6 Steps to financial planning for women

Here is a simple six-step plan for financial planning for women.
But before we get on to that, a gentle reminder: For women, as with all individuals, investments form an integral part of financial planning; investments generate returns for the future and take care of your financial needs. This is especially necessary in light of the big question -- 'What if'?
'What if' your husband has not planned your finances well enough? 'What if' there was an eventuality in your family? 'What if' your children's career plans cost you a hefty packet? After all, it's the children who decide on their future, not the parents.
And most importantly, the need for financial independence for today's woman, investments have a role to play therein as well.
Education has also played its part in driving women towards the corporate world. More women are taking to education than before. Armed with a degree, they naturally want to put it to good use by taking up a job. The past few years have seen a steady rise in the number of working women in India.
On the other hand, the Indian marketplace has also evolved and thrown up a whole gamut of new goods and services at the consumer's disposal. This has led to a change in lifestyles for many people. With women taking to work, disposable incomes of households have also increased. And naturally, along with income has come the additional responsibility of investing.
Apart from working women, homemakers too should take to investing. They can save from the monthly allowance they get to run the house. Not only will this enable them to plan better for the family's future but the savings will also prove to be handy on a rainy day. After all, women are considered to be better savers than men!
Like all of us, women also have to deal with an increase in cost of living (inflation). Vegetable prices have been rising consistently. A gas cylinder, which was available for around Rs 70 ten years back, costs almost Rs 300 now.
And of course, there's the issue of rising medical bills as the years roll by. Women hence, need to ensure that they have an investment plan in place to secure themselves against inflation.
These are just some factors that should compel women to think on the need to invest. And of course, drive them towards actually investing money on a regular basis into various investment avenues.
But just what are these investment avenues that we are talking about here? And how do women go about the task of investing their money 'smartly' to yield a desired return on their investments?
This issue of Money Simplified answers all these questions and in the process, empowers today's woman with the necessary advise and guidance to secure her financial future.
6 steps to financial planning
The most arduous of journeys begin with a small step. When it comes to something as important as planning for child's education and marriage, that small step means setting yourself an important objective.
To put it plainly, the fundamentals of investing are no different for women; so you have to plan your investments, execute the investment plan and track it regularly. If this sounds a little complicated, don't worry, we have simplified the process for you.
Step 1: Define your objectives
The most important thing to do while you sit down to plan your finances is ask yourself why you want to invest. For a married woman with kids, the answer could be child's education or child's marriage.
For a woman whose kids are already married, the desire to invest could stem from a dream to set up a small boutique, for instance. For a woman who is yet to get married, it could be for her marriage. So you could have a variety of objectives; when you get down to penning them down you will notice that the list is a lot longer than what you had bargained for.
When we began compiling a list of likely objectives for women we came up with some interesting options:
Saving for your own marriage 5 years from today.
Saving for your child's education 15 years from today.
Saving for your child's marriage 20 years from today.
Saving for a small business that you want to set up at a later date.
Saving for an overseas trip, maybe even a pilgrimage 5 years from today.
Saving for a gift for your spouse or parents.
Saving for your retirement 30 years from today.
This seemingly long list could be even longer when you take into consideration objectives that are peculiar to you. Some of the more popular investment objectives like saving for child's education and marriage we have discussed in detail in 'Plan for your children's future.'
Once you have the investment objectives in place, the next step is to prepare an investment plan to achieve those objectives.
This may sound daunting, but it isn't, when you consider that it's your investment consultant who has to draw up the investment plan and your role is limited to giving him inputs in terms of your investment objective, appetite for equity-linked investments, investment time frame, tax-efficient returns and the like.
Step 2: Identify the investment consultant
Since your investment consultant has such an important role to play in helping you achieve your investment objectives, it is important that you 'connect' with the right consultant.
If you have been reading the newspapers even cursorily, you would have observed several instances of agents getting their clients to invest in unsuitable investments only to boost their commissions without a thought to the client's investment objective and risk appetite.
In the long run, this could have a ruinous impact on your investment plan. To make your job simpler, we have prepared a checklist to help you select the right investment consultant:
Both insurance and mutual fund consultants need certification before they begin advising clients. Insurance agents must be certified by the IRDA (Insurance Regulatory and Development Authority), while mutual fund agents must be certified by AMFI (Association Mutual Funds in India). The agent must have the certification on his person, so it's relatively simple to affirm whether your consultant is qualified.
Does your investment consultant offer a complete investment solution? Or is he the type who only collects the application form, cheque and submits it to mutual fund/life insurance company? Remember you are looking for an investment consultant not a delivery boy. An investment consultant should be competent enough to understand your financial objectives and chalk out an investment plan that can best help you achieve them.
It is critical that investment consultants are objective and unbiased in their advice. Being objective means placing the client's interest over your own. How do you discern that your agent isn't taking you for a ride? There are ways to find out. For instance, if you are a low-risk investor and your agent recommends a sector-specific mutual fund or an aggressive ULIP (Unit Linked Insurance Plan) then you can be sure that your investment objective is being sacrificed to fill his pockets. The investment consultant should be faithful to the plan that he has prepared for you and his advice must revolve around it.
Value-add investment services is another area that your consultant must treat as priority. Tools and calculators, stock and mutual fund alerts, portfolio tracker, research on mutual fund schemes and life insurance plans are some of the value-added services that investment consultants provide. Of course, there are few consultants who do this, but those are the ones you must identify. Some of these tools are web-based and should appeal to women who are net-savvy.
Even after you have taken the insurance policy or invested in a mutual fund scheme, you relationship with the investment consultant continues. You may need feedback on your investment, account statement, premium cheques to be submitted to the life insurance company, follow-up on dividends on your mutual fund investments and the like. It is the responsibility of the mutual fund agent to provide prompt after-sales service and resolve these issues efficiently.
Step 3: Preparing an investment plan
Once you have identified the investment consultant, you must get down to actually implementing the investment plan keeping in mind the investment objectives. For this you need to bare your 'financial' soul and tell him exactly what you want to achieve, the time frame over which you want to achieve the investment objective, the amount of money you want to invest in equities (this is important because equities can give a push to your savings, but also carry higher risk).
If you find this a little too detailed and even unnecessary remember it's important for the consultant to know this so that he can prepare a well-defined investment plan. It's a bit like telling your doctor everything so that he can prescribe the right medicine.
Step 4: Executing the investing plan
After preparing the investment plan, your investment consultant will help you execute it. This involves, for instance, taking the child insurance plan for your child's education/marriage, or the diversified equity fund to build a corpus to buy property after 10 years.
All the investments and insurance options that have been outlined in your investment plan have to be bought. Of course your consultant will help you with it, but it pays to be personally involved up to a level.
For instance, to the extent possible fill the application forms yourself so you learn about the relevant details. While filling the insurance application form, you have to give a true and fair picture of your medical history, accurate information on your weight and height and other details of this nature.
Giving inaccurate information on these points could lead to rejection of claim at a later date. Your investment consultant is unlikely to know these details better than you, so personal involvement is necessary. Likewise, appointing a nominee is common across mutual funds and life insurance, so ensure you have those details correctly filled in.
Step 5: Review the investment plan
Setting the investment plan in action is an important step towards achieving your financial goals. But to ensure you stay the course, a regular review of the investment plan is necessary.
Of course, this will also be done under the guidance of your investment consultant. There could be several reasons why your investment plan may need to be adjusted from time to time.
One instance is when stock markets change course over a period of time, they disturb your asset allocation. So you may have to redeem some of your equity investments or buy more of them depending on how much risk you are willing to take.
As you approach the milestone (child's medical admission or marriage), you need to get out of equity investments since equities are risky in the short term. That money should be invested into short-term debt, which is relatively safe.
Again, all this may sound very complicated, but your investment consultant is the one who will keep his eye on such events and will make necessary adjustments to your investment plan. On your part it helps to be informed since it's your money on the line.
Step 6: Redeem your investments
As the event you have been saving for, is upon you, you need to redeem your investments. With a mutual fund investment this involves signing on the redemption slip and having your consultant submit the same to the mutual fund. In case of a life insurance policy that you have taken, it involves having your consultant submit the policy documents to the life insurer and follow up for the maturity proceeds.
Then you will need to sit down with your consultant and understand the taxation issues involved with the redemption of your investments.
As you can see, setting financial goals, outlining an investment plan, executing it, reviewing it, is not really a difficult task. It may be time consuming but it's certainly not difficult. With a systematic and disciplined approach to investing and by identifying the right investment consultant, financial nirvana could be closer than you think.

Mutual Funds are Best Investments to reduce your RISK

The domestic equity market has been very volatile in the recent past. An average volatility of 1,000 points either side at the bourses has become an order of the day. Due to this, the net asset value (NAV) of mutual fund (MF) schemes too have been impacted as they are directly linked to the equity markets.
The volatile financial market has compelled retail investors to chalk out their investment strategies properly. And, they have been sending several questions to this website on MF industry and the financial market.
Mukul K Gupta, CEO, Birla Sun Life Mutual Fund took some time from his busy schedule to address the issues and concerns raised by the investors. Excerpts:
I want to invest in mutual funds. Please give me a brief knowledge about them.
A MF is a trust that pools the savings of a number of investors who share a common financial goal.
The money thus collected is then invested in the capital market instruments such as shares, debentures and other securities. The income earned through these investments and the capital appreciation realised are shared by its unit holders in proportion to the number of units owned by them.
Thus, a MF is the most suitable investment for the common man as it offers an opportunity to invest in a diversified, professionally managed basket of securities at a relatively low cost.
Currently, in which scheme should I invest? My budget is Rs 4,000 per month.
With a budget of Rs 4,000 per month, you can invest wisely and the best way to do so is investing through a systematic investment plans (SIP). You can have couple of SIPs with allocations to mid-cap funds and the flexi-cap funds. If you are looking for tax planning then allocations can also be made to equity linked saving schemes, ELSS.
Is a unit linked insurance plan (ULIP) better than ELSS (close ended) scheme?
Investment in ULIPs and ELSS funds has to be viewed differently, though the products look comparable. In terms of returns, ELSS funds would always outperform the ULIPs due to low fund administrative and other charges.

Secondly, ULIPs also charges for the life cover associated with it.
The general opinion is that investing in an SIP on a long-term basis is better. Could I set a time frame for SIPs, say 20 years on a compounding basis?
Best results from SIPs are visible only in the long-term, though the definition of long-term may vary from people to people. I believe one should look at allocating funds towards SIP for minimum of 5 years.
What is the minimum amount to start investing in SIP?
To begin with a Rs 1,500 SIP is a very good idea. SIPs are the best way to invest for long-term wealth creation.
I am 28-year-old and earn Rs 45,000 month. What should be my monthly investment in MFs through SIP and what are the good MFs in which I can invest?
Your SIP allocation should be at least Rs 5,000 per month. You can look at mid-cap and flexi-cap funds to start off your investments and later move to thematic funds. If you are looking at tax planning then make some allocation to ELSS funds as well.
I want to invest Rs 15,000 per month in MFs. Please inform which are the best performing in terms of providing returns and tax saving?
Returns from MFs are directly linked to the equity markets so it would be very difficult to put a number to returns in term sof percentage. In the long run, markets have given returns in the range of 15 per cent to 18 per cent.

For tax saving, one needs to invest in special category of MFs termed as ELSS. These schemes have a lock in of three years.
Will investing in an infrastructure fund be profitable in the long run?
Investing in equity markets with a long term view is always good. And investing in companies participating in India's infrastructure boom is even better. India still has a long way to go in infrastructure development and as current order books of the infrastructure companies suggest they are in for huge rise in scale of operations.
What is a new fund offer (NFO)? How does it differ from equity shares?
New fund offer (NFO) or investments in MFs are quite different than investing in equity shares. Basically, MFs pool money of several investors through a professionally managed asset management company. MFs are the best tool tomitigate your risks associated with investments in equity markets and at the same time enjoy the upside of equities.

Making money is short term

Making money is a short-term process, while creating wealth only happens in the long run. Vikas Khemani, executive vice president and co-head, institutional equities, at Edelweiss, believes this is the only mantra for young investors to become wealthy in the long-term.
"I have seen most young people these days call up their friends working in a stock broking house and ask them for tips. This will help them make money in the short-term. But, on a net basis, they won't be able to take this money out," he warns all those investors trying to cash in on the recent bull market frenzy.
Vikas spoke about the sectors, themes and stocks that can become help youngsters create wealth if they have an investment horizon of five to seven years.
Which sectors do you think can help an investor create wealth, in say, 10 years?
Ten years is too long a time period. Probably by that time you will have two cycles (ideally, any economy moves in two cycles: the up cycle and the down cycle, with each making its presence felt for at least five years or more) in place. So I will talk about a long-term horizon, which could be between five to 10 years. The sectors which we at Edelweiss like -- with a three to five year time horizon -- are the banking and financial spaces.
One has to take a structural call on whether India's GDP growth is going to continue at eight to 10 per cent. The answer to that is India is likely to grow for the next three to five years at eight to 10 per cent. In this context, the banking and financial services spaces become the most important. This makes me bullish on this space with a one, two, three, four, five and possibly 10-year perspective if the growth cycle continues.
Which other sector/s do you like for the long term?
Given the fact that there is huge amount of opportunity, the other sectors that we like are the infrastructure and capital goods and the engineering space. As you know, India is still a hugely infrastructure-starved country and we need to build sea ports, airports, roads, improve electrical supply and all such infrastructure related sectors.
Huge amounts of investments are likely to be made in building these infrastructural facilities. In this process wealth creation is going to happen for two set of people: people who are going to create these assets and infrastructure and people or companies who will enable creation of these assets. Both these sections will do very, very well in the long-term: asset owners and asset enablers.
Can you elaborate on these two themes for our readers?
Let us first talk about infrastructure creators or asset owners. These will be companies owning ports, airports, power plants. These companies will own assets, run them and this will be like an annuity (a business that generates fixed returns or steady cash flows every year) kind of business.
For instance, somebody who will own the mines will be an asset owner; those who are operating the mines will be asset enablers. Reliance [Get Quote] Power (yet to be listed) and NTPC are building power plants so they are asset owners. But other companies in the capital goods sector like BHEL will be enabling this process of building power plants.
GMR Infrastructure [Get Quote] will be building airports; but somebody has to help them to build the airport. In the process, both parties benefit a lot. However, asset enablers will yield faster results than asset owners.
Do you see investors making money in the banking and financial space and the asset owner, asset enabler companies?
Absolutely! Here I must also add the domestic consumption story in India. If you are talking about a five to seven year time horizon then I am sure India's per capita income will increase, wealth creation will happen, poverty and illiteracy will go down. All these things will happen structurally. When this happens, consumption in the economy will go up and the companies that cater to the domestic consumption sector will benefit tremendously.
FMCG companies, retail stories and any company related to consumerism will offer a lot of wealth creating opportunities in the coming years.
Companies that would possibly benefit from the above three themes?
Banking and financial services is a fairly large space and if I have to name a few companies than the first name that comes up is ICICI Bank [Get Quote]. They have captured the entire gamut of financial services and I think this bank is going to gain big time in this space.
Another company that I like in this space is Axis Bank. It has done well in the last seven to eight years, and if one has to look at this bank from another five to seven year perspective, then the quality of management that Axis Bank has will help it reap the benefits of a booming Indian economy. Also, both these banks can scale their operations with great ease.
Companies that attract your attention in the asset owner and asset enabler space?
In the asset owner space, I would go for something like GMR Infrastructure, Mundra Port -- they own large assets which are going to yield returns over a period of time. Though there aren't many companies in this sector that are available at reasonable valuations now. Having said that, I would still want to go for GMR Infrastructure and Mundra Port as they are into a space that offers new and exciting opportunities going ahead.
Right now, we are only seeing the initial phase of what is likely to come in these spaces of ports and airports. In the next few years, you can see more wealth creation happening. Other asset owners that come to mind are JP Associates.
In the asset enabler space, L&T comes immediately to mind. The company has displayed an excellent track record over a period of time and they are likely to continue with that. Their organisational platform is strong and I think this company will do very, very well in the next 3-5 years. It can be a potential multi-bagger.
In this space you can also consider BHEL, BEL, BEML. All these companies are large asset-enablers with good quality management support and scalability. I am talking only about large caps here. You can also find a lot of good names in the small cap space in this theme.
However, in this space, the main concern is the scalability of their business models. Otherwise, if I have to give a pick from the small cap space, then Mcnally Bharat will be a strong small cap contender in the asset nabler space.
Stock picks for the long term from the domestic consumption space?
Pantaloon [Get Quote] Retail is one name that can ride the boom in this segment. The management understands the retail game very well. The other story that is a part of domestic consumption story is ITC. It is a part of the FMCG sector, in the agricultural space -- which I believe also offers a huge opportunity for investment. Another name in this space could be McDowells.
Your advice to young investors?
Don't think you can make quick money in stocks. Don't go by tips and hearsay. It is a dangerous thing that people can do at your age. You have to understand what companies you are investing in, what is the aim of your investments is and then put your money in stocks.
If you can't follow this path, then mutual fund route is better for this age group to create wealth. If you look at it, over a period of time, large part of wealth is created through asset allocation rather than stock picking. If you are able to get right your asset allocation mix then I think you have done 90 per cent of your job.
My suggestion to young people would be if you are investing directly in equity, do your home work thoroughly. Read research reports, read about the company you want to invest in, gather more information about it. Then make an informed decision.
Typically, I have seen most young people these days call up their friends working in a stock broking house and ask them for tips. This will help them make money in the short-term. But, on a net basis, they won't be able to take this money out. This way, they will make money but not create wealth. Making money is short-term, creating wealth is a long-term process.
Will you be able to make money out of the markets using trading tips? It never happens. Creation of wealth can only happen if an investor is looking at it as a serious business. Look at it this way: People will work for 8-10 hours in their jobs and make Rs 8-10 lakhs a year. And the very same people want to make the same amount of money in a month's time purely acting on tips from their friends. From the effort and return point of view, there is some disconnect, right? When you come to the stock market, you should come with a long-term perspective. But they don't look at what kind of input they are putting in this effort. They should ask these questions: What kind of intellectual effort I am putting in this? What kind of research am I doing? Most young investors don't do this. In my opinion, this is a very dangerous sign.

Market outlook January 23 2008

Jan 23, 2008
Daily equity Market update

INDEX JAN 23, 2008 JAN 22, 2008 CHANGE (%)
BSE SENSEX 17594.07 16729.94 +5.17
S&P CNX NIFTY 5203.40 4899.30 +6.21
SENSEX P/E 22.40 21.21 +5.61
NSE TURNOVER 19267.55 20630.8 -6.61

(Cr)

Commentary on share market :
The equity markets surged today with Sensex recording the biggest single day
gain of over 1200 points. The sentiment was boosted by an emergency cut of 75
bps by the US Federal Reserve on 22 January, 2008. At close, BSE Sensex had
gained 864.13 points whilst S&P CNX Nifty was up 304.10 points. Both BSE
Midcap and Smallcap Indices ended up 8.15% and 3.96% respectively. Net sales
by FIIs were worth Rs. 2,425.70cr on Jan 21,2008. All the sectoral indices
ended in green today with BSE Realty and Power being the top gainers up 11.44%
and 9.81% respectively. Reliance Energy rose 15.94% on BSE after the company
won a railway project worth Rs. 2500cr. Canara Bank surged 7.36% on reporting
26.39% rise in net profit in Q3 December 2007 over the previous year. Nicholas
Piramal India soared 17.48% after the company acquired pharmaceutical business
of Healthline. Pidilite Industries advanced 9.47% on reporting 69.1% rise in net
profit in Q3 December 2007 over Q3 December 2006. Market breadth on BSE
was negative with 1300 advances and 1401 declines.

Outlook for equity market:
The equity market is expected to trade down
Thursday amid negative global cues and the closing of futures contract for the month of january.

RBI Reference Rates
CURRENCY JAN 23, 2008 JAN 22, 2008 CHANGE (%)
Re-$ 39.56 39.73 +0.43
Re-Euro 57.89 57.34 -0.96
$-EURO 1.463 1.443 -1.39
1 YR FORWARD 1.62% 1.50% +0.12
PREMIUM (BPS)

Commentary on Forex market:

* Rupee ended weak as PSU Banks persistently bought dollars for RBI.
* Forward premiums ended off highs as exporters sold forward dollars after
early trade.

Outlook:

Outlook:
Rupee is likely to take a cue from the movement of dollar in the international
markets.

SIP - A Smart way to investment

What's a mutual fund SIP?Rachna C November 09, 2005 09:45 IST
What type of a mutual fund is a SIP?"
I was taken aback by this question before I realised?the person posing it thought?a SIP was a type of mutual fund.
Unfortunately, many new?investors seem to be under this misconception.
A Systematic Investment Plan is not a type of mutual fund. It is a method of investing in a mutual fund.
Here's to coming to terms with it.

How you can invest in a mutual fund
There are two ways in which you can invest in a mutual fund.
1. A one-time outright payment
If you invest directly in the fund, you just hand over the cheque and you get your fund units depending on the value of the units on that particular day.
Let's say you want to invest Rs 10,000. All you have to do is approach the fund and buy units worth Rs 10,000. There will be two factors determining how many units you get.
Entry load
This is the fee you pay on the amount you invest. Let's say the entry load is 2%. Two percent on Rs 10,000* would Rs 200. Now, you have just Rs 9,800 to invest.
NAV
The Net Asset Value is the price of a unit of a fund. Let's say that the NAV on the day you invest is Rs 30.
So you will get 326.67 units (Rs 9800 / 30).
2. Periodic investments
This is referred to as a SIP.
That means that, every month, you commit to investing, say,?Rs 1,000 in your fund. At the end of?a year, you would have invested Rs 12,000 in your fund.
Let's say?the NAV on the day you invest in the first month is Rs 20; you will get 50 units.
The next month, the NAV is Rs 25. You will get 40 units.
The following month, the NAV is Rs 18. You will get 55.56 units.
So, after three months, you would have 145.56 units. On an average, you would have paid around Rs 21 per unit. This is because, when the NAV is high, you get fewer units per Rs 1,000. When the NAV falls, you get more units per Rs 1,000.


Here are some FAQs on the SIP
1. Is there a load?
An exit load is a fee you pay the fund when you sell the units, just like the entry load is a fee you pay when you buy the units.
Initially, funds never charged an entry load on SIPs. Now, however,?a number of them do.
You will also have the check if there is an exit load. Generally, though, there is none. Also, if there is an entry load,?an exit load will not be charged.
An exit load may be charged if you stop the SIP mid-way. Let's say you have a one-year SIP but discontinue after five months, then an exit load will?be levied. These conditions?will wary between mutual funds. ?
2. What is the minimum investment?
If you do a one time investment,?the minimum amount that you?have to invest is Rs 5,000.
If you invest via an SIP, the amount drops. Each fund?has their own minimum amount. Some may keep it at least Rs 500 per month, others may keep it as Rs 1,000.


3. How often does one have to invest?
It would depend on the fund.
Some insist?the SIP must be done every month. Others?give you the?option of investing once in three months or once in six months.
They also give fixed dates. So you will get the option of various dates and you will have to choose one. Let's say you are presented with these dates: 1, 10, 20 or 30. You can pick any one date.
If you pick the 10th of the month, then on that day,?the amount you have decided to invest in the fund has to be?credited to your mutual fund.
4. How must the payment be made?
You can opt for the Electronic Clearance Service from your bank; this means the mutual fund will, as per your instructions, debit a certain amount from your account every month.
Let's say you have a SIP of Rs 1,000 every month and you have chosen to invest in it on the 10th of every month. Under this option, you can instruct your mutual fund to directly debit your?bank account of Rs 1,000 on the due date.
If you don't have the required money in your account, then for that month, no units will be allocated to you. But, if this continues periodically, the mutual fund will discontinue the SIP. You need to check with each mutual fund what their parameters are.
Alternately, you can?give cheques to your mutual fund. In this case, they may ask for five Post Dated Cheques upfront with your first investment.
Since these cheques are?dated ahead of time, they cannot be processed till the date indicated.

5. Must I state for how long I want the SIP?
Yes. You will have to state whether you want it for a year or two years, etc. If, during the course of this period, you realise you cannot continue with the SIP, all you have to do is inform the fund 15 days prior to the payout.
The SIP?will be discontinued. You can continue to keep your money with the fund and withdraw it when you want.?
6. Do all funds offer SIP?
No. Liquid funds, cash funds and floating rate debt funds do not offer an SIP. These are funds that invest in very short-term fixed-return investments. Floating rate debt funds invest in fixed return investments where the interest rate moves in tandem with interest rates in the economy (just like a floating rate home loan).
All types of equity funds (funds that invest in the shares of companies), debt funds (funds that invest in fixed-return investments) and balanced funds (funds that invest in both) offer a SIP.
7. Tax implications
Let's say you have invested in the SIP option of a diversified equity fund.
If you sell the units after a year of buying, you pay no capital gains tax. If you sell if before a year, you pay capital gains tax of 10%.
Let's say you invest through?a SIP for 12 months: January to December 2005. Now, in February 2006, you want to sell some units.
Will you be charged capital gains tax?
The system of first-in, first-out applies here. So, the amount you invest in January 2005 and the units you bought with that money, will be regarded as the units you sell in February 2006.
For tax purposes, the units that you sell first will be considered as the first units bought.

8. How will an SIP help?
When you buy the units of a fund, you may do so when the NAV is really high. For instance, let's say you bought the units of a fund when the bull run was at its peak, leading to a high NAV. ?
If the market dips after that, the value of your investments falls and you may have to wait for a long while to make a return on your investment. But, if you invest via a SIP, you do not commit the error of buying units when the market is at its peak. Since you are buying?small amounts continuously, your investment will average out over a period of time.
You will end up buying some units at a high cost and some units a lower price. Over time, your chances of making a profit are much higher when compared to an one-time investment.

Why rich get richer

Why the Rich Keep Getting Richer
Rich people: fortunate, lucky, selfish, and arrogant? Or highly educated, caring, brilliant individuals? Becoming rich isn't hard, but it does require a bit of time and knowledge. Having time to get rich, educating oneself, and buying assets are the three key factors in attaining untold wealth.
Rich people usually either have or make time to get rich. Most people that now own huge mansions, have wonderful riches, and drive the nicest cars usually begin taking the road to riches in their spare time. One plan, the most common, is to work at a low-risk, steady job until one has enough money to invest in something that will feed one for the rest of their life. But before one can invest in anything, one first has to educate oneself.
Although the best way to educate oneself in a particular investment is to have a mentor, and thereby gaining valuable hands-on experience, another excellent way to do this is to listen to tapes and CDs and to read books on the subject. I have done both, mainly pertaining to real estate, but also I have read a wonderful book about making money on the Internet, called Multiple Streams of Internet Income, by Robert Allen.
Lastly, after creating time to get rich, and educating oneself, one simply MUST buy assets that will create money for one, and not liabilities and toys such as a new car every other year, and boats. These come only after one can prove that he is capable of handling and keeping money. Simply put, according to multi-millionaire Robert Kiyosaki: "Assets will feed you, and liabilities will eat you." An example of an asset is a rent-house, or stocks and bonds in a certain company. Only, that is, if the company is good and the stocks are ultimately going up in value.
In conclusion, we see that the three most important ways the rich keep getting richer are: having or making time, subject education, and buying assets. These are the key factors influencing wealth. I personally plan on educating myself in real estate, as it seems the simplest and safest way of getting rich.**

Personalized Financial Advisory Services

Welcome to Kathir Capital

Kathir capital aims at providing you the best of financial advisory at FREE of cost.

Services offered:

• Cash flow planning
• Wealth Creation Planning
• Tax planning
• Children Education planning
• Children marriage planning
• Insurance planning
• Retirement planning

Products suggested :

• Shares
• Mutual Fund
• Insurance
• Fixed Deposits

We handle products of all companies so we can proudly assure you that we are
INDEPENDENT FINANCIAL ADVISERS.

EXISTING BEST NEW FUND OFFER:

Reliance Natural Resources Fund
Unit Price : Rs:10/- During NFO
Closing On: Jan 31 2008

For more information contact:
Kathirvel Murugan R
9894827929

Or even you can drop a post here
we will rush you with application form.

Proof required:
PAN card Photo copy