Savings

Facts Of Retirement

Having a peaceful life after retirement is a dream everyone wish to have right? Retirement could have multiple meanings depending on person to person. For a few it might relate to travel and explore places with their family members or for others it may be starting a new business or any other Retirement goal of that matter. For all these goals you wish to accomplish- Let’s have a look on a few surprising facts about retirement. Successful retirement planning requires consistent savings to provide for a time when income is no longer generated from your job. Seniors aged 75 and above spend a lot time seeing TV, on average about 5 hours a day. You’ll still pay (some) income tax in retirement Many people are not confident that retirement will be comfortable Many people have little or no r...

Portfolio and your retirement lifestyle

Portfolios are usually constructed based on the individual’s investment objectives, the risk tolerance and the time horizon. Investors can feel confident that they own a well-diversified portfolio but only if they use these inputs and portfolio optimization calculations, so that they pursue their long term goals. As a retiree, your retirement goals play a major role in building your portfolio. Starting a business? If retirement funds are used to start a business it entails your risk. You might want to consider reducing risk levels of your investment portfolio to compensate for risks for a new business venture. Of course a new business cannot generate income right away and hence you might want to construct a portfolio which is income oriented and provide you for your current income till the...

Women and retirement

Many women are the primary breadwinner in their house but yet just a few are confident in their ability to fully retire with a lifestyle of their comfort. When it comes to retirement, women may even leave their future to chance. College: The reason behind difference is not lack of education or independence. In fact more than men, women go to colleges and graduate. So why are they away from taking charge of their long-term financial picture? It may be due to lack of confidence. Only a few women say that they are confident enough when they talk about money and finances with advisors and professionals. Women may step back from discussing about retirement as they feel that they shall appear uneducated or naïve and hence hesitates to ask questions. Facts of women and retirement- Women are almos...

Ever Heard Of This Investment Risk?

Investors are aware that investing in capital markets may present any number of risks such as Interest rate risks, company risk, market risk etc. Risk is not a separable companion for long-term growth. Some of the risks can be mitigated by the method of diversification. Also you may face another less known risk as an investor for which neither the market compensate you nor can it easily be reduced by diversification.  Yet it might be the biggest challenge to the sustainability of your retirement income. This risk is called the SEQUENCE OF RETURNS RISK. The uncertainty of the order of returns which an investor shall receive over a period of time refers to sequence of returns risk. “Never try to walk across a river just because it has an average depth of four feet”. For an example- say a mar...

How to Double Your Investment?

There’s something that intrigues most investors by the idea of doubling one’s money. Doubling your money is a realistic goal that investors must always be moving towards, as well as something that can lure people into impulsive mistakes regarding investing. Here we shall look at the right and the wrong ways to invest for huge returns. THE SUPERIOR WAY- EARN IT SLOWLY To double your money, the most tested way over a reasonable time is to invest your money in a solid, non-speculative portfolio that diversifies between investment grade bonds and blue chip stocks. The portfolio won’t get doubled in a year, but will surely do eventually. The old rule of 72 helps you calculate the time it would take for your investment to get doubled if its growth compound itself. According to rule 72 you got to...

How can Diversification Help you?

Diversification is an important mean to manage risk. But, it does not guarantee against a loss. The key is to identify investments that perform different under various market conditions. It will be diversified between bonds, stocks and cash alternatives. How diversification works For an instance, say a stock portfolio included a mechanics company, a car manufacturer and a diesel service firm. Here, even though the portfolio has spread risks it may not be considered as a good diversified portfolio as all of them are connected to one Mechanical industry. So, switch to different portfolios such as a mechanics company, a computer company and a drug manufacturer. The concept of diversification is one reason as to why mutual funds are so popular among the investors. Ways to diversify your invest...

Retirement Income & the Conventional Portfolio

Experiencing negative returns early in retirement could deplete your portfolio quickly. For this, you might want a couple of strategies to help mitigate this concern. LIQUID ASSETS It is required to have a pool of very liquid assets to fund two-to-three years of retirement spending which could help you from selling long term assets at an inopportune time. Through time, and depending on market conditions, you might have the opportunity to replenish this cash reserve using gains from your retirement portfolio ANNUITIES Another complementary strategy is to integrate annuities. This could help you to shift the risk of market volatility off your shoulders. The guarantees of an annuity contract depend on the issuing company’s claims-paying ability. Annuities have contract limitations, charges &a...

Plan well for your Child’s Education

In earlier 90’s the fee for children’s education was in thousands and today it’s not the same. The fee structure for children’s education is so high that it could make you worry for your child’s educational future. Planning now for your child’s education can reduce the anxiety you will face when time comes to dish out the money. It would be your little ones dream to get educated in institutions of their choice & also pursue higher level degrees, but making sure they can afford the education is your job. Your planning shall be all according to the following things below-  Today, the fees is near to 2 lakhs for a B.com degree, above 10 lakhs for engineering etc. 10-15 years from now the educational fee will be much more higher. Let’s have a look on some approximate costs of a few of repu...

Your Emergency Fund- Is It enough?

Have you ever experienced one of those days wherein the water heater stops heating, dishwasher stops washing & your family ends up on a first-name basis with the nurse at urgent care. Then, as you are driving to work you see smoke seeping out from under your hood. Bad things happen to the best of us, & instead of spacing themselves out, they almost always come in waves. It is important to have a financial life preserver, in form of an emergency cash fund. Many people know that an emergency fund is an important resource but at the same time they area nit sure about how much to save or where to keep the money. Others wonder how they can find any extra cash to sock away. HOW MUCH MONEY? How much is enough to set a target amount for starting an emergency fund?  Unfortunately, there is ...

How Do You Choose The Right Mutual Fund?

  Saving and Investment for future security is at most important for each and every individual. For several people, busy lifestyle and lack of proper information might create a problem in selecting the right investment product. Mutual funds help you to get out of this hindrance. Mutual funds provide skilled investment management for people at a reasonable value. Here are a few tips for selecting mutual funds: Fund house: You need to choose a fund house on which you’ve got enough faith to invest your money and not adjust in a scheme of your choice. Identify fund houses that have a powerful presence within the financial world and provide funds that have consistent record.   Achieve goals of investment: Investments are made in such a way that it makes sure your savings enhance your ...

Start Small and Grow Big

Dream Big, Start Small, Stay Focused and Keep Going Forward Ever thought of saving from your salary? Ever managed to do it? If not, here is a plan for you to develop the habit of saving and investment – SAVE INSURE INVEST !! Let’s start small – Rs.500 It is an amount you can save easily and get started with investing. Rs.500 is the minimum amount to start an SIP(systematic investment plan). Start investing Start investing in an SIP with a debt mutual fund as it let’s you withdraw the amount at a day’s notice and also provides better returns if the money is left dol in your savings account. Stay invested regularly Set a fixed date for an SIP every month so that you don’t end up spending money. Keep the process on for about 6 months to 1 year and later sta...

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