Tag: Beginner Level

How Jagoinvestor Forum answered 10,000 times !

Posted on by Jagoinvestor

Most of the readers of this blog do not know whats going on at the other end of this blog which is our questions and answers forum. It’s a place where you can post any personal finance query, whatever doubts you have in mind and the community will help you with answers. You can extend the conversations untill you are fully satisfied and some amazing people on the forum will go miles to fully help you.

I want to take this opportunity to thank few key people on this personal finance forum who have gone beyond expectations and really taken up the full charge of the forum. You can say these people have taken over the forum from me and I am damn happy about it.

Some amazing statistics about the forum

There are close to 2,300 questions asked till date on the forum and close to 10,000 answers are already given, which makes it an average of 4 answers per question asked, which shows a good mix of discussion. I feel proud to say that out of those 2,300 question , all 2,300 are answered, which means 100% questions are answered. The average time it takes a question to be answered ranges from few minutes to few hours . I hardly know any question which was answered after 24 hours of its posting. There are around 1,300+ members on the forum.

Teaching is the best way of Learning

I would like to acknowledge mainly two people on forum who are really amazing and have exceeded the expectations of everyone. They are Ashal and Ramesh . You would really be amazed that they have answered at least 30-40% of the total answers out of those 10,000 answers and they have some really amazing and deep understanding of personal finance topics, which can even beat some certified financial planners ! .

The main idea of this post is to show you that incase you want to excel in the area of personal finance, all you need to do is help people solve their queries, give some time to help others and answers more and more questions from others. This is exactly what Ashal and Ramesh have done and they are the best people I know when it comes to personal finance understanding.

Btw, Ashal is a chemical engineer and Ramesh is a Doctor and this is enough to break your myth that “I cant be great in personal finance because I am not from finance field” . I want to stress on the point is that personal finance is not an area which demands you to be from a finance field. All you need is some passion and that attitude of helping others and learning through teaching others – that’s all . Within no time – you will develop a good understanding of everything 🙂 .

Some really good conversations on Forum

To give you an idea, here are few good questions asked on the forum and you can see the length of the discussions and to what level discussions happen.

Why should you use Forum and When ?

You can ask your question on the forum, for any topic which you need to discuss at length, or anything which you feel should get extra attention and different people views. You can also use the forum to take a second opinion. Just make sure that you have done some homework on your side before asking the question.

If you want your login/password to be created for the forum, you can register yourself on the forum here or just fill up this form and let me know that you want me to open an account for you by filling up this form.

I really want you all to acknowledge the efforts of these wonderful people on the forum and congratulate them. They have really done outstanding work.

I would also kind of acknowledge the efforts of some other heroes who have contributed significantly on forum like BanyanFA , wealthucreate , justgrowmymoney , Shashank , Bharat Shah, Jagadees , Rakesh , Prabeesh , Abhishek and MoneySavingsHelp and many others !

5 difference between stock & mutual funds Investing

Posted on by Jagoinvestor

When we say Equity, what comes to your mind – Stock or Equity Mutual Fund? While a single stock or a mutual fund both comes under the category of Equity and they are good option for long-term investment and needs periodic review. There are some differences between stock investing and mutual fund investing that is done by a common man. It’s a good idea to know where they differ and in which situation they differ, so that one can take better investing decisions. Let’s look at the main differences

 

Stocks and Mutual Funds Difference

Volatility

When you invest in a single stock or bunch of stocks (3-5 scrips), the change in it’s value is very high. On a given day it can be extremely volatile. It can give you 20% return and sometimes -10% loss also depending on the environment. This can be very exciting and at the same time very disheartening and gives you a feeling that you need to “act fast”. 

Mutual fund on the other hand is not that much volatile by nature, as the diversification is very large and at a time 50-100 stocks are covered. Different kinds of stocks from different sectors and market capitalization are involved in mutual fund and the over all change in value is thus less volatile (other than extreme days).

Return Potential

This is very much in line with the above point but still let’s look at it separately. There are lot of success stories where someone got quick rich by investing in equities directly and it can happen, but those are rare happenings and require lot of work and analysis, patience and belief in what you have picked. If you want superb returns in short time and you believe you can research well, you can go for stock investing directly but then risk is also more.

Mutual funds are known to deliver good returns (not in line with stocks, but still very good). So you can expect handsome returns from mutual funds but not unbelievable like stocks return. This is mainly because the money is diversified across different stocks (read ideas) and chances of all of them becoming a super success in short time is impossible.

Monitoring Required

Stock investing is a personal affair and you are doing it on your own the decision of what to sell and what to buy is on you. Even in case of long-term investing, you might have to keep an eye every quarter or yearly unless you have really spent some good time in picking the good stock. You need to also keep an eye on news and sector specific developments.

Monitoring in mutual funds is relatively low because the job of monitoring is anyways done by the fund manager who is paid SALARY to filter through the fluctuations. He constantly adds and removes the stocks from the portfolio. This can be a positive point, but sometimes it can be a negative point also if there is too much of churning.

SIP Investment

Mutual funds are known for possibility of SIP (monthly investment). SIP in mutual fund works and is recommended as a great way for a salaried person to invest in equity markets for long-term basis without understanding the working of equity markets.

However SIP in stocks do not work. Yes, some companies provide you the facility of SIP in stocks, but it’s a terrible concept. There is no diversification and SIP in a particular stock does not make sense because the risk is with single stock. A stock can be in a bad phase for years and decades, whereas in a mutual fund the bad performing stock is weeded out.

Asset Class Restriction

Stocks investing is restricted to Stocks only. You can choose a large cap stock, mid cap stock or small cap stock, but finally it will be equity asset class. However, mutual funds can invest in mix of asset classes. There are equity funds, debt funds, gold funds, Mix of Equity and debt also. To top up, even balanced funds are there which can adjust the asset allocation on its own, so in a way mutual funds are more superior in terms of features compared to a single or bunch or stocks.

Conclusion

Mutual Funds are actually collection of stocks only but just because it’s a group of stocks the characteristics are not very similar to that of stocks. You should be clear about all the points of difference and only after that you should decide whether to invest in Stocks directly or take the Mutual Fund route.

Why you should take more than 50 lacs of term insurance

Posted on by Jagoinvestor

Are you planning to buy a term insurance for less than 50 lacs of sum assured? I would suggest better take it for more than 50 lacs sum assured and there are two main reasons for it- which I will share with you in a moment. A lot of people who want to split their life insurance cover into 2 policies, split it in such a way that the sum assured of both the companies are below 50 lacs.

For example– If you want to take a cover of 80 lacs, you might want to take 40 lacs from first company and another 40 lacs from some private company, or any similar combination. But did you know that the premium you would be paying can get you much more sum assured than you had imagined. It might be the case that you can take 60 lacs life cover from each company you were planning and still pay the same premium. So now lets see in detail those 2 reasons why you should be taking a sum assured of more than 50 lacs from a particular company term insurance plan.

Reason 1: Discounted Premiums For 50+ lacs Sum Assured

Have you ever noticed how the premiums for online term plan keeps on increasing till you move upto 50 lacs, but the moment you reach 50 lacs and move beyond, the premium suddenly reduces? Now you must be thinking, what logic on this earth makes premium for 60 lacs policy lesser than the premium for 40 lacs? See an example for recently launched Bharti AXA eProtect online Term insurance plan. The premium changes when you change the sum assured from 40 lacs to 60 lacs for 30 yr old make with 30 yrs tenure.

Term Insurance premium for more than 50 lacs

Why the premium reduces when the sum assured increases beyond 50 lacs? Sourav Shah of Aegon Religare helps us to understand this –

At higher insurance rates, the medical tests are compulsory for most companies. Mostly this limit is over 49.99 lakhs. So as such when a customer goes for medicals, the company is sure that they are insuring a better quality of life with a higher life expectancy. As such the risk with insured population of customers undergoing medicals and being issued a policy, is much lower than with customers who opt for lower sum assured and are not required to undergo medicals.

It’s a risk-reward mechanism. The company offers an incentive to the customers to undergo medicals by offering lower charges for higher cover. Only people who do not have enough time to go for medicals opt for life cover of lower amounts where premiums are higher. But this doesn’t mean that customers who do not undergo medicals and pay higher premiums should worry at all. Once they have declared all details correctly to the insurance company and are issued a policy, they are as secured as those customers who have undergone medicals. Also the medical costs are borne by most companies. For instance AEGON Religare bears the cost of medicals for all customers.

So from this statement what I can understand is that if you take the policy for more than 50 lacs, the company makes you go through medicals (mostly all of them) and that way they can sure at the start itself, if they want to issue a policy to you or not. In case you go for lower sum assured, then they charge higher premium because they dont make medicals compulsory! . So this reason for lower premium for more than 50 lacs should be the first reason why you should opt for more than 50 lacs cover. As you can see from the snapshot above, premiums for 40 lacs and 60 lacs are almost same, so why settle for 40 lacs ?

Reason 2: Medicals are compulsory for Term Insurance of more than 50 lacs

It’s mentioned that even those people who do not go for medicals, don’t have to worry about their claims if they are not around, because they are generally paying more premiums, for the reason they don’t have more than 50 lacs of cover. However, personally I think it’s a grey area despite all the regulations. Let’s take a case, suppose you are suffering from high BP, but you are not aware about it and then you take a term plan for 30 lacs where in there are no medicals and in the declaration you mention that you don’t have any illness, because basically you are not aware about your own illness. Now in this case, what difference does it make if you are really aware about it yourself or you are not aware about it. Later on after 5 yrs suppose if you die, then company can prove the point that you had high BP at the time of taking the policy, but how will they prove that you were aware about it or not.

You all know that ICICI iCare has no medicals in their term plan upto sum assured of Rs. 1.5 crores and that’s the reason why their premiums are higher than other companies term plans because they factor in this point that there would be many people with illnesses. Some might be aware about it and some might be not. But today if you have the option of clearing things in black and white and have your medicals done, then its better that you do it, so that tomorrow there is no chance of any confusion and repenting (oh .. you will not be around even).  Even Sourav Shah of Aegon Religare thinks alike .. here is what he says about this “no medicals” term plans.

Yes, you are right. A term plan without medicals will obviously factor in the cost and be planned accordingly. But it dosent mean that there should be problems at the time of a claim. If the customer at the time of taking the policy declares all facts correctly then there shouldn’t be a problem. But as a personal view Yes, I would definitely recommend that a customer goes for medicals and then applies for a term plan as this leaves no room for ambiguity or any doubt that the customer was absolutely healthy when he undertook the plan. But then this is strictly my personal view.

So were you planning to split your term plan and take two term insurance plans for less than 50 lacs? Better take plans for more than 50 lacs each and mostly it will not affect the premiums. What do you think about these 2 points which I have mentioned? Do you agree about these points about term insurance !

Did you start your Health SIP ?

Posted on by Jagoinvestor

I begin each day of my life with a ritual of receiving one sms around 5:30 am from my fitness coach Sanjay. The sms reads “I am coming at 6:00 am so get ready” I take a look at the sms and reply “yes”. Initially, I thought that my ritual is to exercise every day, but my real ritual is saying Yes to my coach because, the moment I say YES to him my laziness goes away, my reasons/excuses disappear and I look up to the ceiling of my room and say to myself “Get ready Nandish it’s time to invest in your fitness.” This ritual has had transformative effect on me. I know it is absolutely no fun to wake up in the dark and push ourselves to go for a tiresome run or to hit the gym. But if you really want to cherish your wealth in later years of your life start forming healthy habit of exercising. One of the best website you can explore to get yourself educated on various exercises and diet is http://exrx.net/.

Health SIP

We have a rule if you do not exercise you can’t become our coaching client no mater how much money you have. It is because health is your true wealth. Let me share what we ask to our coaching clients

One of the Questions that we have asked all the people who have worked with us is

Is your well-being on your priority E.g. Do you Exercise/Go for a walk or play any sports? (If the answer is no this will be the first thing we will ask you to start, this will allow you to enjoy the wealth that you are going to generate in life)

Here are some Real Life answers from real people that I have received; I am sharing this so that you can learn from other people’s sharing

  • Yes, I am health conscious and selfish when it comes to health
  • I don’t exercise regularly
  • I used to. I will be resuming soon
  • Yes, for the past 7-8 months I have been going to gym regularly and have a very balanced diet.
  • To somewhat no. I try to maintain a healthy life-style, but fail occasionally.
  • Yes. I am too occupied to start with any of the activities. I am currently working on this.
  • Yes. My wife is an athlete and she pushes/motivates me to stay healthy. I walk every evening and try to maintain weight. I very strictly believe that Health is wealth. There is no use of money at all if I cannot stay healthy. E.g. – Yuvraj Singh – what will be the use of so much money if cannot be cured.
  • Yes. I go to Yoga in my office, daily. I have started this since last 8 months and doing it regularly<90% attendance>.
  • Sporadic exercise. Swim and play badminton regularly.
  • This is exactly what I don’t do at all. All I need to do is start ASAP.
  • Yes. I used to walk daily till 2 months back. Due to back pain and monsoons now it’s held up for two months.
  • I keep doing exercises on and off. More than 3 months back I have taken up Karate. I do that twice in a week, and I am quite sure that I am not going to quit that
  • I hardly do the above, but I will try to make it as a habit very soon.
  • No. My physical activities have reduced
  • Yes, I believe it is. I have started to go on a diet plan and been on it for a couple of weeks now. I have also started to go to fitness centre (tread mill and weights) for a week now. I hope and believe I can continue this.
  • I thoroughly enjoy sports. I play tennis and walk quite a bit. I also do yoga fairly regularly.JMy biggest priority is stay healthy and fit – a fitness freak, if you will. (I wish I had the same drive for money, ever since started earning!

Here is what one of our clients wrote me – “I have reduced my weight by 12 kgs in 6+ months and my BMI is close to ideal though still a bit above. Feel so much more energetic. How is your health investment doing?”

Some Need Shock Therapy

In one of the readers meet held at pune one of our client shared his life changing experience with the group .Once he had to participate in check-up camp organized in his company. He got his tests done and the doctor gave him a very serious look and told him to move to a separate room and relax there for some time. Doctor came after some time and said everything is going to be fine, with this his tension was at its peak. Our client got restless and asked the doctor “what’s the matter?” and doctor said “Diabetes” Our client’s world got shattered in that moment, his heart sank and his throat got dry.

Doctor saw all this and then said, “You are not having diabetes my friend but you are close to having diabetes and so it was necessary for us to give you some shock Therapy.” Our client bought new shoes the same day and was all geared up to take charge of his health. The next day, even with heavy rains, he was jogging in the park…. Do not wait for important things to get urgent, act today, take the learning’s from this experience.

Here is something that I received from my father a few days back

The Dalai Lama, when asked what surprised him most about humanity, answered, “Man. Because he sacrifices his health to make money. Then he sacrifices money to recuperate his health. And then he is so anxious about the future that he does not enjoy the present; the result being that he does not live in the present or the future; he lives as if he is never going to die, and then he dies having never really lived!”

Start your Fitness SIP

Sharing from my personal life, I avoided doing physical exercise for years. My reasons were bigger than my commitment. I broke my reasons 2 yrs back, I hired a Fitness Coach who comes to my home and makes me do a lot of work-out. The fee that I am paying him for his services, I consider it as my HEALTH-SIP. I am familiar with all the exercises and capable to do them on my own but those 5 extra counts that he makes me do is only possible with him. I take this opportunity to thank my coach Sanjay, his commitment is amazing.

Some people…

  • Take better care of their pet than what they do themselves
  • Take better care of their gadgets than what they do themselves
  • Take better care of their car than what they do themselves

Focus more on your health than buying health insurance

When I coach people I see that people are more committed to buy the right health cover and more laid back on focusing on their health! Your body is the only thing which is going to stay with you for the rest of your life. See that you take care of yourself because it is said that your body is the only place you are going to live in for the rest of your life. Connect with your true wealth first, we have heard this since childhood health is wealth but most of us forget this when we grow –up. Getting health cover is important but do not deviate focus from your health, make a commitment you will live your life in such a way so that you do not have to use your health insurance ever. (Unless it is an accident or some other major health issue)

Health Insurance for parents

We interact with many people who want to buy health cover for their senior citizen parents. It really becomes very difficult in getting health cover after certain age and even if you get cover it comes with high premium. More than health cover start giving time to your parents, put 2-3 lacs aside (you can put even more if you have) for them and you can have your own health cover designed for your parents. All they want is your time, your attention and unconditional love. Encourage your parents in doing light exercises or light yoga . One very powerful meditation is conducted by organization called vipassana Meditation, they have world wide centers http://www.dhamma.org/ . My parents have done the same and I think it is the greatest gift we can give to our parents. Enroll your parents for naturotherapy, see that they have proper intake of fruits and dry fruits. See that your parents are not feeling lonely and they are around their friends. Take steps that make them happy this is far far better than saying I am a responsible son I have bought health cover for my parents.

Conclusion

As people are turning towards term plans a lot of people also turning towards joining gyms, going for a brisk walk, hiring a fitness coach, taking advantage of fitness facilities provided by companies. This is your true wealth. I always tell people that at the age of 55 or 60 you might have a lot of money but what if your body is not aligned to cherish that money? Stay healthy, stay committed and stay FIT. Do share what message you got from this post, if you are one of those who are not exercising simply start from this moment. After you complete reading this article do 5 push-ups, climb a stair, just do something in this moment, take small steps, engage in activities that you enjoy doing and change your relationship with health and fitness.

This article is written by Nandish Desai 

This week action ?

  • Do you exercise? Yes or No
  • Hire a coach or join a gym in this week?
  • What one action you can take to bring more life in your parent’s health?

Under Construction vs Ready to Move Property – Which is better ?

Posted on by Jagoinvestor

There is absolutely no confusion in saying that everyone wants to buy a house, a dream home which they can call their own. However, one big confusion among buyers is whether to buy an Under-Construction Property or a Ready to move in Property. Each of these options has its own pros and cons and it is extremely important to be aware about the advantages and disadvantages of Under construction and Ready to move property. Lets look at them:

Under Construction vs Ready to move in properties

Negative Points of Under Construction Property

1. Delay in project & Dispute of the Land & Permissions

If you know of any project which was delivered on the exact day that it was promised, its rare! Delay in the project for various reasons is one of the top most issue with under construction properties. On an average 2 years is the deadline given by the builders, but it gets delayed and further delayed most of the times. 2 yrs can turn out to be 4 or 5 yrs of wait in a lot of cases and this adds to the frustration of buyers.

This delay is caused mainly because of the dispute on the land, cash crunch and most of the times incomplete permissions from authorities. Builders start the construction after obtaining most of the required and most important permissions, but at times there might be few permissions which are still going on, but builders start the construction. So it becomes very important thing for a buyer to check all the required permissions and the ownership details of the lands. This is very true for small builders especially.

One important point to note is that even though the house is delayed by just 1-2 yrs and finally comes in your hand, but in a lot of cases promised amenities are given after a long period and some people are still waiting for that swimming pool which was promised in 2001 .

2. You don’t get what you see

The biggest issue, I repeat – the biggest issue of under construction properties is that you never get what you are promised or have seen as sample flat . Sample flats are built-in a way and decorated in a manner that your heart will met down and you will sell your self to grab that opportunity, and over years you will build so much expectations from your under construction house. But when you really get the possession, you will realise that a lot of things are not up to the mark and not as per the promise done. Sometimes layouts are changed & you may not like the new one.

Another issue is over promise in many things. For example – Some builders give false promises that Municipal Corporation Water Supply will be made available in the society after 3-6 months of completion of construction of society, but some builders never fulfill this problem once all the flats in the Society are sold. The builder’s objective of selling the flats is fulfilled and then he is not interested in the problems that people face. A lot of times oral promises are done on many things like cost of parking, extra facilities like swimming pool, gym etc and then they are not fulfilled. And at the end, you are in a situation where you can’t do anything. Either take it or fight a case against the builder and many hassles that come along. Hence please never agree to any oral agreements under any circumstances – Always insist on written agreements with clear delivery milestones etc. One bad experience from T. Ashok is like this

The builder did not construct shelfs and almirahs as promised. He left the house only with walls and lafts. So, I had spent more than 2 lacks for wooden works in kitchen and two bed rooms. Really that was a big burden for me apart from loan amount. So, here after anybody buying house, must ask the builder to mention all in agreements like painting, shelfs, windows, doors,etc., otherwise they may suffer like me.

3. Quality of work may be compromised

Another issue is the quality of work that gets done. The quality of the construction material used, Doors and windows fillings can be compromised with, electrical sockets and switches can be of cheap quality, plumbing can go horribly wrong and even the facilities like parking space, children playing area and other amenities might be below the mark or what you expected and when you complain about all this, there will be all sort of explanations like losses in other schemes, cash flow issues and the cost increase by builders and a new series of promises that it will be done soon. For an example watch this video experience for bad quality of construction and unkept promise by Unitech

4. Income tax claim is headache unless you get the possession certificate

I hope you knew that you can avail for tax benefits only after you get the possession of the house. Saving tax on the EMI’s is one of the big reason why many people plan their house buying, only to realise later that they never thought about this aspect. So if you are going to buy under construction property , be ready to pay rent + EMI and not getting any tax benefit unless you get the possession certificate, and incase the construction gets delayed by few months to 1-2 years, it will be frustrating.

Positive Points of Under Construction Property

1. You start paying slowly & conveniently

The best part of Under construction properties is that it is affordable for most of the people through a home loan. When I say “affordable”, all I mean is that from payment perspective life is easy. You make a down-payment which is generally 20% of the property price and then start making the monthly EMI’s each month and this is how a lot of people are able to own the house. Later after few years , a lot of people feel comfortable as their salaries go up, but the EMI’s value is very much the same. Even if one is not taking a home loan, they can pay the money in parts as it can be construction linked payment.

2. Choices of floor or location are much wider

There are various locations where new projects come up, so the choice in terms of location or which floor you want are generally high. If you are not happy with 12th floor, you can pay more and take the 3rd floor, but in case of ready to move apartments, if 12th is available, then that’s all you have. No choice!

3. Good scope of Price Increase

Under Construction properties are generally in the outer area’s or the non-core part of the city and hence the price appreciation due to future development is good in under construction properties. However this is not true in each and every case. You still have to look at the location and future plans around that area. But the point is that compared to ready to move in apartments, under construction properties have more potential for price increase.

Negatives Points of Ready to Move Property

1. A lot of legal work and documentation

Generally there is a lot of legal work and documentation required in case of Ready to move properties compared to Under construction, because there are no fresh documentation, but a lot of “transfer” documentation.

2. You need to arrange all the money in one shot for down payment, registration etc

In case of Ready to move in properties, all the payment has to be made upfront and all at one time. There is no stages in payment like you have in Under construction properties. So even if you are buying it on home loan, you have to pay all the down-payment, registration charges, stamp duty etc all at one go.

3. Chances of getting duped!

In case of ready to move in properties, there is a big risk of getting duped. You have to make sure that you investigate things very properly. There are cases where same property has been sold to more than 1 person. Make sure you hire a good real estate consultant or a good lawyer who can study the documents well and the fine prints.

4. Inflated Price already

The price appreciation in case of Ready to move properties is generally lower than Under Construction properties from percentage increase point of view (not absolute increase). Most probably the ready to move in properties which are much older than 5 yrs, a lot of development around them has already happened and the price appreciation has taken place for most what is deserves.

Positives Points of Ready to Move Property

1. You buy what you see

When you buy Ready to move properties, you exactly get what you have seen. There is no chances of getting duped at least in those things which you can feel and experience. This is not in the case of Under construction properties , because you never see the actual thing , you see samples or the “projections”. It’s a good idea to talk to the people around or the neighbors about the water/electricity and other things and take their feedback.

2. Immediate relief from Rent & travelling cost

A lot of people who are paying very high rent or travelling very far for their work tend to buy the ready to move houses because they want immediate relief from the high rent or travel cost and one can get it in ready to move properties.

3. You can know what kind of people live around you

This is one big advantage of ready to move houses. You can already see who your neighbours are, what community they belong to , what income level they have and if you would like to be with them or not . In case of under construction houses , you are never sure what kind of people will be around you.

Conclusion

So the final conclusion from various experience is that if you want to buy the house from investment point of view, then buying an under construction house makes sense. However if its mostly from living purpose and you want to consume it for your own purpose, then buying a ready to move house makes more sense. Also all the pros and cons discussed can vary from case to case and the points discussed here are based on a general information and feedback.

Can you share what are your experiences and pros and cons of under construction vs ready to move property !

File an RTI application for EPF withdrawal or EPF Transfer Stutus

Posted on by Jagoinvestor

Are you frustrated because of the delay in your EPF withdrawal or EPF transfer? Are you waiting from many months or years at times to get any kind of clarity on your EPF status?

Are you frustrated with your EPF withdrawal or transfer?

I have seen countless number of people on this blog and other forums really getting frustrated with waiting and waiting for years at times for their EPF withdrawal/transfer and they don’t get any information or update on the status. It is only when you personally visit the EPFO offices, you get some clarity, but even that does not help. So now if you are fed up with the EPFO office and it’s slow speed of work, what’s the final step you can take? In this article I will show you how you can use file an RTI application and successfully get lot of information and at times get your work done at a speed which you never imagined. Filing RTI application for EPF information has worked wonders for many people and they claim that it works brilliantly (if you do it right way). I know your eyes are shining, but let’s understand some background before you rush to find out how it works!

Some success stories of RTI solving the EPF issues

Case 1

I would like to share the success with RTI. I opted for EPF withdrawal about 4 months back, and did not receive my PF amount until I decided to file an RTI Application. And it was realy shocking to see the amount getting credited to my bank account within 3 days of receipt of application by K.R.PURAM, Bangalore EPFO. – Rohit

Case 2 

My EPF withdrawal issue was resolved with RTI. After submitting the forms, after around 3 months, the EPFO claimed that they transferred my withdrawal money to my bank account. However I didn’t receive the money in my bank account. I raised online grievances for 3 times. Each time I got the same answer saying that the money has been transferred and has not been returned back to EPFO, so it must have been deposited to my bank account and I should check my bank account. Around 6 months went in this process with no results. As a last option, I filed an RTI application and to my surprise, the money got deposited in my bank account in 5 days (with additional interest for 6 months) and also received a reply for my RTI application.If EPF grievance system does not work for you, go for RTI. – Manish

Case 3

Yep RTI does the trick most of the time , I got all my PF issues sorted out with RTI application and have all the written proofs with cheque numbers etc for all my previous transfers. They even informed my about my balances for current year and told that they are yet to prepare the PF a/c’s for my company for the current year , but here are your balances with us. It really helps. – Hitesh

 

What is RTI and how it applies to EPFO office?

RTI as we all know is a common man’s tool to get a speedy and clear information from any govt office. Supreme Court has clearly mentioned under article 19(1) that Right to Information is a part of Right to Speech & Expression. Now, as EPFO comes under the RTI purview, you can file an RTI application and ask anything you want about your EPF. Govt is bound to respond within 30 days to your letter with all the information you had asked. So if you are unclear about what your EPF status is or if your EPF transfer work has even started? Why did your EPF money still not credited in your bank account etc etc… You can ask all these questions and you should be getting the 100% right and clear answers within 30 days. The only point here is that you should be doing it the RIGHT way. So lets see what all you need!

Note : Before filing the RTI , a good idea would be to file a EPF grievance redressal form online

File RTI in 3 easy steps

Step 1: Buying a Postal Order of Rs 10 from Post Office

The first step is to go to Post Office and buy a Postal Order for Rs 10.  It should be in favor of Accounts Officer of the Concerned EPFO Office. Like if you are sending your EPF letter to Bangalore, the Rs. 10 postal order should be in favor of Accounts Officer, EPFO, Bangalore. The fees can also be paid by demand draft, but that would be expensive, better go for Postal order as it is commonly used for RTI.

Step 2: Drafting your RTI letter

The first step is to draft RTI letter for your EPF related queries. All you need to do is write a letter on a normal paper (better take a very high quality A4 size paper). Though there is no specific format for RTI application letter, still there are some rules of drafting it.

  • The letter subject should start as “Application Form for Seeking Information under RTI Act 2005”
  • The letter should be addressed to Central Public Information Officer, Employees’ Provident Fund Organisation, (Provide Concerned PF office address). Refer to this EPFO directory for exact address of PF office for your jurisdiction.
  • Make sure you mention your Name, Address, Contact telephone number and your Email id along with EPF account number.
  • Now, put all your queries which you want to ask regarding your EPF (putting them as bullet points is recommended)
  • As a next thing, you should have a declaration – “I do hereby declare that I am a citizen of India. I request you to ensure that the information is provided before the expiry of the 30 day period after you have received the application”
  • Finally at the end of the letter, mention the proof of payment of fees as – Proof of payment of application fee: Attached Indian Postal Order for Rs. 10 /- dated  dd/mm/yyyy  favoring “Accounts Officer of EPFO” as application fee.
  • And complete the letter by putting your Signature, Place and Date.
  • Sign the letter and Put your Postal address
  • Mention the payment details like Postal order number, issuing post office, date, cash receipt details, etc., towards the end of your application

Following is a sample RTI letter.

EPF withdrawal or EPF Transfer RTI application Template

Download the PDF format here

Step 3 : Send the RTI letter by Registered Post or Speed Post

The final step is to send this RTI letter by Registered post only, as no courier is accepted. Please make sure you keep the acknowledgement receipt carefully for all the future communication (if any). It might be required by you.  Once you complete the 3rd step, the RTI letter should reach the concerned authority in few days and then within 30 days you should be getting the reply within 30 days (as per RTI act).

Two RTI’s application needed in case of transfer of EPF

Note that in case of EPF withdrawal case , all you need to do is file an RTI query for the concerned EPF office. But in case of Transfer of EPF, there are two EPF offices involved, they are Source and Target. For example if you got transferred from Bangalore to Delhi and applied for EPF transfer, then your source EPFO office is “Bangalore” and your Target office is “Delhi”.

You will first have to file an RTI for the Source EPFO office to find out if the transfer has happened from their side or not. It might be the case that they rejected your application and you don’t even know about it. Once you file an RTI to them, you will atleast know what is the exact status. If you get a reply that the Transfer has still not happened, then they will let you know by when it will happen or give some pointers on the situation, but in case they say that they have transferred it from their side, then it means that the issue is on Target EPF office and they might not have processed your transfer yet. In that case the next step is to file second RTI to the target EPFO office.

File an RTI application for the Target EPFO and this time, along with all the details also mention about the first RTI and the response you have got from the Source, so that you show them all the proof of what you have done. Now you should get a reply from them again within next 30 days on what is their action and what is the exact status of your EPF transfer.

Online RTI Filing (For NRI’s or lazy Resident Indians)

For those who are too busy to visit Post office and do RTI filing offline. You can use the services of www.rtination.com for filing the RTI. They will help you create the RTI letter and then you need to download it, sign it, scan it and send it back to them by courier or ordinary post. They would speed post it to the concerned officer and also enclose the fee. At the moment the fees is Rs 150.

Important Points while Filing RTI application

When you file an RTI application, there are some very important points you should remember, because incase you don’t take care of some very critical points, it would mean rejection of your application and unnecessary work again. Here are some important points:

  • Do not address your RTI application to the PIO by his name, just in case he gets transferred or a new PIO is designated in his place, it will be an issue. However addressing the Officer by name has its own advantage like when it reaches his desk, by seeing his name, he might see more interest in opening it and that might mean speedy work. However in my opinion, better not put the exact name of the person.
  • Before filing the RTI, see if checking the status online helps here
  • The matter can be hand written, or typed. There is no compulsion of typing the content.
  • Be very specific while asking the questions, don’t ask unimportant or unnecessary questions, because some states like Karanataka have limits on the number of words in the RTI application (150 incase of Karnataka)
  • Check the exact fees for RTI application for the state where you are sending it. Because it can be different from states to states. Like incase of Haryana, it’s Rs 50, not Rs 10.

You can read about RTI in detail here

Can you share your experience about EPF withdrawal or EPF transfer and in case you have used RTI for resolving the issue? Are you going to use RTI to get your EPF problem solved? Please update your results once you are successful.

Paid Jagoinvestor Workshop in Pune (25th Mar)

Posted on by Jagoinvestor

We have planned a 1 day paid workshop across different cities in India, starting with Pune. The first workshop will be on 25th Mar (Sunday) in Pune and it will be a full day event. It was not easy to decide what should be covered in the workshop, but we really want to make sure it is of extremely high value and should leave an experience. So, after a lot of discussions and brainstorming we designed the workshop which we are calling as “Design your Financial Life”.

Contents of Design your Financial Life

The workshop will start at 9:00 am and will go up to 6:00 pm in the evening. The focus of the workshop is, that any one who attends has a clear understanding of how he should lead his financial life. The talks will be a rich mix of mentoring on how to think about money and what mistakes to avoid (coaching aspects) and it will also have some talks on how one should look at various dimensions of their financial lives and get the ground rules clear about them. There will be 2-3 group activities and exercises which will enrich the program. Here is the table which gives a full day time line.

Jagoinvestor Workshop Details

Pune Workshop Registrations are Closed now

Who should attend the workshop

This workshop is targeted at those who are beginners and have made a start in area of personal finance and they would like to spend a full day to hear and experience rich conversations on money and learn the ground rules of most important area’s of personal finance.  The workshop will assume that participants are beginners/moderate knowledge about money related matters and they would like to build on it from that point. The session will be a mix of mentoring & insights on how to think about personal finance related things.

By the end of the session you should be capable of charting out your Financial Roadmap and be self-sufficient in basic level of thinking in personal finance.

You can register for workshops in your city here

What this workshop is not

This session is not for experts who know it all. This session is also not for those who wants any stock or mutual funds tips or any kind of get rich-quick kind of tips. Financial Planners or advisors should also refrain from attending the workshop.

Meaning of different Term Insurance Riders !

Posted on by Jagoinvestor

There are different kinds of insurance riders and the common question is “Which insurance riders should I take?” . This is not a question I or anyone else can answer for you. This has to be decided by you and no one else. All you need to know is what exactly a rider is and what it is going to provide you.

Term Insurance Riders

What are different kind of Insurance Riders ?

Insurance Riders are the extra benefits that can be purchased and covered for under the life insurance policy. Apart from the basic Life insurance cover, you can choose to add some extra benefits to the life insurance cover, but you will have to pay extra premium to get such add-on benefits. The basic premiums will then increase. Note that the base policy features are always there and you get the base Sum Assured in case of death. Addition of these riders has nothing to do with the original rules of the policy. Let us see all the insurance riders one by one.

1. Accidental Death Rider

In this rider, you get additional sum assured if the death occurs due to an accident. The biggest myth which investors have is that they will get the money if death is due to accident only if this rider is added, else not. This is not true. If you don’t take this rider, still the base Sum assured will be paid to you. This rider is only for the extra sum assured in case of death due to accident at additional cost, nothing else. So if you take a policy of 50 lacs sum assured with accidental rider of 25 lacs. You will get 50 lacs in case of death other than accident and 75 lacs in case of death in accident. A lot of policies cover you from disabilities which arise out of accidents. See Accidental Insurance Policies

2. Permanent & Partial Disability

This rider is helpful in case you are disabled permanently or temporarily due to accident. In that case most of the policies pay periodically for next 5-10 yrs a certain percentage of Sum Assured. For example, 10% of Sum Assured per year for next 10 yrs. This way this rider acts like an income generation insurance most of the times. However note that the rider is helpful only incase the disability happens due to accident only. Read the policy document of the company for exact wordings. Most of the times, this rider is combined with Accident Death rider.

3. Critical Illness

This rider gives you a lump sum amount if you are diagnosed with an illness which is pre-specified and is mentioned in the policy. Generally all the major illnesses are covered in Critical Illness cover. Some of the examples of critical illness mentioned are Heart Attack, Cancer, Stroke, Coronary artery by-pass graft surgery (CABG), Kidney failure and Paralysis for example. After the critical illness is detected, the policy might continue or terminate as per the policy document. At times, the policy coverage reduces by the amount paid to you. So better read the policy document to know exactly what will happen in this rider.

4. Waiver of Premium

This rider makes sure that in case you are not able to pay future premium due to disability or income loss, the future premiums are waived off but your policy is still in force like always. This is in a way insurance of the premium payment till your policy expiry date. In case this rider is not present and you are disabled and not able to pay the premiums, then the policy will expire and you will not get any benefit later when you die because due to non-payment of premium the policy expires and the cover stops.

5. Income Benefit Rider

This rider is present in some policies and it’s mainly for the income generation after the death of the policyholder. If this rider is present, the policy holder’s family will get additional income per year for 5-10 yrs along with regular Sum Assured. For example, 10% of Sum Assured for next 10 yrs will be received by the policy holder’s family.

These Insurance Riders come with cost and exclusions

Note that riders come with cost, so just because they are present in the policy as add-ons, don’t jump and include every kind of rider possible. Ask yourself why you need a rider and if there is really a need for it. Read about the rider rules in details and read what is not included in that rider. Also compare the cost of insurance riders from different companies to take a better decision.

How two readers got justice and got their money back

Posted on by Jagoinvestor

Today I want to show you how 2 fellow readers of this blog were in a fix when it came to their hard-earned money and they were struggling to get justice from their respective banks and financial institutions. They mailed me and commented on this blog and when I saw those comments, I thought – “lets see what can be done!” This is a post where you can learn what kind of things can be done if you are having issues at times and then try to resolve it further.

Case 1: How an old lady got justice from ICICI Prudential

Some months back an old lady named “Nita” commented on this blog how ICICI Prudential representative have taken advantage of the situation and played around with her money. It was not a case of miss-selling, it was actually unethical behaviour (or call some kind of fraud). So I decided to help her in whatever way I could. Here is what she wrote 

Dear Sir,

I was holding ICICI Prudential Life Time Super policy (Policy number: XXXXXXXX) and have already paid two premiums. The third premium was due for payment in July 2009. Due to delay, there were frantic calls from ICICI Bombay office for making the payment. On 28th December 2009 when called again from ICICI Prudential Bombay office, I requested them to get the premium collected as assured by their officials at the time of issuing the policy. I was told by their office that a representative would come on 29-12-2009. On 29th Mr. K N Pandey mobile No XXXXXX a representative of ICICI prudential came and after verifying his credential from Dehli office in-charge Mr. Mratunjay Sharma Mobile No XXXXXXXXXX  a cheque for Rs.50000/- was given. He demanded that a photo and a signed copy of form was required to get the lapsed policy restored. these were given to him.

Later on, finding that instead of a receipt of the premium paid for the old policy (policy number: 05225842),a new policy “LifeStage Assure Pension- policy number: 13129468″ was delivered. This was issued under forged signature.(photocopy attached). Soon after the receipt of the new policy in 3rd week of jan-2010, the matter was reported to the company’s representative Mr. K.N. Pandey and his immediate superior Mr. Akhilesh Gupta Financial adviser of ICICI prudential Mob. no 09838506002 and Delhi office Mr. M Sharma. They accepted their mistake and I was assured that the new policy will be closed and the amount of the premium will be transferred in my old policy no: 05225842.I trusted them since they begged saying that if the matter was reported, they were to lose their jobs.

But, having failed in my efforts the matter was reported to the chairman ICICI Prudential in September 2010. I never got the reply but when I presented all the documents before ICICI Prudential Manager at Kanpur office I was given a copy of reply sent by the Bombay office in Sept 2010.

(photocopy attached)

The local office after having gone through the records and finding my complaint genuine, they again sent the complaint to Bombay office and I was asked to wait. Again there has been no communication from Bombay office but on my approach to local office I have been given a copy which is ditto of the previous reply.(photocopy attached).  On the advice of local branch manager to save my one Lac rupees deposited earlier in policy No. 05225842, I have borrowed the money to deposit Rs ONE Lac i.e. two years premium to get the policy revived. The amount has been debited from my account on 26/05/2011 but I have not yet received any communication regarding revival of my policy.

The fraudulently (under forged signature) issued new policy No 13129468 is still hanging in abeyance and my Rs.50000.00 is at stake. Since I am an old lady with meager source of earning I cannot afford to operate two policies and that’s why I have been trying to get the amount of the second policy credited for the old policy. Since now, I have come to know about IRDA can help in such matters I therefore request your good office to look in to my case and help me to get justice.

Yours faithfully,

NITA TRIPATHI
06/12/2011

What I did

I tried to find out who is the current CEO of the company and tried to find his email id, but failed. Then I found him on facebook and left a message to him (didn’t get any reply). I then contacted a PR agency in Mumbai who earlier contacted me on behalf of ICICI Pru and I knew they must be knowing someone at ICICI Pru who could help the lady. This worked and I got a mail from ICICI saying that they will work on this and get back with their response. I replied back to them on email like this –

If it was a normal misselling case , I would have let this go , as misselling is same as misbuying . but here it was fraudualant activity and without any reason the old lady is harrassed and she is not able to do anything . Please take up this case with priority and more than professional grounds , help the lady on human ground . It would be appreciated if you can follow up with the concerned people who were send to collect the money from lady and even their seniors .

I am cc’ing Mr Kunal Pradhan and lady Nita Tripathi .

Thanks
Manish

The case was resolved and Lady got her money back

After that there was no activity for few days and some weeks back I got a mail from the lady and she confirmed that the things are resolved now.

Dear Mr Manish,

Wish you a VERY HAPPY HEALTHY AND PROSPEROUS NEW YEAR.

I am extremely sorry for not writing to you earlier about the progress in the matter. In fact after your intervention, ICICI Pru immediately responded. They have now cancelled the mis- sold policy and have credited the amount to the old policy account after getting the formalities completed locally.They have issued the receipt and provided the number by email but I have not received the hard copy as yet.

Honestly speaking I have no words to express my gratitude and thanks for all the help. I pray to GOD to give you all the success and happiness in life.

Thanks once again.

Nita Tripathi

Case 2 : How Bharat Kamble got his Rs 24,000 back from ICICI

One reader Bharat Kamble was struggling to get back his money from ICICI Bank. His credit card was charged twice and ICICI was making him run around here and there without any valid reason. Here is the problem he was facing. I thought of using twitter to communicate this issue to ICICI bank and ask them to act on priority.

ICICI Complain on twitter

Within 24 hours, I got a message from ICICI stating a reference number and they asked Bharat to reply back to ICICI and mention that code number in the message subject (I guess they take it with priority and seriousness). Bharat did exactly that and then he got his money back. I asked him to write a testimonial for us and here is what he sent back in email (problem and solution both).

Dear sir,

I am a 29 year old Geotechnical enginner from mumbai. I am planning for migration to Australia and have already applied for an Australian PR (Permanant Residence). On 21st June 2011, i have paid the fees for PR application to the IEA (Immigration Engineers of Australia). The amount was Rs. 24603/-. I gave the details of credit card in the application form and the amount of Rs. 24603/- was deducted from my ICICI credit card. This amount was reflected in my July month statement. Later in the August month statement i saw the same transaction been done again on 22nd July 2011. I called up to the IEA department for clarification. They said that the first transaction was unsuccessful and hence they did the second transaction which was successful.

I told them that the money has been deducted for both the transactions. They said that ask your bank to talk to our bank (commonwealth bank) for the unsuccessful transaction, also they me the reference file number for the failed transaction as a proof. Later daily i had been calling the customer care of ICICI bank for the problem and solutions. but i got only one answer from all of them stating ” its the mistake of commonwealth bank and they have to sort out the issue. The only alternative for this is that to raise a dispute against this amount”). I was really very tensed and worried about this problem. I showed them the reference file number which was given to me by the commonwealth bank , but they said that we cant check this reference number.

On 23rd Sep. 2011, i file a dispute against this transaction with ICICI bank. They told me that it will take 45 days to solve this dispute and also the result make not be in your favour. i was really suffering from a bad time in that period. after 45 days on 18th november, i called the CC of ICICI bank for the status of the dispute and they said that it will take another 45 days to solve the issue.

Finally while surfing on the solutions on internet i came across “jagoinvestor”. I read all the comments (some of the problems were similar to mine one but not the same exactly and thought lets put up my problem over here. Within 24 hrs i got a valuable feedback from Mr. Manish Chauhan. He gave me a code number and said that put this in the subject matter and send this email to [email protected]. I did the same thing and after 3 days i got a reply to that email mentioning that the amount has been debited on your account. I felt like my feets were not on the earth. I was relaxed and happy.

What should i say about this guy. I am very thankful to him.
I would like to inform you all that beware of such kind of theft and use of credit card has to be limited.

 What you can learn from this?

This post was to show you that one should reach some key people in the company and then communicate the issue to them. Just talking to customer care wont help. Reach to CEO, MD directly, mail them and expect some help. Leave messages on twitter or facebook pages of these companies. At times it works. However I am not saying that this will always work, but nothing to lose if you try!

 

How to Check EPF Balance online ?

Posted on by Jagoinvestor

A lot of us do not have even an idea on how much money we have in our Employee Providend fund account (EPF) and how to check EPF Balance online or offline. So in this post we will see how one can check his EPF balance online and get the details back through sms . Earlier I used to search a lot on checking EPF balance online and I came across some links , but most of them never worked. But few months back I successfully got sms with my EPF balance status. Let me show you that.

How to check your EPF balance online ?

  • Go to this EPFO website link
  • There will be a link below the page to check your EPF account balance status online , click on that (direct link)
  • You will see a drop down there to select the PF Office State ( like Maharashtra, Karnataka , Delhi etc) . Select your PF office .
  • Once you select the State , you will see a list of different cities office, like for Karnataka , you can see one of the options as “Bangalore” along with the “data available upto” date , so you can get your PF balance till that date only .
  • Choose the city office
  • You will be taken to the page where you will have to fill in EPF account number , Your Name and mobile number and Submit.

How to enter your EPF account detail ?

For an example lets say Manish Chauhan worked in Bangalore and had a  Employee Providend Fund account with number KN/62345/876 . This name “Manish Chauhan” is the name appearing in EPF slip .

In that case 62345 will be the Establishment Code (which will be first blank column) and 876 will be the account number (third column) . The second column will be blank in most of the cases , it’s actually the sub code or extension of the establishment code.

EPF balance Online

 Important Points

  • Note that the name should be exactly same as it appears in EPF slip
  • The office and state have to be selected properly , In a single start there can be many offices , make sure you choose the right one.
  • The SMS can come a little late , so please be patient
  • The amount can be only upto a certain date which will be mentioned in the SMS

Can you share if you have are waiting for your EPF money from long time ? Are you facing problem in getting right information on why your EPF money has not reached you ? Were you successful in the enquiry of EPF Balance online ?