The Path to Creative Solutions

 

                                                 

                                                                        The Path to Creative Solutions

1) Fall in love with the problem. Understand the problem and commit to solving it in a flexible manner, rather than fixating on a particular way to solve it.

2) With falling yields in Debt Funds and Markets have reached a peak for the time being how do search for Alfa.

3) The normal way would be to look at other asset classes. That would be

 fixating on a particular way to solve the problem but we need to display flexibility

4) This is where the industry looked at processes that could add Alfa to the Returns

5) Thus, was born Asset Allocation and Rebalancing which initially 

was age based with say annual rebalancing

6) As Algorithms emerged, one saw the development of valuation-based Rebalancing in BAF category

7) This process became an Alfa generator

8) Now we have Booster STP which is again a great process to enhance performance

9) Can we now look at some other areas to increase Alfa

10) Say for instance restructuring your lifestyle

11) If without causing disruption and inconvenience one can enhance the overall wealth then why not step away from the process and move into the

 life style design of the client and tinker with it

12) For example, by restructuring the Client’s assets – Reducing Real Estate and Adding Liquidity, using services like Ola, Oyo, Swiggy and Service Apartments one can add efficiencies

13) For example, if one were to sell his house for Rs 1 cr. & Stay in the same house on rent at Rs 30K, an SIP of Rs 70K is generated

14) This is about 1.5 cr in 10 years which itself means 20 years lifestyle of Rs 1 lac per month

15) The idea is to break the walls, the barriers to our thinking and rediscover the undiscovered

Raja Bhattacharjee

investment.junctions@gmail.com

https://www.investmentjunctions.com/

 

10 Terms You Should Know About Mutual Funds

10 Terms You Should Know About Mutual Funds

Are you afraid of investing in mutual because of the technical jargons? Or have you invested in mutual funds but don’t know about the terms associated with mutual fund investing?Don’t worry. In this article, we will go through some important terms or jargons associated with mutual fund investing that you should know.

1.Asset management company:

Asset Management Company is the company that manages money of individuals and institutional investors on their behalf. The asset management company manages the investment and takes care of the other related activities like marketing, accounting, etc. 

2.Account Statement

Account statement gives a consolidated view of your mutual fund holdings through email. If you have invested in mutual funds, the account statement will help you track and monitor your mutual fund portfolio composition easily.

3.Net asset value (NAV)

A mutual fund comprises many units. When you invest in mutual funds, the fund house will allot you certain units based on your investment amount and current market scenario. Net Asset Value (NAV) isthe unit price of the mutual fund unit. The NAV depends on the value of the underlying securities and the total number of units of the fund. All fund houses calculate the NAV of funds at the end of the trading day.

4.Assets under Management (AUM)

Assets under management (AUM) is the total size of the assets managed by AMCs. It is the sum of the total assets held by the fund minus the liabilities. The AUM of the fund depends on the underlying value of the assets and inflows from investors.

5.SystematicInvestment Plan (SIP)

Systematic Investment Plan (SIP) is the most common mutual fund term. However, many people and investors believe that mutual funds and SIP are two distinct entities and believe that investing in mutual funds is riskier than SIP. It is not true. SIP is a way/route to invest in mutual funds systematically and invest a predetermined amount of money at regular intervals. SIP builds discipline in your investing journey. As you invest a fixed amount of money every month, fund houses allocate more units when the market is down and vice versa. As a result, SIP averages out your investment cost.

6.Systematic Transfer Plan (STP)

Similar to SIP, Systematic Transfer Plan (STP) is a systematic way where investors can transfer predetermined amount from one fund to another fund of the same mutual fund house. If you have a lump sum amount to invest but don’t want to invest the entire amount in an equity fund, you can park the money in a liquid fund and set up a STP of a certain amount that will be transferred to an equity fund of your choice.

 

7.Systematic Withdrawal Plan (SWP)

Systematic Withdrawal Plan is the opposite of SIP. SWP allows investors to withdraw a predetermined amount at regular intervals from their earlier investments. In this process, the units are redeemed, and the amount is credited to the investor’s bank account.

8.Growth and dividend option

Many mutual fundsoffer two options: growth and dividend option. In growth option, the fund reinvests its profits and bonuses. However, in the dividend option, the fund distributes the profits to their investors. However, the distribution of profits is not fixed. It depends on various aspects such as market conditions and the decision of the management.

9.Asset Allocation

Asset allocation is the mix of different assets such as equities, debt and commodities. It helps to diversify and reduce the risk associated with your portfolio. It is because asset classes react differently to the same news or events. You can diversify your overall portfolio by investing in different asset classes. Hybrid mutual fund also takes care of asset allocation by investing in unique assets.

10.Benchmark index

All funds must have a benchmark index. The benchmark acts as a performance yardstick. It helps us to measure the performance of the fund. The benchmark is a market index such as BSE Sensex or NSE Nifty. The benchmark will depend on the type and nature of the fund. The aim of the fund manager is to beat the benchmark index.

Conclusion: There are many more terms associated with mutual fund investing. These were the ten key terms associated with mutual fund investing that can help you understand the various nuances of investing in mutual funds.   

This blog is purely for educational purpose and not to be treated as an personal advice. Mutual fund investments are subject to market risks, Read all scheme related documents carefully.

 Email:  investment.junctions@gmail.com

 Phone: 09830146206

 Office : 09681518774   /  7449858289

 https://www.investmentjunctions.com/

 

How can Senior Citizens Get Health Insurance ?

How can Senior Citizens Get Health Insurance ?

 

For many people, life after 60 is like a second inning. They have paid their debt, educated their children, and made them capable of standing on their feet. So, senior citizens have enough time to pursue their hobbies or go on a world tour. Of course, one needs to be in good health to enjoy their retired life.

However, senior citizens are the most vulnerable to diseases. Moreover, after retirement, sources of income may also dwindle. Hence, health insurance becomes the need of the hour. 

In the past, it was almost next to impossible to get health insurance for senior citizens. However, things have changed after the Insurance Regulatory and Development Authority of India (IRDAI) set 65 years as the maximum age for entry into health insurance.

This gave rise to health insurance plans for senior citizens. 

What is health insurance for senior citizens?

As the name suggests, health insurance for senior citizens is a health insurance plan that covers the health-related expenses of individuals above 60 years.

The individual has to pay a health insurance premium at regular intervals to avail benefits of health insurance.

Benefits of Senior Citizen Health Insurance

Health insurance offers various benefits to senior citizens. Here are some of the essential benefits:

Covers the cost of treatments: Medical treatments are getting costlier every year. Having adequate health insurance helps to stay protected from unexpected expenses from medical treatments. Most health insurance companies offer plans that cover various illnesses and other ailments. 

Covers medical coverage to elderly individuals: Individuals above 60 years of age can get health insurance coverage through senior citizen health insurance as the regular health insurance plan offers coverage to individuals below 65 years of age.

Maximum age to renew: One can not only take health insurance for senior citizens after 65 years, but policyholders can also renew the policy up to 80 years. Few companies also allow policy holders to renew their health plan until 90 years if there was no break in premium payment.

Cashless hospitalization : Most insurance companies that offer insurance plans for senior citizens allow cashless transactions. In cashless hospitalization, the hospital settles the hospital bills with the insurance provider.

Tax benefits: Payment of premium against the health insurance plan can be helpful to reduce taxable income as premiums paid are eligible for tax deductions under Section 80D.

Things to know before buying senior citizen health insurance

Before buying a senior citizen health insurance plan, here are some things that you need to know before buying a senior citizen health insurance plan.

Lifetime renewability:

As this health insurance plan aims at senior citizens, it should offer lifetime renewability. This will help senior citizens to renew their policies with no hassle. 

Co-payment rate

Most senior citizen health insurance plans have a co-payment clause. The co-payment clause is a clause that states that the insured individual has to pay a percentage of the total hospital bill.

Typically, the co-payment rates can range from 20% to 50%.

For instance, if the total hospital bill amount is Rs.5 lakhs and the co-payment rate is 30%. In this case, the health insurance company will pay Rs.3.5 lakh, while the policyholder needs to pay the remaining Rs.1.5 lakh.

So, it is essential to buy a health insurance plan with a low co-payment rate.

Entry and exit age

Another essential factor that you need to consider is the entry and exit age. Select a health insurance plan that doesn’t have any entry or exit age. This will help you buy the health plan at any age and exit whenever you want to.

Waiting period

Typically, health plans come with a waiting period for existing illness. This is the length of time that you need to wait before utilizing your plan’s full coverage.

However, most senior citizen health insurance plans have a waiting period of up to 2 years for specific ailments. In addition, the waiting period can go up to 4 years for pre-existing diseases.

Conclusion:

Suppose you are a senior citizen and don’t have a health insurance plan. In that case, you can look at health insurance plans for senior citizens. It has various benefits. However, it is essential to compare a few factors such as lifetime renewability, entry and exit age, waiting period or co-payment rate before buying a senior citizen health insurance plan.

This blog is purely for educational purposes and not to be treated as personal advice.

Raja Bhattacharjee

 

 Email:  investment.junctions@gmail.com

 Phone: 09830146206

 Office : 09681518774   /  7449858289

https://www.investmentjunctions.com

6 Simple Ways Parents Can Teach Money Lessons to Their Kids

Did you know children learn money-saving habits by the age of seven? However, many parents are not comfortable or are very reluctant to talk about money with their kids. But it is a parent’s responsibility to teach money lessons and how to manage money to their kids

If you are a parent, ignoring money lessons may not be the right thing to do for your child. We know it is difficult to teach these lessons to our children. Hence, we are sharing some ways that may make you feel comfortable while discussing money issues with your kids.  

Help them distinguish between needs and wants

It is common for kids to demand everything that they see on the shelves of a supermarket. But it won’t be wise to give everything to your kids even if you can afford it. Teach your kids the difference between ‘needs and wants’ with age-appropriate examples.

For instance, if your child is begging you to buy drums and telling you how they really need them. You can tell them about the condition of a keyboard that they really needed a few months back.

Let them earn their money

Giving your kids the opportunity to earn their money may make them aware of the importance of money and hard work. You can give them a nominal amount of money when they complete the household chores. This will allow them to save money as they earn.

Instill saving habit

Helping your child inculcate a savings habit is an essential life skill. But asking your children to save money without explaining the reason behind it may be a very futile exercise.

You can define a savings goal to keep your children motivated enough to save money.If your kids know what they want to save for, you can help them break down their target amount into smaller amounts and give them a certain amount of money every week or month to save towards their goal.

Make them aware of the different saving options

As your children save money, they will need a place to save that money. You can get piggy banks for your younger kids. Transparent piggy banks will give them a sense of accomplishment when they see their bank filling up with coins and notes. 

Opening a bank account may be the best option for your older children. It will help them become familiar with banking and the different saving and investment options.

Tracking their spending

To be a better saver, one needs to be aware of where they are spending their money. Encourage your kids to track their spending and keep a note of it in a notebook or a money manager app.

Give them interest on savings

You may offer specific interest rates on your kid’s savings to make them excited about saving. If your kid is old enough, let them calculate the monthly interest they will earn on their current month’s savings. Paying a nominal monthly interest on their savings may help them save more.

Conclusion

Knowing how to manage money is an essential life skill. And as formal education ignores financial literacy, it is up to the parents to teach good money lessons to their kids.

In this article, we have seen six ways parents can help their kids inculcate good financial habits.

This blog is purely for educational purposes and not to be treated as personal advice. Mutual fund investments are subject to market risks, read all scheme-related documents carefully.

Raja Bhattacharjee

investment.junctions@gmail.com

https://www.investmentjunctions.com/