Tuesday, August 30, 2011

Social Media Calculator

The power of social media is not unknown. If only you ever wanted to measure it, here is an app to count the 'number of people joining facebook', 'emails sent globally', 'minutes of video calls on skype', etc... The count interestingly demonstrates the exponential growth of each category. Ever wondered how much time us spend on Facebook/Gmail/LinkedIn/Youtube??? Not to worry, u're not the only one - you are just following the trend.

And for social media marketers, its just a visual treat :)


Thursday, August 25, 2011

How & Why Should you invest in Stock Markets Even After Your Retirement?

Inflation and Retirement         
Most Retirees feel great getting a bulk sum as provident fund and gratuity, and wish they knew a magician, who could spin their money 2 to 3 times in just 5 years, in addition to ensuring a regular return for their day to day expenses. It is true we all want it to keep up with the inflation rate in the market. I know of no such magicians, and it is practically not possible to multiply your money 2 to 3 times in just 5 years. But I definitely know of smart investment planning and investment advisors that could help you to beat inflation.

A step by step look at your considerations to come out with smart calculated investment decisions:
 ¨       Post-retirement, you know that you would no longer earn a regular income and would have to stay on your savings, provident fund, gratuity, and other benefits that have been given to you. You would definitely want more good returns on your investments, but your appetite for risk is low, for you would not want to lose your precious savings. So you would prefer to shift your portfolio of investment from risky ones to safer ones like fixed deposits in banks and good rated companies.

¨      However your need for more income, capital gains to keep up with inflation, and rates of interest on fixed deposits decreasing each year may make you puzzled about coping up with the increased financial needs. You, as a senior citizen are lucky to be getting additional interest, however taxes leave you with not much more. However you are not prepared to subject your savings to the volatile bullish and bearish trends of the share market of over-confidence and pessimism.
¨       You retire at 60, considering 5% is the rate of inflation annually, with life span as 85, and spending Rs.20000 per month, you would require a retirement corpus of Rs.42,00,000 if the return rate was 8%, while you would require Rs.47,00,000 if the return rate was only 7%.  I am sure you would invest smart, reducing your retirement corpus by 10.5% by just investing for 1% more return.

¨       It is true that stocks and shares gave an annual compounded return of 17 to 18% in the last 15 years, with long term stocks giving a compounded returns of about 15 to 18% annually. However you have not appetite for risky and volatile investments, and may want to play safe with low or moderate risk to capital and in not putting all your eggs in one basket or to divide your risk.

¨       After your retirement you would do best to follow the advice of financial experts and invest no more than 10 to 20% of your retirement corpus in shares and stocks. A novice to the share market, or lack of time, inclination or shrewdness may not prove right to deal in the share market, and most financial advisors advice senior citizens to invest in mutual funds. These companies have experienced fund managers and researchers with in-depth knowledge of various industries and valuation principles and also offer diversified investment options in shares in companies, debt instruments and government securities.

¨       The choice of retirees should be to invest in big cap funds, funds investing in huge paid-up capital companies, while mid cap funds suit those who do not mind medium risk-taking. However small cap funds, invested mostly in start-up companies are to be avoided, being highly volatile in nature.

¨       Time plays a vital role in investment in mutual funds, and a good investment advisor would advice you appropriately. The best option for senior citizens would be to first invest a lump sum in a debt based funds that promise good, safe and regular return. This could be followed up by a systematic investment/transfer plan of investing or transferring through ECS regularly a fixed amount for units of a mutual fund. This definitely proves beneficial to take advantage of the volatility of the market, as buying different number of units each month helps to spread the risk also.
A Final Thought:
However your smart calculated investment choice of mutual funds requires evaluating every 3 to 6 months. This would help switching between mutual funds at the right time. My last but most important advice again especially to senior citizens is never go in for stock trading in a big way without proper knowledge and inclination and lose due to volatility of stock and share market.
(The author is Ramalingam K, an MBA (Finance) and Certified Financial Planner. He is the Founder and Director of Holistic Investment Planners (www.holisticinvestment.in) a firm that offers Financial Planning and Wealth Management. He can be reached at ramalingam@holisticinvestment.in.) 

Why Buying Life Insurance Online makes sense?

Till 21 months ago life insurance as a product category was only sold through intermediaries. These could be life insurance agents, corporate agents, banks and brokers. These sales were driven largely by the commissions to be derived from such a sale and less by the needs and interests of customers. This resulted in a basic dichotomy that lead to a large number of dissatisfied customers who felt that they had either, been a sold a product they did not need or one which only partially fulfilled their needs. This remains a problem with intermediated selling where often the interests of the intermediary supersede the interests of customers.
The interests of the intermediary also lead to the creation of a number of insurance myths or legends. The most common myth was insurance was too complex a product to be bought by a customer. It needed the intervention of an intermediary to explain the product to the customer and facilitate the buying process. Today in category after category, including life insurance, it has been proven that there is a section of customers who do not need intermediation and are quite capable of making informed choices on their own. This is fuelling online sales of financial products including life insurance.
If you are a customer who is online and is comfortable using the internet and have some experience of having made an online purchase then maybe it is time you seriously looked at buying your life insurance online. Yes there are number of good options that are available on the internet for you.
In October 2009 a new entrant in the life insurance field took the bold step of launching a term product that was meant exclusively and designed specifically for online purchase. The product called AEGON Religare iTerm Plan was designed in such a way that the savings from distribution and other expenses were passed on to the customer resulting in great savings ranging from 10-70% - depending on age and policy term. This plan was immediately successful and continues to be one of the premier online plans available in the market. Today however there are options available from ICICI Prudential, Kotak Life, Metlife and AVIVA. This availability of products has expanded the market and has brought term insurance, classically a neglected category amongst both life insurance companies and intermediaries, back into the limelight. More importantly it has busted the myth that there is no ‘self-service’ market for life insurance products.
Today more and more customers are going online and buying life insurance for protection.
While the market is focusing on term plans AEGON Religare has again taken the lead and has launched another online plan which offers protection on a unit-linked platform – the AEGON Religare iMaximize Plan. This means that the product is structured in a manner so as to provide protection against death, income protection and protection of goals and ambitions. This works through a triple benefit feature. If the person who is the insured were to die his nominee/s will get immediately upon death the sum assured. In addition for the remainder of the policy term the nominee/s get an annual income equivalent to the annual premium paid and lastly, the company continues to pay the annual premium and keep the invested fund alive till the maturity of the plan wherein the nominee/s get the fund value.
This plan provides a triple protection layer that sets it apart from other plans in the market. As it is an online plan there is no premium allocation charge thus maximizing the life insured returns. It can be bought online through an 8-10 minute buying process. It is likely that we will see more such plans from other companies as well in the future.
Hence, the reasons why buying life insurance online is beneficial is that it provides you with value, is convenient - it can be done from you home or office anytime and most importantly you buy a product that you decide upon and not what an intermediary wants to sell. So if you’re comfortable go ahead and buy your life insurance online you’ll see value in it.
Buying Insurance online makes sense mainly because you get an option to compare various policies at one place.
source -CJ is an insurance geek who is keen about Online Insurance industry

Wednesday, August 10, 2011

All you wanted to know about Mediclaim Policy

Health care costs are sky rocketing day by day. Therefore the need for having a mediclaim policy for you and your dependents has grown. Suppose you have to undergo some medical treatment or need to be hospitalized for certain reason, then a mediclaim policy will be of immense help to you in covering your health care expenses. The reason is Mediclaim offers protection in case of unexpected medical and health care emergencies.

Hospitalization expenses in case of illness, disease or accident will impose a heavy financial burden on individuals and families. This is where the mediclaim policy comes in handy. The mediclaim policy can reimburse the hospitalization expenses or can pay the hospital directly on behalf of you.
A mediclaim policy provides a health cover of certain amount of money. This amount depends on the amount that the insured person was insured for.

The mediclaim policy can be taken for an individual or for an entire family. Some insurance companies allow a discount on the premium if the policy is taken for a family.

Insurance companies have fixed some age limit for medical test. If the individual is below that age, then he or she need not undergo medical test for taking mediclaim policy. If the individual is above that age limit then he needs to go for medical test.

If any pre-existing disease has been found out in the medical test, then those diseases will not be covered under the mediclaim policy for a waiting period of a first few years.

If you have a mediclaim policy from your employer, that may not be sufficient. Employer may cover the employee and not necessarily his entire family members. And moreover these policies are not portable and cannot be individualized if you leave the job. Employer provided policies cannot be transferred to another employer in case you switch your job. Also employer provided policies will give you coverage as long as you are employed. Once you retire you may not be having coverage.

It is really unfortunate that only after your retirement you need health insurance at the most. If you plan to take a fresh policy after retirement, insurance company will not cover the pre-existing diseases at that point in time. Though your employer provides a health insurance policy it is better for you to take a separate health insurance policy at least with a small amount of coverage.

The coverage amount of the health insurance policy need to be decided based on your health consciousness, your family health history, and the class of hospital you choose for treatments.

If you are not health conscious or you don’t do regular exercises or you don’t follow proper diet or you frequently take outside food or don’t go for annual health check-ups then it is advisable to go for more sum insured coverage in your mediclaim policy.

If your family has got any adverse health history like heart disease, high blood pressure, stroke, diabetes, kidney disease, cancer, any form of paralysis, or any hereditary disorder then you need to choose higher coverage amount in your health insurance.

If you will be choosing high class hospitals for your treatment then you need to go for higher sum assured. If you will be choosing medium level or low level hospitals then you can choose the coverage amount accordingly.

Also you need to revise your health insurance coverage amount based on the changes in the above factors and the changes in the medical cost. Also the increase in the age needs to be considered for deciding the coverage amount.

The icing on the cake is you get tax benefit under section 80D for the mediclaim premium paid. For senior citizen the limit under this section is Rs.20000 and for others it is 15000.

Most people don’t think about health insurance very often.  But it comes to mind first when a loved one is sick. Mediclaim policy is one of those things everyone knows he or she should take but usually puts off until a more opportune time. Living without a mediclaim policy is like going out on a rainy day without an umbrella or a raincoat.

If you have not covered adequately yourself and your dependents with mediclaim policy so far, then now is the right time to take action. The fact that you are reading this article shows you have decided to stop procrastinating, delaying and have answered the ancient question, “If not now, when?” with “NOW!”.

(The author is Ramalingam K, an MBA (Finance) and Certified Financial Planner. He is the Founder and Director of Holistic Investment Planners (www.holisticinvestment.in) a firm that offers Financial Planning and Wealth Management. He can be reached at ramalingam@holisticinvestment.in.)
image source 

Thursday, August 4, 2011

Mutual Fund SIP: for Short term or Long term?

It may look very strange when everyone is advocating Mutual Fund Sip for long term, what is the necessity for this debate on ‘Is Mutual Fund SIP for Short term or long term?’.

Theoretically doing a Mutual fund SIP for long term will work for investors. But for practical reasons we need to commit a Mutual Fund SIP for short term. That is we need to break that long term into many 6 months or 1 year periods and commit your Mutual Fund SIP for first 6 month or 1 year.

Then at the end of 6 month or 1 year renew your SIP for another 6 month or 1 year. You need to renew like this till you complete your predetermined long term period.

You may think it is an unnecessary paperwork and waste of time. But you will be completely convinced when you have finished reading this article.

Contribution towards Mutual Fund SIP Changes:
How much you are contributing towards Mutual Fund SIP changes over a period of time.

Ø  At the beginning of a career a person will be able to commit Mutual Fund SIP for small sum of amount. As he progresses in his career, he or she will be able to increase his contribution towards Mutual Fund SIP.
Ø  Similarly, when someone reaches a stage where he need to spend more on kid’s higher education, daughter’s wedding, buying a house or meeting a major financial commitment, it is difficult for him to continue the same amount of Mutual Fund SIP contribution.
Ø  So whenever you renew your Mutual Fund SIP at the end of 6 month or 1 year, you can look at your cash flow position and based on that you can renew the Mutual Fund SIP for the increased amount or the same amount or the reduced amount.

Portfolio Review:
Also it gives you a chance to review your portfolio with your advisor once in 6 months or 1 year.

Ø  The scheme which you have chosen for Mutual Fund SIP is performing well when compared to its peers or not? You need to review this periodically. The scheme may turn out to be a laggard.
Ø  The scheme may be performing well when you have chosen for doing SIP. But over a period of time, it could have derailed from its performance. This is something like our cricket players. They will be in a good form in the game for some period of time. Then they will lose their form after sometime. So you need to periodically check up whether the fund is performing NOW or not.
Ø  If you are committing a Mutual Fund SIP for 10 years, then the advisor may not be coming back to you whenever you call him for reviewing your portfolio. If you commit for 6 months or 1 year he or she will be definitely coming to you for renewing the Mutual Fund SIP. You can have a review with him or her at that time.
When you commit Mutual fund SIP for long term, generally we ignore to review it. It may generate poor returns. You can avoid this by periodic review.

Equity Exposure in Overall Portfolio:
How much equity exposure you can give to your overall portfolio can change the amount of Mutual Fund SIP in equity and debt.

Ø  As the age goes up, your ability to take risk comes down. So you need to change your equity mutual fund SIP contribution periodically.
Ø  How close or distant you are to achieve your financial goals will also decide your equity exposure. If you have got long period to achieve your financial goal then you can have more equity exposure. When you have short period to achieve your financial goal, then you need to reduce your equity exposure.
Ø  Rebalancing your portfolio based on your predetermined asset allocation will also decide your equity exposure.

All this can change your Mutual Fund SIP amount in equity funds.

So committing a Mutual Fund SIP for long term looks good on paper. For practical reasons we need to commit for short term and renew it at the end of every short term till achieving our financial goals.

In this regard, instead of committing a Mutual Fund SIP just like that, having a long term financial plan and committing Mutual Fund SIP based on that plan will be really fruitful. This will make a solid difference in achieving your financial goals.

(The author is Ramalingam K, an MBA (Finance) and Certified Financial Planner. He is the Founder and Director of Holistic Investment Planners (www.holisticinvestment.in) a firm that offers Financial Planning and Wealth Management. He can be reached at ramalingam@holisticinvestment.in. )

Wednesday, August 3, 2011

Maxximo Minivan TVC

Mahindra's answer to Tata Magic - Maxximo Minivan. M&M foreseen tremendous potential in the commercial people-mover market in India and thus Minivan was born. The market had only one commercial 4-wheeler (LTV) offering - Tata's Magic. Rest of the market was capitalized by Force's Cruiser, Trux, etc. The effort has bear fruit and Mahindra has already sold more than 1900 Minivan's in July itself.

The new television campaign is to highlight the better looks, wider space and extra comfort. The creative is simple and plain. The space is well highlighted by using school kids in the ad.

Tuesday, August 2, 2011

Indian Car Sales Figures - July 2011

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