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Top 10 Best Monthly Income Plan for Investment

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Monthly Income Plan for Investment
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In India people do not prefer Monthly Income Plan for Investment neither the plan is very popular. Well one thing that I want to share with you is that monthly income plan is the best alternative for fixed deposits. It is often seen that the investors get confused between the monthly income plan and monthly income scheme. Investors feel that both the investment options are identical but this is not the case.

Basic difference between Monthly Income Scheme and Monthly Income Plan for Investment:

S.NoMonthly Income Plan for InvestmentMonthly Income Scheme for Investment
1.It is a debt oriented mutual fund investment schemes.It is a post office investment schemes.
2.MIP offers you varied monthly income as the money is invested in equity and debt at an ratio of 20:80 respectively.MIS offers fixed monthly income at a interest rate of 8.5% annually
3.It doesn’t guarantees monthly income.It is offers you fixed monthly income.
4.It offers return of 14%* annually.It offers return of 8.5% annually.
5.The investor will have to pay 1% exit load if he/she withdraw money before 1 year.Lock in period is 1 year but if investor withdraw money before it then he/she will have to pay 1 to 2% penalty.
6.TDS is not applicable here.TDS is not applicable but tax is charged on the interest earned.
7.No limit on investment amount.For single account limit is of 4.5 lakhs while for joint account limit is 9 lakhs.
8.Ideal for risk averse investors.Ideal for investors who cannot afford risk.

What is Monthly Income Plan?

Monthly Income Plan is one of the debt oriented form of investment. It is a form of mutual funds which offers you monthly income in the form of the dividend payout. In monthly income plan for investment 80% of the money is invest in debt instruments like government securities, corporate bonds etc. While the rest 20% is invested in equity market.

The monthly income plan (MIP) is offered in two different variants are:

  1. Aggressive MIP Mutual Funds
  2. Conservative MIP Mutual Funds

1. Aggressive MIP Mutual Funds

It is type of MIP mutual fund in which 70% of the fund is invested in debt instrument. While remaining 30% is invested in equity. Such type of MIP offers high returns at high risk.

2. Conservative MIP Mutual Funds

In such type of MIP mutual fund 80% of fund is invested in debt instruments. However 20% is invested in equity. Such type of MIP is ideal for low risk takers. The returns offered by conservative MIP is lower than aggressive MIP.

Options for Monthly Income Plan Investors:

  1. MIP with Dividend Option
  2. MIP with Growth Option

1. MIP with Dividend Option

Such an option provide regular monthly income to its investors in the form of dividend. While investing money the investor needs to choose the dividend payout frequency like monthly, quarterly or yearly. It is an ideal form of those who are looking for monthly income plan for investment.

2. MIP with Growth Option

Such type of option offers its investor a chance for capital appreciation. So if you will select the growth option then you income will grow. You can even take benefit of the capital appreciation at the time of redeem these funds.

4 Shocking Facts To Why You Should Avoid Investment Guru

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Do you guess who is the person who can make simple and easy things complex? Well, let me tell you these are the investment gurus. There are lots of financial media channels that which not only broadcast financial news, but also provide views, advice and expert opinions on various investments. And we investor thinks that they are the god of stock market and knows everything. But we do not know this that their advice is not good for achieving our portfolio or financial goals. You should know which advice is useful for your portfolio and which is irrelevant. So, today in this article I am going to share with you why you should avoid investment guru as much as you can.

Why You Should Avoid Investment Guru

1. Avoid Advice that is not in compliance with your financial goals

There are lots of investment guru that you see in various finance channels. Some favors gold then some real estate. Do not ever follow their advice blindly. First check and study your investment portfolio properly. Then on the basis of that decide whether you want to invest on gold, equity or real estate. The rule is simple, if you follow your investment needs blindly without looking at your financial needs, you will end up in the losing side. It is possible that the advice is correct but does not suits your risk profile and investment time frame.

2. See whether investment guru advice is really objective or not?

An investment guru must be objective in his advice. But the investment guru whom you are following advice is actually objective or not. There is possibility that there decision biased or in self interest. Such type of advice is not for your best interest. So, if you are following such type of investment guru, then think again. This is one of the most important reason that why you should avoid Investment Guru.

Also Read>>> 10 Mistakes to Avoid When Investing In Share Market in India

3. Sometimes the forecast is one-sided

There are some experts that provides advice by analyzing only one of the side of the story. They forget the most important fact that every coin has two aspects. If an investment guru is not considering all the related factors that can impact the investment, then just avoid that investment guru. A good expert is one who not only analyse and provide conclusions but also share the future uncertainties with the investor.

4. Forecast is based on a single event

If an investment is providing advice just on the basis of current event or on the basis of a single event, then just avoid that investment and investment guru. This means that he has not looked at the different aspects of the investment decision. Such type of advice can damage your investment portfolio.

So, if you think that you do not know market and that’s why need to follow the investment gurus or experts for making your investment decision, then you are just a lazy person. If you are investing in market, then try to understand it and learn about it. We scared that if we will take any decision, it will end up in loss. Always remember that experts are not one of the Market Gods who knows everything.

Aaykar Setu App – An app by Income Tax Department of India

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Aaykar Setu App
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Aaykar Setu app is the latest app which was launched by Income Tax Department of India. Want to pay tax, apply for PAN, track your TDS, chat with the tax experts without going anywhere? As now all this is in your fingertips with Aaykar Setu app. This app is basically a new income tax payer e-service module. Due to which you can enjoy all this by sitting at your home.

Furthermore, the word Aaykar means Income Tax while Setu means bridge. Hence it is very clear from the name of the app that it will fill the gaps and build a bridge between the Income Tax department and taxpayers. Well Aaykar Setu does lot of things like applying for a PAN Card, payment of tax, conducts live chat with with the tax payers and lot more.

However, Aaykar Setu was launched by the Finance Minister of India Arun Jaitley in Delhi. The main purpose behind launching this android app was to provide better services to tax payer’s and also solve grievances of tax payers. The app is easily available on Google Playstore and you can also download Aaykar Setu apk file. Or you can give missed call on “7306525252”. Then you will receive an link with which you can download the app in your device.

Speaking on this occasion Arun Jaitley said that,”the app is having amazing interface and it will reduce physical interference between assessees and the tax assessing authorities. The finance minister specially focused on the efforts of government on improving tax payers services.

Aaykar Setu App Features:

1. Tax Tools

The comprises of several tax tools like calculators which you can use by feeding the required amount of information. It includes rent free accommodation, medical facility, transport allowance, income tax, education allowance, advance tax and TDS calculation.

2. TRP at your Doorstep

The Tax Return Preparer (TRP) feature can be located easily by using this feature. Aaykar Setu app will ask for your mobile number, email address and yes your name too.

3. Check Your TDS Statement

You can make use of this feature in order to check the status of your TDS. You can even fill form 16 and can even verify your TDS return.

4. Pay Tax

Use this feature in order to pay tax directly from the Aaykar Setu app. Furthermore you can even file for rectificaton of your tax credit mismatch, calculate tax, check your tax credit statement, correction and inquiry related to challan.

5. File Return

You can even file income tax return, download the ITR form, take assistance of Tax Return Preparer and also calculate tax.

6. Apply PAN/TAN

With this application you can even apply for PAN or TAN also can apply for re-issue of the card. You can even make correction on your card, can do verification of the card. Lastly can also link PAN card with Aadhaar card.

7. LIVE Chat

You have an option to chat with the income tax department officials. In case if you have any query then all your questions will be answered here. You can chat with the officials from Monday to Friday during office hours.

Step by Step Guide to Lock Unlock Aadhaar Card Online

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Lock Unlock Aadhaar Card Online
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Now in India Aadhaar Card has been made mandatory document. The usage of Aadhaar Card has been increasing day by day. Whether you are buying a sim or wants to continue a sim, open a bank account,  avail subsidiaries and so on you need Aadhaar Card. So it is very important to prevent misuse or fraud from your Aadhaar Card. Hence due to which it is very important that you know how to lock unlock Aadhaar Card Online.

The complete mechanism like how one can lock unlock Aadhaar Card has been provided by UIDAI. So when you will lock your Aadhaar Card then it will lock all the biometric details of the users. With the term biometric details I mean fingerprints, iris and photograph. Same will be the case when you wish to unlock your Aadhaar Card. Since while unlocking you will have to provide all the required details.

Step by Step Guide to Lock Unlock Aadhaar Card Online

How to Lock Aadhaar Card Online?

Step 1. Visit the UIDAI website. At the home page you will find Aadhaar Services where you will see Lock or Unlock Aadhaar Card option.

Step 2. Simply type your Aadhaar Card number and enter the security pin and then request for OTP. You will receive on your registered mobile number enter that OTP on the OTP field. Then click on the Login button.

Step 3. Type the security code and then click on the Enable button.

That’s it your Aadhaar Card will be locked. You will even receive a message on your screen which says that “Congratulation! Your Biometrics is Locked”.

How to Unlock Aadhaar Card Online?

Step 1. Visit the UIDAI website. At the home page you will find Aadhaar Services where you will see Lock or Unlock Aadhaar Card option.

Step 2. Simply type your Aadhaar Card number and enter the security pin and then request for OTP. You will receive on your registered mobile number enter that OTP on the OTP field. Then click on the Login button.

Step 3. After login you will be provided with two different options like Unlock and Disable. Simply enter the security code their and then click on the Unlock button.

Points to Remember:

  1. Lastly the locking unlocking Aadhaar Card can be done only via online medium. The offline platform for locking and unlocking Aadhaar Card is not available.
  2. You need to link your mobile number with the Aadhaar Card in order to avail this facility. Since you will receive an OTP on your device.
  3. Once you have locked your Aadhaar card then it will be unlocked for only 10 minutes.

What is Accounting Period Concept? Full Explanation with Example

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What is Accounting Period Concept?

The Accounting Period Concept states that accounting activities period should be divided into smaller intervals so that performance of the business can be measured. In order to report the performance of the business to outsiders, one year is the usual accounting period.

Most of the corporate has to provide annual report to the shareholders as well as income tax reporting on annual basis. In most of the businesses, the accounting year or fiscal year corresponds to the calendar year. But there are many businesses use the natural business year instead of the calendar year.

Interim Reports

Management needs information more often than once a year. Income statements for management are therefore prepared more frequently. The most common period is a month, but the period may be as short as a week or even a day.

Problems with Accounting Period Concept

Businesses are living, ongoing organisms. The act of chopping the continuous stream of business events into time periods is arbitrary. Since business activities do not stop or change significantly as one accounting period ends and another begins. This fact makes the problem of measuring income for an accounting period the most difficult problem in accounting.

Accounting Period Concept Example

Ram & Sons is running a garments business. As per going concern concept the business will run for indefinite period. So, as per accounting period concept, Ram & Sons prepare their accounts once in a year where the year starts on 1 April and ends on 31st March.

What are Bad Debts? Accounting Treatment of Bad Debts

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What are Bad Debts?

Bad Debts are the unrealized amounts from the customers that they never going to pay back to the business. The main source of the revenue in any business is the sale of goods or services to customers on credit. Such sales either involve payment in lump sum or in installments over the period of time.

This results in rise in the sales revenue as well as accounts receivable of the business. And when customers does not pay their obligations, this result in increasing the loss in these accounts.

Bad Debts Example

Suppose ABC company began the operations in 2010  and made sales of about 10,00,000, all on credit. Let’s assume, company does not receive any money from the customers. This results in accounts receivables of Rs. 10,00,000.

Accounts Receivable will appear on the assets side of balance sheet under current assets head. On the other hand, in income statement, it appears as sales revenue. But this will happen only when all the customers will pay off their bills. In reality, there are some customers who did not pay their bills. Hence, their accounts become bad accounts.

Case 1

Suppose a person makes a purchase with no intention of paying for it, so he does not pay it. In such case, an organisation has not made any sale. No revenue is earned and nothing was added to the accounts receivable account of the company. If you record this transaction, it will result in overstated of sales revenue and accounts receivables.

Case 2

There are some occasions when the customers really want to make payment but due to some reasons he was not able to do so. The treatment of bad debts is  same as in Case 1.

Accounting Treatment of Bad Debts

There are two methods to record the bad debts in the books of account. One way of making this adjustment is by the direct write – off method. Accounts that are believed to be uncollectible are simply erased from the records by subtracting bad debts amount from accounts receivable. Then the same amount appears as an expense in the income statement. The journal of this adjustment is as follows –

Bad Debts Expense A/c                Dr.

      To Accounts Receivable

Second way is the allowance method. In this method, accountant estimates the certain amount for uncollectibles. This amount appears as an expense in the income statement. On the other hand, in balance sheet, amount gets subtracted from accounts receivables. The adjusting entry is as follows –

Bad Debts A/c       Dr.

     To Allowance for Bad Debts

What are Marketable Securities? Accounting Treatment

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What are Marketable Securities?

These are short term securities that are easily convertible into cash within short period, mostly less than 1 year. If an entity has temporary excess of cash, rather than or in addition to investing it in certificates of deposit, the entity may invest it in marketable securities.

Types of Marketable Securities

There are several types of marketable secuities

  • Commercial Paper – A short term interest bearing promissory notes, mainly issued by large organisations having high credit ratings. They issue it to fulfill their cash requirements for the shortest time.
  • Treasury Bills – This is a instrument issued by government of India for short term borrowings. It is issued at discount and is redeemable at the par value.

Stock of companies as well as bonds of firm and government entities are also part of these securities, if they are marketable that is, they can be readily sold.

Accounting Treatment of Marketable Securities

GAAP set out explicit rules for the Balance Sheet valuation of marketable securities. GAAP classify these securities into three categories –

  • Held To Maturity Securities – These are the debt securities that the entity intends to hold to maturity. They appears on the Balance Sheet at cost.
  • Trading Securities – These are debt or equity securities that are held for current resale. They appears at the market value, with any unrealized gains or losses of the period included in the calculation of the period’s income.

The entry for the unrealized gain  is as follows –

Marketable Securities         Dr.

To Gain on Marketable Securities

  • Available for sale securities – This category of security involves those marketable securities which are neither debt nor securities. They also appear at their current value. But the gain is place directly under owner’s equity.

What is PayTm Digital Gold? – How to Buy or Sell PayTm Digital Gold?

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What is PayTm Digital Gold?
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What is Digital Gold?

Digital Gold is a way in which gold can be hold in digital form. Furthermore digital gold is allows its buyers to buy gold on just single click. Now in India digital gold can be purchased from your Paytm account. So Paytm Digital Gold is a platform from where you can buy digital gold in India.

Since Indian women simply love gold. However it is one of the most precious, auspicious purchase for special occasions like marriage, diwali etc. Women’s in India buy gold and include it as their part of investment. Since the price of gold keeps on increasing and their are several usage of gold.

Certain problems that buyer faces while buying gold in the traditional form:

  1. Biggest problem is that getting right price. If you would have visited jeweler’s nearby you would have noticed the fluctuation in price of gold in different shops. If the current price of gold is 2,780 per gram. Now if you will visit 2 or 3 jeweler’s then you will see that price that your local jeweler’s will offer you will vary from 2,800 per gram to 3,200 per gram.
  2. Problems with storing the gold. Several people keep gold at their house while other keep it in bank. Keeping your gold safe from theft becomes another headache for the buyer.
  3. It is very important to buy gold from a reliable buyer who can offer you pure gold. Since several jeweler’s mix different other elements in the gold. Because of which with time the gold color turns black.

All these problems will be solved if you will buy Digital Gold. As from here you will receive 100% pure gold at right price.

What is Paytm Digital Gold?

Paytm Digital Gold is an online platform from where buyers can buy 24 carat pure gold. Recently Paytm signed partnership with an international – accredited refinery MMTC PAMP. The main motive behind this partnership is it provide an online platform where buying of gold can be done.

Paytm Digital Gold platform provides basically two options to its buyers. In first option, the buyer can buy the gold and store it in there online account. While second option is that people can buy it as for delivery of gold at their house. The gold will be delivered in 1, 2, 5, 10, 20 g coins.

You can use your digital gold as a type of investment by trading on gold. Like you can buy digital gold from Paytm and then can later sell it. Since the price of gold keeps on fluctuating so one can enjoy the profit on this fluctuation. For example, you can buy gold when the price of gold is 2,600 per gram and then can sell it when the price of gold is at high. You can simply enjoy benefit on your investment.

How to Buy Digital Gold from Paytm?

Buying digital gold from Paytm is very easy. As you can buy gold from the Paytm official website or Paytm app.

Buying Paytm Digital Gold via Paytm Website-

  1. Simple open www.paytm.com.
  2. Then tap on the “Gold” option.
  3. Now select the option like buy gold in rupees or buy in gram. Click on the desired option.
  4. Then simply type your name and your address along with the pincode.
  5. Then you can proceed ahead for payment.

Buying Paytm Digital Gold via Paytm app-

  1. Firstly you need to download and install Paytm app.
  2. There you will find “digital gold” option click on it.
  3. Then click on the buy option. Select on option whether you wanna buy gold in rupees or in grams.
  4. Now provide delivery address along with pincode.
  5. Lastly proceed ahead for payment.

How to Sell Paytm Digital Gold?

If someone wants to sell his/her digital gold then he can do it buy simply following few steps. The seller will have to offer gold in rupees or in gram in Paytm. The customer’s gold account holdings should be higher than or equal to the offer made by the seller.

In addition to this, the seller will even have to provide his/her bank account along with the IFSC code in order to enable the selling of digital gold. The seller will have to pay the convince fees. Once the seller will pay the fees then the amount will be credited to his account. Lastly the gold holding’s will be debited from your gold account after sale of the gold.

Details about Gold Accumulation Plan in Paytm?

The gold accumulation plan of Paytm is unique in its own sense. This plan lets you accumulate gold on your paytm gold account with the value of Re. 1. One can buy or sell gold in the fraction of 1 gram and more. Also buying and selling can be done on 365 days of the year via Paytm.

How to Withdraw Gold from Paytm?

Withdrawal of gold from paytm wallet can be done. With the term withdrawal of gold we mean conversion of digital gold into physical gold.  You can withdraw gold either in 1 gram or in multiples of 1 gram. The steps involved in withdrawal of gold from paytm is similar to the way you buy gold from your local jeweler.

  1. Firstly, you will have to apply for withdrawal of gold from your gold account.
  2. A wide range of gold designs are available you will have to select in which design you need your gold coin.
  3. Let me tell you that different coins designed offered on Paytm website will have different making charges depending upon the design and weight of coin.
  4. Next you will have to additional charges for delivery of gold.
  5. Lastly you will get gold on your doorstep and you will get a confirmation on your registered mobile number.

How To Become Rich While Doing Your 9 to 5 Job?

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become rich while doing your 9 to 5 job
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Who are among the top richest persons in the world? All the businessman. In India, lots of billionaire lives and what is their profession? Well, they do business that have made them rich and wealthy. Do you have ever seen a person who is going on his 9 to 5 job and is rich? Hardly few. It is a real fact that you cannot become rich if you are working for someone else. It is also true that it’s not in everyone’s blood to start a business and become a successful and wealthy one.

Most of the people want steady income and job security so they remain happy in their 9 to 5 job. But if you are one of them who want steady income as well as become rich, then this article is just for you. Today in this article I am going to share with you how to become rich while doing your 9 to 5 job.

How To Become Rich Wile Doing a 9 to 5 Job?

Here are the 5 ways to become while doing a job.

1. Go for Stock Option

You can become rich while doing job by going for employee stock option. So, when you are searching for job, search those companies which offers employee stock option. Choose the stock option that can make you rich. But make sure that it doesn’t comes with some binding contract about work.

2. Join Limited Liability Partnership or become partner in some business

One of the best way to become rich while doing your 9 to 5 job is to join the Limited liability partnership. LLP firms share the profits not only with their partners also with the employees. So, search a good LLP company and get a partnership status there. Initially it will be difficult to get the partnership. Do hard work and prove your actions and take your boss in confidence that you really good and valuable asset for the company.

3. Start a side business

Another way to become rich is to start a side business while doing your job. Well, this is really need hard work, time and your complete dedication. Once you are back from your job, dedicate yourself in your side business. But you also need to make share that it does not result in conflict of interest with your company.

4. Do Invest Smartly

While doing your job, you can make investment in various investment avenues just like Warren Buffett and Rakesh Jhunjhunwala did. Select the asset class in which you want to invest. If you have confusion in deciding the asset class, make an appointment with a financial advisor and take advice from him. Always try to diversify your investment.

5. Take Control over others Business

You can also become rich by taking over the business of someone else. You can either make capital investment in the business or wait for the retirement of the owner. If you are lucky, you never know you will end up with an established business.

So, it is clearly seen that one can become rich even while doing his or regular job. All you need is a wise thinking, dedication and hard work.

 

Everything about Bharat 22 ETF by Government – Invest or Not?

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Government of India has recently launched Bharat 22 ETF. After the successful launch of CPSE ETF in January 2017, government has come up with Bharat 22 ETF. It is an exchange traded fund. The main purpose for launching this ETF is to encourage and boost up its disinvestment initiatives. Bharat 22 ETF reflect the performance of 22 companies in which government held the stakes and want to divest. This ETF will collect the money from the subscribers and will invest in these 22 stocks. In addition to this, it will also reflect the performance of the index.

Bharat 22 ETF will invest in top PSU’s as well as blue chip public and private companies in which government holds a stake through Specified Undertaking of the Unit Trust of India (SUUTI).

What stocks are part of Bharat 22 ETF?

1. Finance – 20.3%

  • State Bank of India – 8.6%
  • Axis Bank – 7.7%
  • Bank of Baroda – 1.4%
  • Rural Electrification Corporation – 1.3%
  • Power Finance Corporation – 1%
  • Indian Bank – 0.2%

2. FMCG – 15.2%

  • ITC – 15.2%

3. Basic Materials – 4.4%

  • National Aluminium Co. Ltd – 4.4%

4. Energy – 17.5%

  • ONGC Ltd – 5.3%
  • IOCL Ltd – 4.4%
  • Bharat Petroleum – 4.4%
  • Coal India Ltd – 3.3%

5. Utilities – 20%

  • Power Grid Corporation of India – 7.9%
  • NTPC Ltd – 6.7%
  • GAIL India Ltd – 3.7%
  • NHPC Ltd – 1.2%
  • NLC India Ltd – 0.3%
  • SJVN Ltd – 0.2%

6. Industrial – 22.6%

  • Larsen and Toubro – 17.1%
  • Bharat Electronics Ltd – 3.3%
  • Engineers India Ltd – 1.5%
  • NBC Ltd – 0.6%

Key Features of Bharat 22

  • Its a new fund offer, date and other details yet to be announced.
  • Demat account is mandatory in order to purchase this ETF.
  • Bharat ETF comprises of 6 different sector namely Finance, FMCG, Energy, Basic material, and utility sector.
  • It also include Blue Chip companies such as  SBI, IOCL, NTPC, ONGC, Coal India & Power grid.
  • The trading of fund will takes place on BSE and NSE.
  • The returns of the ETF depends upon the performance of 22 stocks.
  • ICICI Prudential AMC will be managing this government ETF.

Bharat 22 ETF – Whether Invest or not?

  • Your 41% of the corpus will be invested in 3 stocks L&T, ITC and SBI. All these stocks belongs to different sectors so there is diversification.
  • The performance of this ETF depends mainly upon 11 stocks which covers 85.5%.
  • It is a fund launched by government. If we look at the earlier government ETF, CPSE ETF, then 3 year return was just 3.85%.
  • A highly diversified exchange traded fund as it comprises of 22 stocks.
  • The average return of the large cap fund consisting of the above stocks is 12%.

So, I will suggest you not to invest a huge amount on this new fund offer. Instead invest a small amount so that if anything goes wrong, you didn’t have to loose your hard earned money.

10 Best Expert Financial Planning Tips for 2017-2018

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10 Best Expert Financial Planning Tips
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Here in this article I will be sharing with you 10 best financial planning tips of 2017-2018. It is very important to plan your investment. Because when you will plan for your future then only you will be able to live a better life in future.

Expert Financial Planning Tips:

1. Start SIP

Starting SIP is one of the best financial planning tip for you. One of the best advantage of SIP is, it invests your money in the market irrespective of whether market has gone up or down. Since our investment decisions are often governed by our emotions. When market goes down we start to panic and due to fear we try to exit market. This decision can be right in some situation but not always.

SIP controls your emotions and invest your money in the market against your will. Even when the market is down. Then few days later when market will go up you will automatically start enjoying the benefits and returns.

2. Maximize Your Retirement Savings

It is always better to plan your retirement savings. You must invest wisely in your retirement scheme so that you get more benefits in your future. For maximizing your retirement savings you must invest in schemes with offers tax benefits.

Also you can apply for higher amount of transferring of funds from your account to the retirement saving account. You can also apply for automatic transferring of funds so that the money is transferred even if you wish to avoid transferring of funds.

3. Reallocate Your Investment

Third financial planning tips is reallocating your investment. It is very important to timely reallocate your investment depending upon the market scenario and trends. As the market keeps on changing hence it is very important to walk with the changes in the market. In simple words, when you would have done investment then you would have done allocation of your funds on the basis of the market trends.

Like if at that point equity was doing better so you would have invested more in equity lets say 70% in equity and 30% in debt. But if you will see your investment after an year you might see that the returns on equity are lower than the debt funds. So with the option of reallocation of investment you can invest your higher amount on debt then equity. Means you will now invest 70% of your fund in debt and 30% in equity to gain higher returns.

4. Invest In Long Term Schemes

One of the financial planning tips is to invest in long term schemes. No matter whether you are willing in invest in share market or in government bonds or securities. It is always advisable to buy a plan and stick to it for longer time frame.

When you will invest your funds in a long term scheme you will even get tax benefits. Not only tax benefit but by investing in long term funds you will even receive higher returns. In-comparison to the returns that you will receive by investing in short term funds.

Also Read>>> 10 Mistakes to Avoid When Investing In Share Market in India

5. Carefully Manage Your Debt

It is very important to manage your debt. Debt could be in any form whether credit card loan, house loan, car loan, education loan. One thing that one can do is to minimize your debt is to reduce the usage of credit card. Or you can even avoid using credit card. Since credit card gives you an option to buy things today and pay it later.

But let me tell you this is not a wise step because when you will receive your salary next month more than half of your salary will go for pay your dues. Another way to manage your debt is you should payback that debt first which is most expensive and charges highest rate of interest and so on.

6. Review Your Insurance Coverage

It is very important to review your insurance coverage. Since with time the needs changes hence it is very important to review you insurance policy. With time it is very review that the reason for which the policy was purchased is your need even now or not. Several time you even need additional coverage on your existing policy if needed you can even apply for umbrella coverage.

7. Education Re-Financing

If you are the one who had taken educational loan then here is an option for you. Since the interest rates keep on changing with time and your interest rate on your education loan might have increased over the time. Now to repay this loan you can simply take an another loan at a lower interest rate. You can use this loan to repay your educational loan. Later you can payback the other loan easily since the interest rate on that loan is lower.

8. Investing for Your Kids

You can even invest funds for your kids future. With time the things are getting expensive so is the education and medical expenses. Hence you can invest your kids so that when they go to college you can easily pay their fees. Or you can apply for insurance policy for your kids if they have some disability so that you can easily treat them.

9. Invest in Tax Saving Funds

Well another financial planning tips is to invest in tax saving funds. There are several schemes launched by the government of India PPF, LIC, National Saving Certificate, Pension Funds etc. Not only this even if you invest in share market then if you will invest for more than 3 years then also you will receive tax benefits.

10. Take Expert Advise From Financial Planner

Lastly, taking expert advise is last financial planning tips. Taking advise from an experienced person is never a bad idea. If you are going for financial investment then it is always advisable to take advise from an expert. Instead of ending up committing mistakes it is better to take financial advise. There are several financial adviser who charge heavy fees. While there are even several advisers who provide free expert advises. Now its up to you like what type of expert planner do you need.

But if you ask me then I would suggest you to go for payed financial advise. Since when you go for free advise the advisers push a policy or investment option in which they receive high commission. And it might be a bad advise for you so you should go for payed financial advise. Since they will provide you unbiased advise.

What is Standard Cost? Uses of Standard Cost

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standard cost
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What is Standard Cost?

A standard cost is a measure of how much the cost of an item should be in comparison to the record of how much it actually was. In other words, standard cost is used to describe what the cost of one unit of product should be. On the other budget cost also a part of standard cost. However, budgeted cost is used to describe what the total cost of many units or of a time period should be.

So, a standard costing system is a system for product costing that records standard costs either in addition to or instead of actual costs. Standard cost represent what the cost should be. Therefore, if actual costs are higher than standard costs, the variance is said to be unfavorable. Unfavorable variances appears as debits in variance account. Similarly, if actual costs are below standard, the variance is a favorable variance.

Standard Cost Entries

Following are the entries in which standard has been introduced –

Entry 1 – Purchase of Materials

The actual cost was the actual quantity received times the actual price paid per unit of material. Whereas material inventory was debited for the actual quantity received times the standard unit price. Both amounts are based on quantity received. Thus, the variance occurs solely because the standard and actual unit prices of material were different. So, material price variance is –

Material Price Variance = (Actual Quantity × Standard Price) – (Actual Quantity × Actual Price)

Entry 2 – Usage of Materials

In usage of materials, the variance  occurs solely because the standard and actual quantities of materials issued were different. Thus, the material usage variance is –

Material Usage Variance = (St. quantity × St. Price) – (Actual quantity × Standard Price)

Entry 3 – Direct Labor

The actual labor cost was the actual hours multiplied by actual rates. Whereas work in process inventory was debited for standard for standard hours multiplied by standard labor rates.

Uses of Standard Cost

A standard cost system is used for several reasons –

  1. It provides a basis for controlling performance.
  2. Provides cost information useful for certain types of decisions.
  3. It may provide a more rational measurement of inventory amounts and of cost of sales.
  4. It also reduces the cost of record keeping.
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