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Know what will happen to your money when Paytm becomes payments bank

Digital payments provider Paytm has received final approval of the Reserve Bank to formally launch its payments bank. It expects to start operations next month. One 97 Communications, the parent company of Paytm, is preparing to merge its wallet service with the payments bank. If you are a Paytm user and worried about the change, here's what you need to know: What will happen to the money in Paytm wallets? The money will be transferred to the Paytm Payments Bank Limited as the wallet business will become part of the new company. It will happen automatically, and you need not do anything. Other banks too have their wallet businesses apart from their usual business. Will the Paytm app change? No. The user experience will remain the same as the app will continue to work as it does. You will continue to use it to pay for taxi, fuel, food, etc. the same way. What will change then? The wallet business will get transferred to the new company but will keep running as it is. Will I get a bank account number, cheque book, debit card, etc. ? Only if you opt to open an account with the new payments bank of the company. Otherwise your wallet will keep working as it is. The company will give you an option to open a separate account. You will earn interest on your money if you choose to open a payments bank account. How is a payments bank different from the usual bank? A payments bank cannot lend or give ..

5 Mistakes Small Investor Should Avoid As Market At Top

Date:- 17/03/2015
The Indian stock market has been in a bull phase since Dec 2011. Nifty had touched a low of 4531 on Dec 20 ‘11, and rose to touch a lifetime high of 9119 on Mar 4 ‘15 – doubling in a little over 3 years.

Can the market rise even higher? Sure it can. Can it double again in the next 3 years? Anything is possible in the stock market – but the probability will be low because of the higher base.

So, expectations of making windfall gains should be moderated. Does that mean that there are no multibaggers left in the market? The market always provides opportunities – but investors need to be patient rather than chase after the ‘next Infosys’ or the ‘next L&T’.

Making huge gains is what motivates small investors to enter the stock market. But more important than making huge gains is preserving capital. The best way to do that is to avoid some common mistakes small investors make near a market top.

Here are five of them:

1. Looking at the Sensex and Nifty levels on a daily basis

Sensex and Nifty should be looked at for determining the long-term trend in the market. An easy way to do that is to look at an index chart with the 200 day EMA superimposed on it. A rising 200 day EMA with the index trading above it indicates a bull market. A falling 200 day EMA with the index trading below it represents a bear market.

Unless you own the 30 Sensex stocks or the 50 Nifty stocks, knowing the precise levels of Sensex and Nifty are not of much consequence and induces needless greed or fear. It is the performance of your portfolio that you need to monitor. Your asset allocation plan should tell you which assets you should buy or sell or hold.

Don’t have an asset allocation plan? Better make one – otherwise your investment decisions will be based on hearsay and gut-feel, which are sure tickets for disaster!

2. Selling in a panic if the market corrects 5-10%

There is a tendency for stock markets to correct when indices hit levels with several zeros in them, e.g. Sensex at 30000 or Nifty at 9000. Many traders (and investors) prefer to sell (or buy) at such levels. Note how call and put options are written at 7600 or 8800 – never at 7562 or 8793!

Corrections are part and parcel of a bull market. Corrections of 5-10% are quite common. These should be taken in stride, and in fact, welcomed as opportunities to add more. If you sell off in a panic, you may either miss the next leg of the up move, or re-enter at higher levels.

3. Getting swayed by economic and/or political news

Various economic and political news – which may or may not affect the stock market – flow into the market on a daily basis. Some companies win a few coal blocks in the auction – their stock prices go up. The IIP number is lower than expectations, the market falls.

The trick to avoid getting influenced by news is to realise that the effect of most news lasts 2 to 3 days at most. Things return to normal soon. It is the actual performance of the companies you own (yes, you own a small ‘share’ of the company whose stock you purchase) that matter over the longer term.

4. Buying ‘cheap’ stocks because the good stocks are ‘too expensive’

Regardless of when you enter the market, good stocks will typically trade at a premium. This is more so near a market top. If a stock is trading at a ‘cheap’ valuation, there is usually a very good reason for it to do so. Remember that ‘cheap’ stocks have a tendency to get even ‘cheaper’ – often just after you buy a large chunk of it!

If you are not an expert stock picker, and are confused about which stocks to buy during the ongoing correction in the market, choose a good diversified equity fund or a balanced fund. And keep investing your surplus savings in the fund regularly. After a few years, you will be amazed at the fortune you have generated with very little effort.

5. Holding on to your losers in the hope of getting back your ‘buy price’

If your portfolio has losers – don’t feel ashamed or blame your luck. Despite careful selection processes, stocks fail to perform as per expectations or lose money.

The big mistake – and this is perhaps the biggest cause of loss for most small investors – is to keep holding on to the losers in the hope of getting back your ‘buy price’. If a stock is losing money near a market top, it is unlikely it will ever make any money. Remember that the market doesn't care about your ‘buy price’.

The best time to get rid of your losers is near a market top – when you may still find a buyer for them!

Budget HIghlights 2015-2016

Budget 2015-2016 Presented by Honorable FM Shri Arun Jatiley

12:36 PM Finance Minister Arun Jaitley Concludes Budget Speech
12:32 PM All contributions to Sukanya Samridhi scheme to be tax free.
12:32 PM Propose To Gain `15,000 Cr From Overall Tax Tweaking
12:32 PM Loss On Revenue For Direct Tax Proposal To Be `8,315 Cr
12:32 PM Individual Tax Payer Will See Benefit Of Tax Up To Income Of Rs 4.44 Lk
12:32 PM Service Tax Exemption Extended To Pre-cold Storage Warehousing
12:32 PM Govt to allow exemption of Rs 1.5 lakh under new pension scheme
12:32 PM Postal Department to use its vast network for proposed Payment Bank
12:32 PM Govt to increase limit of deduction of health insurance premium to Rs 25,000
12:32 PM Loss On Revenue For Indirect Tax Proposal To Be Rs 23,383 Cr
12:31 PM No tax slab changes
12:31 PM Contribution to pension scheme increased from Rs 1 lakh to Rs 1.5 lakh
12:31 PM Tax relief for yoga instructions, institutions
12:30 PM PROPOSE TO INCREASE SERVICE TAX RATE TO 14% FROM 12.36%
12:30 PM To Allow Exemption Of Rs 1.5 Lk Under New Pension Scheme
12:29 PM Additional deduction of Rs 50,000 on social safety schemes
12:29 PM Addtional Deduction Of `50,000 For Contribution To NPS
12:28 PM Transport Allowance Exemption Increased To Rs 1,600/Month
12:28 PM HEALTH INSURANCE PREMIUM LIMIT FOR SENIOR CITIZENS TO BE Rs 30,000
12:28 PM Rs 150 core to create world class IT hub in India: FM Jaitley
12:27 PM PROPOSE SOME CHANGES TO EXCISE DUTY ON CIGARETTES
12:27 PM TO INCREASE LIMIT OF DEDUCTION OF HEALTH INSURANCE PREMIUM TO `25,000
12:26 PM PROPOSE TO INCREASE THRESHOLD FOR TRANSFER PRICING TO Rs 20 CR
12:26 PM Tax ease on serious diseases for seniors raised to Rs 80,000
12:25 PM TO INCREASE EXCISE DUTY TO 12.5%
12:25 PM TO INCREASE LIMIT OF DEDUCTION OF HEALTH INSURANCE PREMIUM TO 25,000
12:24 PM Tax-free cap on medical expenses raised to Rs 25,000
12:24 PM For senior citizes: Tax-free cap on medical expenses raised to Rs 30,000, says
12:23 PM Excise duty rate effectively raised, petroleum products exempt from excise hike
12:23 PM Interpretation: Govt reduces excise duty on leather footwear
12:23 PM Excise duty rate effectively raised, petroleum products exempt from excise hike
12:22 PM Arun Jaitley calls for promoting cashless transactions; RuPay debit cards for all
12:22 PM Service tax upped to 14%: FM
12:21 PM TO HAVE 100% TAX DEDUCTION FOR SWACHH BHARAT & CLEAN GANGA
12:20 PM Wealth tax abolished. Additional 2% surcharge on tax for earners above Rs 2 crore
12:20 PM TO INCREASE EXCISE DUTY TO 12.5%: FM
12:20 PM 10% tax ease on royalty fee on tech services
12:20 PM Allow Tax Pass-through For Alternative Investment Funds
12:19 PM TO REDUCE CUSTOMS DUTY ON 22 ITEMS
12:19 PM To Tighten Reporting Of Cash Transactions
12:19 PM To Allow Tax Pass-through For Alternative Investment Funds
12:19 PM Income Tax On Royalty Fees For Technical Reduced To 10%
12:19 PM To Have Benami Transaction Prohibition Bill For Domestic Black Money
12:18 PM FEMA will be rejigged to include black money provisions
12:18 PM To Tighten Reporting Of Cash Transactions
12:18 PM TO DEFER GAAR BY 2 YEARS
12:18 PM Foreign Exchange Management Act To Allow For Seizure Of Foreign Assets
12:18 PM Proposes 5 ultra mega power projects for 4,000 MW each
12:17 PM NEAR PRESENCE OF FUND MANAGER NOT TO CONSTITUTE PERMANENT RESIDENCE
12:17 PM Construction and Contracting - Real Estate : FM proposes to rationalise capital gains regime for REITs/InvITs
12:16 PM Capital gain regime to be rationalised
12:16 PM Propose To Rationalise Capital Gains Regime For REITs/InvITs
12:16 PM Offshore fund managers to get ease on fund managment, law to be tweaked
12:15 PM To Enact New Law For Black Money
12:15 PM FM says exemptions for individual tax players to continue
12:15 PM GST to be implemented from next year
12:15 PM Foreign Exchange Management Act To Allow For Seizure Of Foreign
12:15 PM To Have Benami Transaction Prohibition Bill For Domestic Black Money
12:14 PM TO RATIONALISE & REMOVE EXEMPTIONS FOR CORPORATES
12:14 PM To Enact New Law For Black Money
12:14 PM BASIC RATE OF CORPORATE TAX TO BE 25% OVER NEXT 4 YEARS
12:14 PM Government announces bank to fund small entrepreneurs
12:14 PM Corporate tax cut to start from next year
12:14 PM REVENUE DEFICIT TO BE 2.8% OF GDP IN FY16
12:14 PM Atal Pension Yojana to be launched
12:14 PM NON-TAX REVENUE IN FY16 SEEN AT Rs 2.21 LK CR
12:13 PM GROSS TAX RECEIPTS IN FY16 SEEN AT Rs 14.49 LK CR
12:13 PM Penalty for evaders will be 10 years in jail
12:13 PM Govt proposes to reduce corporate tax rate to 25% from 30%
12:13 PM OTAL EXPENDITURE IN FY16 SEEN AT Rs 17.77 LK CR
12:13 PM Govt to launch PM Suraksha Bhima Yojana
12:13 PM GST TO BE IMPLEMENTED FROM NEXT YEAR
12:13 PM To promote cashless transactions via RUPay debit cards
12:12 PM REVENUE DEFICIT TO BE 2.8% OF GDP IN FY16
12:12 PM NON-TAX REVENUE AT Rs 2.21 LK CR
12:11 PM Exemptions of individual tax payers to continue
12:11 PM GROSS TAX RECEIPTS AT `14.49 LK CR
12:10 PM PLAN SPEND AT Rs 4.65 LK CR FOR FY16
12:10 PM Corporate Taxation to be cut in 4 year
12:10 PM To Set Up Exclusive Commerical Divisions In HCs To Resolve Disputes
12:09 PM FY16 health sector allocation at Rs 3,31,500 cr
12:08 PM ON-PLAN SPEND AT Rs 13.12 LK CR FOR FY16
12:07 PM ALLOCATE Rs 2.46 LK CR FOR DEFENCE IN FY16
12:07 PM To Increase Allocation Towards DMIC As Ordering Picks Up Throughout Year
12:06 PM FY16 boost for health sector at Rs 3 lakh crore
12:05 PM Earmarking Rs 1,200 Cr For DMIC Projects
12:05 PM Allocate Rs 33,150 Cr Towards Healthcare
12:04 PM Bank Board Bureau An Interim Step In Forming A Bank Holding Co
12:04 PM To Set Up Autonomous Bank Board Bureau For Selecting Bk Executives
12:03 PM Propose To Set Up IIM In J&K & Andhra Pradesh
12:02 PM Propose AIIMs In Five More States
12:02 PM MGNREGA allocation increased by Rs 5,000 crore; at highest-ever level
12:01 PM National Optical Fibre Network to be extended
12:01 PM To Launch A National Skills Mission To Enhance Employability Of Rural Youth
12:00 PM To Introduce A Public Contract Resolution Of Disputes Bill
11:59 AM To Introduce Regulatory Reform Law For Infrastructure
11:58 AM To Allocate `75 Cr For Electrical Vehicles
11:57 AM To Introduce Indian-made Gold Coins To Reduce Demand For Foreign Coins
11:57 AM To Amend Section 6 Of FEMA To Control Capital Flows
11:57 AM Propose To Introduce Gold Monetisation Scheme
11:56 AM To Do Away With Distinction Between FPIs & FDI
11:56 AM Propose To Allow Foreign Investment In Alternative Investment Funds
11:55 AM Visa on arrival for 150 countries
11:55 AM Rs 1000 crore boost to Nirbhaya Fund
11:55 AM Rupay Debit Cards to be incentivised. Move towards paperless transactions
11:54 AM Propose To Develop A Sovereign Gold Bond
11:53 AM GDP SEEN AT 8-8.5% IN FY16
11:52 AM EXPECT CPI TO REMAIN CLOSE TO 5% BY YEAR-END
11:52 AM To Set Up Task Force To Create Financial Sector Redressal Agency
11:51 AM To Incentivise Credit, Debit Card Transactions
11:50 AM Employees EPF may become optional
11:48 AM 5 cr small business to get mudra bank
11:46 AM To Set Up Expert Committee For Legislation On Single-window Clearance
11:44 AM To Encourage Ports In Public Sector To Corporatise
11:43 AM To Set Up Expert Committee For Legislation On Single-window Clearance
11:43 AM To address job creation in software sector
11:42 AM Will Establish National Infra Fund, To Allocate Rs 20,000 Cr
11:41 AM To Allocate `1,000 Cr For Support To Start-ups
11:40 AM PM farm plans get Rs 3,000 crore extra allocation
11:38 AM Second unit of Kodanakulam N plan to be commissioned in 2015-16
11:36 AM PROPOSE TAX-FREE INFRA BONDS FOR ROAD, RAILWAYS & INFRA PROJECTS
11:33 AM Rs 150 crore earmarked for Atal Innovation Mission
11:32 AM NBFCs With Size Of Over Rs 500 Cr Will Get Access To SARFRAESI
11:31 AM Propose Accident Insurance, Pension Schemes For Poor
11:30 AM Aim For Farm Credit Of Rs 8.5 Lk Cr In FY16
11:29 AM PARITY FOR NBFCS WITH BANKS FOR THOSE WITH SIZE OF OVER `500 CR
11:28 AM Tax-free infra bonds proposed for rail, road
11:27 AM To Allocate Rs 25,000 Cr For Rural Infrastructure
11:26 AM Need To Cut Subsidy Leakage, Not Subsidies
11:25 AM National agri market to increase income of farmers
11:24 AM To Allocate Rs 5,300 Cr For Micro-irrigation
11:23 AM Committed To Rationalising Subsidies
11:22 AM Need to cut subsidy leakage; aiming at rationalising subsidies
11:21 AM Direct Transfer Of Benefits To Be Further Expanded
11:20 AM To Look At Divestment Of Strategic & Non-strategic Cos
11:19 AM FIRM ON ACHIEVING MEDIUM-TERM FISCAL DEFICIT TARGET OF 3% OF GDP/td>
11:18 AM To Meet Fiscal Deficit Of 4.1% In FY15
11:18 AM Transfer To States To Be 62% Of Total Receipts
11:18 AM Aim to make India manufacturing hub of the world
11:17 AM Impact: Ceramics/Granite : Govt says will see 6 crore units of rural & urban housing by 2020
11:16 AM A roof for each family in India by 2022- 75th Year of India's Independence
11:14 AM Skill India and Make in India to get further boost
11:13 AM Our objective is to keep inflation below 6 per cent & work towards substantial reduction of poverty
11:11 AM Expect to implement Goods & Services tax by April 2016
11:09 AM Move to amend RBI act and provide monetory policy committee
11:07 AM The rupee has become stronger by 6.4%
11:05 AM Three achievements of government Success of Jan Dhan Yojana, Coal auctions & Swach Bharat
11:01 AM Finance Minister Arun Jaitley arrives at Parliament to present the Union Budget 2015
10:30 AM Budget will start at 11.00 AM

Prime Minister Narendra Modi launches Sukanya Samridhi Yojna under Beti Bachao campaign.

Prime Minister Narendra Modi today launched a small deposit scheme for girl child, as part of the 'Beti Bachao Beti Padhao' campaign, which would fetch an interest rate of 9.1 per cent and provide income tax rebate. 'Sukanya Samridhi Account' can be opened at any time from the birth of a girl child till she attains the age of 10 years, with a minimum deposit of Rs 1000. A maximum of Rs 1.5 lakh can be deposited during the financial year. The account can be opened in any post office or authorised branches of commercial banks. "The scheme primarily ensures equitable share to a girl child in resources and savings of a family in which she is generally discriminated as against a male child," said a government statement. In an effort to motivate parents to open an account in the name of a girl child and for her welfare to deposit maximum of their savings upto the prescribed limits, higher rates of interest at 9.1 per cent is proposed to be given on the deposits on annually compounded basis with income tax concession in this financial year, the statement said. The account will remain operative for 21 years from the date of opening of the account or marriage of the girl child after attaining 18 years of age. To meet the requirement of higher education expenses, partial withdrawal of 50 per cent of the balance would be allowed after the girl child has attended 18 years of age. "The provision of not allowing withdrawal from the account till the age of 18 has been kept to prevent early marriage of girls," the statement said. The Prime Minister handed over bank account details to five girls under the 'Sukanya Samridhi Yojna' (girl child prosperity scheme).

How To Manage & Maintain Investment Documents and Financial Papers

what problem the family faces when somebody dies without keeping any records of his/her investments? How to recover them etc. Now, we will know what are the documents required for each type of investing or saving, what document the company provides to you, how to keep the documents and give access to your family, etc. What are the common documents required for Saving and Investing?

PAN CARD – This is the first most important and almost mandatory document required for investing in any asset class in India. PAN number is frequently required for travelling abroad, buying Gold, Car, and property or opening a bank account, applying for a passport apart from normal investments. Remember, two-three things are very important here - Name, Date of Birth and your signature. The name should be correctly spelled else chances are everywhere your name will be wrong. Check the date of birth as it is a valid document for your age proof. Put in the same signature as you put elsewhere while applying PAN Cad as it also used as your signature proof. Needless to mention your father name should also be correct. Please note these informations are printed on the PAN Card. You should also give correct and complete address while applying PAN CARD as your INCOME Tax refunds are sent to this address only even if you give different address while submitting IT returns. Remember, the address is not printed on the PAN Card. In case of you find any details as wrong, do not worry as you can get them rectified by filing up the rectification form and submit with the proof of what you want to change – download fromhttp://www.incometaxindia.gov.in/Archive/ChangeForm.pdf.. You can also verify the details of your PAN athttps://incometaxindiaefiling.gov.in/portal/knowpan.do On-line applications can also be made athttps://tin.tin.nsdl.com/pan/index.html and/ or athttp://www.utitsl.co.in/utitsl/uti/newapp/newpanapplication.jsp

PASSPORT – This is another important document used commonly as you proof of identity, Date of Birth and address.

TELEPHONE (LANDLINE) & ELECTRICITY BILL – These are commonly used as your address proof while applying for PAN Card and Passport or open a bank account 

BANK ACCOUNT – These days in India, every investment requires your bank account details. The less number of bank accounts you have the better it is. Commonly asked document is your Cancelled cheque copy and photocopy of your bank statement or bank pass book. Nowadays, all maturity payments, redemptions, interest and dividends are directly credited to your bank account. Therefore, I suggest that you select one bank account for all your investments so that you can track what is coming and what is not?

KYC – This is another document which is a pre-requisite for investing in Mutual Funds. For doing a KYC your photograph, address and identity proof is required. A Mutual Fund Advisor will do the needful. However the status of same can be viewed at http://www.cvlkra.com/kycpaninquiry.aspx. KYC is also required for opening a share trading account but that is done separately while opening the account and it is built-in inside the account opening form.

IT RETURN COPY – After Submitting your Income Tax Return you get this acknowledgment copy which needs to be kept safely as these are frequently required for large value transactions, your foreign travels, sending your kids overseas for higher education and seeking personal, Home or education Loans. COMPUTATION OF YOUR INCOME/NETWORTH – Again, this is mandatory along with wherever your IT return copy is required. Without this you can not apply for Home, personal, educational or business loan. Now, let us discuss what documents do you get against which investment?

LIFE INSURANCE POLICY – A policy Bond/ document wherein a complete detail of the policy terms along with policy number, Nominee name etc. is printed. This document is very important as the original is needed in case of a claim or maturity.

GENERAL INSURANCE (example – Mediclaim, Car etc.) – A Policy certificate is issued by the company which is normally valid for one year. You get a new certificate each time you renew else the policy gets lapsed. Along with this you will also get a Card with your photo and insurer details for showing to the hospital. 

MUTUAL FUND – Here you don’t get a Bond instead you get an Account Statement which has a FolioNo. or Account No. Each Mutual Fund Company gives a different Folio number as per their system. Therefore if you have invested across 15 schemes of different companies then you will have minimum 15 statements. However, this can be reduced by maintaining multiple schemes of each company under one folio.

PUBLIC PROVIDENT FUND (PPF)– You should get the passbook updated at the beginning of each financial year (FY) – this gives you a complete picture of total contribution made in the entire FY including interest credited and the total balance lying at the end of the FY. Income Tax rebate can be claimed under section 80C (for the amount contributed during the FY – maximum contribution one can make is 100,000 per FY) by submitting a copy of this passbook.  

POST OFFICE SCHEMES – Like PPF, here also you get passbooks which need to be updated annually for the same reason as PPF. Some schemes do offer IT rebate therefore, you need to account them.

BANK ACCOUNTS – you either get a Quarterly or monthly statement or a passbook. This needs to be preserved for future and past references and in some transactions providing 6-12 months bank statement is mandatory. Needless to mention you also get the cheque book. Here, apart from the account number two more informations are very important – MICR CODE NO. this is a 9 digit number printed alongside the cheque no. and IFSC/RTGS Code, this is a 11 digit number printed on top of the cheque or on the first page of the cheque book. Remember these numbers are used frequently for on-line transactions as well as getting direct credits in your account.     

SHARE TRADING AND DEMAT ACCOUNT – Though you provide lot of documents here, but you only get the trading account code and demat account details from the Broker. You should insist and obtain a photocopy or scan of the entire set of documents or check with your broker as some provide links for downloading the documents from their websites. Now, we will discuss how to preserve or protect these documents? This is very simple but commonly avoided or neglected by investors and most of the time we do find them when required due to improper maintenance of records. Here, we have to use common sense. Each person might think differently in protecting or tracking them, but here are some simple ways – keep original copy of all the receipts scanned or photocopy in a file or folder. I suggest, for each policy one should maintain one file/ folder as you are supposed to keep all renewal receipts. You can keep the scan copies in separate folder in your computer. For each investment a seperate file should be maintained. Keep the Life Insurance policy Bond in your Bank Locker as you will not require them before maturity or claim  Keep all Passbooks and cheque books in one place under lock and key. Do not keep and blank signed cheque. Keep your Demat account book also under lock and key as these are like blank cheque and required when you sell some shares. Remember, not to keep the book with you broker Mediclaim policy card should be kept in a place where it can be accessed instantly during an emergency. If you do not provide the details during emergency/ admission in the hospital you will not be able to claim the medical expenses. Now, most important – Keep every details maintained in an excel file wherein monthly/ quarterly/ half-yearly/ Annual payments of Insurance premium and others should be maintained. Those not using excel should maintain all the details in a register. Those who are very familiar using computers and internet the best way is to scan all the documents and keep them in separate folders and put it in cloud using www. dropbox.com - Dropbox is a free service that lets you bring all your photos, docs, and videos anywhere. This means that any file you save to your Dropbox will automatically save to all your computers, phones and even the Dropbox website. Dropbox also makes it super easy to share with others, whether you're a student or professional, parent or grandparent. Even if you accidentally spill a latte on your laptop, have no fear! You can relax knowing that Dropbox always has you covered, and none of your stuff will ever be lost. Now, the last thing and the most important purpose for which this whole article is written. Share  the details with your family. I am not saying you give access of everything to every one! At least your spouse or your grown up children (on whom you depend or confide in) should know this. I think, we all invest or save and protect our families only, so what is the harm if they know? Let them not get horrified or face a horror story in case you are not there. 

2015 Keep Your Financial Always on Check

I recently learnt a very important lesson in goal-setting and habit-forming from a medical doctor. A persistent bad back has me visiting the orthopedics more than I like. They all say the same thing—regular exercise is your panacea. Not marathon running but just a simple, regular workout. I find that I begin well enough, but two months later regress into inaction. Travel, the big destroyer of routines, is the usual excuse for not finding the 30-40 minutes to do what is needed. Then this one guy sits me down and tells me: just do these three exercises. Do them twice a day. Don’t skip. Don’t do more if you have no time. Don’t do three sets of 10 each if you don’t have time. Do each just once. But do them. I hear him. And start. That’s it. The goal became smaller. Much more manageable, and one that did not require a full 30-40 minute time slot in the morning. I find that when one set is done, there is always space to do one more. And when three exercises are done there is always the space to do 10 more. The doctor did two things that worked. One, he set a small enough goal that he knew is manageable. And if I say I can’t do even that, I’m not serious about getting better and can look for another doctor. Two, he set a habit-forming default. So the day there is pressure on time, it takes less than 10 minutes to get through the routine. On days when there is time, I can take the full 30-40 minute module. I’ve always been fascinated by the synchronicity between finance and health. We mean to get both in order but keep putting off the actual doing. The benefits of getting a grip for both are in the distant future—and the human being is not very good at delaying gratification. If it is the everyday habit that is the tough part of health, it is the toughness of the problem that makes us put off translating the thought into action in finance. In fact, Daniel Kahneman in his book, Thinking, Fast and Slow, presents research on how the human brain, when faced with a tough decision, takes the easier way out of either not deciding at all or getting distracted with irrelevant details that are familiar. For example: when faced with a decision on long-term investing, rather than sift through the 5,000 products out there, we will use some crutch to make a quick decision. This could be reading about a particular product in the media. Or seeing an advertisement for another product. Or simply getting influenced by the nice manner of the sales person selling a third product. For those as challenged in finance as I am in health, here is the two baby step approach to financial health. One, make goals that are doable. For instance, do not try and solve the problem of retirement planning at one go (unless you are working with a financial planner). Start by identifying how much you are able to save each month after you’ve met all your basic expenses. Write down two numbers. The first is the minimum you can save and the second is the maximum you can do. The first number will be the amount left over after all the discretionary spends on holidays, entertainment, eating out has been made. The second number is the potential of saving that you have if you cut out harshly everything other than the most basic spends. Our goal is a halfway house between these two extremes. Write that down. This is your savings target each month. Two, know what to do with this money every month. This is the key habit-forming step. You will not allow it to accumulate into one mass in your savings account to be invested at one shot at the end of the year, but will take a decision to find an instrument to soak up this money each month. If this decision is taking time and effort, do one of two things. Open a two-in-one account and sweep the money into a fixed deposit (FD) each month or keep moving the money into a short-term debt fund each month. If you can’t choose the fund, stay with the sweep-into-FD strategy, but do not leave it in the savings deposit. The two-step way inculcates the regular saving habit and allows you to see your own saving potential when you look at the FD balance or the debt fund corpus after six months. On the bigger question of money advice for 2015. The advice remains consistent—there is no change in what I recommend as product choices. Gold is no more than 10% of your portfolio. The core of your money box is in zero-risk products such as provident fund, Public Provident Fund and FDs. The rest of your investments are in equity-linked products, ideally mutual funds. You have an emergency fund that covers six months of your living costs. You have a pure term life insurance policy. And, you have a medical insurance policy. (from ONE Browser)

NITI AAYOG WIll REPLACE PLANNING COMMISSION...PM WILL BE CHAIR PERSON

The 65-year-old Planning Commission was today replaced by a new body, NITI Aayog or National Institution for Transforming India, which will serve as a policy think-tank for the central as well as state governments and have Prime Minister Narendra Modi as its Chairperson. The NITI Aayog will have a governing council comprising all state Chief Ministers and Lieutenant Governors and will work towards fostering a ‘co-operative federalism’ for providing a “national agenda” to the Centre and States. The body will have a CEO and a Vice Chairperson, to be appointed by the Prime Minister, in addition to some full-time members and two part-time members, while four union ministers would serve as ex-officio members. The Planning Commission, known as a socialist era institution, instead had a Deputy Chairperson. Besides, there would be specific regional councils, while experts and specialists from various fields would be there as “special invitees nominated by the Prime Minister”. NITI Aayog will serve as a ‘Think Tank’ of the Government as “a directional and policy dynamo” and would provide the governments at the Centre and in states with strategic and technical advice on key policy matters including economic issues of national and international importance, an official statement said. NITI Aayog follows Prime Minister Narendra Modi’s announcement in his Independence Day speech in August 2014 that there is a need for replacing the Planning Commission by a new body keeping in view the changed economic scenario. The government has set up the new body through a Cabinet Resolution, wherein it has invoked words of leaders like Mahatma Gandhi, B.R Ambedkar, Swami Vivekanand and Deen Dayal Upadhyaya. While the two part-time members would be from leading universities and research organisations, the number of full time members has not been specified as yet. As per the Resolution, the NITI Aayog will provide a ‘national agenda’ for the Prime Minister and Chief Ministers to foster cooperative federalism while recognising that “strong states make a strong nation”. It will also interact with other national and international Think Tanks, as also with educational and policy research institutions. (from ONE Browser)

Happy New Year

At the end of a very fruitful year, I write in to connect with you and express my gratitude in your support to my endeavors.

I take this opportunity to wish you and your family compliments of the festive and holiday season. I wish that peace, love and prosperity follows you always and forever!

Seasons Greetings and Best Wishes for the New Year 2015!

Gold Loses the Shine in 2015.. What next in 2015 ?

The new year may see a further decline in gold prices as metal loses inflation-hedge appeal Gold is considered a physical store of wealth, as it gives an opportunity to investors to diversify the investment portfolio and acts as an inflation and currency hedge. Let’s assess how it fared in 2014 and what’s  in store. Year in review Spot gold prices started 2014 around the $1,200/oz mark, then headed higher towards $1,400 in mid-March. Russia’s military intervention in Ukraine, rising gold investor index and physical demand from China in the first quarter led the rally towards $1,400. After briefly touching $1,390 in mid-March, prices started to decline and, then, corrected downward towards $1,250 in June. From there on, prices started to rally again, touching $1,350 in mid-July. However, they lost steam from July onwards and corrected to the extent of $1,130 in the first half of November. A combination of factors contributed to this — consistent growth in the US economy, strength in the dollar index, waning demand and geo-political tensions. Declining inflationary trends on the back of falling crude dragged gold prices further. Outlook for 2015 Since oil prices have fallen to unsustainably low levels, the main cause of concern across the globe now is deflation. ECB is battling to revive the economy and the worry is whether cheap oil would send the euro zone into outright deflation. Japan is already printing money to prop its economy. However, the US economy is on a mend as the third quarter GDP growth came in at 5%, the strongest in 11 years. The US Fed has already tightened its monetary stance and the US economy is likely to be on track to raising interest rates sometime in 2015. The price trajectory would be dependent on the diverging policies of central banks across the globe. Investment demand with SPDR gold holdings is waning and is at a six-year low. While falling crude bodes well for the global economy, a falling inflationary scenario, reduces gold’s appeal as an inflation hedge. The growth in the US economy, falling inflation hedge appeal and strength in the dollar index at large will be the major factor for gold prices to head lower in 2015. For 2015, the upside potential for spot gold prices (CMP: $1175/oz) can be $1,340/oz while the downside can be seen at $1,090/oz. In the Indian markets, MCX gold futures (CMP: R26,602/10 gm) can move higher towards R30,000/10 gm while lower side can be seen at R24,400/10 gm. What should retail investors do? One should put 10-12% of the corpus in gold. The advice to retail investors would be to buy on every dip, taking into consideration the risk appetite, along with the complex set of factors revolving around the metal. Physical gold is worth holding because it’s a universal finite currency. On the other hand, it involves a number of costs. The advice would be to wisely allocate money in this commodity as over-exposure might hamper the overall return of the portfolio. By Naveen Mathur The writer is associate director, Commodities & Currencies, Angel Broking (from ONE Browser)