SIP stands for Systematic Investment Plan, it is an automated method of investing in mutual funds. You select a mutual fund, an amount and a date. On your selected date, the predecided amount is deducted from your account and equivalent units of the selected mutual fund are allocated to you. All this happens without any manual intervention……….
A mutual fund is a fund created from a pool of money collected from a large number of investors. This pool of money is managed by a professional fund manager. The money of this fund is invested in various assets to generate income/capital gains for the investors. The assets in which money is invested is determined on the basis of pre-agreed and declared objectives of the fund. For example, an equity fund invests majority of the money in stocks. ……..
Index investing is a passive investment strategy. The investor chooses an index like NIFTY or SENSEX. Money is then invested in stocks listed on the index. The investment is made in the individual stocks in the exact same proportion as the index. The aim of this method of investment is to mimic the performance of the index. Index funds are the easiest and most commonly used method to implement index investment………
Income tax applies to all Indian bloggers. You calculate all the earning you made from your blog. You subtract all the expenses related to the blog. On the final income, you pay income tax. GST is a little more complex. Blogger is the supplier of a service or good (if you sell a physical product). If the receiver of that service/good is in India. You have to pay GST at 18%. But, if the receiver of that service/good is located outside India. You don’t have to pay GST……
The dividends paid are not an extra benefit. In reality, dividend results in less appreciation of Net Asset Value (NAV). The dividend is also marketed as being a tax-free income. But you might end up paying more taxes. The fund house distributes the dividend after deducting the Dividend Distribution Tax (DDT). Dividend option being a source of regular income is also a myth. The fund house is not bound to distribute dividend. In cases when fund’s earnings are negative or below a certain level, there might be zero dividends distributed………..
Unlike mutual funds, the expense ratio determined by the regulatory authorities for traditional plans is quite high. Added to this a hefty commission given to insurance agents also eats into the premium paid. Both these factor adds up to a very low rate of return these plans offer to their customers. Even this low return is available after more than a decade and thus inflation further reduces the actual value of the return customer gets. The operational costs, commission and returns eat up a major chunk of premium so the insurance amount is very low in comparison to term plans……..
For a family of 4, parents around 30-year-old and children up to 10-year-old, living in a Tier – 2 city, an annual income of more than 45 lakh will bring them in the category of being rich. But the income alone cannot determine whether a person is rich or not. A person or a family can be considered being rich if they are having a high net worth. A regular and safe source of income, that can ensure a lifestyle lacking any fear of safety, survival and unforeseeable emergencies. They should also have ample time to take part in recreational activities at their leisure and the freedom of taking part in the majority of legal activities without any financial constraint……..
I got my first practical experience of an SME loan by sanctioning a MUDRA loan for a retail shop. For this project, I had to analyze how people run their retail shops. I present here the best practices that I came across and some additional factors. I have seen many established retail shops employing these strategies………
Back in the days when I was working in a bank. One day we were asked to attach a CIBIL report of borrowers in the files of all agricultural loan. That is when I realized the relevance of CIBIL for agricultural loans.
So, how does CIBIL matter for farmers? Most of the credit institutions have made CIBIL mandatory for any type of loan. In the case of agriculture loans, the absence of credit history is not given much importance by banks……….
Recently a LIC agent visited my house, I didn’t buy any policy as my life insurance goals are already covered. But the conversation (which was almost 2 hours) made me think about a question.
Is LIC of India still a good option? If you are looking to buy a pure insurance product, LIC is comparable to other insurance companies. If you are looking for endowment, money back, etc (a policy which provides a return on the premium paid, on maturity), the story changes completely………….