Archive for the ‘ Wealth Accumulation ’ Category

Sandwich Generation & their Finances

Thursday, May 7th, 2015

Sandwich Generation is the term used for people who care for their aging parents while supporting their own children.

India is known for it’s family values since ages, when an Indian speaks of family he does not limit it’s meaning to spouses and children. The Circle of Care in Indian families embraces all generations.

With Increase in Life expectancy and a generation of young adults struggling for financial independence the burden and responsibilities shift to the Middle Aged who still have to build their own retirement nest.

The phenomenon is not new, but the dynamics have changed considerably, families are smaller than they once were, so there might be fewer siblings to share the burden and with more women in the workforce having the extra responsibility of yet another person to care for squeezes their time which also leads to extra burden on the couple.

http://pamperyourmind.com/wp-content/uploads/2014/10/san-gen-family.jpg

How should you Plan ?

As you have two sets of dependents leaning on your financial house, be sure it’s strong and sturdy.

  • Maintain a Decent Contingency/ Emergency Cash Reserve
  • Take appropriate Insurance covers for yourself – Protecting your family from the risk of your disability or death is more important than ever.
  • Take sufficient cover for long term health for yourself and your family – Proper Insurance coverage will reduce your burden financially in case of any eventuality
  • Do not belittle the importance of your own Retirement Planning, continue with your savings – If at all possible, don’t use your retirement savings—whether through loans or early withdrawals—to support your kids or parents. Withdrawing from your retirement funds could leave you inadequately prepared for retirement and force your children to support you financially. You should break the cycle.
  • For Eduction Cost of your child opt for Education Loan

How to deal with both sides ?

Your Children : Your children are watching and learning from you. Have an open dialogue with them on importance of financial planning. Children raised with money management skills will be better prepared for their own financial success.Prepare a Financial plan and save accordingly for children education and marriage.

Your Parents : Know your parents’ total financial picture, help them in managing their funds. Help them in their Estate Planning. Take special care that they are safe, make necessary changes in the house required for the elderly. Devote some quality time.

Above all, be realistic about what you can do. Don’t expect too much of yourself, either emotionally, physically or financially.

Recommended Mutual Funds – Large Cap

Tuesday, February 18th, 2014

Equity is a powerful asset class that offers potential for long term wealth generation. However this potential is only realized for those investors that are able to maintain a diligent and disciplined approach towards it. The Investors should also select the schemes wisely wherein the fund managers are aligned in their long term approach to risk management and wealth creation.

Large Cap Equity Mutual Funds make a base for your equity portfolio and should weigh atleast 35-40% of your equity portfolio.

BIA Capital Recommends  following Large Cap Funds for your Mutual Fund Portfolio.

  Return as on 11-02-2014 (Returns above one year are CAGR) Ratios based on 3 years performance
Name of the Funds AUM (in crs.) as on 31-12-2013  YTD  1 month  3 month  1 year  3 year  5 years  10 year  Beta  Alpha  Sharpe Ratio
ICICI Prudential Focused Bluechip Equity Fund 4,705 -2.22% -0.75% 1.85% 7.48% 8.94% 22.36% - 0.85 0.34 0.451
Birla Sl Frontline Equity Fund 3,586 -3.32% -1.59% 1.86% 5.41% 8.25% 20.59% 17.90% 0.90 0.36 0.38
Axis Equity Fund 603 -4.38% -2.67% 0.23% 7.64% 8.85% - - 0.83 0.35 0.47
Franklin India Bluechip Fund 4,958 -3.35% -1.41% 1.07% 0.28% 5.45% 19.17% 15.97% 0.87 0.08 0.273
Edelweiss Diversified Growth Equity Top 100 Fund 22 -4.10% -2.29% 0.83% 7.62% 9.39% - - 0.82 0.35 0.464

A brief note on the recommended funds :

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It’s not that hard to be a millionaire..take the first step to wealth

Thursday, January 30th, 2014

Today’s article reminds of the following quote :

The First step is always the hardest, but it’s the only way to reach the second step. – Susan Gale

Being a Millionaire, a multi-millionaire or in the Indian Context being a Crorepati is always desirable. It is achievable too if you have disciplined savings approach.

Let’s analyse how one can achieve this wealth accumulation goal. As we know The First Step is always hardest – Accumulating the First Crore is hardest but later on the your savings have a multiplying effect.

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