Category: How to-Guide

Buying a new House? Here are 10 additional expenses you should be ready for!

Posted on by Team Jagoinvestor

Are you planning to buy a house? If yes then, you would have planned your investments and saving in line with the “Cost of the house”, you are looking for. But, when we buy a house, there are so many other events/costs which comes during or after buying the house which we do not plan well beforehand.

In this article, we will look at various things where we might have to spend money for. If you are planning to buy a brand new house, this article will give you a good direction on how to plan out your finances.

List of expenses associated with the purchase of a new home

 1) Stamp Duty

Stamp duty is a tax, levied by the state government on every transaction of property i.e. buy and sell, whether it be commercial or residential property. As it is levied by state govt. the rate varies from state to state. It ranges from 3% to 10%, depending on the slab decided by the particular state (in Maharashtra it is 5% of market value or agreed value of property whichever is higher).

Stamp duty is calculated on the higher value of any of the following:

  • The ready reckoner rate also known as circle rate/market value which is predefined every year by state government for every town, state or village, or
  • The agreement value of property. For example, if the agreement value of a property is Rs 50 lakhs and the value according to the ready reckoner rate is Rs 40 lakhs, then, the stamp duty would be calculated on the higher value, i.e., Rs 50 lakhs.

2) Registration cost

For registering a property on your name, the state government will charge you a registration fee. It varies from state to state. But most of the cases it is 1% of Market value of the property. Registration fee is lowered if the buyer is a senior citizen or a woman. In most cases, the builder will add this cost when they quote the house value to you.

3) Interior Cost

When you get the new house, its the bare minimum house with walls, electric points. It’s your job now to furnish it and decorate it as per your taste.  So, it is suggested to consider the cost that you may need to spend on interiors. And if you want to do marble flooring, designer wallpapers, texture paintings on wall, chandelier, modular kitchen, etc… the interior cost will tend to go up.

4) Advance maintenance fee 

When we move to a new house, and if it is in a newly constructed project, usually we are asked to pay a maintenance fee for a year or two by the builder. It can be a decent amount if you consider advance payment, so please consider that.

5) House warming party

When you move to a new house, you may feel like celebrating it with your friends or family. Some people may like to have a grant celebration or some may like to have a small party with close friends & relatives. So, the cost of house warming party varies from the taste of person to person, find out how do you want to celebrate it? And accordingly, plan for that cost separately.

6) Furniture

Many people want to set up furniture before moving to the new house and some people do it after 2 to 3 years of moving in, which is also okay. So, if you want to move in, to furnished new house then, you will require to buy or appoint a carpenter to make your home furniture best suitable as per your needs and requirements. You need to be prepared for the cost of furniture such as sofa, bed, almirah, dressing table, dining table with chairs, shoe rack, study table, electrical appliances, etc… depending on your needs.

7) Additional charges in flat

Now, these costs are subjective, it depends on the needs of a family. These additional costs include a video security system and iron grill at the main entrance for security purposes, pigeon net if your new house is having open balconies and mosquito net for windows, etc.

8) Sinking Fund

Sinking fund is a cost, which you may need to pay, to the society you will be living in, every year for a certain period of time such as  5 to 10 years. These charges are paid by all the house owners in the society, so that society’s huge maintenance cost, which can be for Lift maintenance charges, Building painting, clubhouse renovation, parking space, and building renovation charges, etc.

For example, if the lift of your building is not working and it requires 10 Lakhs to get repaired then it will be made from the sinking fund collected by society.

9) Small house alteration

Now, this cost again is subjective, it may change from person to person. Many people want to make some changes in the existing layout of the new house before moving. So, they will be needing extra money for this. Examples of small alterations are changes according to Vastu Shastra & creating storage space (storage room or shelf) etc.

10) Packers and Movers Charges

Moving your home stuff from one place to another can also cost a bit, especially if its an inter-city move. Do consider this cost as well when you are buying a new house.

Conclusion

For many of us buying a house is like achieving a huge milestone in our lives. When we plan our savings and investments according to, not only for the cost of the property but, also for other additional expenses to be incurred, then we will have more clarity & avoid the burden of so many expenses before buying our dream home.

And I would say around 10 – 20% of your house cost, should be kept aside to meet all these expenses. eg. if you are planning to buy a house of Rs. 50 Lac then additional 5 – 10 Lac has to be taken into consideration.

If anyone in your circle of friends and family is planning to buy a house, let them know about these additional costs. And also, if I have missed some points so please add in the comment section.

Is it possible to take loan against Fixed Deposit?

Posted on by Anuradha Singh

FD is one of the most popular investment option in India due to its numerous advantages like safety, fixed interest earning and easy to understand product. And now you can easily get a loan against your FD even if you don’t have a credit score or meet any income earning eligibility criteria to apply for a loan.

So, One of the main advantage of holding a Fixed Deposit (FD) is that you can secure a loan amount below your FD amount, without actually breaking it!

Can I get loan against my fixed deposits?

Eligibility criteria, documents required and how to apply?

In order to apply for Loan against FD, you will have to approach your bank manager, fill the desired form and submit the important documents. Many banks such as PNB, HDFC etc… are offering online facility for loan against FD.

Eligibility criteria for taking the loan against FD –

  • You need to have a year old active fixed deposit with the bank.
  • Applicant should be at least 21 years old
  • Applicant has to be resident citizen of India
  • Individual, sole proprietorship, societies, HUFs etc are eligible.

Documents required for taking the loan against FD –

  1. Application form
  2. Fixed Deposit receipts
  3. A cancelled cheque might be required if the loan is being taken from financial institutions other than banks
  4. Duly signed agreement letter
  5. Passport size photographs
  6. Valid photo identity proof

Let us see a video to understand it more clearly –

Interests charged on the loan amount

The interest rates charged for FD loans as compared to traditional loan interest rates are very less. It is generally around 2% to 3% more than the FD interest rate.

Example – Ram is having a FD worth Rs 10,00000. He is earning an interest rate of 6.5% on his FD; if he applies for loan against FD then here he will be charged an interest rate of 8% to 8.5% on the loan. The interest charged here is much less than the average loan interest rate that usually ranges from 9% to 15% (varies from banks to banks).

Below is an indicative chart of different banks with interest rates on overdraft of FD

what are the interest rates of different banks on loan against FD?

Is pre-payment of loan against FD allowed? If yes, how much is the penalty charged?

Yes, pre-payment of loan is allowed with no penalty charges. If you are thinking of taking loan against your FD, and you know that after few days or few months you can make pre-payment of the existing loan then you will be at profit because pre-payment is also allowed that too with no penalty charges.

How long can be the loan tenure?

The loan tenure against fixed deposits depends on the tenure of the fixed deposit. The tenure of loan will not be more than the term of fixed deposit. In most of the cases tenure of loan is 3 years.

Example – Sham wants to avail a loan on his fixed deposit (whose maturity is in 5 years). He can avail the loan only after completion of one year of FD. If he takes loan then he will have to repay the loan within the next 4 years, before the maturity of the fixed deposits.

Loan against FD vs Breaking the FD

The natural question here one will ask is, why not break the FD itself and use the money? Why one should apply for the loan??? Let us see the difference between the both and then one can take the decision.

Difference Between Loan against FD and Breaking of FD

[su_table responsive=”yes” alternate=”no”]

Features Loan Against FD Breaking of FD
Ease of getting money Money will be received after procedure of loan sanction is over  Money is received immediately either in cash or Bank
Interest Rate Interest on loan amount has to be paid No need to pay interest
Sanctioned amount Limitation on amount received (Up to 90% of FD) You get the entire amount you invested so far

[/su_table]

You can see in the table above, all points favour breaking of Fixed deposits, but one reason why you can think of taking the loan against FD is-

The human tendency, that you repay the loan in EMI form easily rather than again creating the FD. If you break the FD and use the money, there is no compulsion for you to again save money and create the FD and it might happen that you will not have wealth at later point.

However, if you take a loan against FD, then the FD exists and you will look at the loan repayment as your primary objective and forced to pay back the money.

One more reason of taking loan against FD is, IF you are asked for a financial help by some relative or friend and if you choose to get loan for them against the FD. Then, they will be more serious in repayment of EMI because then they will be knowing it well that you have facilitate them a loan which has to be repaid on time. So, it will become obligatory for them to repay.

And in the same condition if you break FD and give the money as loan, its a transaction between you and your friend/relative and there is a tendency of all human beings to not return the money on time and become very casual about it, if it is not legal obligation over some one.

That was all about the loan against FD .. Do feel free to ask any doubts in the comment section.

How to do KYC for Mutual Funds? Its quick and easy!

Posted on by Team Jagoinvestor

Are you a new investor in mutual funds ? If yes, then you might be having these questions in mind.

  • What is KYC ?
  • What do I need to do to register my KYC?
  • Whom should I approach?
  • Do I need to do my KYC every time before investing into mutual funds?

So, in this article you will get the answer of all such queries.

CAMS KRA KYC form

CAMS KRA KYC form

What is KYC ?

KYC i.e. Know Your Client is a process required by RBI norms which needs to be completed before starting any investments. It is used as an eligibility test of an investor to prevent illegal activities like money laundering. So, if you are planning to start investing in mutual funds, you need to register your KYC first.

Do I need to do my KYC every time before investing into mutual funds ?

No, as KYC is one time exercise (central process) needs to be done before investing. Once your KYC is registered you need not to undergo same process again while investing with different mutual fund houses.

How can I register my KYC ?

For KYC registration, KYC form has to be filled with all the details and needs to be submitted along with self attested copies of required documents (as discussed below).

Also note, that if you want to invest in mutual funds (Resident or NRI), Click here to know about Jagoinvestor mutual fund services. We also help you in getting your KYC done

From where can I get the KYC form ?

You get get the KYC form via 3 sources:

  1. For this you need to visit the website of CAMS KRA, Karvy or other registrars.
  2. Or you can also visit the website of the fund house where you want to start your investments.
  3. Or you can reach an Independent Financial Advisor.

What documents are required to be attached with KYC form ?

[su_table responsive=”yes” alternate=”no”]

For Resident Indian following documents are required :

  1. Copy of photo ID proof such as Aadhaar, Passport, Voter ID, or Driving license etc.
  2. Copy of address Proof eg. Electricity bill, Aadhaar etc.
  3. Copy of PAN card
  4. Two passport size photos
 For Non-Resident Individuals(NRIs) following documents are required :

  1. Copy of Passport is compulsory
  2. Copy of Overseas Address Proof
  3. Copy of Indian PAN card
  4. Two passport size photos
  5. Copy of other national or Citizenship Identification Number or Taxpayer Identification Number

[/su_table]

Important Points:

  1. POI card needed for POI
  2. In case your overseas address is not in English, you need to get it translated by a translator in your city and get their stamp
  3. In case you do not want to travel to India just for making investments, you can always give POA to someone trusted who can do the process for you.
  4. In person verification is mandatory for true identity verification. So, Fund houses or registrars does IPV via video calls.

Where can I check my KYC status?

Once your KYC form along with required documents is submitted to the registrars(CAMS, Karvy, Sundaram etc.) It will take 4 to 5 days in registration. Once it is registered you can start investing into mutual funds. You will get the  alert about the registration via mail or SMS. However, if you want you can check status of your KYC by entering your PAN in either of the links below:

https://kra.ndml.in/
https://camskra.com/
https://www.karvykra.com
https://www.cvlkra.com/
https://www.nsekra.com/

You can also refer these links for downloading KYC application form.

Conclusion :

For KYC you need not to go anywhere, it can be done from your home. So, if you are planning to start investing in Mutual Funds, KYC is the first step to it. And if you are having any trouble in KYC or while investing, do let us know in the comment section.

How to unlink Aadhaar from Bank, Digital Wallet & Other Service Providers?

Posted on by Jagoinvestor

Good News!!

The Supreme Court has ruled that citizens of India do not have to link their aadhar number to a range of services such as bank account, mobile sim, digital wallet (paytm), passport, etc. However, the Supreme Court has said that biometric ID is mandatory for accessing social welfare schemes and subsidies such as, LPG subsidy, Jan Dhan Yojana, etc.

aadhar card linking

Last year a lot of stress was there for having an Aadhar card and urgently linking the aadhar to avail public and private sector services. That panic state in the country made us link our aadhar with a bank account, sim card, investments (KYC updation) and whatnot.

After all, there so many questions were raised on the basis of the Right to Privacy and Right to avail the basic services which should not be stopped on the question of not having aadhar card number.

There were so many news such as,

After all these, the verdict of Aadhar not mandatory has been passed.

So, now it is a good news for those you never had an aadhar and never got it linked with anything. However, for those who have linked the aadhar with their private accounts and are concern about their private information getting hacked, may delink the aadhar.

Process of Un-linking

Now, the question arises is it so easy to delink? Do I again need to stand in the queues at post office and banks for hours for delinking my aadhar? The answer is NO. Because, Aadhar delinking is optional and not mandatory. If you feel insure that your private information may get leaked than you should delink your aadhar number.

Below given are the processes of delinking aadhar from Post Offices, Bank, Digital Wallet, and Mobile operator.

1. How to unlink aadhar from Bank Account

Before proceeding to unlink Aadhaar from Bank, first, make sure that your Bank Account is not linked for any DBT (Direct Benefit Transfer). If you unlink the Aadhaar with the bank which is linked for DBT (like Gas subsidy), then you may not receive the DBT money in your account. Hence, try to unlink Aadhaar from bank cautiously. Following are the steps for delinking aadhar from bank.

  1. Visit your branch
  2. Ask customer service to give you Aadhaar De-Link Form.
  3. Submit the de-link form
  4. Within 48 hours your Aadhaar details will be de-linked from your bank account.
  5. Cross-check after 48 hours whether it has been de-linked or not.

2. How to unlink aadhar from Post Office Account

For delinking aadhar card number from post office accounts, you just need to submit a form of delinking of Aadhar Number. This is how Indian post office payment bank de-link form looks like.

how to delink aadhar from post office schemes

3. How to unlink aadhar from digital wallets such as Paytm, Mobikwik, Freecharge

  1. Call the customer care and ask for the procedure to de-link.
  2. You will receive an e-mail to attach a soft copy of your Aadhaar.
  3. After sending the e-mail, you will receive a reply stating that within 72 hours (depends from company to company) your Aadhaar will be de-linked.
  4. Cross check again after 72 hours with the customer care.

4.How to unlink aadhar from sim card companies such as jio, Vodafone, idea, etc.

  1. Call the customer care and request for unlinking aadhar.
  2. You may be asked to send an e-mail with a request to de-link your Aadhaar details.
  3. Once you send it, then they will send you the confirmed message of unlinking Aadhaar.

There might be some difference in the process of delinking for every service provider. Because as of now there are no standard rules set up for delinking. So, you may directly contact the customer care of the service provider and they will guide you on the exact process.

Please feel free to comment on how fruitful this article was.

How to earn 25,000 as an extra-income (while keeping your day-job) in 3 simple steps

Posted on by Team Jagoinvestor

Here is a guest post from Zubin Ajmera from Progress & Win (detailed bio at the end) .. He would like to share his insights on creating extra income while you are at job.. Over to him.

–

If I have to tell you the latest trends and fantasies of Indians these days, it would be 4 things :-

  1. Going on dating apps (“Forget Tinder, did you check out this new app?”)
  2. Trying a new restaurant (“We should really go to this new cafe opened last month, they serve the most delicious desserts”)
  3. Watching the latest movie (Robot 2.0?), or the new series on Netflix (“Did you watch Sacred Games, or Narcos?”). I mean, look at this craziness
  4. Starting a business (“Sometimes, I feel my manager doesn’t understand it! I just want to quit my job and start something of my own!”)

Today, I want to talk about the 4th — starting a side business. And it’s funny because the moment I tell this, the instant choleric reaction is:-

  • “Uhh, I’m already occupied with so many things. I don’t have enough time”
  • “Business?? I don’t even know where to start from”
  • “Why will anyone pay me? I’m not an expert”
  • “I’ve an idea in mind, but not sure if it will work!”

I call these Mental Scripts, these are some of the barriers you have in your head when starting anything new.

I don’t necessarily blame anyone for this. The fact is, we live in this “startup ecosystem” where you’ll come across hundreds of sites talking about technology, ecommerce, and mostly hear words like — “funding, investors, seed round A, renting office space, hiring”, etc.

I want to tell you that all of that is possible, but you CAN take a different route. A different route might mean –

  • Starting a tiny business while still working at your day job (so eventually you’ve an option to quit your job)
  • Working on something you’re interested in or deeply care about. For eg: I love to research and spend on perfumes. My weird dream is to start a business on it someday. Not kidding, just look at my enrapturing expression when I buy a new one online –

The expression after you order your favorite thing on Amazon

  • Creating a second income stream
  • Finding your first paying customer (Apple sold its first iPhone on 29th June, 2007 Flipkart got its first customer in October 2007. Moral for you — It all starts with ONE)

In fact, imagine how life looks like if you have 2 paychecks deposited in your bank account every month. A second income rolling in.

For most of us, the bulk of our fixed income comes from our salary. What if you added one more stream to your income? That one stream might not be equivalent to your salary, but even an extra, say 25,000 — what do you think you can do with that?

  • Pay for petrol or other bills
  • Cover up for rent
  • Buy that extra pair of clothes or shoes
  • Take someone out for a lavish dinner
  • Maybe take a short weekend trip to some new place?

 
Here, I’ll show you what that second stream of income looks for me –

This was from November itself. Each customer worth $50

And let me show you what a business where you’re your own boss looks like for other ordinary people, who are just like you and me –

  • Deepak Kanakaraju teaches digital marketing through his online courses and workshops
  • Sandeep Singh sips a chocolate milkshake at a coffee shop, while he finds/reports online security loopholes for tech and ecommerce companies
  • Karan Batra is a finance expert who provides various tax and finance saving services
  • Ritika Tiwari is a writer, who provides content writing services for many websites and companies

Google all of them, and there are plenty of others who were working professionals and started as beginners. See more examples here.

Is this a dream “not possible”?

No! With a few simple steps, this is achievable. It’s not even a distant dream, you can start earning more in as little as 6 weeks and build a sustainable income — for life.

Let me show you how.

The simple framework to start a side business (in 6 weeks or less)

It boils down to 3 simple steps:-

Step 1: Find an idea

Step 2: Niche it down

Step 3: Get your first 1-3 paying clients

That’s it. I’m not going to throw 100 different things at you (“start a website, buy a domain, get the xyz discount”) to confuse you further.

I’m not even going to use complicated jargons you’ve never heard of, you really don’t need to when you start off.

It’s kind of like when you start working out at the gym. Your goal initially is not to lose 20 kgs, but maybe a tiny goal to lose 5 kgs first.

That’s the goal here as well. To find an idea, test it, and get your initial clients. Do these 3 steps, and boom — you’ve a functioning business.

And the interesting part is all of this is possible while sitting in your office desk….doing your work…on the laptop…..or on a weekend….or coming home after work….or after dinner….just by spending 5-7 hours per week

Let’s go through the details of each.

Step 1: Find an Idea

Tool required: A pen and a paper (do not ask “what fancy tool should I use?” There isn’t)

Time required:  15-20 minutes

You’d be surprised when I tell you this —  80% of my readers face this challenge, which is coming up with an idea.

  • “I don’t have any ideas”
  • “Where should I start from?”
  • “Zubin, I have an idea, but I am not sure if it will work”

It’s kind of like an “excuse” you make to cover up on not taking action. But you also make it sound “correct” in your head, so you think what you’re doing is right.

For eg: “I don’t have enough time” is the most common one you’ll find. Here’s an interesting comment on one of my articles for YourStory – (You can check my full response here btw.)

A big part of starting a side business is internalizing your inner psychology and mindset. (And it’s never about “which domain to pick”, or “what the name of your company should be”)

Let me show you 2 simple techniques to come up with atleast 10 different ideas in under 15 minutes. I’ve used them and I still do, many of my readers have, and it continues to work.

One quick caveat is to stop censoring yourself as you go through this process. No telling yourself “I can’t do this”, “I’ll do this some other day maybe”

Much of this is about creativity, testing, taking action, and eventually having fun with it.

Technique #1: The YUS Technique

I call it Your Unbeatable Superpowers (YUS). Each one of us is different. Our story is different — where we come from, experiences we’ve had, people we meet, places we travel, stories we know, food we eat, clothes we wear, etc. This is what makes you unique.

So, how can you monetize these experiences? How do you turn your unique experiences into profit viable ideas?

Answer the key elements below:-

  • Experiences you’ve gained — like learning algebra or studying architecture, finance or consulting, traveling by spending less, doing interior designing
  • Skills you’ve developed — like playing a guitar, working on excel, taking better photos, coding in java
  • Challenges you’ve faced and overcome — like treating foot pain, getting the perfect muscular body, losing weight, learnt to write better
  • Achievements you’ve been awarded for — maybe you got a promotion, or a high MBA score, or bought a car from your own pocket, or stood first in a swimming competition

Write down as many you can think of.

Technique #2: The Detective Hat Technique

I want you to answer these questions –

What would you do on a Sunday morning after your morning breakfast?

You wake up at 10 am (hey, it’s SUNDAY!), spend another 10 minutes on your bed. Brush your teeth. Take a bath. Have your breakfast.

Now after all this, what do you usually do?

Will you go to the gym? Read business websites? Watch cooking videos? Go to a networking event? Arrange your next travel trip?

Write it all down!

What do your friends/family struggle with and ask your help for?

Do they come to you for design advice? Or ask you about finances? Or they need help with planning an event? Learning how to create excel spreadsheets? Advise on what phone/laptop to buy?

Remember, no idea is a bad idea at this stage. I want you to list down EVERYTHING you can think of when using the techniques. You’re not allowed to

  • Chalk out any idea
  • Think “this idea isn’t possible” (How do you know?)
  • Critic yourself (“I am not an expert”)

We’ll remove some of these ideas, don’t worry. I’ll show you how to identify and eliminate the bad ones. But, we’ll address all of these concerns later.

Right now, just put everything on the page.

Great! With using just these 2 techniques, you now have a list of 10-15 potential ideas. (If you also want to see the Book Shelf and The Flight technique to come up with more ideas, check below here.)

Here’s how your list might look like –

This is from one of my readers. A simple exercise, and you already have so many ideas

Awesome! Pat yourself.

Now, I want you to pick one idea. Do not obsess over this. Pick one idea. Do inky-pinky, or something that interests you, or what idea catches your eye when you look at the list, or just ask your mom (she gives the best advice sometimes trust me) — that’s not the point.

The point is to pick 1 idea to test and validate, and move to the next step. A lot of people get stuck at this step alone. Treat this as a system. You simply follow the steps, trust the process — and you will see results.

Step 2: Niche it Down

Tool required: Just your creativity

So, you’ve an idea. Now, let’s determine who can be your potential customer/client.

In marketing, there is a golden rule penned by author Tim Ferris in his book, which goes — “if everyone is your market, then nobody is your market”

Once you have a rough idea, the next step is to identify the person who will pay you. Don’t go after each and every individual you can think of.

Ask yourself – Who is my ideal client?

Bad answer: My ideal client is 18-35 year-old men

Really? An 18-year old college “dude” has almost nothing in common with a 35-year old professional. They are at different stages in their lives, have different goals, their lifestyle is different, and they have completely different mindsets.

GET REALLY SPECIFIC! I cannot emphasize the power of getting super-specific.

Good answer: 30-35 year-old men who are working professionals

Amazing answer: 27-35 year-old men who are working professionals, in the IT industry, living in Mumbai. They typically work in IT, Banking, Finance companies. They are either middle or senior level professionals in their career. They work largely on these xyz softwares, excel spreadsheets, and emails. Most of them are married. They commute either by train or a bus. They spend most of their time on social media (Facebook and LinkedIn.)

I mean, look at that amazing answer above. I love you already!

The more specific you get, better your chances of early success. When thinking of your ideal client, you want to deeply understand :-

  • Age
  • Location
  • Demographics
  • Where do they hang out often?
  • What do they read, watch, listen?
  • Where do they go to solve their problems?
  • Type of industry they are in
  • etc.

Let me walk you through an actual example. Say our idea is — “content writing”

Who is my ideal client? Maybe we come up with –

  • Marketing agencies who require content writers on a part-time basis
  • Authors or bloggers who require for their website or a new book
  • Small scale companies who need for regularly putting out new content for their blog and social media channels

Say we pick the first one — marketing agencies, since the demand for content writers might be more there. Agencies need content writers everyday!

Again, the point I want to emphasize is do not obsess over and over again. Pick one and move to the next step. With a little testing and refinement, you will learn a lot more, than to simply sit and daydream on it.

So, where are we? You’ve an idea — you’ve narrowed it down for a specific market, you know EXACTLY who would be a good target audience for your idea.

Alright, great then, this is a good start!

Step 3: Getting Your First 1-3 Paying Clients

Back in the day, getting a client meant doing some grilling work — months and months of waiting, no response, following up repeatedly, all a dreadful process. Oh, and by the way, how can we forget there was less internet access and penetration!

Today, finding your first paying customers is pretty quick, cheap and easy. Let me show you the cheapest and a free way of getting a client.

Go Direct!

Yes, just go direct — send an email, or meet in-person, or do a direct cold call.

My recommendation: Start with 5-10 emails a week. Can you do that? Don’t answer that, since the answer to that question is “Yes, you can!” So, you better not give me the “I don’t have time excuse!”

With about 30 minutes per day, you should be able to send 10-12 emails (even while watching Netflix on your laptop, OK?).

Let me go one step further and show you an exact word-for-word script to send.

The 5-Point Formula Email Script to Get your First Paying Client

Few things which make this deceptively simple email work like magic –

  • It’s simple and casual (you feel you’re talking to this person friendly. No “sir”, nothing formal)
  • It’s not too short, and not too long, yet it covers all important points —
    • a quick intro
    • services you can offer
    • problems he has
    • benefits to him
    • a call to action
  • Not all of your recipients will respond, but a few will, and that is your road to turning those into paying customers

Once you set the foundation of getting your first client correct (i.e. you know your idea is validated, there is demand for it, you’re getting responses to your emails, etc.) — you can then scale. You can get your next 10 or even 100 clients pretty easily.

Conclusion, and Your Next Step

Unlike other “digital marketing” gurus, who preach overwhelming stuff –

  • “You NEED a website. Here is the 50% discount on the hosting provider”
  • “Just do affiliate marketing” (Blunt truth: you will not see any results for the first 6 months alteast!)
  • “You must have a Facebook page!”

These are the same advises I got, and which you will get too.

Instead, without setting up a website or a facebook page or any fancy bells and whistles, which is all for later, start with this simple 3-step system. I’ve used it, many have, and the best thing about it? IT WORKS!

Forget Black Friday, here’s my “give-me-a-slap-if-it-doesn’t-work” guarantee offer: Apply this proven system, and you WILL see results. If you don’t, I’m open to get slapped (just don’t hit me hard, please!)

About the Author: Zubin Ajmera

After his 5-year stint in USA, Zubin returned back to India. He’s a Content Marketer, Founder of 2 online businesses, and started Progress and Win, a site where he helps working professionals and beginner bloggers start an online side business from scratch, using tested techniques and strategies.

He believes in a strict “no-B.S” approach, has been covered on Entrepreneur India, YourStory, directly worked with 2 authors, 4 CEOs, and featured on multiple other brands.

My 24 min talk on Radio 94.3 FM – “Upgrading your family vacation”

Posted on by Jagoinvestor

Last month, I was invited by 94.3 FM Radio one in Pune to talk on the topic “Upgrading your Family Vacation” as part of an investor education initiative by UTI called “Swatantra”

Below you can listen to the whole episode in a single audio file (24 min).

 

I had a great time with MJ Tarun, where he asked me a few questions related to Vacations and How to plan for it and I gave my answers to each question.

The whole episode was recorded and in total there were 10-11 questions that were broadcasted for 5 days in a week (2 questions each day).

jagoinvestor with radio one

In case you want to read those questions

For those of you, who want to read the answers given by me and not listen to them, we have re-written them in text format along with each question.

Question #1 – Do you see any similarity in Planning vacations and managing finances?

Yes, there are similarities. But to all the people who are hearing this talk, they will first think that managing finances and planning for vacations how they are the same things? But if you see both of them at a deeper level, you will realize that both of them need strong planning to get the best output.

Just like a person messes up their financial life by not planning for it, in the same way, if you do not plan your vacations, they will either not get the best experience or pay too much for output.

Just like there are good practices for living a good financial life, in the same way, there are some good practices to follow you are planning your vacations.

Question #2 – What are some important things we should do before leaving for a vacation?

I suggest a few things

Suggestion #1 – One of the things, I personally do and will recommend everyone is that whenever you are going for the vacation, it’s a good idea to always call the hotel and confirm the booking incase you have booked it from 3rd party websites like Makemytrip or Yatra. There have been cases where due to some miscommunication, people have been denied check-ins by hotels.

Suggestion #2 – The second thing is you should ideally buy a travel insurance if you are going for a longer trip (especially when you are going out of country).

Suggestion #3 – One more recommendation is to always check if the places you want to see are open on you day you will be in town or not. Many places are closed on some particular day and I have seen many tourists frustrated by the fact that they did not check the details.

Suggestion #4 – Another good idea to to check what all payments are going to happen from your account like your EMI’s, your SIP’s or any of your investments, and make sure that the money is available in your bank account, because a lot of times it happens that you don’t have balance in your account, you are not there, the bank is calling you and you know that is something you should take care of. That’s very important.

Suggestion #5 – You should also make sure you have some extra balance in your bank account like always have 20-30k extra amount because you don’t know when you will need some extra money on your vacation.

Suggestion #6 – And finally just make sure you have the Xerox copies of all you documents like passport, your hotel bookings proof, ID proofs with you and one copy at home also, so that if you lose them you can call someone back at home and use them.

Question #3 – Some financial tips for those, who are planning for a low budget vacation

It’s a very interesting topic. When we plan for a low budget trip we want to minimize our expenses wherever we can. However, my take on this is to not minimize the core attraction of the trip. Let me explain

Generally, we have 4 important expenses

  • Travel
  • Food
  • Stay
  • Experiences

On any trip, there is one thing which is the best thing about that trip. Some places, you get amazing food, while some places offer awesome experiences, some places give you a nice stay experience.

Whatever the best thing about your destination, you should spend on that and mercilessly reduce or cut down on other things, this is a good way to reduce your expenses and at the same time get the best out of your vacation when you are low on the budget.

Let me give you an example,

  • If I am going on a Goa trip with my male friends, then I will not spend much on stay and experiences, because I know I will mostly be hanging out on the beach with my friends, enjoying local food and relaxing. So I will not restrict my expenses on food but cut down on everything else. I will stay on cheap beach shacks but enjoy the food at great places.
  • If I am going with my family mainly to relax and spend quality time, then I will spend a lot on quality stay which has good facilities but would cut down on other things if I am low on budget.

And a few other things which you can do is go in the offseason if it is possible and try to book your tickets in advance, that is one way that you can save on the travel part. And obviously, you can search for some online deals there are many websites which give you very good deals. So these are a few more things that you can do.

Question #4 – Why do we even need to save for trips? We can use a credit card for that and it’s easily available these days.

That’s a Good point!. It’s a very important thing to understand for the younger generation who start their financial journey with credit cards these days.

One should understand that, If you are using a credit card or any type of credit to fund your vacation for once in a while (like once in 10 times) then it is fine. But what we have seen is now a day’s people are just living on credit without planning on how to pay back.

When you use credit, you consume first and pay later in the future.

So you don’t feel the pain of paying and this makes you spend more. This makes the expenses look small or you get a false impression that there is not much impact on your financial life due to that one transaction. People get into the pressure of spending because they see their friends and others enjoying and partying and if they do not have money in a bank account, it feels like they still have to pay capacity because of the credit card in their pocket.

There are various researches that have shown that this is how people get into a debt trap. This is how people start their financial life and then later after 5-10 years they get into a deep mess. people don’t realize this.

If you see most of the people who are deep into debt whose financial life is bad, If you track down their financial histories this is how they have started spending.

So don’t make it a habit. If you are using a credit card or loan, you also tend to overshoot your budget because swiping a card does not feel like paying. You don’t see money going out of your bank account like you feel when you pay by cash.

So yes, I would not recommend credit card in general, but if it is once in a while it is fine. Also, if you use too much of credit card or too much of credit, your CIBIL score also gets impacted and that is the very important thing nowadays for getting loans.

My comment does not apply to those who are super disciplined to make the credit card dues payment every month on time.

Question #5 – If I need my partners to help in saving for a trip, what are your thoughts about it?

We have mostly grown up in families where there was a single breadwinner (Father). But things are slowly changing. Now men and women both are earning equally and they both have their own bank balances and assets.

If one partner feels that the money for the trip should be spent from both accounts (husband and wife), then both the partners should share the expenses.

And if you are not married and you are going with your Girlfriend or Boyfriend, then obviously it depends on your equation with your partner, how comfortable you are and what you think about financial matters. And it depends on how much money do you need for going to that particular place. If it is a lot of money then I think both of you should contribute, it will be great.

Question #6 – What are the mistakes that we can avoid while making our investments?

If you see the goal of vacation it is generally a short-term goal in most of the cases.

It is not like a retirement goal or kids education which will come after many many years. So one of the most important things here is the liquidity of the money, whenever you need the money, money should be available.

So you should save your vacation money mostly in a debt fund or recurring deposit which is simple and gives you some basic return, but do not invest in products which are highly volatile or have a lock-in of few years, otherwise if you break that investment there will be a penalty.

Question #7 – If we think to go for a good, lavish vacation which investments do you think are ideal?

So, if this lavish vacation you are planning to go for is going to happen in the next few months or maybe after a year, you don’t have much time actually.

You need a lot of money for that. Either you have it already, you need to accumulate it every month. There is no conversation of getting good returns on that investment because you have no time.

So let’s say if you want Rs.1 Lac after a year, the best option for you is to save Rs.10K or Rs.8-9K every month and you should do it ideally in a debt mutual fund.

You can go for a debt mutual fund which is a great alternative to FD, tax-efficient and you will get a little bit more return than your FD. Or if you are not comfortable you can go with normal FD also, that is also fine.

I want to make another comment here.

Nowadays, vacations have become a very integral part of life and people are going on vacations every year or alternate years. One should have a dedicated fund only for the goal of “vacations”. I suggest that one can start a SIP only for this particular goal and use the money for vacations.

Question #8 – Can we invest a fixed amount every month and make it a habit for vacation?

Yes, you can invest a fixed amount every month in mutual funds, It’s called “SIP” or Systematic investment plan. Everyone must have seen the advertisement these days on TV.

The best part of SIP is that on a fixed date of a particular amount gets debited from your bank account and the best part is that it happens automatically. You don’t see that money and hence you don’t spend that money.

The biggest problem now a day is that because the money is available in your bank account all the time, you can see it and you can access it and naturally, it will find its way for some expenses in your life. So a good idea is to make sure that it gets deducted automatically and you don’t access it. So this is a very good way of saving for your future.

Question #9 – What are the things that we should keep in mind before investing in Mutual funds?

I will talk about three things mainly. First thing is that you should not come into mutual funds with the mindset of getting rich quick. Most people see mutual funds as a stock market and want to just double their money with least effort.

The mutual fund industry is 20-25 years old, already very matured and you should come in mutual funds with the mindset of wealth creation.

The other thing is whenever you are choosing your product or whenever you are choosing a fund you should choose it as per your goal and as per your risk appetite. You can’t just pick a random mutual fund and invest in that. It’s not like Fixed deposits, where every FD will work great.

If you can’t take a risk then don’t invest in a fund which is very very volatile and risky. And if you want high return then don’t invest in a fund which is going to be a very stable return product. So choose it as per your risk appetite.

Finally, I would say that if you can’t do a lot of analysis, and you feel that all this is not your cup of tea, then hire an advisor, pay the fees and take his help in selecting the fund. Don’t think that you can do it all by yourself.

Not hiring an adviser sometimes can cost you more. Bur at the same time, there are some investors who are smart enough and can do these things themselves, but I would say that hardly 1% of Indians are like that. People get overconfident in financial matters and mess up their own financial life.

Question #10 – Is travel insurance a good investment?

First of all, insurance is not the same as an investment. An insurance policy is only to protect from uncertain situations.

Whenever you are going on a vacation there are a lot of things which can go wrong.

  • You can miss your flight
  • Your luggage may get lost
  • Some accidents can happen
  • You may get sick while traveling

All these have financial implications and if you have good travel insurance, then it will cover all these things and they will pay for all these expenses.

So if you want to transfer this risk to a 3rd party, you can go for travel insurance by paying a small premium for it. Whereas, if you are ready to face all these problems and risks you can choose not to take travel insurance. It’s all about choice I would say.

I personally feel that when you are going on a long vacation, especially out of India, then a good travel insurance policy is a must.

Hope you enjoyed the audio show

Do you have any comments on the talk? Do let us know in the comments section.

What is EPS Scheme Certificate? (this is related to EPF pension)

Posted on by Jagoinvestor

Do you know that, when your employer contributes to EPF then a larger portion of it goes to EPS (Employee Pension Scheme)? In this article, I will elaborate to you what is EPS, how it works and also the process of getting its certificate to claim your pension.

Employee Pension Scheme

What is the EPS scheme?

EPS i.e. Employee’s Pension Scheme is actually part of EPF itself, which means it is applicable for all the employees who are contributing towards EPF. This scheme offers a guaranteed and secured pension to the employee after retirement. A nominee can also get the benefit of pension under this scheme after the death of the employee.

Both employee and the employer contribute equally i.e. 12% of employee’s monthly salary towards employees EPF. However, the 12% which the employer provides, out of that 8.33% goes towards EPS and only remaining 3.67% goes to your EPF.

Diagram showing contribution to EPS and EPF

Features of EPS:

  • The minimum pension amount that you get is Rs.1000 per month.
  • The employee can avail of the pension benefit after retirement or once he attains 58 years of his age.
  • The employee can defer his EPS up to the age of 60. In this case, he will get an increase of 4% on his EPS balance for every deferred year.
  • Widow/ widower and children (up to 25 years of age) of the deceased employee will also get the benefit of this pension scheme.
  • In case the widow/ widower opts for remarriage then, only the children will receive the pension until they attain the age of 25 years.
  • If the child is disabled then, he is eligible to receive the pension for his entire life.
  • To claim your pension you need to get the EPS certificate from EPFO.

Who can get EPS certificate?

Every employee who has been registered under EPFO can get EPS certificate for claiming his pension. The EPS balance can be either withdrawn after retirement or it can be claimed as pension by opting EPS certificate depending on the tenure of service and the age of the member. So, to elaborate this, I have given some examples below (The length of the service is rounded off to one year if the number of months served is more than 6)

    • A person working for 9 yrs. and 6 months (will be considered as 10 yrs.) but less than the age of 58yrs can either apply for the scheme certificate or can withdraw the money from EPS.
    • A person who has attained the age of 58 yrs. but has completed only 7 yrs. of service then he can either apply for a scheme certificate or can also withdraw.
    • A person who has done more than 10 years of service has to apply for a scheme certificate. He cannot withdraw money from the EPS account.

What is EPS Certificate?

EPS Certificate is a certificate issued by the Employees Provident Fund Organization (EPFO), Ministry of Labour, and Government of India, stating the details of service of the Provident Fund member. The EPS Scheme Certificate shows the service details of the employee, i.e. the number of years he has served and the family details of an employee, i.e. the member of the family who is eligible to get a pension in case of death of the member. As the EPS Scheme Certificate has all the details regarding the service of a member of EPFO, it serves as an authentic record of service.

This is how EPS Certificate looks like:this is how eps certificate looks like

How to apply for EPS Scheme Certificate?

Once you are leaving the job, then you have to fill the Form 10C. In the form 10C, there are options either to withdraw EPS or apply for EPS Scheme Certificate. Once you chose the options to issue EPS Scheme Certificate, then your employer sends the same to EPFO and then EPFO will issue you an EPS Scheme Certificate. If your all inputs are correct, then EPFO will issue you the EPS Scheme Certificate within a month or so.

This is how Form 10C looks like:

this is how form 10 C of EPS looks like

I hope this article has helped you in understanding every detail about EPS and its certificate. Let me know if you have any queries or doubts in the comment section.

Procedure for EPF Withdrawal on death? (here are 6 documents required)

Posted on by Jagoinvestor

A lot of EPF accounts are lying unclaimed after the death of an employee. Families have no idea how to claim the EPF money and what is the process?

Today I will share with you how your family will be able to withdraw the EPF account money in case something happens to you.

withdraw EPF after death of employee

How to claim EPF money after the death of an employee?

Once a person is dead, the beneficiaries of the dead employee can proceed with the process of withdrawing the EPF money. The first right is of the nominee who was mentioned in the EPF by the account holder. Mostly it’s a father or mother as most of the people are unmarried when they start their careers and they mention one of the parents as a nominee.

Here are the documents one need to submit

[su_table]

1 EPF Composite Form The first form is called the Composite form for death cases, which is a single form to be filled to claim EPF, Insurance money and any pension amount.
2 Death Certificate You need to provide the death certificate of the EPF account holder who had died.
3 Birth certificate of children claiming pension If there are children of the deceased who are claiming the EPF, they need to provide the birth certificate for each of them
4 Joint photograph of claimants One has to provide a joint photograph of all the claimants together. This is to make sure that there is no fraud in the name of claimants.
5 Copy of cancelled cheque or attested copy of the first page of Bank Pass Book To make sure there is proof of the account where the money is is going, one has to provide a copy of the cancelled cheque or the first page of the bank passbook
6 EPS Scheme certificate (only if applicable) This is a certificate which is a document that has all the details of who will get the pension etc after the death of a member. It’s issued by EPFO and this is applicable only when there is a pension part applicable.

[/su_table]

How does the EPF Composite form look like

Here is a snapshot of how the EPF composite form in death cases looks like. This is the main document that one has to fill if they want to claim the EPF amount.

Composite claim form to withdraw money from EPF account after death of employee

You can also download the EPF Composite form for death cases here.

Share this information with your Family

As you can see, that the process of claiming EPF is lengthily and painful, you should make sure that you make it easy for your family members to claim back the EPF money. Hence please do the following things

  1. Keeping all of your important information in one place which is safe and accessible to your family
  2. Please update the nominee of your EPF to someone whom you really want it to go
  3. If you have a WILL, mention the beneficiary who should get the EPF money

I hope you get a clear idea about the EPF claiming process now. If you have any query please reply in the comment section.

What happens to PPF account once you become NRI?

Posted on by Jagoinvestor

Once you become an NRI, what happens to your PPF account? Can you continue it or do you need to close it?

The one-line answer is – NO, You do not have to close it, and you can continue it till its maturity.

But there are more details to this.

Last year on 2nd Oct 2017, govt-issued a notification that once a person becomes NRI, his PPF account will be closed on the same day he becomes the NRI and all his money will earn only 4% interest thereafter.

New PPF Notification cancels the older notification

So yes, in Oct last year the rule had changed regarding PPF for NRI. You had to close it once you become the NRI, but recently on Feb 23rd, 2018, there was another notification issued that the old notification is on hold now and canceled till further notice.

Do NRI have to close their PPF account once they become NRI - answer is NO

This means that the same old rule will be applicable now onwards for NRI investors. An NRI cannot open a fresh new PPF account but can hold an existing PPF account till maturity.

Let’s see a few frequently asked questions related to the PPF accounts of NRIs.

NRI PPF FAQ

Q.1 Can NRI open a fresh PPF account?

As per the change in the amendment of the public provident fund, a person cannot open a PPF account once his status changes to NRI.

Q.2 What will happen if I’m an NRI and still open a fresh PPF account?

It is possible to open a PPF account for NRI because of the inefficiencies in the system, but before doing that you must be aware that legal actions can be taken by the authority in such cases. You will not get any interest on your PPF account if they find out.

Q.3 What should I do if I have a PPF account when I was Indian residential and later become NRI?

You do not have to do anything here. You can continue your PPF account till its maturity, but you cant extend it after 15 yrs.

Q.4 Can I contribute to my existing PPF account once I become NRI?

Yes, you can invest in your existing PPF account even after becoming NRI through your NRE or NRO account. You can only contribute till your PPF account matures.

Q.5 How to close my PPF account after it matures?

The steps for this process are as given below:

Step 1: Fill the application form for PPF withdrawal (Form C) and send it to your parents, relatives or friends in India, with an authority letter in which mention it clearly that you are giving that person the authority to withdraw your PPF.

This is how FORM C looks like:

this is form c for withdrawal of ppf

Step 2: That person then will go to the bank where you have your NRE/NRO account and get he documents attached by the the manager and then submits the documents. Bank will accept only the attested documents.

We hope you got a fair idea on the PPF rules related to NRI. In case you have any queries, let us know in the comments section below.

How to calculate Future Value of your monthly Investments

Posted on by Jagoinvestor

Lets say you want to invest Rs 2,000 per month for 10 yrs and then want to leave it for next 20 yrs to grow . How will you calculate it ? Do you know ?

Today we will see this basic calculation and learn how to find out the amount you can generate .

Calculate Future Value of monthly Investments

We have to understand that there are two phases to this calculation. First is  Payment  Phase, which is total time when you will pay money from your pocket , example 10 yrs .

Next phase is Investment Phase, This is total time frame you are invested in something product. Example 30 yrs, So in this case Phase 2 – Phase 1 = 20 yrs , which is the time when you let your money grow .

What it means is that your money will grow in two phases, First is the payment phase when you are investing money from your pocket, at the end of the payment phase , you will build a corpus which you can call as “Payment phase Corpus”, Now after this you stop payment any amount from your pocket and just let this “Payment phase coupus” grow year by year in some product till your target date.

So as per our earlier example, You may want to pay for 10 yrs (payment phase) and then let it grow for next 20 yrs and at the end of 30 yrs (Total Investment phase) you will build the “Investment Corpus” .

We will see an example calculation below . Assumptions are

Ajay wants to invest Rs 4,000 per month for 10 yrs and expects a return of 12% yearly (Payment Tenure) . After 10 yrs of investing from his pocket he then wants to leave that investment to grow in Equity (see suggestions for equity funds) and expects it to grow by same 12% return.

His total Investment tenure is 30 yrs. (Video tutorial for calculations)

Calculations

Payment Phase : Our first task here is to calculate the Corpus generated after Payment tenure first . So as per example, Ajay wants to invest Rs 4,000 per month for 10 yrs (120 payments) @12% return expectation .  The forumla you have to apply is called Future Value forumla or annuity due (payment in the start of the period) . The forumla is :

FV = A x (1+R) x (((1+R) ^ n) – 1)/R

where

A = Investment per month : This is the amount invested per month , In our example its 4,000 per month

R = Rate of Interest per month (yearly interest/12) . This is monthly return you expect , If you expect the return to be 12% per year , then per month return will be 1% (compounded monthly) , hence R = 1% or 0.01

n = This is total number of payments , so multiply 12 by the number of years , so if your duration is 10 yrs ,then n = 12X10 = 120

As per the formula

FV = 4000 x (1+.01) x (((1+.01) ^ 120) – 1)/.01

= 9,29,356

So we have found that the total corpus generated after 10 yrs of payment tenure is Rs 9,29,356 . First step is completed .

Investment Phase : Here , we are going to calculate the final value of the corpus at the end of Investment phase , so as per step 1 , we have Rs 9,29,356 at the end of 10 yrs , which we will call as Payment phase Corpus (PPC) . Now this amount will be lying in the investment for growth . We just have to apply compound interest formula now which is:

Final Corpus = PPC x (1+R) ^ n

where

PPC = Payment Phase Corpus , we have calculated it above and its value is 9,29,356

R = Rate of return expected for the rest of the period , we have expected it to be 12% or 0.12

n = this is the number of years we are letting the money grow after Payment phase . In our example it was 20 yrs, because total investment tenure was 30 yrs, out of which first 10 yrs was payment tenure .

Applying the formula we get

Final Corpus = 9,29,356 x (1+ 0.12) ^ 20

= 89,64,840

So the final amount you can generate by investing 4,000 per month for 10 yrs and then leaving it to grow for next 20 yrs @12% is 89.64 lacs.

Calculator

You can use the calculator Below to find out your Corpus (Look at more calculators)


Comments please , Did you find this whole calculations very tough to understand ? Suggestions ?