ARB FinTip collection - August 2012

A collection for you of valuable tips in Personal financial management, Each tip is important to take you towards wealth creation.

ARB FinTip

 Medical reimbursement insurance and medical benefit insurance is different, Go through the details before buying one, medical reimbursement insurance is must. It helps you to protect your created wealth.

ARB FinTip

Retirement is a long term goal, take a calculated risk while planning to create a retirement nest. Long term debt may not be a good option.       

ARB FinTip
 A scientific and structured personal financial management has an ability to make your life stress free. 

ARB FinTip 
In the process of wealth creation it is important to have a knowledge of saving tax. Wealth creation process should start with Tax saving.

ARB FinTIp
Debt instruments are useful for short term goals and to keep reserves, at any given point of time you should have a allocation of some part of your wealth in Debt instrument.

ARB FinTip
Give each investment its own time to grow and give you a result, never expect results prematurely, it may result in mismanagement of investment portfolio.

ARB FinTip ( 6AUG2012)
 Taking direct control on your cash flows i.e. knowing your income and expenses is the first important step in money management, unfortunately most of the individuals Don't.

ARB FinTip - 8Aug 2012
 Create your own wealth so that you have to depend little on bad loans.

ARB FinTIp (10Aug2012)
 If you are not going to study on your own about financial market, Mutual funds are the better option to you for investment.

ARB FinTip (12Aug2012)
Bank FD and RD is a good option of investment if your goals are short term.( less than 3 years.), Stay away from equity market.

ARB FinTip (13Aug2012)
 Equity market is attractive now, Start long term SIP in Equity MF's, other wise you may have to regret after 5 years.

ARB FinTip (16Aug2012)
Keep 6 months expenses as an emergency fund in your savings a/c. This amount will protect you and your career.

ARBFinTip (17Aug2012)
Scheduling and tracking your expenses has a potential to save your 10% of expenses. Don't beleive me TRY it.

ARBFinTip (20Aug2012)
Consistency is an important attribute in wealth creation process.

ARB FinTip(22Aug2012) 

Free Personal financial management advice may be injurious to your financial health. Take care.

ARB FinTip(23Aug2012)

Before signing any application of financial products from the market pl take a time to look at features, Benefits and terms & conditions. If you are signing without reading you deserve to be cheated.

ARB FinTip (24Aug2012) 

 Medical benefit plan is not a replacement to Mediclaim . Mediclaim is must.

ARB FinTip(25Aug2012)

The best investment in this world is investing in self. You are the biggest asset for your self. know your true Value. 

ARB FinTip(25Aug2012)

The best investment in this world is investing in self. You are the biggest asset for your self. know your true Value. 

ARB FinTip (27Aug2012)

 If you want to become wealthy your investments overall percentage returns should be more then rate of inflation. If not your are not growing your asset it is reverse even if it is growing amount wise.

ARB FinTip(28 Aug2012)

 When it comes to pre-payment of the loans the loans with high interest rate should get a priority. this will result in reduction in Interest burden and optimization of cash flow.

  

ARB FinTip 

Negotiating in a skilled way is a art which you have nurture to be wealthy. This will save your cost and add to wealth creation :) 

ARB FinTip (30Aug2012)

Patience is a very important attribute in the process of wealth creation. You should know when and how  much to expect from the investments.

ARB FinTip (31Aug2012)

Hanging up with loss may keep you away from the wealth creation opportunities, so come out of loss and invest it in profit making opportunity.

About the author : Ashish Ramesh Bhave is a CERTIFIED FINANCIAL PLANNER, focused and specialized in financial planing for individuals and families. Can be reached at arbfinancials@gmail.com or Cell : 08793107044

Confused state of mind ?

Avery normal human psychological treat - we get confused when there are many options available and we have to choose one among them. for eg. We go to buy a shirt may be having some style colour in mind , showroom is full of different style and colours , latest arrivals .......We buy one and after reaching home it gives a sense that the one which you bought is not the one which you thought of but some thing else, Do this happens with you ?

Out of 100 I am sure most of you will agree to this.

The same is applicable when it comes to financial product selection. but the impact of the wrong selection of financial product is dangerous than that of a wrong selection of shirt, it has a life time effect and can hamper the optimization of the cash flows.So when you are in confused state of mind, Don't take decision. You can follow the following steps in such confused state of mind.

What you should do ?

The most important thing is that you should know what you are looking for i.e. benefits you are looking for .write down the benefits you are looking for and search in the market for the product which fulfills your all needs. This process will filter out some of the products for you and makes the selection process less complex for you.Don't go for any product which do not give you all the benefits you are looking for but gives some benefits which you had not thought for.When any two products are giving all your benefits then you can check the other offerings from the product.The other benefits you are getting should be checked against trade off value ( i.e. the cost you have to pay.)

If still it confuse you then you should go for professional help.

About the author : Ashish Ramesh Bhave is a CERTIFIED FINANCIAL PLANNER, focused and specialized in financial planing for individuals and families. Can be reached at arbfinancials@gmail.com or Cell : 08793107044,   www.arbfinancials.com

Endowment (Traditional) insurance plan, weather it is good for you?

Life insurance is easily accessible tool in India, which is considered and accepted as investment tool nationwide.( ? )

There was a trend 5 to 6 years back of selling ULIP’s but the trend is changed now days towards selling Traditional policies. Now clients are wondering why this shift had happened? The companies or the agents who were confident on ULIP why today are not confident about same?

Whatever it is a ULIP, (where the all types of costs are disclosed to clients) or traditional (where no cost is disclosed to clients) you have to understand some basic things and then analyse weather it is really an investment tool or not, I would like to help you in same and want to put some point in front of you.

1.     The main purpose of Insurance is protection, in life it is about protection of the income generating capacity of Individual.

2.     In insurance is distributed by distributors who come in different avatars like Agents, Advisors, Brokers and Banks who are remunerated by the commission on selling of insurance products.

3.     In India insurance is sold not bought ( it is slightly changing now a days due to awareness and availability of online term plans.) and because of this the intermediaries are paid handsome commissions to continue and get motivated to sell policies and thus the cost to company is high.

4.     These costs are loaded on the premiums because these coasts are passing on to clients.

5.     So your premiums do not include only the premium but much more than pure premium.

6.     It means that you are paying for all these expenses from your pocket every time, the purest form of life insurance do have a portion of costs in to it however it is less because of the small amount of premium.

What is a result for you   

From above points you can make it that in traditional policies also you have to pay lot of expenses from your pocket which may not be in your interest. So the amount which you are paying is not invested 100% in investment.Thus these traditional plans yield less returns as compare to the pure investment instrument like PPF can yield which also gives you tax free returns.Thus buying a traditional insurance plan either you are not getting returns or not getting enough cover which is required for you. 

What you should do?

Do not mix two different things, insurance and investments don’t taste good like Mango and Pista mix ice-cream.Both of these instruments are made for different use.

Investments: For wealth creation.

Insurance: For wealth protection.

Keep both of these things separate and consider insurance as an expense not an investment.

 Your views are welcome.  Did you get the answer ?

 

About the author : Ashish Ramesh Bhave is a CERTIFIED FINANCIAL PLANNER, focused and specialized in financial planing for individuals and families. Can be reached at arbfinancials@gmail.com or Cell : 08793107044