AVFINPAL- Your Financial Pal

A few months ago, I met a mid-aged man at a family gathering. After having spoken for a while, he confided in me that he would never in his life, waste his money on making investments, even in blue-chip stocks. Trust, me when I say I don't blame him for this notion against the equity investment as indeed equities can be brutal to your financial health if it isn't with proper thought, planning and guidance.  After having a brief discussion with him, I thought to myself that he must definitely be a conservative investor. Cut to a few weeks later when I met approached me for consultation, he very enthusiastically informed me that he had recently experienced a windfall of Rs. 50 Lakh from the sale of a late grandparent’s property.  However, most of that amount had already dwindled down, courtesy of investments in penny stocks, on an exciting holiday to the Maldives and rather surprisingly, on horse race betting. When I commented on the unlikeliness of this occurring the last tim...

The reality of retirement planning isn’t as dramatic as it sounds. It is, in fact, easier if you start early because you never know what befalls in the future. So where do you get started? What could you possibly do effortlessly to save for your post-retirement days and not depend on other family members?  Well, We have talked about retirement planning many times before so in this post, we won't be taking up the details regarding retirement planning. In this article, we are going to be discussing one of the most famous and most ignored retirement planning instruments NPS. Yes, you have read that right I used two contradict words in the last line but apparently, it is true. NPS has become one of the most talked-about and famous investments and retirement tools. Yet a lot of us don't know what it is actually about. Hopefully, by the end of this article, you would be at least able to judge if you took the right decision by investing or ignoring the NPS. But before we start underst...

When I first learned about investing, I thought you could only buy individual company stocks or bank instruments. Subsequently and in an interesting way in my childhood, I was introduced to this new asset class altogether which was paying me a certain amount (higher than bank FDs)  periodically and was much more secured than equities.  Yes, you might have guessed it by now I am talking about "Bonds". Several times during my childhood, my grandparents decided to give me government bonds as part of my birthday present and  I was inquisitive to know more about it but my curiosity was killed by telling me it isn't a thing for kids.  At the time, I definitely didn’t understand what the phrase "face value" or "YTM" or "Cupon" meant or why I couldn’t use these official-looking pieces of paper.  I guess more video games and clothes could be a better option back then.  Cut to few years, as the value of those decades-old bonds has matured, I started re...

Being a millennial has its virtues and shortcomings, but more often than not, millennials are considered to be financially indisciplined, frittering away their money on avocado toasts and lattes. Recently, one of my clients brought his son to me for a session on personal finances and investments. The main concern of the father-son duo was that they weren't able to figure out where all the salary is going and how can he be more prudent towards his finances. While having a discussion with him I realized that the issues he has been facing are common among the young professional and the main problem was lack of financial literacy and the segregation and consensus of the young generation's mindset from their parents.  So in this article, we will be discussing the aspects of finances that every young professional should consider to manage their finances in a more responsible manner (as their father would want them to). 1. Pay Yourself First:  Before you get on to pay the vendors for...

People think of the investors as people who find out a lot of ways to get success: sometimes by picking up individual stocks in the share market, sometimes by choosing on to the best of the mutual funds available and few do it in some other ways too. The art of investment to create wealth and accomplish long-term objectives has been recognized time and again. But not everyone avails full advantage of it. What distinguishes the most prosperous investors from the rest are HABITS. Well, it is quite appropriately said by someone that there are a lot many ways to do something, and the same philosophy applies among investors as well. When we see the lives of some successful investors, we would always come across some similarities in all of them and that is what we are going to talk about in this article further on. Contrary to popular belief, successful investing is not about “timing” the market or choosing the “best” funds. In fact, truth be told, the perfect market entry or exit time is qu...

It started with the default of Infrastructure Leasing & Financial Services (IL&FS), signs of trouble emerged in June 2018 when behemoth financial conglomerate defaulted on inter-corporate deposits and commercial papers (borrowings) worth about Rs 450 crore.  Following the traces of the event, the credit rating of the company was downgraded to "D" in September 2018.  This downgrade triggered the whole chain of defaults and downgrades in the fixed income segment. This led the regulator to tighten its norm and be on its toes to proactively look for any loose gaps in the ethics and functionality of the corporates.  After the IL&FS many major corporates, some of those who were even the market leader in their industry followed the trails. One such example was DHFL which caused significant pain to debt mutual funds.  Since 2018, there have been several other entities bearing the same fate. However, we won't be covering all of them as the point of concern he...

Gratuity is given by the employer to an employee for the services rendered by him. It is usually paid at the time of retirement but it can be paid before provided certain conditions are met.  As per Sec 10 (10) of the Income Tax Act, gratuity is paid when an employee completes 5 by him. It is usually paid at the time of retirement but it can be paid before provided certain conditions are met.  or more years of full-time service with the employer(minimum 240 days a year). However, it can be paid before the completion of five years at the death of an employee or if he has become disabled due to accident or disease Gratuity is a statutory benefit – employers are required to pay a lump sum benefit to their employees who have served for at least five years. The lumpsum is generally calculated as 15 days of eligible salary for each year of service. Unlike certain other benefits like salaries, bonuses and life insurance, an employee receives gratuity only at the exit from the c...