Thursday, July 16, 2015

Youtube learning

Youtube channels you should watch

I hate reading books, I would rather watch a quick video while riding a bus or a cab.

What Youtube channels should you watch? Here are some not mainstream that you can watch with your children



Youtube offline is a boon but doesn't work all the time, I suggest using youtube-dl to download the videos and watch them at leisure.

Thanks,

lousy Zen
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Insurances! Insurances! Insurances!

You will need Insurance. Life, PA & Health.

You will need two insurances for sure, one is for Life and one is for Health. Get these covered first. Don't use policybazaar.com , they will spam you, call you everyday even if you say DND. 


Life Insurance

Do not try to use insurance as an investment. I did the mistake and paid dearly! Money back is bad, ULIP is bad, everything that has a maturity benefit is bad. Shut up and buy a term policy - split it in two or three - one LIC eTerm (5 lacs), one Max Life (5 lacs),  one HDFC Click2Protect (5 lacs) and one in ICICI Lombard (5lacs). Diversify, hopefully none of them will reject a claim.

Very related is Personal Accident Insurance, get one along with Life Insurance, if you are young over 25 - this is what will probably best fit you.

Here's a comparative of best term policies out there, any of these is fine, just pick one or two

Underwriter Ø



Ranking Attribute Ú
Max Life
Rank 1
HDFC Term Click2Protect
Rank 2
ICICI Pru iProtect
Rank 3
LIC e-Term
Rank 3
Sum assured
25 lacs
25 lacs
25 lacs
25 lacs
Term
35 years
35 years
30 years
35 years
Premium
3875
7729
5450
8180
Personal Accident Addition Cost
0.63
0.57
0.40
∞
Settlement Ratio
93.9
94.0
94.1
98.1


Health Insurance


Compare! read policy documents very carefully
I like ICICI, Religare and Max Bupa from the looks of it. I never made a claim because I am covered by my employer.

Livemint article - They advocate ICICI
Comparison image (pasted below in additional notes also)

Property/House Insurance

Got a big house with lot of EMIs, don't skimp buy a property/house insurance that at least covers fire, theft, etc.

Additional Notes

Livemint comparison of Health Insurances


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Friday, July 10, 2015

First time investor - Invest in Mutual Funds without stepping out

Online Friendly Mutual Funds


I went through application process for purchasing mutual funds online, spent 2 lacs to generate this study, so that you don't have to suffer. I targeted direct option with all funds as if I were a first time investor.
With most MFs a little bit of juggling between your personal data like bank account, MICR code and PIN/password generation exercise - you will get online, you can transact online.

Here is the online friendliness meter
Red - Deceptive; First purchase is easy but online transactions are not available
Orange - Paper work involved; This is when you can't make first purchase online
Yellow - Light paper work involved; submission of forms for PIN generation is involved
Green - Good, everything can be done online; no need to step outside

One's marked in Red and Orange are least user and online friendly. Most of them use Karvy software for operations and Karvy is BAD at customer service. For Canara Robeco and IDBI - any emails you send to customer service will go to Karvy! These MFs are not even interested in talking to customers. This is bad news for investors.

Escorts has no online presence, it is very odd that they don't have it.

I chose India Post speed post for all posting of paperwork, most of it just cost 17 rupees within the city. Tracking and sms alerts are bonus.


Online Account Opening Online Transactions Ease of Use / Transactions Security/authentication
Axis  Yes, 2 step register and buy Yes, once folio is created Yes, fairly easy okay
Birla  Yes, 3 steps, first log request for zero balance folio and then wait for activation, and then buy Yes,
Once folio is created		 Yes,
fairly easy to use		 okay
BNP  No, all paper No
Need to request for a PIN. Site is also confusing as it serves both Sundaram and BNP		 Not so great Sharing concerns between Sundaram and BNP
Canara  Yes, 2 step but fully ridden with problems - fake online ease to buy but paper labor to follow No
Needs paper work with physical documents and post, twice the work		 Ok, poor customer service is painful okay
DSPBR  No, all paper and post Yes, easy once folio is created Straight forward okay
DWS  No, all paper and post Yes, easy once folio is created okay okay
Escorts  No, all paper and post No online portal No online portal No online portal
Franklin  Yes, 2 step, register and buy Yes, easy once folio is created Yes okay
ICICI  Yes, 2 step, register and buy Yes, easy once folio is created Yes, old style ui okay
IDBI  Yes, 2 step but ridden with paperwork - fake online ease to buy but paper labor to follow No, folio is frozen till all paper work is submitted, twice the work Painful, need to submit documents and wait, poor customer support okay
IDFC  Yes, 1 step Yes, but will need to wait for 3rd party verification One of the most easy websites to use okay
JP Morgan  No, all paper No, will need to apply through paper and post okay okay
Kotak  Yes, 1 step No, will need to apply for PIN through paper and post okay okay
Mirae  No, all paper and post Yes, once folio is created okay okay
Motilal  Yes, 1 step Lacks username password creation ability, you have to key in folio number doesn't show progress, apart from that is is okay Potential risk of key sniffing as folio number is keyed in
Principal  Yes, 1 step but ridden with paper work - fake online ease to buy but paper labor to follow Yes, once folio is created, works only on MS Internet Explorer! only internet explorer can be used. Firefox and Chrome aren't supported! okay
Reliance  Yes, 1 step Yes, once folio is created good okay
SBI  No, all paper work Yes, once folio is created okay okay
Sundaram No, all paper work Yes, once folio is created okay okay
Tata No, all paper work Yes, once folio is created okay okay
UTI Yes, 2 stepYes, once folio is created okay okay
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Wednesday, July 8, 2015

Mutual Funds in India - Not so easy to tread!

Why should you invest in Mutual Funds

Don't buy Mutual Funds from a broker, buy Direct not Regular, don't commit to SIP right away - do iSIP later.

Let me draw a small diagram of your life in numbers

          income
|>===============|-------------------------||
25    expenditure      55     expenditure     85 
If you start to work at 25 and would retire at 55, go on to live till 85 - You will need to fund 30 years of retirement with first 30 years of salary! 

Your working career of 30 years needs to fund your 30 years of retirement. So, speaking like a lay man you should be saving 50% of your salary and growing it at a minimum of inflation rate. Historical inflation rate in India is anywhere between 4.0% - 11.5% (actual numbers don't matter for the argument I am making). A fixed deposit for a tenure 1 year would earn you at least the average inflation rate. So at a bare minimum you should put your savings in FDs that automatically get renewed and never touch them till you retire.
All your expenses, groceries, emergencies, housing EMI should be funded by your expendable 50% of salary. Cross your fingers and hopefully you will sail through!

Let's take this savings target one notch up now. Why? The more you save, the sooner you can retire. It is not a linear relationship though. If you save 10% more from your salary you wont retire 3 years earlier (10% of 30).
The sooner you want to retire, the higher you will have to save over the 50% mark of your salary and the higher should your returns be over inflation rate. So, what is the next easy way to earn returns above FD interest rate? Yes, markets, and a less risky variant called mutual funds. Debt funds will be a little better and Equity funds will be much better. So it is imperative you have to invest in Mutual Funds - hopefully in Equity or Balanced or Index funds. Come on, don't be a sissy and put all your money in FDs.



How to invest in Mutual Funds?

SEBI is the regulatory body when it comes to Mutual Funds in India. SEBI mandates that everyone who wants to invest in mutual funds should be KYC complaint. You can read on the internet about how to get KYC done yourself. There are a couple of blog posts about it.

Do not apply for mutual funds over 5000 through a broker in all of your life time. Never ever use a broker, ever! They will give you a regular plan and not a direct plan. If you are lazy like me, use them only to get your KYC done for a mf one time deposit of 5000, nothing more. Don't get sucked into SIP right away.

You should always apply to mutual funds directly - either online when possible or through paper. This way you can apply to direct option of each fund scheme. They usually give 1% more than the regular option. Yes, that 1% matters. Use any retirement calculator and you will see that every 1% additional return on investment can sometime cut down you goal of yearly saving up to 40% (magic of compounding!). My most favorite symbol on the keyboard is ^.

 Start with Index funds, gain confidence over a year and then venture into other risky (brown color) schemes. Index funds will do better than most FDs most of the times year over year.

 Next article - Most online friendly mutual funds in India

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Sunday, July 5, 2015

Indian Personal Finance Websites

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