4 Things That Couples Should Keep in Mind While Investing In Mutual Funds

If you are married, you may spend a lot of time with your better half, helping them solve their problems, planning vacations or just relaxing at home.

However, couples also need to discuss investments as well. And, mutual funds are a popular investment option.

This article will look at the four main aspects that couples need to take care of while investing in mutual funds.

Do you want to maintain a joint account or an individual account?

You can use a joint account or a regular account to invest in mutual funds.

Many mutual fund platforms provide mutual fund joint holding accounts. You and your spouse must both be KYC compliant to invest under a joint account.

However, keep in mind that if there are any ELSS funds in the portfolio, only the primary account holder would be eligible for tax benefits.

How do you want to take care of goals?

The second factor to examine is your objectives. Goals help you to understand why you're investing in the first place. And, because you're investing as a couple, you'll have two types of goals: your joint goals as a couple and your different individual goals.

Examples of joint goals

• Purchasing your first home
• Saving money for your children's college education
• Putting money aside for retirement

Examples of Personal goals

• Creating your home gym 
• Investing in a high-end camera to pursue your photography passion
• To increase your professional possibilities by taking a course or going back to college

There are two ways to tackle joint goals: Investing together and separately. 

The first technique allows you to pool your resources and invest in a common objective. For example, if both of you are saving for retirement, you and your spouse together would buy three high-performing equity funds. If you own funds 'A' and 'B,' your spouse might invest in 'C' to supplement your portfolio. If the funds overlap, then you or your spouse can trim some of the holdings. 

You and your partner can pursue separate goals in the second strategy. You can, for example, invest in your child's schooling while your spouse invests for retirement. Because you and your spouse are investing for distinct purposes with this technique, it isn't a big problem if your portfolios coincide.

If you are investing for the same goals, keep an eye for portfolio overlap with your spouse

If you and your spouse are investing for the same goal, the funds must complement each other. It's because too many similar funds, after a certain point, don't add much to diversification.

Assume you have three large cap equity funds A, B, and C in your portfolio, and your spouse has three additional large cap funds, say schemes D, E, and F. If this is the case, diversification will not affect your portfolio.

Reach a mutual consensus for financial goals

It is natural for two people to have opposing view points on specific issues. Similarly, your partner may have different plans for specific significant financial goals in your life, such as retirement or a child's schooling. Assume your partner desires a luxury retirement, however you want a conventional or frugal one. These factors influence the amount of money needed for both of your retirement goals.

As a result, it is critical for you and your partner to communicate the visions for various financial goals in your lives to reach a mutual consensus and effectively plan investments to achieve common goals.

Conclusion:

Investing together as a couple can be tricky. So, it is essential to find a middle ground that can help fulfill the common financial goals. This post discussed the top four aspects that you need to consider as a couple when investing in mutual funds.

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
AMFI Registered Mutual Fund Distributor
9830146206
42 CHITTARANJAN AVENUE , 2 ND FLOOR  ., KOLKATA, 700012
investment.junctions@gmail.com || www.investmentjunctions.com

 

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NPS

Basics of National Pension System

The National Pension Scheme (NPS) is a retirement solution that aims to help individuals plan for retirement and help accumulate wealth. Through regular contributions, users can get the provision of a monthly pension in later life. The Pension Fund Regulatory and Development Authority (PFRDA) governs NPS.

Who can open a National Pension System (NPS) account?

Any Indian citizen between the ages of 18 and 65 can open an NPS account.

However, NPS registration is compulsory for all Central Government employees who joined after 1st January 2004. Armed forces are an exception.

How does it work?

The aim of the National Pension System (NPS) is to create a retirement fund. You need to accumulate funds when you are working so that you can use the funds after retirement. So, we can classify it into two parts: the accumulation period and the withdrawal phase.

When you are 60, you get to take 60% of the accumulated corpus as lumpsum. This sum of money is tax-free withdrawal. You need to purchase an annuity with the remaining 40% of the funds. The annuity will take care of the regular monthly payments. 

Categories of NPS

The National Pension System (NPS) offers two accounts for systematic and flexible investments: Tier 1 and Tier 2.

After you open an NPS account, you get Permanent Retirement Account Number (PRAN). The PRAN is required for fund management and making contributions.

Tier 1 NPS Account:

• Tier 1 account is the compulsory NPS account. The central government and state government employees, and other employees, have a Tier 1 account.  
• This account has a set lock-in period that lasts till 60 years.
• A minimum deposit of Rs. 500 is required to open this account. It only allows for a partial withdrawal under limited circumstances.
• Contributions to Tier 1 accounts are eligible for tax deductions under Sections 80CCD (1) and 80CCD (1B). This means that you can invest up to Rs. 2 lakh in an NPS Tier 1 account and get a tax deduction on the entire amount, i.e. Rs. 1.50 lakh under Sec 80CCD(1) and Rs. 50,000 under Sec 80CCD (1B). The employer’s contribution to the NPS, up to a certain extent, is deductible under section 80CCD(2) when calculating the employee’s total income.

Tier 2 NPS Account:

• If you want to open a Tier 2 account, you must first have a Tier 1 account.
• This is a voluntary NPS account that allows members to withdraw funds as needed.
• You can make a minimum deposit of Rs.250 to open the account.
• Contributions to the NPS Tier 2 account are not tax-deductible.

Investment Choices

When you invest in NPS, you have the option in various asset classes, like debt- corporate and government securities, equity and alternative investment funds. Depending on your risk tolerance and age, you get to invest in these different asset classes.

You have two investment options to invest in your NPS Account:

1. Active Choice
2. Auto Choice

Let’s understand each one of them.

What is Active Choice in NPS?

• You can choose the percentage allocation in asset classes.
• Equity, corporate debt, government securities, alternative investment funds, or AIF are the four asset classes available under the active option.

What is Auto Choice in NPS?

• Your investment is automatically distributed among different asset classes in a pre-defined percentage based on your age in auto choice.
• Depending on your risk tolerance, you can select an aggressive, moderate, or conservative option.

Here’s the asset break up under the different options of Auto choice:

Aggressive:The maximum equity exposure is capped at 75% for individuals up to the age of 35

Moderate : The maximum equity exposure is 50% for individuals up to the age of 35

Conservative : The maximum equity exposure is 25% for individuals with a maximum equity exposure of 50%.

Conclusion: National Pension System is an investment tool that aims to help you build a retirement fund. In this article, we have shared the basics of the National Pension System. Call us to know more about NPS.

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

Raja Bhattacharjee

 

 Email:  investment.junctions@gmail.com

 Phone: 09830146206

 Office : 09681518774   /  7449858289

 

website: https://www.investmentjunctions.com

 

How to design a good life, a safe life, a life of happiness, discovery and invention?

 

How to design a good life, a safe life, a life of happiness, discovery and invention?

How to live a life of Abundance?

Why SIP is just the tip of the iceberg?

Discover SIP and other such life transforming tools  

 SIP's true magic has been that it succeeded it getting investing emotion out of the investment decision which otherwise is near impossible .

Therefore come hell of highwater the SIP flow continues to serve people, the markets and the nation .

SIP has helped in reducing market volatility which in turn has encouraged more and more people to become investors .

 Consider these: Monthly SIP contribution at the end of January 2022 was Rs 11,517 crore,

 an all-time high figure, and compared favorably to Rs 11,305 crore recorded in December 2021. 

Also, total AUM from SIPs jumped to Rs 5.77 lakh crore from Rs 5.65 lakh crore a month ago, 

the Amfi data showed. 

Total number of SIPs also rose to 5.05 crore, from 4.91 crore by end-December 2021.

SIP flows have been instrumental in supporting the markets despite uncertainties arising out of external factors like rate hike by the US Fed and FII outflows. 

SIP clearly helps to build a resilient India 

However SIP alone is not a solution to society's myriad challenges

First SIP is an accumulation tool that works only after 7 to 8 years for the investor 

 There are other challenges that need addressing 

 The biggest challenge from a daily life perspective is the need to have the right amount 

of money available to spend at the right point in time 

Accumulation is necessary but it is not the answer to every problem

An accumulation mindset can be destructive by making people sacrifice their opportunities 

because of their obsession to accumulate

 There is no joy in dying rich and living poor

Understanding the Power money and the significance of Enough is equally important for a balanced life 

Accumulating Threshold is the point after which the Corpus can support endless cash flows 

Cash Flows is the fuel that takes quality of life forward

 Just Accumulation is like buying a Mercedes to be parked in the Garage only

 Cash Flow will take the Mercedes out to places and provide the occupant the joy of driving 

and seeing places.

Therefore Knowledge of  Time Value of Money and the construction of the  various cash

 flow solutions plays a massive role in designing quality of life .

 Financial Freedom a new concept based on FIRE (Financial Independence Retire Early) is the

 most important concept today for people to be able to design a good life for themselves.

 Providing funds for lifelong education which is the need of the times.

 Providing funds for a lifetime of holidays and vacations.

 Providing a  great Retirement experience.

 Providing a constant cash flow to become the bedrock based upon which one can serve

 the people without worrying about earning our of delivering such society building services .

These all can be designed with the Power of SWP Knowledge which itself emerges from

 the knowledge of Time Value of Money (TVM).

One of the biggest scope in Personal Finance Management has been drowned by the noise created around SIP.

SIP is great but time has come to explore further and provide people the joys of life .

SWP, STP & now Booster STP are all habit building process like SIP that keep destructive

 emotions of Greed and Fear at Bay and Deliver a Good Life to Live and Cherish .

Raja Bhattacharjee

 

 Email:  investment.junctions@gmail.com

 Phone: 09830146206

 Office : 09681518774   /  7449858289

 

website: https://www.investmentjunctions.com

https://www.facebook.com/investmentjunctionscom

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Madam, It’s Time to Take Control of Your Money

Madam, It’s Time to Take Control of Your Money

Women of today are different. They have gone places and made big strides in all fields. Women take charge of their career and don multiple hats. While many women go for solo trips around the world, the majority of women are still yet to take control of their finances and money. It is seen that working women, no matter how much they earn, hand over their money and their management to their husbands or fathers.

This aspect needs to change, and women need to start taking control of their money and make financial decisions.

In this article, we will see why women must take control of their finances and simple ways that can help them to do so.

Why do women need to invest more and take control of their money?

For the unforeseen future

No one can predict the future. So, it is necessary to stay prepared for unforeseen circumstances. Women need to take care of their money so that they can tide over unfavorable situations such as divorce or death of their husband.

Women are more likely to take more breaks in their career than Men

Women are more likely to take more career breaks than men to raise children and take care of their ageing parents. They may also have to give up on a good job if their spouse is transferred to another city. Moreover, getting a job after a break is not an easy task and may take several months to land in a favourable organisation or position.

Women need to save more as they are paid lesser than men

Although the wage gap may be inching closer every year, women, on an average, are paid lesser than men for the same job with the same educational background.

Women may stay alive longer than men

Data shows that the life expectancy of women is higher than men. This means that, on average, women are more likely to stay alive than men. A longer lifespan will lead to more healthcare expenses, medicines and other living costs.

Women make better financial decisions

The saving and investment style of men and women vary. Women tend to make prudent investment decisions that can contribute to their and family's financial goals. On the other hand, men prioritize on the returns potential of their investment options.

Women focus on low-risk options

Women are more concerned about the safety of their money than returns and invest in debt options to better capital protection. These options due to their unfavorable taxation structure restricts the total amount that can be accumulated over a course of time.

Women are more focused to their goals:

Women are a little bit choosy in anything. From shopping to investment, they do a lot of research and love to set a time bound planning. To accomplish her financial goals which may vary from sending kids to school/college, a holiday, save up an emergency fund, saving for a large expenditure such as buying a house or for a wedding, saving for retirement or just grow overall wealth. They invest in a manner that helps them achieve goals in the given time period.

Women are natural savers

Saving comes easily for women. Women can take full advantage of compounding by starting investment early.

Here are a few ways that can help women to take steps towards their financial independence

 

1. Most women lack confidence when it comes to money matters. The first step should be placing faith in themselves and believing that they can manage their money.
2. Do your homework. Read about the different investment options such as mutual funds, stocks to find out the right investment option.
3. Talk with your husband and other family members. It is important to know about the financial decisions taken by your husband or parents so that you are not clueless about money in an unfortunate scenario. Make sure that your husband has added you as a nominee and you are adequately insured.
4. Get help. If you are unsure how to proceed, you can consult a financial advisor who will guide you.
5. Start by investing small amounts, say 20 to 25% of your income.
6. Target short term financial goals. Achieving these goals will boost your confidence making you confident of taking on long term goals.

 

Conclusion:

There is nothing that a woman can't do. With a little bit of guidance and self-confidence, it is possible to take control of your money. So, this women's day, instead of relying on your husband or father, take money matters in your hands and fulfil all your financial goals.

Raja Bhattacharjee

 Email:  investment.junctions@gmail.com

 Phone: 09830146206

 Office : 09681518774   /  7449858289

 

website: https://www.investmentjunctions.com

 

NPS, PPF and Sukanya Samriddhi scheme .

Minimum contribution required in FY 2022 - 2023 

PPF vs NPS vs SSY Minimum Deposit Amount: There is important news for the account holders of the Public Provident Fund (PPF), National Pension Scheme (NPS), and Sukanya Samriddhi Yojana (SSY). Actually, tax saving schemes require account holders to deposit a minimum amount in a financial year to check whether their account is active or not.

Let us know who has the minimum balance amount in these important schemes?

PPF 

The minimum annual contribution to PPF for a financial year is Rs 500. Along with this, you should also know that the last date to make this contribution for the current financial year is March 31, 2023. If you haven’t deposited the amount yet, do so soon. Otherwise, you will have to pay a penalty of Rs 50 each year along with an outstanding subscription of Rs 500 for each year.

NPS

As per the rules, it is mandatory for Tier-1 NPS account holders to deposit at least Rs 1,000 in a financial year. At the same time, if the minimum contribution is not made in the NPS Tier-1 account, then the account will become inactive. For this, you will have to pay a fine of Rs 100. Not only this, you should know that if one has a Tier II NPS account (where lock-in of funds is not required) along with the freezing of the Tier-I account, the Tier-II account will also be automatically closed. Will be done.

Sukanya Samriddhi Account Scheme

It is mandatory to deposit a minimum of Rs 250 in a financial year in Sukanya Samriddhi Account. Otherwise, you have to pay a fine of Rs 50 for this. In such a situation, if you have not yet checked the minimum amount in this account, then check and update today, for any support call us .

Raja Bhattacharjee

 

 Email:  investment.junctions@gmail.com

 Phone: 09830146206

 Office : 09681518774   /  7449858289

 

website: https://www.investmentjunctions.com

5 Things To Do At The Start Of The Financial Year

The new financial year 2022-2023 is here. If you want to become disciplined with your finances, \doing certain things at the start of a new financial year can simplify your financial planning needs.

Here are five things that you need to do at the start of the financial year:

Analyse your asset allocation: It is essential to review your portfolio's asset allocation before making 

any financial decisions in the new financial year. You can rebalance your portfolio's asset allocation 

if there is any significant change in your asset allocation because of recent market movements.

Let us assume that your ideal asset allocation among equity and debt asset class is 80% and 20%,

 respectively. During a market rally, the equity allocation in your portfolio may increase to 90%.

 If you are not happy with the current asset allocation pattern, you can rebalance your portfolio 

to the original asset allocation. To do that, you can redeem your equity investment, or you can

 increase your debt investment. The rebalancing exercise helps you to keep risk and reward at a 

level that is optimal for you.

Review financial goals: Financial goal give a sense of purpose to your investment. So if you have

 financial goals, this can be the right time to review your journey towards achieving your financial goals. 

It can help you understand if you are struggling to achieve a financial goal or if the cost of your

 financial goal has increased. You need to evaluate your target investment amount and draw an 

alternative plan with your financial advisor in such cases.

Review your investment: While it may not be a good idea to check your portfolio daily, a timely

 review of your investments can help you understand your investments' performance. A review of 

your investment at the start of the financial year will help you figure out funds that have performed 

exceedingly well and funds that have underperformed its peers. You might want to reconsider further 

investment in funds that have consistently underperformed its peers throughout the past few quarters.

Tax planning: Do you want to have a stress-free financial year-end? If yes, then you need to start Tax 

Planning at the beginning of the financial year. Tax Planning in April gives you enough time to calculate

 the amount of money you need to invest and start investing smaller amounts regularly instead of 

investing lump sum at one go.  Equity Linked Savings Scheme (ELSS) is a type of equity Mutual Fund that 

offers tax benefits the maximum investment amount of rupees 1.5 Lakhs under section 80C of the

 Indian Income Tax Act. It is one of the best tax saving investment options as it provides wealth creation

 with tax benefits.

Increase your investments: You can fulfil your financial goals earlier by increasing our 

Systematic Investment Plan (SIP) by a certain percentage every year. The start of the financial year

 is the best time to increase your SIP. Typically, increasing your SIP investment with an increase in

 salary can help to reach your financial goal easily. Moreover, by increasing your SIP with your salary, 

you are less likely to spend more on splurges. You can aim for at least an annual 10% increase in 

SIP investment. Asset allocation analysis, review of financial goals, review of your investments, tax planning, 

increasing your SIP amount are the five things you can carry out at the beginning of the financial year.  

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

 

 Email:  investment.junctions@gmail.com

 Phone: 09830146206

 Office : 09681518774   /  7449858289

 

website: https://www.investmentjunctions.com