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Why PF?

Why to Invest in PF ?

To be frank, most of us, especially the salaried, PF gets done by the company where you work. Government has now made it compulsory, for companies to provide Provident Fund  for all employees.

The good part about PF, is that one doesn't have to do it manually. Its mostly deducted from your salary and invested in your PF account.  Normally, its 12% of your basic component which you invest and 10% is paid by the Company. The best part of this investment is the Interest Rate and the power of compounding which acts on this investment

Even if your Basic Salary is 15,000/- INR, then your PF will be 1800/- from your side and 1500/- from the company, each month. That adds up to 3300/- per month. Though your salary would increase every year, I will still consider the same amount for 40 years of your working life and see how it adds up.

Use a compound Interest Calculator and you will realise that the amount comes to 10,657,413/- which is more than 1 crore. Its but obv…
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NPS - Should I Invest in it ?

The National Pension Scheme, or the NPS, which its commonly called, has gained more and more popularity over the past few years, is indeed a very good way to save your money.
For one, its a scheme pushed by the government, but It would still be investing the funds in the different investment avenues, which the traditional government driven initiatives, would keep away from. In short, apart from many debt funds, based on the option one chooses with the NPS partner bank, one can invest in many of the Equity Based Funds.
So, the next question would be, how is it different from investing in Mutual Funds ? More than one, to be precise.
This is meant to be a Retirement FundThere is Tax Benefits under section 80CCD (80 CCD(1) and 80CCD(2))  while investing the amount.These Tax Benefits are over and above the Tax Benefits under section 80CCC, which currently(Budget 2017), is pegged at 1.5L only. Mutual Funds investment come under this 1.5 Lakhs investments.
Now coming to the NPS itself, the inves…

Clear your debts by part payments

Every one of us, most likely has one or the other type of loan. Those who dont, I must say that, they are indeed blessed
Loan is not a bad thing to have. It gives one the ability to buy something(preferably an asset), at a earlier time, and slowly pay over a period of time.
Though it's a good thing, but at the same time, you need to understand that, it's from  the interest which you pay, which gives banks all the profits and also manage to pay the salaries of all their employees. Not a small amount eh ? So the earlier you reduce you loan amount, the better for you, from your savings point of view.


Let me give you an example, which will tell you, how much you can save by doing a early part payment.
Assume you have taken a housing loan of 20 lakhs and your monthly EMI is roughly 20,000/-. An EMI will have a principal component as well as an interest component. In the initial years your principal component will be very less, while your interest part very high, and this will cha…

Tax Planning for New Financial year

April, this is the time, when we need to declare the Tax Declarations which we would be doing in the coming year. Some of us declare few investments and only hope to do them sometime in the year. But not all are able to meet that commitment. Here are a few advices, which I would suggest to use as a guiding tool, rather than for planning.


Lets look at the Simple Tax Investments which we can use.
80ccc Upto 2 Lakhs under Section 80 ccc.  In this 2 Lakhs, 50,000/- is only meant to be invested in NPS(National Pension Scheme). The Remaining 150,000/- can be invested in Insurance Plans, Mutual Funds , NSC.From this 150,000, since you would also have been paying PF from the company itself, it would be also considered as an investment. You will need to do it and you dont have a choice. If you have a home loan, the Principal from the home loan, will also be considered as a contribution towards the 1.5 Lakhs. After subtracting the PF amount which you are paying and the House Loan Principal compo…

Smaller Savings Add up

Its always the smaller Savings which add up. when I mean small savings, its about putting those smaller amounts in a place, where, it will grow up to be a larger value.

Was reading this article on Quora and I thought that I should be sharing it.

1) Small purchases add up. In the place where I live, a coffee will cost about $4. Drink a coffee every day and you are dropping well over $1,000 a year on your coffee habit. That's the price of a vacation to a foreign country or a couple tailored suits. Make the coffee at home and save BIG! 2) The true cost is not what you paid today, it's what you give up in the future. I can spend $1,000 on coffee this year. Or, I could put that $1K in an S&P index fund and let it sit till I retire. If I could have earned say 8% annual returns and plan to retire 30 years later, my coffee habit this year reduced my retirement by $10,000. Understand these basic concepts and you'll be able to to become much wealthier by making some simple, sma…

1 Crore on Retirement

I have been getting some emails from some insurance companies asking me to invest into some of their funds/plans and become a crorepati when you retire.
First, I don't like to rely on insurance companies which sell ULIP only to gain the commissions to give you promises especially for your retirement fund.

The ULIP and mutual funds give the returns only on market conditions. Market goes up, you get a good return and goes down.. you know what that means. This is acceptable, when you can afford to take risks, but wouldn't be the only investment for my retirement plan. I would like to invest a bigger portion in debt funds when it comes to retirement, than on equity funds.

The given ad, said, invest 8000 per month and earn 1 crore. But do these people give guarantee on the returns. The disclaimer is always present there, that the returns are subject to market conditions.

Lets say, you invest 8000 per month in a FD and lets say, you still have 30 years of your working life. A simpl…

Your PF

Every time that you change your company, the HR will give you the document to withdraw the money or transfer it to the next company that you join. And we being we, the urge is to withdraw it, considering the fact that you are so pressed for clearing that long pending credit card bill, which has already absorbed huge amount in the form of 33% interest. Definitely, it makes more sense to clear off the high interest rates debts with these amounts which barely give 9% interest.
But hold on. Though the urge is there to withdraw and I know, almost everyone has immediate needs. But just make sure to keep the money handy for your retired life. Remember, now, you have a source of income and the PF money is meant to take care of you when you dont earn. Please remember that you dont earn a pension like our parents did, when worked for an government organisation. Yes, those are the perks that they enjoy , and we will not be.

So , in short, once you join your new company, please transfer the mone…