My Grandson Roshen

 

Joint Accounts.

   One of the wisest things we have to do is, that whenever we open an account we should open it in a joint name, that is to say in the name of yourself and your wife or your mother etc.

   This will avoid the problems that may arise in some tragic event.  We should also inform our partner about the joint account.  

   But there are some salient features while investing.

1. Never trust anyone including close relatives, as they may be change their color at any times.

2. Never give the amount or bank challan or ask any unknown persons like helper to visit the bank.  The transactions must be  do it yourself exercises.

3. Do not boast about yourself.  Everyone know about ourself only through us.  Not through other means.  Keep shut about yourself.

4. Do not keep all the eggs in one basket.  Have several banks, several means to invest.

Pension plan.

Many of the Government servants think that they can get pension, a decent sum, and therefore there will not be any problem once they attain 58 years.

Sorry. You are totally wrong. At the time of retirement your pension and other benefits are merely pittance compared to, to-day's life style.

If it is a decade earlier, it may be true. But in this day, it is far from true.

So if you are not prudent enough to save for the rainy day, you will be in tantrums.

Forget about the government pension. Let it come, we will make other pension plans right from today.

All the government institutions offer pension plan. You have to invest regularly like 2500 or 5000 in the pension plan account, which is available in all the banks. Visit several banks, have the brochures, think for yourself and invest in one of the banks or other government institutions.

If you invest regularly, you will be starting to get minimum 10000/- from the month of your retirement age. You will be getting the pension till your life time.You need not invest any money after 58 years. You will be only getting money. Depending on your investment today you may get pension even 25000 per month or more.

Now in India, the life expectancy is 85 years. It may increase to 90 years in a decade. So even if you retire around 60 years you have to spend for another 30 years where as in the remaining 30 years after retirement we have to spend, and there is no chance to earn.

So invest in a pension plan.

Insurance.

One of the finest instruments of savings is Insurance.

There are several types of insurance.

1. Life insurance

2. Medical insurance

3. Wealth insurance

Life insurance means your life is insured for a certain sum, in case, touchwood, if any things happens to the insured, the company pays the total sum to the nominee. This requires quarterly, half yearly or monthly premium to be paid. Depending on your age you can take insurance for 10 lacs, or 25 lacs.

Medical insurance caters to your unexpected ailments. You can have medical insurance for yourself, your wife, your kids etc. Though Government servants are covered by Star Insurance, this is an another type of insurance which requires premium and which take care of us in cases of sudden illness.

P P F and G P F

One of the finest savings instrument that is safe, best and profitable is public provident fund and general provident fund.

You may be subscribing to GPF. You must increase the subscription to 25% of your gross income per month. Suppose if you receive 20000 as gross salary increase your subscription to 5000 per mensem. Increase it by 1000 every two years. So if you are 30 years now and if you start saving in G F as told above, you will be getting not less than 35 to 40 lakhs while you quit service. If you are shrewed you should be following the reinvesting theory. As and when your GPF subscription reaches five lacs please withdraw 50% and reinvest in an instrument which gives more than 8% interest like LIC money plus, Birla's scheme, or TATA AIG Insurance which are as safe as Government instruments.

By this you not only repay your GPF loan but also you save a portion of this.

Go to any main post office and obtain a ppf form, public provident fund scheme pay a decent sum as subscription, make monthly payment and you can get a sizable return while you retire.

The Eighth Wonder.

You know what is the 8th wonder of the world?

It is the power of computing. In other words it is the compound interest that banks and financial institutions pay to us when we invest money with them.

For eg. if you are 25 years and if you start investing Rs.1000/- per mensem, at the age of 55 you will get Rs.30.8 lakhs.

On the other hand if you are 35 years and if you start now, your net return at your 55th year will be Rs.9.19 lakh.

So the power of computing is the eighth wonder of the world.

We have to evolve a S I P a systematic investment plan. One such plan is put some money in a R D account in a bank or post office. R D means recurring deposit.

We can make a minimum investment of Rs.l000/- for a period of five years or ten years .

We can instruct the bank where we receive our salary to credit the amount from your salary every month, to a R D account . It will help you to avoid the monthly visit to the bank. The bank will automatically debit the sum from your salary.

Or we can have two or three RD accounts in the name of wife, son or daughter according to our earning and saving capacity. It will have more useful results.

What to do after the RD matures? Convert it as Fixed deposit . So if you are in your 30th year and you invest in RD continuously up to your retirement, you will receive your maturity in your 35th year, 40th year, 45th year, 50th year and your 55th year. So you will have five FD accounts at your ripe age.

Continuous flow of drops of water will fill the bucket very quickly.

For some obvious reasons some people might forget to withdraw their salary in banks every month. Never do that. This is a dangerous thing. Whether you need the money or not, we should withdraw the money immediately and we may reinvest in something . It will avoid lot of problems in the long run.

Gold - A real boon for middle income group

Most of the Government servants come within the category of middle income groups. It means that our income and expenses account tally and left with meagre amount to save.

But we have to save for the rainy day. Now it is estimated that in an average people live up to 85 long years. The life expectancy has increased sharply. So after a certain period our flow will totally stopped. Then we have to live only on the source that is with us.

One of the best form of investments is Gold. Yes. But we need not invest in the form of ornaments. We may have the option of investing in the form of coins which are available with the jewellery shops.

Count your period up to retirement. If you are in the middle of your 30s then you will have another 25 years of service. 25 years means 300 months. From this month onwards if you can buy one or two grams of coin according to your saving capacity, then you will have around 500 grams. This computation is made with the hope that in some months you may be able to buy, or not , you may be able to increase the volume of total grams you are investing.

After 25 years 500 grams means multiply it with 12000. That is what the financial planners hope for the price of gram of gold in 25 years. You will have a fortune in your hand.

There are various forms of investing. Gold is one such thing. Wait for some more interesting thing tomorrow.