Thursday, December 31, 2009

Top performing Mutual Funds of 2009

Top performing Equity Mutual Funds for the year 2009
  1. Principal Emerging Bluechip
  2. JM Mid Cap Fund
  3. ICICI Pru Discovery Fund
  4. Taurus Infrastructure
  5. Principal LT Equity 3 yr

 Top performing Balanced Mutual Funds for the year 2009
  1. Kotak Dynamic Asset Allocation
  2. HDFC Prudence Fund
  3. ICICI Pru CCP - Gift Plan
  4. Reliance RSF Balanced
  5. Tata Balanced Fund
Top performing ELSS Mutual Funds for the year 2009

  1. ICICI Pru Tax Plan
  2. Birla SL Tax Relief 96
  3. HDFC Tax Saver
  4. ING Tax saving
  5. Taurus Tax Shield

Sensex gave a return of 78% and Nifty gave a return of 73% approximately in the year 2009.
We are still to reach the earlier highs but the Nifty closing above physological 5200 mark is good end to the year 2009 and 2010 seems to be lot more promising and exciting with power sector could be leader in coming year.

Friday, December 25, 2009

UTI Mutual Fund declares dividend in Tax saving scheme

UTI Mutual Fund declares a dividend in two of its schemes.
1) UTI Tax saving ELSS Fund - 15% dividend
2) UTI Transportation and Logistics Fund  - 15% dividend.


the record date for above dividend is 29th December 2009

Tuesday, December 1, 2009

Top performing Mutual Funds for the month of November 2009

Top performing diversified Equity Mutual Fund for the month of November 2009
  1. SBI Magnum Comma Fund
  2. JM HI FI Fund
  3. Birla SL comm Equity
  4. Sundaram Media and Ent.
  5. Religare AGILE Fund

Top ELSS MF for the monthe of November 2009
  1. Bharti AXA Tax Advantage
  2. JM Tax gain Fund
  3. DBS Chola Tax saver Fund
  4. Religare AGILE Tax
  5. HSBC Tax Saver Equity Fund

Thursday, October 29, 2009

Investing in Diamond Jewellery; look for a certification from a reputed institution !

Most of the people love daimond jewellery especially women love them and We all know the importance of solitaire daimond ring for engagement. Daimond jewellery be it daimond set,or a daimond ring they all have very high romantic value.

What did you say Value ? but do you know how to find out actual Value of that piece. Its always advisable to buy a certified piece of Daimond Jewellery because in this days and age there are lots and lots of duplicates and cheats out there in the market and infact the duplicates looks more beautiful then the original so in order for you not to fall for something worthless its always advisable to have a certified Jewellery.

There are various reputed institute who certifies Jewellery at a reasonable cost one of them is called GII (Gemological Institute of India ).

A typical GII certificate will look as follows.

Client Name: M/s Mehta and sons
Summary No : 9004208-10-45628-3
Description of Article: One 18k Yellow Gold Pendant Rhodium plated weighing in total 9.440 gms. with 84 Daimonds. Total estimated Daimonds weight of 1.50 cts

SHAPE/CUT : Round Brilliant
EST. TOTAL WEIGHT : 1.50cts
COLOR : F - G
CLARITY : VVS
FINISH : VERY GOOD
COMMENTS : Graded as mounting permits

The certificate will have an image of the Jewllery and the details of various parameters based on which you can easily find out the actual value of that Daimond Jewellery.

Happy Investing in Glittering Daimonds !

Tuesday, October 27, 2009

Dividend declared in Reliance Growth Fund and UTI Mastershare

Reliance Growth fund which can be counted amongst few of the the most succesful fund of all time over 10 year period and the flagship product from Reliance fund family declares dividend of 50%.
Record date : 30th Oct 2009.

UTI Mastershare one which can be counted as "lambi race ka ghoda" has declared dividend once again for 23rd time in its 23 years history. The record date is 30th Oct 2009. Dividend is 27% or Rs 2.70 per unit.

Both of the above fund can be part of ones portfolio for long term capital accumulation. Reliance growth is more aggressive and UTI Mastershare is more stable and consistent performer for so many years.

Saturday, October 17, 2009

Happy Diwali !

Wishing you all a very happy and prosperous New Year !
May this samvat bring us more Wealth and better health !

Wednesday, October 14, 2009

Best Mutual Funds in Samvat 2065 from Diwali of 2008 to Diwali of 2009


Here is the list of Best performing mutual funds from last Diwali to this Diwali in various categories.

ELSS category
  1. Can Robeco Equity Tax saver - 77%
  2. Taurus Tax Shield                   - 71%
  3. Sahara Tax Gain                     - 70%
  4. Birla SL Tax Relief 96             - 67%
  5. DBS chola Tax saver Fund     - 65%
All the above funds gave returns of over 65%+ much above the indices performance where, Nifty gave a return of around 44% while Sensex return was above 50%.

Diversified Equity Mutual Fund
  1. ICICI Pru Discovery Fund       - 96%
  2. Sundaram Smile Fund              - 85%
  3. IDFC Small and Midcap Fund - 84%
  4. Birla sun life Midcap Fund        - 83%
  5. Taurus Infrastructure Fund       -  81%


Balance Funds Equity Oriented
  1. Birla Sun Life 95 Fund           - 69%
  2. Reliance RSF Balanced         - 66%
  3. HDFC Prudence Fund          - 60%
  4. Tata Balanced Fund              - 55%
  5. Can Robeco Balanced Fund - 50%
This is 1 year performance of Mutual funds as on 14 Oct 2009, It can be used as just a reference for your investment decision for final investment decision your should consult your Financial Advisor. Its interesting to note that in the same period SILVER gave a return of 73% whereas GOLD gave a return of 34% in Samvat 2065. Even precious metals should also be part of your portfolio.

Note: Source of data is moneycontrol and economictimes

Wednesday, September 16, 2009

Advantages of forming a Trust. Why do people form Trust ?

Setting up a trust as you would be aware via your bollywood movies is mostly for the purpose of protecting assests of a minor to  he turns adult. Trust is an entity created to hold assets for the benefit of certain persons or entities with a trustee managing the trust.
Terms and there meaning
  • The person who reposes or declares the confidence is called the "author of the trust".
  • The person who accepts the confidence is called the trustee.
  • The person for whose benefit the confidence is accepted is called the "beneficiary".
  • The subject matter of the trust is called "Trust-property" or "Trust-money".

Advantages of a Trust
  • Property transferred to the trust during the lifetime will pass directly to the beneficiaries of the trust. The trust property does not have to go through a probate. (Terms of the trust remains private however in case of will if there is a probate or legal case then the document becomes a public document)
  •  Trust is good way to take care for the assets of minor children or elderly people or incapacitated dependents.
  • Saving on taxes: The growth on assets , such as shares transferred to a trust now belongs to trust and it does not combine in your income.
  • the author loose a legal control of the assets and hence in case of insolvency creditors cannot claim money held in trust. however you can have some control by being a trustee of the trust.

Monday, September 14, 2009

How to calculate returns from an SIP ?

 Most of the readers of this site would be making an investment via SIP or Systematic Investment Plan over the years. Well for most people when you have done an one time investment its easy to calculate the returns. but people find it too complicated to calculate returns from an SIP. so here is nice calculator which will calculate value of your SIP investment and you can compare the performance of your different funds.

http://valueresearchonline.com/learning/CalcSIPReturn.asp

Friday, September 4, 2009

Beware fake clone of ICICI bank website; please DO NOT login on to this page its a FAKE


Recently I received an email from ICICI bank, I do not hold any account with ICICI so I was surprised. the email is as follows

============FAKE email from FAKE icici clone ============

Important Online Banking Security Alert: Verifiy Your Online Banking Security.Thursday, September 3, 2009 7:23 PM


From: "ICICI Online Accounts Alerts" Add sender to ContactsTo: undisclosed-recipients

Dear Customer,

ICICI is constantly striving to provide you with more convenience, control, and security to assist in managing your finances.

As part of our ongoing efforts to make it easier and more secure for you to use our online services, we have upgraded the ICICI E-Sign Consent and Online Access that you reviewed and accepted when you began to use ICICI Online® Banking service(s).

To upgrade your online details, please visit our secure server webform by clicking the link below...
Verify My Account Security.

This alert relates to your Online Banking Profile only.

Thank you for your cooperation.
ICICI Internet Security Team.
© ICICI Bank Ltd. All rights reserved.
==================================

If you click on the above link it will take you to the page which looks very similar to ICICI bank webpage BUT wait a minute and look at the url for the address and it looks like
http://madmercsairsoft.co.uk/images/indexx.html

This clearly proves that it is a FAKE clone of ICICI bank webpage so beware and DO NOT login to this page. I would request the authorities to heavily PENALISED all the companies who host such fake sites. AND ICICI Bank should take this matter very seriously with the authorities for the safety of the ICICI Banks Customers.

Wednesday, September 2, 2009

Consistent Top performing Mutual Funds over 5 years

ELSS
1) SBI Magnum Taxgain
2) HDFC Taxsaver

Equity Diversified Mutual Funds
1) SBI Contra Fund
2) HDFC Top 200
3) UTI Dividend Yeild Fund
4) Reliance Growth Fund

Balanced Fund
1) HDFC Prudence Fund
2) Reliance Regular Savings Fund Balanced Option

This Mutual Funds have seen both the bear market as well as bull market and consistently performed better then there category average. They are my personal picks for long term SIP.

Thursday, August 27, 2009

NHPC IPO Allotment basis

NHPC IPO which was oversubscribed during the period 7/8/2009 to 12/8/2009 and priced at Rs. 36 per share the allotments are out.

Those applying for full quota of 2625 shares have been firm allotment of 713 shares per application.
Those having a minimum allotment have been allotted 175 shares in the ratio of 14:51

Monday, August 24, 2009

Dividend by Reliance Mutual fund in ELSS as well as two other schemes

Following are the dividend declared by Reliance Mutual Fund in respective schemes.

1. Reliance Banking Fund 20 per cent
2. Reliance Pharma Fund 15 per cent
3. Reliance Tax Saver (ELSS) Fund 15 per cent

Record Date : 28/08/2009

Thursday, August 13, 2009

Retail Subscription of NHPC is 3.8730 times Which means you will roughly be allotted 25% of shares applied for

As per the data on NSE website,NHPC LIMITED was subscribed more then 23 times of the issue, but for retail investor important piece of data is not the overall subscription but the Subscription number of Retail category which has been subscribed 3.87 times as shown below, data taken from NSEIndia.com
3 Retail Individual Investors (RIIs) 490631900 1900194450 3.8730

This means that if you will be allotted roughly 25% of number of shares applied for (100/3.87= 25%approx) .
For e.g if you have applied for full shares(2625 * 36 ) Rs 94500. Your chance of confirmed allotment is about 25% which brings to Shares in range 650 to 700.
for somebody who has applied for minimum lot of (175 * 36 = Rs 6300). There should be either lottery based allotment of 1 application for 4 applications applied, or there can be uniform allotment of 45 shares each application.

Monday, August 3, 2009

After the ban on Entry Load , exit load kicks in MF industry

After the SEBI bringing the ban on Entry loads in Mutual Funds which was earlier 2.25% on most Equity oriented Mutual Funds being implemented from 1st August 2009. Most Mutual Fund houses are now bringing in Exit Load to compensate some what for the loss of it.

Recently many Fund houses has announced change in there charge structure. most of them are increasing the tenure of exit load from 1 year to 3 years now with an exit load of 1% being charged if you exit an MF scheme before completion of 3 years.

Many schemes which did not have any exit load at all are incorporating the exit load of 1%.
some MF houses have variable exit load structure like if your withdraw before 1 year exit load is 3% , withdrawal between 1year and 2 year will extract 2% exit load and withdrawal between 2nd and 3rd year exit load is 1% and withdrawal after 3 years no exit load.

All this changes will be implemented on new investments registered after 1st August 2009. Even in case of SIP registered after 1st August 2009 new rules will apply and SIP registered before 1st August 2009 old rules will apply.

Hence many of the people who have enrolled for SIP before 1st August 2009 it is advisable to stop your old SIP and register new SIPs with the same funds.

Get Wealthier and Wiser !

Sunday, August 2, 2009

Top 5 Mutual Funds for month of July 2009

Top performing ELSS Mutual fund for the month of July 2009
1) DBS Chola Tax Advantage Sr-1
2) Bharati AXA Tax Advantage
3) ICICI Pru Tax Plan
4) Sundaram Tax Saver
5) Quantum Tax Saving

Top Performing Diversified Equity Mutual Fund July 2009
1) Tata Select Equity Fund
2) ICICI Pru Discovery Fund
3) UTI Master value Fund
4) Birla SL Oppurtunities Fund
5) Tata Equity P/E Fund

Friday, July 10, 2009

Health Protection Plus plan from LIC simplified with example

Lic has come out with another Health cover with Unit linked plan called with Health Protection Plus Plan. The earlier one is called Health Plus plan. (Whenever any policy of LIC uses the word 'Plus' at the end it means its an ULIP product and its NAV based)

When you first take a look at the policy its a huge document seemingly very complicated with so many new terminology. Lets us simplify it one part at a time with example.
1) Hospital Cash Benefit (HCB). A daily benefit is payable in case the insured is hospitalized due to either accidental body injury or sickness. (It can be from min of Rs 250 per day to max of Rs 2500)
To understand this with an example lets take an HCB as follows for family of four
Person Insured : Rs 2000 (called PI )
spouse : Rs 1500
1st Child : Rs 1000
2nd Child : Rs 1000
you can also select varying HCB; for spouse and children maximum allowed is Rs 1500.

2) Major Surgical Benefit (MSB): In the event of the insured undergoing one of the major surgeries defined in the Annexure I, a lump sum benefit (regardless of the actual costs incurred) equivalent to the percentage of the sum assured mentioned against that surgery will be payable on providing proper proof of surgery to the satisfaction of the corporation.
(MSB is 200 times of HCB meaning for our example it works out as follows
PI = 200 * 2000 = 4 lakh
Spouse = 200 * 1500 = 3 lakh
1st child = 200 * 1000 = 2 lakh
2nd child = 200*1000 = 2 lakh)

3) Domiciliary Treatment Benefit (DTB). The Principal Insured can claim an amount equivalent to the actual expense he or she has incurred in respect of any domiciliary treatment or to meet the medical expenses incurred over and above the hospital cash/major surgical benefits in respect of either oneself or the others insured under the policy.
DTB is available only after at least 3 years premiums are paid

4) Premium : Let us see how to calculate premium with example as follows
a) If one life is covered then it is : 6 Times of HCB (for single life)
= 6 * 2000 = Rs 12000 (If only single person is covered)

b)If four lives are covered then it is: 6 Times of HCB for PI + 3 times HCB for others
for our example it is as follows
Premium = 6 * 2000 (PI) + 3*1500(spouse) + 3*1000(1st child) + 3*1000(2nd child)
= 12000 + 4500 + 3000 + 3000
= Rs 22500( If four lives are covered)

NOTE: This means that ideally it is better to take policy for entire family as we get 50% discount on other members premium.
for other terms and conditions you can visit LIC website

Tuesday, July 7, 2009

UTI Mahila Unit Scheme ;Hybrid conservative balanced fund for women

Following are the marketing claims from UTI Mutual Fund and they come out to be true
  1. UTI Mahila Unit Scheme is the only Scheme which is exclusively designed for Indian women above 18 Years of age in the whole Indian Mutual Fund Industry.
  2. UTI Mahila Unit Scheme is the top performing fund in the Hybrid Debt category in the entire Mutual Fund Industry.
  3. UTI Mahila Unit Scheme has been continuously rated as a Five Star Rated Fund by Value Research online
  4. UTI Mahila Unit Scheme has won LIPPER Awards for its consistence high rated performance in the Year 2007, 2008 & 2009.
  5. Prudent Asset Allocation (Minimum 70% Debt, Maximum 30% Equity) in the Fund with a view of Safety and Consistent Returns is the hall mark of the Scheme.
  6. Lower volatility of returns and well diversified & actively managed portfolio are some of the additional feathers of UTI Mahila Unit Scheme.
  7. Superlative Performance across all Time Periods: UTI Mahila Unit Scheme is the Super performer in the Hybrid Debt Fund Category.
It has ranked First in Last One Year Performance, First in Last Five Year Performance and also is ranked First in performance since inception.

Monday, July 6, 2009

changes in Personal Tax for individual in the budget

Income tax exempetion limit for
1) senior citizen Income tax limit increased by Rs 15,000 to 2,40,000
2) Women Income tax limit increased by Rs 10,000 to Rs 1,90,000
3) Individaul income tax limit increased by Rs 10,000 to Rs 1,60,000

10% surcharge on income tax of above Rs 10 laksh has also been abolished
The much hated FBT or fringe benefit tax has also been abolished.

Friday, July 3, 2009

Origin of the word Budget; It actually means a bag

The origin of our word 'budget' is the Latin bulga,meaning a little pouch or knapsack. The word turned up in English in the fifteenth century, having travelled via the French bougette, a diminutive form of bouge, “leather bag”. Its first meaning in English indeed was “pouch, wallet, bag”, and followed its French original in usually implying something made of leather.

By the end of the sixteenth century, the word could refer to the contents of one’s budget as well as to the container itself. People frequently used this in the figurative sense of a bundle of news, or of a long letter full of news, and the word formed part of the name of several defunct British newspapers, such as the Pall Mall Budget.

The connection with finance appeared first only in 1733, as the result of a scurrilous pamphlet entitled The Budget Opened, an attack directed at Sir Robert Walpole, The allusion was that the government minister responsible for financial affairs opened his budget, or wallet, to reveal his proposals. It probably also echoed the idiom to open one’s budget, “to speak one’s mind”, which was current then and continued to be so down into Victorian times. By the 1760s, it was clearly well established, and has been the standard term ever since. But it was only in the 1880s that it began to be used as a verb in the sense of planning one’s expenditure, and the attributive meaning of “inexpensive; suitable for someone of limited means” is first recorded only in 1958.

Wednesday, July 1, 2009

No Entry load for MF from 1st August 2009

As was expected after the SEBI's announcement about abolishing entry load on investments in Equity diversified Mutual Funds. The final effective date is 1st August 2009.

Benefits
1) No more entry load of 2.25% which was being charged earlier. Hence the investor's invested amount will be more.
2) No incentives for churning of Mutual Funds investments which is good for the investor.
3) Investor can now decide how much he wants to pay to the advisor for his service and hence can expect better and improve service from the advisors.

Cons
1) The major drawback for this is that now MF advisors will not be motivated to sell MF products and hence they will stop selling MF and rather now will sell ULIP which are sold as investment cum insurance products and where commission for Advisors is very high.
Hence Most small investors would have to be vary of getting into ULIP products.
Ultimately this is good deciscion for the educated and financialy savy people but a very decscion for the most of the common man who dont understand much about financial products. Now Mis-selling of ULIP will be very high.
2) Exit load might be increased by MF Houses

for readers of this blog simple piece of advise.
STAY AWAY FROM ULIPs. Keep investments and insurance seperate.

Top performing Mutual Fund for the month of June 2009

Top performing ELSS Mutual fund for the month of June 2009
1) SBI Tax Advantage Sr-1
2) Escorts Tax Plan
3) HDFC Long Term Advantage
4) Fortis Tax Advantage
5) HDFC Tax Saver

Top Performing Diversified Equity Mutual Fund June 2009
1) IDFC Small and Midcap Fund
2) Tata Capital Builder Fund
3) HSBC Emerging Markets Fund
4) JM Core 11 Fund
5) Tata Indo - Global Infra

Tuesday, June 30, 2009

Dividends declared by many funds recently

Following is the list of dividends declared by Mutual fund houses in the month of June.
ICICI Pru Power (D) - 26/06/09 - 1.000
Tata Equity Opp. Fund (D) - 26/06/09 - 1.500
Franklin India Prima Fund (D) - 24/06/09 - 6.000
Birla SL Basic Industries (D) - 23/06/09 - 5.000
Birla SL Infrastructure -A (D) - 23/06/09 - 1.000
DSP-BR India T.I.G.E.R-RP(D)- 19/06/09 - 2.000
ICICI Pru Discovery Fund (D) - 19/06/09 - 1.200
ICICI Pru Growth (D) - 19/06/09 - 1.000
Principal Emerging Bluechip(D)-19/06/09 - 4.000
Sundaram Capex Oppor. (D) - 19/06/09 - 2.000
UTI Master Value Fund (D) - 15/06/09 - 2.000
UTI Mid Cap (D) - 15/06/09 - 2.000
UTI Transport & Logistics (D)- 15/06/09 - 2.000
Sundaram Fin-Ser. OppRP(D)- 12/06/09 - 1.000
Birla SL Dividend Yield (D) - 10/06/09 - 1.000
IDFC Imperial Equity - A (D)- 08/06/09 - 1.200
UTI Wealth Builder Fund (D) -08/06/09 - 0.800
Sundaram MediaOpp-RP (D) -05/06/09 - 1.000
Bharti AXA Tax Advt-Eco(D)-04/06/09 - 1.000
Bharti AXA Tax Advtg-RP(D)-04/06/09 - 1.000

Wednesday, June 17, 2009

E-filing IT returns for AY-2009-10 ;Address for submission of ITR-V

E-Filing for AY 2009-10 has been enabled for all ITR forms.

Please furnish the Form ITR-V to the Income-tax Department by mailing it to
Income Tax Department ,
CPC, Post Box No - 1,
Electronic City Post Office,
Bangalore - 560100,
Karnataka

within thirty days after the date of transmitting the data electronically. No Form ITR-V shall be received in any other office of the Income-tax Department or in any other manner.

Saturday, June 6, 2009

Income Tax Refund Status

Following is the link to check the refund status of your Income Tax Refund. You simply have to enter your PAN CARD Number.
https://tin.tin.nsdl.com/oltas/refundstatuslogin.html

Thursday, June 4, 2009

Assessing Current Wealth of an Individual

How to assess one's current Net worth ?
Net worth = Items of Value(Assets) - Amounts Owed(Liabilities)

The process to find out ones Net worth is first List out all the assets and the most liquid at the top (cash , bank accounts,FD, Mutual Funds) and then list out all the liabilities(credit card, bills outstanding, Taxes etc).


Liquidity is a measure of the ease with which an asset can be converted into cash or cash equivalents. The easier an asset is to convert into cash, the more liquid it is. Cash is the most Liquid asset.
Following is the table for your reference

Assets
Cash
Bank Accounts
Fixed Deposits
Cash surrender value of LIC
Cash surrender value of Annuities
Market value of Investments
Mutual Funds
Stocks
Bonds
Others
Market Value of House/real Estate
Investment Property
Vehicles
HouseHold Furniture/Appliances
Jewelry/precious metals
Collectibles
Loan Receivables
Others
Total Assets

Liabilities
Credit Card Balances
Bills Outstanding
Outstanding Loan Balances
Taxes Due
Others
Total Liabilities
Net Worth (Assets - Liabilites)

Determining your Net worth is the first step in financial planning and assessing your financial wealth. Net worth is a tool for comparing the changes in your financial position over a period of time. An increase in net worth over a period of time is a favourable trend and a decrease in net worth is a deduction in wealth.
The aim should always be to increase Net Worth
  • Appreciating Assets
  • Reducing Liabilities
  • Increasing Income
  • Reducing the expenses

The relationship between current liquid assets and current liabilities indicates relative ease or difficulty in paying upcoming debts. This evaluation ratio is the current ratio and is determined as follows

Current Ratio = Current Assets / Current Liabilities


The other important ratio is debt ratio

Debt Ratio = Total Liabilities / Net Worth

Saturday, May 30, 2009

Top performing Mutual Funds for May 2009

Top performing Diversified equity Mutual Funds for the month of May 2009

1) Taurus Infrastructure Fund
2) JM Core 11 Fund
3) Escorts Growth Plan
4) Taurus Ethical Fund
5) Sundaram Capex Opportunity Fund

Top performing ELSS Tax Saving Mutual Funds for the month of May 2009

1) Bharati AXA Tax Advantage
2) Taurus Tax Sheild
3) DBS Chola Tax Saver
4) SBI Tax Advantage
5) ING Tax Savings

This funds have performed much better the the average broader market. The average broader market returns were 28.3 % for Sensex and 28.1 % for Nifty for the period May 2009

Thursday, May 28, 2009

Intestate Succession Act ; person dies without making a will

Intestate Succession
When a person dies without making a will, which is capable of taking effect. The property devolves upon the wife or husband or upon the relatives of the deceased in the following manner:

If 'A' has left no will - He has died intestate in respect of the whole of his property.
'A' has left a will, whereby he has appointed 'B' his executor but the will contains no other provisions-
'A' has died intestate in respect of the distribution of his property.
'A' has bequeathed his whole property for an illegal purpose- 'A' has died intestate in respect of the distribution of his property.

and lastly when a will is partially incapable of being operative.

'A' has bequeathed Rs. 1000 to 'B' and Rs. 1000 to the eldest son of 'C' and has made no other bequest and has died leaving the sum of Rs 2000 and no other property. 'C' died before 'A' without having ever had a son. 'A' has died intestate in respect of the distribution of Rs. 1000.

Distribution of property in case of widow/widower

  • Where the intestate has a widow-
If he has also left any lineal descendants, one third of his property shall belong to his widow, and the remaining two-thirds shall go to his lineal descendants, according to the rules hereinafter contained;

If he left no lineal descendant, but has left persons who are of kindred to him, one-half of his property shall belong to his widow, and the other half shall go to those who are kindred to him, in order and according to the rules hereinafter contained;

If he has left none who are kindred to him, the whole of his property shall belong to his widow.

Lineal descendants mean descendants born in lawful wedlock only.

  • Where intestate has left no widow, and where he has left no kindred-
where the intestate has left no widow, his property shall go to his lineal descendants or to those who are of kindred to him, not being lineal descendants, according to the rules hereinafter contained; and if he has left none who are of kindred to him, it shall go to the Government.

  • Rights of a Widower
A husband surviving his wife has the same rights in respect of her property, if she dies intestate, as a widow has in respect of her husband's property, if he dies intestate.

  • Rules of distribution - Children, Grandchildren Etc.
The rules of the distribution of the intestate property (after deducting the widows share) amongst his lineal descendants (descendants born in lawful wedlock only) are as follows:

  • Where intestate has left child or children only

Where the intestate has left surviving him a child or children, but no more remote lineal descendants through a deceased child, the property shall belong to his surviving child, if there is only one, or shall be equally divided among all his surviving children.

Child or children - The word 'Child' does not include an illegitimate child, but must be born out of lawful wedlock. The words 'any child' mean and include 'children' as well.

  • Where intestate has left no child, but grandchild or grandchildren
the property shall belong to his surviving grandchild if there is only one, or shall be equally divided among all his surviving grandchildren.

  • Where intestate has left only great- grandchildren or remote lineal descendants
In like manner, the property shall go to the surviving lineal descendants who are nearest in degree to the intestate, where they are all in the degree of great- grandchildren to him, or are all in a more remote degree.

  • Where intestate leaves lineal descendants not all in the same degree of kindred to him, and those through whom the more remote are descended are dead.
If the intestate has left lineal descendants who do not all stand in the same degree of kindred to him, and the persons through whom the more remote are descended from him are dead, the property shall be divided into such a number of equal share as may correspond with the number of the lineal descendants of the intestate who either stood in the nearest degree of kindred to him at his decease or having been of the like degree of kindred to him, died before him, leaving lineal descendants who survived him.

One of such shares shall be allotted to each of the lineal descendants who stood in the nearest degree of kindred to the intestate at his decease; and one such share shall be allotted in respect of each of such deceased lineal descendants; and the share allotted in respect of each of such deceased lineal descendants shall belong to his surviving child or children or more remote lineal descendants, as the case may be, such surviving child or children or more remote lineal descendants always taking the share which his or their parent or parents would have been entitled to respectively if such parent or parents had survived the intestate.

  • Where an intestate has left no lineal descendants, the rules of the distribution of his property (after deducting the widows share, if he has left a widow) are as follows-
If the intestate father is living. he shall succeed to the property.
If the intestate father is dead, but the intestate mother is living, and if any brother or sister and the child or children of any brother or sister who may have died in the intestate lifetime are also living, then the mother and each living brother or sister , shall be entitled to the property in equal shares, such children taking equal shares - only the shares which their respective parents would have taken if living at the intestate death.

If the intestates father is dead, but the intestates mother is living and the brothers and sisters are all dead, but all or any of them have left children who survived the intestate, the mother and the child or children of each deceased brother or sister shall be entitled to the property in equal shares, such children taking in equal shares- only the shares which their respective parents would have taken if living at the intestates death.

If the intestates father is dead, but the intestates mother is living and there is neither brother, nor sister, nor child of any brother or sister of the intestate, the property shall belong to the mother.

Where the intestate has left neither lineal descendants, nor father , nor mother, the property shall be divided equally between his brothers and sisters and the child or children of such of them as may have died before him, such children taking in equal shares, only the shares which their respective parents would have taken if living at the intestates death.

Where the intestate has left neither lineal descendants , nor parent, nor brother, nor sister, his property shall be divided equally among those of his relatives who are in the nearest degree of kindred to him.

Monday, May 18, 2009

Succession Rules for Male Hindus and Female Hindus

Succession rules in case of Male Hindus

The property of Male Hindu dying intestate shall devolve in the following manner:
Firstly upon all the heirs being relatives specified as in CLASS I.
Secondly if there is no heirs of CLASS I, then upon the heirs being the relatives specified in CLASS II.
Thirdly if there is no heir of any of the classes, then upon the agnates of the deceased (one persons said to be agnate of another if the two are related by blood or adoption wholly through males)
Lastly if there is no agnate, then upon the cognates of the deceased.(one person is said to be a cognate of another if the two are related by blood or adaption but not wholly through male.)

Class I heirs:
  • Son
  • Daughter
  • Widow
  • Mother
  • Son of predeceased son
  • Daughter of predeceased son
  • widow of predeceased son
  • Son of predeceased daughter
  • Daughter of predeceased daughter
  • Son of predeceased Son of predeceased son
  • Daughter of predeceased son of predeceased son
  • widow of predeceased son of predeceased son
Class II heirs
  • Father
  • sons daughters son , (2) sons daughters daughters, (3) brother,(4)sister
  • daughters sons son, (2) daughters sons daughter, (3)daughters daughters son, (4)daughters daughter.
  • Brothers son, (2)sisters son, (3)brothers daughter, (4)sisters daughter
  • Fathers father, fathers mother
  • Fathers widow, brothers widow
  • Fathers brother, fathers sister
  • Mothers father, mothers mother
  • Mothers brother, mothers sister
Class I heirs take simultaneously to the exclusion of all other heirs. Heirs in the first entry of ClassII shall be preferred to those in the second entry, those in the second entry shall be preferred to those in the third entry and so on in succession.

Succession rules for Female Hindus
The property of a female hindu dying intestate shall devolve:
  • Upon the sons and daughters (including the children of any predeceased son or daughter) and the husband
  • Upon the heirs of the husband
  • Upon the mother and father
  • upon the heirs of the father and
  • upon the heirs of the mother
However if any property is inherited by a female hindu from her father or mother, it shall devolve in the absense of any son of daughter of the deceased(including the children of any predeceased son or daughter) not upon the heirs referred to above but upon the heirs of the father and any property inherited by a female hindu from her husband or from her father - in - law shall devolve, in the absense of any son or daughter of the deceased(includng the children of any predeceased son or daughter) not upon their reffered to above but upon the hiers of the husband.

Saturday, May 16, 2009

How does a Financial Planner Help?

Financial Planners can guide individuals to achieve there financial goals.
Following are the things on which Financial Planners can guide you and improve efficiency of your money matters.
1) Systematic savings : Many of the middle class Indians teach there young kids to save many of you would have your own "Piggy Bank". we would keep on putting smaller changes and over a period once we open the piggy bank it would be amazing to know it would have turned into a big amount. The same principle is applied and instead of your money being idle in the money bank you should make your money work to earn more money. Most FP would recommend you to have a Systematic Investment Plan or an SIP.

2) Cash Flow Management: The financial planner would study your income generation and spending habit and would advise you on leaks if any in your habit and how you can maximise the savings part from you cash flow.

3) Asset Allocation for Investment : Normally there are two kinds of people one who strongly believes safe investment like Bank FDs, Post Office Deposit, PPF, LIC etc which are very safe in nature but hardly manage to beat the inflation and actually it seems to be safe but if you look for inflation adjusted returns its not safe as such.
There is an another extreme case where in investor only invests in Stocks and they dont bother about FDs and stuff and they are very vulnerable to the Equity market performance and in the downturn it would be very painful to see people making huge losses even the most experts would have made loss in this tough times.
so the idea is to balance out were in you should have safe investments for markets downturns as well as you should also have equity exposure to beat the inflation for a long term gains. Financial planners would guide you in maitaing an asset allocation for Debt, Equity, Real Estate, Gold.

4) Risk Management via Insurance Planning : Financial planner will study your lifestyle, your bussiness, your dependents etc and suggest you Insurance planning which will help you should there be any unforseens events. example a Jewellery showrooms can have insurance against Theft and robbery thereby owner is protected in case the robbery takes place. House owners can have insurance for there house in case there is natural calamities like Flood or Earthquake you will be covered if there is a damage to your property.
The list goes on and on like Mediclaim Insurance, Life Cover etc

5) Tax Strategy to improve your savings: There is so many laws in taxation and so many cases were in if you plan properly you could end up saving lot of money on taxes. Like if you invest Rs 1 Lakh under section 80C. you could end savings as much as Rs. 33K if you in highest tax break. Another example would be you could save tax if you hold Shares or Mutual Funds and made short term profit then you can sell the share were you have made losses and then you can buy those shares again next day. so your profit is reduced because of loss booking you also have the shares.

6) Estate Planning: Everybody who have assets this includes real estate, bank Fds, Stocks, Jewellery etc, one should always have a will in place so that there is no problem for the legal heirs later on. Financial Planners can work out succession plan and draft wills and suggest best ways to do things in a planner manner.

Thursday, May 7, 2009

New Pension System; Details about NPS

New Pension System (NPS) - Many people even call it New Pension Scheme.

OBJECTIVE
NPS is regulated by the governing body PFRDA and is voluntary defined contribution pension system in India. The aim of this scheme is
1) Provide Old age income
2) Provide market based income over long term with minimal risk.
(The scheme will have around more equity exposure if you are young and it will keep on reducing to less then 10% when you reach retirement)

HOW Does it work ?
you will have to get a PRAN (Permanent Retirement Account Number) from point of presence. (list of point of transaction is available at http://pfrda.org.in/writereaddata/linkimages/POP-SP%20LOCATION%206-may9759639400.pdf)

The forms are available at http://pfrda.org.in/indexmain.asp?linkid=180

There are two types of accounts
1) Tier-I pension account : This is a non-withdrawal account till retirement
2) Tier-II savings account: This is simple voluntary savings facility. you will be free to remove your money from this account whenever you wish.

The customer need to make two choices
A) The customer has to select one fund manager out of 6 so far
1) ICICI Prudential Pension Funds Management Company Limited
2) IDFC Pension Fund Management Company Limited
3) Reliance Capital Pension Fund Limited
4) SBI Pension Funds Private Limited
5) Kotak Mahindra Pension Fund Limited
6) UTI Retirement Solutions Limited

B) customer has to select Investment option out of 3 choices. (By - default 'Auto choice' will be selected)
There are 3 classes defined as below in which your fund will be invested.
Asset class E - 'High return, High Risk' - Investment is mostly in Equity(That also only Nifty stock)
Asset Class C - 'Medium return, Medium Risk' - Investment is mostly in fixed income by corporates
Asset Class G - 'Low return, Low risk' - Investment is mostly in purely fixed income by government
you can select the ratio in which you want to invest your wealth in, E class can have at the most 50% of your investment. G and C class can have maximum of 100%.

DEFAULT option is Auto choice a Life cycle fund
If you do not select the investment choice, then the default investment will be in Auto choice called Life cyle fund

The way it works is as follows depending on your age throughout your life the asset allocation will keep on changing every year. The following table gives you an idea about your asset allocation
Age Asset E Asset C Asset G
35 50% 30% 20%
40 40% 25% 35%
45 30% 20% 50%
50 20% 15% 65%
55 10% 10% 80%

This is a very good choice so for most of the people who do not understand financial planning this is by default very good recommended thing government has done.

How Much minimum do I need to invest in NPS every year ?
1) You need to make minimum of 4 contribution in year with a minimum of Rs 500 in each transaction and overall minimum Rs 6000 in a year. There is however no upper limit as of now.

What are penalty charges if I am unable to contribute in a particular year ?
For every year default you will have to pay Rs 100 as penalty. Also during the period you do not pay, NPS keeps charging this penalty every year from your corpus, till it goes zero and then the account will be closed.

Can I withdraw money from the NPS in emergency ?
In Tier I scheme is a non - withdrawal scheme till you turn 60 or in case of death
In Tier-II scheme however is a voluntary savings scheme, which will allow you to withdraw money. The starting date of this scheme will be announced later.

What are the charges.
The best part of this scheme is the charges are very low.
Fund Management charges - 0.0009% on value of investment every year, (Note: this in comparison to other insurance companies which charges 0.75% to 2% is very very low)
Transaction charges are also very low.

I am 30 years now and need a pension income of Rs 10,000 per month when I retire at 60 years how much should I contribute in the scheme ?
This will depend on the asset allocation you select and the performance of the fund which again depends on market conditions. however for reference the returns from the past similar scheme run by PFRDA for government employee was around 14%.

To be on the safer side Assuming you will need a corpus of around Rs 16 lakh for monthly returns of Rs 10,000 so you will have to invest annually Rs 84,000 or Rs 7000 per month. To achieve your goals.


How to contact in case of queries for NPS ?
Toll free number - 1 800 222 080
Website for PFRDA - www.PFRDA.org.in
Website for accessing your NPS account online - www.npscra.nsdl.co.in

For Once This is an excellent pension scheme for the people in the unorganized sectors. If implemented properly this will be a great boon to the people of India and they thank Government during there old age. This scheme is really good for people from blue collar to businessmen to even your sandwichwalla and milkmans.

My only concern is who will market this scheme to the common man. I hope government does lot of marketing for this scheme.

Sunday, May 3, 2009

Top performing Mutual Funds for April 2009

Following are the top performing Equity Diversified Mutual Funds for the month of April 2009

1) Principal Junior Cap Fund
2) SBI Magnum Emerging Business
3) Can Robeco Emerging Equity
4) JM Small & Midcap
5) ING C.U.B Fund

Saturday, May 2, 2009

Top ELSS Funds for the month of April 2009

Following are the top performing ELSS Mutual Funds for the month of April 2009

1) DBS Chola Tax saver fund
2) Can Robeco Equity Tax saver
3) JM Equity Tax saver
4) Birla SL tax releif 96
5) Bharati AXA Tax Advantage

Sensex average returns for the month was 19.2%

Tuesday, April 21, 2009

Codicil ; what is codicil under succession act ?

"Codicil" is an instrument made in relation to a will and explaining, altering or adding to its dispositions and shall be deemed to form a part of the will. Accordingly, a codicil has to be executed and attested just as a will.
(According to the section 64, Indian Succession Act)

In the event if the will has been properly made in Law, The testator may want to make some changes in the will, He can cancel earlier will or make a fresh will incorporating the desired changes or he may alter some parts of the existing wills suitably by way of CODICIL. Such a codicil will form part and parcel of the existing will. A Codicil to be valid must be executed and attested in the same manner as a will. It is supplementary document to the will and cannot be independent by itself.

following are the characteristics of CODICIL
  • It is an instrument made in relation to a will
  • It explains, alters or adds to the dispositions of a will
  • It shall be deemed to form part of the will
  • The testator may want to change the name of the executor by adding some other names via codicil
  • The testor may want to change certain bequests by adding to the names of the legatees or subtracting some of the names, perhaps due to the death of the beneficiaries or the Executor. This can be done by making a codicil.
  • The Codicil must be reduced to writing.
  • It must be signed by the testator and attested by two witnesses.

Friday, April 17, 2009

FICO Credit Score; How does it work ?

How does Fico credit score works ?

When any one gives you a credit or a credit card they looked at a parameter or a score card and its called Fico credit score. It is an indication of your credit risk at a particular point in time. In other words, it is calculated on the basis of the latest gist of information enclosed in your credit report when the score is requested. When your fico credit score is high, that means you are a low risk to them.

Fair Isaac Corporation computes the mathematical formula which arrives to your fico credit score. People who have a high fico credit score are because they pay the bills on time. They go for a credit line increase only when needed. They apply for and open new credit accounts only when there is a requirement. They do not max-out credit cards.

The Fico credit report is regularly updated with new information from your creditors. So your fico credit score two weeks ago is probably not the exact score a lender would get from the consumer reporting agency today. Fico scores range from 300 to 850. For a Fico score to be calculated on your credit report, the report must contain at least one account which has been open for six months or more. Also the report must contain one account which has been updated in the past six months.

There is no such thing as a good fico credit score. It is hard to say what a good score beyond the context of a particular lending decision. Fico scores are considered on the basis of your payment history, length of credit history, amount owed, any new credit and types of credit in use. The higher your fico score, the lower risk are you to the lender or the creditor.

Everybody should work on to improve there Fico Credit Score !

Thursday, April 16, 2009

Credit Score ; How to improve it ?

Credit score how to boost them up ?
Following are the ways in which you can improve your credit score

1) The most important thing to boost your credit score is to be punctual with your payments.

2) Review your credit report and rectify any errors you come across regularly. One error or discrepancy in your credit report could impact it negatively and has a possibility to ruin your credit history. So in order to boost your credit score, take conscious steps to monitor your credit report as frequently as possible.

3) You could also enroll with a credit monitoring service which automatically monitors your credit file every business day and alerts you of any untoward change on your credit file.

4) Close any accounts that you do not need or use. The benefit is that this reduces your amount of available credit and can help boost your credit score in the bargain.

5) Don’t let anyone make any inquiry on your credit report unless there is a total requirement for doing so. Increasing number of inquires on your credit report has an inbuilt tendency to ruin it.

6) Credit scores are dynamic. They are based on your current credit report which means that it changes every time your credit report changes. Although the change may be negligible, it could be much more glaring also. Boost your credit score by reducing the balance on credit cards to least amount of your available credit.

7) If ever a loan from a bank is denied because your credit score was low, you will be presented a list of reasons for that low score. You can review the reasons along with your credit report and take necessary steps to boost your credit score.

8) You can also turn your score upwards by taking alternative measures to make your credit card payments on time. There are alternatives like auto pay (direct debits), online payments or payment over the phone. Normally banks charge a certain fee for this service but the payment gets posted on the same day. This means that even if you make the payment on the due date, you can have the peace of mind that you have not gone past due. Conscious efforts on the part of the credit card holder to make the payments on time and consistently, is seen as an improvement. This surely will save you from succumbing to a default rate.

9) The notable thing is to get credit or ask for a credit line increase only when you need it. It is a different thing when you are trying to set up your first credit. Use your available credit line carefully and be regular with your payments.

10) The best thing is to keep on saving bit by bit every month and invest in Mutual funds or other appreciating assets rather then live on credit to credit and keep on paying interest.

ALWAYS PROMOTE DEBT FREE LIFE AS FAR AS POSSIBLE.

Wednesday, April 15, 2009

Credit Card Debt - How do I come out of it ?

Credit Card Debt - How do I come out of it ?
Majority of American population is addicted to the plastic money and the addiction has turned them to victims of the credit card debt. It is one thing to use the credit card and enjoy the frills and the instant gratification which comes along with it, but it is tiresome to pay the price for it later. To get out of credit card debt and still use the credit card wisely is more of a mental thing.

You just need to change your attitude and develop some amount of self control.

1) Use your available credit line carefully and make your payments on time. Your payment history makes a lot of difference; you stand to improve your credit score dramatically if you do not miss a payment.

2) The first thing to get out of the credit card debt is to be punctual and consistent with your payments.

3 ) Try and pay more than the amount of minimum due. The credit card companies use smart business tactics when they ask you to pay only a small percent, the minimum due of the amounts owed by you. When you pay just the minimum amount due, the credit runs for a longer period, which means more finance charges, late fees and more revenue for the credit card companies.

4) You can also get out of credit card debts by taking alternative measures to make your credit card payments on time. There are alternatives like auto pay direct debits, online payments or payment over the phone. There is a possibility of a fee for a payment over the phone but it is worthwhile because it will not show as a late payment in your account and ruin your report unnecessarily.

5) Conscious efforts on the part of the credit card holder to make the payments on time and consistently, is seen as an improvement. This surely will save you from succumbing to a default rate or being delinquent.

6) Review your credit reports and rectify any errors you come across. One single incident of identity theft or discrepancy in your credit report could ruin your credit history. So in order to boost your credit score, take conscious steps to monitor your credit report as frequently as possible. You could also enroll with a credit monitoring service which automatically monitors your credit file every business day and alerts you of any changes not initiated by you.

7) Close any accounts that you do not need or use. The benefit is that this lowers your amount of available credit and can help maintain your credit score in the bargain. Don’t let anyone make any inquiry on your credit report unless there is a total need for doing so. Increasing number of inquires on your credit report has an inherent tendency to spoil your credit ratings because they imply that you are in dire need of credit. Your intention should be to carry only one or two credit cards with balances paid in full.

8) The notable thing is to get credit or ask for a credit line increase only when you need it. It is a different thing when you are trying to set up your first credit.

9) Consolidating your accounts to reduce your payments is another alternative which could work to your advantage. Unless you have maxed out your credit line, you could combine your debt from other credit cards, onto one of your credit cards with the low interest rate and pay it off.

10) You could call the credit card company and ask them to help you with the transfer of funds.
When you have to pay off your credit cards, start off by paying from the one which has the lowest rate first, and then proceed to the next one with a slightly higher rate. You could call up the credit card company and tell them the rate of interest rate is high, and that you would like to negotiate for a lower interest rate. If you have been a faithful customer, the credit card company would give you better options or even offer you a credit card with a lower interest rate. But then, you will have to call up the credit card company and ask them to lower the interest rate. They would want to retain you as their customer and would not like if you switch to another competitor and they would do everything in their capacity to keep you happy.

Use your credit card wisely and Debt should be out of the window for your hassel free future.

Monday, April 13, 2009

Credit Report for Free

Every Consumer Reporting Agency (CRA) has to furnish free credit reports, when voluntarily requested by you once in a year As per the amendment to the Fair Credit Reporting Act.

Your credit report contains information relating to your payment history, the amounts owed by you, your residential address, how consistently you pay your bills, whether you have been sued, or if you have filed for bankruptcy. All this information reflects your FICO (Fair Isaacs Corporation) score, which is a snap shot of your credit risk. A high FICO score means you are a low credit risk to the lenders. The top three nation wide credit reporting agencies are Equifax, Experian, and Trans Union. These as well as the other CRAs sell the information in your credit report to creditors, lenders, mortgage companies so that they could evaluate your application and take a decision whether to extend the credit to you or not.

Free credit reports are useful for a variety of reasons. One of them is well, because it is free. Secondly, if you have to buy something prestigious like a home or a car, or if you have to apply for a job, then most of the lending organizations and company refer to your credit score and credit report. So it helps if you have fair, accurate and up to date information about your credit status in your credit report.

A free copy of the credit report will be provided to every American citizen. To order your copy of a free credit report you could go to the website, www.annualcreditreport.com, the only authorized source for your free annual credit report from the three nationwide consumer reporting companies. You could also call their toll-free number, or write an application and request for your free copy. You could call at 877-322-8228, or fill in the Credit Report Request form and mail it to

Annual Credit Report Request Service,
P.O. Box 105281,
Atlanta, GA 30348-5281.

To get your free credit report, you have to provide personal details like your name, address, phone number, Social Security number and date of birth. If you have relocated in the past two years, you need to give your last address as well. You may have to also give information like the mortgage payments you are paying or the debt amount you have to clear.

As you are aware that identity thefts are on the rise. It is very easy for anyone to access your credit file or fraudulently apply for a credit card in your name. After that the criminal could even do balance transfers in your name, ask for a credit line increase and process address changes without your knowledge. Not only do you have to bear the brunt of paying a hefty bill for no fault of yours, but you also spoil your credit ratings. So it is better to be safe than sorry. So as a security measure, you get your free credit report only when you apply for it. If you get an email or a pop up ad, asserting that it is from the three top credit rating agencies and would give you a free credit report, please ignore it because it could probably be fraudulent. You must not give any sort of personal and credit information because none of the three credit reporting agencies or their website will ask for your personal information, unless you voluntarily ask them for a free credit report.

A free credit report is also provided when your application for credit line increase is declined. You will get a letter from the company giving you the reason for the decline along with the phone number of the credit reporting agency. You have two months from the date of receiving such a letter, to contact the credit reporting agency and asking for a copy of the free credit report. This happens in reasons when your application for a job or insurance is declined as well. Even in cases when you see a discrepancy in your credit report or if you feel that there is an identity theft being committed on your credit card, you could apply for a free credit report from a credit reporting agency. You also have the right for a free credit report if you are unemployed and would take up a job within the next 60 days. Under no other circumstance do you get a free credit report, other than the no-cost credit report which you get annually from the top three nation wide credit reporting agencies.

You could order one report at a time from the three CRAs or you could even ask for all the three reports at a time. However, it is sensible if you ask for the three reports over a course of time in the year, because the information is up-to-date and accurate, and also you can keep a check on any kind of untoward activity on your credit file. If you are credit conscious and would like to completely guard any kind of identity theft in your credit card accounts, then you could enroll with a credit monitoring service. This service automatically monitors your credit file every business day and alerts you of any kind of changes in your account which is not initiated by you. There could be a free trial period for you to try the automatic monitoring system. You also receive a copy of a free credit report along with the automatic credit monitoring system.

It's always is wise to be updated with your credit report at least once in a year.

Wednesday, April 8, 2009

Simple Investment Strategy ; It works most of the time

Many people do the work of selecting stocks and they dont know when to buy a stock when to sell a stock and most of the time sell the stock when it is about to rise and they buy the stock when it is about to fall.
Here is one of the simplest investment strategy if you want to make better returns then your FDs.

Investing in the following ratio
1) 50% in NiftyBees (Exchange Traded Fund and underlying asset is Nifty) LARGE CAP
2) 25% in JuniorBees (ETFund and underlying asset is BSE 100 stocks) MID CAP
3) 25% in GoldBees or Gold ETF or Debt Fund

Now when the market rises you can sell equity and buy debt it is called rebalancing the portfolio and when market falls you can buy equity and sell debt and again rebalance it to original ratio.

This is most simple and easy to follow strategy you can rebalance either every month or when the market is very volatile you can see if the ratio are out of order by more the 10% then you can rebalance them.

Many people in the age group of 20 to 35 years can follow the ratio (50,25,25)for Long term investment, however if you are nearing to retirement then you should have ratio (20,5,75)

Most of the peopl can have there version of the ratio according to there risk taking capacity as well are there goals.

Thursday, April 2, 2009

Best performing Mutual Funds for the period of 1/04/2008 to 31/03/2009

Top performing Diversified equity Mutual Funds for the Financial year ending on 31st March 2009

1) Franklin Asian Equity
2) UTI Dividend Yield Fund
3) Birla SL Dividend yield
4) UTI Contra Fund
5) Sahara Growth Fund

Top performing ELSS Tax Saving Mutual Funds for the financial year ending on 31st March 2009

1) UTI Long term Advantage S2
2) HSBC Tax saver Equity Fund
3) Reliance ELSF series 1
4) Reliance Tax saver ELSS
5) Can Robeco Equity Taxsaver

This funds have performed much better the the average broader market. The average broader market returns were -37.9 % for sensex and -36.2 % for Nifty for the period 1/04/2008 till 31st March 2009.

Wednesday, April 1, 2009

Top performing mutual funds for the month of march 2009

Top performing ELSS Mutual Funds for the month of March 2009

1) JM Taxgain Fund
2) Bharati AXA Tax Advantage Fund
3) Reliance ELSF Series I
4) Birla SL Tax Relief 96
5) ICICI pru Tax plan

Top performing diversified Equity Mutual Fund for the month of March 2009

1) Templeton Equity Income
2) Principal Emerging BlueChip
3) Templeton Growth Fund
4) Principal Global Opportunity Fund
5) Kotak Global Emerging Market

Friday, March 20, 2009

Wills : Different kinds of wills

Different Kinds of Will

Conditional & Contingent Will
Such will become enforceable only after the occurrence of a particular event.

Example : Mr Nilesh made a will mentioning that his son Piyush would be entitled to the flat in Mumbai after his death (death of a testator) only if he becomes lawyer. If Piyush became a Chartered Accountant and not a lawyer, he will not be entitled to the flat after his fathers death.

Joint Will
Wills made by two or more persons are known as Joint wills. They operate as if each person has executed a will with regard to his own property . Such wills operate on the death of each testator and the legatees are entitled to the properties of the testator who dies as if these are two or more wills constituting a single document.

Joint wills are revocable at any time by either of the testators during their joint lives. or after the
death of one, by the survivor. The survivor is treated as the Trustee in the joint property if there is a contract that prevents the will from being revoked.

Mutual or Reciprocal Will
When two or more persons make a will whereby they bequeath their properties to each other. It is known as reciprocal/Mutual Will. such wills may be revoked by any of the testators during their joint lives, but it is necessary for that person to give prior notice to the other testators so as enable them to make changes in their wills. E.g. Rajesh and his wife Rajeshwari make a reciprocal will bequeathing their properties to each other.

Duplicate Will
A testator may sometimes may execute a will in duplicate, One kept by him and the other to be deposited in safe custody with a bank or an executor or Trustee. The testator for the sake of safety, makes a duplicate will. However, in order to be valid, each copy must be duly signed and attested. If the testator destroys the part in his custody, It is revocation of both the wills.

Concurrent will
A Testator generally makes one will. But sometime for the sake of convenience, A testator may give away some properties in his native country by one will and the properties in another country by another will. Such wills may be treated as independent and Probate may be granted to one will, unless there is any indication to the contrary. but if the wills are relating to the properties in both the places, then both wills must be included in the probate.

Holograph will
A Holograph is a will entirely in the handwriting of the testator. It is considered to be a very good
form of will, because it is in the handwriting of the testator and its authenticity is enhanced for the same reason.


Privileged or Oral Will
This is a valid in law only if it is made or executed by a soldier employed in an expedition or engaged in actual warfare or by an airman so employed or engaged or by a sailor at sea if he has completed the age of 18 years to dispose of his property by a will. such wills may be in writing or by word of mouth.


Who can make a will
According to section 59 of the Indian succession Act, The following can make a will
1) Any person of sound mind
2) Any person who has reached the age of majority

The following person cannot make a will
1) Lunatic and insane persons
2) Minors i.e below 18 years of age. In case a guardian is appointed to a minor, Such minors reaches age of maturity only at the age of 21 years.
3) A person imprisoned in jail.

Tuesday, March 17, 2009

Dividend in Reliance Growth Fund and Reliance Vision Fund

Following are the dividends declared in Reliance Mutual Fund Schemes
1) Reliance Growth fund - 20% (Rs. 2 per unit)
2) Reliance Vision fund - 20% (Rs. 2 per unit)

The record date is 20.03.09.

Monday, March 16, 2009

Dividends declared in HDFC Mutual Funds

HDFC Mutual Fund declares dividends in its three equity schemes

1) HDFC Capital Builder Fund ; Dividend = 20% (Rs 2 per unit on a face value of Rs 10)

2) HDFC Top 200 Fund ; Dividend = 30% (Rs 3 per unit on a face value of Rs 10)

3) HDFC Tax Saver ; Dividend = 50% (Rs 5 per unit on a face value of Rs 10)

The record date has been fixed as March 5, 2009.

4) HDFC Equity - - - -----Record date : March 19th - Rs 3/- pu ( 30.00%)
5) HDFC Prudence Fund - - Record date : March 19th - Rs 2.50/- p.u. ( 25.00%).

Click here for more MF Dividends :- Recent MF Dividends


Friday, March 6, 2009

How to Draft a WILL or what is the Format of a WILL

FORMAT of a Will

I, _ _ _ _ _ _ _ , son/wife of _ _ _ _ _ _ _ ,resident of _ _ _ _ _ _ _ ,age _ _ years, am making this will on the _ _ day of _ _ _ _ _ _ _ out of my free volition and without any coercion or undue influence whatsoever and state that this is my last will and that I hereby revoke all Wills and codicil made by me at any time heretoforce, I bequeath my property , interests and other rights as follows:

1. I bequeath on my death to _ _ _ _ _ _ _ ,my title interests and all other rights which i have as owner of the residential / Commercial Property at _ _ _ _ _ _ _ , I hereby sate that he shall be
entitled to use and enjoy the said property at his own will after my death.

2. I bequeath on my death the following ornaments and jewellery belonging to me to _ _ _ _ _ _ _ :-(Give the list of the ornaments)

3. I bequeath on my death, cash balances lying with me at the time of the death to _ _ _ _ _ _ _ .

4. I bequeath on my death,bank balance lying in my name at Savings/Current Bank Account No._ _ _ _ Bank of _ _ _ _ _ _ _ ,_ _ _ _ _ _ _ Branch, _ _ _ _ _ _ _ at the time of my death to _ _ _ _ _ _ _ .

5. I bequeath the amounts receivable by me the time of my death from various parties on various accounts to _ _ _ _ _ _ _ .

6. I bequeath the amonts and other valuables owned by me and lying in locker number _ _ _ _ in my name at Bank _ _ _ _ , Branch at the time of my death to _ _ _ _ _ _ _ .

7. I direct that a sum of rupees _ _ _ _ Only (Rs. _ _ _ _ /-) be set apart from my assets at the time of my death and be donated to a charitable trust or persons whose aim and objective is to provide food, medical assistance, education assistance, etc to the needy persons.

8. I direct that before distributing my assets in accordance with this will , all my debts , liabilities and monetary obligations including all testamentary expenses, costs, charges,expenses in respect to probate and other legal charges at the time of my death be met out of my assets.

9. I bequeath all the other residuary property , assets and other rights whether or not existing at the time of my death to _ _ _ _ _ _ _ .

I further state that my father Mr, _ _ _ _ _ _ _ is appointed as the executor of the this will.

I declare that I am the owner of the properties mentioned in this will and an entitled to make this will. I am of sound mind and health at the time of making this will.

In witness whereof , I have hereunto set and subscribed my hand and signature on this _ _ day of _ _ _ _ _ _ _ .



Signed

Signed by Mr. _ _ _ _ _ _ _ on his last will and testament, all being present at the same time. Thereafter at his request and in his presence, We subscribed our respective names and signatures as attesting witnesses all being also present at the same time.

Signature of the Witnesses
1. I have witnessed and read the aforesaid will.

Sign

2. I have witnessed and read the aforesaid will.

Sign

3. I have examined Mr. _ _ _ _ _ _ _ on the date of this will and wish to sate that he appears to be in of sound mind and sound mental health at the time of making the above will.

Sign of doctor

Sunday, March 1, 2009

Best Diversified Equity Mutual Fund for the month of February 2009

Few of the Top performing Equity Diversified fund for the month of February 2009 are as follows.
1) Birla SL Comm Equity-GAP-RP(G)
2) DSP-BR Natural resources RP (G)
3) HSBC Emerging Market Fund (G)
4) Escorts Power and Energy (G)
5) Mirae Global Commo-Stock(G)

Sensex gave a return of -1.2% during the month of February 2009. The above funds performed better then broader market.

Saturday, February 28, 2009

Best Performing ELSS Mutual Fund in the month of February 2009

Few of the Top performing ELSS - Equity Linked Saving Scheme for the month of February 2009 are as follows.

1) JP Morgan Tax Advantage (G)
2) IDFC Tax Advantage ELSS (G)
3) Tauraus Tax Shield (G)

Sensex gave a return of -1.2% during the month of February 2009. The above funds performed better then broader market. This should not be considered for long term investments.

Tuesday, February 24, 2009

Finance Minister cuts Service Tax by 2% ;

Finance Minister decided to cut Service Tax by 2% ; Thus bringing it down from 12% to 10%. What does that mean to a common man ?.

Its not a huge saving but quite a good amount of saving for an Individual.

Lets a take a simple example of an Individual look at things we use in daily lives for monthly bills.
1) Telephone bill = Rs 500
2) Cell Phone bill = Rs 700
3) Internet bill = Rs 1000
4) Cable TV = Rs 300

This comes to nearly Rs 2,500 per month meaning Rs 30,000 a year and the service tax @ 12% would come to around Rs Rs 3,600 now the same would come down to Rs 3,000 so you end up saving around Rs 600 bucks for a year.

This list above does not include various other service tax you might be paying, like courier fees, lawyers fees, Chartered Accountants fees, Doctors Fees etc . Everywhere now you would saving around 2% which is really good in this tough times.

Saturday, February 21, 2009

How to calculate Surrender value, Loan Value of an LIC policy ?

In order to find a surrender value of a LIC Policy, first you need to find out is PAID UP Value.

PAID up Value = [No of years premium paid * S.A /Policy Term] + [Bonus * S.A/1000]

where S.A = Sum Assured

Example: from LIC Wings Ready Reckoner book, Mr. A has taken an Endowment policy of 30 years term on 15.7.1983 for S.A of 2 lakhs and has paid premium upto date till 15.7.2007 i.e 25 years. Now he wants to know how much is the surrender value.

First let us find out the Paid up value by using the above formula
Paid up value = [25 * 2,00,000/ 30] + [ 1583 * 2,00,000/1000] = [ 166667 + 316600]=4,83,267
* Bonus is given from the bonus chart of LIC for 25 years Endowment plan
* Most of the people would get a reminder from LIC with details of your bonus , you can just put the total bonus amount in the second part of above formula or you can also call up 1251 from MTNL or BSNL and get the bonus information by just entering the policy number.


SURRENDER VALUE = Surrender value factor * Paid up value /100

for above example surrender value factor from lic chart is 65.84 so substituting we get
Surrender value = 65.84 * 4,83,267 / 100 = 3,18,183

Loan Value = 90% of Surrender Value (approximate)
In above case you can get loan of up 90% of 318183 = 2,86,365

Monday, February 16, 2009

Jeevan Varsha close ended Money back policy from LIC

After hugely popular and successful Jeevan Astha which collected more then 1k crore, LIC has come up with a new money back policy called Jeevan Varsha.
  • The plan will be available for sale only between February 16 and March 31, 2009 .
  • Jeevan varsha plan is available with two policy terms of 9 years and 12 years.
  • The policy will offer Rs 65 per Rs 1,000 sum assured for 9 year term and Rs 70 for a 12 year term.
  • The first time survival benefit are payable every three years.
  • Amount received 15%,25% (60%+G.A+L.A) at the end of 3, 6, 9th years respectively for 9 year plan.
  • Amount received 10%,20%,30%,(40%+G.A+L.A) at the end of 3,6,9,12th year respectively for 12 year plan.
LIC officials said though guaranteed additions in Jeevan Varsha is lower than Jeevan Astha, the rate of return will be similar to it taking into consideration other factors.

Below is an example from LIC for 35 years Male for a term of 9 year and sum Assured Rs 1,00,000

End of year
Premiums Paid during the year

Benefit on Survival / Maturity at the end of year

Guaranteed

Variable

Total

Scenario 1

Scenario 2

Scenario 1

Scenario 2

1

15918 0

0

0

0 0

2

15918 0

0

0

0 0

3

15918 15000

0

0

15000 15000
4
15918 0
0
0
0 0
5
15918 0
0
0
0 0
6
15918 25000
0
0
25000 25000
7
15918 0
0
0
0 0
8
15918 0
0
0
0 0
9
15918 118500
0
20000
118500 138500

Wednesday, February 4, 2009

Max New York Life 'Life Maker Unit Linked Investment Plan' - Risk Element

Most of the readers of Financial Planning articles would know that ideally you should have your Investment and Insurance separate. But because of the lack of financial knowledge or aggressive marketing campaign and aggressive follow-up by agents most of the people tend to take ULIP plans. But I would say at least it's better that you started thinking of Insurance and investments which most of common man don't even think in there busy day to day life.

Following is an example of ULIP plan from Max New York Life the plans name is Life Maker Unit Linked Investment Plan - Risk Element.

This plan the allocation is 50% in Balanced Fund and 50% in Growth Fund.
Out of investment of Rs 1499.94
Balanced Fund investment is of Rs 581.28 and Units alloted are 35.926 at the rate of 16.18
Growth Fund investment is of Rs 581.25 and Units alloted are 30.337 at the rate of 19.16 as on 18/12/2008

so the total investment is of (581.28 + 581.25 = 1162.53 ) so out of Rs 1499.94 your actual investment is of only Rs 1162.53 and the remaining Rs 337.44 which is almost 22.5% of total investment has gone for various charges such as admin charges mortality charges etc.

so you can make your own conclusion how good is this ulip plans where charges are as high as 22.5%

TIP: If you have taken similar policy then you can maximize your returns by using the switch option and rebalance yours investment. If the markets are down and you think it will go up in the future then allot maximum investment towards Growth portion and when the markets are at high then you can move the maximum investments towards Balanced option.

Sunday, February 1, 2009

Top performing equity diversified Mutual Fund for the month of January 2009

Few of the Top performing Equity Diversified fund for the month of January 2009.

1) ICICI Indo Pru Indo Asia Equity RP (G)
2) DSP-BR Natural resources RP (G)
3) JM Multi strategy fund (G)

Sensex gave a return of -3% during the month of January 2009. The above funds performed better then broader market.

Saturday, January 31, 2009

Top performing ELSS funds for the month of January 2009

Few of the Top performing ELSS fund for the month of January 2009.

1) IDFC Tax Advantage ELSS (G)
2) Quantum Tax saving Fund (G)
3) UTI Long Term Advantage S2 (G)

Sensex gave a return of -3% during the month of January 2009. The above funds performed better then broader market.

Tuesday, January 27, 2009

What is Estate Planning ?

Estate is the total property, real and personal, owned by an individual prior to distribution through a trust or will. Estate includes real estate, cars, bank accounts, Insurance policies, Mutual Fund investments, FD's, stocks, provident fund, Jewellery etc.

Estate planning distributes the real and personal property to an individual's heirs. Estate planning is the process by which an individual or family arranges the transfer of assets in anticipation of death or incapacitation. An Estate plan aims to preserve the maximum amount of wealth possible for the intended beneficiaries and flexibility for the individual prior to death.

Wills and trusts are common ways in which individuals dispose of their wealth. Power of Attorney, Gifts, Partition, Succession are other ways.

Financial Planning is the process of meeting individual life goals through the proper management of one's finances. Life goals can include buying a house, saving for your child's higher education, planning for retirement or distribution of assets among beneficiaries.
Estate planning is part of financial planning by which an individual can arrange the transfer of assets in anticipation of death or incapacitation. An estate plan aims to preserve maximum amount of wealth possible for the intended beneficiaries and flexibility for the individual prior to death.

Objectives of Estate Planning

1. Transfer of assets to beneficiaries: Almost all individuals want there accumulated wealth should go to their beneficiaries. The beneficiaries may be a family member, a friend or even other people in the society. The basic objective of Estate Planning is that all this accumulated wealth should be transferred to the beneficiaries

2. Paying least amount of taxes:
Planning should be done such that Maximum amount should go to the beneficiaries with minimum amount of tax deduction.

3. Planning for Incapacity:
There should be plan if there is incapacity to avoid court guardianship and legal battles creating unnecessary waste if time and money. This can be done through tools like Power of Attorney.

4. Orderly Business Succession:

If someone owns a business, his will should provide for management of succession plan, including who should be given management and operating powers of the company.

5. Who Shall Receive and When ?
Properly executed Will should mention all beneficiaries and who should get what and in what proportion. Also if there is a minor then there should be a trust formed to look afters his share till he gets major and can handle on his own.

6. Selecting Executor, Trustee, and Guardian:
An Executor is a clients personal representative after his death and responsible for functions such as
a) administering the estate and distributing the assets to clients beneficiaries
b) paying estate expenses and outstanding debts
c) ensuring that all life insurance and retirement plan benefits are received
d) Filing or hiring a person to file all necessary tax returns and paying the appropriate central and state taxes from estate funds. When those duties are complete, this responsibility ends.

Trustee is required if the clients will creates trusts to accomplish more long-term goals, such as providing for minor children or giving to a charity or educational institutions. Trustee is responsible for the managing the trusts assets and ensuring that the beneficiaries are provided for in accordance with the provisions of the Trust.

Guardian: is appointed to act as a surrogate parent for the clients children, ensuring that it is in the best interests of children.

Risk associated with failing to plan for Estate Transfers
  • Clients property transfer wishes go unfulfilled.
  • Transfer taxes are excessive
  • Transfer costs are excessive
  • The clients family is not provided for financially in a proper manner
  • Insufficient liquidity to cover clients debts, taxes and cost at death
  • Time consuming and expensive Probate.
Steps of the Estate Planning Process
1. Establish the client/planner relationship:
The financial planner should clearly explain or document the services to be provided to the client and define both his and the clients responsibilities. The client and the Financial planner should decide on how long the relationship should last and how is the compensation and How the the decisions will be made.

2. Gather Clients Information: Financial planner should gather all the information from the client including the cash flow , expenses, income, future long term expenses, long term goals. clients intentions and expectations.

3. Determine the clients Financial Status:
The financial planner should analyze clients information to assess his current situation and the total worth of his estate to determine what he must do to meet clients goals like analyzing assets , liabilities and cash flow, insurance coverage , investments, tax strategies etc.

4. Develop a comprehensive plan to transfers consistent with all information and objectives: The planner should address clients objectives like transfer to beneficiaries with least amount of taxes.

5. Implement the Estate Plan: There should be an agreement between the client and the planner how should the plan be implemented.

6. Review the Estate plan periodically: The client and planner should also agree on who should monitor the progress of the plan. If the planner is in charge of the process. he should report to the client periodically to review the situation and adjust recommendations, if needed as the clients life changes.