JAGOINVESTOR

“How can I ask my Parents to write a WILL ?” – Are you dealing with this uncomfortable issue ?

Posted on October 13, 2014August 6, 2019 by Jagoinvestor

Enough has been written about the importance of WILL and why Estate Planning is important and how not writing a WILL can cause trouble to their family if some unfortunate event occurs. However I do not see enough conversation around how kids of today can communicate this hard fact to their own parents and inform them about the consequences of them not writing a WILL .

I know this sounds a bit crazy and if you “dare” to even think of asking your parents about their WILL, the world around you will label you as the greedy son/daughter, who is behind his/her parents wealth who has shown their true colors :).

But calm down, I know its not the case. If you want your parents to write a proper WILL, that does not mean that you are greedy and want your parents wealth (though there are some cases like that). You might just want them to not leave the confusion around or any unneccessary legal complications

The Awkward Moment while talking to parents for writing WILL

Every week, I see atleast 2-3 comments from our blog readers, where there is some property issue and clash between family members because its not clear who gets what part of the pie ? In almost all the comments, I can see that there is no WILL written, everyone in family is clueless on what happens next and what is the first step, everyone has their own reasons of why they deserve more than the other and its gets real messy !

The Uncomfortable Situation

The young generation is facing this as a challenge these days. They can very clearly visualize the future confusion they are going to encounter if their parents do not write their WILL and plan for their assets to be distributed properly, however its nearly impossible to talk to their loved one’s about writing their WILL because they will be labeled as “the greedy son/daughter” .

If children even give a slightest hint that they want their parents to write a WILL, its often taken in a wrong sense. Parents might think that you now want “your share of the pie” . The feeling of guilt in children is so high that they prefer to keep quiet and just be with the flow and face all the issues in coming future.

What can be the issues if WILL is not written ?

Before we move forward, I wanted to share with you what kind of issues a family can face incase of missing WILL

They are not aware about the wealth of the family and where its kept
They have to hire a lawyer and complete lots of legal formalities incase some dispute arise between family members
The “blame game” starts in family and higher chances of strained relations
Lengthy procedures of transferring assets in other names

3 Real examples of real life issues faced by Children

Example 1

Hi Manish

My father died in 1999 and he left no will. I have one sister elder to me and she is married since 1980 and living with her husband. Now i want to sell the house in which we are living since last 30 years. The house is still on name of my father. When i told my sister to sign on papers as i want to sell this house, she became greedy and started asking for her share.

Throughout my life I have kept my parents and spent lot of money on their health and livelihood. She did nothing. Even i have spent lot of money on renovation of this house.

Do i need to give any share to my sister. Should I fight a case. Please guide me

Example 2

Hi Manish,

My father in law purchase a land but there is no will, in my family there are my father in law, mother in law, my younger brother in law & his wife & my husband. I know that after his death this land will divided in equally 3 parts – between his wife (mother in law) & his two sons. But I want to know that can my mother in law gives her portion of land to her younger son, because she prefer & loves to younger son, no elder son.

But where my husband wants to take the land equally between he & his brother in future after death his mother (my mother in law). Please give advise what to do in this future problem, so that my husband & his brother not to fight for land in future,

Example 3

Dear Manish

I want your opinion. My father bought a plot in 1996 an died in year 2000 leaving no will survived by me (married daughter) my brother and my mother . My mother constructed a house on the same plot with the help of my brother. the registry of the plot is still on the name of my father but house is on my mothers name.

Now my brother wants to sell the house without my mothers consent who is very old. Can i stop the sale as heir.

In the above examples, can you see the confusion the family has to go through. If there was a WILL written, I am sure the confusion would have been much lower.

How to Encourage your Parents to write a WILL without asking them directly ?

I know its tough to talk about this directly with parents or even in-laws (your spouse also faces the same issue with her/his parents) . So here are some alternatives which can be chosen

1. Make your Own WILL and consult your Parents on it

Most of the parents to some extent understand the importance of estate planning and why they should write the WILL . But somewhere they do not take the final action and feel that still its not the ‘right time’ .

The best thing children can do is, start working on your own WILL and let your parents learn about it as an example . (We can connect you to the right company who can help you write a WILL , fill the form here if you are interested in that)

Even if you have very less networth (couple of policies, and some money in the bank) , still its worthwhile exercise, because you can involve you parents in the process and help them understand what kind of issues arise when WILL is not written. Share with them the process, registration, how one can change the WILL later and other related things. I think some of the parents are aware about it already, just that they never initiate the process of writing WILL and there is no specific reason for it, they feel they will do it “someday” .

2. Educate them using some one else example

Another thing you can do is, as an when the right moment comes, you can tell them about “someone else” and how they are suffering because of absence of the written WILL and the legal consequences they have to face.

You can surely find someone in your friends circle or some one in your relatives who is the right example for this. You can initiate the casual conversation with parents about what they are going through and help them understand that the central issue is absence of written WILL and missing estate planning component. This can put the right food for thought into their mind on estate planning using these examples.

Parents Insecurity and why they do not write the WILL

Almost everyone of us have old hindi movies where parents gave away the property in their children early in their life in the hope that they will treat them well , but their children do not care for them later and parents are in a fix now, because they cant take back their property from them.

A very similar kind of unconscious insecurity is there in every parent’s mind. I am not saying they doubt their children, but somewhere they do not want to take the risk and want to be 100% sure on how they should pass on their wealth to their children and they keep on waiting for that right moment. Not directly related to this topic, but here is an example of what kind of issues old parents are facing.

Show your Parents you are there for them

It might happen that even in your case this insecurity is coming in between. Its important to have the positive atmosphere at home and parents should be confident enough that they are secure and should have high confidence in children. Only then estate planning will become an integral part of every parents financial life and they will do it much before in their life.

I hope everyone who is reading this article, understand that this article is just raising this topic to make sure it helps parents as well as children and they both understand this important step in financial life and its positive and negative effects. Wanting your parents to write a WILL does not always mean that children are greedy, all it means is that they want to make sure the future complications are avoided by completing the right formalities.

I would love to hear what kind of views you have and what you think about this topic ?

How I failed into stock trading and 4 amazing things you can learn from my experience

Posted on October 1, 2014August 6, 2019 by Jagoinvestor

Today you are going to learn some valuable lessons of stock market trading from experiences of a person who traded in stock markets for 1.5 yrs and failed miserably during those 1.5 yrs. This person is no one else, but myself

Background

Let me share my story

Sometime in June 2007, I got recruited in Yahoo from campus placements. I was 23 yrs old, fresh into job and had no idea how my life is going to take shape at that time. Suddenly, I saw a huge inflow of money (salary) in my life and I was not very clear what to do with it.

I had some weird notions about “Getting Rich Quick” back then. I was good with numbers, knew about stock markets basics and considered myself to be “analytical”, so I thought I am smart, very disciplined internally and can “possibly” do better than “average” in stock markets (every one thinks like that only).

So I was ready to enter the world of stock markets.

Now, there was one more guy in our new joiners group who was equally enthusiastic about stock market (that guy is now an IAS officer) and just like a smoker finds another smoker in a big group, we found each other and became buddies.

Over the next few weeks we made various plans on how we will get rich trading in markets. We were already millionaires on an excel sheet and we thought even in worst case scenario, we will do well.

So our next step was to open trading and demat accounts.

When God Sent that guy!

Things were all set, we were about to start the race.. and one day one ICICI Direct guy was in office (targeting new set of employees to open trading accounts) and we thought he was god sent ! . We opened our trading + demat accounts in no time.

The Rs.500 annual charges seemed too small to us compared to what we would be minting in coming months. When he said its “FREE” for the first year, we were like – “We won’t mind even if you charge 10X for that in the first year” .

We got to know about “options”

While we were ready to start our journey in stock markets . We got to know that there is something called Options (derivatives) apart from regular stocks. This was something new for us. We googled and searched about options, and we came to know it’s a high risk/return thing. We didn’t focus too much on “high risk” part , the only thing we could read was “high return” part.

So next moment, 20-30 eBooks got downloaded on our laptops and we decided we will learn about it and make sure we don’t leave any stone unturned for make our “millionaire dream” a truth. It was a bit hard for us to delay our “trading” for few weeks 🙁

Learning about options was FUN

Learning about Options trading opened up to a whole new world for us. We learned that options trading is an amazing leverage tool which was very fascinating. I learned about technical analysis also and used all the office bandwidth to download technical analysis eBooks and videos (at one point of time, I had 1000+ eBooks on stock markets and I didn’t read 998.8 eBooks out of it).

For those who want to learn about options in detail, I would recommend an excellent resource on it from Deepak Shenoy of Capitalmind. He did a webinar on the topic and it was recorded and uploaded on youtube. You can see it below

After getting introduced with Options, our greed went to next level and now we became much more rich on excel sheet. Our profit margin went really high (but we didn’t focus too much on risk factor, infact we were not even clear on where we are entering into and how risky it can turn out to be).

So were all set with high energy, but could not take any action because our trading account was still not active that time and we were waiting for it.

Finally we started Trading

So, one day I got a sms – “Your Trading account XXXXXX9484 is Activated – ICICIDirect” . I logged into my account, transferred 10,000 from my ICICI bank account to ICICIDirect account (they were interlinked already) and there was one stock we were following from long time. We bought an OPTION for that stock , I had to pay approx Rs 6,000.

We went for lunch and were back in 3o min
I logged in my trading account and saw the current price of the Option trade
It was Rs 8,500. I SOLD it

I made Rs 2,500 profit , a 24% profit during LUNCHTIME and now we were planning, if we can I leave our jobs ?

I realized years later that one should never make profits in their first trade in stock markets, it fuels the overconfidence in you like anything and gives you a false sense that you are really some smart guy !

Now the Learning Starts

Till now I was giving you the background of what all happened before we started our options trading journey . For next 1.5 yrs, we were very much involved each day into stock markets, made some money, lost a lot more money, got frustrated, some short-lived happy moments came in too and finally one day I put a big break on my options trading.

I learned a lot of lessons in those 1.5 yrs of my journey in stock markets and realized that I can pass on some learning’s to others who are now trying to enter the markets or are fascinated with the potential stock market trading holds .

I am not saying my learning’s are some hidden secrets which are very new, but I can share what all I learned in my style , I am sure it will help someone who wants to learn from my mistakes.

These few points will help you to not make mistakes I did and help you overcome some myths and notions associated with stock market trading . Just a request – Note that these learning have come from my trading in Options (which is derivatives) and not regular stocks, but that does not change the learnings you are going to read below.

Mistake #1 – I focused too much on Knowledge

When I entered into stock markets, I was of the impression that I need to acquire a lot of knowledge on how things work, how various strategies work ? How technical analysis can help in trading ? I learnt all the technical indicators, back tested them on the past data, wrote lot of programming scripts to test my hypothesis.

I even went on to download lots of videos online and watched it over and over for many months and I realized that my knowledge had gone up significantly. I now understood lots of concepts, strategies, complex terms .

I could see a chart and instantly see lots of hidden patterns and could tell more than a normal person who does not know how to read a chart.

But then, over the months, I realized that “knowledge” is just a secondary element to trade successfully in stock markets. Almost all the good traders around the world agree that “knowledge” does not contribute more than 10-15% in being a successful trader. It’s an important thing , but certainty not the holy grail

I am not saying that one should not focus on “knowledge” part, all I am saying is that it’s not that KEY thing to succeed. Over knowledge will only create problems for you.

One of the famous stock trader Ashwani Gujral says in his book – “How to make money trading derivates” – that as per his experience over many decades, he feels that knowledge of charts etc contributes to just 10% of success for any trader. Here is the chart which explains what he mentioned in the book

So, learn things in stock market and then concentrate on the other important elements which you will learn in some time. Dont overthink about knowledge part.

Mistake #2 – I went against the Trend

What I have seen is that all the new traders somewhere want to challenge the markets and want to predict when markets will fall and when it will rise. They want to predict when the trend will reverse. They want to catch that top or bottom.

This is the essence of where most of the failed traders are stuck . If markets are rising , somewhere inside me, I wanted to catch the top and wanted to prove as if I “almost” know that now markets will fall OR if markets were going down.

However in this process, I realized that all the time I was just trying to swim against the trend, If markets were going up, I tried to predict when it will fall and how much and vice versa, and in that process I never stayed with the trend. There was some kind of fun in going against the trend. It was very tough to accept that markets can be simple (not easy)

Below you can see last 1 yr graph of NIFTY Index and see that there has been an uptrend in market and it has risen from 6000 in 2013 to around 8000 now . That’s 33% increase , but imagine someone who didn’t stay with the trend and always tried to predict when will market fall and looked at markets with suspecting manner and never got in the trend itself.

So just make sure that you never go against the flow in general. If I have to compare this trend following with some adventure sports, then I will compare it with Surfing, where you ride on the flow of the water. The flow of the water itself will take you with it, you just need to stay with it. Imagine what happens if you try to go against the water flow, the chances of you getting crushed is high.

So, try to identify the overall trend (upside , downside) and then make sure whatever is your trading style , be with the flow itself.

There is nothing wrong in having a contrarian view and predict when the markets will turn its direction, but be sure you know how you will take that decision. You can surely take a call against the trend , but make sure you accept that you were wrong in case you fail. Don’t try to prove yourself right if you are wrong, because it’s only going to harm you.

Mistake #3 – I didn’t realize that Money management is supreme

I personally think this is the most important part of being a successful trader . The biggest reason for my failure was that – I was very casual about money management and made the biggest mistakes in this area. Money Management in context of trading is all about managing your overall money and how much part of your overall trading capital you put at risk in each trade.

I will give you an example – Let’s say you have set aside Rs 10 lacs for stock market trading . Now let’s say you make 2 rules

Rule 1 : You will never use more than 20% of your capital in any given trade, no matter how promising it looks to you. Which means out of Rs 10 lacs you have , you will not put more than Rs 2 lacs on any single trade (so even in worst case, you will lose only 20% of your capital)

Rule 2 : The maximum loss you will allow on any give trade is 10% , which means that if you put Rs 2 lacs on a trade, you will not let the loss cross 10% , which is just Rs 20,000

If you see these 2 rules, you can see that the maximum loss in any single trade will not be more than Rs.20,000 which is 2% of your overall capital. So assuming you make 1 trade each month, you have 50 months of quota with you to go wrong fully

No one is so bad that they will make bad decisions every time, you make good and bad both decisions , but important point is that you should survive in markets till that time when you start taking right decisions .. Hence it’s important to be in the game and unless you take money management very seriously , you are bound to get out of the game some or the other day.

This is exactly what happened with me. By the time I started realizing that I am moving from “bad trader” to an “average trader” zone , my capital was over and I was already in loss and I never went back to the game itself.

Why one should use Money management ?

The biggest reason why money management should be used is that it does not expose you heavily to the risk on a broader level, even if there is very high risk on individual trades.

And the next big reason why money management is crucial is that it brings some kind of consistency in your growth overtime.

Below you can see 3 versions of money management, which is BAD , Average and GOOD money management, where the overall risk taken on a single trade is moving from high to low.

I did some simulation on excel where we are measuring how capital will grow over 36 months (assuming 1 trade is done in a month) . I ran 25 tests and plotted them on a graph together. You can see how in case of bad money management the growth of capital is very random, unpredictable and varies from very high (lucky) to very low (unlucky)

But in case of good money management , the growth of capital a trader has moves up over time and with high consistency .

So to sum up , I would say money management system is like having a great stamina . If you are there for longer time in markets, in a way you win the battle to some extent.

Mistake 4# – I thought trading is all about WINNING

Psychology plays a big role in being a good trader. From the childhood we are programmed to WIN and that same mindset takes over rational thinking in stock markets trading too. We want to WIN on all the trades , It’s hard to accept that you were wrong , being wrong means taking a LOSS . LOSS equals FAILURE and we are never taught properly how to take failures. And that’s exactly what happens in trading, novice traders don’t cut their losses fast, they let them grow (ego) and keep hoping that they will WIN

This is what also happened with me. When I bought an option for a stock, every time I wanted to WIN, every time I wanted to make profit on that option. I thought I will become a great trader , if I WON more and more ..

I was so WRONG

Winning MORE times is not same as making MORE money in stock markets trading. I know some of you who are reading this are confused with this statement , but let me explain this important point

So when it comes to stock market trading, you can’t choose how many times you WIN or LOOSE, but can control HOW MUCH you will win or lose !

All you can do is 3 things

1. You can control how fast you can get out of loosing trade (getting out of a bad decision)

2. You can control how long you will stay with a winning trade

3. And You can control when you will take the decision using your knowledge.

WINNING MORE , but still LOOSING

Every trade you make in stock market, you should make sure that your profits potential is generally much higher than the risk potential. Here is how it should look like

It’s very much possible that a trader wins 6 out of 10 times and still looses the money and in the same manner, it can happen that a trader wins just 4/10 times and still makes a lot of money.

Let me explain this with an example. Let’s say a person has Rs 10 lacs to start his trading .

A good trader wins just 4 times, but he makes sure that he will make big win and every time he makes a bad decision, he cuts the loss fast.

And in same way, a bad trader might win 6 times , but every time they are in hurry to book their profits (so they earn small every time) and when they are in loss, they do not book their losses fast (no money management rules in place) and hence let their losses grow because they can’t accept they made mistake (Ego) . The chart below will explain you this .

This is the only big difference between a good trader and bad trader .

Conclusion

Today I have shared my mistakes I did when I traded OPTIONS and I hope you will learn from my mistakes . But this can just be starting point only, you will only learn when you get on the ground and do the real trading. Till then it’s just a practice no matter what you do.

It’s extremely addictive to trade and if you are like me, you will feel a great thrill trading either stocks, futures or options (or any other instruments) , while I didn’t succeed in trading, I at-least know why I failed, I at least came to know my weakness and now I can improve upon it. I can at least help others to not make the same mistakes I did.

Also in future, if I get into trading again, I am sure I will be 10X better compared to earlier version of mine. I know it will still be very though, but I can try at least and when I stopped my trading, somewhere I felt bad about leaving it. I felt as if I am turning my back and got a feel of leaving the battle ground, but it was a right decision because I could have damaged my own net-worth to a big extent had I not stopped.

I would love to hear what you feel about the points I shared and if you would like to share your own experiences

The shortest guide for a 22 yr old to start investing his money ?

Posted on September 22, 2014August 6, 2019 by Jagoinvestor

I was on Quora some days back when I came across an answer by Yuvraj Wadhwani on a thread called “How should a 22-year-old in India invest his/her money?” . It was such a beautiful answer and loaded with awesome advice to someone young to start their financial journey in life.

I instantly contacted Yuvraj, if he would like to guest post his answer on Jagoinvestor and He replied back saying he would be glad to do so. So I am putting up his answer to that question here on this blog for everyone . Read it from start till end. Its a bit different in style, but really worth .

Note : I have realigned some lines and combined them together to make proper paragraphs.

yuvraj wadhwani

OK let’s begin with wise words I learned a while back.

The principle of “Divide Investing in 3 plans”

It took me a while to get this, but it is really empowering to understand this principle. It is wise to divide investing in 3 plans.

Plan to be secure
Plan to be comfortable
Plan to be rich

Let’s take each of these in detail.

1. Plan to be secure

Buy a big term insurance policy and don’t look at market linked insurance plans (ULIPs). Set aside some money and trust that your financial planner will do a good job with it. Also, set aside some money (~3 month’s salary) as an emergency fund. Once you set this up, this should be an automatic plan that doesn’t require your time or effort.

I think everyone should have a plan to be secure. Now, before going to the second or third plans, ask yourself this question..

“Do I want to be comfortable or do I want to be rich??”

This is a very important question as it will probably determine what you do while following your plan. It’s similar to setting up your goal before buying a gym membership. You may choose to have a light jog on the treadmill, or work out heavily with weights. You choose what you do.

Now read on, I hope after reading you will make a more informed decision about which plan is right for you.

2. Plan to be comfortable

The plan to be comfortable should be pretty straightforward for everyone. If you are a salaried personnel, then you save a portion of your income. You use 80cc to minimize your taxes, invest in diversified mutual funds, SIPs, or recently infrastructure bonds, or specific stocks if you have a good education.

You also have a financial planner who can give you advice for specific funds, or who can tell you to rupee cost average your investment. You also make some money of “hot tips”. If you follow this plan, you should live and retire comfortably. There is nothing bad/wrong about choosing this plan, just as there is nothing wrong with going to the gym for a mild jog. It’s an individual choice. Most individuals would find themselves in the comfortable zone. I encourage all of those people to read further as well.

3. Plan to be rich

Extracted from a book

Q: “What’s your advice for the average investor??”

A: “Don’t be average”

Why? Because the average investor is a slave to the market.

Average investors make money when the market goes up and lose it when the market goes down. Average stock traders don’t make money. (They don’t lose, but don’t make it either). When the market crashes, the average investor loses the maximum.

Successful investing is not about the investment, it’s about the investor.

This is perhaps the least understood concept of investing. This is the reason why people ask questions like “Where should I invest my money?” and the most accurate answer to the question is the question..

“I don’t know, are you a good investor?”

Let me give you an example – “What happened during 2008-2010 in stocks worldwide? Everyone knows they crashed right? Everyone who was invested in stocks lost money right??”

WRONG!

John Paulson’s , a hedge fund manager , made more than 15 Billion $ for his company in 2007. (That’s a billion with a B). That money is almost equal to 80,000 crores.

Many claim that he made around 4-5 Billion Dollars of personal money during (2007-2010). That’s more than 20,000 crore rupees. While this was claimed the greatest trade ever, the point I am making is that it is entirely possible to make money when the market is going up and down.

So what are the differences between average and rich (above average) investors?

Simply stating, successful investors have 3 E’s that average investors don’t have.

Education
Experience
Excessive Cash

1. Education

A successful education starts with a good mindset. A successful investor has much more education than the average investor. A successful investor is committed to getting better and better with their education. How do you define commitment?

Do you know that friend of yours who plays the guitar? Do you know who else plays the guitar?

Got it ?

One of the differences between them is their commitment to playing. So how is the mindset of a successful investor different from an average investor? Let me draw a diagram to better explain. In the world of business, there are 4 kinds of people

Employees
Self Employed
Business Owners
Investors

cashflow quadrant jagoinvestor

Simply put, average investors think from the left side on the diagram and rich investors think from the right side of the diagram. Does that make a lot of difference, you may ask?

The answer is YES.

Let me put forward a few myth busters to put it in perspective.

(Avg Investor): My house is my biggest investment.
(Rich Investor): A house is a liability

(Avg Investor): Diversification reduces risk
(Rich Investor): Diversification is de-worsify-cation (Warren Buffett quotes)

(Avg Investor): Stock market is risky
(Rich Investor): Risk comes from not knowing what you are doing

(Avg Investor): Avoid risk
(Rich Investor): Take more control and manage risk

(Avg Investor): Real estate never comes down (extremely popular in India)
(Rich Investor): All markets go up and down

(Avg Investor): Saving money is good
(Rich Investor): Saving money pays maximum ~8% before tax, inflation is ~10%, so saving money is a guaranteed loss.

I could go on, but hopefully you get the point.

I am not saying what the average investor is saying above is bad advice, but it is average advice. As I mentioned, average investors make money when the market goes up and lose it when the market goes down. And if you have been reading till here, then you might be interested in making money whether the market goes up, down or sideways.

Also, if you find yourself arguing against the Rich Investor statements, that means you too are thinking from the left side of the quadrant.

So, how do I educate myself for being a rich investor?

Books
Tapes
Workshops
Mentors

Remember, successful people have coaches, amateurs don’t. Sachin Tendulkar may be the best batsman in the world, but he still has a coach. In case you are wondering, then investing is a subject that you may never be perfect in. Just like there is no perfect batsmen in cricket (everybody gets out), there is no perfect investor. But the more education you have, the better your chances are.

2. Experience

This should be a no-brainer. How do you get experience? By applying what you learn. Start small as mistakes will happen. If you stay on track it will become easier and easier. It might feel like trying to eat with your opposite hand. In the beginning, you will spill your food, you will be frustrated and probably won’t be satisfied, but in time you will learn it eventually.

3. Excessive Cash

This is the tricky part, but if you have educated yourself well, and have gained good experience, then excessive cash (or some cash) should already be rolling.

A note on the ultra rich

The rich investors invest in assets (stocks, bonds), but what do the ultra rich invest in?

The ultra rich don’t buy assets, they create assets. This is the secret how the richest people in the world created their wealth. They created an asset which millions and millions of people want to buy. Bill Gates created Microsoft, Larry Ellison created Oracle, Warren Buffet created Berkshire Hathaway.

Final Words

Q: “How should a 22 year old Indian graduate invest money?”

A: “I don’t know, are you a good investor?”

All right, you have my attention, now how do I get started?

Cool, this is what I would recommend.

Knowledge begins with words.

What does that mean? Let’s take an example. Many times when you travel, you meet people or are around strangers and you hear them talk. Most of the time you can guess their professions. Have you wondered how?

It’s by the words they choose and say.

I evaluated the students and the grades are good.
(Teacher)

My boss is not a good person.
(employee)

I shorted that stock as the P/E ratio was high.
(stock market trader)

That patient had to be given a muscle relaxant.
(Doctor or medical professional)

So the lesson here is that if you want to excel in any field, you must learn (hopefully master) their words. And you know what, words are free! (yeeiiiii)

So tell me if you understand any of these words.

P/E ratio
Volatility
Bull Market
Bear Market
CAGR
Y-o-Y growth

If not, then this is your first step, to learn and understand these words.

How?

Read your business newspaper.
Listen to the market news.
Use google.

Let me tell you a secret

Most of these complex sounding words are actually simple concepts. Really???

Let me tell you the job I had previously. I was Production support analyst for a retail POS application for a telecommunication company which sold products in multiple verticals. Only the job title is complex. So why do all these finance companies and news channels use these fancy titles and words? Because they want to sound smart, and want to sell you stuff.

So when you start learning words, you’ll understand the bullshit most TV channels and financial advisers preach as “investment advice” is really sugarcoated salesmanship.

So when the next time you read an investment advice column and say, “That’s nonsense”, Congratulations, you are making progress. If you are reading this, that means you don’t want to be average. So I encourage you to take the next step in your education and start learning words. I’ll try to help as much as I can.

Thanks Yuvraj Wadhwani for giving permission to publish his quora answer on this blog and share his knowledge

Why you should collect NOC (No Objection Certificate) once your loan is complete ?

Posted on September 11, 2014August 6, 2019 by Jagoinvestor

Once you pay off your loan, a big responsibility is off your mind and you feel relaxed. Its a moment where you do not want any further run around and want to now move on to other things in life.

And this is exactly why most of the loan customer do not collect a document called “NOC” or “No Objection Certificate” from their lender and it can get them into trouble later in life. At some places you will hear the word “No Dues Certificate” , but generally most of the executives in real life use the word “NOC” only

Read the incident below to understand its importance

importance of NOC No objection certificate

What is NO Objection Certificate (NOC) ?

With reference to loans, An NOC or No Objection Certificate is a legal document provided by the lender which states that the loan has been complete and their is no outstanding to be paid by the customer as on a specific date. Whenever a person pays off a loan, its important to take this NOC document from your lender.

How to get the NOC ?

Generally, all the lenders dispatch the NOC document to your registered address once your loan is complete. However at times, people do not pay attention to it and loose out on it for some or the other reason. Also if the registered address with lender is your old address (suppose you changed the address in between the loan), then also you will miss the NOC document.

So if you do not get the NOC, better contact your lender and ask for it specifically.

What kind of problems can happen if you dont have NOC ?

A lot of people think that just because the EMI’s are paid off fully, the job is done. However its extremelly important to have a legal document with you which clearly states that you do not owe anything more to then lender.

This way you are protected legally and if someone claims later in life that you owe more to the lender, you can produce the NOC if required. I would like you to have a look at the incident below which create some issue for one of the loan customer, who had paid off the loan, but didnt have the NOC with him

Hi Manish,

I have taken a personal loan from Bajaj Finance in the year 2004. All along, I have been thinking that I have paid the loan. To this effect, Cibil report also says, there is no balance outstanding and the account is closed on 31.12.2008. I don’t have NOC.

Today, I have received a call from a Lawyer saying that he has a summons to arrest me and I need to pay the balance amount of Rs.3750/- and that too I need to pay before 3 pm.

Could you please responds me as to what should I do. My question is will he really have Summons or just he is threatening. I can pay, but he is asking me to pay beofre 3 pm. That’s what I am not able
understand.

Here is another incident where Rahul settled his outstanding credit card dues with Standard Chartered bank and didnt collect the NOC . Then after many years he got a notice from the bank to pay 7.7 lacs. Here are his comments

Its been 12 years now, and I dont have the copy of NOC (or No Dues Certificate) with me. How do I prove my case as SCB isin’t ready to check me credit card history to see where the problem was. They just keep saying “they can’t retreive the information as they have sold those accounts to saha finlease.

And what about the notice they sent me asking me to attend conciliation camp to be held on 11th November?

Read the full incident on our forum

How NOC can help you in future if some problem arise

NOC is a legal document which has weightage . It proves that you really have paid off the loan fully and if there is any confusion, then NOC solves it.

Read these two incidents which were shared on our forum and you will understand its importance

Dear Manish,

Same problem as Sandesh I had with Indus Ind Bank Kolkata recently. They told me that my score is very low so they are not considering me. However, I submitted them my CIBIL Report which clearly says 763. There was an issue with a credit card which I cleared 1 year back.

I submitted them the NOC too. The HR here told me that she has forwarded the details to her central office. Now I am waiting to hear from them.

(Source)

Dear Ravish,

If you have the NOC issued by the bank, saying all dues have been cleared and there is nothing pending, you can get a loan. But as Dear Ashal has suggested file dispute with CIBIL and wait for 2-3 months to get it rectified.

I had the same experience about 3 years back and credit card in question was issued by HSBC. I got the NOC issued by HSBC and applied for loan with HDFC, while submitting the application I informed HDFC about the HSBC story. Later on, HDFC asked for the NOC and cleared my loan.

(Source)

Go get your NOC right now

So now, if you had any loan in past which you have completed and paid off, make sure you have applied for the NOC and keep it safely in your records

Does your Income tax website account have your CA phone number ? You can now claim it back

Posted on September 8, 2014August 6, 2019 by Jagoinvestor

Let me start by sharing with you what was the situation of millions of tax payers in India till now.

If they wanted to do e-filing and went to income tax website and tried to login to their account, they failed at it, because they did not have the password, because it was created by their CA’s or someone else who assisted them once in filing their tax.

And the person could not even use the “forget password” option, because it asked for some information like Phone/Email to send the OTP pin or authentication link and obviously their phone and email was not used while creating the account.

And this meant depending on the CA for this. However recently Income Tax Department has taken strict action on this. Income Tax department has sent an email to all the income tax payers to update their emails and phone numbers if they want to do that.

Now as per new rule, A person can use his phone/email on maximum 10 accounts (now CA’s wont be able to update their personal phone/emails on all their clients, which is also a bit big issue for most of the CA’s , because a lot of their clients are not net savvy and its very convenient for CA’s to manage their accounts)

Anyways, Here is a an email snapshot of the email which was sent by income tax department.

email from income tax website

More details on this page below

https://incometaxindiaefiling.gov.in/eFiling/Portal/StaticPDF/Update_Contact_Details.pdf

How to update your Phone Number and Email on income tax website

If you are a new user, then its very simple and you can just go to their website and create a fresh login/password. Now its mandatory to give phone and email id. There will be one time password (OTP) sent and authenticated.

Now if you are a registered user (your PAN is your User id) and if you want to make sure that the full control of your login is with you, then make sure you update your email and phone on the website.

Here is what you need to do to update your phone and email on their website

1. Go to https://incometaxindiaefiling.gov.in/ and try to login
2. Click on “Forgot Password” link and put your User id (your PAN) and move ahead
3. One the next pages you will get an option to update your email and phone.
4. Choose that and follow the steps.

Below is an image snapshot of how it looks like

Change your Email and Phone on Income Tax website

Note that there is also an issue with this new move, because now any person who has information about your details can create a new email and phone and can use that to claim an account (assuming he also has information about the bank details which was used by the person) .

A lot of CA’s are also not liking this change by the income tax department, because now their clients will go away as they are not under control of their CA’s .

Would like to know what you do you think about this move by IT department.

10 smart actions every Indian Parents should take, once their baby is Born ?

Posted on September 1, 2014August 6, 2019 by Jagoinvestor

When a new kid is born, your entire life changes. You are excited to enjoy the new phase of your life. Today we are going to touch upon some basic things you should watch out for and focus on after your new kid is born.

These are few things which you will eventually complete, but if you are too late, you might end up waste your time and energy. So its better to learn from others mistake and take some actions before hand.

Things to complete in your financial life once a new kid is born

Note that we are going to look at only those things which are related to personal finance at some level. Also most of the things are generic in nature, so if you do not agree to some, just move on and do not implement them for yourself. Lets look at them one by one.

1. Review your Life Cover

Once your kid is born, a new life comes into existence. Its now an additional responsibility you and your spouse have on your shoulder. All the future and current expenses needs to be taken care.

Think about it, all the school expenses, future education expenses, providing for all the best things in life – This all is going to cost a lot of money and the breadwinner is going to provide for that. So, If something happens to breadwinner, your life insurance should provide all these expenses.

So make sure you increase your life cover after reviewing all the numbers. In case you have not yet taken any life insurance, I strongly recommend now get a life insurance plan. As a thumb rule, I think increasing your life cover by Rs 50 lacs is the minimum you can do.

2. Get the baby added into Health Cover

If you already have a health insurance plan (either bought yourself or through employer), make sure you add the kid to the policy the moment they are born. If you do not have the health insurance yet, you can now get the health insurance and make sure the kid is part of the policy.

Some policies already cover your new born kid without any extra premium from the birth itself provided they have also paid for the maternity claim in the same policy.

As an example – Family First Health Insurance from Max Bupa has provision for new born babies from the day they are born and even cover vaccination costs for the first year. Look at the snapshot below

add newborn baby in health insurance

Below is the vaccination chart along with the age, vaccination name. It will help the new parents.

vaccination chart india

3. Start a Recurring deposit for upcoming school expenses

We conducted our workshops in 3 cities in India and one of the common point most of the participants agreed on is that school expenses on a yearly basis are in the range of Rs 50,000 to Rs 1 lac per year. Even the pre-schools are costing a bomb now, which can range anywhere from Rs 25,000 to 2 lacs per year.

Below is a report on pre-school charges in Bangalore from Times of India

Some pre-schools also double as creches providing day care, and charge astonishing rates. One such school in HSR Layout charges Rs 1.38lakh per year for day care of kids up to two years old. Timings are 8.30am to 6.30pm — one hour less costs Rs 1.25lakh, and till 3pm, it’s Rs 96,000.

There are some pre-schools that charge up to Rs 1.5lakh. A prominent national chain, with a branch in Indiranagar, charges around Rs 80,000. On an average, Rs 30,000-35,000 is what you will need to give your child a headstart in life. Most schools have also started their own pre-schools, from where the children automatically move on to nursery.

As these expenses will arrive in next 2-3 yrs, its important to make sure you are ready to arrange the money for this. The most simple way to plan for this short term goal is to either open a Recurring deposit in your bank or start an SIP in a debt fund.

If you want to plan investments for your children education or overall financial planning, you can leave your details on our services page and we will get back to you.

Coming back to the point, As an example, suppose the expenses are going to be Rs 45,000 and if you have 30 months in hand. You can just open a Rs 1,500 RD and when it matures after 30 months, you will have that money with you.

When I asked for some suggestions on this topic one one of the facebook groups run by Ashal Jauhari. Pattu gave an interesting point regarding School Expenses in the start. Have a look at the conversations below which was part of the long discussion in the thread there

school expenses for kids

4. Update your Nomination’s in various financial products

You might want to have your baby nominated in some of the financial products you own. It can be your bank accounts, fixed deposits, mutual funds or even some property. You might want to add your newborn as one of the nominee in the assets you own. Read more about nominations in this article if you do not understand what exactly nomination is.

Also, if you have written your WILL, then you might want to update it soon after the baby is born. If you miss this, and if you old WILL didnt have the right kind of wordings, then your baby might loose his/her share in your wealth in worst case.

5. Register the birth Certificate

Make sure you apply for the birth certificate for the new born asap. It is a simple process if you complete it in the starting itself, else it will get complicated later. Most of the hospitals anyways has this as one of the mandatory things you need to do.

You can get the form from the hospital itself and then submit it to the local authorities within 21 days of birth. This page mentions the procedure in detail in-case you want to have a look.

6. Start a Saving Bank account for kid

One of the best things you can do for the kid from the start itself is open a saving bank account for the new born the moment they are born. Almost all the banks have facility for kids to open their bank account. For example – ICICI Bank clearly mentions that any kid starting age 1 day to 18 yr are eligible to open a bank account called “Young Stars” with them.

I would like to draw your attention on 3 reasons why you should open a bank account for your newborn kid.

Reason 1 – Put all the Cash Gift in the Kids Bank account

The moment your kid is born, for next many months and years – you will start getting lots of gifts in form of Cash. Often this money is not handled properly in families because of its small ticket size and it gets consumed here and there and finally evaporates.

You can always make a rule that all the small/big money coming in the baby name (on their birthday’s or baby shower functions etc) will be deposited in the saving bank account opened for the kid.

Reason 2 – You can open dedicated long term investments for your kid’s future

Another reason why you might want to open a saving bank account for the kid is that if you want to invest for your kid long term education or any other thing. You can make sure you start the investments from the kid account itself.

This way the account will be dedicated for that purpose and your volatile decision making will not impact the savings for kid. You can either invest in Kids PPF account through this account or do a SIP in equity mutual funds for long term investments needs.

Mr. Jinesh Shah from in one of the facebook group shared what he does for her kid.

Reason 3 – Your kid will learn about banking and personal finance from very start of his life

Another good reason for opening the bank account for your new born kid is that once he/she turns upto 8-10 yrs, you can allow them to partially handle their own bank account and teach them banking aspects.

Learning that they have their own personal bank account will make them feel good and also they will take keen interest to learn these things, which most of the people learn very late in life.

Bonus Tip : You can also apply for your baby’s PAN card within few weeks/months of his/her birth. Anyways you have to make it later, so why not in the start itself. Its always a good practice to have a proof of identity in the start.

It will be handy if you want to apply for other kind of documents like Passport, bank account, etc . You can read this experience from Amit Gupta when he applied for PAN Card for her daughter.

7. Buy clothes and toys smartly – they’re often gifts

I know new parents are excited and want to give their best. They will buy lots of clothes and toys and no one has any authority to advice parents on what to do and what to not do. The emotional side of joy cant be suppressed. However Often new parents realized later that they have overspent too much on things which baby never needed.

In reality, for the first few months – the babies only sleep almost all the times and they grow so fast that things you had bought for them is now not needed by them. And when relatives and friends come for visits, they anyways bring lots of things you had already bought for kid.

So there are few tips which can optimize the expenses side and also help reduce the wastage done by many parents.

Rotate things among your group – There can be many things which can be rotated among parents for their new born kids. If you have some item which can be shared with some other new parents, then better share it with them and help them reuse things. There is nothing wrong in it.

Shop Slowly – Buy things one by one and not in a lot – If you want to buy something for your kid, start small – let the moment come and buy it. This way you will not buy things which are unwanted for kid.

Below is a survey done by Moneylife on the topic “The real cost of parenting” sometime back. It explains what kind of expenses families are doing on various stages for their kids. I am sharing the results for the age group 0-4 here. If you are interested to look at the full survey results, please read their full article here

8. Dont invest in CHILDREN PLAN

Yes, thats correct.

The moment you become parents, Apart from the joy and happiness, some part inside you will also be “very worried” about the kids future and how you will provide him/her best in life. This is the perfect mis-selling moment on the name of kid by various agents.

All the insurance agents (uncles and aunties) will come to you and try to sell you a CHILD PLAN. You will be sailing on the emotional boat at that moment and you will hear sentences like – “Gift you kid his bright future” and “This is the perfect thing you can buy for your kid in the start” .

While I am not against any policies and plans, but these Child Plans are often designed to exploit these kind of emotions and things are bundled in such a way that they look over attractive proposition to a new parents for their kid.

Inside the product its often the mix of insurance and investments with some kind of payout on regular basis. These are high on costs and a bit complex products. Its nothing but a slightly changed versions of ULIP’s or traditional insurance plans.

In case you are really impressed with those products, my suggestions is to wait for some months, and later study them properly and then buy them if you are fully convinced about them.

In general I would recommend any new parent to insure them with a simple Term plan and either open a Recurring Deposit or just invest in a simple mutual fund with SIP route to start with or you can follow this ready made calculator, I create sometime back for planning your kids investments

9. Have a 24/7 reachable Doctor nearby home

Medical expenses and Doctor visits are one of the top most expenses you will have to incur after the baby is born and for at-least first 1-2 yrs and you cant even avoid this issue.

You will have to travel many times to doctor. These visits are sometimes planned and often emergencies. You even might be in your office when you get a call from home that baby needs urgent attention and then you take a day off or leave early from office.

It helps a lot if the doctor is near you home or within few KM’s distance. At times people have their doctors as far as 15-20 km’s (for reasons like – “He/she is the best doctor I think”) and then in-case of emergencies it can take 2-3 hours to just travel.

So its always the best thing to have a good doctor nearby and try that they are reachable almost all the times. Ask their permission if you can call them anytime (day or night) and take consultation. Compensate them for their effort and they should agree.

10. Make a Baby Emergency Kit and save on Time+Money

This is a great tip shared by Nandish (He became father 1 yr back), while I was working on this article.

He shared that they have created an emergency kit for baby, which has medicines for the recurring issues and most common things which new parents will encounter all the times like stomach ache, teething issues, loose motions, fever etc. You can sit with your doctor and take consultations on what all to do in various situations without visiting them.

To show you importance of this emergency kit, I would like to share an incident which happened with Nandish. Her neighbor’s kid was having some issue around afternoon time, when her husband was in office and no one was there at home (I forgot the medicine name) .

She was trying to find out how she can get the medicine asap from somewhere. Because there was an emergency kit available at Nandish home, that common medicine was there and she could get it instantly. This is a small action, but it saved a visit to doctor and even a trip to market to just fetch the medicine.

This kit can also have wet wipes, extra nappies and every other thing you can imagine. Its even very handy if you suddenly have a travel plan (locally within city) and its going to take yours . Medimanage has put up a very nice starters guide for new parents, have a look at it.

Conclusion

The points if implemented will help you make your parenting journey more smoother and your financial life more better over long term. I know most of the people do not think about all the points mentioned above thinking they will handle things once they arrive, but then its your choice. Its a always a good idea to prepare for things well in advance and not wait for the last moment surprises.

Can you share some more tips which are not mentioned above. It will help people who are about to become parents or new-weds who will plan for their kids in next few years.

Yes – You can now invest extra Rs 50,000 in your PPF account and it will be accepted

Posted on August 23, 2014August 6, 2019 by Jagoinvestor

Congratulations, Now you can now go and deposit the extra Rs 50,000 in your PPF account as the limit for your PPF investments was raised from Rs 1 lac per year to Rs 1.5 lacs in this budget.

ppf

A lot of investors had invested Rs 1 lac in their PPF account this year start and when the budget raised the limit by extra Rs 50,000 . They had this big question – “Can I invest Rs 50,000 more in my PPF account this year and get the income tax benefit?”

The thing is even if the budget has mentioned that PPF limit was raised, it does not get increased instantly. I mean the banks officials and post office staff does not allow the max limit the same moment. A separate notification is required by the RBI after making the required amendments in the Public Provident Fund scheme and that’s exactly what happened on 22nd Aug .

PUBLIC PROVIDENT FUND (AMENDMENT) SCHEME, 2014 – AMENDMENT IN PARAGRAPH 3 AND FORM-A

NOTIFICATION NO. GSR 588(E) [F.NO.1/2/2014-NS.II], DATED 13-8-2014

In exercise of the powers conferred by sub-section (4) of Section 3 of the Public Provident Fund Act, 1968 (23 of 1968), the Central Government hereby makes the following further amendments to the Public Provident Fund Scheme, 1968, namely :—

1. (1) This Scheme may be called the Public Provident Fund (Amendment) Scheme, 2014.
(2) It shall come into force from the date of its publication in the Official Gazette.

2. In the Public Provident Fund Scheme, 1968,—

(i) in paragraph 3, in sub-paragraph (1), for the letters and figures “Rs.1,00,000”, the letters and figures “Rs.1,50,000” shall be substituted;

(ii) In Form-A, in paragraph (iv), for the letters and figures “Rs.1,00,000”, the letters and figures “Rs.1,50,000” shall be substituted.

Below you can see the copy of the notification which came 1 day back and the same has been sent to all the banks and post office departments and RBI has asked them to now incorporate it and also inform to all the PPF subscribers.

ppf limit raised notification rbi

How much extra income tax you will save by investing Rs 50,000 more in PPF ?

If you are into the highest bracket of 30% , in that case you will save 30% tax on the extra Rs.50,000 invested in PPF. So that comes to Rs.15,000.

Earlier you used to pay income tax on Rs.50,000 (because you had maxed out your investments in income tax saving products) , but now you will save 50,000 and also pay Rs.15,000 less in your income tax (because your taxable income will come down by 50,000)

So now you can visit your SBI Bank or Post office or any other bank where you have your PPF account and invest the extra Rs.50,000 🙂

Allow Wealth coming into your life by breaking your Belief System

Posted on August 14, 2014August 6, 2019 by Jagoinvestor

Most of the TV channels help in selling products like – Lal Kitab, Suraksha Kavach, Shri Yantra . They do this day and night and according to these advertisements, these products helps people in becoming prosperous. Most of the news channels have at least one show on Palmistry too, which solves people financial problems. Some believe in it and some choose to call it superstition.

Stop Wealth Coming in Life

Superstition or Beliefs

Here is an old story to learn something from about superstition or beliefs

When the spiritual teacher and his disciples began their evening meditation, the cat who lived in the monastery made such noise, that it distracted them. So the teacher ordered that the cat be tied up during the evening practice. Years later, when the teacher died, the cat continued to be tied up during the meditation session. And when the cat eventually died, another cat was brought to the monastery and tied up.

Centuries later, learned descendants of the spiritual teacher wrote scholarly treatises about the religious significance of tying up a cat for meditation practice. Now how is this related to financial life ? Many such cats are present in your financial life, which you might not even be aware about, you believe in few things as if they are truth without questioning them and thinking about it.

Let’s look at some real life examples

[note color=”f2f2f2″]
“Advisor: Sir, gold prices have gone up because of festive season I think you should wait for some time?

Mr. Shah: No no, We buy gold only during Diwali. No matter what gold prices are – we would like to go ahead.
[/note]

[note color=”f2f2f2″]
Real estate agent: Sirji, one very good property is available at a very competitive price. The property is main road touch and it is difficult to get such property at this rate.

Mr. Singh: Oye No no. it’s House number 13. It is an unlucky number we can’t go ahead with this property. Show us some other property.
[/note]

[note color=”f2f2f2″]
Insurance agent: Sir I have a traditional plan, where you get high returns and your money is absolutely safe

Half of india: Yes, my parents taught me the same. I believe in LIC, I know LIC is safe and best investment. I am ready. tell me where to sign?
[/note]

Whats your Belief System

Now look at your belief system. Look at what did you hear on TV or read something on blog or magazines, that became part of your belief system. From time to time question your thoughts and beliefs, as questioning will help you grow.

Break your belief system,
Nandish Desai

How this Lady paid Rs 25,000 in pay-order charges for claiming her PPF maturity amount

Posted on August 6, 2014August 6, 2019 by Jagoinvestor

Is your PPF account going to mature very soon ? You are excited to finally redeem your years of saved money in PPF account.

But do you know that some banks are playing with some investors ignorance and charging them hefty amount in the name of DD charges or Pay-order charges to give bank the Public Provident Fund account matured amount.

Let me unearth this no so known or talked about thing today.

bank charges

Read this incident below to understand what I am talking about

My neighbor (a very old working woman) had a PPF A/c in SBI, on 31st of March 2010 it completed its 15 year term and hence the same was eligible for withdrawl, she duly filled up the redemption form and asked the bank to redeem the amount.

On 14th of April 2010, the bank issued a pay order but deducted bank charges (as the savings account is with another bank), SBI has nearly deducted bank charges of about 25000/- from her.

My neighbor didnt have a bank account in SBI, her account is in IDBI and SBI has deducted the charges for preparing a pay order. Here no service is being rendered but rather its bank obligation to make the payment.

Please help. It would be good if we can help her.

(Source)

Some Banks not allowing PPF Maturity Redemption directly to saving bank account

When your PPF account matures, and you want to redeem the money, there are several options you can get the money. You can either take it directly in your saving bank account, or get a DD created or a pay-order.

However a lot of banks fool customers and never share with them that the money can be directly credited to the saving bank account and force them to make the Demand Draft or Payorder, because that involves charges and it adds to the bank revenues.

And most of the times, the helpless customers fall for it because the charges at times are in range of few hundred and they do not want to pursue the matter and complicate it.

In the example above, you can clearly see that the person was forced to get the money through pay-order and such a heavy charges for that was applied.

This whole mis-guiding worsens, when the person does not have the saving bank account in the same bank, the officials in-charge tell that its mandatory to have a saving bank account in the bank if you want to get the redemption amount in your saving bank account, else you will have to get it through DD or payorder, which is completely wrong.

There is no rule like that. One should be able to get the money through NEFT or RTGS or direct bank transfer if they wish to and the PPF redemption form gives that option clearly. Have a look

sbi ppf widthdrawal form after maturity form C

You can clearly see that there is an option of crediting your PPF maturity amount to any saving bank account.

Some real life Incidents of Banks Asking for heavy charges at the time of PPF maturity payment

Mr. Naresh was asked by Bank of Maharashtra for DD Charges for PPF maturity Payments

Bank of Maharashtra charged me DD charges of Rs 5050/ while making maturity payment of my Public Provident Fund account money. I had asked them to transfer money by cheque or NEFT, but they refused and issued me DD. Is there anything I can do?

Mr. Premji was charged payorder charges of Rs 900 by State bank of Hydrabad

State bank of Hyderabad recovered about Rs.900/- for issuing their banker’s cheque (pay order) for PPF part withdrawal. I am told that as per the PPF rules, the bank cannot recover any charges for issue of Banker’s cheque or pay order for PPF withdrawals. However I am unable to find out such rule in print.

What is the correct status regarding the above issue? Which authority will give a authenticated clarification?

Where to complain for these kind of issues?

A lot of people are not even aware that banks are taking them for granted and trying to levy charges which are unethical. Customers do not resist at times, because they dont want to get into the mess and waste their time for small charges (like Rs 500-Rs 1000).

At times they are excited to receive the big amount from their Public Provident Fund account and cant wait for it. At times there are emergency situations which dont allow them to fight back. But incase you want to fight back. Make sure you follow these following steps

Make sure you meet the Bank Manager and tell him clearly that you know the rules and there is no such rule that you have to pay DD or Payorder charges to get back your own money
Ask them in writing for charges and also insist that they show you the rule book.
If nothing works, file an RTI to RBI asking about the bank action and if there is any such rule. You can also file a RTI to Post Office (which handles PPF finally) about this rule.

Have you ever come across this situation in life ? If not , great ! .. you are now informed what to do when you face this situation

Meet this 15 yr old youngest participant from our Mumbai Investor Workshop + Some Pictures

Posted on July 23, 2014August 6, 2019 by Jagoinvestor

We completed our Mumbai workshop just 2 days back on Sunday and it was a great experience overall to connect with our readers . However there were 2 most amazing experience which I want everybody else to know about.

Youngest participant was just 15 yrs old

Yes, you read it right .. One of the participants had booked a couple ticket and he choose to bring his young son who was just in school to make sure that he put the right seeds in his son’s mind about money and personal finance. We were really amazed seeing this and congratulated him on his attitude towards money and his commitment for this son future. The best part was that his son participated well and also shared what all he has learned from the session at the end.

investor-workshop-jagoinvestor-1

One of the best things about the workshop was that a lot of couples attended the session together, one person came along with his mother, another guy came along with his best friend and many participants also came along with their siblings . It was an environment filled with learning and dedicated to do something for their financial life. We also had fun doing some group exercises, which everybody loved and had a great message.

There were conversations about Financial Freedom , Passive Income and many other amazing topics – which all the participants liked a lot. Here are some more pictures

Bangalore and Pune Workshop

We still have few seats left for the workshop in Bangalore and Pune. For those who always wanted to attend this workshop should come over, because mostly this will happen only once in year. The workshop will have some very deep conversations about various topics like Financial Freedom, Passive Income, your mindset about your financial life and how you can focus on next 5-10 yrs in designing your financial life.