Making Your Financial Dreams Come True

Like most people, you have hopes, dreams, and life goals for yourself and your family. These might include buying a home or business, saving for college education for your children, taking a dream vacation, reducing taxes, and retiring comfortably. Financial planning is the process of wisely managing your finances so that you can achieve your dreams and goals — while at the same time helping you negotiate the financial barriers that inevitably arise in every stage of life.

Managing your personal finances is ultimately your responsibility. However, you don’t have to do it alone. A qualified financial planner, such as a CERTIFIED FINANCIAL PLANNER (CFP) professional, can help you make decisions that make the most of your financial resources. 

Financial planning can help you:

• Set realistic financial and personal goals. 
• Assess your current financial health by examining your assets, liabilities, income, insurance, taxes, investments and estate plan. 
• Develop a realistic, comprehensive plan to meet your financial goals by addressing financial weaknesses and building on financial strengths. 
• Put your plan into action and monitor its progress. 
• Stay on track to meet changing goals, changing personal circumstances, changing stages of your life, changing products, markets, and tax laws

Do you need the services of a financial planner? 

How do you know if you could benefit from the services of a financial planner? You may not have the expertise, the time or the desire to actively plan and manage certain financial aspects of your life. You may want help getting started. You may benefit from an objective, third-party perspective on what are often emotional, difficult decisions. And in today’s hectic world, it can be beneficial to have a financial planning expert help to make sure you stay focused and follow through with your financial plans.

Importance of Estate Planning: Planning Beyond the Will

Planning ahead is the best way to assure, protect and manage your estate upon your demise.  You have worked your whole life to accumulate the property that you own.  Who do you want to decide regarding how your life’s work will be distributed when you are gone?

Inheritance Issue:

·        Estate planning is the difference between assets and liabilities, to be inherited by legal heir(s)

·        It ensures that an estate is distributed or used for a purpose in the way you want

·        Without plan, an estate is passed on according to religion-based succession laws

·        It should be an integral part of financial planning

·        Many shun it as the value of their assets is not sizeable but that is no factor

Why Estate Planning?

Estate planning is about life – in the present and in the future. Most importantly, estate planning is about the life of your family, your loved ones and the peace of mind you get from helping to provide for their financial security. A well-prepared estate plan will also help uncover alternative solutions you hadn't considered or didn't know were available. 

Whether your estate is of large or modest value, your estate plan should be part of your total financial strategy and based on solid financial planning principles. In its essence, estate planning addresses the establishment or continuation of a tradition, one that involves the accumulation, conservation and distribution of assets in a tax-efficient manner. It requires a complex interaction of various disciplines and laws. 

Estate planning involves all assets left behind after death, from a house and everything in it to savings and investments. Estate planning means planning what happens to all of your assets when you die, and what happens to you if you become incapacitated. Most estate plans include

• a will
• an assignment of power of attorney
• a health care proxy
• a trust, possibly

What is Compound Interest Effect?

Now what’s with Money ?? It grows.. grows with time…

And why ?? Because it gets compounded.

So what’s compound interest exactly? Its earning interest for interest already earned. In other words, your interest on savings also earns interest. Suppose you deposit some money in your account today, there will be an increase in the value of it after a year. And, that’s because it has earned interest.

The journey to wealth can begin with even keeping aside the smallest amount each day.

Don’t believe ?? The picture below says a thousand words.

 

Point No 1 : - Rs. 15000/- invested per month for 20 years will turn into more than Rs 1.13 Cr.

Point No 2 : - On the contrary, if you left it in a savings account, it would be worth something in the region of Rs 36 lac Only.

And the best part about enjoying the power of compounding is:

You don’t have to be rich to see its benefit; but you can become rich in the process

You can start from today; so why not start now?

The more time you give it, the fatter balance you can enjoy with, later.
In our seventh grade maths we were taught a powerful return formula called compounded return.

Amount = Principal X (1 + return) ^ holding period of investment X 100

Relax, We are not testing your seventh grade knowledge. We just want to let you know that the return in the above mentioned formula is known as Compounded Annual Growth Rate (CAGR). The manipulated formula for this return, which is also called CAGR is given by:

= ((Ending value/Beginning value) ^ (1/holding period of investment) – 1) X 100

Let’s say Rs 1 lac became Rs 1,16,664 Lac. (8% p.a.) in 2 years. Calculate CAGR

= (1,16,664/100000)^(1/2)-1 X 100

= 8% p.a.

CAGR is the most powerful tool to assess performance of your investments. Now an LIC or bank agent cannot fool you by saying if you invest Rs 5 lac today, after 15 years you will get ~13 lac, a return of 157%. Because you would know that CAGR for this investment would be mere 6.5% p.a. which does not even meet inflation rate. This invest will eat up your wealth rather than generate any return for you. 

However, it’s not as easy as it sounds else everyone would have been a millionaire by the time they retired. The good news is that with a bit of planning, you can reap the benefit of compounding. 

As a first step, you will need to plan your expenses in such a way that you save 20% of your income every year. 

Secondly, your savings need to be invested in such a way that they provide you with consistent return. Start with a Monthly Systematic Investment Plan (SIP) with 3-4 mutual funds. The practice of investing into an SIP will force you to get into the habit of saving regularly and reap the benefit of compounding.

How Share Market behaves Today ...

          Market OutLook By Elite Wealth  

 

We are in the beginning of what may become the mother of all bull markets. Stay on the long side of the market. Add to your equity portfolio on every correction and dip. Yes, corrections will come, be sure about that! 

INDIA BEGINS ITS TRYST WITH DESTINY, TAKES THE FIRST STEP TOWARDS BECOMING A GREAT NATION; GOOD DAYS ARE COMING – ACHE DIN AANE WAALE HAIN. STAY ON THE BUY SIDE OF THE MARKET. 

Bank Nifty saw a big move and closed higher. Trend is very strong on upside. After such a big rally, prices tend to consolidate. Look for a buying opportunity in outperforming banking stocks like AXIS BANK, BANK BARODA, HDFC BANK, PNB, SBI, ICICI BANK and YES BANK.

Resistance remains intact for the CNX IT. Prices have seen a big down move and closed below to its short term support at 9200. Trend is down in IT Sector. We should avoid buying IT Stocks and look for a shorting opportunity here.

• Trend is up in FMCG Sector. Prices are consolidating at its top. We may get a buying opportunity in outperforming FMCG Stocks like BATA INDIA, HUL and ITC. Look for a buying opportunity in these stock.

 

Corporate & Economic News :

Wheels India, steel wheel maker for passenger cars and utility vehicles, has reported a 64.11 per cent jump in net profit at Rs 8.78 crore for the fourth quarter ended March 31, 2014.     

• Essar Ports will be investing Rs 3,000 crore into expansion over the next three years as it has received environmental clearance and legal go-ahead from the government in four port projects, which were stuck for several years.
• Adani Enterprises reported a massive six-fold increase in consolidated net profit at Rs 2,847.82 crore for the January-March quarter, boosted by gains from compensatory tariff for its arm Adani Power.
• SpiceJet's net loss widened to Rs 321.5 crore loss in Q4 FY 2014 as against Rs 186 crore loss in the same period last year as it faces impact from high fuel costs, rupee depreciation and slow passenger growth. This was its third successive loss and the airline's has jumped five times to Rs 1,003 crore in FY 2014.
• The Mumbai wing of the Directorate of Revenue Intelligence (DRI) issued a Rs.5,500-crore show cause notice to two companies of the Gautam Adani-led Adani Group, and Maharashtra Eastern Grid Power Transmission Company Ltd and its contractor PMC Projects
• JK tyre would double its capacity at its greenfield plant at Chennai by the end of this year. 
• Speciality Restaurants which runs chains such as Mainland China, Sigree and Oh Calcutta, has begun talks to purchase a significant stake in celebrity chef Sanjeev Kapoor's SK Restaurants Pvt Ltd.