Personal Finance

Investment for Daughter Education ?

Posted by : vvrk

Dear Saby,
Please review the information that I have provided and let me know your feedback.

For College
===========
Cost Today = Rs.2 Lakhs
Time to College = 10 years
Inflation adjusted cost after 10 years = Rs.4,31,785

For MBA
=======
Cost Today = Rs.7 Lakhs
Time to MBA = 13 years
Inflation adjusted cost after 13 years = Rs.19,03,737

Assumptions
===========
Assumed inflation = 8%
Assumed returns = 15%


Vanilla Plan
============
The following is what you need to invest on a monthly basis every month.

For college = Rs.1,642/-
For MBA = Rs.4,278/-

The total amount that need to be invested per mount is approximates Rs.6,000/-


Growth Adjusted Plan
====================
If you think it might not be feasable to invest Rs.6,000 per month, then the following is your second option.

For College = Rs.9,48/-
For MBA = Rs.2,113/-

The total outgo the first year is approximately Rs.3000/-. But in this plan you need to keep increasing your investments every year by 15%. So the first year SIP amount is Rs.3000, second year Rs.3,450, third year 4,000 etc.

In the vanilla plan the investments are the same very year. In the growth adjusted plan, the sip investments increase by 15% every year.

Please do let me know which plan you would like to choose. Based on the plan you choose, I can come up with an investment plan.

Thank You,
Raj

Investment for Daughter Education ?

Posted by : kentmss

Dear Sarabjeet,
Congratulations, for being foresighted and already planning for your daughter's education. You are also lucky being advised by such experts like raj, ashalanshu, ranjan, etc.
Please avoid ULIPs. They are very expensive and not transperant. Go for good Diversified Equity Funds. Preferably through SIPs. For your need of 16 lakhs in 10 years, at a assumed return of 18% per annum, you need to invest monthly 5200.
Your present portfolio is good and you can stay invested. However, it lacks Solid Large Cap Funds and you can consider investing in the same through SIPs, which will help achiever your goal faster.
While combining insurance and investment is definitely not advisable, you can certainly consider investing in DWS TAx Saving Fund, which has given a good account of itself in its short history. Investment in this fund will get you 5 times Free Life Insurance of your Investment Amount.

You can also consider investing through Century Sip Plan in Birla Mutual Fund schemes. This offers your upto 100 times Free Life Insuance of your monthly Investment.

With the above in mind, I recommend you to invest in the following funds
Birla Sunlife equity Fund
DWs Tax sAving Fund
DSPML Natural Resources and New Energy Fund
Fidelity Equity Fund
Sundaram Select Focus Fund

From your present portfolio, you should
HDFC Equity - Switch to HDFC Top 200 Fund
ICICI Infra - Switch to ICICI Dynamic Fund

Before committing to any sip, first insure yourself adequately with TERM Insurance, which is cheap and effective way of insuring yourself.

Best of luck,
Srikanth Shanakar Matrubai

Investment for Daughter Education ?

Posted by : RANJAN

ULIPs are not good investment vehicles . Insurance companies are not very transparent about their charges. Better to keep INSURANCE & INVESTMENT separate. Have enough PURE TERM COVER for yourself. Otherwise, all plans for saving for your child can go wrong.

An Insurance Agent will always recommend a ULIPs . The reason for this is quite obvious.

For investment - go for SIP in diversified equity funds. Look for value research ratings. Invest atleast 60-70% in large cap funds. Avoid NFOs. Look for funds with a good 3-5 year past performance.

Investment for Daughter Education ?

Posted by : pcspune

Dear sarabjeetsethi.

You may consider SIP Insure in Reliance Growth Fund.

Centuri SIP in Birla Frontline Equity is also GOOD Option.

SIP in KOTAK -30/Kotak Opportunity Fund under KOTAK Starkid( With Free Insurance )

For Tax Saving Investment in DWS Tax saving Fund (with Free Life Insurance upto Rs. 5 Lacs is also Good Option.

P.C.Sharma

All is not lost: 12 rules that can save you further losses

Posted by : shookershocks

very good and very needful for each investor

Mayawati is the highest tax paying

Posted by : Sriman35

PS: I dont like Mayawati, not even 1%.

Radhika ji,

Don’t you think we have to appreciate Mayawati, that she is paying taxes now, that too at the top of list. Take the case of Ambani brothers, who are among top 5 richest people of India, but not even in top 200 list of tax payers.

Appreciate if you could have opened a thread on why Ambani's are not highest tax payers..!

Some of your points mentioned in the first post are pretty low on values, at least the below.
'Is she some young s-- bomb that folks should gift her such?'
You mean to say that young s-- bombs deserve that kind of money. Pls have a second look. Many of those young s-- bombs are like that out of necessity or compulsion.

Timepass:
‘Is she an entertainer NO NO NO ..’
Mayawati certainly is an entrepreneur if not entertainer. For me it is both. ;)

MF with free INSURANCE - GOOD OR BAD???

Posted by : Guest

Dear All,

Thanks for your comments and suggestions.

Currently I am in initial stage of my carrier and also relatively new to world of investments/Savings.
(Hence the statement \\`all we hate ULIPs\\` may not be correct and is only personal in nature, after only few days of my study)

I agree that my initial urge for investment was only for tax saving purpose, however after bit of research now I am carefully thinking of some financial planning.

For tax saving purpose I was almost on the verge of taking DWS, but somehow I went through the documents carefully and observed that -

This is relatively new fund and performed very well for 1 yr, beating its benchmark hevyly, though many (not all) of the old trusted ELLSS
showed negative results for the same period.

However I am still not able to convince myself to put my initial hard earned money in this fund for long term due to ...

1) The offer document mentions that - \\`The AMC shall pay premium amount to the insurance company (In this case MetLife)\\`.
The statement appears ambiguous to me as it dose not mention exactly (or in terms of %)the amount it will pay. (which is generally mentioned in the ULIPs document)

2) Though this amount would be small (smaller than term insurance -as ashport pointed out) but I think it will still sizable amount at the end of year and much more at the end of maturity as we will loose compounding effect of that money as well.
So in true sense, I feel this is not a \\`FREE\\` insurance, and why to loose our even a single penny, which is ment only for investment.

3) Also for me (and for most of others), since all are supposed to be insured completely by term insurance plan/Plans, then there is absoulutely no necessity of this added so called \\`Free\\` insurance (at the cost of investments).

4) Though the fund (DWS tax saving) has performed very well for 1yr, I personally feel that it (and all this category funds) may suffer loss in long term as AMCs will try to pull more money for insurance purpose which they might have not done in initial years. (- just a personal intuition)

5) I also went briefly (not in detail) through the insurance details given by AMC, and found that we need to sign \\\\

Income Tax On Fixed Deposite

Posted by : Guest

Dear Sir,

I am salaried person of a PSU and Tax payer in the bracket of 30%.

I want to invest Rs 50000/- in fixed deposite in view of increased interest rates.

However, to save the tax on the interest earned on proposed Fixed deposite, i want to buy it in the name of my spouse who is a house wife and have PAN Card.

So i am planning to buy the FD in her name for a period of one year and submit her IT return as individual.

I request you to kindly advise me whether it is allowed as per Income Tax Act.

Regards


Sanjeev

Invest via SIPs, don\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\\`t time mkts: Franklin Templeton

Posted by : niruvijay

Dear sir I m 40 yr old and I have need some money after 5-7yr at the time of my beti marriage and I able to invest 1000-2000 pm. which scheme and mf is better for me. I m regularly investing stock market but not yet invest in mf. also tell me about ur saving of entry load way.

Stay away from new funds: Value Researchonline

Posted by : RANJAN

It is a closed ended scheme. The exit load is heavy if you come out within 3 years. If you do not require the money now - stay invested and pray that the fund will do well. Never go for NFOs and especially closed ended schemes. Go for good value research rated funds. (5* or 4*) Invest ONLY VIA SIP.

Income Tax On Fixed Deposite

Posted by : ashalanshu

Dear friend, As u told, u r in 30% Tax slab, I assume to avoid Tax on FD interest, u r planning to invest in ur wife's name. My dear friend Tax evasion is not legal.

My dear friend, u can't avoid it, as the income generated from any cash amount gifted to spouse, 'll be clubbed with income of original person whose money was it, Under clubbing of income provisions of Section 64.

If u do want to take benefit of high interest rates with low tax on it, plz. invest in FMPs (Fixed maturity plans) of MFs of duration 1Y & more.

Due to indexation benefit, ur net tax liability on gains from such FMPs 'll be far less than what u 'll pay as tax on bank FD interest.

Thanks

Ashal

MF with free INSURANCE - GOOD OR BAD???

Posted by : Guest

Hello all,

As I am going through lot of querries here, some experts are suggesting MFs/ELSS (like DWS tax saving), which is having free insurance with it.

1) But is it good? as such schemes will eventully pull all insurance expenses money from its MF/ELSS fund? to pay the contracted insurance company (like MetLife in case of DWS tax saver)


2) Are these insurance are really free, or there are any hidden charges that will be recovered by AMC, from fund money? I think this is just a gimmic to attarct ignorant investores.

3) Since all we hate ULIPs to keep insurance and investements separate, then why we suggest MF/ELSS with insurance?

4) Are such funds good for long term, though they are performing well on short term (Like DWS tax saving)?

I have not done much study with this, Kindly reply if u can throw some light.

Regards,
Anand

Transaction slip conditions

Posted by : Guest

Is it necessary for the investors to fill only the transaction slip of the AMCs for making any changes such as address, bank details, etc. A simple plain signed letter would not be sufficient? Please advise.