An ideal financial plan

An ideal financial plan
by Priyanka Sharma 25/09/2017

To achieve your long term financial goals, you must have a financial plan. A financial plan is a process of estimating the capital that you would require in the future to become financially secure. As life is uncertain and full of certain contingencies, having a financial plan will ensure that you achieve all your financial goals.

It is of primary importance that you make a financial plan that is ideal and is according to your lifestyle. Here are some points which will aid you in making a financial plan:

S.M.A.R.T financial goals

Identifying and setting financial goals is the essence of any financial plan. Without financial goals, there won't be any motive to your financial plan. An ideal financial plan requires your goals to be S.M.A.R.T. For a goal to be an S.M.A.R.T goal, it should be:

  • SPECIFIC by stating the goals to be achieved with the money involved.
  • MEASURABLE by exactly estimating the monetary amount.
  • ATTAINABLE by setting goals which are attainable.
  • REALISTIC by setting goals which can be achieved given the market trends and your financial condition.
  • TIME BOUND by setting a time limit to achieve the financial goals.
  • Once you have set S.M.A.R.T goals, you can start investing your resources to meet these goals within the required time limit.


Your financial plan should provide adequate provisions for unfortunate events and emergencies. It should contain investments that can be liquefied when there is a sudden need of cash. You can look to invest in mutual funds through SIP (Systematic Investment Plan) which will provide you a disciplined approach towards investment as you can invest as little as Rs 500 per month and withdraw when you are in need of money. Another investment you can opt for is a life insurance policy which will provide you a life cover in the form of death benefit and a maturity benefit at the maturity of the term.


An ideal financial plan should always be flexible in the sense that you can change it according to your lifestyle. With time, your income will increase and so will your needs and your standard of living. The financial plan should have the ability to adjust according to the changes in your financial needs and your social status. If your financial plan is rigid and doesn't allow for adapting to change, there is a fair possibility that you won't be able to achieve your financial goals.


A financial plan should be simple; it should be readily understood and managed by you in every sense. As it will be you executing the plan at every stage, you should make it manageable so that you can monitor your investments quickly without having to spend a considerable amount of time. A simple financial plan will ensure that you won't make any complicated mistakes and achieve your financial goals efficiently.


An ideal financial plan should be able to anticipate future expenses and market trends after a thorough understanding of the basics of the market and the financial condition of the person making it. It is only by anticipating future expenses that the financial plan can provide a monetary value to the financial goals. In simple words, the ability of foresight would mean that besides the needs of "today," the financial plan also provides for the requirements of "tomorrow".

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7 Benefits of Online Trading

7 Benefits of Online Trading
by Nutan Gupta 25/09/2017

Online trading is an act of buying and selling financial products through an online trading platform. Stocks, bonds, options, futures, and currencies can all be traded online. These platforms are normally provided by internet based brokers and are available to every person who wishes to try and make money from the market. You can educate yourself on your investment options, place orders to buy and sell, and possibly make (or lose) a considerable amount of money without ever speaking to a broker or leaving the comfort of your home.

Online trading has a lot of benefits; here are the 7 main benefits:

It is convenient

When it comes to online trading, you only need to open a trading account via internet and you’re good to go. You’re not bound by time and place as long as you have an internet connection. Hence, online trading is convenient and accessible from anywhere with limited hassle. It also saves time.

It is cheaper

In online stock trading, the stock broker fee which you will have to pay is lower when compared to the commission charged by traditional method. If you trade in a sufficiently large volume of stocks, it is possible for you to be able to negotiate your broker’s fees.

You can monitor your investments anytime

Online trading allows you to buy or sell shares according to your convenience. It offers advanced interfaces and the ability for investors to see how their money is performing throughout the day. You can use your phone or your computer to evaluate your profit or loss.

It almost eliminates the middleman

Online trading allows you to trade with virtually no direct broker communication. Apart from reducing the overall trading cost, this benefit also makes the trading hassle free, making this service much more lucrative.

Investor has greater control

Online traders can trade whenever they wish to. On the other hand, in traditional trading, an investor may be stuck until he or she is able to contact their broker or when the broker is able to place their order. Online trading allows nearly instantaneous transactions. Also, investors are able to review all of their options instead of depending on a broker to tell them the best bets for their money. They’re able to monitor their investments, make decisions and buy/sell stock on their own without any outside interference; thus, giving them greater control over their investment.

Faster Transactions

Online banking is fast and efficient. Funds can be transferred between accounts almost instantly, especially if the two accounts are held at the same banking institution. All it takes to be able to buy or sell stocks is a single click of the mouse. Through this, a quicker exchange can be made which may also ensure quicker earnings.

Better understanding of one’s money

This is a hidden advantage of online trading which you wouldn’t want to pass up on. Just like conventional stock trading, you can predict the market behavior and use this to predict a rise or fall in price of the stock. You’ll be handling your own finances and be responsible for them. Over time, you become more experienced in understanding the market, and good investment opportunities from the bad ones. This knowledge about money is very useful, and having this on your resume makes you more marketable to companies looking to fill a well-paying position in the finance department. So while making a quick buck, you also manage to become financially smarter, in both your professional and personal life.

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5 ways to double your investment

5 ways to double your investment
by Nutan Gupta 25/09/2017

Everyone dreams of making more money. But unfortunately, everyone doesn't have the privilege to ask for a pay increase. Our day to day expenses keeps on growing at a rate which is much higher than the annual increment of our income. But a pay raise is not the only way to increase your income. These are the many ways by which you can enhance your earnings and can even double your investments:

Earning it slowly: The Classic Way

One of the most tested ways to increase your investment over time is to invest in a good, old fashioned portfolio which has both stocks and mutual funds and is not speculative. The money you invest in these will not double right away, but it will inevitably increase eventually.

To be able to speculate how much time your investments will take in growing themselves, there is a simple rule of thumb called the ‘72 Rule’. It works on the principle that if you divide 72 by the expected annual rate of return, you will be able to predict the number of years it will take for your investment to double itself.

For example, let us assume that your expected annual rate of return on your investments is 8%. On dividing 72 by 8, you will get the number of years in which your investment will double; i.e., 9 years in this case.

High Risk-High reward: The Contrarian Way

Share market is the best and the quickest way to make money. You can purchase shares online by yourself or through a broker. You can sell your shares anytime and earn quick money.

There is no denying that buying shares and stocks come with the risk of losing all of your money. However, it also includes tremendous opportunities to earn a significant amount of profits as well. If you are careful and have researched all about the earnings and the book value of the company you wish to invest in, investing in stocks and shares will ensure that you double your investment in no time.

Systematic investments: The Safe Way

Most of us have a full-time job and are very busy with work and related projects. Investing and researching about a company takes a lot of time which most people don't have. However, this doesn't mean that you are out of the "doubling your investment game."

Investing in mutual funds through SIP (systematic investment planning) provides you an opportunity to increase your investments over time without continuously monitoring the market conditions. You can invest as little as Rs. 500 every month. Your money is automatically deducted from your bank account and invested in a particular mutual fund scheme. Your mutual fund account then gets credited with units equal to the amount you have invested.

SIP provides for a systematic investment without having to worry about giving your precious time towards investment and still doubling your investment over time.

Future values: The Speculative Way

While slow and steady might work for some investors, some investors are constantly looking to increase their investments as soon as possible and are willing to take bigger risks to earn greater returns. For these kinds of investors, derivative trading is a perfect choice.

Derivatives are financial contracts that derive their value from an underlying asset. These could be stocks, indices, commodities, currencies, exchange rates, or the rate of interest. These financial instruments help you make profits by betting on the future value of the underlying asset (such as stock, futures, a commodity, currency or an index) on which a derivative's price is based.

Derivative instruments are of two types: futures and options. Futures allow you to bet on future trends in prices of an underlying instrument in which you are not required to pay the entire amount right away but only a fraction of the value of the stocks. Options give you an alternative to buy or sell the stock, commodity or a debt instrument at a target price. If you think that the stock price of a company will increase in the future, you can buy the stocks today and can sell them in the future when their price increase, giving you the opportunity to earn huge amount of profits.

Appreciation values: The Smart Way

Real estate is another investment option which is capable of doubling your money in a period as low as 5 years. It provides for a stable cash flow as you can rent the property and is far more predictable from any other investment options. Buying a house or a land today for Rs 30 lakh can increase in value by way of appreciation and yield a return of up to Rs 50 lakh in just 5 years.

Right now, real estate is little down due to demonetization. However, it is expected that this sector will soon regain its former status, thereby providing opportunities for a huge amount of profits to be amassed in a short period.

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The ABC’s of Investing

ABC's of Investing
by Nutan Gupta 25/09/2017

The money that you earn is partly spent and the rest is saved for a rainy day. Savings refer to the funds that are kept aside in safe custody, such as a savings account. Instead of keeping this money idle, you can invest your savings in various financial instruments which will pay you a hefty return in the near future.

The question that arises now is how and where to invest this money. Potential investors can always take the help of a financial advisor and an investment advisor, both of who are capable of providing detailed knowledge on the subject on investment and investing money. Investors can start investing after fulfilling the following simple steps:

  1. Obtaining documents relating to Personal Identification Proof and Address Proof.
  2.  Approaching intermediaries like a broker, RM etc.
  3. Filling up the KYC form and furnishing the details required.
  4. Filling up of the broker-client agreement.
  5. Opening a DEMAT Account and linking it with a savings account.

As soon as these steps are completed, an investor can start investing in the financial market.

The investment options can be well classified into 2 parts. They are:

  1. Physical assets: It comprises of tangible items like real estate, commodity, goldand silver in the form of jewelry and even antiques. 
  2. Financial assets: It comprises of FDs with banks, small savings instruments with the post offices, provident fund, pension fund, money market instruments and capital market instruments.

The money market gives the scope of short term investment options. It deals with debt instruments such as bills of exchanges, commercial bills, treasury bills, certificate of deposits etc. These have relatively low risk and relatively low returns. However, they are one of the safest investment options, especially for those investors who want to play safe.

A capital market is an option for long term investment. The various instruments of capital market are shares of companies (equity), mutual fundsSIP investmentderivatives market, IPOS, etc. These have a higher risk and higher returns in comparison to the instruments of the money market. Although stock investing is considered to be more rewarding, the high risk factor associated with it can result in loss if there is a downswing in the activities of a company.

The investment strategies of an individual depend on certain factors, such as:

  1. The risk taking appetite of investor
  2. The time horizon of investment
  3. Expected return
  4. Need for investment

Investments make our fund grow over a period of time whereas savings is just idle cash. Our short term needs can be fulfilled with the help of our savings but for the achievement of our long term financial goals, investment is a must. This is only possible with financial planning.

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Sectors to benefit from Indo-Japan bullet train project

Sectors to benefit from Indo-Japan bullet train project
by Nikita Bhoota 29/09/2017

Indian stock markets have rallied 23% (Nifty 50) and 21% (S&P BSE Sensex) in the first 8 months of FY17. Nifty 50 has crossed the 10,000 mark and Sensex surpassed 32,000 for the first time. It is an uphill task to identify stocks for investment in such a bullish market. One way to select stocks is to spot sectors that are likely to see an organic growth supported by concrete development plans/policies of the government.

Among the recent developments, Mumbai-Ahmedabad bullet train project in collaboration with Japan is a remarkable project. In this project, Japan will be the primary financier wherein it will fund 81% of the project cost at an interest rate of 0.1%; the overall cost is expected to be Rs 1.1 lakh crore. The project is expected to be completed by FY22.

On the basis of the above development, we believe Capital Goods, Metals, Infrastructure and Cement sectors to benefit the most from this project.

Capital Goods

Capital Goods sector is the backbone of the numerous manufacturing subsectors in the country such as Heavy Electrical Equipments, Power, Defense and Railways. The sector has seen 3.7% growth in FY17. Going forward, Capital Goods sector is expected to grow with the support of government initiatives like Make in India and bullet train project. Some of the stocks that are likely to benefit from bullet train project include:

BHEL - Government-owned BHEL, India’s largest power equipment manufacturer with 55% market share in the segment, is likely to play a major role in country’s bullet train project. BHEL and Japan-owned Kawasaki Heavy Industries have formed a joint venture to manufacture rolling stocks for the project. According to recent reports, the company is expected to manufacture the coaches at its Jhansi Plant in Uttar Pradesh or Bhopal in Madhya Pradesh. The company has an order backlog that stands at Rs 101,380 crore in Q1 FY18.

Siemens and ABB - These companies are expected to benefit from bullet trains as they manufacture electrification systems and high-speed rail traction. ABB derives ~25% of the total revenue from electrification products business.


India is the 3rd largest steel producer in FY17 with total production of finished steel at 83.01 million tonnes. Government is taking steps to improve the country's domestic steel sector and raise its capacity to 300 million tonnes (MT) by 2030-31. Pickup in domestic activity as well as commencement of developmental programs like construction of smart cities, bullet train etc will increase the demand for metals and related products. Some of the companies to benefit from the bullet train project include:

Tata Steel and JSW Steel - These stocks are likely to benefit from the project as it will increase the demand for commodities like steel, iron etc. JSW Steel is one of India’s largest private sector steel manufacturers with a capacity of 18mtpa followed by Tata Steel with an installed capacity of 10mtpa.


The Government of India is highly focused on improving the rail and road connectivity in the country. Road Transport & Highways Ministry has invested around US$ 47.7 bn and Union Budget 2017 has further allocated Rs 131,000 crore for laying down 3,500 km of railway lines in 2017-18. Metro rail and bullet train project are the step towards developing urban infrastructure in the country. Some of the stocks to benefit from these initiatives:

NBBC- The company is likely to get new orders for development of new railway stations once the bullet train project is commissioned. The company recently got orders to develop 50 stations (10 stations in June 2017 and rest in September 2017). The company has a strong order book of Rs 75,000 crore in Q1 FY17 (90% from PMC and redevelopment segment, 10% from real estate and EPC division).

Larsen and Toubro Ltd - L&T offers services like construction of railway sidings and yards, bridges (steel and concrete), tunnels, rail-based urban transit systems (metro systems), stations (including underground stations), railway electrification, rolling stock, locomotives, intercity coaches, wagons and so on. The company has a total order book of Rs 262,900 cr as on Q1FY18.


India is the 2nd largest producer of cement in the world.  It has a production capacity of 420 MT as on June 2017. The country has a lot of potential for development in the infrastructure and construction sectors and the cement sector is expected to largely benefit from it. Some government initiatives like smart cities and bullet train project will boost the demand for cement. Some of the companies to benefit are:

Ultratech Cement- It is the largest cement producer in India with a cement capacity of 95.3 MT (includes acquisition of the cement plants of JAL and JCCL- 21.2 MT and overseas operations). It has a market share of 22% on a pan-India basis and is the 4th largest player globally.

Some of the other cement companies to benefit from this project are ACC, Ambuja and Prism Cement.


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What is the right age to buy a term life insurance cover?

What is the right age to buy a term life insurance cover?
by Nutan Gupta 01/10/2017

Death comes knocking at the door without any prior notice. The death of the only breadwinner of the family brings the family into severe financial crisis. This is the time when you realise the importance of a term insurance policy the most. A term insurance plan secures the life of your loved ones and helps them to meet their day-to-day expenses. It is always better to buy a term insurance plan early in life as an individual gets immense benefits for starting early. Also, the premium charges are also low when you are young.

Let’s take a look at the different ages and factors that one should consider while buying a term insurance.


During the 20s, an individual just steps into his professional life and is relatively debt free. He has lesser family responsibilities and buying a term cover at this age can help him pay off his education loans if any. Moreover, term insurance premiums are less expensive when an individual is young.


An individual, in his 30s, tend to have family and kids. While his income is higher at this age, the responsibilities are much more. He may have financial liabilities like home loan, car loan etc. The premium will tend to be slightly higher, given the family responsibilities.


During this age, an individual’s long term financial liabilities like a home or car loan is paid-off. However, he may have higher responsibilities like his child’s higher education or his own retirement planning. It is better to opt for a cover which provides a greater coverage and financial protection. The cover should be able to take care of your family expenses after your death.


When an individual reaches this age, his children already start earning and most of the debts are paid-off. Family members are not financially dependent on your earnings. During this age, what an individual is most concerned about is his retirement. At this age, the best option for an individual is to buy an endowment plan which will help him save and give him a lump sum amount on maturity.

Term Insurance Premium amounts for a cover of Rs. 50 lakh

Age Premium Amount
22 Rs. 4,270
32 Rs. 5,455
42 Rs. 9,606
52 Rs. 17,534

The above table shows the difference in premiums as per the age of an individual. As the age increases, premium increases.


Age plays a major role in deciding the amount of your term insurance. The biggest mistake an individual makes is to not opt for a substantial cover for the family. One should make sure that the term cover takes care of all the basic necessities of the family in case of the sudden demise of the policyholder.

Get a Term Insurance Cover Now!