Alpha Investments

Thumb Rules of Financial planning.

1. 30 % of your income must be used for monthly living expenses.

2. 30% of your income must be used for Liabilities repayments, if any..

3. 30% of your income must be SAVED and INVESTED for your future LIVING.

4. 10% of your income must be spared for entertainment, vacations

5. 6 months expenses must be available for emergency fund (should be invested in LIQUID FUND, FD Etc)

6. Home Loan must be registered and apply on both husband and wife name. (Both can get benefits on Home loan Tax benefits)

7. Buying second house for investment is not advisable ( Survey reports - it will fetch you only around 2-3% return)

8. After 45 years of age, not supposed to enter into any BIG LIABILITIES (Higher education of children and wedding of children will happen around 45 to 55 only, so plan now for the same.)

9. Have joint account @ Bank savings account.

10. Property must be registered on both Husband and wife name. (As per legal act – after husband first legal heir is wife, after wife it will go to children only)

11. Regular check on Nominations at all financial instruments. if not nominated, do it now..

12. Only in insurance policy, Claims payable to Nominee. In other financial instruments legal heirs certificate is must to get back the settlement

13. Must have Term Insurance to financially secure future of your dependants..

14. Don’t take any financial investment decisions EMOTIONALLY, and also Avoid last minute tax saving investment decisions, plan well in advance..

15. MEDICAL COVER must (in spite of Group mediclaim coverage given at office) (After retirement there is no mediclaim coverage, after 50-55 years of age, it's very tough and costly to enter into mediclaim)

16. For your jewelry LOCKER, Only one lakh is payable by bank, if theft or fire happen at bank. Provided insurance done.

17. Like same way Government guaranteed only one lakh for your FD also. (Fixed deposits with Banks upto Rs. 1 lakh only are backed by deposit insurance)

18. Must know all Tax implications. You cannot avoid paying tax. But you can minimize by way of tax planning and investments..

19. All financial documents must be kept safely and keep family members informed of the same..

20. Financial investments must be followed through personal financial advisor..

21. Review your portfolio at every six month..

These are general suggestions, personal Finance and investment decisions depends upon case to case_

Have a Healthy and Wealthy Financial Year 2017-2018..

Digitising MFs:

1) Liquid Funds as alternative to e-wallets:
After demonetisation, there has been a huge surge in making payment to vendors through e-wallets like PayTM, SBI Buddy, Mobikwik, Freecharge, etc. To make the payments to vendors, the e-wallet on registered mobile no. is first funded from Bank Account. Liquid Funds can be a good alternative to e-wallets for making payment to vendors by redeeming units. Currently, when the redemption from Liquid Fund is done, payment is made to the investors Bank account, it cannot be paid to third party. MF industry will have to overcome this hurdle. There is one possible solution, Investor’s mobile no. is registered with MF, it is possible to register the third party (vendor/receiver of Funds) with MF through mobile app from investors registered mobile no. The redemption amount can then be paid to the registered third party (vendors/receiver) only. MF Industry can also tap such vendors for transferring the money to Liquid Fund in Vendor’s name. MFs can decide on upper limit for such third-party payments to protect investors from frauds. Investor can also earn higher return on his idle Funds and help MF industry to pe*****te and popularise MF Products.

2) Liquid Fund account for payment of monthly Salary:
Currently, Large and small organisations are paying monthly salary to employees Bank Account by ECS, The primary account thus is Bank account for all transactions, after making all monthly payments, the investor may transfer some amount to Liquid Fund or it remains idle in savings account. Why can’t the Liquid Fund account be primary account. The monthly salary could be first transferred to employees Liquid Fund account and he will transfer the moneys to his Bank Account as and when he wish to make payments through cheques or otherwise. Employees should be given a choice to get their salary either in Bank account or Liquid Fund. AMCs should start with their own employees to set a good example for retail investors.

A Healthy Money Tree

Money Plant, besides being an ornamental plant, is believed to bring prosperity and luck. Some of us grow and nurture money plant at home. But how about growing and nurturing your own “Money Tree”? A Money Tree which will yield fruits and give shade in your old age.
Many of us do plant the Money Tree. But with our little knowledge we do not nurture it to its best. Most of the investors have substantial investments in Savings Bank Account, Fixed Deposits and Insurance policies. But this kind of nurturing the “money tree” will provide you only limited or scarce production of fruits, leave alone the shade needed in your old age. This kind of “money tree” will bring in only limited prosperity as it does not consider the inflation demon and taxes which restricts the growth of money tree to its full potential. To grow a healthy and fruit bearing Money Tree, you should invest in different schemes or products which are taxed less and are high on returns than inflation rate.
Let’s see an example, a Mango Tree bears 1000 delicious and tasty mangoes every year. Some of these, say 100 mangoes get damaged by bacteria and micro-organisms before they are ripe, a few others, 300 mangoes are eaten by birds and monkeys. And now, you are left not with 1000 mangoes but only 600 mangoes which can be truly eaten and relished. Similarly, in your money tree, inflation represents the bacteria affected mangoes and taxes represent the mangoes damaged by the birds and monkeys, which invariably reduce your produce (income) from 1000 mangoes to 600 mangoes. Hence your focus should be on nurturing your Money tree healthier with high produce by pruning up through reduced taxes and high returns than inflation rate.
Investments in Mutual Funds will make your Money tree healthier by reducing taxes and giving you higher returns over inflation. This nurtured healthy ‘Money Tree” will bear healthy fruits and give greater shade in your old age.
Begin nurturing your Money Tree today!! Consult your Mutual Fund advisor to help you nurture your healthy ‘MONEY TREE’.

Simplify your life - make payments from your mobile - thru UPI

To overcome the lower denomination cash crunch, a simple solution to make payment through mobile is made available by RBI, follow the steps below and you will realise that sending and receiving money is as simple as sending and receiving emails or messages.

Simple Solution from RBI to make small CASHLESS payments:

Step 1:
Check whether you have account in following Banks which are currently providing this customer friendly facility
Andhra Bank, Axis Bank
Bank of Maharashtra, Bhartiya Mahila Bank
Canara Bank, Catholic Syrian Bank
DCB Bank
Federal Bank
HDFC Bank
ICICI Bank
Karnataka Bank
Oriental Bank of Commerce
Punjab National Bank
State Bank of India
TJSB Sahakari Bank
UCO Bank
Union Bank of India
United Bank of India
South Indian Bank
Vijaya Bank
YES Bank

Bank of India and Bank of Baroda will shortly provide this facility

Step 2:
Check whether you receive SMS on your mobile no. from your bank regarding credits or debits in your Bank account,
if YES then we are closer to solution of making easy cashless payments
if NO then visit your Bank branch, complete KYC process, carry your’s and joint holder’s photo, PAN cards and Aadhar Cards, register your PAN card, mobile no, email address (if any)

Step 3:
Check whether you have Android Phone as currently UPI app is available on Android phones.
Is your phone Samsung Sony, HTC, LG, Motorola, Nexus, Micromax, Lava, Vivo, Nokia, Google Oppo, ZTE, Xiaomi, Lenovo, Huawei, OnePlus then you have Android phone.

Step 4:
Go to Playstore
Search any Bank “ UPI App” in ‘Playstore”, take help of younger generation to install the UPI app
You can install any of the Bank UPI App, lets take SBI UPI App
Click on link for SBI Pay https://play.google.com/store/apps/details?id=com.sbi.upi
Or you can use AXIS PAY https://play.google.com/store/apps/details?id=com.upi.axispay

Press install button, installation of app on your mobile may take few minutes.
You can install any bank app even if you may not have account in SBI or Axis.

Step 5:
Register your mobile, generate a password and virtual address for cashless payments and receipts. This is similar to generating email address in Gmail, Yahoo, Rediffmail, Hotmail etc.
You may choose yourname@bankname as virtual address.

Step 6:
You are now ready to do cashless transactions. This is similar to sending or receiving your email or messages.
Choose virtual address of a person you wish to make payment, enter the amount and click “send”.
To receive payment, choose virtual address of a person you wish to receive amount from and click on “ask”

Step 7:
Try among family members, friends and relatives first, transact small amounts to get the hang of the system. This is 24*7*365 days system with maximum limit of Rs 1 lakh per transaction.

Once you become expert, train others so as to get the maximum benefit of UPI system of RBI.

SBI Pay - Android Apps on Google Play

Demonetisation Impact on your Investments

Life and Investments are similar to game of Chess; to succeed you anticipate first and then make your move, but your chances of success are less when you make your move first and expect your opponent (circumstances and environment) to follow according to your plan.

The impact of demonetisation on our investments will be short term pain and long term gain. As in Chess, you may lose a few pawn, knight or bishop initially but to Checkmate or succeed you will have to anticipate what’s next.

Govt fight against black money is now quite clear, the cash economy will be throttled and unorganised sector will be slowly turning towards the banking system. This will be slow process as it involves attitudinal change in dealing with day to day transactions from cash to electronic and mobile banking of whole of Indian population. This is similar to computerisation of banks in early 1990, there was huge opposition, required attitudinal change but we all see the benefits today. Can you visualise the huge amount of transactions and ease of banking without computerisation?

The impact analysis of demonetisation is given below:

1) Equity and Debt Markets
Expect a bumpy road ahead for next 3 months before smooth ride. The Indian equity markets would be volatile more due to external events like US Fed raising interest rates, Euro Banking crisis, UP election outcome, Trump policy announcements. A smart investor will invest at every dip during such events as every market fall will be an opportunity to invest at low levels.

Debt markets should do well over next 6-12 months as interest rates trend lower. However, Debt Funds should be held for minimum 36 months to benefit from lower tax impact. If you are investor who understand volatility and your investment horizon is more than 36 months Equity/Balanced Funds would suit you better.

2) Deposit rates and borrowing rates to fall:
The legitimate huge cash holdings will find its way to Bank accounts and in short term Banks will have liquidity surplus. The interest rates on deposits will trend lower. Banks will be forced to lend thus giving a boost to economic activity including consumption. Lower interest rates will also increase Corporate profits as interest costs decreases.

3) Inflation to trend lower:
As black money component in economy reduces and more legitimate money flows in bank accounts less money in citizen’s pocket to splurge or even buy essential day to day goods, this will reduce demand, housewives will negotiate harder with vendors. Bank lending should help boost supply of goods. The impact of decline in demand and increase in supply of goods will bring down the inflation over next 6 to 12 months

4) Few Sectors will suffer:
The cash hoarded or unaccounted money finds outlet in real estate, gold and unaccountable lifestyle, thus the govt measures on demonetisation may lead to decline in demand for real estate, expensive jewellery, capitation fee based expensive professional courses and high end consumer luxury goods. Consequently, the demand for cement, paints and construction materials will also suffer. The negative impact on these sectors may last for 12 to 18 months.

The unorganised sector like small traders, small scale manufacturing and services which depend on money lenders for cash working capital will be hugely impacted in short term. However, they will eventually turn to Banks, NBFCs and Microfinance firms for their borrowing and this is a huge positive for these sectors.

5) Higher Government spending on Social and Infrastructure Sector:
Many unorganised sector businesses will come in mainstream and their income will be reflected in Bank accounts. Govt will be able to garner more taxes from such business activities. It is expected that the increased revenues with govt will be utilised for improvement of social infrastructure viz; primary education, medical facilities, rural roads and market access. Further increase in expenditure on physical infrastructure like ports, roads, railways, waterways. This should boost demand for cement, steel and metals. Better connectivity will help tourism sectors. The employment generation in rural economy will increase demand for consumer goods.

Demonetisation to benefit PSU Banks more than Private sector Banks
What you see today is long queues outside Banks to deposit Cash. This is happening in large cities, small towns and villages all over India. The common man on streets, small traders, hawkers, peons, maid servant, taxi drivers just look around and you will see lakhs of such small but active contributors to the economy who use to keep cash at home are now depositing cash in Banks. The impact on Banks is that it will lead to huge liquidity in Banking system which will bring the interest rates down and force Banks to lend to large and small businesses. I expect that PSU Banks will be major beneficiary of demonetisation as they have huge branch network and aam janta trust PSU Banks more than Private sector Banks. Lower interest rates will boost treasury income and reduce the probability of NPAs which is huge positive for PSU Banks. Lower interest rates will also affect Private sector Banks negatively as their NIM - net interest margin will shrunk. Private sector Banks also have high cost structure, higher wages and currently their shares are overvalued compared to PSU Banks.. Going forward smart investors may sell Private Banks like HDFC Bank, Axis Bank, IndusInd, Yes Bank and shift to SBI, PNB, BOB and host of undervalued PSU Banks.