Dear Rkdave17, The plans of Birla r neither here nor there. I mean not effective for getting Insurance at cheaper cost & also not performing well on investment front.

I personally invested 20K in a ULPP of Birla around sept. 2003. It was s single prem. plan & no insurance component. In Sept 2004 I again Top up 10K. At the time of investment, i invested in 35% Eq. fund (it was the highest Eq. component in that pension plan). After watching its performance, till Dec. 2005, I decided to quit.

The reason was, the performance of fund was not upto the benchmark, forget about beating it. In the same duration, with same Eq. exposure, TIPP (Temp. India Pension plan) performed much better.

Even 2day after surrendering the policy, whenever I checked the returns of this Plan, well my decision of quitting is right.

Thanks

Ashal ...

Dear Radhika_nandlal. Investing in bank FDs is not a wise thing on ur part if u r already a Tax payer. According to our prev. discussions i know u r a tax payer. For every Tax slab of 10, 20, 30 & highest Tax slab the post TAX return of this 11% FD `ll be as below.

For 10.3% Tax slab - Effective interest earning from FD 9.867%
For 20.6% - 8.734%
For 30.9% - 7.601%
For 33.99% - 7.261%

It `ll be better on ur part if u invest this amount in a mix of FMP, MIP, Floating rate, Short Term & Long Term debt funds. Dividend in each of the above funds is taxed @ 14.15% by MF itself & the same is taxfree in ur hand. So if u r above 10.2% Tax slab, u may opt dividend transfer option, to invest the dividend in Eq. MFs of ur choice. This way ur basic capital is almost secure, u r earning an average return of 8-11% in the form of dividend & increase in the value of Units & the dividend invested in Eq. MFs for 3 years, `ll provide the extra kick in ur returns, so for a time frame of 3 years u may expect a post tax return of 10-12%.

Regarding ur Jeewan Dhara policy i already expressed my views some days back.

Thanks

Ashal ...

Dear jr.prased, For accumulation of retirement funds, don`t opt ULPP as ur preferred vehicle of investment. The reason is - common problem or disadvantages attached with Unit plans & i hope u r aware of the same, the another problem is the Taxation angle.

The amount u `ll receive as pension after vesting age `ll be taxable in ur hand. Even if u go for 35% cash commutation & opr pension from the remaining 65% fund, tell me dear where `ll u invest that 35% cash commuted part to earn healthy & taxfree return at the than ur age of 60+. Also the returns generated on ur corpus after start of pension of r very poor in the range of 4-5.5%.

A better way `ll be to invest majority of ur retirement needs in Eq. MFs now & a small part in PPF. Once u enter the age of 50 years gradually reduce ur exposure to eq. & increase ur allocation in PPF & transfer some of ur Eq. part in balanced funds.

Once u reach the age of 60, u may have a major part of ur investment in debt & hybrid funds & a small portion say 15-20% in Eq. MFs at that time too.

Thanks

Ashal...

Dear milind finance, weekly STP route is another mode of investment in Eq. MFs with a discipline & of course a slightly more earning.

How it works - Say u have 50k Rs. with u, & want to invest, in HDFC Top 200 fund with 4 SIPs of 1K Rs. every month, over the 12 months. In case of normal SIP, the money `ll be debited from ur saving account on every SIP date, the remaining amount in ur bank ` ll earn u an interest of 3.5% per annum & remember it is also Taxable so actual earning from this interest `ll be very low subject to ur Tax slab. Also u `ll have to check ur bank ACCT. regularly that SIPs r debited timely.

Now for same 50K Rs., first u invest this amount in HDFC Cash managment saving plus retail Plan (the liquid + fund of HDFC). Under weekly STP of 1K Rs.. the same amount `ll be debited from the Liquid + fund of HDFC & `ll be invested in ur Targeted Eq. MF, HDFC Top 200 in this case. The remaining amount in liquid + fund `ll earn 6-8% return per annum. Post Tax return `ll be much more in this case than saving bank return.
As the folio no. `ll be the same for both these fund, u `ll get a composite unit statement, hence tracking of ur investment `ll be very easy.

I hope the info `ll be useful to u.

Thanks

Ashal...

Dear dr sundeep, the long term fundamental & investment prospects of Rel. Gr. Fund r same as of Indian Economy. If u r positive on Indian Economy for next 8-10 & even more years, this fund should be in ur portfolio & if u think that SKY IS GOING TO FALL WITHIN A DAY OR TWO, Rel. Gr. is not a fund for u. Being a midcap oriented fund, its performance `ll be in slump under current market conditions but as & when the situation improves, so `ll its performance.

Thanks

Ashal...

Dear mayekar, From ur chosen funds,

Large Cap - HDFC Top 200 & DSP ML Top 100
Mid cap - Rel. Growth
Multical - SBI Contra
Balanced - HDFC Prudence
Sectoral - IPru Infra

All the funds chosen by u r proven performers over long duration in their respective category. No need to panic. Continue investment in the same.
1. Going for more aggressive fund under large cap category `ll be a personal call.
2. Sitting on Large amount of cash, has helped RRSF to contain the fall better but at the same time, it is a dangerous sign also. The reason is U & me or any other investors r investing in RRSF for Eq. returns & not the returns generated by money market instruments by sitting on cash. If sitting on the cash is going to protect our downslide, it `ll be better to have our money in our own hands.
3. Yes RRSF `ll dilute the large cap bias of ur portfolio.
4. Plz. note for past some time, only the name of SBI is contra, otherwise the portfolio of this funds is more like an aggressive multicap fund. So again it `ll be personal choice between an aggressive fund SBI contra & a conservative fund DSP ML Eq.

Thanks

Ashal...

Dear 250778, In the article, SWP stand for systematic withdraw plan.

Under SWP, u first invest a lump sum in any MF scheme & at the time of joining the scheme, also fill the SWP form for withdraw of money on a predefined interval (every week, every month, 3 months or 6 months). the SWP may be in money terms say 10K Rs. or 20K Rs. or in Units terms, say 100 or 500 units redemption on every SWP interval.

I hope the above info `ll be useful to u.

Thanks

Ashal ...

Dear Ashal Congratulations! on being awarded the recognition! it is well deserved thanks -Ritul...

Dear Ashal Congratulations! on being awarded the recognition! it is well deserved thanks -Ritul...

My Dear Friends, it nice to seeing your discussion efforts that helps people to reach on safe rock for investment. I am reading & educating my self from you all guys(ashlanshu,joetom,kentmess,etc.) i just like to add some more worthy benefits available in market from another company "Birla Sun Life". Here providing my some efforts which come to know after comparison between various companies on illustrations return (after deduction of all charges like FMC, Mortality, allocation etc.) . 1) compare to Tata Aig invest Assure vs Birla`s Prime Life Premier plan: Age 30,invest 5Lakh,investment term 20 year,Expected return on 10%(after deduction of all charges like FMC, Mortality, allocation etc.) Tata provides:Rs.22,00,736.Birla:Rs.26,74,575. 2)SBI Horizon2:Age 30,Rs.25000 investment for 20 years: SBI returns 10%:11,68,273. Birla Classic Life Premier`s 10%: Rs.13,44,966. 3) few plan of Birla’s provides 365 switches free every year. 4) Unlimited withdrawals (365 days) every year. 5) cheapest life coverage plan in market like Dream Plan. 6) one of best plan which I like is, Platinum plus for Highest NAV Guaranteed Returns on maturity. So friends, its just to for sharing view and knowledge between each other. Keep Sharing your Golden views.. Together we Grow.. Regards, Rk ...

Dear Ashal, How did I miss this one? Please accept my belated congrats for being selected boarder of the day. You are truly doing a wonderful job along with other boarders. Keep up the good work. Regards, Wadia...

Dear Ashal, Congratz for being the border of the Day. It is very heartening to see MMB recognize the genuine contributors of this board like yourself and Ranjan. -Raj...

The loan availed is certain for six months and hence the loan should be repaid with six months interest, even if it is repaid on the next day. In bank OD on FDRS actual days are charge for interest. Corrections are invited. v.krishnamoorthy...

dear ashal, congrats for being the boarder of the day. regards shakti...