Monday, September 28, 2015

SMART INVESTORS START EARLY

 Be A Smart Investor and Start Investing Early to Get Compounding Benefits. 

Little Drops of Water Make A Mighty Ocean!!

 Saying to you “I will start next week” is nothing less than a disaster. This next week could well next fortnight, next month, next quarter and even next year. Time flies and the amount you need to invest will only increase. The hard truth is you just can’t afford to delay.



 It is rightly said that Time is more than money. 


Starting saving early ensures that you have the time ti ride out the stock market volatility and thus you are in a position from the '8th Wonder of the World' the "Compound" effect. The younger you are, the fewer are your financial obligations, leaving you with higher surplus to invest. 



If you start to invest from the age of 25 years Rs. 5000 a month, your total investment will be Rs. 21 Lacs till your retirement age of 60 years. Your investment value will be Rs.5.70 Crore.

If you start to invest from the age of 35 years Rs.15000 a month, your total investment will be Rs. 45 Lacs till your retirement age of 60 years. Your investments value will be Rs 4.13 Crore.
 
How come you invest less still get more value or you invest more still get less value ?? 
It is just because "Time is More than Money"

Start investing Early in life to create more wealth...
 
 
You will be surprised to see the enormous difference by investing just 1 month early.



COST OF DELAY :


Do you know that if you intend to invest Rs.2000pm and delay the same by just one(1) month, you would be losing Rs.1,90,792!!!! (Calculated @20% for 25 years). And in today's worth of money, you are losing Rs.44,454. Yes, by delaying your Rs.2000 investment by 1 month, you are losing Rs.44,454 in today's worth


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Sunday, September 13, 2015

Sovereign Gold Bonds Scheme - Better than even Gold ETF


The Government with an intention to attract the Huge Quantity of Gold laying in the households of Indian Family and reduce the Demand for Physical Gold has recently approved the  approved the Sovereign
Gold Bonds Scheme, which was announced in the Budget 2015-16.

HOW MUCH?
Under the Scheme, Investors can buy/deposit up to 500gms of Gold per year by way of Gold Bonds which will be issued by the Reserve Bank of India. These Bonds will not only give the same benefits of a Physical Gold but also the convenience of easy liquidity by way of listing on Stock Exchanges where you can buy/sell/trade these bonds.
These bonds can also be used as Collateral for Loans too.  The bonds will be issued in rupee. They will be issued in denominations of 5,10,50,100 grams of gold or other denominations.
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The Tenor of the Bonds are not yet announced but it is expected to be about 5 years.


TAX TREATMENT:
* Capital gains tax will be the same as for Physical gold for individual investors. This means
that short-term capital gains tax will apply if you sell within three years. The profits will be added to your income and taxed at income slab. Long term capital gains tax is 20 per cent with indexation.


SHOULD YOU GO FOR IT???
Yes, if you are holding Gold purely for Investment purposes, the Scheme makes great Financial Sense.
In fact, if you are buying Gold, say for a Marriage in Family which is about 10 years away...then this Scheme definitely makes sense.
You can buy, say 100 gms and for that interest (2%, is what I hear) (again, not much, but something is better than nothing)....so at the end of 10 years, you will have not just 100gms but 110 Gms which makes this Scheme a Winner.

Whats more, the minimum is only 30 gms!
 And, the icing on the cake is, (not yet confirmed), the Sovereign Gold Bond Scheme could well see Capital Gains Tax Benefit  in the Next Budget!!


In fact, if you are accumulating Gold via Gold ETFs, then this scheme is all the more attractive to you. 

Ask your Financial Planner who should be able to guide on this.


Safety?
No worries here. Since these are Government of India bonds, they are sovereign.

If you are buying Gold for Consumption purposes, (Jewellery for family members), then this Bonds may not work for you.

WILL THE SCHEME BE SUCCESSFUL?
I doubt this!
Indians are too emotionally attached with Gold. No family would like to see their "beloved" Gold melted and given a Paper in lieu of it!

Quantity of Gold credited to the Depositors of Gold will depend on the Purity of Gold. Now, this could be a cause of clashes and could lead the Investors to be wary of the Scheme.

 Another negative could be the fact that the Redemption will be in the Form of Rupees. Now, this is a double edged sword. While some may argue, I can always add my cash and buy more or use this cash to buy less, sentimentally Indians have great attachment with Gold and would rather prefer Gold Bars.

Majority of Indians buy Gold with Black Money and buying these bonds is possible only with White Money!!!

And pledging Gold is the ultimate last resort of Indians....so this Scheme will find it very difficult to attract its core target - the Indian Families and in that sense, this sense could well be failure.....though its intentions are very good.

Regards,
Srikanth Matrubai


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also visit http:/http://goodinsuranceadvisor.blogspot.in/

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