Ready - Set - Go! Make the Right Start This New FY
Ready - Set - Go! Make the Right Start This New FY.
Congratulations! You have made it to the new financial year! Amidst covid waves, new variants, wars, market volatility, last-minute tax planning & ITR filings, the past financial year was surely one bumpy ride. But now that the dust of the previous year is all set on your end, it's time to start fresh!
Read More...
Aren't we all looking forward to that big number? Incentive/Bonus is something many of us would be getting at this point in time. Most of us have even set our minds on things to buy or places to go. While all that is good, we should not lose sight of our long-term goals in life. We need to be sure of how much to invest out of this bonus! Using the bonus strategically and with good consideration to your financial situation is what is recommended. The bonus can be used in multiple ways like - wiping off your credit card bills, partial or full pre-payment of your high-cost loans, investing for a life goal like retirement, education for children, buying a home, etc. Personal expenses like buying gadgets & consumer goods, new bikes or cars, gifting family, holidays and such things should ideally come after a serious thought is given to the things mentioned above. All in all, you should make the most out of your bonus. After a year of hard work, you deserve to spend on your desires. Just make sure that there is a proper balance in the allocation of the bonus, to not let this opportunity go to waste.
With all your affairs wrapped up for the previous year, it's the best time to look at the bigger picture and find out exactly where you stand. Make a list of all your assets & debts to get a bird's eye view of your current financial situation. It can be pretty easy to lose track of accounts, credit cards, and statements of other financial products. With all the details in front of you on paper, you can evaluate and understand your financial situation in a better way.
Once you have the picture in front of you, you need to ask certain questions:

  • What has changed in the past year?
  • How much have you earned, spent and invested in the past year?
  • What are pain areas i.e. high-cost debts which you need to wipe off?
  • What change do you wish to see at the end of this year?
Re-evaluation of goals is yet another necessary thing. Make sure you revise your financial goals and the investments planned for the same. You may ask questions like:
  • Are there any new goals you need to add and/or old ones to remove?
  • Is there any change in the target amount and maturity date of the existing goals?
  • Is there any significant change in your life that needs to be addressed in your financial plan?
  • Is proper investment mapping /allocation done for your goals as per priority?
Your financial plan covering important aspects like life goals, investment/portfolio planning, insurance or protection and taxation, is the core element of your financial well-being. It lays down the path that you need to pursue to live a financially secured life. The start of the new year is just the right time to reassess your financial plan.
Why leave out your investment portfolio? With high market volatility just behind us, perhaps you should check your existing vs target asset allocation, to see if there is any change required in the same. Ask questions like:-
  • What should be your target asset allocation? What is your current asset allocation on the entire investment portfolio? Is it optimum for your profile?
  • What post-tax, real returns (net of inflation) can you expect to get on the investments and also the entire portfolio?
  • How much are you saving from your earnings? How much more can you save this year?
While considering your investments, please do not forget to consider investments in bank FDs, small savings, PPF, gold and even real estate, to get a fair picture of your entire portfolio made with the objective of investment. If you are expecting increments & promotions, make sure that you also increase your SIP amount. The increase ideally should at least match the inflation figures just to make sure that you are saving the same "value" of money as you did last year, not even accounting for the change in your status /ambitions. Sit with your financial products' distributor /advisor if needed and update your portfolio to make it in sync with the new realities.
Many things may have changed over the years. That is why it is imperative to reassess your insurance needs. See what changes you need in your insurance portfolio. Make sure that you have adequate coverage with term insurance, health insurance, critical illness and personal accident insurance. These are the must-haves in your portfolio in addition to motor insurance which is mandated by law. If your lifestyle, financial status and/or family composition have changed in the past year, you can increase your coverage and/or buy additional policies to stay updated.
A last-minute tax-saving rush wouldn't be far from your mind if you did your taxes up-to-the-minute this time and made last-minute financial decisions. Doing your tax planning in the months of February and March is now an old fashion and not good also, as it may reflect on the quality of your decisions. The better thing to do is to make sure you have it planned at the start of the year. You may have a fair idea of your spending on things like provident fund, life insurance, etc to know how much balance of 80C you need to save. The simplest and most often recommended thing to do is to start a SIP in Mutual Fund ELSS schemes towards your 80C deductions. SIPs will make sure that you make the most of the market volatility throughout the year. Do quick planning for other important sections as well to make the most of it.
A work well begun is half done! This new FY is an opportunity to start fresh. Let us commit ourselves to making significant improvements in our financial well-being this year, after the past couple of challenging years. Let us go back to the basics, stick to boring things that actually work over the long term, fortify our finances and implement the learnings of the past in our financial planning. Let us hope and work towards making the most out of FY 2022-23.
Wishing you a Prosperous New Financial Year!
NJ E-wealth
Why Are We Not Saving For Retirement?
Why Are We Not Saving For Retirement?
Various experts have emphasized the need for retirement planning time and time again. It is regarded as a "High Priority Item" for those who intend to continue their existing lifestyle after they retire. Despite the importance and criticality, most people let this important planning slide down their priority list, and in some cases, it even drifts off the list. The main reason for this is that the relevance of retirement planning is yet to be comprehended and understood in a society like ours. Life goals, culture, savings behaviour, family dynamics and lifestyle are some of the variables that often lead to procrastination in making this decision. The end result - you are left with little at the time of retirement and are at the mercy of your family.
The need for retirement planning arises simply because of four reasons
  • (a) Loss of income / earning ability post-retirement.
  • (b) Increased life expectancy
  • (c) Lack of adequate social infrastructure & support
  • (d) The need to have a financially independent & dignified retirement life
An increase in the average life expectancy increases the need for retirement planning. So if your retirement age is say 60, you are looking at easily 20+ years of post-retirement life for a life expectancy of 80+ years. This period is too long to ignore and even scary for many. For employees, the accumulated pension & gratuity is most often spent on things like buying a house, settling children with higher education/ marriage/business, and so on. Often, little is left to continue the same pre-retirement lifestyle even after retirement. Plus with age, health care costs also skyrocket. It is also often seen that children stay away from parents for better career opportunities and also due to the nuclear family trend. All these factors make retirement planning perhaps the most critical decision of your life. Retirement planning is a must. Period.
While there are no formal numbers, there have been many studies /surveys that highlight the sad reality of retirement planning in India. One of the surveys pointed out that nine out of ten 'urban' Indians worried about savings not lasting through retirement and that 80% of Indians were not ready for retirement. Another survey pointed out that half of the Indians do not have any retirement plans. The survey also found that people are worried about the cost of living, healthcare issues and the lack of family support in future. It was also found that children's needs and the security of the family take precedence over all else and that one in four of the respondents dreads the idea of being dependent on children or families in old age.
Despite people knowing the need for retirement planning, very few adequately save for it. We have compiled a list of the reasons or excuses why people do not plan for retirement.
As a society and culture, Indians, unlike western societies, have always worked hard to support their children with education costs, marriage expenses and overall settled life. Whatever little we have, we would first prioritize saving it for the goals related to children, then home & family and so on. Retirement planning, unfortunately, and sadly, is ranked very low in priority.
There are a few things one can realize here. First, higher education can even be done by taking student loans, should your child be deserving to get admission to any reputed domestic or foreign university. Secondly, unless you want to splurge on marriage for your son/daughter for your own reputation, marriage should not be a big burden. Further, shouldn't children share the financial responsibility of their marriage? After all, it's an important life goal and event for them too and they should at least contribute some part of it. For a change, marriages should be as per the status of the bride and groom and not of their parents. Days of dowry too are gone and today educated, working and successful women can take responsibility for their marriage expenses. Instead of saving for dowry, one should spend on educating their daughters.
A fair argument can be made that little is available to save towards retirement after all expenses and savings for other life goals. But this only means that the future will be much more financially challenging for you. We can only say here that saving for retirement as early as possible, right after you start earning, no matter how small, will go a long way due to the power of compounding. The best time to start saving was then, the next best is today. What's important here is to start saving and then slowly let it grow.
Another aspect here is investible surplus or savings. If you do not have adequate savings, your entire financial well-being is in question. A perplexing financial position can be frustrating and burdensome, but doing nothing about it will not make it any better. In reality, it's the time to sort things out and make actual efforts to untangle the mess. Perhaps it would be the right time to sit at the table with your financial expert who can assist you in evaluating and comprehending your entire financial picture, as well as developing a plan to clean up the mess and make it work for you.
Many people live with the notion that they still have a lot of time left for retirement and thus they plan for other things. Often, this mindset takes you from "too soon" to "too late, while you were busy with other things like marriage, home, car, career, children and so on. Most of us would end up here unless we do something today. Remember, the later you start planning for retirement, the greater the financial burden of accumulating a larger sum for retirement. So don't put it off any longer; begin planning today!
There are certainly a few who think that their retirement is well taken care of. They assume that they have sufficient savings to last them into their retirement years. Unless one has a guaranteed alternate source of income, we can never be sure. There is a lot of uncertainty out there, as we have seen through the pandemic and current war. We can never be sure of what the future holds. So, even if you feel you have saved enough for all the expenses, health care costs, aspirations, retail inflation, economic uncertainty, unpredictable events and so on, we suggest you still save more for retirement if you can.
"Don't simply retire from something. Have something for retirement as well!"
The most effective retirement tool is time. If you have adequate time left, there is little to worry about, provided that you do not procrastinate/delay retirement planning any further. If you are out of time, then you need to sit down and work on the math. Divert a significant amount of your efforts and resources to make sure that your retirement, along with that of your spouse is not compromised any further. There is a sound reason to balance goals for your children and those for yourself too, given the social trends before us. Explore things like creating alternative sources of income, delaying retirement, selling off your second home to fund your retirement kitty and so on. We would suggest that you seek guidance from a financial expert to discuss this further.
NJ E-wealth
Six Must-Have Insurance Policies To Cover This Year
Six Must-Have Insurance Policies To Cover This Year
2020-2022! This period has taught us a lot of valuable financial lessons & the importance of having insurance is one of them. Be it the unpredictable lives we lead or the risks of medical emergencies & accidents! In today's modern times, we can't say what will happen in the next hour or day! And that's why it's necessary to have all the suitable insurance covers to protect yourself, your family, and your assets during uncertain times of distress. People nowadays have started considering insurance as a safety net that protects them from financial troubles on rainy days.
Read More...
Every earning individual with dependents should carry this coverage. With growing uncertainties surrounding our lives given our lifestyles and in light of the recent pandemic, the importance of having adequate financial support and stability can be felt deeply in the absence of the bread earner. Moreover, the extent of financial comfort and stability possible with a pure term plan is unmatched. A cover of Rs.50 lakhs is the bare minimum one must have today to give comfort to the family. However, the targeted cover amount should be at least ten times your annual income plus all outstanding liabilities. Ideally, one should aim to cover outstanding liabilities, household expenses for required years and important life goals like education & marriage of children.
While buying a life insurance cover, ensure that you get cover for the maximum years possible. Further, ensure that you disclose all the relevant information honestly and undergo necessary medical examinations. A yearly premium frequency can be taken to avoid the chances of delays /non-payment in monthly /quarterly frequencies.
With medical inflation running in double digits, health care coverage is the need of the day. Our current sedentary lifestyle of stress, traveling, long working hours and unhealthy eating habits, make us very susceptible to illnesses. Often such medical emergencies are unforeseen and may create a financial crisis for you and your family. Taking a comprehensive health plan can help you cover the costs of treatment, hospitalization and other medical procedures. Health insurance safeguards you against the monetary impact and the stress that accompanies illness /disease. Currently, the minimum sum insured must be at least Rs 5 lakh to Rs 10 lakh, taking into account the expected quality of medical care and the city you live in.
While buying health insurance, you may also consider floater plans to cover the entire family. It is also good to opt for a complete cashless plan & keep insurance cards handy. Make sure that you keep an eye out for exclusions and inclusions in the policy before deciding anything and undergo medical tests if required. It is better to buy personal health insurance cover, even if you are covered by your employer.
Accidents don't occur only on the streets. It may happen anywhere, even at home. One careless step can blow out your finances. Your healthcare spending increases as you undergo treatment and your income stream gets disrupted until you get better. That's where accident insurance plays a crucial role. This insurance basically covers the risk of death or disability, either temporary or permanent, caused by an accident. The best part is that it is the cheapest cover for self-protection and can be taken even by those whose income is low or the ones who cannot qualify for life insurance due to medical issues.
While buying a personal accident policy, make sure to opt for the highest comprehensive cover that you can get and also afford.
Most people think having a health plan is enough but they don't consider the fact that there are some serious diseases that require special attention. A critical illness insurance policy helps you to handle expenses related to life-threatening diseases such as cancer, heart attack, stroke, Parkinson's disease, paralysis, liver disorders, kidney failure, and so on. These can cause prolonged financial chaos for a stretched period of time.
Critical illness plans are generally available as a benefit plan, which means you can get the sum insured as a lump sum payment upon diagnosis of the illness, irrespective of any expenditure made. Critical illness policies are also available as riders with life & health insurance policies but a standalone policy is always a better choice. While buying this policy, make sure that you look for wider coverage and a shorter waiting period.
Your own home is your most prized possession and something that takes years to set. However, most people are unaware about home insurance policies. Should you not consider insuring your house, including the valuable possessions you have at home? You have the flexibility to cover the building/structure and contents like furniture, appliances, jewelry, etc. You can also choose a comprehensive policy covering both. A good home insurance policy will protect your home and valuables from risks like natural calamities, burglary and theft, fire/water damage and others. The best part is that home insurance is very affordable. While buying home insurance, make sure that you have comprehensive coverage and you list out all possessions, backed with necessary documents.
As most of us know, having third-party liability insurance is mandatory in India. What most of us are not aware of is that third-party insurance only protects the owner against legal liability arising from an accident causing any permanent injury or death to the third party. It doesn't cover the repair expense of the damages caused to the car or your suffering due to the injuries. Therefore, in order to drive stress-free, one must have a comprehensive motor insurance policy that covers both, your damages as well as third party liability.
Most of us would already have a motor insurance policy but the next time you are looking for a comprehensive cover, explore the additional riders and discounts available. You may explore riders like engine protection, roadside assistance, zero depreciation, vehicle replacement, consumables, etc. Make sure that you also do not miss out on your no-claim bonus (NCB).
Securing your financial well-being is of utmost importance. One unfortunate event can cripple the entire family and wipe out savings of years. Lack of financial resources should also not restrict you from choosing the best quality of medical intervention required. Adequate coverage for the D's of life - Death, Disease and Disability is a must for everyone. The beginning of your new year presents an opportunity for you to review your insurance portfolio and get adequately secured for the unseen future. Sit down with your insurance advisor and discuss how best you can ensure ring-fencing your wealth and also, peace of mind.
loans
  1. Aadhar based Mandate
  2. E-mandate (Net banking / Debit card)
  3. Physical Scan Mandate
Fund Manager INTERVIEW
patner Interview
Mr. Harish Krishnan
Sr. Vice President & Fund Manager
Mr. Harish Krishnan is a CFA, PGDBM (IIM Kozhikode) , B.Tech (Electronics & Communications). He has a has 16 years of experience spread over Equity Research and Fund Management. Prior to joining Kotak Mutual Fund, he was based out of Singapore and Dubai, managing Kotak's offshore funds. He has also worked at Infosys Technologies Ltd in his earlier stint. He is a Bachelor of Technology (Electronics & Communications) from Government Engineering College, Trichur, a post Graduate in Management from Indian Institute of Management, Kozhikode and a Chartered Financial Analyst from the CFA Institute.
Read More

Kotak Deepak Amrutlal (ARN-127784)
AMFI REGISTERED MUTUAL FUND DISTRIBUTOR

Deepak A Kotak
  • Retirement Assessment
  • Child Future Assessment
  • Portfolio Review
  • Mutual Fund:Debt / Equity / ELSS

"We have taken due care and caution in compilation of this E Newsletter. The information has been obtained from various reliable sources. However it does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions of the results obtained from the use of such information. Investors should seek proper financial advise regarding the appropriateness of investing in any of the schemes stated, discussed or recommended in this newsletter and should realise that the statements regarding future prospects may or may not realise. Mutual fund investments are subject to market risks. Please read the offer document carefully before investing. Past performance is for indicative purpose only and is not necessarily a guide to the future performance."

This Page is Best Viewed with Chrome Browsers