We are not saying that stock market is a bad place to invest. Just that it is not for everyone and not every day is a good day to invest. Let’s not get carried away with the rally and feel left out. There are other ways of making money and they are safer. Caterpillar will help you identify those and consider your goals are a priority.
When I was a kid, my mother was my tutor. She would often ask me about the chapters I find tricky. Let’s start with that chapter only, she would insist.
I hated it back then, I still hate it today. But over years, that approach became my habit. It helped.
When we do not know where is the life headed, retirement planning for obvious reasons drop to the bottom of our to-do list. But, my learning says, it should be on top of the to-do list. Once you plan your retirement properly, other short and medium term goals fall into place.
We often say: “Abhi toh bohot time pada hai, baad mein aaram se kar lenge.”
But time flies and tomorrow never comes.
Let’s assume that you are 30, married, and living in a metropolitan city. Suppose further that your monthly expenses are Rs. 60,000 per a month and you see yourself retiring at 55, and die by 85. Here’s the money you need to accumulate if you were to live the lifestyle you are envisaging for you in the silver days:
At an inflation rate of 5% per annum, your Rs 60,000 monthly expenses today would be Rs 2,08,000 by your retirement. To earn that inflation adjusted Rs 2,08,000 per month expenses, you need a corpus of Rs 7.75 crore.
To reach a corpus, you need to invest. Suppose you are getting 12 per annum return, which is huge given the prevailing fixed deposit rates. This is what you would be needing to invest monthly today:
After 5 years
Rs. 78, 350
After 10 years
Rs. 1,55, 130
After 15 years
Let’s talk about reducing your monthly expense (no pun intended)
(Numbers have been rounded off for ease of understanding)
As you see, it is necessary to start planning retirement as early as possible because compounding is a process and there is no catalyst to speed it up.
No to forget are unforeseen events such as pandemics and slowdown in the economy, for which some savings are a must.
Moral of the story- Delaying for later or next month or next year is a disaster waiting to happen. Pick your phone and call on 817-827-1045 to get started. We are here to provide help and guide you every step of the way.
The Sensex and Nifty, and even Midcap and Smallcap indices have been hitting fresh highs. You track your portfolio. You are elated with huge gains. Bech dun kya? You wonder to yourself.
There is nothing wrong in booking profits if you see attractive gains in your portfolio. But, this is not an ideal approach. We at CIIS encourage you to have an ‘exit’ strategy first before you park your money with us. You don’t redeem your investments just because everyone else is doing so. Or, because you expect market correction in the coming months. Markets cannot move in one direction. It’s a cycle. It’ll go up and up and down and down. You cannot time it. What you can time, however, is your exit strategy. We tell you all about it.
How to get your exit strategy right?
Buying a stock or a mutual fund is not as difficult as deciding when to sell it. However, if you approach investments in a disciplined manner, it becomes a cakewalk. Are you aware of the most basic principle of investing? If not, then you are not alone. In fact, people who know it also ignore it. Today is your chance to learn and make the most of it. This basic principle is what defines your exit strategy. Curious? Of course, you are!
I am sure you must have heard of goal-based investing. Do you do it? Tell us in comments.
Linking a goal with your investments is the basic principle of investing. You can’t just start an SIP of Rs 5000 every month for eternity. You must have a goal in mind. This could be your imminent wedding, child’s higher education or wedding, a vacation abroad or your retirement. If you have a goal in mind, we can help you estimate exactly how much funds you need to collect to secure your goal.
We will tell you how much monthly outgo is needed. Once we have settled that, rest assured, you will meet your goal in the timeline we have set for it.
What if the stock market performs much better than what we had expected? You’ll meet your goal sooner. If you have collected the required corpus already, you exit. As simple as that. If you have not, you don’t. The markets must be staring at a correction, but your goal is still years away. Market correction shouldn’t bother you. Assume markets do correct. It will be an opportunity to buy more stocks or units at cheaper rates. When the tide turns again you will be much richer closer to your goal.
If your goal is just a year away and you are in the middle of a bull market – as we are now – you consult your advisor. You may want to exit from equities and move your funds to a safer debt mutual fund. Your exit strategy should always revolve around your goals.
Follow the basic principle of investing. Every single investment that you have done or will do should be linked with a goal. Define your exit strategy by having a clear estimation of future value of your goals. Once you get it right, the highs and lows in the market shouldn’t bother you. Collecting the future value of your life goals is your aim (and our promise). We strive towards it. We befriend market moves to achieve it.
Call us (+91-8178271045) to know more about exit strategies. We at CIIS are happy to help.
We hear everyone say save money for a rainy day. Most of us do. We have our umbrellas in place. But, what if rains don’t stop? Or, it keeps raining for days or weeks? Our umbrellas won’t be enough. We would need a raincoat and a solid roof over our head.
What is your solid roof in case of a health emergency? Some of you may have bought a health insurance policy. But, would that be enough if you stay hospitalised for more than four-five days or face multiple hospitalisation in a year? It won’t be. Your base health insurance policy is just an umbrella. Your need a raincoat and a solid roof of a super top-up plan.
What is a super top-up plan?
A super top-up plan is a cost-effective way to boost your health insurance coverage. It compliments your base health insurance policy and gets activated after you exhaust the sum insured in base policy. For example, if you have a health plan of Rs 5 lakh coverage and a super top-up plan of Rs 10 lakh coverage, total coverage available to you is Rs 15 lakh. First your base plan will get used up, and if need be, the Rs 10 lakh super top-up.
One may buy a standalone super top-up plan (and no base policy), but it is not advisable. We will explain it soon in the article.
Super top-up versus higher base sum insured
Taking ahead the above example, you may wonder why not take a base policy of Rs 15 lakh, instead? Here comes the affordability factor. A combination of Rs 5 lakh base and Rs 10 lakh super top-up will be much cheaper than a pure base policy of Rs 15 lakh. Take, for example, a family floater (2 adults and 2 children) insurance with a base cover of Rs 25 lakh will cost you around Rs 29,000 per annum compared to a combination of Rs 5 lakh base policy and Rs 25 lakh super top-up (with a deductible of Rs 5 lakh) at nearly Rs 21,000 per annum premium. What is deductible, you ask? Read on.
Call us on 8178271045 for more details
Why super top-up plans are cheaper?
If something comes cheap, you must ask, ‘why?’ Super top-up plans are cheap because these policies comes with a deductible, that is, it comes to your rescue only after you have taken care of certain medical expenses by yourself (up to the deductible amount). This could either be through your base policy, group health insurance from your employer or simply paying the amount from your pockets. Need more clarity? Let’s take an example.
All super top-up plans have a deductible amount. So, if you buy a Rs 20 lakh super top-up plan, the deductible amount could be Rs 5 lakh. This is how deductible in super top-up plan works:
Scenario one: If your approved claim amount comes in at Rs 4 lakh, nothing from Rs 20 lakh will be paid to you. Pay Rs 4 lakh either by yourself or from a base policy.
Scenario two: You get hospitalised again in the same year. The approved amount this time is of Rs 3 lakh. In this case, super-top plan will get activated but only for Rs 2 lakh. Rs 1 lakh will have to be paid by you.
Scenario three: You are again in the hospital in the same policy year. The approved claims amount to Rs 8 lakh. The full amount will be taken care of by the super top-up plan.
Thus, one has to pay the deductible amount only once in a year, and super top-up plan takes care of your medical bills from then on. Super top-up plans are different from top-up plans in which deductible is to be paid every time you get hospitalised before top-up policy cover comes into picture. Top-up plans are largely in extinction now as super top-up plans are clearly much more beneficial.
Who should buy a super top-up plan?
Super top-up plans are available for individuals and for a family plan too. Even if you keep a lower deductible amount, you can still boost your coverage significantly. These become absolutely necessary in case of a family floater policy, especially in covid times, when chances of more than one family members getting hospitalised in a year are quite high. Remember only once you have to take care of the deductible amount. Rest of claims in a single policy year will be covered under super-up plans.
Pick up your phone and connect with us for more clarity. We are available at 8178271045.