Neil Armstrong's financial planning tip...

Neil Armstrong's financial planning tip...

Apollo insurance covers:
Neil Armstrong led the historic voyage into the space way back in 1969, but his mind was filled with the worries about his family's finances in case of his absence due to a mission failure... And the crew could not afford life insurance with their federal salaries.

What did they do to protect their families?

So about a month before they were set to take off to moon, Neil Armstrong, Michael Collins and Buzz Aldrin got themselves locked into a room and started signing hundreds of autographs on envelopes with space images, which can become financial valuables for their families just in case if the mission perishes their lives.... They are now referred as Apollo Insurance covers....

Now, most of us are financially well off and need not think of such ideas to protect our families. All one needs to do is to spend Rs 5** a day to protect one's family....

Protect your family right now....

What can Rs 5 get you?

Rs 5 per day** can get you a cover for your health care costs:

**For an individual aged 35 for 1 lac health cover.

All one needs is just Rs 5 per day ** to ensure basic personal health cover.... And Rs 5 these days get nothing substantial for us. Think about it.

Wide variety of features in health insurance plans give you useful options for the entire family:

• Exclusive senior citizens' plans with and without medical tests.
• Maximum cover can go upto 50 lacs.
• No upper limit in entry age.
• Single cover can cover three generations of one family (Grand parents, children, in-laws, grand children).
• Periodic free health check up.
• Life long renewal.
• Special discounts in premiums.
• Tax benefits under Section 80D upto premiums payable upto Rs 35,000.

Health care costs are sky rocketing....

If, cost of a major surgery is now Rs 5 lacs, can you imagine what can the same surgery cost after 10 years???

Rs 31 lacs

A whopping 31 lacs for the same surgery which may cost Rs 5 lacs. That's the effect of rising costs of health care.

Call 9 55 11 55 11 6 for suitable health insurance plan.

My live show in Raj News TV on Equity & Economy

On 6th August 2012

Financial Planning tips: Health Insurance

(The author is the Founder and CEO of Money Avenues, a Wealth Management firm based in Chennai which offers investment solutions through  i.S.M.A.R.T financial plan. Feedback can be sent to ismartfp@ gmail.com) 

Financial Planning Tips: Health Insurance:

Having a separate health cover, apart from what your company provides, makes a lot of sense. Going forward the current generation will confront health care concerns as we are the in the age of rapid lifestyle changes and stress filled careers. All studies point out to the rising health scares in the future as well and compounded by the rising health care costs. With very few exceptions, most diseases are curable these days, thanks to the innovations in the fields of medicine and technologies. But such innovations and life extending technologies come at a huge cost to the people availing health care benefits. This with other factors necessitate one to have a comprehensive health care cover.

Look at the 7 reasons why one must have a health insurance cover right now:

1. Your company's group health insurance  cover you, but may not be sufficient:

Employees and their dependents by and large are covered through group insurance in respective organizations. But many a time, such covers are not sufficient though. For a family of 5 (Husband + wife + kid + dependent father + mother) even a cover of 10 lacs may not be sufficient. But in many organizations, cover may not even exceed 3 - 5 lacs for the total family. Having an independent health cover is paramount, because no one these days work for one organization for their life time. 

2. Risk for dependent parents:

Many organizations have little or restricted covers for the elder dependents, as the risk premium is high on them for the organizations. It is important to have a separate cover for the dependent parents/senior citizens for which one can avail tax rebate under Section 80D. Remember, beyond 60s, taking a health cover for the elderly becomes really tough as the age and health factors make it expensive and cumbersome. Remember during the times of medical emergencies, their health care costs can drain your hard earned savings.

3. Job changes:

In the current career trends, people do not stay with one organization for ever. People keeping moving from one to another at a reasonable pace. The present organization may not offer something similar to what the previous organization offered on group health cover. The vagaries of such changes can be negative many times. One will be left with no cover during the times of transition, from one job to another.

4. Health care costs sky rocket:

Health care costs are set to sky rocket in the future. Thanks to innovations in the field of medicine, most diseases are curable these days with very few exceptions. But unfortunately, such innovations come at a huge cost. Be prepared for such sky rocketing costs in the future.




5. Only you retire, not your needs:

Our generation may not have a predictable retirement lifestyle, given the fact that private sector does not provide us social security post retirement. With the break down of family systems, retirement life will be largely independent and lonely. Health care costs will be an important component in the retirement life. Take a comprehensive health cover now which can come along with you till your life time. Be prepared in a smart way.




6. When PRETIREMENT is the order of the day:

This generation is not fancied about working the usual way for too long... It can be starting our own venture, doing social work, pursue dreams etc., All have aspirations and ambitions of chasing our dreams in life. I don't see many of us working beyond late 40s and 50s... Be prepared for such circumstances by proper planning. Everyone wants to Pretire and not retire..... 


7. Tax benefits under section 80D:

Government extends tax concessions for medical insurance premiums under section 80D. This section allows you to take the benefit for the premiums paid upto Rs 15,000 for self and family, and upto Rs 20,000 for dependent parents. So go ahead and plan your medical insurance and enjoy the tax benefits too....



(The author is the Founder and CEO of Money Avenues, a Wealth Management firm based in Chennai which offers   investment solutions through i.S.M.A.R.T financial plan. Feedback can be sent to ismartfp@ gmail.com) 

Not taking risk is THE greatest financial risk...

(The author is the Founder and CEO of Money Avenues, a Wealth Management firm based in Chennai which offers   i.S.M.A.R.T financial plan. Feedback can be sent to ismartfp@ gmail.com) 



Not taking "RISK" is the greatest financial risk...

Surprising!!! ???


But that's the reality. During our times, the greatest financial risk in one's life is not taking risk... Our generation is going through roller coaster lives. We are in an era of reasonably high income, higher lifestyles, higher aspirations, higher costs, lack of time, dwindling investment choices etc.,


We do take risks in life, careers, jobs but when it comes to investing, we tend to shy away from taking risks. And that will lead us to a definite dead end...


Let's look at the reasons why "not taking risk is the greatest risk in our times"...




Sky rocketing cost of living:

While our incomes are running, costs of living are sprinting... Let's consider few numbers...

• If you were to spend Rs 7.5 lacs for a professional degree for your child now, can you guess what could it cost after 15 years???

Rs 62 lacs

• If you were to spend Rs 20 lacs for a foreign degree now, can you imagine what could it cost after 15 years???

Rs 1.63 Crores

• If you were to spend Rs 15 lacs for a wedding now, can you guess what could it cost after 15 years???

Rs. 1.23 Crores

• Ok, let's see how much would your idli vada coffee breakfast cost you... If you were to spend Rs 60 now, after 20 years...

Rs 990

• If you were to retire now and you need Rs 50 lacs as retirement fund, after 20 years...

Rs 8 Crores

• If your monthly expenses are Rs 25,000 now , the same budget after 20 years would be...

Rs 4.10 Lacs

These numbers give very strong indications about the future costs for sure... These numbers should make one realize that not taking risk is the greatest financial risk....


Let's take the case of retirement:

• Let's assume I need 8 crores for retirement fund after 20 years based on the current estimate of Rs 50 lacs... 
• Let's also assume I deposit Rs 50 lacs in an FD which gives me an average annual return of 9% for 20 years.

After 20 years...

What I need is

Rs 8 Crores

But what I got is

Rs 2.80 Crores.

with the investment @ 9% returns...

The gap between what I need and what I got is too huge to bridge... And that's the cost of not taking enough risks while investing...


Remember, we are living in a globalized economy, wherein risk taking is a key ingredient for successful businesses. Investing in the stocks of such businesses can only add value to our wealth creation efforts...


Before closing, a recap of the story of five friends...



Story of Five friends:


Mr. Lazy
Mr. Fun
Mr. Cautious
Mr. Calculator
Mr. Smart


All of them put Rs 1 lac at the same time and after 20 years lets see how they have done?


Mr Lazy             @ 6%    - Rs 3.21 lacs  
Mr Fun              @ 9%    - Rs 5.61 lacs 
Mr Cautious       @ 12%  - Rs 9.65 lacs 
Mr Calculator     @ 15%  - Rs 16.36 lacs
Mr Smart           @ 18%  - Rs 27.40 lacs


If you observe, the difference between each one is just 3% in returns, but look at the difference in returns over the period of time... And that's the power of compounding for you my friend... It works very silently... 



Mr. Smart took risks and he was rewarded by the power of compounding...


Remember,


Not taking risk is the greatest financial risk




(The author is the Founder and CEO of Money Avenues, a Wealth Management firm based in Chennai which offers   i.S.M.A.R.T financial plan. Feedback can be sent to ismartfp@ gmail.com) 

Power of Compounding works on your money.. But do you?

(The author is the Founder and CEO of Money Avenues, a Wealth Management firm based in Chennai which offers   i.S.M.A.R.T financial plan. Feedback can be sent to ismartfp@ gmail.com) 

Power of Compounding works on your money... But do you?

Power of compounding works like a magic... Of course, only if you allow it to work... Want to look at some numbers??

Story of three friends:

Mr. Smart
Mr. Responsible
Mr. Fun


Generally its assumed that people take higher risks in the early stages of life and reduce the risk levels as they grow old. Same is assumed here...


Each invest Rs 1 lac in the following ways:


Mr. Smart           - at the age of 30 @ 18% PA
Mr. Responsible - at the age of 35 @ 15% PA
Mr. Fun              - at the age of 40 @ 12% PA


At the age 50, lets see how they have done....

• Mr Smart invested Rs 1 lac at the age 30 @ 18% PA and accumulated a mind boggling,

Rs 27.40 Lacs

• Mr Responsible invested Rs 1 lac at the age 35 @ 15% PA and accumulated just about

Rs 8.14 Lacs

• Mr Fun invested Rs 1 lac at the age 40 @ 12% PA and accumulated a meager

Rs 3.11 Lacs

The winner was Mr. Smart because of 3 important reasons:


1. He did not just save..
2. He started investing early on..
3. He got efficient returns..


And look at the difference in the numbers each one made...And it was possible only because of the power of compounding which worked very well in Mr. Smart's favour... And of course he did his home work to take the advantage of the POC..

For the other two, their cases were double edged swords... They not only started late and but also invested in low yields...Though the difference in % returns is not very big, but the difference is too huge in actual returns because of starting early and efficiently...

Moral of the story:

• It's wise to start saving...
• It's wiser to start investing early on..
• It's wisest to invest investing early on with efficient returns...

Only then the power of compounding will be extremely beneficial to your money... An efficient financial planner will be able to guide you to realize the power of compounding for your investments...


If you have missed it...

(The author is the Founder and CEO of Money Avenues, a Wealth Management firm based in Chennai which offers   i.S.M.A.R.T financial plan. Feedback can be sent to ismartfp@ gmail.com) 

Saving Vs Investing...

(The author is the Founder and CEO of Money Avenues, a Wealth Management firm based in Chennai which offers   i.S.M.A.R.T financial plan. Feedback can be sent to ismartfp@ gmail.com) 




Savings is not equal to Investing:

Keeping it in the bank savings a/c @ 6% = Savings


Investing the same intelligently to earn 15% = Investing...


That's the difference...


In actual numbers,


In the first case, 1 lac kept in the bank a/c @ 6% gets you Rs 3.21 lacs after 20 years.


In the second case, 1 lac invested @ 15% gets you Rs 16.36 lacs after 20 years.


Which is your choice? Saving or Investing???


And remember, its not an easy task to achieve 15% returns PA given the constraints you would face. Hence the role of a wealth manager becomes important to make your money work hard...


Remember, Saving is not equal to Investing...



(The author is the Founder and CEO of Money Avenues, a Wealth Management firm based in Chennai which offers   i.S.M.A.R.T financial plan. Feedback can be sent to ismartfp@ gmail.com) 

Blog achieves 10,000 visitors milestone...

(The author is the Founder and CEO of Money Avenues, a Wealth Management firm based in Chennai which offers   i.S.M.A.R.T financial plan. Feedback can be sent to ismartfp@ gmail.com) 


The blog achieves 10,000 visitors milestone... :-)

Thank you visitors and readers...


(The author is the Founder and CEO of Money Avenues, a Wealth Management firm based in Chennai which offers   i.S.M.A.R.T financial plan. Feedback can be sent to ismartfp@ gmail.com) 

Invest in yourself...

(The author is the Founder and CEO of Money Avenues, a Wealth Management firm based in Chennai which offers   i.S.M.A.R.T financial plan. Feedback can be sent to ismartfp@ gmail.com) 

Investing in yourself:

Financial planning is all about YOU.... Investing in yourself. 


YOUR health protection is important:

Health cover is very important for professionals like you and me... Yes, most of us are covered by our companies. But think about the times when there is a change in job, or change in career itself or during the retirement... Our current lifestyles definitely pose great challenge on our health. Having a good personal health cover will provide you the sense of reassurance during times of uncertainty.. Also this gives you a chance to save tax under Section 80D.


YOUR life protection is important:

The life is your's... Take control of it. Life insurance is a great tool to value the invaluable human lives. It's very true that nothing can replace a human life. But life insurance provides financial cover to one's family on his/her absence. Thumb rule is a person should have a life 5 times of his/her annual income, which means on his/her absence the family can sustain atleast for the next 5 years... Your life is important.


YOUR money is important:

You work really hard for your money... Make your money work equally hard for you as well. Because it's your money. Realize the power of compounding which can work wonders for your financial future. 


http://mymoneyavenues.blogspot.in/2012/04/one-compelling-reason-to-manage-your.html


YOUR family's future is paramount:

Your family's financial future rests on your shoulders. Job, career, protection, wealth creation all revolves around your family. Ensure your family's financial future through proper financial planning. Because it's your family...


YOUR goals are important:

You are what your goals are... It can be on your career, children's future, retirement planning etc., Though life is quite dynamic these days, its very important to identify your goals for your future... Which can then be supported by a good financial plan. Because, it's your goals...


YOUR time is important:

Exactly, time is precious. Waste is wisely... We just don't have unlimited time at our disposal... We need live today, save for tomorrow, invest for future... Our and our family's goals and aspirations rest on us and we need to make most of it. Get a financial plan done for you by financial planner and waste your time wisely...


YOU are very unique:

You are a unique person; what is appropriate for you may not be the same for your friend or colleague... You are unique because of your dreams, goals, aspirations, future plans, priorities are unique only to you. Financial planning cannot be "one size fits all"... Financial plans are custom made for each and every individual...


That's why I said, that financial planning is all about investing in yourself...


(The author is the Founder and CEO of Money Avenues, a Wealth Management firm based in Chennai which offers   i.S.M.A.R.T financial plan. Feedback can be sent to ismartfp@ gmail.com) 

Financial Planning Vs T20 Cricket...

(The author is the Founder and CEO of Money Avenues, a Wealth Management firm based in Chennai which offers   i.S.M.A.R.T financial plan. Feedback can be sent to ismartfp@ gmail.com)



8 reasons why T20 Cricket and Financial Planning are similar...

T20 cricket is no different from Financial Planning. Fast paced, uncertain, little time to achieve, limited resources and most importantly, winning the game. Our lives can also be equated with this T20 evolution in the sense that our lives too have evolved drastically.


Let's look @ 8 points what financial planning lessons can be learnt from T20 cricket:


1. Game Plan:

Let's get it straight; T20 is all about precise game plan and teams don't win matches by sheer luck as it's appears. Every ball which is being hit and every ball being bowled is planned for the simple reason that teams have only 120 balls to bowl and 120 to bat and the match has to be won within that... So is the case with our financial life. We have big financial goals and objectives with very little time on hand. That requires a sound financial plan to make one a winner in his/her life. It's all abut game plan.



2. Run rate matters from the start:

Like in a T20, life is filled with run rates... Limited time to achieve too many things... Children education, foreign holidays, new home, retirement plan etc., Time and money is very limited, hence the importance of achieving the desired run rate (returns in our case). 

• Story of 3 friends aged 30: 

They invest 1 lac each and meet after 20 years...


Mr. Cautious invests at the age of 30 years @ 9%
Mr. Responsible invests at the age of 35 years @ 12%
Mr. Fun invests at the age of 40 years @ 15%


@ 50 years...


Mr. Cautious has made  5.61 lacs @ 9% 
Mr. Responsible made   5.47 lacs @ 12%
Mr. Fun has made       - 4.04 lacs @ 15%


If you look at the results, you would be astonished...
Mr. Cautious has made most money among the rest though he earned the lowest returns in the group. But what made him as the winner is, he started early on in his life. On the other hand, Mr. Fun got the highest returns, but started very late in his life.... Power of Compounding worked very well for Mr. Cautious.




3. Right choices of Ps (player/product):

T20 in India is all about getting the right players in the right winning combination. Once that's done, the rest is on the field. Financial life is all about getting into the right products which can ensure our financial future. 


http://mymoneyavenues.blogspot.in/2012/04/one-compelling-reason-to-manage-your.html


The above link shows how people can benefit financially by choosing the right investment avenue with the limited resources.




4. Importance of Coaches:

T20 is all about having great winning coaches. Though the T20 format looks very fun loving, it's a serious business. And that's why we see the best coaches in the cricket business getting drafted into T20 league. Financial planning is all about having good coaches to assist people on formulating financial goals and prepare a financial plan to achieve those goals.




5. Fast faster fastest...:

Our life is as fast as a T20 game and even before we could realize the game is over... Such is our lives that we find very little time to plan for our financial future; but we have ever growing goals and aspirations for our future. We are largely focus on earning wealth.. But the critical component is to create more wealth out of the earned wealth. 




6. Hero there/zero here and vice versa:

We have seen many heroes of ODIs and Test formats turning zeros in T20 formats. Many zeros in ODIs and tests have turned heros in T20. Many of us are hugely successful in our careers and professions, but that may not be the case with our financial planning and there are many reasons for that. Our success in careers need not translate into successful financial life.




7. Make the most out of resources:

Resources in T20 are limited and they have to be optimally utilized. For eg., A best bowler can bowl only 4 overs. Same is the case with our lives. We have limited resource, limited time frame but unlimited goals; we need to optimally utilize it for our financial future. For eg., If I have Rs 1 lac to invest., I can either keep it in bank a/c which gives me 6% or I can choose to invest in an avenue which can give 15%. This is one way to look at optimizing resources. 


8. Defensive and Offensive game play: Protection and creation

T20 is all about the judicious mix of defense and offense, though it is widely popular for exotic shots and scores. One has to protect wicket when it is required and offend when needed the most. Same is the case with our lives. We need to first protect our and our family's interests against uncertainties. Also that we need to go for long term wealth creation for a bright financial future. Any one strategy alone will not yield the desired results both in T20 and our lives.





(The author is the Founder and CEO of Money Avenues, a Wealth Management firm based in Chennai which offers   i.S.M.A.R.T financial plan. Feedback can be sent to ismartfp@ gmail.com)

One compelling reason to manage your money effectively...

(The author is the Founder and CEO of Money Avenues, a Wealth Management firm based in Chennai which offers   i.S.M.A.R.T financial plan. Feedback can be sent to ismartfp@ gmail.com)



One compelling reason to manage your money effectively:



Power of Compounding:

There are many compelling reasons to manage one's money effectively, but I can tell you one compelling reason as to why you have to manage your money effectively, and Power of compounding is that reason...


Story of Five friends:


Mr. Lazy
Mr. Fun
Mr. Cautious
Mr. Calculator
Mr. Smart


All of them put Rs 1 lac at the same time and after 20 years lets see how they have done?


Mr Lazy            @ 6%    - Rs 3.21 lacs  
Mr Fun             @ 9%    - Rs 5.61 lacs 
Mr Cautious      @ 12%  - Rs 9.65 lacs 
Mr Calculator    @ 15%  - Rs 16.36 lacs
Mr Smart          @ 18%  - Rs 27.40 lacs


If you observe, the difference between each one is just 3% in returns, but look at the difference in returns over the period of time... And that's the power of compounding for you my friend... It works very silently... 


Remember earning money is only one side of the coin; but creating wealth is the important another side of the coin...


Just by effectively investing the money Mr Smart has got 21 lacs more than Mr Lazy, who had kept his money in his savings bank A/C...

So decide if you want to be Mr Lazy or Mr Smart on managing the hard earned money... End of the day, you work really hard to earn money... The next time you leave it in your savings bank a/c, think about the power of compounding...


(The author is the Founder and CEO of Money Avenues, a Wealth Management firm based in Chennai which offers   i.S.M.A.R.T financial plan. Feedback can be sent to ismartfp@ gmail.com)