Friday, April 24, 2015

Should I borrow Rs.5 lakhs with salary Rs.50K p.m.?

Last week I received a query from one of my blog subscribers.

Rohit was planning to buy a new car. The on-road cost was working out to about Rs.6.50 lakhs. His idea was to pay Rs.1.50 lakhs as down-payment from his annual bonus and finance the balance Rs.5 lakhs through a car loan.

With a total salary of around Rs.50,000 per month, Rohit was wondering whether borrowing Rs.5 lakhs for the car was Ok or not.

Wednesday, April 22, 2015

File income tax returns this year with a helmet on

Contrary to many promises and huge expectations, the Modi Govt. is proving to be far worse than the previous Govt., at least as far as the tax terrorism is concerned.

You will be absolutely shocked to see the latest Income Tax Returns Forms issued by the IT Department for the Assessment Year 2015-16.

Monday, April 20, 2015

Are you buying equity shares using rear-view mirror?

Unless you are on a suicide-cum-murder mission, you won't drive your car looking through the rear-view mirror.

Rather, your attention would be focussed beyond the windshield, on what lies ahead of you. Thus you would speed up, slow down or manoeuvre your car depending on the traffic situation in front of you.

Unfortunately, most people don't apply the same logic when investing in equity.

Friday, April 17, 2015

Non-callable Bank Fixed Deposits to make a debut

As you may recollect, in my blog post 'RBI's 6th bi-monthly monetary policy is a pleasant surprise' I had mentioned that RBI is planning to soon announce the guidelines for banks to issue a new type of Fixed Deposit.

At present, individuals and HUFs depositing up to Rs.1 crore are allowed early encashment i.e. callable deposits.

The new fixed deposits — known as non-callable deposits — would be the ones where premature withdrawal would not be permitted.

Wednesday, April 15, 2015

7 reasons why mutual fund size matters... a lot

It is often a matter of debate whether the corpus size of a mutual scheme — AUM (Assets Under Management) in MF lingo — has a bearing on its returns or not.

To arrive at the right conclusion, one must appreciate the fact that investing is not an exact science. Ten people, given the same set of stocks, will deliver ten different results.

Monday, April 13, 2015

Is Chit Fund always a Cheat Fund?

First and foremost, one must understand that Chit Fund is NOT an investment.

It is merely a "collection" scheme where
... individuals get together to form a group
... each member contributes a specified amount every month to a kitty
... total collection for the month is given to one person among the group
... each member receives the monthly collection once, till the cycle is complete

Friday, April 10, 2015

New nomination rules in life insurance perfect for our family

As I have often discussed in the past, Nomination is not a Will.

It is merely a provision that enables quick and easy transfer of our assets, to the nominees, after our death.

As per law, nominees hold these assets merely as a trustee or caretaker, till they are transferred to the legal heirs as per the Will or, in the absence of a Will, as per the relevant Succession Laws. [Of course, nominees and legal heirs could be the same persons.]

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