniques and review your portfolio regularly.

5 Things to Check before Redeeming your Mutual Fund Units

If your Mutual Fund investment is giving you lower return than you may be tempted to redeem your units and invest your money elsewhere. But you have to be careful before redeeming your mutual fund units. Here are 5 things that you should check before redeeming your MF Units.

01) Understand the difference between Mutual Funds & Stocks -

First of all educate your self. Mutual funds are not stocks. Owning a stock & a Mutual Fund units are two entirely different things. whenever you buy a stock, it means that you are investing in that particular business. But whenever you buy units of any mutual fund, it means that you are investing in the portfolio of stocks that fund manager has strategically build. So before redeeming your mutual fund units, you should carefully check the various parameters of fund performance.

02) Change in Fund Manager -

We invest in mutual funds not because of large fund houses but because of the fund managers. We in vest our money in a Best Fund management team, so you should carefully monitor the fund manager. If your fund manager quits the fund, it may be a time to exit. But of course, it is not the hard and fast indication to quit the fund. You have to see the new fund manager and his expertise also. It is quite possible that the new fund manager may be as efficient as the previous one.

03) Change in Fund Strategy -

During the recent down turn, many mutual fund schemes have changed their objectives. Some became diversified funds from sector funds and so on. So it may be a time to exit if your fund changes its Investment Strategy.

04) Change in Fund Performance -

You have to compare your fund performance with the underlying Benchmark Index and the peer funds having the same investment strategy. If your fund does not perform well, it is the time to exit.

05) When your Personal Investment Portfolio changes -

Besides changes in the mutual fund itself, other changes in your personal portfolio may require you to redeem your mutual fund units and transfer your money into a more suitable portfolio.

So you should check all of the above things before thinking of exiting from your Mutual Fund scheme.

[Image Credit: http://www.inmagine.com/ucsi017/ucsi017029-photo]

Baroda Next: SME Loan for Medical Centre

www.bankofbaroda.com

Bank of Baroda brings you SME Loan for Medical Centre. Which is a perfect dose for your Nursing Home / Hospital.

Key Features: -

- Simple Documentation

- Loans in just 14 Days

- Single Window Processing

I think this is the best solution for those doctors who have recently completed their post-graduation and want to start their own Hospital.

In the recent past, you must have heard the word ‘Bailout’. Everyday while watching the TV or reading the news paper, we hear the term bailout very often. So What this bailout is and why large governments such as USA go for this option? This article is all about the basics of the bailout.

What is Bailout? -

Wikipedia: Bailout, in economics and finance, is a fresh injection of liquidity given to a bankrupt or nearly bankrupt entity. A bailout is an act of loaning or giving capital to a failing company in order to save it from bankruptcy, insolvency, or total liquidation and ruin.

Investopedia: A situation in which a business, individual or government offers money to a failing business in order to prevent the consequences that arise from a business's downfall. Bailouts can take the form of loans, bonds, stocks or cash. They may or may not require reimbursement.

Layman’s Explanation: Whenever a large Business make a huge loss or no longer viable to survive, government thinks of bailout that business. The reason is simple. That Business has created so many jobs in the economy (in millions) that if we shut down that business, unemployment rate in the economy will shoot up significantly and it will be impossible for other businesses and government to absorb that much amount of job loss.

Another possible reason is that, if government thinks that the bailout of a company might be seen as a necessity in order to prevent greater, socioeconomic failures: For example, the US government assumes transportation to be the backbone of America's general economic fluency, which maintains the nation's geopolitical power. As such, it is the long-held policy of the US government to protect the biggest American companies responsible for transportation--airliners, petrol companies, etc-- from failure through subsidies and low-interest loans, or, in other words, through bailing them out. These companies, among others, are deemed "too big to fail" because their goods and services are considered by the government to be constant universal necessities in maintaining the nation's welfare and often, indirectly, its security.

Let us discuss about Satyam. Ramalinga Raju, the owner of the Satyam had done a big fraud even though why the government has not shut down this business? Well, because Satyam has created 50,000 jobs in the economy and shutting down it means a mass scale job loss. Of course, this is not the example of bailout. But i want to tell you that when you become too big, it is impossible to fail.

For example, Chrysler, a large U.S. automaker was in need of a bailout in the early 1980s. The U.S. government stepped in and offered roughly $1.2 billion to the failing company. Chrysler was able to pay the entire bailout back, and is currently a profitable firm.
One of the biggest bailouts is the one proposed by the U.S. government in 2008 that will see $700 billion put toward bailing out various financial organizations and those affected by the credit crisis.

Indian VAS Market: Rs.4,200 Crore & Growing Industry

Indian Telecom Market is world’s one of the largest market. It is growing exponentially right now and this exponential growth has created various Business Opportunities for all the Business segments in India.

VAS (Value Added Services) is the exponentially growing market in the India. The Popular Mobile content or VAS (Value Added Services) include SMS, audio, music, video, software and games. The Indian VAS market is estimated at Rs.4,200 Crore and is expected to double in the next 3-5 years only. With falling revenue per users, telecom service providers are focusing on VAS content to increase average revenue per user (ARPU).

VAS contribute 7-15% to the revenues of various telecom companies in India. While the same contribute around 30% in the case of Japanese Companies.

The Voice is becoming a cheaper commodity content and data will become the important revenue streams for telcos.

Emerging Trends in VAS Segment:

- Audio is the past; Video is the future. Telcom companies will now focus on increasing use of multimedia and rich data traffic

- Mobile email: Mobile data business applications are among the fastest-growing segments in this market

- Content is expected to become less network-dependent in the future, with VAS providers providing content directly to end-users/

- Some content will be provided free and such services will be paid for by advertisers rather than consumers.

The Biggest Challenge -

The biggest challenge to the VAS and software providers is the issue of piracy, which continues to be a major threat to revenue. This is intensified by the easy availability and accessibility of technology.

Income Funds are the good choice for people who have build sufficient corpus for their retirement. This article is all about the basics of the Income Funds.

What is Income Funds?

Wikipedia: An income fund is a mutual fund whose goal is to provide an income from investments.

Investopedia: A type of mutual fund that emphasizes current income, either on a monthly or quarterly basis, as opposed to capital appreciation. Such funds hold a variety of government, municipal and corporate debt obligations, preferred stock, money market instruments, and dividend-paying stocks.

In Layman’s language (My preferred language), Income funds are the mutual funds that primarily invest in Government Bonds & High Grade Corporate Bonds to generate a fixed regular Income for an Investor. These funds may invest in dividend paying blue-chip stocks. However, mainly they invest in bonds only because dividends are not sure and regular source of income. The Capital Protection is the main objective of such type of funds.

Why to invest in Income Funds?

Well, because Bank Savings account & fixed deposits give you only 3-6% return while Income Funds may give you as high as 8-10% return depending on the fund manager’s investment strategy. So these types of funds are good bet for savers mainly who want to live on their investment income.

The case for investing in income funds is stronger at this time because the 10-year government bond yields have not fallen in line with a sharp decline in short-term rates.

Types of Income Funds -

There are basically two types of Income funds. One is Passively managed and the other is actively managed.

Passively managed income funds by definition, mirror the benchmark index whereas actively managed funds aim at outperforming the index. Those fund managers who have actively or dynamically managed their funds well have been able to outperform the benchmark considerably.

Gilt funds versus Income Funds -

Many people have false belief that, gilt funds and the income funds are the same thing but actually they are not. Gilt funds are those which primarily invest in Government securities and that’s why tend to give less return because government securities have low yield.

While Income funds maintain an appropriate blend of corporate credits and government securities. This blend provides the benefit of diversification, particularly when the credit spreads are contracting.

In summary, Income funds are good bets for those who want to generate a regular income from their money at low risk.

In a recent article from eMarketer, 27.9 million US Internet users have a blog they update at least once per month, and they represent 14% of the Internet population. By 2013, 37.6 million users will update their blogs at least monthly.

"Blogs are now mainstream media," said Richard Jalichandra, CEO of Technorati.  "You’re also seeing mainstream media coming in the other direction by adding blog content."

Even more importantly, eMarketer estimates that in 2009 96.6 million US Internet users will read a blog at least once per month. By 2013, 128.2 million people, or 58% of all US users, will do the same.

If you ask me than Blog is a Company and its owner is a CEO. Yes, This is true. The Future of Businesses is Blog. Right now so many Web Entrepreneurs around this world are working hard day and night to develop their Blogs because in the next era, The Blogs will be considered as a Company and their owners as a CEO of the Company…!!!

Intellectual Property: A Viable Business Model

The Economic Times, India’s most reputed Business News Paper has initiated “The Power of Ideas” Campaign to find out Entrepreneurs from the economy, nurture their ideas and provide them venture capital fund.

You will be surprised by knowing that at least 10 aspiring entrepreneurs in India see Intellectual Property (IP) as a viable Business Model. Out of the 254 finalists in ET’s ‘The Power of Ideas’ Programme, 10 chose to submit intellectual property based business ideas for their preferred area of entrepreneurship.

Example:1 Ashish Gupta, a Delhi based professional who has been successful in setting up a retail venture in India, aims to use licensing of IP based technologies to spread education in India.

Example:2 K M Dixit, a Delhi based Government Employee in his forties, has formed a team of retired government employees to work on an idea to start a venture on disaster recovery management

Example:3 Sapna Agarwal, dean of a Kota-nased Business school, who is also a corporate trainer and a post graduate in Gandhian thoughts and non-violence, wants to start an IP based education and trainig venture covering the whole country.

In short, Intellectual Properties have the great potential to generate money. This Blog is also an Intellectual Property. The Information stored in the articles of this Blog is the mind work which is useful to literally millions of people.

In short, Intellectual Property is a viable Business Model…!!!

ICICIDirect: Online Tax Payment Service in India

ICICI Direct come up with Tax Investment Planning Services to ease your Income tax worries. You can now register online with ICICI Direct.com for availing its Tax Payment Services. You just have to visit your nearest ICICI Direct Branch and they will assist you in your Tax payments.

Not only this but their Relationship Manager will assist you to chose the right Financial Product for your Investment needs. Once you get log-in ID and password, you can log-on to ICICI Direct and register online for these services.

ICICI will assist you to complete your return filing formalities with the tax authorities. Online Tax Payment India is the best service to pay your tax online hassle free. Filing your Income Tax return was never this much easy before.