Attitude is Altitude

Got Insurance? Get it now !!

Insurance is not an investment. Basically, Insurance financially secures your dependant or yourself when something unfortunate happens to you or your assets respectively.

Major types of insurance you should consider....

What?	Life Insurance	Health Insurance	Auto Insurance	Mortgage Insurance
Why?	Financial security for your dependant after you	Financial assistance on major medical expense	Financial assistance to handle accidental damages on your automobile	Saving your dependant from any of your outstanding loan liability after you
Where?	General Insurance provider (LIC, SBI, ICICI, HDFC, TAT AIG, ING VYASYA)	Insurer with good hospital coverage near your area	Bajaj Capital, Oriental etc. First few months along with auto purchase	Most Housing Loan provider has type with Insurer with additional premium
When?	Start early for lower premium	At least start before age 30	On Auto Purchase	On Large Loan ie. Housing Loan
How Much?	100 x Monthly Income	Yearly Income	On actual damage (All damages are NOT covered)	Equal to outstanding loan
How Long?	Long Term or Whole Life	Whole Life	5-10 yrs	Outstanding Loan period
What more?	Endowment, Accidental death benefit, Annuity, Disability Income, Dividend Options	Cashless payment, Hospitalization income benefit	-	-

Simple Steps to get Insurance

Quick Guide: Investment Options in India

Here is quick guide to supplement my previous post on Investment options in India.

Bank FDs	Average Gain (annual) 7-8%	Key Points Slow and Steady
FMPs	6-9%	Slow and Steady
Debt Funds	7%	Slow and Steady
Post Office Schemes	6.5-8%	Tax,
PPF	8.00%	Tax, Long term
NSC	8%	Tax, Medium term
Equity	15-20%	Risky, Need market knowledge
Mutual Funds	10-15%	Risky, SIP, For everybody
ELSS	10-15%	Tax, Market linked
Balance Funds	10%	Moderate, Market linked
ULIP	10%	Tax, Insurance
Moneyback/ Endowment plans	5-6.5%	Tax, Insurance, Cash Value
Real Estate	5-15%	Long term, larger capital
Commodities	5-15%	Cyclical, Hedging inflation
Gold	5-10%	High, Hedging inflation
LEGENDS
- High Risk
- Moderate
- Low Risk

Effective Advertising - Danger of Using Mobile phone while driving

Web address in indian languages soon..

Domain Name,’ the unique identity to access the web, currently only with Latin characters, will be introduced in Indian languages in India by June 2010.

C-DAC, GIST, P7une, in close association with DIT and with contributions from C-DAC Kolkata and Thiruvananthapuram have evolved a policy document for International Domain Names in Indian languages.

Over three years, out of 22 scheduled Indian languages, work on 14 major languages has been completed. The remaining eight languages would be taken up soon

The awareness workshop for availability of domain names in Indian languages, was an effort of the DIT, Govt of India, C-DAC (Centre for Development of Advances Computing) and NIXI (National Internet Exchange of India - the designated registry in Domain Names.

However, the fact remains the majority of keyboards are not designed to input local languages. So it would be interesting to see how this development is successful in converting "Non users" to internet users.

What you do with your extra money? Investment Options in India

Here I'm presenting consolidated list of investment options in india. Actual allocation of funds should depend on your short/long-term cash needs.

Typically when you are young and have steady savings, you can afford to take more risk intern maximize your gain and later part of your life reduce risk and focus on steady gain.

Bank FDs

• Very low risk and low liquidity.
• Low returns, but assured. Depending on the tenure and bank, could be around 6-9%
• Since returns are fully taxable, the post-tax returns will be still lower.
• Good for very low risk investors and those in the nil or low tax brackets. As interest rate scenario seems to be peaking, one could consider investing in 3-5 year FDs.
  

FMPs

• Low risk and low Liquidity.
• No assured returns but depending on tenure and the MF, could be around 6-9%. (Ability to deliver the indicative returns).
• MFs attract much lower taxation and hence give better post-tax returns vis-à-vis Bank FDs.
• Good for low risk investors, but in high tax brackets. Good for investing the debt portion of one’s portfolio.
  

Floating Rate Funds

• Low risk and high liquidity.
• Market linked. Today could be around 5-7%.
• Lower taxation of MFs makes Floating Rate funds attractive.
• Good for investing short-term money where one needs higher liquidity.
  

Debt Funds

• Low to Medium risk. High Liquidity.
• Returns are market-linked. Today could be around 5-7%, but susceptible to interest rate risk.
• Lower taxation of MFs makes such funds attractive.
• Can be avoided in a rising interest rate scenario but is good in a falling interest rate scenario.
  

Post Office Schemes

• Low risk and low Liquidity.
• MIS scheme give 8% interest. Time deposit 6.25-7.5%.
• Since returns are taxable, the post-tax returns will be still lower.
• Good for very low risk investors and those in the nil or low tax brackets.
  

PPF

• Low risk with very low liquidity (15-year lock-in period. Partial withdrawal allowed after 6 years).
• 8% assured returns. Interest is tax-free. Also Sec 80C benefit. Hence a good scheme.
• Good tax saving investment option. Good for investing the debt portion of one’s portfolio.
  

NSC

• Low risk with low liquidity (6 years lock-in).
• 8% assured returns.
• Interest fully taxable. But eligible for Sec 80C benefit.
• Not very attractive vis-à-vis other options like 5-year Bank FDs.
  

Equity

• High risk and high liquidity.
• Market linked returns. Good potential.
• Attractive tax treatment. No Long Term (investment of more than 1 year) Capital Gain Tax and 10% Short Term Capital Gains Tax.
• Needs high risk appetite. Ideal for those investors who have a good corpus, good knowledge and time to track the markets regularly. Care should be taken to invest in good profit making companies. Penny stocks should be avoided.
  

Equity Funds

• High risk and high liquidity in open-ended funds.
• Market linked returns. Good potential.
• Attractive tax treatment. No Long Term Capital Gain Tax and 10% Short Term Capital Gains Tax.
• Ideal for small and common investors, but with high risk appetite. SIP and a long term investment horizon can cut down risk and increase the probability of making good returns. Ideally, one should build a well-diversified portfolio with say 40-50% money in 5-7 diversified funds (large cap oriented), 20-30% money in 3-4 mid/small-cap funds, 10-15% in 3-4 sector funds and 10-20% in balanced funds.
  

ELSS Funds

• High risk with low liquidity (3 years lock-in period).
• Market linked returns. Good potential.
• Attractive tax treatment. No Long Term Capital Gain Tax and 10% Short Term Capital Gains Tax. Also Sec 80C benefit.
• Good tax saving investment option. Amounts beyond Rs.1 lakh limit could be invested in open-ended funds. SIP in ELSS would reduce the volatility risk.
  

Balanced Funds

• Medium to High risk. High Liquidity.
• Medium to high returns. Market linked.
• Attractive tax treatment. No Long Term Capital Gain Tax and 10% Short Term Capital Gains Tax.
• Though convenient as both debt and equity investment is covered under one fund, it may be better to invest separately in equity and debt funds for better control.

ULIPs

• Low to High Risk depending on the investment option i.e. Pure Debt or Mixed or Pure Equity. Low Liquidity (3-5 years lock-in period).
• Low to high depending on the investment option. Market linked returns.
• Tax free returns.Allso Sec 80 C benefit available.
• Not an attractive option due to high charges, low flexibility and low diversification. There are other better similar investment products like MFs with low charges, high flexibility and high diversification. As regards life cover, the same could be done through a term policy.

Endowment/Moneyback Plan

• Low risk and very low liquidity
• Low returns. Generally around 6-6.5%.
• Tax free returns. Also Sec 80 C benefit available.
• Not an attractive option due to low returns. There are other better similar investment products like PPF. As regards life cover, the same could be done through a term policy.

Real Estate

• Variable risk and variable liquidity depending on the type and location of property.
• Market linked returns. Good potential.
• No tax advantages, except attractive tax benefits on the home loans.
• High initial investment required which could make one’s portfolio lopsided; high transactions costs like title-search, registration brokerage etc.; and cannot be partly liquidated. Therefore, real-estate MFs (expected in the near future) may be a better alternative than direct property investment. If investing directly, it is important to assess the potential and clear title.

Commodities

• High risk with high liquidity.
• Market linked returns.
• No tax advantages.
• Highly cyclical.

Gold

• Low long-term risk. But volatile in short term. High Liquidity.
• Has traditionally been a hedge against inflation. So returns could be around inflation levels.
• No tax advantages.
• Not an attractive investment option. Can be used for portfolio diversification to partly hedge against inflation. Gold MFs are better than buying physical gold

Happy Investing !!

Keep your mobile no., dump your service provide at just Rs19

Did you ever want to change your mobile service provider (for poor service, better tariff) , but were reluctant to change your no.?

Jan 2010 is when mobile world will turn truly democratic.

The country is set to introduce mobile number portability (MNP) on December 31. MNP allows the subscribers to retain their existing mobile telephone number even as they move from one access provider to another. This move is irrespective of the mobile technology or from one cellular mobile technology to another of the same access provider, in a licensed service area. In other words, the consumer can switch from CDMA to GSM.