And its’ time to budget yourselves with Budget 2013-14

At the first glance, the budget this year may appear harmless to the middle class, but make no mistakes, it will bite the common man in more than one way. Of course, if you read the fine print! Let’s examine what some of the things he has given….

·         P. Chidambaram announced a tax credit of Rs 2,000 for persons with income up to Rs 5 lakh. He said, it will benefit 1.8 crore tax payers entailing a revenue sacrifice of Rs 3,600 crore.

·         Securities Transaction Tax on mutual fund redemptions reduced from .25 percent to .001 percent. In the equity futures segment, STT would be brought down to 0.01 per cent from 0.017 per cent. Little relief for those who invest in Mutual Funds and shares

·         First home loan from a bank or housing finance corporation upto Rs. 25 lakh entitled to additional deduction of interest upto Rs. 1 Lac. Apart from the current deduction of 1 Lac 50 Thousand. Congrats to those who are yet to buy their first home!

·         Income limit for the tax-saving Rajiv Gandhi Equity Savings Scheme is raised to Rs. 12 Lacs from Rs. 10 Lacs. This benefit is now extended for 3 years from the current provision of 1 year. Good news for those who do not have a demat account or never traded in shares or bought mutual funds through a demat account.

Now, lets’ examine what all he  has taken away…

·         Buying a Nice House? Pay 1% more - Property transactions skewered; TDS of one percent where transaction exceeds Rs.50 lakh. Sorry, a nice home would now be little expensive!

·         Pay more to eat – As it will cost you 12% more due to service tax on all air conditioned restaurants regardless of whether or not they serve alcohol. Convince your family to have a good meal but at a non – air conditioned restaurant!

·         Nice way to recover the so called revenue sacrifice - Ten percent surcharge on income exceeding Rs.1 Crore (Rs.10 million/$180,000) a year; only 42,800 people have declared such income, very surprising! However, Chidambaram did a good job by trying to recover a decent portion of what he gave by way of Rs.2000 tax credit to 1.8 Crore tax payers.

·         Pay more to watch - Finance Minister has doubled the import duty on set-top boxes to 10 per cent making them costlier. The four metros are now compulsorily digitised for cable connections

·         Pay more to talk - smart phones or phones priced more than Rs.2,000 will now become pricier with the sharp rise in excise duty to 6 per cent from 1 per cent

·         Pay more to travel - Diesel will see a sustained rise in price if global oil prices do not retreat as the allocation made for fuel subsidy is also lower which means that the Centre is moving towards freeing prices of petroleum products. Remember, your rail travel has already become costlier courtesy the railway budget.

·         Pay more to cook – With freeing prices of petroleum products, the cooking gas might prices are set to rise..

·         No real savings – Effective tax saving of 6.47% for those who earn upto 5 Lacs as the FM has allowed a tax credit of Rs. 2000, but this is not real courtesy the growing inflation. To make it more effective, FM should have enhanced the Tax bracket instead of offering a paltry Rs. 2000. Let’s compare the personal Tax scenarios of current and next FY –

Individual	Income Level 500,000	Income Level 5,000,000	Income level 11,000,000
Tax for FY 2012-13	30,900	1,369,000	3,223,900
Tax for FY 2013-14	28,900	1,369,000	3,546,290
Effective Tax savings	2,000	Nil	NA
Effective Tax savings	6.47%	0.0%	NA
Additional Tax burden	NA	Nil	322,390
Additional Tax burden	NA	0.0%	10%

Therefore, whatever Chidambaram’s famous poet Thiruvalluvar says "Kalangathu Kanda Vinaikkan Thulangkathu Thookkang Kadinthu Seyal" (which means,"What clearly eye discerns as right, with steadfast will and mind unslumbering, that should man fulfil.") For Aam Aadmi it is a budget with some pain and hardly any gain

This article was also published in "Chatterpiller", the newsletter of Carma Connect
https://carmaconnect.in/newsletters/2013/03/17/finger-food-9/

Investors can now search for financial advisors through Advisorkhoj.com

AdvisorKhoj is a website that brings together investors, distributors and AMCs. Its founder Pradip Chakrabarty shares his plan on his new venture in an interview with Pallabika Ganguly. What is advisorkhoj.com? Advisorkhoj is an on-line directory to help investors locate financial advisors and distributors across the country. The idea is to create a one-stop portal where investors can search for all types of financial advisors such as investment advisors, insurance, tax planning, financial planning, shares and commodities, etc. The portal will help advisors to grow their clientele. The beta version of the portal has been launched and it will be fully operational in two weeks. The portal is our attempt to bring the three stake holders – investors, advisors and manufacturers, on to a single platform. The advisors can propagate and promote their business, manufacturers can showcase their concepts and products and investors can avail these services and products through a credible financial advisor or distributors in their neighborhood. What prompted you to launch such portal? For the past few years, financial advisors are facing a lot of regulatory challenges. Moreover, the market has also been volatile for quite some time. Today media portrays, most of them as commission earning agents. Therefore, I felt the need to make it clear to media and investors that the little financial penetration that exists in the country is only due to the financial advisors. So, I launched a website which showcases the expertise of licensed financial advisors. How will it benefit distributors? This is the only virtual platform that is meant to help distributors to reach masses. By listing on the site, distributors benefit in several ways: Advisors can list complete range of services offered by them, like from preparing PAN Cards to financial planning, will writing and so on. In addition, advisors can talk about their services and list their achievements in their‘bio page’ for the investors to see. Most importantly, it will create a ‘pull’ as the investor will search the advisors and seek their services. What is your business model? Our business model is based on subscription fee. The basic registration ‘Madhyam’ service is free for advisors where an advisor can display his education qualifications, experience, team size and office photograph.  But advisors can only get access to investor’s contact details as well as upgrade their profile by adding investor’s experience video by availing any of the three paid service – ‘Uttam’ for Rs 499 per annum (p.a), ‘Atyuttam’ for Rs 1499 p.a. and ‘Sarvottam’ for Rs 4999 p.a. Each level of subscription will entitle the advisor to a different set of value added services. How can advisors register on the portal? Advisors can register themselves in three ways: Online registration – advisors can go to our portal – www.advisorkhoj.com and register online. For mutual fund advisors a special link has been created… the moment a mutual fund advisor enters his/her ARN No. a verification code will be sent to his/her mobile. The advisor only needs to enter the verification code and he/she is registered! Telephonic registration - financial advisors can call on 08880009939 or give ‘missed call’ on our helpline number 08067730036 and our call centre team will get in touch with them and help them to register on our portal. Write to us with their complete profile details at register@advisorkhoj.com How will it benefit investors? Oh, that’s a really a good question and I would like to show you certain statistics. Google analytics show that more than half million Indians, on a monthly basis, search for advisors who offer investment products, tax advice, financial planning, mutual funds and other financial products. But, investors end-up seeing links of some Indian banks or large corporate distributor, offices of mutual fund and insurance companies. Hardly any IFAs contact details are visible in the search results. Our aim is to bring the portal on the first page of such searches so that all advisor contacts are easily available to investors. Investors get to choose advisors and compare advisors on the basis of experience, awards and qualifications. Investor can also post their queries which will be answered by our expert advisors.  To connect to the advisor the investor can do a City, area and the service or a product based search for the best results. Our administrative team will help the investor to instantly connect to specified advisors through sms and email. After availing the advisor’s service he/she can also rate and review the service provider. What are your other plans for advisorkhoj? Clearly, our plan is to bring all three stake holders on to one platform and our mission is to take financial advisors and distributors to the masses. This mission will not be accomplished unless we bring all the current active advisors (the number would be approx 500,000 across product and service categories) on our portal, enroll new set of advisors from B-15 cities and conduct investment awareness program in tier II and III cities and rural areas. Therefore, all our plans will revolve and evolve around these things apart from our plans to execute certain completely out of the box ideas.  When will the portal be operational? We have done a soft launch of the portal so that advisors can register from next week. Once we have registered advisors across one hundred cities, we will popularize the portal among investors.

Financial Must do’s in 2013

December 21, 2012, we all waited for the world to end. But fortunately or unfortunately the world still exists and so do we. We moved on, bid adieu to 2012 and welcomed 2013. Let us begin this year by marking out what is important to us financially.

 INCOME TAX – An alert to all those who have not filed their Income Tax return for the FY 2011-12. The last date is March 31, 2013. 

To calculate your tax liability log on to:http://law.incometaxindia.gov.in/DIT/Xtras/taxcalc.aspx.

While filing return also check whether you got refunds (if any) for the last FY 2010-11. If not, check the status here https://tin.tin.nsdl.com/oltas/refundstatuslogin.html

RGESS - This year brings to you the Rajiv Gandhi Equity Savings Scheme. New retail investors with annual income of Rs 10 lakh and below are eligible to claim a deduction of 50% on a maximum investment of Rs 50,000. Applicable for those who invest for the first time into equities, Exchange traded funds (ETFs) and Close Ended mutual funds listed on stock exchange and invested only in BSE 100, CNX 100 and blue chip public sector stocks. Shares of PSU firms categorised as Maharatna, Navratna or Miniratna by the central government will be eligible for RGESS. Follow on public offers and IPOs of PSUs will also be eligible (Under sub-section (1) of Section 80CCG of Income Tax Act 1961). Talk to your Tax Consultant to know more.

SIGN UP WITH EPF - It is necessary that you know more about your EPF (Employees’s Provident Fund) account now that it is online! Sign up by clicking http://www.epfindia.com/. This helps you know your current balance etc. thru one time mobile number registration.

CTS CHEQUES - It is time to get a check on your cheque. Cheque Truncation System (CTS), is a project undertaken by the Reserve Bank of India – RBI, for faster clearing of cheques. CTS is basically an online image-based cheque clearing system where cheque images and Magnetic Ink Character Recognition (MICR) data are captured at the collecting bank branch and transmitted electronically.

Based on the experience gained and the benefits that would accrue to the customers and banks, it was decided to implement CTS across the country. Starting April 1st, 2013 only CTS-2010 compliant cheques would be accepted for clearing. Check, whether your bank has sent you the CTS compiled cheques. 

Read more on http://www.facebook.com/pages/Advisorkhojcom/549617321720586

UNIFORM KYC - Effective 1st Jan12, the Market regulator the Securities and Exchange Board of India (SEBI) announced introduction of uniform forms and documents for the purpose of customer identification by different market intermediaries like stock brokers and mutual funds, a step intended to bring uniformity to the process.

With a view to bring about uniformity in securities markets, it has also been decided that the same Know Your Customer [KYC] form and supporting documents shall also be used by all captioned SEBI registered intermediaries.

Those who have done their Mutual Fund KYC prior to 1st January 2012, should get their IPV (In-Person-Verfication) done immediately else they will not be able to invest in Mutual Funds (apart from existing folios). Therefore, contact your Mutual Fund Advisor and get it done. However, if you have it already, you can check the status of your KYC at https://www.cvlkra.com/kycpaninquiry.aspx (if you have done from CDSL) or athttps://kra.ndml.in/ (if you have done from NSDL)

INCOME TAX CONCESSION TO EMPLOYERS UNDER NPS: For those who are Entrepreneurs or Owner of Companies, please note that The Finance Act, 2011 amended section 36 so as to provide that any sum paid by the assessee as an employer by way of contribution towards a pension National Pension System (NPS) to the extent it does not exceed ten per cent of the salary of the employee, shall be allowed as deduction in computing the income under the head “Profits and gains of business or profession”. Use this as a tool to retain your employees!

This amendment will be effective from 1 April 2012 and will be applicable to the assessment year 2012-13 (for the income earned in the financial year 2011-12) and subsequent years.

NATIONAL PENSION SCHEME – Have you opened your Account yet? Started by PFRDA (Pension Fund Regulatory And Development Authority) it is one of the low cost models for creating your retirement corpus. Please contact one of the service providers and get your account openedhttp://www.camsonline.com/PensionSystemServices.aspx

KNOW YOUR CREDIT SCORE - Your Credit Score is critical to the loan approval process. It provides lenders an indication of how likely it is that you will pay back a loan. The credit information is based on the millions of updates received by CIBIL from its strong member base comprising of Banks, Financial Institutions, State Financial Corporations, Non-Banking Financial Companies, Housing Finance Companies and Credit Card Companies.

Why it is important? By understanding your credit history it enables you to take control of your financial situation, make informed financial decisions and also helps to protect yourself from identity theft.

Get yourselves “your score” before the bank rejects your loan request for a reason which even you are not aware off, example – your old credit card dues which you cleared but still showing as outstanding in the books of the Credit Card issuing bank or some wrong bills raised by the credit card company and not received by you and showing as outstanding! These all are going to minimise your score which affects you overall score. Contact http://www.cibil.com/help-center or http://www.experian.in/consumer/index.html

OBTAIN AADHAAR CARD – Aadhaar is a 12 digit individual identification number issued by the Unique Identification Authority of India (UIDAI) on behalf of the Government of India. This number will serve as a proof of identity and address, anywhere in India. Any individual, irrespective of age and gender, who is a resident in India and satisfies the verification process laid down by the UIDAI can enrol for Aadhaar.

Each individual needs to enroll only once which is free of cost. Each Aadhaar number will be unique to an individual and will remain valid for life. Aadhaar number will help you provide access to services like banking, mobile phone connections and other Govt and Non-Govt services in due course.

Aadhaar will ensure increased trust between public and private agencies and residents. Once residents enrol for Aadhaar, service providers will no longer face the problem of performing repeated Know Your Customer (KYC) checks before providing services. They would no longer have to deny services to residents without identification documents. Residents would also be spared the trouble of repeatedly proving identity through documents each time they wish to access services such as obtaining a bank account, passport, or driving license etc

Locate the nearest enrolment Centre: http://appointments.uidai.gov.in/easearch.aspx

This is just a bird’s view of everything that you need to check and do for your finance during the year. Wishing you all a great year ahead!

This article was also published in "Chatterpiller", the newsletter of Carma Connect 

https://carmaconnect.in/newsletters/2013/01/16/finger-food-7/

Have you planned your Taxes for this Financial Year?

by
Pradip Chakrabarty
Founder – Advisorkhoj.com

I know tax planning is a boring and time consuming exercise that we need to do every year. Though, I cannot help you avoid it but certainly can help with all the information that you need to plan your taxes and thus save money.   

First, Let us know the Income Tax slabs for FY 2012-13

Now, Let us know how Personal Tax scenarios have changed from last financial Year? 

Now, how much Tax you can save from various Investments?

One can claim his investments/payments under section 80C, 80CCC and 80CCD, up to Rs. 100,000 (Rupees One Lac only) combined limit - Amount can be invested in:

• Life insurance/Unit Linked Insurance Plan (ULIP) premiums
• Public provident fund (PPF)
• National Savings Certificate (NSC) or National Service Scheme (NSS) or Post Office Tax Saving Deposits
• Accrued Interest of NSC VIII Issue
• Investment in Rural Development Bonds of NABARD
• Five year Tax Saving Bank Fixed Deposits (For 5 years or more)
• Investments in Mutual Funds Tax Saving Schemes (ELSS)
• Employee Provident Fund (EPF) - Employee’s Contribution only
• New Pension Scheme (NPS)  - To the extent of 10% of your salary by the Employer or Central Government will be eligible for additional tax benefit over & above the Rs. 1.00 Lac limit u/s 80C
• Home Loan – only Principal amount paid (If you have got possession of the property)
• Senior Citizen Savings Scheme 2004, if you are more than 60 years of age
• Pension Scheme or Retirement plans under section 80CCC
• Tuition Fees (excluding donations/ development fees) paid for Children (Max 2 Children only) for full time education in school/ colleges in India only.
• The amount you pay as stamp duty when you buy a house and also the amount you pay for the registration of the documents of the house can be claimed as deduction under section 80C. However, this can be done only in the year of purchase of the house.

You can save Taxes further from following

Deduction of upto 10,000 for interest from Savings Bank Account under a new section 80TTA

• Maximum deduction of up to 15,000 under Mediclaim/ health insurance taken for self and family. An additional deduction of up to 15,000 for buying cover for dependent parents. If parents/assesses are senior citizens, can claim deduction up to Rs 20,000 (Under Section 80D)

• The maximum limit is of 1.5 lacs on interest payments of a home loan for a self-occupied residential property. However, there is no ceiling on the amount of deduction if the house is let out or deemed to be let out. In this case, house rent would need to be shown in as income in case house is not self-occupied or it’s a second property (under Section 24(b)/Home loan interest payment)
• Donations made to Religious or charitable Trusts is allowed @ 25/50/75/100% (of the contribution amount) depending upon the charity and approval  (under Section 80G)
• Tax relief on interest payments on education loan taken for higher studies for self, spouse or child. There is no maximum limit on this deduction, but should be from a school/ institute /university recognized by the government (Section 80E)
• Deduction of 50,000 for maintenance of a disabled dependent. If the disability is severe, the deduction amount will be 100,000 (Under Section 80DD)
• Deduction can be claimed if person has a disability. The allowed deduction is Rs 50,000. This deduction goes up to Rs. 75,000 in case disability is severe (section 80U Disabled/ Handicapped person).
• Deduction of upto Rs. 5,000 is allowed for preventive health check-up of dependent senior citizens.
• Expenses incurred for medical treatment for self, spouse, dependent children, parents, brothers and sisters. Maximum deduction is Rs 40,000 (Can go up to 60,000 in case patient is senior citizen). Deduction is allowed only in case of specified diseases or ailments such as, AIDs, Malignant Cancer, Chronic Renal failure, Thalessaemia, Dementia, Parkinson’s disease, etc. (Section 80DDB)

Rajiv Gandhi Equity Savings scheme (RGESS): New retail investors with annual income of Rs 10 lakh and below are eligible to claim a deduction of 50% on a maximum investment of Rs 50,000/- - Applicable for those who first time invest into equities, Exchange-traded funds (ETFs) and Close Ended mutual funds listed on stock exchange and invested only in BSE 100, CNX 100 and blue chip public sector stocks. Shares of PSU firms categorised as Maharatna, Navratna or Miniratna by the central government will be eligible for RGESS. Follow on public offers and IPOs of PSUs will also be eligible (Under sub-section (1) of Section 80CCG of Income Tax Act 1961) – Exact notification and launch of this scheme is expected shortly.

Few useful links in context to your IT planning/ filling returns

1. Know your exact tax amount

• http://law.incometaxindia.gov.in/DIT/Xtras/taxcalc.aspx

2. Check your Employees Provident Find (EPF) Balance

• http://www.epfindia.com/

3. Check your previous Tax refunds (if any)

• https://tin.tin.nsdl.com/oltas/refundstatuslogin.html

4. To Find a TAX RETURN PREPARER (TRP)

• http://www.trpscheme.com/trp/index.jsp

5. View your Tax credits/ TDS from your bank thru net banking facility

• http://www.incometaxindia.gov.in/OnlineInternetBanking.asp

6. To know more about Income Tax

• http://www.incometaxindia.gov.in/home.asp#

Hope, the above comes handy in planning, Saving/Investing and filing your Taxes!

Disclaimers

1) The tax rates mentioned above are those provided in the Income tax Act, 1961, applicable for the financial year 2012-13 relevant to assessment year 2013-14. In the event of any change, we do not assume any responsibility to update the tax rates consequent to such changes.

2) The tax rates mentioned above are only intended to provide general information and are neither designed nor intended to be a substitute for professional tax advice. Applicability of the tax rates would depend upon nature of the transaction, the tax consequences thereon and the tax laws in force at the relevant point in time. Therefore, users are advised that before making any decision or taking any action that might affect their finances or business, they should take professional advice.

3) A non-resident tax payer has an option to be governed by the provisions of the Income tax Act, 1961or the provisions of the relevant Double Taxation Avoidance Agreement, whichever is more beneficial. As per the Finance Act, 2012, submission of tax residency certificate containing prescribed particulars, will be a necessary (though not sufficient) condition for granting benefits under the Double Taxation Avoidance Agreements to non-residents.

This article was also published in "Chatterpiller", the newsletter of Carma Connect
https://carmaconnect.in/newsletters/2012/12/15/finger-food-6/

Retirement Planning for Entrepreneurs in changing times…

…Continued from last issue

by
Pradip Chakrabarty
Founder – Advisorkhoj.com


In the last issue we discussed how important it is to have a financial plan, what is the amount required, and we arrived at a figure of Rs. 2.33 Crores. This is how much you (the entrepreneur) need to accumulate to maintain the same lifestyle till you’re 75, assuming you started your journey at 30 and retired at 50! That basically means you have only 20 years to accumulate all your money. Sounds scary, doesn’t it

A quick recap: There are many avenues to SAVE and INVEST

1. SAVING PRODUCTS – Bank Fixed Deposits, PPF (Public Provident Fund) Account, Debt Funds of Mutual Fund, NPS (National Pension Scheme), Post office Savings Schemes, and son on  – these investment would typically fetch you a return of around 8%
2. INVESTMENT PRODUCTS – Mutual funds (Equity schemes) and Shares – these have potential to fetch you a return of at least 15%-18% if invested for a long term. Since we are planning to invest for next 20 years its’ already Long term.

How much should you SAVE and/or INVEST – Frankly speaking, there are no thumb rules. But, with age your exposure to equity investing should reduce. An old investing formula suggests – 100 minus your age.For Example – When you are starting at Age 30 your equity exposure should be around 70%, at Age 35 – 65%, at age 40 – 60%, at age 45 – 55% and at Age 50 – only 50%. Since this is no thumb rule, let’s assume you are Saving/Investing at a ratio of 50:50.

Solution (At a Ratio of 50:50)

1. Put the 50% (Rs.500,000) out of your Total Savings Corpus of Rs.1,000,000 in a Savings/Fixed deposit/ Debt Product and invest the rest 50% (Rs.500,000) in one or more Mutual Fund Equity Scheme/s.
2. Start a Mutual Fund Monthly SIP (Systematic Investment Plan) for Rs. 14,500/- in  a Balanced Fund (Having 50% Debt and 50% Equity) for 20 years – assuming return of 11.50% CAGR

(CAGR means Compounded Annual Growth Rate)

Final Corpus Figures

Saving / Investing Details	Amount after 20 Years
Rs. 500,000 in a Fixed Deposit for 20 years	Rs.   2,330,478
Rs. 500,000 in a Mutual Fund Scheme or Equity	Rs.   8,183,268
Rs. 14,500 Monthly SIP in a Mutual Fund for 20 Years – assuming return of 11.50%	Rs. 13,413,965
Total Retirement Corpus at Age 50	Rs. 23,927,711

Therefore, simply speaking you need to invest ONLY RS. 14,500/- per month for next 20 Years! Small Money?  Yes, really small – but, remember you need to invest month after month for next 20 years. But how that is possible? The answer is POWER OF COMPOUNDING and DISCIPLINED INVESTING!

Please look at the chart below to find out how a small amount can turn into a magical figure through power of compounding and disciplined investing.

Monthly Investment	15% return per annum
	5 years	5 years	10 years	10 years	15 years	15 years	20 years	20 years
	(Investment)	(Total Return)	(Investment)	(Total Return)	(Investment)	(Total Return)	(Investment)	(Total Return)
2,000	1.20 Lacs	1.79 Lacs	2.40 Lacs	5.57 Lacs	3.60 Lacs	13.53 Lacs	4.80 lacs	30.31 Lacs
5,000	3.00 Lacs	4.48 Lacs	6.00 Lacs	13.93 Lacs	9.00 Lacs	33.84 Lacs	12.00 Lacs	75.79 Lacs
7,000	4.20 Lacs	6.27 Lacs	8.40 Lacs	19.50 Lacs	12.60 lacs	47.38 Lacs	16.80 Lacs	1.06 Crore
10,000	6.00 Lacs	8.96 Lacs	12.00 Lacs	27.86 Lacs	18.00 Lacs	67.68 Lacs	24.00 Lacs	1.51 Crore
15,000	9.00 Lacs	13.45 Lacs	18.00 Lacs	41.79 Lacs	27.00 lacs	1.01 Crore	36.00 Lacs	2.27 Crore
20,000	12.00 Lacs	17.93 Lacs	24.00 Lacs	55.73 Lacs	36.00 Lacs	1.35 Crore	48.00 Lacs	3.03 Crore
25,000	15.00 Lacs	22.42 Lacs	30.00 Lacs	69.66 Lacs	45.00 Lacs	1.69 Crore	60.00 Lacs	3.78 Crore
50,000	30.00 Lacs	44.84 Lacs	60.00 Lacs	1.39 Crore	90.00 lacs	3.38 Crore	1.20 Crore	7.57 Crore

Monthly Investment	18% return per annum
	5 years	5 years	10 years	10 years	15 years	15 years	20 years	20 years
	(Investment)	(Total Return)	(Investment)	(Total Return)	(Investment)	(Total Return)	(Investment)	(Total Return)
2,000	1.20 Lacs	1.95 Lacs	2.40 Lacs	6.72 Lacs	3.60 Lacs	18.38 Lacs	4.80 lacs	46.86 Lacs
5,000	3.00 Lacs	4.88 Lacs	6.00 Lacs	16.81 Lacs	9.00 Lacs	45.96 Lacs	12.00 Lacs	1.17 Crore
7,000	4.20 Lacs	6.83 Lacs	8.40 Lacs	23.53 Lacs	12.60 lacs	64.34 Lacs	16.80 Lacs	1.64 Crore
10,000	6.00 Lacs	9.76 Lacs	12.00 Lacs	33.62 Lacs	18.00 Lacs	91.92 Lacs	24.00 Lacs	2.34 Crore
15,000	9.00 Lacs	14.64 Lacs	18.00 Lacs	50.43 Lacs	27.00 lacs	1.37 Crore	36.00 Lacs	3.51 Crore
20,000	12.00 Lacs	19.53 Lacs	24.00 Lacs	67.25 Lacs	36.00 Lacs	1.83 Crore	48.00 Lacs	4.68 Crore
25,000	15.00 Lacs	24.41 Lacs	30.00 Lacs	84.06 Lacs	45.00 Lacs	2.29 Crore	60.00 Lacs	5.85 Crore
50,000	30.00 Lacs	48.82 Lacs	60.00 Lacs	1.68 Crore	90.00 lacs	4.59 Crore	1.20 Crore	11.71 Crore

Monthly Investment	20% return per annum
	5 years	5 years	10 years	10 years	15 years	15 years	20 years	20 years
	(Investment)	(Total Return)	(Investment)	(Total Return)	(Investment)	(Total Return)	(Investment)	(Total Return)
2,000	1.20 Lacs	2.06 Lacs	2.40 Lacs	7.64 Lacs	3.60 Lacs	22.68 Lacs	4.80 lacs	63.22 Lacs
5,000	3.00 Lacs	5.17 Lacs	6.00 Lacs	19.11 Lacs	9.00 Lacs	56.71 Lacs	12.00 Lacs	1.58 Crore
7,000	4.20 Lacs	7.24 Lacs	8.40 Lacs	26.76 Lacs	12.60 lacs	79.40 Lacs	16.80 Lacs	2.21 Crore
10,000	6.00 Lacs	10.34 Lacs	12.00 Lacs	38.23 Lacs	18.00 Lacs	1.13 Crore	24.00 Lacs	3.16 Crore
15,000	9.00 Lacs	15.51 Lacs	18.00 Lacs	57.35 Lacs	27.00 lacs	1.70 Crore	36.00 Lacs	4.74 Crore
20,000	12.00 Lacs	20.69 Lacs	24.00 Lacs	76.47 Lacs	36.00 Lacs	2.26 Crore	48.00 Lacs	6.32 Crore
25,000	15.00 Lacs	25.86 Lacs	30.00 Lacs	95.59 Lacs	45.00 Lacs	2.83 Crore	60.00 Lacs	7.90 Crore
50,000	30.00 Lacs	51.72 Lacs	60.00 Lacs	1.91 Crore	90.00 lacs	5.67 Crore	1.20 Crore	15.80 Crore

(The above calculations are approximates and may vary a little bit. You may also calculate with free calculators available on various financial websites).

Remember, even though the solution looks simple we fail to maintain the discipline and thus end up into some financial crisis or the other. You also need to know and understand the following during your journey of entrepreneurship –

1. The above is just a glimpse of your Retirement Planning. But to have an exhaustive Financial Plan you must take help of a professional Financial Planner and might have to pay a small fee.
2. Apart from Retirement planning you should also focus on planning your child’s Higher education as with times it is going to be very expensive and demanding. Also, what about planning your children’s marriage?
3. How about planning your and your family’s health? Do you have a Mediclaim policy? Domestic as well as overseas (if you are travelling to abroad frequently). These days, Family Floater Policy is very popular as one policy covers the entire family!
4. What about planning Holidays that you have dreamt of during these 20 years? Have a plan for that too!
5. Now, most importantly, what happens to your family when you are not around? Something happens to you? Remember, they will need the same amount of money which you needed. Here the solution is simple – you should take a TERM PLAN INSURANCE. Term plans typically offer higher Life Coverage at a very low premium and generally not suggested by Insurance Agents as commission on these policies are very low. You should compare various Term Plans offered by Insurance Companies on the web – online buying is also possible. In the context to this article I suggest taking a Term Plan of At least a Crore – Annual premium would be around Rs. 8000 – 10,000 for a Life cover of I Crore till age 75!
6. Document all your investments and keep copy of all the receipts/ Bonds and Statements in one file, record the details in an excel file, scan the documents and keep them stored in your computer.
7. Most importantly, you should review all your investments once every year with your financial planner.

Friends, as we start our journey as an Entrepreneur we write the Story Board/ Draw a Business Plan and prepare a Financial Plan. We also seek guidance of a Mentor. But, most of the times we fail to draw a plan for our own life cycle. We feel nothing will happen to us and focus on things other than our own life. We never take professional Financial advice.. This could turn into a horror story… A recent incident really shook me. A Techie whose wife is a Chartered Accountant died recently in a road accident. Wife did know that her husband kept changing the password of his laptop where all his investments were recorded.. He never shared the password with his wife. Imagine the situation… Wife has no clue about his husband’s investments? What happened to her? How to handle and take care of situations like these?I will try writing an entire piece on this next time and try offering a solution!

Happy Retirement Planning! Or should I say Happy Financial Planning?

*(Disclaimer: Mutual Funds and securities investments are subject to market risks and there is no assurance or guarantee that the objectives of the Scheme will be achieved. As with any investment in securities, the NAV of the Units issued under the Scheme can go up or down depending on the factors and forces affecting the capital markets. Past performance of the Sponsor/AMC/Mutual Fund is not indicative of the future performance of the Scheme. Please read the Statement of Additional Information and Scheme Information Document carefully before investing. Insurance is the subject matter of the solicitation. Contact a qualified Investment Advisor before investing)

This article was also published in "Chatterpiller", the newsletter by Carma Connect

https://carmaconnect.in/newsletters/2012/08/17/finger-food-2/