Most of the people have some or the other bad habit. Either people smoke, have a habit of drinking tea or coffee multiple times a day, habit of eating food outside or any other habit which leads to ill effects on their health.

Minimum Cost of 1 branded cigarette is Rs. 10 and the same cost is that of a cup of tea if drank on roadside tea stall. A samosa would cost Rs. 10. If we analyse our daily habits we spend around Rs. 60-100 behind such harmful habits which leads to long term problems like Cancer, acidity, obesity and much more.

Did you know that a mere saving of Rs. 30/day can accumulate Rs. 4,25,000 and get a life cover worth Rs. 11,00,000? Let us convert our bad habits to health and wealth. Let us reduce spending on such hazards and invest for the best of ourselves and our family members.

At Baxi Investment we are celebrating Convert Habit into Health and Wealth month from September 1^st to September 30^th. If you have any such bad habit or if someone known to you has a bad habit and would like to quit it, contact us. It is for us to choose between Habit or Health & Wealth.

Please share this and let people join hands towards creating a Healthy and Wealthy Society.

Baxi Investment

Your Guide to Financial Well-Being

The major problem that most of the clients throw at me is, we cant save! This question is asked by the one earning Rs. 10,000/month and even the one earning Rs. 80,000/month. So if we think about it, it is not that we can not save. It is like we do not know how to save or rather we do not wish to save.

If you google the question, How to save? You will have thousands of advise about how to save and invest. Mark my words, those are useless unless you implement them. If you want to save, just read and follow the below line.

Start a monthly investment deduction from your bank account of 5% of your salary or average monthly income.

Yes, just start investing 5% of monthly income in the investment option you are comfortable with. Be it SIP, PPF, post office savings deposit, Bank recurring deposit or an insurance policy. JUST START IT. Do not think much. If you want to start right, contact us and we will give you the right option.

Remember better late than never. Friends mark my words, 5% deduction will not impact your monthly budget unless you are paying housing loans.

Baxi Investment,

Hardik Baxi.

+91-7990290560

It was indeed a matter of joy for the public and especially those earning about Rs. 5,00,000/year as their income was tax free from assessment year 2020-2021. Today I wish to review the ill effects of this joy over long term.

Talking to most of clients in the income range of below Rs. 5,00,000, they are no longer interested in investments. Why? Because now they do not need to pay tax. Dear reader, tax benefit through investment is an added advantage and not the sole purpose of investment. We invest for achieving our future goals and with tax benefit we achieve them faster. Increase in income tax limit does not mean there is no need to invest under tax saving options. Rather it means now we have more Rs. 15,000 for investment.

Remember we invest for our goals like Retirement, Children’s education, Foreign trip and much more. We don’t just invest to save tax. So please change your perception and continue with the on-going investment programme.

For guidance on impact of new tax slabs and their impact on your future investments call us on +91-7990290560.

Hardik Baxi

Baxi Investment.

Raksha Bandhan is a very old festival which has its details even in the Bhavishya Purana during the 5^th century. On this day siblings exchange Rakhi with some gift. While tying Rakhi the sister prays and wishes a good life for brother while the brother promises her with love, protection and happiness.

In todays’ world when nobody has time these promises are fast losing their importance. None of the siblings have time to fulfil their promises as they are more entangled in their life and social media. Usually when it comes to gifting, we think of Sweets & Chocolates accompanied by a brand new Mobile Phone or a new Vehicle, or online shopping vouchers. These are traditional gifting ideas exchanged with words of promises and wishes.

Think over now, the sibling will spend whole day with gift living the other one alone, than starts monthly recharge, more time spent on social media, increasing petrol costs and maintenance, purchase of stuff not needed as time limit to use a voucher is there. These gifts may make siblings happy for a day or a week but they are ultimately going to consume time and money going ahead which is not healthy mentally, physically or financially.

If on this Raksha Bandhan you really wish for a better life and safety of your sibling gift them with an Insurance cover for life or an Insurance cover for Health or a Mutual Fund or an SIP of mutual funds. These innovative gifting ideas are actions towards fulfilment of promises and wishes of happiness and safety.

Dear readers traditional gifts are mere actions which do not support words while innovative ideas of Insurance, SIP or Mutual Funds are Actions which will fulfil your promises and wishes to your sibling.

Wishing all of you a Very Happy Raksha Bandhan.

  Hardik Baxi,

Baxi Investment

Hello readers,

One question which most of my clients ask me is whether to invest in Equities or Mutual Funds? Well exactly we ourselves can answer the question as we ourselves and our pattern of thinking decide which one is right for us. Many of business minded people have ability to spot correct stocks which everyone does not have. See your portfolio, market is hitting new highs, are your stocks hitting new highs? Most of 100% equity oriented mutual funds have NAV at new life high. So if your portfolio is hitting new highs with market, you have ability to spot stocks and one must invest in direct equities. But if your portfolio is not hitting new highs with the market, invest in equity oriented mutual funds.

OR

JUST CALL US @ +91-7990290560 AND WE WILL DO THE REST FOR YOU

Yes you read it correct. There is nothing available online about relation between savings and losing weight. Recently I have started my diet program with a target to lose 10 kgs by consuming 1500 calories a day. This intake is my budget. If a consume more calories I have to workout and burn excess calories. While implementing my routine I realised something which I would like to share.

Our lives are full of temptations. The moment we get up we are tempted to use a good soap, good toothpaste, wear good apparels, have a good vehicle and what not. Same is with our eating habits. We want to eat best food in town at best restaurant. Remember that usually food that tastes good is high in calories. Consuming limited calories is like following a budget. While talking to most of the clients I realised that no one follows a budget, if one does not have a budget one can not save well. So if you want to save, have a budget. A budget not targeting how much can we spend but how much can we save.

The markets fell by about 4% in past 6 trading sessions. I received numerous calls from clients about their eroding wealth and profits turning into losses. Dear readers, when we plant a seed it needs continuous watering. In summer especially when it is very hot we need to water them the most. We need to fertilise them and nurture them. Same is with investment. When markets are down, be aggressive and go long , invest more. If you will not invest more, you will never benefit from averaging. So next time market falls, please call for investing more and do not worry. Remember, Bull markets will survive till the end of world. 

I had a question from one of my client regarding housing loan. He wanted to opt for a housing loan without making any changes in his existing investments and his insurance. After almost an hour of discussion he requested me to write an article for others to understand the relationship between Loan and Insurance.

Dear friends, loan is a liability while insurance is an asset. One may even call it a contingent asset. When we take a loan we create a liability and an asset (That is what we think). If we take loan for a vehicle it can be called an asset but asset depreciates fast and involves running cost. When we talk about property it again has high maintenance cost plus it will transfer in your name once the entire loan is repaid. So when we take a loan, we are creating a liability. To balance this liability we must create an asset. That asset is insurance.

Think of a housing loan whose installments are due and consequences that the family will have to face in your absence. Will your family recover from mental trauma, financial loss in the form of lost income, and loss of house due to inability to pay installments? For all those who have outstanding housing loan please upgrade your insurance. The amount must be such that its interest can cover the installment amount. This insurance must be over and above an insurance 3 times your yearly income.

Dear friends change your perception towards genuine insurance planners and agents. They are not to just sell insurance but they are there to provide you right advice so that you and your family live a constant standard of living under whatsoever conditions.

If you are paying a loan or planning to take a loan; and are not insured, contact us today. Special plans are available for such individuals.

Hardik Baxi,

Baxi Investment

What is Systematic Withdrawal Plan (SWP)?​

Systematic Withdrawal Plan is used to redeem your investment from a mutual fund scheme in a phased manner. Unlike lump sum withdrawals, SWP enables you to withdraw money in installments. It can be viewed as an opposite of SIP. In SIP, you channelize your bank account savings into the preferred mutual fund scheme. Whereas in SWP, you channelize your investments from the scheme to the savings bank account. It is one of the strategies to deal with market fluctuations.

With the Systematic Withdrawal Plan, you can customize the cash flow as per your requirement. You can choose to either withdraw just the capital gains on your investment or a fixed amount. This way you will not only have your money still invested in the scheme, but you will also be able to access regular income and returns. The money that you withdraw can be used to reinvest in some other fund or can be retained by you in the form of cash.

How to Set up an SWP?

You need to fill up an SWP form and submit it at the office of the AMC (fund house) concerned. You have to specify the SWP amount and duration of the SWP in the form. If you have opened an online account with an aggregator, you may be able to set up the SWP by filling up an online form instead. If your bank account is registered with the mutual fund, your SWP amount will directly be remitted into your bank account through ECS (Electronic Clearing Service).

There are two options for a Systematic Withdrawal Plan (SWP):

• Fixed Periodic Withdrawal

A fixed periodic withdrawal allows the unitholder to withdraw a fixed sum on regular intervals, say monthly. The mutual fund house will sell units equivalent to the SWP amount and transfer the amount to the investor’s account.

• Appreciation Withdrawal

In the appreciation withdrawal method, mutual fund units holder makes the choice to withdraw capital appreciation on his fund at a fixed frequency. Suppose an individual has invested Rs. 10 lakh in a mutual fund which generates returns at an average of 1.5% per month. If the investor picks up a monthly SWP plan under appreciation withdrawal, about Rs. 15,000 per month would be credited to his account.

While in the fixed withdrawal plan, the corpus may deplete over a period of time, there is no such possibility in the appreciation withdrawal plan as only capital appreciation gets transferred in the form of an SWP.

Example: Click to see real life example

In the month of April I got a phone call from one of my friends informing me about accidental death of one of our childhood friends. For some time I could not believe my ears and my mind went totally blank. How could this be? I had seen him a week back with his family.

I rushed to meet his parents and his wife. His children are too small, the eldest being 11 years old. My friend had 5 kids and wife is not that educated to work and earn outside either.

I started talking about how uncertain life is and before I could express my sympathy and grief his father interrupted me. With an angry tone he told me “તે મરતો ગયો ને મારતો ગયો”, meaning he killed us all by dying. His father is earning Rs. 5000 a month and he is 65+ with additional responsibility of 5 kids and his daughter-in-law. His wife was viewing the scene unable to defend her husband who did not even have Rs. 20,000 in his bank account.

Dear readers it may seem to be a story but you cannot imagine the condition of the family. Rather than being grieved, the family was angry.

This situation has arisen because of lack of financial planning. Had my friend planned his finances he would have just 1 or 2 children and would be insured for medical requirements as well as death.

Financial planning may seem to be least important and may find last place in our to-do list but it is of prime importance. Remember, we want to make our loved ones smile in our presence than why not even in case of our absence?

Most of us visit our family doctors as we trust them the most. But what happens when the doctor prescribes us a wrong medicine? It gives us unwanted outcome in the form of side effects and uncured ailment. What do we do next? We again talk to him about new problems and he changes the medicine. But what if your doctor insisted that he is correct and he knows what you need?

Same thing happens with our investment advisers. They have knowledge of few investment options and a few mutual funds, they will prescribe you with some instrument based on their limited knowledge which will not suit you. On complaining about side effects they make you understand something or the other. Do you feel same thing has happened to you or is happening with you?

If your adviser does not know you he must ask details about your education, current sources of income, family background, assets owned, investments made, family members, dependants, and much more. Your investment objectives and constraints will serve as major guidelines to select the investment option.

Has your adviser ever asked these things to you if he does not know your background? If the answer is no, it means you will always get a wrong medicine and you will always suffer from some or the other side effects of wrong investment.

If you have experienced the above or want to get a health check of your investments feel free to call and fix a meeting.

Feel free to call on +91-7990290560

Mr. Hardik Baxi,

Baxi Investment

BJP led NDA is all set to form the next Government with a comfortable majority and Narendra Modi will have at least one more term as the Prime Minister. The Nifty after trading sideways in 2018, shot up 10% in the pre-election rally in anticipation of Modi win and after a bout of volatility during the last 2 phases of polling, reached its all time high after exit polls. The stage is set for a longer term secular bull trend in the stock market. For long term investors in India, this is a great time to invest in equity.

Long term secular bull market in India

Over the past 20 years, second term for incumbent Governments has resulted in strong returns for equity investors. NDA and UPA wins in 1999 and 2009 respectively saw the stock market surging in both instances – with Modi’s victory we can expect the same this time. Investors both foreign and domestic want stable Governments so that they have clarity on fiscal policy. The Modi Government in its previous term had initiated some important structural reforms in the economy like, GST implementation, Insolvency and Bankruptcy code, Real Estate Act, diesel price deregulation, opening more sectors to FDI etc. A stable NDA Government will ensure continuity of these reforms and also pave the way for other important structural reforms that will strengthen the Indian economy.

The Sensex and Nifty are within touching distance of 40,000 and 12,000 respectively. Both are important psychological levels and the market is set to scale newer highs in the future. While bullish sentiments sweeping through the market now will provide momentum to the leading indices, questions will be asked about over-heating valuations in the coming months; Nifty P/E ratio is now at the higher end of its historical range. Corporate earnings growth will have to sustain the near term rally. Corporate earnings growth has shown clear signs of revival over the past few quarters and should now show more robustness for the rally to sustain. Most fund managers that we have interviewed are bullish about robust earnings growth in the coming quarters.

Great investment opportunities in midcap and small cap

While the focus over the last few days has been on Sensex and Nifty because they make the headlines, a deeper look at the broader market reveals great investment opportunities. 2018 was a difficult year for midcap and small cap segments of the equity market. The Nifty Midcap 100 index fell 16%, while the Nifty Small Cap index fell 30%. Midcap and small cap equity mutual funds were among the worst performers in 2018.

However, the sharp decline in price has made midcap and small cap stocks attractive again. The valuation premium at which Nifty Midcap 100 was trading versus the Nifty has now disappeared. Some reports suggest that Nifty Midcap 100 is at a valuation discount in terms of forward P/E. The valuation premium, at which Nifty Small Cap 100 was trading versus the Nifty in 2017, in fact now has turned into valuation discount.

Both Nifty Midcap 100 and Small Cap 100 Index have risen around 9% from mid February levels, despite high volatility over the past 1 month. This clearly shows that investor confidence is returning in midcap and small cap stocks.Midcap stocks outperformed large cap stocks in the previous term of the Modi Government. Nifty Midcap 150 TRI gave 14.6% CAGR returns compared to Nifty 50 TRI’s 11.5% CAGR returns. A second term for Modi is great news for midcap and small cap stocks and mutual funds.

Many of the reforms initiated and implemented by the Modi Government benefited midcap and small cap stocks the most. One of the most important aspects of the reforms of the previous Government was that they are aimed at transforming the quality of our economic growth, e.g. tax simplification, bringing people into the formal economy, digitization, infrastructure etc. Most of these reforms are aimed at boosting domestic consumption and capital expenditure which will boost earnings of midcap and small cap companies. Some of these reforms take longer time to yield economic benefits, but we can expect to see the benefits of many structural reforms during the second term of the Modi Government. Retail investor sentiments in midcap and small cap mutual funds took a severe hit last year, but we think that this is a great time to invest in midcap and small cap mutual funds.

Conclusion

The last 5 year period was great for equity mutual fund investors. Across different market conditions, different diversified equity mutual fund categories generated on average 12 – 15% CAGR returns (source: Advisorkhoj MF Research), outperforming fixed income and gold by a huge margin. 2018 was difficult year for many mutual fund investors, but the trend over the last 3 months is encouraging and the election results today reinforced the positive trend. This is a good time to tactically increase your asset allocation to equity. However, as stated multiple times in our blog, you should keep your risk appetite in mind when investing and consult a financial advisor.

Consult us today,

Hardik Baxi

Baxi Investment

+91-7990290560

Few of my clients were planning for vacation. On asking them about financial resources for vacation they proudly said “Credit Cards”. Credit cards have made financing each need so easy that now we are habituated to converting our each need into EMI. This may seem a fair deal as we do not have to wait for long, but on the other side one is paying 14-18% interest on the amount borrowed.

If you are looking for a vacation without debt, plan in advance. Make use of time value of money calculators. Prepare a vacation budget for next year and start SIP for 12 months in debt funds or liquid funds with guaranteed returns. On completion of SIP withdraw the money and enjoy your holidays.

This will bring financial discipline, bring down interest cost to zero and avoid sudden cash outflow. Remember to start SIP for every need making use of time value of money calculators.

To learn how to use such calculators for free, contact us today.

Hardik Baxi

Baxi Investment

Disability Insurance in India: How to get it!

Let’s learn what disability insurance is and how to be insured for disability.

Insuring one’s ability to keep earning livelihood is of paramount importance. Accidental disability can render anyone temporarily or permanently disabled for life. This is why we all look for an insurance policy for disability. However, getting disability insurance in India is not a straightforward task. In fact there are no separate insurance policies available especially to cater for the events of disability. So, many people wonder how to get such an insurance policy. Today I am going to write a few facts on this subject.

What is Disability Insurance?

Disability insurance is also known as disability income insurance. It is an insurance policy that covers a person for disability conditions in future. Disability due to accidents and diseases can strike anyone at any time. Such an event may adversely impact one’s ability to earn. A disability insurance policy ensures that if such an event happens, the insured person would get financial assistance. The money got from disability insurance can come handy for treatment and to provide for the dependent family members.

A lot of people do not understand the importance of getting a good disability insurance. People make all sorts of investments but they hardly invest a portion of their income in securing their future against permanent or temporary disabilities.

Depending on the nature of disability, the insurance can provide short-term disability benefits or long-term disability benefits.

How to Get Disability Insurance in India?

As I said earlier, there are no separate insurance policies available for protection against disability. But various Life Insurance and Term Insurance plans come with disability and accident riders. A rider is an add-on for which you will have to pay extra premium. If you opt for disability rider in your insurance plan — then you will receive benefits in case of a disability. Some plans offer benefits only in case of permanent disability whereas some other offer benefits for temporary disability as well.

Disability Insurance often Corresponds to Monthly Income

Yes, the disability rider corresponds to monthly income. One can get an amount equal to their income for a period of 10 years every month. The main advantage of this rider is that disability arising after 180 days of accident is also covered. So even if you get disability later on, you are covered. However the insurance company must be informed as soon as the disability occurs (Standard time is 90 days).

Premium waiver for life insurance policy

Another advantage of LIC disability rider is that post disability the insured does not have to pay any premium for his life insurance policy. The policy continues with all benefits for free.

How LIC defines benefits under disability rider:

In case of Total and Permanent disability arising due to accident an amount equal to accident benefit sum assured will be payable over a period of 10 years in monthly instalments. However, the payment of accident benefit will be subject to an overall limit of Rs.25 lakh under all policies of the Life Assured with the Corporation taken together.

The disability due to accident should be total and such that the Life Assured is unable to carry out any work to earn a living. Following disabilities due to accident are also covered -

a) irrevocable loss of the entire sight of both eyes or
b) amputation of both hands at or above the wrists or
c) amputation of both feet at or above ankles, or
d) amputation of one hand at or above the wrist and one foot at or above the ankle. 

Contact us today for securing your future income @ +91-7990290560