Dreamzunlimited...

Recently, when we were analyzing our business data, we saw that around 10% of our Clients have reached / about to touch 1 crore+ in mutual funds portfolio alone .  Achieving the first 1 crore is the most difficult thing - but once 1 crore is reached, the next 1 crore is going to come up in less than half the time & time for further crores gets further reduced.   Hearty congratulations to all of them 👏 Agreed, all of their disposable income was high , which has helped them achieve 1 crore+, but there were some common traits among these people (if not all, majority shared these below traits) - Conclusion was if we could control what is in our hands, we are sure to reach the goals than focusing at things which are out of our control .  Their Savings rate was higher They didn't bother about market up & downs much - they invested & stayed for long-term They didn't keep withdrawing in between (had separate bucket for short term needs) They didn't chase perfor...

You may have group health insurance cover with your employer already - That is good as it provides the below benefits already:  There is no 2-year waiting period for certain treatments & for pre-existing diseases.  Your parents may be covered in the same plan where the above is covered too.  But having a separate insurance apart from group insurance is absolutely necessary for the below reasons - We have experienced the below situations, where in the client was hospitalized but without any cover .   Employer chooses to stop the benefit suddenly, especially for parents.  Employer increases the premium substantially high due to higher claims incurred - hence it becomes kind of unaffordable, again especially for parents.  Customer switches job & during the change-over time (even for 15 days) & during probation period of 6 months, the insurance cover was not available.  Customer / family members become uninsurable - meaning they would have unde...

What are Index Funds?   Index funds invest the money in the chosen index say SENSEX / NIFTY 50, etc. They just mimic the index stocks & their proportions - there is no active fund management done by the mutual fund company.  Are Index Funds safe & guaranteed?   Index funds also invest in shares & hence the returns are subject to market risks as with any other fund. The returns are NOT GUARANTEED - Ex. during Covid, it is Sensex / Nifty that fell over 50% & hence index funds also would fall to the same extent.  But they are top companies of India & are blue chip stocks?   The stocks in the index gets changed semi-annually based on their market value. Barring 7 to 9 companies, the other 40-odd companies have kept changing periodically in the Nifty to index. A blue chip stock does not always remains a blue chip stock . Remember: Yes Bank, Suzlon, Reliance Communications, etc.  Ok - I hear that Index funds will get more returns than other f...

 No. #1 reason not to choose Dividend option in Mutual Funds is that DIVIDENDS ARE TAXABLE at your tax-slab rate - they get added to your income.  No. #2 reason which many are not aware is that: Dividend pay-out in Mutual Funds is taking from your money & giving it back to you .  To explain this with an example: Let us assume:  Investment Amount: 1 lakh Purchase unit price (NAV): 10/-  No. of units purchased: 10,000 units (1 lakh / 10) Now assuming the unit price is 20/-, the fund value will be 2 lakhs (10000 units * 20).  The fund declares a 10% dividend & so you will receive 20,000/- as dividend. (10% of 20 = 2 * 10000 units = 20,000/- dividend).  Soon after the dividend is declared & paid out, the unit price of the fund will fall to 18 from 20 (10% less as it has been declared as dividend).  Your fund value now will be: 18 * 10000 = 1.80 lakhs.  This 20,000/- is also completely taxable for you. 

Please note - This article is not to suggest that real estate investment is good / bad. This is just to understand the numbers behind the investment. Many-a-times, we get carried away by absolute numbers of price rises & make emotional decisions.   Let's calculate the TOTAL OUTFLOW for this home purchase:   Interest Paid to the bank in 20 years: 52 lakhs (More than even the loan amount taken).  Interiors done for the home: 6 lakhs (You don't get this money back) Opportunity Cost of investing the Down-Payment of 12 lakhs & Interiors of 6 lakhs in Bank FD @ 6% interest rate: 1.08 lakhs every year .  TOTAL OUTFLOW in 20 years: Around 80 lakhs extra for 60 lakhs property! But I will pre-pay the home loan soon? So this calculation is wrong?! Great – Can we assume you will REPAY 5 lakhs every year starting from 1 st year onwards till the loan amount is closed? Home loan will get closed in 7 years instead of 20 years – that’s fabulous.  But do you know ...

 Things To Do when your child turn 18! Apply for PAN (change the status of PAN from Minor to Major, if applied) Link mobile number in Aadhar & update biometrics Open Bank Account (change the status from Minor to Major, if already opened) Register Nomination in all financial instruments taken earlier as minor (MFs, Insurance policies, Bank Accounts, etc.) Apply for Voter's ID Passport Renewal / Apply fresh Open Mutual Fund Account & Start SIPs (even if it is just 1,000/- p.m.) Start donating blood regularly Apply for Driving License Learn to drive 4-wheeler

Direct Stocks or Mutual Funds ? Investor - I want to invest in Equities.  Me - How long can you stay invested, how much risk can you take & what's your return expectations? Investor - I can stay invested for 10 years, okay with volatility & return expectation is 12-15%.  Me - Okay, we will invest in ABC Flexicap, XYZ Midcap and PQR Small cap Mutual Funds.  Investor - Can we not do direct stocks? Me - You want to generate returns, how does it matter where these returns are coming from (Direct stocks or MF)? Also you are not going to be able to track sector rotation, corporate actions & news etc. As a retail investor, MF is a much better option & it will make you the returns you are expecting over 10 years. Should you also take the stress of looking at so many stocks & decide everytime to buy, stay invested or sell?  Investor - But direct stocks will generate higher returns?  Me : It's a misconception. - In direct stock investing, the br...