Tag: Beginner Level

IMPS – Online Money transfer in 30 seconds from your Mobile Phone

Posted on by Jagoinvestor

IMPS or Interbank Mobile Payment Service is a technology which offers an instant electronic fund transfer service through mobile phones between two banks in India. There are other two money transfer systems called NEFT and RTGS already in India, but they are not a mobile payment system like IMPS and they’ll  take some time to get settled. IMPS is a real time system of money payment.  The service has been developed by National Payments Corporation of India (NPCI), a section 25 company formed by Reserve Bank of India (RBI) and Indian Bankers Association (IBA). Here’s a testimonial from Harsh, who transferred money using IMPS…

Recently I issued a cheque from one of my account and did a NEFT transfer to build balance but NEFT failed to do the job in 48 hours, in the middle of night i started searching for how to do a instant transfer and then I got to know of IMPS. Registration happened instantly in matter of minutes and shockingly money transfer happened in micro seconds even faster than a google search – (via)

The transfer limit through IMPS is defined by RBI in the Mobile Payment Guidelines issued to banks. The customer can transact on IMPS subject to a daily cap of Rs. 50,000/- per customer overall for transactions through mobile for the funds transfer.

How to do Money Transfer using IMPS

All you need to make a transfer through IMPS system is your mobile number and MMID number . MMID number is a 7 digit random number which you get by registering for IMPS facility with your Bank. But make sure your mobile phone is activated before you register for MMID. Note that both sender and receiver should have their phone and MMID number from their respective banks. Once you have that you can transfer the money using sms or internet banking . A lot of banks also provide a mobile application which you can download from bank website and install on your phone. Note that before sending the money to the receiver, you should register them once as you do for any bank account.  The image below gives you good idea on what needs to be done for carrying out an IMPS transfer.

Steps to transfer money through Mobile using IMPS

What happens with your do a IMPS Transfer through Mobile ?

When you make a IMPS transfer, your sender mobile first sends this information to the sender bank , which checks the data; whether your MMID is correct or not and if it matches with what it has in its system. If it’s all correct, it debits the money from your bank account and transfers this to the NCPI server, which then transfers it back to the receiver’s bank. The receiver bank goes about checking everything again and then sends the status of the whole transaction to NCPI, which passes it back to Sender’s bank. Both Receiver and Sender are then updated about the transaction through SMS. All this normally takes just about  15-30 seconds for everything to happen and the money gets transferred near instantaneously. How does IMPS work

5 Advantages of IMPS over NEFT and RTGS

Let me enumerate 5 major reasons why you want to register with your bank for IMPS and generate your MMID as soon as possible. IMPS offers some major advantages over NEFT or RTGS money transfer and here they are

1. Instant Transfer of Money

When you do an IMPS transfer, it happens instantly within few seconds, so it’s practically real time money transfer, unlike NEFT or RTGS which works in batches and takes time in money transfer. Which means in case of emergencies, you can use IMPS and it will act like a fast money transfer mechanism

2. Transfer without Internet Connection You dont need a internet connection or a computer for IMPS transfer, you can just do the transfer using your mobile phone through SMS or using the mobile application, hence you can do the money transfer even when you are travelling, all you need a mobile connection 3. Money transfer even on Holidays and outside working Hours

You can transfer the money anytime, 24X 7. With NEFT or RTGS , you can’t do money transfer on holidays or even Sundays. You can’t do it outside the working hours defined by the banks. But with IMPS you can literally make transfers in early morning, midnight or whatever time you want.

4. No Need to disclose Bank account number and other details

All you need for making the transfer is mobile number and MMID , so you don’t need to disclose your actual account number or even the bank name.

5. Easy, Simple and Secure

Making a IMPS money transfer is so easy.  All you need is the MMID, Phone number and the amount. The money gets transferred easily so fast. It makes easy for those who fear technology and do not want to deal with it . You can teach this to your parents or some one who is not that technologically advanced.

IMPS Charges

The charges depends from banks to banks . While exact charges details you can find from your respective bank, it seems the charges are extremely low and are on per transaction basis, not on the limit of money. It seems to be Rs 5 per transaction (not confirmed) yet. Apart from the charges from banks for using the service, if you are doing the money transfer using SMS , you will have to pay standard sms charges . However if you use internet or the mobile application, there will be no charges apart from the service charges.

Money Transfer Limit under IMPS

The limit is defined by RBI in the Mobile Payment Guidelines issued to banks. The customer can transact on IMPS subject to a daily cap of Rs. 50,000/- per customer overall for transactions through mobile for the funds transfer. Transactions up to Rs. 1000/- can be facilitated by banks without end-to-end encryption.

Which Banks are part of IMPS Facility

As of now 52 banks are the members of IMPS facility. Some of them have started the IMPS service and some will start it very soon. Those are

  • ICICI Bank
  • Axis Bank
  • State Bank of India
  • Indian Bank
  • Kotak Mahindra Bank
  • Oriental Bank of Commerce
  • Union Bank of India
  • Andhra Bank
  • Canara Bank
  • HDFC Bank
  • Lakshmi Vilas Bank
  • Bank of Baroda
  • Indian Overseas Bank
  • Bank of India
  • Punjab National Bank
  • South Indian Bank
  • Vijaya Bank
  • IndusInd Bank
  • UCO Bank
  • Federal Bank
  • State Bank of Hyderabad
  • Citibank
  • State Bank of Bikaner and Jaipur
  • Punjab and Maharashtra Co-operative Bank
  • The Thane Janata Sahakari Bank
  • Development Credit Bank
  • Dombivli Nagari Sahakari Bank
  • State Bank of Travancore
  • Catholic Syrian Bank
  • Syndicate Bank
  • Yes Bank
  • State Bank of Patiala
  • Allahabad Bank
  • Karur Vysya Bank
  • The Greater Bombay Co-operative Bank LTD
  • Corporation Bank
  • IDBI Bank
  • Tamilnad Mercantile Bank
  • United Bank of India
  • Standard Chartered Bank
  • Bank of Maharashtra
  • Central Bank of India
  • Dena Bank
  • Dhanlaxmi Bank
  • ING Vysya Bank
  • Janata Sahakari Bank, Pune
  • Karnataka Bank
  • State Bank of Mysore
  • The A P Mahesh Urban Co-operative Urban Bank
  • HSBC Bank

you can look at the latest list of all the banks and their details here  What do you think about this technology ? Will it help in your financial life ? Are you going to use IMPS facility to money transfer through your mobile ?

8 things I learned by quitting my full time job

Posted on by Jagoinvestor

Haven’t we all faced this at one time or the other? The pain of staying in your job getting worse than the pain of leaving your job ? If the answer is yes, this article is for you.

I am writing this article after Sunil asked a related question on leaving a job and starting a business on his own in our questions and answers forum. He wanted to discuss few things before he can start a business by quitting his day job.

Hello Guys,

Looking at the market conditions in Indian IT Market, it is obvious that anything can happen at any given point of time… I have interest from starting to set up a business (small scale) and have a cushion to my career…. I need few ideas from learned people like you in starting up a business (with at least 3-4 lacs).

I would really appreciate your feedback and comments.

In this article, we will discuss a few things about leaving a regular job and starting on your own,  developing  business idea which you’ve had from long time.

Why this topic on a personal finance blog ?

Truly speaking, this is related to your financial life. A lot of people have extra ordinary aspirations and desires in life. They want to travel around the world, they want to own millions and want to have an ability to spend whatever amount they want on anything in life, but deep down they know, that it would not be easy to achieve everything they want from a regular 9-5 job.

A lot of people get into a job which they feel would be suitable for them, only to realize it later only after few years, that they have made such a big mistake in their life. But we have so much to accomplish , children education , their future, the desire and pressure to give them the best in life, parents , spouse , their dreams and their wants in life.

People who are not happy at their job, they just bury themselves under responsibilities and for entire life, keep on dragging in their current profession and job. However this not a story of everyone, a lot of people love their jobs and are really content and satisfied with what they are doing.

I had recently done a survey on how people are frustrated in their current work and some more information. Here are the full results. please go through it and look how do you fit in there.

 

What about those who are not satisfied in their jobs and career? I had earlier written that your financial life is directly related to your career . If you are not doing great in your career, it will impact your earnings, and hence directly impact your financial goals and the wealth you will generate in life.

So you need to decide if you want to move on and do something on your own as soon as possible, be it  for emotional satisfaction or more monitory satisfaction. Unless you are happy in your work, you cant focus on wealth creation.

My Story of leaving a job and starting on my own

Some people get shock of their life, when they hear that I was a software guy once in my life.

Let me share with you, how I was once a very good student in Computer Science and then became a dull/boring/worthless/unproductive software guy and finally took charge of my career and went on to change my domain to Personal Finance and even wrote a Personal Finance Book (Read 65+ amazing review on flipkart)

 

My Story

I was working in Yahoo at Bangalore in a nice software job, I was considered a good student at my post graduation days but only I know what I was really capable of (like you do) .

I was good at many things like Algorithms, data structures and problem solving skills, but really sucked at others;  Networks, Operating Systems and System related things. Somehow I managed to muddled through, but I still don’t understand them even today 🙂

Yahoo hired me (thanks to them) for the job which demanded exactly all those things out of me, which in my wildest dreams I never wanted to work on. I was devastated and saw my end in the first month of my job. But I had to continue the job, because of my financial commitments.

Each day the expectations in my job grew way beyond my performance, and it made sure my guilt and dissatisfaction increase at a compounded rate. I could see clearly that I am working for money only, I was not able to see myself anywhere in next 3-5 yrs, The frustration of going office without any motive and passion was really killing from inside. I was very sure and clear at that point of time, that my affair with software field has come to an end.

I had to take some extreme step.

How Jagoinvestor came into existence

I had always learned things in my life by teaching others. I was good at personal finance from start of my life and always believed it to be such a easy thing and wondered why people complicate it without any reason. This passion of personal finance and love for teaching gave birth to Jagoinvestor.

I was spending my 80% time at office towards Jagoinvestor (10% time went for lunch). Things moved at a really good speed and I was really passionate about what I was doing and loved it. I suddenly realized that this is my passion, this is something I am passionate about, this was something which was not making any money for me at that point of time, but I could have paid to do it myself.

This was something I woke for each day, Jagoinvestor was something I lived for, It was something which negated my stress and frustration as Software engineer. For next 1-2 yrs, It got bigger and bigger and I was known as an expert 🙂

I was a trusted person on personal finance which was not my field by education, but I was not even considered for something related to software field even though my education and career was based on that. I never cared.

Leaving Job

I and Nandish met in between and we could see how we both could take it to next level. By the end of 3.5 yrs at Yahoo, we were generating some money from Jagoinvestor, but it was not consistent. I knew it can never be consistent flow of money in business, at least in starting years.

I gathered my courage and the belief that we will succeed. I owe so much to Nandish who motivated me and coached me on this aspect, which helped in decision making of quitting my job.

It was not easy ! I had spent so much time and (little) effort in computer science, My parents had put lot of struggle and money on it, and after all I had spent 3 yrs on Computer Science, how could it go for a waste ? How could I leave a well paying job which everybody dreams of and become a blogger ? What will my relatives think , What will my own family think ? What will my future-in-law’s think (SE vs Blogger) .

There was pressure – but I was sure I was not a pressure cooker, I knew I could not risk my entire life. There was not a perfect moment to “quit my job” and I knew there will never be, on the last day of 2010, just few months before my marriage, I left my job and took the next bus to Pune from Bangalore to start the new year and new journey in life, without thinking much what’s ahead.

There were thoughts like “Am I making a right decision ?” , “Will it really be the way I am thinking?” etc , but I also knew deep down that, if I don’t do it now, it would never happen.

Now, after a year and a half  of leaving my job, I can say not even a single day have I remembered or missed my job (except the unlimited sweets and the rasam-rice), though I loved the company. Each day has been a wait to open my laptop and enjoy writing articles and help people in their queries. My Work life is now 100 times better than what it was before leaving the job.

That’s my short story 🙂

So whats next ?

You don’t always have to build  a multi-million dollar start up or create an empire! If you are not happy in your current job, then you just need to move to some other sector or start some business.

Nandish always says that people are so much attached to their current job that they believe that’s their destiny and life now. They don’t even get a thought that their purpose of life might be something else, if they are good at their current job, there might be something where you are awesome .

Just because you didn’t accidentally got into some profession or some company does not mean it owns you or your entire career. You can still move . If you were asked that you will never be able to work in the same sector/profession again because “god” has ordered it , what would be the next thing you will fit in ? What will interest you and you might want to give it a try (share with us)

 

 

8 things I learned by quitting my full time job

Based on my little experience and whatever I had learnt from others, here are some of the sharing for someone who is considering to leave a job and start on his own. These tips are not extra ordinary tips, they are more of a reminder to you rather than teaching something.

If you consider all these points in your planning, then the chances of getting successful would increase. Neither of the below points are perfect, nor it will be applicable to every one. These are just some observations from my side.

1. Start the background work now

Most of the people wait for the last moment till things get ugly and each day is a nightmare at job. If you are very clear that you want to head out on your own someday, start the background work right now in this moment.

Whatever you want to do, learn the game of that while you are in job, start understanding dynamics of the business you want to get into, now. The job to business transition is really a tough thing to do. It takes time, it takes effort, it takes dedication.

2. See if you can do something parallelly

It’s not always possible, but if there is any way you can run your business or start something on the side, it would really increase your confidence.

The chances of this happening is higher, if you can find a right business partner. For most of the people who work in big companies, the best thing could be to talk about it with few friends in the office group itself, who also share same kind of vision and passion. 

Here is a sharing from a jagoinvestor reader on how he worked with his colleague’s after office hours and successfully started his own company soon despite having a home loan and kids to feed

Me and my friend developers who have high passion on starting up a company, we both are married and both have kids of less than 1 yr. We worked after office hours to make the setup and finally we started our company this new year officially quitting.

We made a huge savings to run for next whole year in the same life style and to pay home loans. If we have not taken home loan we would have jumped a little earlier, how ever I see it in a positive way, it keeps us pushing like a fire under belly, we have to do that little extra and that deadline of payments are always there and a huge sum I have taken two house loans including one in joint .

3. Create the buffer

One of the biggest deterrent for starting on your own is “what if things go wrong” kind of questions. This happens mostly if you are weak on your buffer amount. The buffer is nothing, but your emergency fund, in-case things don’t work out for initial few months or 1-2 yrs . It should pay for your basic expenses at-least, if not luxuries.

The larger a buffer you can create, the better it is and it will happen only if you start now at this moment, otherwise not. I would say a 3 yrs buffer is a good number, but most of the people are ok with 1 yr buffer too. If your current expenses are 40,000 per month, you would need 5 lacs per year (40,000 X 12) is what you need for 1 yr and 15 lacs as your 3 yrs buffer.

See how you can generate 5 lacs as first milestone and then 15 lacs. Note that your buffer is inversely proportional to your confidence and how ready you are for your new venture, and a direct function of how ready you are overall.

4. Double income will help

Software guys have this advantage like no one else, a lot of them are DINKS (double income no kids), husband and wife both are earning good money. This situation is ideal for those who want to give it a try. While one person can earn and make sure things are on track, the other person can give his/her shot on entrepreneurship.

If things go wrong, you still have something to fall back upon. I see this situation as “one is earning the money and the other is burning the money”, but at the end it’s more easy than a single earner case. So now if you are about to get married and want to leave a job and start on your own in next few years, you know you will have to give more preference to someone who is earning money. That’s a choice you need to make.

5. Get rid of liabilities

If you already have some kind of liability, like a home loan, it really becomes a pain to even think about leaving a job. You might have to postpone your decision, but don’t bury it . Yes, you have a liability, but once you complete that liability you will have your own home, & that would be a great support mentally. You know in the worst case you have something to fall back on.

Also another advantage would be that once you complete your home loan, you will have one expense less (rent) to pay in life and as you still have many years left to take the jump, its an ideal situation to plan. When you know there are many years in job, you can give your maximum time in planning, getting ready and if possible “increase” the size of your buffer!

6. Imagine the worst case and find ways to deal with it 

This is the biggest reason why most people do not budge from their jobs and keep dragging. The worst case scenario really scares them to death. In the book  How to stop worrying and Start living, the author Dale Carnegie says that one can reduce the worry by mentally accepting the whole worst case scenario, and really write it down and then see what will be his actions at that point of time.

Imagine you are a software guy. What is the worst case which can happen if you take a calculated risk of leaving the job and starting something on your own after lot of planning? 

This is what I can think of – You will blow all your buffer you have created, your venture will not work out and you will lose some months or years – what next?  Worst case, you will have to get back to a job. It will be tough, you will face difficulty to get back to the same level of salary. In worst case, you will start lower than what you earn today, but that’s what is the cost you will have to pay for the desire of starting on your own.

7.  Don’t quit the job !

Just because you are reading this article does not mean you start feeling that you also want to leave your job and start your own venture. No ! .. We are just talking about those, who are “dragging” , they are unsatisfied with their jobs and want to do something else in life.

Its perfectly fine if you are just in your job and move on with the same thing for life. A quite lot of people really excel at their work and earn really big bucks, its all about your love for the work and how far you can go with it, you can always move to next job, go abroad and earn more money.

So not quitting a job is also an option. You need to think about it, evaluate the pain and pleasure attached to both the options and choose what you want to do. There is nothing right or wrong decision, its only “your decision”.

8. Make it as a project

When we get on call – Me and Nandish sometimes talk about the concept of Dreams vs Project. You complete your office work because its a Project, you complete your college practicals and exams because it’s a project, and you also prepare and present a presentation at work because its kind of a “project.”

You fail at getting up early in morning and exercise because its a Dream, not a project, you are not able to save enough to pay down-payment of house as planned, because its a Dream, not a project.

In much the same way, most people do not achieve the transition of leaving the job and starting their venture because its a dream, not a project. If you want to understand more about the difference between Dream vs Project, listen to this 12 min’s audio

Idea’s for starting a new venture

A big challenge in leaving the job and starting on your own is “what will be the next venture?” It leaves an open question in many minds and people are not able to take the decision. We can all collectively share some idea’s on what kind of small or big business can be done with small and big capital .

You must have one good idea to share , Please share it will all and I will publish the list of all idea’s on this same article once they start floating.

Real Life Sharing’s about how they feel at current job ?

Experience 1

Following the herd culture ,i.e, after 12th doing engineering and then software job irrespective of one’s branch and now life looks like to be more of a mechanical where everyday you do mundane things and on top of it some crap , foolish and utterly junk lowly intellectual managers govern your appraisal and hike.

I want to get rid of this junk industry where human emotions get dissolved in thin air and people are moving towards making themselves machine oriented trying to achieve efficiency of typical machine with elusive numbers.

Experience 2

I am working with a pvt limited Bank.Though the Bank is employee friendly and has a great future but I feel my vertical is very boring and stagnant.My supervisors are very rude and insult me in front of everyone.My job has no challenge and stagnant.Though my knowledge is better than other colleagues but I am given job of a doc executive.

With no knowledge involve in it.I wanna go 2 other dept.but my supervisors are not allowing me for that.It makes me helpless.My productivity is getting decreases but I ve not lost hope may be in future I ll get a better work related 2 my knowledge.

Experience 3

Not much to share. Not just enjoying my job. Its not satisfying. Its not what I wanted to do in my life. i’m a bank Manager now, but don’t really feel so, being in one of the largest pvt sector banks. There is a lot of gap between what is written in offer letter and what is being offered us to do daily in office.

The number of hours we give to office, is just too much. Usually more than 11 hours a day, all through the year. What I and most of the colleagues believe that, if we give this much dedication and passion to some venture of our own, then we can reach pinnacle of success on our own.

Why should we give so much to another company? Will it give us a justified share of its profit if we give so much to the company. NEVER.

Experience 4

Basically, i am a drummer and interested in the Music domain. By chance or by mistake i have come to this bloody Software Industry, which is full of diplomacy and politics, which is never suited to my type! So planning to be back with my musical nature and rocking mode.

Experience 5

I am a post graduate degree holder in Mechanical Engineering (Research) from IIT Madras . I was chosen by one of the biggest software companies from campus for my employment. I am being employed in the IT outsourcing division. Company recruits were bragging at the time of placement.

I am doing some type of maintenance and enhancement work of some client’s mainframe software which up to a certain extent is challenging due to the analytical and logical skills involved. My current job does not leverage my scientific and mathematical knowledge acquired during my studies and that feeling keeps me dissatisfied in my current job.

I did not take a honest and serious effort in moving out from the situation as I got very much comfortable with the current position and also due to other family commitments. A 2-3 year onsite work opportunity is looming and I am hoping of saving a corpus and proceed for a career change.

Can you relate to the above cases ? Is your story very much on same lines ?

How did you find this article ? Do you think it was valuable for you ? Are you in that situation where you want to leave the job and start something on your own ? Share your experience or views with all of us .

How Delay in Land Registration Costed Rs 50 lacs to Vivek – Real Life Experience

Posted on by Jagoinvestor

I want to share a real-life incident. One of my friend Vivek told me how he lost Rs 50 lacs worth of Land in one shot because his grandfather made a mistake of not doing land registration on time and kept delaying it for so long, that it was finally too late. It was just an irresponsible attitude towards documentation. The funny part is that no one in the family knew about this except his grandfather and these guys only came to know about it and were shocked by the incident. Vivek’s Grandfather lived near Varanasi and had always believed that the money should be invested in land and properties, Its the only way to grow your money faster and there is no risk in it.

Whenever he has any chunk of money, he just used to buy land with a future vision that one day it will be useful and give good returns and help his big family and so many children and grandchildren. This was during the 1960’s and ’70s. So once, he bought a big plot near Varanasi. You might be aware of how in villages and small cities, most of the work is done on relationships and verbally. Someone’s word is taken as promise and that was a time when people were not that bad like today:), hence things went smoothly, especially in those days and in a situation where everyone knows everyone.

Land Registration In India - Mistakes and Real Life Experience

So he bought land from one of the known people who lived very near to their home. e paid the money and bought the land (everything verbally).

It was a normal incident.

Their point was “Documentation will happen in a few days/weeks” . Both parties were fine with this, as the world was not going to end and there was ample time to things. Grandfather also started construction on the land and things started moving. No attention to proper documentation and registration even after many weeks and months. The land registration fees was also not that high. Few people kept reminding Vivek’s grandfather that Land registration is still incomplete and it has to be done. But he kept on delaying it as he was over-optimistic and never felt that anything can go wrong. He over-trusted the people around him.

From Future to Now

40 yrs are gone. Grandfather is no more, The guy from whom he had bought the land is also not in this world, he was a good guy. Grandfather’s vast properties were divided between his children (obviously daughters didn’t know that they are also legal heirs and claim their share as per Hindu Succession law). Now the guy who had sold his land took the money and is dead now, his children one day found out the property papers and saw that it’s on their father’s name.

You know what happened next.

They knew this is a bloody awesome situation and gave Vivek and his brother a choice. Either give 50% of the property back (without much fuss and delay) or 100% property with a court case. They knew the other party is totally weak (100% weak) from the documentation angle and legally they can not do anything. The proof that “land was sold and money was paid” does not exist anywhere. Knowing how badly they are stuck with this situation, Vivek and his brother had to hand over 50% of the property to these people else they could have lost everything. The land cost was approx Rs 1 crore and the 50% part was worth Rs 50 lacs in today’s standards.

What is Land/Property Registration and Why is it Necessary?

Land or Property Registration refers to the registration to document changes in ownership and transactions involving immovable property. Whenever you buy a piece of land/immovable property, you need to register the same with the authority concerned, so that a legal ownership title is guaranteed to you. This greatly reduces the risk of fraud and helps solve disputes easily, in addition to creating and maintaining an up-to-date public record. While Land Or Property registration is not that easy, still there are some measures being taken for making property and Land registrations easy in recent times. Also, the registration process depends and varies from state to state, you can get the information about some state here

Is your Land Registration Complete?

A lot of instances like this happen in our life also. We make payments to people and do transactions and make promises verbally. If anything happens to us in between, neither there is any track or it, nor any information about it, our family will never be able to find out what happened, in fact they will not even know that “it happened” . So always refrain from doing anything which is not backed up by supporting documentation. Never!

Especially on the Real estate part, check if the documents are totally in place, see it from “What if I am not there” angle! Do you have any experiences like the above-mentioned example? Do you know someone who has not completed his Land Registration of Property Registration?

6 type of Portfolio Diversification – Meaning & Strategies

Posted on by Jagoinvestor

A lot of people with high net worth still do not understand Portfolio Diversification. They made good money, their investments have zoomed over the years and they feel that they have understood the mantra for growing wealth. However, an important parameter to look at is “Diversification”. How much diversified you are in your overall financial life? Let us understand what strategies we can adopt for diversification of portfolio, but let’s look at 2 examples to understand the problem first.

Example 1

Let’s look at Ajay’s example – whose net-worth has is 4 crores overall, but 3.5 crores are in just one flat in Mumbai. What can go wrong? There can be several events which can affect Ajay, An earthquake in Mumbai can come someday, prices may suddenly take a hit (if not today, maybe in future, Ajay might come to know someday that the quality of material used is not good, Liquidity issues etc etc

Example 2 

Robert has successfully grown his net-worth to Rs 15 lacs in just 3 yrs, but the issue is that most of these 15 lacs in concentrated into a single mutual fund called HDFC Top 200. What can go wrong ? – The equity markets can see one of the biggest fall just 3 years before Robert needs the money, The stocks picked by the funds can do exceptionally bad, the fund manager might take wrong decisions in a row, The expense ratio increases and you don’t know its hurting you badly from many years etc etc.

While these are hypothetical examples, you must have got a good idea of what I want to say here. A portfolio extremely skewed on one side can be extremely dangerous, maybe the chances of risk are low, but still, it can occur.

Diversification in Personal Finance

6 types of Portfolio Diversification

Asset allocation is a word that describes how well are your assets allocated across various asset classes and you do it with diversification! A lot of people feel that just because they have invested in 10 mutual funds, they have diversified their investments, but portfolio diversification is achieved at different levels. In my book Jagoinvestor, In the last chapter I talk about the simplicity of Financial life and show how 3 mutual funds are not too much different than 5 mutual funds in equity diversified category, Their underlying investments (large-cap stocks, mid-cap, the concentration of the largest stock) are pretty much exact same. Now Let’s see some of the types of Portfolio Diversification

1. Across Asset Class

You might want to diversify your investments in different asset classes like equity (mutual funds, stocks), Real estate, Debt products, commodities like gold, silver and finally Cash. It’s important to do this kind of diversification if you are not an expert in one asset class and can not handle it fully.

2. Within Asset Class

When you invest your money in one asset class but in different kinds of instruments or companies, you are diversifying it across various instruments of the same types. A very simple example is opening Fixed Deposits in various banks. If you had to open a 10 lacs FD, the chances are you will choose 4 banks and put 2.5 lacs in each rather than doing it for 10 lacs in just one bank. In the same way someone investing in 5 different equity mutual funds. While the underlying asset class is exactly the same (equities), but still some kind of diversification is there (different fund managers handling it).

3. Geography Wise

Then you can diversify location wise or geography-wise. You can invest in real estate in India, US, UK .. You can also invest in real estate across different cities within India. You can buy stocks in the Indian stock market, US stock markets, and other countries too. The idea is to take advantage of currency fluctuations too, but this is only for experts who understand that.

4. Across Capitalization

When you invest in mutual funds, you can choose to invest in small-cap funds, large-cap funds, extra large-cap funds, small companies, big companies, etc, etc. Note that the risk and return potential will be different and anyways you will invest in different companies.

5. Across Time

Your investments can be across time also, like long term investments, short term investments, medium-term investments, You can have a 5 yrs deposit, 2 yrs deposit and 6 months deposit as well. Imagine if you have done 5 yrs deposits only – which can affect your liquidity

6. Across Style

There can be diversification across styles – You can invest in products giving you fixed income, or which are just for growth purpose. You can invest in something that has value investing principles or more speculative ideas.

Can you think about more kind of diversification or any other benefits for portfolio diversification?

What about Over diversification?

Should you diversify in all ways? Definitely not. The above ideas are just to show you how many kind of diversifications can be there, you should not overdo it and try to incorporate all kind of diversifications in your financial portfolio. Just see how much makes sense in your case and properly access how much you need it.

If you look at your current portfolio, Many many marks out of 10 will you give on the parameter of “Portfolio Diversification” or “Asset Allocation”?

Shocking ! – Job Rejection due to Bad CIBIL Report

Posted on by Jagoinvestor

Your credit score is going to affect your Employment. You can face job rejection due to it! Yes – that’s happening already. A lot of companies especially Finance and Software Companies have started asking candidates to present their CIBIL report and score (or any other credit report) at the time of the interview and it has started playing a role while selecting a candidate. So if your credit report is bad because you have not paid your loans on time or if you settled your loans in past, you might get rejected in your next job interview provided your prospective employers look at your cibil report/score. Note that it’s standard practice internationally to check credit score before employment and various other purposes.

Employers looking at cibil report at job interviews

3 Real-Life Example of Job Rejection due to Bad Cibil Report

I am sharing with you 2 real-life example’s where credit report was asked before the interview and they were eventually rejected (there can be other parameters for rejection apart from the bad credit report)

Example #1 – How Sapan has rejected a job in HDFC

Sapan a reader of this blog faced job rejection twice by HDFC Bank and an NBFC just because there was a credit card dispute on his credit report and he could not convince them that it was his fault.

I lost the Job twice in HDFC Bank even after got selected for Relationship Manager but rejected by HR team because of my credit card dispute which was stolen and unauthorized transaction took place of 50000/-. In the end of the day I was failed to convince the HR team and I was forcefully to pay 50000/- and got a job in one of the NBFC which also checked my CIBIL before getting job. – from facebook comments below

Example #2 – Rejection by Indian company for a Bad Credit Report from the US

Even those who are coming from US to India and looking for Jobs, employers are asking their US credit score – Here is an incident which happened with Nandish’s friend, this sharing was from Nandish

He was in US for almost 8 yrs. During that time he created a lot of debt for himself. His job transfer got him back in India, he knew his credit score in US is bad and he never bothered about it as he thought now he will be staying in India. His job was going on well and his life was comfortable. On one fine day he decided to quit his job and started his own business. He could not make it in business, his social responsibilities forced him to get once again in job. He started applying in different companies and finally one Bangalore based company offered him 16-20 lac pay package. He was excited and thrilled to get this offer. This company was US based and one of the most important criteria they would check is their US credit score…My friend tried hard to convince them but finally he was not selected. To improve his US credit score he is now really working hard but nothing seems to be working for him.

Example #3 – How an Indian Bank asked for CIBIL report

One of the readers was asked for her CIBIL report when she applied for a job in an Indian Bank, She applied for CIBIL report and handed over to the bank, the bank has not followed up with her after that.

I have applied for a job in bank and they have to check my CIBIL. I have a loan taken just 2 months back and only one installment hit my a/c thru cheque and tht was honored. Bank want to check my CIBIL before hiring. I haven’t had any bad experience but ya this is first time my CIBIL gonna check… and might be there is some problem according to bank ppl as they have not reverted me after my cibil check.

Quotes from some of the latest articles on media

  • If you thought you had only to worry about banks getting hold of your credit histories, there’s more. Of late, employers too have been asking prospective candidates to submit their Credit Information Report from CIBIL. Your employability could be affected by the report, as it happened with an acquaintance of mine, who was refused employment in a bank because of his poor credit history. Would you rather pay for your mistakes at a later stage in life or plan for those loan EMIs and pay them on time? – source
     
  • Some employers may also ask a potential employee to submit his/her credit report during the hiring process. Those with poor credit scores may be rejected in favor of those who have demonstrated better financial planning. Thus, the credit score and report may become a vital ‘reputation’ collateral even for employment in the future. – Source
  • Companies in western nations are known to make credit checks before taking people on board. In India, companies have started checking the creditworthiness of an individual, especially for senior-level hiring. Employers ask the candidates to produce their credit report at the time of interview because employers cant access it directly.  The trend is picking up in financial and IT sector companies. – said Harshala Chandorkar, senior vice president, consumer relations, Credit Information Bureau (India) Limited (Cibil). – Source 

Why Do Employers want to check your Cibil Report?

If you think for a minute and try to understand it from an employer’s perspective, you will realize that there are some reasons why employers might want to look at your CIBIL report before they hire you. Here are some –

1. It’s part of “background check”

A very valid point can be that checking your credit report or score can be seen as a part of “background check” . While there are genuine reasons why some innocent guy had a bad CIBIL report, a person having a bad CIBIL report can be seen as an irresponsible person and not capable of taking care of things. Just like no company likes to hire someone who has a criminal record, in future even having an extremely bad credit report can be seen in that way.

2. Bad credit record might indicate bad intentions as general

A person having a bad credit report might not be seen as an honest, credible person to work with and he/she might be seen as a potential threat to the work environment. While this is a big debatable topic – look it from employers point of view, they see things in a very defined manner, if the company policy tomorrow says that we will not hire someone with any person whose credit report has a WRITTEN OFF status on a loan, or has a score below 650 , then even those who are innocent and have got a messed up report will feel ask if its unfair, but companies go as per their framework and rules defined, not case to case basis.

3. High debt trap might lead to bad performance

If you have a huge debt on your head, it’s really tough to give your best at work. This is exactly how employers can see it, even though you disagree with it. It has been known that financial issues have a big impact on professional life, you might not concentrate fully if you are in a financial mess and paying off your debt is consistently on your priority list each and every moment.

Bad credit report leads to job rejection in interviews

Is the CIBIL report being checked by all employers and sectors?

As of now, looking at credit reports while the interview is a very new trend seen in India. It’s not widespread, but have started happening. So you can safely assume that it will be a regular process within some months or years. As of now, CIBIL Report is checked at only senior-level interviews especially in Financial and IT sector, but soon this will be happening across sectors and all levels. Employers can not directly access a candidate credit report because RBI guidelines allow credit bureaus to share it only with banks and financial institutions who are clients of CIBIL, hence Employers ask the candidate themselves to present their report when they come for an interview.

Note that credit reports are just one of the parameters being checked by the employers, it’s not the only basis for job rejection. Apart from the credit report, other main and important parameters like job qualification, experience and salary expectations will also matter while hiring, a credit report is just a part of the whole process.

Who else can use Credit Report and Score in coming future?

In an email reply to me, Harshala Chandorkar – Senior Vice President – Consumer Relations of CIBIL shared with me that credit reports can enter our lives in a big way in the future. In future landlords may demand a credit report before renting out an apartment and even telecom providers can see your credit report to assign the limits for your usage, but this can happen in the future, not very soon. Here is what she said in an email reply to me

In more developed economies, an individual’s credit information report and credit score is critical reputational collateral and is being used for multiple purposes by various institutions. Employers review it before recruiting a new employee; landlords require it before renting out an accommodation and of course telecom providers check an applicant’s credit history for assigning limits.

We may see similar evolution in India when a person’s credit report and credit score will be imperative for a lot many things in addition to availing institutionalized credit facilities. Therefore it is very critical for students to maintain a good credit history and pay back the loan dues on time.

Share this information with your friends (you can share it by clicking on the “Share” button on the left side) and let them know about it, they will thank you. Also, let us know – What do you think about this about job rejection due to the CIBIL report? Do you feel it’s going to help us all? Do you think it’s fair to check credit reports by employers in job interviews?

Results of Personal Finance Quiz – with answers

Posted on by Jagoinvestor

I took a personal finance quiz last week, in which close to 1,000 people participated. It was amazing to see the participation and the way you guys took the survey. I am now publishing all the questions with correct answers and the explanation for the answers , along with some observations (results and how different income group, profession performed in it) . Each answer had a 1 mark , so someone who answered 4 right out of 10 , has a score of 4/10 .

Personal Finance Quiz was tough

I did not want to make a simple quiz, so I had designed the questions in such aq way , that the answer which comes to mind immediately was not correct , the right answer was a little hidden one and not easy one . Hence you might see that the answer which naturally came to mind was actually a wrong one , the right answer was a little tricky one.

Some Observations from Personal Finance Quiz

  • The average score of all the quiz takers was 3.48/10 .
  • 94% quiz takers could not score more than 5/10
  • 50 people who were extremely overconfident and said “All 10 questions are correct” , all of them scored below 5 , and the average score was 2.84 out of 10
  • The high income earners were the worst performers with average score of 2.69/10
  • One of the worst performance was from software professionals with average score of 2.91/10
  • Only 27 people were able to score more than 7/10 and just 4 person scored 8/10 . Most of these people had income less than 5 lacs and they thought they had “more than 5 correct answers” , but not all correct.

Answers for the 10 quiz questions

Here are all the 10 questions from the quiz and their answers with explanations. You know what was your answer and hence you can find out what was your score exactly.

1. If you have a bad remark in your cibil report ? What is the maximum tenure it will be there and after that it will be removed ?

Right Answer was There is no upper limit on this . I was sure that a lot of people will choose the answer as “7 yrs”, because they had heard that number “7 yrs” as being the limit after which the bad remark from CIBIL is removed, but its again a myth ! . Yes – you will be shocked to hear this, but 7 yrs is the MINIMUM time-frame for which bad remark will appear, its not maximum. In the question, it was asked for the maximum limit, and right now there is no maximum limit. I was on a phone call with a senior person from CIBIL, and she told me that right now there is no decision on what will be the maximum limit, so on the higher side, the bad remark on CIBIL can be for even 15-20 yrs , you never know , but for sure it will be there for minimum 7 yrs . Now understand that this is when you do not do anything about your Bad remark , if you pay off your outstanding or pending debt , then it will be cleared of, Read this article on how to improve your cibil score and Report

2. CIBIL score is calculated based on past how many years credit history ?

Right Answer was 2 yrs . I was not very surprised when most of the people chose 3 yrs as answer. It must be because they are aware that the CIBIL report contains your last 36 months of history , it has all the data about how much was outstanding and how much you paid. But your credit score is only dependent on past 24 months credit history only, whatever would be the algorithm for calculating the credit score, only past 24 months of data is used.

3. The money you withdraw from your Endowment policy after the 3 yrs lock in period is Tax Free 

Right answer is True.  As per the revised rule, any surrender value from Endowment plans are tax free after 3 yrs, but earliar it was 5 yrs, now its changed  (This answer was updated later)

4. If EMI for 20 yrs – EMI for 25 yrs = EMI for 25 yrs – EMI for X yrs , what is X

Right answer is None of the above . The other 3 options was not a right answer because X will depend on the interest rate value, If the interest rate is a number which is like 10% or something , then the X value will be infinite, but X can actually be 100 yrs or 200 yrs , if interest rate is very small like 3-5% (test your self), hence the answer is it purely depends on the interest rate. You can check this using the this EMI Calculator .

5. Ajay bought a house in Nov 2011 and paid stamp duty of Rs 50,000. Now its June 2012, and his friend recently told him that stamp duty can be claimed under sec 80C. How much of Stamp duty out of 50,000 paid can be claim now ?

Right Answer – He can not claim Stamp Duty Under 80C now . The simple rule is that Stamp duty can be claimed under 80C, only in the financial year its paid.  If you see the question clearly, then you will see that Ajay bought the house in Nov 2011 (that’s 2011-2012) , hence the 80C benefit for stamp duty can be claimed only for 2011-2012 . But the question says that now its June 2012 when Ajay’s friend tells him about the stamp duty thing , now the time has passed, he cant claim it back now .

6. Father creates a Fixed Deposit on his child name for Rs 10,000 @10% interest rate. Next year who will pay the tax on the interest amount of Rs 1,000 , if child has no other income source

Right answer – No one will pay income tax . I was sure people will confuse this with the income tax clubbing rules, which says that income of minor will be clubbed with the parent who actually invested the money, but here if you see the income for the year is Rs 1,000 which is from the Fixed Deposit on child name, and what many people might not be aware is that, as per section 10(32), income upto 1,500 per child is exempted from income tax clubbing . Only income above Rs 1,500 will be clubbed, which means that a person can make FD’s on their child name and interest upto 1500 will be treated as purely child income and no tax will be paid on that. This is one of the tip you can use to save small tax on the income from investments .

7. Ajay’s age is 25 yrs right now , His birthday is coming next month, but he will not be able to take his term plan before 3 months, Why should he worry ! 

Right answer was There is nothing to worry about . Its because Life Insurance calculations considers the “nearest” birth date, not the next or previous one. So in this case Ajay’s birthday was coming next month, so whether he takes a term plan before 2 months of his birthday or after 2 months, it does not matter, his premium will be same, because his age will be considered as same. Now this has become a standard way of calculating the age, but there might be 1-2 insurers who are still calculating it on the completed age.

8. Ajay sold his land after 9 yrs, but still suffered a capital loss of Rs 8 lacs, In order to save the tax on that, Ajay had also bought some shares 2 months back which have appreciate a lot . He sold them at a profit of Rs 3 lacs, Which option is correct now?

Right Answer was Ajay can carry forward 8 lacs of capital gains loss for next 8 yrs . The first point is that a capital loss can be forwarded for next 8 yrs, not 6 yrs. The other point is that most of the people must have offset the 8 lacs long term capital loss with 3 lacs of short term capital gain, and thought that he can forward only 5 lacs of capital loss, but they forgot that a Long term capital gain loss can not be adjusted against Short term capital gain (a short term capital loss can be adjusted against both short/long term capital gain) . Hence he can fully carry forward total 8 lacs of capital loss for next 8 yrs.

9. You can file an RTI and get information in respect to ?

Right Answer – Both SBI and PPF . All the govt departments comes under RTI act . As PPF comes under Post Office (Govt of India undertaking) and SBI Bank (a govt bank), both come under RTI , and in the same way all the PSU banks like Bank of Baroda , Canara Bank, Bank of Maharashtra etc also come under RTI , in-case you are facing any issues which you wants answered, you can file an RTI application and get your queries answered. Look at this example of how can file RTI for your EPF (Employee provident Fund) queries.

10 Ajay family consists of Brother, Wife and Mother. Ajay holds a Demat account (nominee is brother) and a Joint bank account with wife (nominee is mother) . Now Ajay and his brother both died in an accident , Ajay had not written any WILL . Which of the following is true ?

Right Answer is Demat will be claimed by Mother & Wife, but Bank account will be claimed by Wife Only. It was simple, but confusing. When a nominee dies, its as good as no nominee. Hence The demat account will be considered to have no nominee, which means the hindu succession law will apply in this case as there is no written will, and the demat account will be equally claimed by Wife and Mother (both class 1) . However the bank account will just go to wife because its a joint account, hence the second holder reserves full right on the bank account after primary holder death, the nomination or WILL has nothing to do here, because nominee and Will comes into picture only after both the holders death.

Prize for Top winner of Jagoinvestor Wealth Club

Out of the 4 people who scored 8 , We are picking one random winner , who is Mr. Rajasekaran, and we would like to offer him 1 yr free membership of upcoming Jagoinvestor Wealth Club, which is a paid product . Not disclosing much on what it is exactly, wait for it ! .

How do you feel now

Truely speaking, the personal finance quiz turned out to be very good and I really enjoyed it . You must have see how you quickly answered few questions and got them wrong, you must have spent some time to read them carefully :). This quiz was also designed so that you can see yourself that where you stand when it comes to personal finance and understanding the internals of it. Would love to hear how you feel after knowing the answers, do you feel you were overconfident with your knowledge ? Do you have any confusion in the answers of these personal finance quiz questions and would like to understand more ? Please leave your comments .

EPF e-Passbook – Check Employee Provident Fund Balance Online

Posted on by Jagoinvestor

Good news for EPF account holders. Now you can check your Employee provident fund balance online using the new e-passbook service by EPFO website. EPFO has introduced a new concept called “EPF Account Passbook”, which will allow EPF Account holders to download their EPF Balance passbook at any time they want, which means you can now do EPF balance enquiry each month and see how it’s increasing.

How to register for Employee Provident Fund e-Passbook?

Here are 4 simple steps to register for the Employee Provident Fund e-passbook online and after that you can do the EPF Balance enquiry anytime you want.

Step 1: Register yourself on the website

Register for EPF e-passbook

The first step is to go to the e-passbook members website – http://members.epfoservices.in/ and click on the registration link. Once you are taken to the next page.

Step 2: Generate your PIN and login

Generate EPF epassbook PIN online

You will be taken to the next page where you need to provide details like

  • Mobile number
  • Date of Birth (make sure it matches with EPF records)
  • One of the documents mentioned in the drop-down
  • Name and Number on the document (Like PAN card and the PAN Number)
  • Email

Then you need to click on “Get PIN” button to generate a PIN which will arrive on your mobile and email. This PIN is required for authorization every time you want to download the e-passbook and check your Employee Provident Fund Balance. At this point in time, you will need to log in again which will take you to the main page where you can do your EPF balance enquiry and download the e-passbook.

Step 3: Download the EPF Passbook which has your balance

Download EPF e-passbook PDF

Now on this page, you need to go to option which says “Download E-passbook” and under that click on “Download E-passbook”, It will ask for the state where your establishment is covered like Maharashtra, Karnataka, Delhi etc.. Once you click on the state, it will ask you to choose the exact EPF Office.

Step 4: Enter your EPF details

Finally download the EPF Passbook

Now you need to enter your EPF account number and name of the account holder, and click on “GET PIN”, which will generate the PIN on the fly which will come on your phone and email. You need to now enter this PIN below and you can download the PDF which has your current Employee Provident Fund Balance and other details. Make sure you do not close this page unless you get the PIN. One of our Financial Coaching Client, Jassi tried this whole thing and his experience was good

I followed the same steps. Yes the PIN is received in your mobile after some time, so one needs to be patient. And the page should not be closed until one receives the PIN, to access further. After receiving the PIN, log in to the application. If e-passbook is available, it should be shown immediately. Otherwise, one might have to wait. – On Email from Jassi

Checking your Employee Provident Fund Balance from time to time?

Now with this method, you can keep checking your EPF account balance from time to time, you can check it each month after your salary is deducted and some days pass, or you can also check your PF balance on a quarterly or yearly basis, whatever works for you. I hope you are clear about some hidden and must-know facts about your EPF

Sample EPF e-Passbook

Below is a sample EPF passbook which you can view and download. It shows how EPF e-passbook looks like and different entries made by the employer. But you will see only those entries which were uploaded and updated by your employer. It might happen that some people see their old data only.

sample epf passbook

12 Important points to know about EPF passbook

Here are some of the very important things you should know about the Employee Provident Fund e-passbook facility.

1. One Mobile number

One mobile number can be used for one registration only. However, you can change this mobile number later if you want so in case your mobile number changes, no worries.

2. One EPF account per establishment

You will be able to view only one EPF account details per establishment, means if you have two EPF accounts under Maharashtra (suppose you had a job in Mumbai and Pune), then you will not be able to view both of them, In that case you will need to first transfer one EPF to another. However, you can view your EPF account details which are under different establishments like saying one in Karnataka, Maharastra and Delhi (suppose you had 3 jobs)

3. Total of 10 EPF accounts can be viewed

A total of 10 EPF account details can be viewed under different establishments. I think its very fair logic because, in all probabilities, a person will not have more than 10 EPF accounts in several establishments, if he has, no one can help him anyway 😉

4. Inoperative & Settled EPF account details not available

If someone’s EPF account is inoperative (it happens if you leave the job and for 3 yrs there is no activity in your EPF account, even the interest will not be credited to that account), or the account is settled (you withdrew the amount already) , then your details will not be available. Tip – You can file an RTI application for your EPF queries and get them answered.

5. Details on request if you left the job before Mar 2012

If you have left your job before Mar 2012, then your EPF account may not be seeing any credit in past few months, in that case he will not be able to see the Employee provident fund details immediately, but it can be requested on the website (you will see a link) and that will be uploaded in few days.

6. Available only if the employer has uploaded Electronic Challan Cum Return of May 2012 onwards

This facility is available only to those whose employers have uploaded the Electronic Challan cum return for May 2012 onwards, Electronic Challan is a way of submitting the employee’s contribution to EPFO online, which is recently introduced by EPF organisation.

7. No need to remember user id and password

There is no user id and password, all you need is your mobile number, document name and document number, which we all remember anyways. At the time of downloading your EPF Balance passbook, you will need to generate the PIN online which will be sent to your phone, this will reduce the chances of fraud

8. Private EPF trusts not eligible 

Those employees who have their EPF with private PF trusts (or called as establishments exempted under the EPF Scheme) will not enjoy the benefit of this e-passbook facility, hence they will not be able to check their employee provident fund balance online using this.

9. Use multiple id’s to register

You can add several documents like Driving license, passport, ration card etc in the same account, this way you dont need to remember just one document id and its number, you can log in using any of those which you are carrying at that time.

10. Details and Entries in the EPF passbook

Month and date wise transactions made in member’s account will be displayed in the passbook from the year for which the annual accounts were updated for the establishment for the first time since computerisation of the concerned field office. For example, if the first annual accounts of member’s establishment were updated for the year 2008-09 by the concerned field office after its computerisation, the passbook will display the opening balance for the year 2008-09 and all transactions thereafter.

11. Error while Downloading the passbook

While downloading your EPF passbook, you might see an error saying “YOU HAVE ENTERED INVALID MEMBERS ID OR NAME”.

Please check whether you have entered the correct code & account number and/or name. In case yes, the name may not be matching as per the record in EPFO. In such a case, the member has to contact the concerned EPFO office. At times some entries from EPF passbook might be missing, in which case, the member should check first with the employer whether the returns for the month/year related to the missing entry has been submitted by him to the concerned EPFO office. In case yes then he/she can contact the concerned EPFO office regarding the missing details.

12. Not getting the PIN on your mobile?

Ideally, you should get the PIN on your mobile as soon as you click on “Get PIN”, but if you dont get it fast, it means the lines are busy and you should wait for more time and re-try!

Tip : Use Chrome instead of other browsers, Some components are running smoothly on Chrome, but not on other browsers .

Are you going to check your EPF Passbook?

Is this working for you? Did you try to find out your Employee Provident Fund Balance using this method? Once you are able to do your PF balance enquiry using this way and check your EPF passbook online or not? kindly let us know on the comments section.

Personal Finance Quiz to test your Knowledge – 10 questions

Posted on by Jagoinvestor

How much do you understand personal finance? You must be reading this blog from last many months or years, now let’s see how much you know. We have designed this short 10 question personal finance quiz to see your knowledge. Just answer these 10 questions and pick and answer from the drop-down. I will post the answers and scores very soon. Please write your full name when you enter your answers.

The quiz is over and Results are declared here

Direct link to Quiz here

Charity Week – Break your Attachment with Money

Posted on by Jagoinvestor

We are all living in a world where we are conditioned and functioned to GET than to GIVE. Since childhood, I have been trained to focus more on getting than on giving. Getting good grades, getting admission in a good college, getting good placements, getting awards and getting good salary packages.

Charity in India

We had some realization that we would like to share with each one of you. We saw that the other side of getting is GIVING. The world of giving is much more magical than the world of getting and with this charity week, we would like each reader of Jagoinvestor to get in touch with the magic of GIVING. Tell me honestly, why do you get on Jagoinvestor – to get or to give? I am not saying getting is bad, it is important to givers so that they will have more to GIVE more. Some of you really take out time to forward good personal finance articles to your friends even if you know they wont read because you care for them.

Let’s not get stuck in the rat-race because even if we win, we will end up as a RAT. We are not saying become a saint, all we want to point out is that, as an investor you are much more than your bank balance, you are much more than your investment portfolio and the returns that you get. We want you to realize how wealthy you are in this moment.

ROI of your Life

With Charity Week, we want you to get in touch with the ROI you are going to get from YOUR LIFE and not just from your money. A Go-giver will always have highest ROI from his life because he is more of a contributor than a consumer. You experience life at its peak when you are a giver and not a taker. Three messages we learn t and we would like you to learn from Charity Week are:

1. Connect with power of Giving

I was really touched and moved when Manish shared this experience with me. Manish and his wife were traveling from Pune to Mumbai. When the bus got on expressway, the conductor found one villager in the bus who was not having money to buy the ticket. It seemed as if he has got into a wrong bus by mistake. As per the rules the conductor asked that person to get down from the bus. Everyone in the bus was watching what was going on and in that moment Manish and his wife decided to talk to the conductor. They told the conductor that whatever is the fair we will pay but allow this person to travel, don’t drop him on such lonely highway. Manish and his wife paid for that person’s ticket and conductor finally allowed that villager to travel. That villager’s eyes got wet and it carried immense acknowledgement for Manish and his wife. In that moment, Manish experienced some magic and that is the magic we want each one of you to get in touch with. When you a giver you operate from service and help someone.

The big lesson here is – “It takes an open heart to help someone and not a lot of money”

2. Wealth isn’t the end, it’s the beginning

One thing that we have realized is that wealth is not an end but it is always a beginning. I have a small garden in my backyard and I invest (notice I don’t spend time I invest my time) some time every day to be with nature. Any garden is initially a patch of land and then you plant a seed or a sapling, we start to give that seed all the Wealth of water, Wealth of fertile land and Wealth of sunlight, that is how the sapling or seed starts to grow and on one fine day, it starts to give flowers and fruits. The fruits and flowers blooming is not the wealth, the wealth happened in the beginning. As an investor you also need to get in touch with the wealth you start as an investor. You always have wealth of actions, wealth of time, wealth of ideas, wealth of dreams, wealth of people and blogs that can help you understand about money. Your job as an investor is to nurture your financial life with the wealth you BEGIN with.

The big lesson here – Wealth is not the end. It is always the beginning

3. Break your attachment with money

We wanted to do this charity week long back but at that time I was not making any donations. My attachment with money was massive; I was focusing more on what I can get rather than what I can give. The world of giving is always a world of abundance. One of the things we have realized is that even if you take away abundance from abundance it still remains abundant. I never use to give money to any needy person thinking these people don’t work hard and we should not encourage such things. I never gave money to any charitable organizations thinking my money will get misused.

I had some realization some time back. My father took me to a GAUSHALA (A Cowpen). I liked the place, I also had some interaction with the person who was managing that place, he shared with me how people donate and contribute with an open heart. He was full of love and service and he had no expectations from me or from anyone. In that Cowpen you can adopt a cow with some annual fees. Something happened to me in that space and my attachment with money broke. I made maximum donation I could on that day and it was a very fulfilling experience. From that day I am looking for opportunities where I can help or serve someone.

The big lesson here : Giving is one of the easiest, most difficult things you will ever do.

I and Manish always discuss that no matter what your salary is or which mutual funds you invest or how much gold you acquire, unless you break your attachment with money you will never become wealthy.

What some Charity Week Hero’s did in this Charity Week

See what Sam did

These days, we are so attached to the money that we hardly care about people in need. Couple of years back, one day i went to a small railway station near my house in Bangalore for a morning walk. (It has a long and nice platform ;-) ). After a while i sat on a bench, a train came. I was observing the people and its amazing that these people get up so early in the morning , travel so long to do their jobs & I don’t think they get huge salaries. At that moment i realised how lucky i am, that i have a good job, i can earn money by working on a computer. I also realised that i am in a position to help many people in need. Since then i started very small donations to couple of organizations, and also i came across a micro finance NGO – http://www.rangde.org where we can lend the money to poor people who wanna do small business. I am a regular investor in Rangde.

See what Sainath did

I like Akshya Patra and contribute for the outstanding service they are offering. To come up in life education is necessary. But what good the education is if we dont have lunch during school hours. How will we digest the knowledge without having proper food. Akshaya Patra provides lunch to loads os school students which i think is a very good initiative. I totally support them and will spread their work to all.

See what Suhas has done

I have right away donated Rs 4200/- for child education through net banking to smile foundation India. I wanted to do this since some time but got the timing today with your donation week. I storongly belive that only education can uplift this country from all the mess we are in. Thanks for bringing up the topic. and offcourse it feels gr8……:)) Keep up the good work………

See what Aparna did

Recently, we had been to Shimoga (a place near Bangalore) to a temple. There are around 23 boys who are sponsored by the temple committee. When we saw the boys, we went ahead and donated money so that these boys get good food to eat atleast once in a year. We are also planning to donate some money in the next year for the same cause. Also, recently, we donated around Rs. 17,000 to a boy who wanted to complete his education. We donate atleast Rs. 20,000 yearly. Its our routine :)

See What Sushil did

I have been donating Rs.300 to UNICEF children’s fund every month. I was shocked to hear this would help 120 newborns for polio medication. And Rs.1200 would take care of a child’s expenses. Yes, our petty amounts make HUGE differences somewhere!. It also has other donation campaigns, where u can donate any amount you wish to give every month. I am increasing it sooner :) . In my hometown (Siruguppa) in Bellary district, Karnataka, I know a doctor who goes to villages teaching Dos and Donts, giving them free medication, helping them on monthly visits. I wish to donate some amount to his foundation soon.

See What Rajendra did

When you give without any expectation you get more. We experienced this when Rs 20400 has passed through our hands to reach Maaillu which takes care of 180 children who don’t have parents(www.maaillu.org) It is foolishness to feel that it is a donation- God gave us that great opportunity. We earned that money by doing another good work of helping others with the only intention of passing it to Maa illu. That extra work gave us real satisfaction than the giving, (giving became our duty). I feel that writing about charity is also the duty of you. I always remember the words of Infosys Narayana Murthy ‘ Power of money is power of charity’. As he said, We have to earn to give it away.

Our invitation to you in this Charity Week

We invite you to hear your call. Join the charity week with the most loving heart and do some charity in any organization of your choice. Make this week special make it an integral part of your life. It’s time to think beyond numbers, financial products and calculations. We want you to fix your life’s calculation first and the rest will happen on its own. In this week be of service to people around you, fill yourselves with a lot of love and help everyone around you. Do something special for all those who are serving you and you never ever noticed them! Be it your liftmen, your security guard, your office person, your helper at home, or just help some poor people

Fill the comments section with heartfelt experiences and sharing, let the goodness in you come out. Let’s master the art of giving. This kind of charity may have never happened on blog, lets create a world that works for everyone, let’s contribute and be of service to everyone around us. Make this charity week a piece of your heart and enjoy the wealth called ‘LIFE’.

Here is how you can make a start, following are few organisations where you can make a donation

Rs 1,75,000 already donated by 32 readers

We are close to thousands of readers on this blog , even if 10,000 people donate even Rs 500 , it would be close to Rs 50 lacs worth of help to someone. Think about it – do your bit .

Here is the form where you can submit your donation details so that we can measure as a blog how much money we donated and what difference we created in the world. If you are already doing charity share your experience in the comments section. Only the money that you will be donating in this week will be counted.

Just donate some money and let some money go out of your pocket for someone else. You will experience a very different kind of feeling which will be great.

How to calculate monthly average balance ?

Posted on by Jagoinvestor

Do you understand what is the meaning of Minimum Monthly Average Balance in your saving account? When you say “Monthly Average Balance of your saving bank account is Rs.10,000”, what does it mean exactly?

A lot of people feel that their balance in saving bank account should not go below Rs.10,000 on any given day, otherwise, there will be penalty charges and they make sure that they have a buffer of Rs.10,000 in their saving bank account all the time.

This means that their accounts should always have that much surplus. However, the way the monthly average balance is calculated is different and very simple.

Meaning of Monthly Average Balance?

It simply means the average of all the closing day balance in a given quarter. So given a quarter, add up all the closing day balance and then divide it by the number of days in the quarter. If you have to put it as formula it would be

MAB = (Total of all the EOD closing balance)/(number of days in the quarter)

Let me show you an example. Let us say the quarter we are talking about is Apr-June. Now your balance at the start of the quarter (Apr 1) is Rs.20,000. You withdraw Rs.15,000 on 15th Apr and then Deposit Rs.8,000 on 12th June. What will be the Monthly average balance for the Apr – June Quarter?

quarterly average balance

 

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Learnings & Tips

  • Keeping Rs.10,000 in a bank account for 15 days is same as keeping 5000 for full 1 month (10k * 15 days = 5k * 30 days)

PSU Banks vs Private Banks

A lot of PSU banks like SBI Bank, Bank of India, Allahabad bank generally have a lower Monthly Average Balance to be maintained in a savings bank account, its average limit is up to Rs.5000 in most of the banks and non-maintenance Charges are very low around Rs.40-50 only.

However Private banks like ICICI Banks, HDFC Bank, Axis Bank etc have Monthly balances as high as Rs.10,000 and high charges as a penalty for not maintaining it, It some times can be as high as Rs.750.

Did you knew how the minimum average balance is calculated ? Now will this information impact your banking in any way ? Will you keep less money in your bank account because you now understand that Monthly average balance is calculated in a different way than you thought?