Many times, you may have read the word Financial Planning and you may have many complicated definitions as well. Hope you have watched “3 IDIOTS” . When Aamir was asked the definition of machine, he said in simple language “Machine is anything that reduces human effort”. Similarly in simple language “Financial Planning is the process of meeting your life dreams/goals through the proper management of your finance.” Dream of buying a new car, a dream house, getting your children married in style, or simply retiring early to Live Life King Size. There are two ways you can deal with finance in your life: 1 Without Planning wherein at some point of time in future, you will have money and then you will decide how to use that for your goals. 2 With planning, you decide
Waiting for market to correct before investing: Greed and fear psychology is at play for investors who wait for market to correct before investing. In my experience, investors who follow stock markets are more likely to exhibit this trait as opposed to investors who do not follow markets. Investors should understand that individual stocks and mutual funds are different investment instruments. A mutual fund comprises of a portfolio of stocks. So while an individual stock in a fund portfolio may be overvalued there will also be stocks which will be undervalued. Diversification of individual company risk, also known as unsystematic risk, is the fundamental concept of a mutual fund. The strategy to wait for market to correct can theoretically work if you believe that the market itself is overvalued. However, you should understand that it is extremely difficult, if not practically impossible, to correctly call a market bottom. Many investors who exited their mutual fund investment in 2
The Goods and Services Tax (G.S.T.) is a landmark step taken by the Government of India to boost the GDP and introduce a more effective tax regime. GST is a win-win situation for the entire country. It brings benefits to all the stakeholders of the industry, government and the consumer. It will lower the cost of goods and services to give a boost to the economy and make the products and services globally competitive. By subsuming most of the central and state taxes into a single tax and by allowing a set-off of prior-stage taxes for the transactions across the entire value chain, it would mitigate the ill effects of cascading and improve competitiveness and liquidity of the businesses. GST will be applicable to all dealers whose aggregate turnover in a financial year exceeds INR 2.00 Million (INR 1.00 Million in case of eleven special category states). Separate registration will be required in every state from where a taxable supply of goods or services is made. This article c
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