Saturday, December 27, 2014

EASY WAY TO TAKE HOME LOAN INTEREST RATE CALL- especially under current scenario

Got lot of calls from known people as well as client family’s, as to what to do with their loans ( More from home loan subscribers/ to be subscribers ), especially in current interest rate market scenario?What to do with Home Loans in current interest rate scenario?

MARKET UPDATE- an Overview- Interest Rates related-

The markets are pretty confusing. If you are watching Money control or NDTV or Bloomberg or UTV or for that matter any of the business channels and if you are following any or all media forms, you will hear and notice, MIXED OPINIONS, - markets are divided- on what is the direction RBI will take on interest rate decision.

The international, political and economic recent news calls for a cautious approach and while there is no fundamental uptick in Indian Companies profits as well. Although the recent oil drop and inflation drop is a positive sign which calls for interest rate cut. Now it depends upon the RBI governer, Mr.Raghuram Rajan, to take the call. Some say he will declare interest rate cut even before next meet, while some say he will wait for the meet to declare the same and some say he will wait to decide and declare the rate cut for this meet and will do only in next meet. While international analysts say he is waiting for next step declarations from US, Europe, Russia, Japan and China and also keeping close watch on Oil rates and inflation rates as well.

My view-

While the RBI has not taken any direction call, our economy is already adjusting. If you have noted, the FD rates going a year ago were around 9.5-10 pct., which is now around 8.75 pct. The 10 year Bond yield of GOI papers is around 7.9 pct currently which was around 8.5 pct in sept. and around 9.5 pct. a year ago.So now there's official call from the Reserve Bank that may take interest rate further down.

So while RBI has not taken the call markets have already adjusted itself.

The recent Confusion for Home Loan Subscribers-

1 What to do if I have a loan currently under floating rate scheme?
2 What to do if I have a loan at Fixed rate?
3 What should I do if I am looking for a loan? Should I go for floating or fixed rate scheme?

The confusion has increased recently, when HDFC re-launched Fixed rate Mortgages i.e. it has re-launched a fixed term, fixed rate home loan scheme, where home loan for 2-3 yrs fixed rate term is in range of 10.15 to 10.35 percentage range and 10.25 to 10.5 pct. fixed term fixed rate range for 10 years.

Below is the Economic times HDFC News cut- ( Please note on the same news it is also written SBI, Union bank, not planning to cut rates )

Above I have briefed the market scenario and the cusp at what it is. The market believes a 50-75 basis downward rate call by RBI in 2015 and infact that is already factored in.

What should be your call on home loan? Well depends upon the following answers from you-

1 What is your market take on interest rate? ( Although very difficult to take interest rate call )
2 At what stage your loan is- i.e. what term is completed and how many years are pending?
3 Your kind of scheme currently
4 What are the switching from one home loan provider to another home loan provider costs?
5 What are special discount benefits the home loan provider is offering?
6 The home loan provider’s hidden charges, if any
7 When the fixed term ends, what would be the scheme of rate applicable?
8 What would be the EMI break-up? And accordingly tax benefit ( individually needs to be calculated with break-up) ?
9 Ease of operation and ease of switching of loan
10 How does it fits in your financial plan and what will be the effects of changes

An overall view on your individual situation ( depending upon above questions answers ) will help you define your Home loan call and for that you can call upon your financial consultant. He/she has the nag of the markets and if you help them understand the above queries, they can suggest you on your approach with more conformity.

What-One-Can-DO after news as on 29-09-2015 after 0.5% interest rate drop declaration by RBI-

The Finance minister asked.
The industry honchos asked. And so the RBI governor said "Take it. Happy now?"
50 basis points repo rate cut was much more than expected. This means banks now borrow from the RBI at 6.75% and get only 5.75% for their deposits with RBI.
While banks borrow at 6.75% from RBI, they borrow from retail investors at more than 9%. Why should they?
Quickly - what all does this mean to you as an investor?

In the short term
- All banks will reduce interest rate on their deposits. SBI and Andhra Bank have already announced reduced rates effective from 5th October.
- There will be a short term bond market rally.
Your debt fund investments will show a healthy gain in your next periodic review
- Foreign investors who have invested for higher rates in India will find it less attractive. Expect a flight of capital, especially NRI deposits, institutional bond market investors etc.
- Market sentiments will spike equity markets.
Banking sector might gain
- If you have a home loan on floating rate - the interest rate should fall.

What you should do?
- If you are planning to do any fixed return investments like bank Fixed Deposits, do them now. Next week, you might get 0.5% lesser.
-Call the bank and ask for lower interest rate on your floating rate home loan
- Keep investing in equities through systematic investments

In the long term
- This is good news for companies who plan to start new businesses or expand. They could borrow at lesser rates. Lesser interest costs mean better profits for industry. Which should reflect in their share prices going up. Good days for equity investors.
- Lesser inflation means more money in the hands to spend. And if saving the money is going to get lesser returns, as well spend it. Good for almost all industries. Good days for equity investors.
- You should be able to borrow at lesser rate for purchase of new house or car or anything else. Ensure your credit score is good. Whether this will improve real estate prices is hard to say.
- Lesser interest rate may be bad news for retirees or those who expect their investments to give regular cash flow. Government will be forced to reduce small savings scheme rates. Expect lesser from EPF / PPF / PO deposits etc.

What you should do
Invest in a portfolio of assets that include debt, equity, real estate and commodities.
Base the asset allocation on your goals, risk profile and cash flow needs
Protect all risks and write your WILL.
Manage Money Well, Live Well !.
Ask your Financial Consultant Now.....
                                                                                       -add on write-up, bhuvana


" Poorna Nazariya " ( Wholesome View ) , is what Arth Shastra says, is important to take any financial decision

Tuesday, December 16, 2014


Why HR / Employer seek Financial Awareness sessions, NOW, for employee’s?

What is at the top of Mind of an employee at this point of time, which also in a way is top at every employeer’s mind as well?

Well two TOP MOST upcomming events-

EMPLOYEE RE-VIEW ( INCLUDING PAY ) ( how to enhance employee engagement ?) 
TAX - DECLARATION’s PLANNING in advance for the year? ( WITH AWARENESS) ( as pay scales are also reviewed/declared) ( would that be great ?)

( this directly leads to more employee concentration and highten's productivity )

I don’t know, if you noticed, but both are in red bold, because if it is taken in right sense, and put-forth correctly, handled rightly,  it’s most enjoyable part of life.

After the year 2014-2015 is finally done with and all Employee's have just intime finished their declaration submission, it's that time of the year when they are in total touch of their net Income, Net expenses and Net Taxes paid and these sometimes leads to uncerainity and depression, if not handled properly and so less productivity. ( Reason being sometimes most people realise that their expenses are more then their desired income and hence their borrowing is more i.e. life not self-financed. ( this is time when generally companies are also thinking of employees pay packet revision )

This is also time when employee's are planning or have already planned their Vacations due to Summer Holidays, so yet more expenses.

If this feelings and time, if taken and guided in the right sense can lead to best results from and for them as well as the company

After the tax and expense season the individual comes to practical terms and feels the real ground level pressure. ( Do you as an HR / Employer/ individual, want to feel and be under pressure ?)


-          Depression
-          Less productivity
-          Some may avoid enjoyment  ( also depressing) to not do extra expenses, so absenteeism
-          Non-involvement, pre and/or post season
-          Teamwork going down
-          Only few participate actively, so groupism
-          Borrowing money from colleagues, which creates unpleasant work environment
-          Resulting into Health issues  
-     Individual budgets go for toss and non-planned expenses shoot up
-     At the end of the year, Tax filling issues, non clarity on Tax implication ans tax laws
-     All this leads to Higher Employee Attrition



I am sure you and your employee has experienced a point of time, were all have to submit  IT and investment declarations alongwith proofs and details, so that TDS, can be rightly deducted after full year adjustment by the company. This nearly one month activity is so hectic and disturbing for a lot that people have to run from pillar to post to collect papers and information. Most start searching tax details online, and all sort of misleading or/and non required details are floating around ( which actually takes a lot of time of employee ).Most also do last minute tax saving investments which they grudge later, as they find not good for them. ( but still, lot doing the same mistakes year on year, because of non-planning and in haste).People have less money for next few months and so are more disturbed. Lot of people don’t know what is deductible and not deductible, what can be claimed under which IT section and upto how much limit and what all can be claimed; so end up paying more taxes.


-          People paying more taxes then actual, and some inhaste give wrong declarations, so has to apply for refund ( which is an extra activity by itself)
-          less productivity
-          People having cash crunch
-          People having not good sleep
-          Absenteeism to handle personal finance matters
-          Lot of people fall prey for hand loan or credit card loan in these phase and few also fall into debt trap
-          Attrition- people moving to another company for small increase
-          Resulting into health issues, for self and/or family members

Well, which Employee, Employer and/or HR would not like to enjoy this summer vacation season to it’s fullest ?
More and more people are taking interest in physical, emotional and financial health- ARE YOU ?

It’s that time of the year where-

-          Involvement in Company activities can be increased
-          Person is always present at each and every part of company activity
-          Inter-personal engagement’s happen the most
-          Employer-Employee and all concerned departments and authorities are extremely involved in.
-          Where an individual can actually increase cash flows ( relatively) year-on-year
-          Attrition can be reduced
-          Productivity can be upscaled
-          Overall well-being is maintained
-          Working environment can be upscaled and/or maintained


All the above can happen for longterm only through unbiased, thruthful, loyal, trustworthy FINANCIAL WELLNESS – awareness session at your company by dedicated Lifestyle Financial Consultant.

I am going to LEH-LADAKH Summer Vacation tour at peace of mind.... ARE YOU AND YOUR EMPLOYEE AT PEACE OF MIND ?

Tuesday, December 09, 2014


What Are you currently Thinking upon?

1-      Mr.Narendra Modi, his opposition and India ? ( How India will move forward) / ( Will Shiv Sena really Support Maharashtra government for long ) / ( or will Sharad Pawar, NCP Supremo, Withdraw support ) /  ( or How will new foreign policy work in favour of India )
2-      World Economics, Terrorissm, ISIS etc.? ( How China, Pakistan, Afghanistan , Iran, Iraq, Korea,USA, Russia, Japan React to it? )
3-      How all business sectors will benefit from upcoming budget and Modinomics? How will good Governence Help India? Will GST Be launched? Will my Tax burden Reduce?
4-      How Environment is changing? ( Pollution, new diseases’, gas leakages, less greenery, less water )
5-      Will my salary improve, next year as well? Or will I have to change my current job?
6-      How this market condition will improve, so that business improves?
7-      Will SENSEX Touch 30,000 before coming union Budget? Will NIFTY cross 10,000 ?
8-      Will Mr.Rangarajan, RBI governer, reduce rates in next review meet or in between?
9-      How will my health be in future or will my health improve?Hope my family’s health remains good.
Are these actually your worries?


1-      How can I improve / upgrade my lifestyle? Can I have that Latest mobile ? or Can I gift that to my Wife?
2-      How can I prepare for my future of my desire? Children’s education, Graduation, Marriage , Business Expansion, Buying Home / Secondary Home, Retirement, buying new Mid-Segment SUV car, Vacation etc
3-      Will all my dreams be fulfilled, even if I am not there?
4-      How can I concentrate more on work and have only measured worries?
5-      How can I ensure my Family being Happy and safe, both at the same time?
6-      Can I be more with my family, more relaxed?
7-      What is my current situation like? And how far can I go ?
8-      Will me and my family have to scale down, our standard of living?
9-      Do we have to compromise, everytime ?
Are above worries your’s?

If the answer to second set of queries’ is more profound, the answer is right in Financial Planning.  " YES ".

And your worries can minimize and one can actually have only measured worries- which are required to be their, by you, cause you will start choosing worries as well, because of Clarity and Confirmity through Lifestyle Financial Planning.

Family will have better idea of their current as well as future situation. Your basic worries can go in about 2-6 months, from date of enrollment.

Just imagine a situation which most of us go through, some or the other time, which is : Daughter is not well, parents take her to Specialist and Dr.recommends to take out few reports and says about specific problems and also suggest it’s solution, so that daughter can perform better and normal, what she is made for to originally do.SO one is not sticking to the PROBLEM, but knowing actual problem and having a specific solution- does the worry minimise?

WORRIES are forever, but they are no longer your worries, once you know which have to be taken seriously.


Incorporate worry-free life , through proper Lifestyle Financial Planning.Mind you, Time is ticking, and not by your side, always.

Thursday, November 27, 2014


Whenever I see Clients portfolio first time , I usually see atleast some portion or atleast one of the ULIP Investment ( not only insurance ).Whenever I do Insurance and Investment, Analysis and I recommend on the same as per the Product mix, Need of the client family and the market conditions, I have two options to provide -

ONE- To advice client to surrender the ULIP Policy
TWO- To advice client to continue

Whenever I have clients with ULIPs in their Investment Portfolio, Always people ask me whether to Continue, or to Stop investing further or to Stop investing and withdraw. Lot of Smart Investors also ask me if they need to switch their ULIPs option.

To explain further,all insurance ulips sellers ,most of the time have an option available  that one can Switch from say Equity / Growth / Maximiser to either Secure ( Protector ) or Balanced ( Different product seller / manufacturers have different names).Now what and why is that??

I will help you understand, in short- If as per market conditions one wants to book profits or limit loss or seize an opportunity of market cycle from either of the asset classes ( Equity or Debt-as the case may be) , and do not want to withdraw currently, one can do so utilizing this option at very low cost / initially some even offer no cost / some offer limited switches in a year free of cost.

The crux lies in what to do in current market condition ?
Should one utilize switch option in ULIPs?
If yes, When ? Is it now ?

Well to understand this, let us discuss few current market indicators as below,


Now if you see Equity Market seems to be on the BULL Run ( Though ahead of fundamentals, lot on future expectations ), Debt Markets interest rates seems to be on Down turn especially in medium term ( in next 6 months RBI is expected to cut interest rates- REPO Rates ), Bank FDs interest rates are moving southward / down, gold seems to be on down to stable trend , crude oil also seems to be stable to down turn and rupee seems to be stable to depreciating in medium term. ( ALL THESE FACTORS COUNT TO TAKE SUCH SWITCH DECISSION ALONGWITH INDIVIDUAL CONCERNS AND NEEDS )


Where do you think Markets are headed??What is your take on each asset class??What does your portfolio demand?? Where are you placed as to your goals in life ?

If you are bullish and do not need money now and can hold on for longterm, you can hold on to Maximiser / Enhancer option, if you think you need to book profit, you can switch to Secure option from growth / equity and if you are not needing money now and also not sure what is happening in markets, you can continue holding Balanced option.

If you are holding Secured option, then what to do? Well you must have hold it for long and you can continue if you need money in next few yrs./months and if needed in more than medium term, then can you switch to Equity option? Well depends upon what is your market outlook, liquidity condition, your portfolio composition, your goals, your desired future, your market take etc., as I say, no one is expert enough to time the market.

No one in individual capacity is expert enough to time the market ( IS ANYBODY ? , you know someone ? ) and hence after fair study of the above and many market related indicators, one has to see what is his/her family desired future or goal and take a decision, if one should switch or not.

What is your self assessment ?
Do write and comment , if you want to know more, and even if you differ on views.

Thursday, October 02, 2014


STARTING A NEW SERIES-Dr..Humming Bird Says.......
Dr.Hummingbird will hum it’s words of Financial Wisdom and will instinctively help to think every time it says or asks on a topic…….Here’s something to know about this beautiful small bird…..
Hummingbirds are New World birds that constitute the family Trochilidae. They are among the smallest of birds, most species measuring in the 7.5–13 cm (3–5 in) range. Indeed, the smallest extant bird species is a hummingbird, the 5-cm bee hummingbird, weighing less than about 2.5g.
They are known as hummingbirds because of the humming sound created by their beating wings which flap at high frequencies audible to humans. They hover in mid-air at rapid wing flapping rates, typically around 50 times per second, but possibly as high as 200 times per second, allowing them also to fly at speeds exceeding 15 m/s (54 km/h; 34 mph), backwards or upside down.
Hummingbirds have the highest metabolism of any homeothermic animal.To conserve energy when food is scarce, they have the ability to go into a hibernation-like state (torpor) where their metabolic rate is slowed to 1/15th of its normal rate.
With the exception of insects, hummingbirds while in flight have the highest metabolism of all animals, a necessity in order to support the rapid beating of their wings during hovering and fast forward flight. Their heart rate can reach as high as 1,260 beats per minute, a rate once measured in a blue-throated hummingbird, with a breathing rate of 250 breaths per minute, even at rest. During flight, oxygen consumption per gram of muscle tissue in a hummingbird is approximately 10 times higher than that seen for elite human athletes.
Hummingbirds consume more than their own weight in nectar each day, and to do so they must visit hundreds of flowers daily. Hummingbirds are continuously hours away from starving to death and are able to store just enough energy to survive overnight.
Hummingbirds are rare among vertebrates in their ability to rapidly make use of ingested sugars to fuel energetically expensive hovering flight, powering up to 100% of their metabolic needs with the sugars they drink (in comparison, human athletes max out at around 30%). One study showed that hummingbirds can use newly ingested sugars to fuel hovering flight within 30–45 minutes of consumption. These data suggest that hummingbirds are able to oxidize sugar in flight muscles at rates high enough to satisfy their extreme metabolic demands. By relying on newly ingested sugars to fuel flight, hummingbirds can reserve their limited fat stores to sustain them overnight fasting or to power migratory flights.
The dynamic range of metabolic rates in hummingbirds requires a corresponding dynamic range in kidney function. The glomerulus is a cluster of capillaries in the nephrons of the kidney that removes certain substances from the blood, like a filtration mechanism. The rate at which blood is processed is called the glomerular filtration rate (GFR). Most often these fluids are reabsorbed by the kidneys. GFR also slows when a bird is undergoing water deprivation. The interruption of GFR is a survival and physiological mechanism unique to hummingbirds.
Studies of hummingbirds' metabolisms are relevant to the question of how a migrating ruby-throated hummingbird can cross 800 km (500 mi) of the Gulf of Mexico on a nonstop flight. This hummingbird, like other birds preparing to migrate, stores fat as a fuel reserve, thereby augmenting its weight by as much as 100% and hence increasing potential flying time over open water.
Hummingbirds drink nectar, a sweet liquid inside certain flowers. Like bees, they are able to assess the amount of sugar in the nectar they eat; they normally reject flower types that produce nectar that is less than 10% sugar and prefer those whose sugar content is higher. Nectar is a mixture of glucose, fructose, and sucrose, and is a poor source of nutrients, so hummingbirds meet their needs for protein, amino acids, vitamins, minerals, etc. by preying on insects and spiders.
Hummingbird bill shapes vary dramatically, as an adaptation for specialized feeding. Some species, such as hermits (Phaethornis spp.) have bills that are long allowing them to probe deep into flowers that have a long corolla. Thornbills have short, sharp bills adapted for feeding from flowers with short corollas and piercing the bases of longer ones. The sicklebills' extremely decurved bills are adapted to extracting nectar from the curved corollas of flowers in the family Gesneriaceae. The bill of the fiery-tailed awlbill has an upturned tip, as in the avocets. The male tooth-billed hummingbird has barracuda-like spikes at the tip of its long, straight bill.
The two halves of a hummingbird's bill have a pronounced overlap, with the lower half (mandible) fitting tightly inside the upper half (maxilla). When hummingbirds feed on nectar, the bill is usually opened only slightly, allowing the tongue to dart out and into the interior of flowers. Hummingbird bill sizes range from about 5 millimeters to as long as 100 millimeters (about 4 inches).
Hummingbirds drink with their tongue by rapidly lapping nectar. Their tongues have tubes which run down their lengths and help the hummingbirds drink the nectar. While it had been believed that capillary action was what drew nectar into these tubes, high-speed photography has revealed that the tubes open down their sides as the tongue goes into the nectar, and then close around the nectar, trapping it so it can be pulled back into the beak. Consequently, tongue flexibility enables accessing, transporting and unloading nectar.
Hummingbirds do not spend all day flying, as the energy cost would be prohibitive; the majority of their activity consists simply of sitting or perching. Hummingbirds eat many small meals and consume approximately half their weight in pure sugar (twice their weight in nectar, if the nectar is 25% sugar) each day. Hummingbirds digest their food rapidly due to their small size and high metabolism; a mean retention time (MRT) of less than an hour has been reported. Hummingbirds spend an average of 10–15% of their time feeding and 75–80% sitting and digesting.
Because they starve so easily, hummingbirds are highly attuned to food sources. Some species, including many found in North America, are territorial and will try to guard food sources (such as a feeder) against other hummingbirds, attempting to ensure a future food supply for itself.

These Special characteristic’s of a Hummingbird, let’s us think a lot on our finances and has a lot of relevance, which we need to imbibe from this small nature creature in our day to day Financial Life.

Monday, June 09, 2014



People who have gone through above situations, need not be explained ( just revisit) the topic question, for persons who haven’t, just imagine that you are in anyone or both situation , what would you do then?

OK. Options ???-

A.      Borrow ?
B.      Use some current liquid assets or investments , to fund those situations?
C.      Friendly Hand Loan?

Again those who have experienced and gone through the above situation would agree and know how worst such situation is ( as they have felt it, such situations are very hard to imagine)

Now, through my experience, I have noticed that the main bread earner or Primary person always thinks that I can handle any situation, but what if the main bread earner or primary person is in trouble and if the secondary person ( Wife or children or parents) has to face the emergency and has to -

B-Use some current Asset or Investment, to fund such situation ( it’s another case were the family should know were and how?),
C-Ask for friendly Hand Loan?

S C A R Y situation.? Right?

Friends and readers, this is Practicality, with day-to-day expenses and also medical expenses ever increasing, AND uncertainty in business and employment economic situations, it has become inevitable keeping aside EMERGENCY/CONTINGENCY Fund.

I am sure all would agree FINANCES and INVESTMENTS is like a puppet, if one string stretched another reacts.
Similarly, if in an Emergency if any of the above A / B / C is to be activated this will have a impact on overall finances.

Normal Avoidence  Creating Emergency Fund…..

A-Someone said I have medical Cover, then why would I require such funds /corpus-very valid question, but I say are all family members covered for all possible situations? i.e.
*Who has Valued, how much Medical Cover required? may be the cover is not enough
*All Medical Covers
*Waiting Periods
*If the Hospital is not under Cashless
*Critical Illness- Prolonged term illness has two effects ONE Increasing Regular expenses and TWO somewhere income earning capability reduces
*If Accidents happen and has prolonged period effect somewhere income stream will affect, but expenses would not stop, rather increase
*if the main Bread earner is effected

B-Someone says , I always keep Gold and/or  Cash at home  and/or Fixed Deposit in Savings Bank for such situations…..Well very well at least thought of, planned, but,

*How much and where…. *Keeping cash or gold in Cupboard is considered dead investment, and we don’t know  how much and when,so that may be lying idle for years
( very important to value this and still generate returns out of this)

C-I have lot of Investments-good, are they available immediately and does every family member know what, when and how to take out  those investments or basically whether some investment is available?

D-I have given some amount of Loan to friend/partner, which is available anytime?Well I need not take you through situations where the Friend/partner is genuine and willing, but may not be available to pay , when you require the most.

E-Well I keep some amount in Savings or Salary A/c, which I can withdraw through ATM or online banking transfers can happen….Well best, but do we generally share our ever changing Bank Passwords to anyone on regular basis?

F-I won’t have any emergency? OK, I wish and Pray to Lord to not have any emergency to anybody in the world, but can one be that sure?

Well this Fund is very very important and would say , it Forms base of any Financial Plan.While Emergency situation is not welcome to anyone and should not occur to anyone, but it cannot be ignored that it exists to me.