SEBI, in June 2019, made a few changes to investment guidelines and valuation of securities in debt mutual funds. These changes enhance credit and liquidity profile of the liquid funds. At the same time, these changes can make liquid funds a bit volatile. Let’s try to understand the new SEBI rules. #1 Liquid funds are now required to hold 20% in liquid … [Read more...] about Liquid Funds to have exit load and will now be a bit volatile
Avoiding bad financial decisions is as important as making good ones, but what influences you to make such good or bad financial decisions? Your decisions are a reflection of your financial habits i.e. a reflection of who you are as an investor and as a person. In this post, we will look at 5 financial habits that you can affect your financial lives adversely. #1 Think more and … [Read more...] about 5 Financial Habits that can ruin your Financial Life
Who does not want to retire early? No bosses to report to. No need to slog or worry about Monday blues. Sounds interesting, doesn’t it? By the way, an early retirement does not mean that you will simply sit around and do nothing. It is about the freedom to do what you want to do without affecting the lifestyle you desire. That may mean no work or engaging in something … [Read more...] about Planning to Retire early? A few things to keep in mind
Over the last couple of weeks, I had interesting discussions with a relative and a client. Given their requirements, I had asked them to purchase term insurance plans. However, they couldn't reconcile with the fact that they wouldn't get anything back if they survived the policy term. I am sure they are not alone. Just the thought that you won’t get anything back if you … [Read more...] about Term Insurance plans with Return of Premium Benefit: Worth it?
Home loan interest rate benchmarks have kept on changing over the last decade. We used to have the Prime Lending Rate (PLR), which was replaced by Base Rate. The base rate, in turn, was replaced by the Marginal Cost of Funds based lending rate (MCLR) a couple of years back. Now, SBI is launching a home loan product where the benchmark is linked to the Repo rate. Internal … [Read more...] about PLR, Base Rate, MCLR and now RLLR (Repo rate linked lending rate)
In one of our previous posts, we had reviewed a traditional plan from HDFC Life Sanchay Plus. In this post, let’s look at another popular traditional plan, HDFC Life Super Income Plan. Traditional plans are opaque, provide low life cover and poor returns. Therefore, I do not hold a very high opinion of traditional life insurance plans. However, before writing off any … [Read more...] about Review: HDFC Life Super Income Plan: Makes sense?
Debt mutual funds are again in the news. On June 4, 2019, DHFL could not make the interest payment on one of its bonds. It says that it will pay in another week. Does not matter. Even the slightest delay is considered a default. As per extant rules, even if a default happens in one security by DHFL (not the one held by the fund scheme), the value of the all the bonds from … [Read more...] about The DHFL Mess: Learnings and What should you do?
Many people don’t trust insurance companies. You may pay the premium for many years but still can’t be sure if the insurance company will return the favour when you make a claim. This is a prominent reason why many choose not to purchase insurance despite being fully aware of the risks of staying uninsured. Insurance companies haven’t done themselves proud either. There is no … [Read more...] about Your Health Insurance claim won’t be rejected after 8 years
When we plan for a goal, we assume a rate of return on investments for the goal and plan investments accordingly. Picking up the long-term average return is a rational choice. Long term averages are fine (even though long term averages can also change). However, the sequence of returns matters too. For the same level of long-term return, the actual output can be very … [Read more...] about How the Sequence of returns risk affects your Financial Planning?
No parent wants to compromise on their child’s education. In fact, child education is one of the most prominent goals for almost all my clients. Many readers write with their queries about investing for their kids’ child education too. Many want a one-stop solution for their kids’ education. For this reason, many ask about the “Best Child plan” or the best child plan from … [Read more...] about Review: SBI Life Smart Champ Child Insurance Plan: Is it good enough?