Category: General

I got an opportunity to do a guest post on two very good blogs some days back. One was on How to interpret Warren buffet rules and apply that to trading and another one was how to save for your Future Financial goals.

The response to the second article was more than expected and I had a very good learning experience with some of the readers on those blogs, I would like to share some of the comments with you so that you learn from them and share your ideas about it.

Read more Below.

I am putting some comments I got from the second article, They were very long, fruitful discussion on the separation between “Using a Financial Calculator” and “Influencing your Thoughts”. You can read the comments and actual discussion at the guest blog post itself which would be better for understanding.

Comment from Reader

Still I feel, some where the essence of reality is missing. Not getting convinced with the proportion of earnings and savings.

Eg:- (following the values to be entered in the fields in the tool)
Car – 2015 – 3L needs Rs. 4139 to be saved per month
holiday – 0 – 0 needs Rs. 0 to be saved per month
D’ Education – 2025 – 5L needs Rs. 1909 to be saved per month
Sons Marriage – 0 – 0 needs Rs. 0 to be saved per month
Retirement – 2040 – 10L needs Rs. 864 to be saved per month

Closely, the total amount to be saved per month comes to Rs. 7000.

For a guy earning 30K, to save Rupees 7K with all other expenditure, is not a small thing. To meet his requirements, should be a miser then – no movies (it costs around Rs. 1000 for a family – dad, mom & son to watch a movie ), no luxuries to wife (shopping) and children (say pocket money).

One thing I want to clearly tell you is my intention is not to find the tool as wrong calculator. My intention is to project the scope of the tool to be used by a common man. How a common man will really take the inputs based on the result from the tool and get influenced with.

Yes, it is the person’s personal problem – how to save and how not to; whether to go for saving or not. But it’s the tools responsibility to sustain the thought of saving in the users mind. It just should not be an analyzer or calculator.

It should be more than that. Of course, final decision is left to the user. But my view is, how is that, the tool is going to influence the users thoughts. That influence can lead to change the definition of savings for the user. See GFactor

When a person uses any tool, apart from the direct result, the impact of the tool on the usage also matters. Here, in this case, if the tool scares the user about the saving and if he stops planning for saving (lets just think this can happen for a while) then what is the scope of the usability of this tool.

Once again I am telling, I am not criticizing the tool and its functionality, I was just wondering about the kind of impact it can have on a common man. Coz, Common man never thinks about the logic behind the tool. He and his thoughts will be just carried away with the values. He definitely feels that the tool is misleading him.

Reply from Me

As I said … The tool is a just a giving you values based on the date you provide ..

I saw the numbers you have put in and to achieve these goals comfortably , 7k per month investment is required at any cost . Now if a person earns 30k , then no one can do anything .. Either he forgets some of the goals or earns more ..

There may be many 30k earners and many might be able to save 10k also , and some may not be able to save 1k also .. Now for them Its there personal problem of how to cut their expenses in such a way or optimize the expenses in such a way that their Future goals are also met .See an article on “Can you live with 90% of your Salary ? ”

Let me know your views on this .. this is an important aspect . Also let me know how is the tool responsible for . As I said earlier the biggest problem is not early investing .. if a person starts investing Earlier , then most of the problems which arise later can be minimized .

Personal Note :

The example you have given

Car – 2015 – 3L needs Rs. 4139 to be saved per month
holiday – 0 – 0 needs Rs. 0 to be saved per month
D’ Education – 2025 – 5L needs Rs. 1909 to be saved per month
Sons Marriage – 0 – 0 needs Rs. 0 to be saved per month
Retirement – 2040 – 10L needs Rs. 864 to be saved per month

1. This example has all the Target dates same as what is was there by default .. I hope you are changing it to your personal Target dates ..

2. Why is Retirement Corpus 10L ? Is it really you think is your Retirement Corpus in 2040 ? By then your Monthly expenses would have increased to 7 times to today .

I understood that its not your intention to find fault with calculator, you are trying to say that the tools must have more than what it has right now .. Which is a personal view I think ..

My personal views are different which you may not agree and that’s totally fine ..

I accept that the calculator could have been made more detailed and “influential” with more data in it , putting a “auto0-generated” Suggestions form .. That would be some “work” on my side. . which I will do some day .

However , coming to “Influencing” the thoughts , That is not a small task which will be very easy with a calculator . It takes lots of reading to develop it .. My readers who have been actively reading my articles or other sources are now fully influenced with the idea and now getting good feel of how to develop an attitude towards “;how to save and invest” .

you said “if the tool scares the user about the saving and if he stops planning for saving (lets just think this can happen for a while) then what is the scope of the usability of this tool.”

My views are different .

If a personal can not accept that he needs to save a certain amount based on the numbers he himself gave in the calculator , then he is not accepting the fact that there is some “problem”.

He has to accept this and find solutions for that rather than stop planning for saving altogether .. I agree than it can be disappointing for some one saving just 5k per month and seeing that he needs to invest (not only save) 15k if he wants to achieve his Financial goals (based on whatever info he gave in the calculator) .

He either has to increase his earnings or decrease his expenses or lower his expectations.

Now this reason why he is in this situation is because “most probably”, he is too late in his life planning for things.

At the end, all kind of tools have been made for people who know/can use it. I would like to mention that I assumed that everyone who is reading the article or taking a calculator has that minimal amount of understanding of Financial planning. I guess it was mistake to assume that. I should have mentioned that. Apologies for that.

I would love to hear your views on this. I am not sure if we are on the same ground when putting your ideas, maybe you are trying to say something and I am replying without understanding that thing and hence triggering another “I don’t agree with you” reply.

It may be a communication issue on my part, Let me know if that’s the case. Thanks for this wonderful conversation. at least I have learned too much. Thanks to you.

Manish

Special Thanks

Thanks to Barel Karsan and Mohan for letting me blog on their wonderful blogs, The biggest thanks to readers of Mohan who have made this conversation so enriching with their disagreements, Disagreements are the best things in the world, if its missing, there is no learning.

Note: Please no personal Attacks over comments by taking the name of anyone.

Why should you read answers of other questions? The reason is that there are many questions asked to me which can relate to you also, if not today, maybe later. Hence, Here are a set of 4 questions and answers asked to me on “Ask a question section”.

These questions are on the topics on ULIPs, General Investing and Achieving Financial Goals. You can also look at other Questions and sections part here at Part 1, Part 2 and Part 3

Question 1# [ULIPS] – by Shivang Desai

I had invested rs. 1 lakh in sbi ULIP (as wrongly advised by my uncle)in march 2006 when sensex was 12000 now after 4 years worth of it is just 96000 should i withdraw the money or wait longer since the damage of allocation charges and all is already done…or by withdrawing i can allocate this sum in equities or mfs…..what is the right time to withdraw this money

Answer

Well ..weather you sell your ULIP right now or later does not depend on its current value , You can always buy something else which is going to give you better performance , the fact that you want to sell it at higher price than your buy price is a psychological issue , which every one faces . If the ULIP is bad just sell it and if its good then continue 🙂

I think it would be wise to sell the ULIP and use the proceeds to buy simple mutual funds . One can not guess the right time, but a wise thing would be to wait for a jump in stock markets when you sell it and then buy mutual funds on a drop . Doing this is tough and not easy in itself

If you have a question: Ask Here

Question 2# [General Invsting] – by Sugeet Arora

I am 30. Blessed with daughter 4 months back. Now as the time passing, I am worrying how to secure future of my baby. Where and how to invest. Though I am aware of market fundas.. Still as I am planning for long term, I need an advice.

From research on your site and other places, I concluded that all ULIP scheme are worthless… Rather MF would be a good idea to invest for long term… & what abt equity.. If I rather keep investing in equity and booking profit whenever get chance… What do u suggest ?
Also I wish to use this as tax exemption tool.

Answer

Sudeep, you have to understand one thing that you have ample time in your hand, like 20 years, and the savings you have to do is linked to very important thing, your Daughter’s Future, may be Education or Marriage, whatever, now the first thing you have to know is how much you want to generate, 10 lacs, 20 lacs or 50 lacs, this is something you need to do.

After you know how much to generate, the next question is How, Answering it is not tough, its its 20 years, means its long term, and its important too .. so you can mix up Mutual funds and PPF.

So the best thing you can do is to start a SIP in 3-4 good mutual funds and also start a PPF in your and your Daugther name. Keep investing in these instruments and thats it.
I think this should be enough for your requirement. Dont try equity too much unless you really have interest in that and you have enough knowledge to make some thing there. And dont try to time market and find out when to sell and when to buy, its a tough thing.

Just stick to SIP and make sure you review your investments atleast a year and see that its on track, this simple roadmap should easily take u to your destination. If its not simple, its not worth !!

Question 3# [General Invsting] – by Sugeet Arora

Sir, I want to invest 10000-15000 for my newly born daughter. What do you suggest for the same? I am little bit confused in Fixed deposits, RBI relief bonds and Kisan Vikas Patra

Answer

Sugeet, I dont approve your decision of investing any money in FD, Bonds or KVP for your daughter. Its totally incorrect.

Why, you must be thinking, the reason is that Its a long term investment for you daughter, If you just invest 15,000 one time for you daughter in these instruments, after 20 yrs, its value will not be more than 40k.

It has no ability to fight inflation and its just eating away the purchasing power. For long term you should be using Equities, like Mutual funds, start a SIP in mutual funds, take a SIP of 1,000 per month in a good Mutual funds and keep on investing in it for next 20 yrs.

SIP in mutual funds is the right decision for you, I am sure you must be concerned with the safety of investments, may be thats the reason why you choose FD and Bonds etc. Equity is risky in short term and in long term its risk decrease over time, for 20 years, I dont think you should be at all worried about it.

Question 4# [Achieving Financial Goals] – by Satya Vyas

I have a question. My monthly take home salary is 2.5lacs. I am 24 years old. I want to invest and invest majorly in equities. My goals are :

1)buy a flat with the max. budget of 18lacs.
2)plan for retirement (age 50)
3)buy a sedan with a budget of 20lacs.

The first and the foremost goal is to buy a house, simultaneously planning for retirement. I need to send around 75k to my parents and another 75k to support my lifestyle per month.

The left 1lac I am planning to invest 70% in equities through MFs and Shares etc and the remaining 30% towards my planning of retirement i.e pension plans SIP, insurance SIPs and other fixed and more stable instruments like gold etc. Also I don’t like to take mortgage for too long maximum 4-5 years for any of the goals.

Please advice me when is the ideal time for me to buy my own house and also is this financial planning in sync with my own objectives or not.

Answer

2.5 lacs is great per month salary 🙂 . All your financial goals can be easily met with that kind of money . Let see your goals one by one

a) Your Home: shall not be tough at all .. If you save 1 lac each month , you can buy it in 1.5 yrs . thats the way you should save it.

Don’t put money in mutual funds or shares for this, have a RD for this , or if you can really take some risk, then try some balanced fund for 10-20% part of the money . Also my question is why home for 18 lacs, you can actually take a big enough home for 60-70 lacs and clear the loan in 10 years max. go for that .

b) Plan for retirement (age 50): This is a big enough question and cant be explained in isolation , read my article on 6 steps of Retirement planning . you will get idea on this .. investing 20k per month in SIP would do the job i guess .

c) Sedan: This will depend on when you want to do it , if its a priority , then save more per month , target it in 4-5 years. At last , I must say , if you manage your money well, you can take care of all your financial goals easily soon, I am afraid if you have not taken a 2+ crore term insurance till now, go for it, cover your parents.

At the end, its none of my business, but You should bring down your expenses and lifestyle may be. I am only talking about the part which is unnecessary and can be taken care of. Save now and earn all life.

If you have a question: Ask Here

Some times back I gave my Interview to Ranjan Varma, where I discussed My views on Financial Planning. I also read his views on Why Personal Finance Articles and Advice is Useless?

Personal finance web has increased to a big size in last some years and most of them give useless information. I decided to Find out what do Readers think about this themselves and here are the results.

Results Of Poll

This is the result of the Poll I conducted some time back at this blog with question “Are Personal Finance Articles and Advice Useless”? The results are based on just 74 votes but its quite an ok sample and the results suggest that only 21% people thinks that its of no use but majority (54%) thinks that’s its useful and rest of all thinks that it depends on the person.

I agree with Ranjan Varma on the fact that Personal Finance articles can give you sense of Direction, but its you who have to take Action at the end. This is totally true. Here at Jagoinvestor that’s the reason why I talk on two things HOW and WHY?

HOW

These are the articles which tell you how you do something, How to judge something etc etc . These are Process oriented articles which are important to know but they are not the Key !! . You can get this information from many places . Examples are

• How to calculate your insurance Requirement ?
• How to Findout If a product suits you ?
• How to Choose Good Mutual Funds ?

See List of other “How to” Articles on Archives Page

Why

There are other Categories of articles which are Psychology oriented articles which make you think which actually answer your question of Why Financial Planning is important .

These are thought provoking articles which will open your mind and make you feel what you are missing from so many years… I hope I am doing it successfully on this blog. These are the type of articles which you can use to do your Free Financial planning but remember that it needs a lot of efforts and time.

People who do not understand much of these or Are not interested should see a Personal Financial Planner (Certified Financial planner). Check out RupeeManager, A personal Finance Software which Ranjan is building.

Examples of these kind of articles are :

What is Goal of Financial Planning ?
Can you live with 90% of your Salary ?
Why SIP works well in Long term
How much does Securing your Family Cost
Why people dont take Term Insurance and why they are wrong

So what is the Conclusion

My take on the subject is that Personal Finance articles will be useful to someone only when he thinks about his Finance with a Responsible Attitude. You need to ask lots of “Why” questions, you need to know a few “How’s” and a fraction of “Interest” to take care of your Financial Planning.

Lots of Readers have mailed me and told me how they are changing there views about Financial Planning by reading this blog and how there Finances have taken a better shape now… I feel good hearing this.

Please comment on wheather articles on Financial planning helps you and if yes in which manner, which was teh recent action you took, or which changed your mindset about something? I thank all the people who participated in the Poll… 🙂

Here are a set of 4 questions and answers asked to me on “Ask a question section” . These questions are on the topics on Insurance , Stock market and Futures and Options , ULIPs and Motivation. You can also look at other Questions and sections part here at Part 1 and Part 2

Question 1 # by Vishnu

I am 25, single and my parents are my only dependants. My Dad is aged 65 and mother is aged 55. I have a Group Health Insurance Plan from my company which is given as a part of my compensation package. The insurance cover is for 4 lakhs (2 lakhs for self, one lakh each for my mother and father).

Given the features of the plan and my current need, the coverage of 4 lakhs is sufficient. But, I don’t have any other health insurance plan. Should I go for an additional plan, personally? I also assume that I would be given similar health policies in all my future jobs.

Answer

This is often a question in people mind , you say 4 lacs cover is sufficient , what if you had 10 dependents ?

Then each one would have 1-2 lacs cover and would you say 10-20 lacs is sufficient , what you must see is how much is “each person” cover, For you , its 2 laks , and for your parents its 1 lakh , now this logically , what is chances of you getting any health issue than your parents who are old (55+)

So the real situation nails down to this . Parents has 1 lakh of cover each and they are Old (probability of health issue drastically high compared to you) .

Now there is another issue , which is psychological , people think that chances of bad things happening to them is low than others , which is totally baseless . God forbid , but suppose there is some surgery or any health issue , you can imagine how much does it cost these days .. Lakhs of rupees .

Conclusion :

U should seriously consider covering your parents, Because of old age your will face some issue getting health cover now, also the premiums will be high (good enough), now its you who have to decide if you want to save those premiums (which can go waste, as some logical people declare) or pay the high cost of Hospitalization or Surgery or whatever when it comes, but save those premium . your call 🙂

Question 2 # by Taranprit Singh

I am beginner in this stock world and doing trading just for earn money, money and only money. I can say I am doing good in intraday trading of equities. Now I want to enter in future and options but the problem is I have ZERO knowledge about them, so please it’s my humble request to give proper guide for the same by which I can understand FNO easily.

Answer

I want to congratulate if you are making money in markets with intraday, Keep it up. But !! if its just 1 week or 1 month that you have made money then wait, It can be because of luck or market may not have shown its real face to you.

I would suggest you to keep trading for 1 yr and see all the faces of markets, believe me, 1 yr is minimum time you should trade to see if you can do it consistently 🙂 . Take the greed out of your mind to make lakhs and crores using F&O. I am experienced enough to say that it would kill you badly if you jump into it.

I would suggest you this.

• Keep trading the way you are doing and see if you can do it consistenely for 6 months
• Once you succeed in that, then keep trading and slowly learn F&O, buy books and read on Net, practice a lot.
• Paper trade F&O trades , don’t jump into it with money
• Once you succeed, then do some real money trades with small money, Grow slowly 🙂

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Question 3 # by (Name not allowed to Disclose)

Have taken a new Aviva Lifeline,whole life plan(its still in free look period),i want your opinion abt it… details, Annual premium: Rs.25,000 Premium Policy Term:20years Policy term 72years (i m 28 years – 100 years policy max years) Invested Amt(for 20 years) Rs.5,00,000 Expected Return at 6% is Rs.8,00,000(at the end of 20 years) is this plan good from normal middle class person(of salary of Rs.15,000 per month) point of view?

Answer

Lets not ask a question “Is it good or Bad”, let us ask a question, Can we do better than this ourselves with simple things.

Equity Returns over long term have been more than 17%. Good Mutual funds over 10 yr of history have returned somewhere around 20%. If we think about future and assume even 12% return over long term, Your investment of 25k per year will become 20 lacs after 20 yrs.

>>> 25000 * (1.12)*(1.12 ** 20 -1)/.12
2017468.

If you think aggressively and assume 15%, it would be 29 lacs after 20 yrs

>>> 25000 * (1.15)*(1.15 ** 20 -1)/.15
2945253

At 6% , it comes out to be 9.7 lacs
>>> 25000 * (1.06)*(1.06 ** 20 -1)/.06
974818.

Learn the Calculation in this Video

The reason why you were told 8 lacs is because of the charges and may be some mortality charges for penny insurance you might get there. Check it yourself.

Even if you take a term insurance of 30 lacs yourself now, it will not be more than 10k per year, remaining 15k you can invest in 2-3 good mutual funds for long term. at the end of 20 yrs, you will have at least 12 lacs assuming 12% return. Apply logic and maths and that’s it, you are your own financial planner 🙂

So my suggestion : Break this policy before the free look up period, and take what you get back, the amount spent on medical exam if any will be deducted.

Question 4 # by Vikas

I am 35 and haven’t had much opportunity to invest till 33 yrs. Now I have invested some funds in MFs (DSP Equity, Magnum Contra, DSP TIGER, HDFC Prudence and Sundarm Tax Saver).

I don’t have an established career and have taken any suitable opportunity that came along my way. Off late, I am jobless but have strong desire to start something independently of my own. However that “something” is what I am searching for.

I have to start small with no doubt due my financial restraints, but I know I have special liking for computer related jobs, exports, something creative like handicrafts etc.

Could you please suggest some books or articles or links or your own opinion how to translate this ” virtual something” in my mind to “real something”. I am absolutely sure if i strike the right chord, nobody can stop me, I have worked so hard for others in my regular job so I don’t see why I cant put my “everything” to get that elusive “something” 🙂

Answer

Great .. All the mutual funds u have are nice ones and keep continuing in them . Regarding converting your “virtual something” into “real something”, I have this to say confidence in yourself is amazing and worth appreciation.

To find out what you want to do, you may have to try out various things which may fail in start, but you need to have enough reserve of confidence to tell yourself that you will get it someday. “Making mistakes is a privilege which Unsuccessful people don’t get in life”, I said this one day to my friend and realized what a nice quote I made 🙂 .

“Believe in it.”

Most of the people are doing jobs which they hate or cant excel at, just because they don’t have that guts to start some thing on their own or change their jobs, you are much ahead of them, congrats on that.

Meet new people , try some ideas and make a list things “which you don’t want to for sure”. Prune out the things you don’t like. That would be a better way for finding what you want to do.

“One important thing”  –

We many times think that just because we have lot of confidence and desire to do something on our own will make u succeed, but there are something which have no substitute like Hardwork, spending time reading about what we like, Jagoinvestor was not build in a day, or a month, It needs work and patience and confidence that it will succeed.

There have been instances when I wrote 20 posts in a row after doing so much reading and hardwork, writing in night, but there was no comment which said “Nice job”, that is kind of heart breaking sometimes and makes you feel that “You are going no where”.

But what you need is the “belief” that things will turn out well at the end, just do your karma and results will come, and when they don’t come, just get out and accept it and be ready to move one just like it happens in Trading or Relationship. Its all the same thing at the end.

I did Trading in Markets (options) and failed like anything.

I am still learning and my confidence and belief in myself does not allow me to quit. Best of luck to you in trying to find your way. Don’t get underestimated by the failures . Failures will come and they will teach you more than your success .

Its only the times when you feel like quiting is the time when you really need to keep up yourself. “Difference between Coal and Diamond is that Diamond takes a little extra pressure”, So don’t let that extra pressure make you quit 🙂

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This is second post for answers to Questions asked to me in “Ask a Question” Section . The First Part of Question Answer section is Here . This section has questions and answers related to topics like GOLD , Real Estate , Term Insurance , Mutual Funds , “hiding Information from Insurance Company” . See the questions ans answers below .

Question 1#

I have a requirement of physical gold after 1 year or so. I just got back some money from an old investment. Is it ideal to buy the gold now at this price. Or do I make an FD for 1 year so that I can buy later. What do you see the price of the gold in another year’s time.

Answer

GOLD is near its support levels , so i am not sure if its a good idea to buy it for short term . Its hard to say what will be in a years time frame ,but if its just 1 yr , better to put money in FD and buy gold later .

Other alternative i would suggest is buy it every quarter with 25% money each time .

Question 2#

Have one general question… I was reading “Rich dad Poor dad recently”.. Some interesting concepts but was not sure how it will applicable to indian scenarios.

1. Kiyosaki tell’s that Real estate is the safest way for wealth. But in India (especially in Chennai and Blore), it is not only the value of land we need to worry about but also the reliability of the land owner (Same land is being sold for multiple people), Fake papers, Even if everything is alright some political party/Gunda can stick a flag and claim the land.

2.Is it feasible to have a separate business on top of our regular job?

3.Or should just mind our job and invest our money wisely (Stocks/MF e.t.c) What are your thoughts?

Answer

1. Real Estate is the safest way for wealth , I don’t agree with it .. Real Estate is a good Investment over long term , and you can get benefited in short term also , but for long term , i still recommend Equity. Regarding the reliability of land ownership , that risk is always there , but you can minimize it by taking precautionary measures from your side and by “not acting” foolish and greedy like many people do .

2. Regarding Second business on top of business , yes you can . but if your current job agreement says that you cant , then you cant , because you have agreed with them by signing the documents 🙂 . However I don’t see any issue in regular jobs . Go ahead .

3. There is no one answer to it .. There are other things than making money .. If you like you job just be with it and enjoy , you can side by side do good investing too . But you like investments as a career you can enter the field and have full time job in that .

Question 3#

Hi , after a study of analysis , i am planning to take term insurance policy of 50 Lacks but am facing difficulty to choose which one is better, as i see LIC Amulya jevan premium is 17k per year,(35 years)-50 lacs Bajaj Allianz Life – New Risk Care is 13.5 k (40 years)-50 lacks and also having some accidental,critical benefits.

Please suggest me,can i take single policy of 50 lacks or split into 25lacs, 25 lacs, and to safe side choose either LIC only or any another company like bajaj, kotak ,etc for same tenure who ever offering less premium need to take??

Answer

Well.. you have done 95% of the job by choosing to take term insurance , now to Find the best one is just 5% , because in a way its not too important .. I like SBI and Religare .. you can go with others also .

Term Insurance is a simple product and all companies have it with almost same rules , so the best one is the one with least cost most of the time 🙂 . Riders are your choice , you pay extra if you take them , they are not free.

Divide the policy in 2 atleast , If you are too emotional with LIC , you can have it as one of the insurers .. But there is no issues like Public or private companies.. read my article on this .

Question 4#

I invested in some mutual funds through SIP in FY 2007-2008. My current balanace in these mutuals funds is:- Fidelity India Special Situations Fund – Rs 10000 Fidelity Tax Advantage Fund – Rs 24000 SBI Magnum Global Fund – Rs 10000 DSP Black Rock Fund – Rs 24000 I must admit that I had no idea about mutual funds and invested as advised by a friend who was an agent in a Investment company.

Till early 2008 , all was looking good and the value (combined) was approx. 12000 more than Cost value (if I remember correctly). But now for the past 1 year the value of these funds(combined) is less than the cost value and currently I am at a loss by 7500.

I am not sure what should I do about these funds. Should I withdraw my money? or should let them be as they are in hope that their value will increase someday? Many Thanks for your help

Answer

DSP Blackrock Fund : EXCELLENT funds, Keep it, increase the exposure
SBI Magnum Global Fund : RISKY and seems to be fine (its a midcap fund), decrease the exposure
Fidelity Tax Advantage Fund : Good, Continue
Fidelity India Special Situations Fund : Its a new fund , STOP this and take some old Winner 🙂

You entered at bad time, dont worry its normal .. Review your Mutual funds (you may use my suggestions if you want, Take your call, i am not responsible) and prune out the bad ones and continue with the good one, Equity performance very good if you keep continuing investments and give it some enough time to it to perform.

Equity have risk and hence you are going through the time when you should be calm and control your “mind” which is concentrating too much on Losses 🙂 .

Question 5#

I have LIC Jeevan Amulya Plan for 30 lakhs @ premium of 7.5k. During enrollment, I had a medical checkup including blood test. My policy was confirmed after a month, i.e. after positive medical test result. During medical checkup, there was a document given asking questions about existing health problems.

I had a minor surgery during my childhood (age of 5) and a tonsill surgery at the age of 15. But, I missed to mention those.

Now, when I read some case studies in personal finance articles, I see that hiding such information will create problems later during insurance claim. What should I do now? Should I inform the LIC about the same? Or, do I need to stop the insurance and start afresh giving correct information? Please suggest.

Answer

You should inform them about this as soon as possible , Premium of Life Insurance depends on the Risk involved and Right now , The company is charging premium based on your information , If later they come to know that this information was hidden from them , the claim can be rejected and It will be a right thing from companies point of view , You should inform about this , Your Premium May or may not be revised . Even if its revised , its ok .. 🙂 .

That’s a fair thing

No point in stopping this policy and taking a new one, because any ways you will declare this to other insurance provider. Only in one case you will benefit, if new insurance provider has the premium less than LIC, which i think many will have, do your investigation.

Please leave your comments on this section, If you have some question, please post it HERE

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