1. 1. Achieve Emotional Equilibrium
      Greed to make a fortune in rising economy or fear of uncertain future; both lead to incorrect financial decisions or even indecisiveness. Calm mind and rational approach will help in such contrasting times.
   2. Strategically protect life risks
      Income protection of earning members to secure financial future of the family is critical, especially when uncertainties surround us. Adequate insurance to protect risks such as Early Death, Disability, Hospitalisation is a must. Standalone health insurance in addition to employer provided group cover is essential to cover hospitalisation expenses during lay-offs, gap in job transition and most importantly during retirement phase of life!
   3. Save for the rainy days!
      Regardless of your occupation, maintain contingency fund equal to approx six months of household expenses plus loan EMI’s. In case of emergency or income loss, contingency fund will help protect other assets.
   4. Spend wisely
      Capitalism thrives on producing and selling what may not be required. A clear differentiation between need and want, is the key to wise spending. Budget your expenses to identify leakages and wastages.
   5. Avoid the ‘debt trap’
      Loans to gratify wants is a proven way to run into financial stress; sooner or later. Keep loans to the minimum, with EMI’s capped to 30-40% of net monthly income. For loans on floating interest rate, ensure revision in interest rate is applied on time by your bankers.
   6. Commit to financial goals
      Financial goals are the compass to stay course and build wealth. There will be ups and downs, the very nature of life & markets. Short-term correction in equity funds especially during first 6-7 years is natural.
   7. Asset allocation is the key
      A diversified, unbiased mix of asset classes makes the financial plan strong and stable. Performance of asset classes is generally cyclical, and each has a role in building wealth. Occupation, income, holding time, risk profile, age and health are some of the factors to determine asset allocation %.
      Let us imagine a festive feast prepared by a grandmother, variety of flavours and textures leading to fulfilment. Asset allocation is akin to that in a financial plan.
   8. Periodic Wealth check-up is a must
      A financial plan which is dynamic and relevant with time remains effective! Changes in family size, career, health, economy, government regulations, compliances etc affect the financial plan. To stay aligned, ‘review’ once a year is worth it!
   9. Prioritise health and fitness
      This point may appear out of context. However, fact remains that health impacts creation and retention of wealth. An agile mind and active body is more productive and capable for challenges. Moreover, staying healthy can keep the medical expenses away.
   10. When in doubt, reach out
       Even with a sound financial plan, an unexpected situation may present itself. Or, a random financial product, investment option may look tempting. Before making a move, seeking guidance and support of a credible professional always helps.

By- Lt Col Sunil Tandale, Veteran
09 Aug ‘24

The post 10 steps to build financial resilience in uncertain times appeared first on Renascent Wealth.

DIY (Do it yourself) product buying is the ongoing trend.

Flashback, a decade or two ago – random financial advice still existed, however limited to personal connections – friends, colleagues, relatives or agents.

In both scenarios, a product focused approach ignoring the compliance, legal aspects & attendant risks – have created & will create complexities sooner or later! Often the situation is better described as a mess, leading to losses, and challenging to sort out without professional help.

Let’s understand with two real life scenarios –
Case 1
Shri Raghav (name changed for anonymity) a senior citizen was always good at savings. Living a modest life, the family vowed to put aside money to build a secure future & they did. He picked multiple financial products during his career – conventional life insurance policies, mutual funds, shares and few bonds. Other assets included real estate & bullion.

At age 60, it was now time to utilise his assets to begin a passive income stream. Proceeds from PF (being a private sector employee) & insurance annuity would fall short of requirement. A solution was needed.

Enter financial professional – appointment taken, meeting scheduled. Shri Raghav walked into the office with a bag full of documents, proof of investments held in physical mode. Exact accumulated value of his investments unknown. Upon scrutiny – gaps emerged & so did compliance lacunas. The sellers of most of those products were no longer in contact to reach out. The challenge was on!

It took four months & approx 300 manhours to put things in order & get all financial assets streamlined in a de-materialised (Demat) mode, with compliances in place. Shri Raghav was happily surprised (startled would be the right word), to know the total accumulated value. Other assets were restructured & monthly passive income created. A clear blueprint of his networth with asset class wise holding rendered him more confidence. Today, Shri Raghav is living a fulfilled retired life; free of worry & financial dependency.

Take Away – Financial Planning is a continuous, life long process; not a random product buying activity. The end part of the process being seamless transfer of legacy. When random approach is replaced by scientific process, the benefits are both – tangible & intangible!

Case 2
Prem (name changed for anonymity), a savvy Gen Z software professional was putting aside some money using DIY approach. He selected products based on views of social media platforms & ranking websites. Over two years he was invested in 12 mutual fund schemes and 08 stocks, through three different online aggregator platforms. Prem was excited to see the double-digit returns on his equity investments. However, monitoring his investments seemed tedious and a bitter Crypto experience made him cautious.

It was time to seek professional support to know if he was on track.

During pre-meeting evaluation, Prem’s eCAS (Consolidated Account Statement) unfolded a different story. Having opened three Demat Accounts – 100% of mutual funds held by him were in physical mode! 50% with ‘no nomination’. A detailed awareness session, helped Prem understand the purpose and gave him direction. Today, with a defined Financial Plan, the young professional is applying skills to his own domain, & making strides to fulfil his goals.

Take Away – Opening an investment account on an online platform does not ensure that investments are held in ‘de-materialised’ or Demat Mode. Physical folios may seem easy to pick, but difficult to manage since any updation/amendment, transmission of units to nominees requires signatures & paperwork.

Moreover, ‘Asset Allocation’ plays vital role in Wealth Creation. Keeping the financial plan dynamic with needful re-structuring is therefore the key.

In financial context, DIY must have a new definition – Did I Yo-Yo!

By – Akanksha Tandale, CFP®
18 Jul ‘24

The post Are your investments unknowingly scattered? appeared first on Renascent Wealth.

• Insurance is too complex for me
• I am too young to buy an insurance policy
• What’s going to happen to me? I am hale and hearty!
• I am always here for my family…
• Health science is pretty advanced, people live much

longer If yes, then you need to consider the case of Aditya and Radha.

My colleague told me that she was investing in a term policy. I could not understand the need for it. She said, “Just like you, I too did not care for life insurance earlier. However I saw death very closely in my family. Aditya, my brother-in-law passed away in a car accident. He was 48. This left my sister Radha in an emotional shock and financial disorder.

Luckily, Aditya had taken a term insurance plan at the age of 37. He had chosen a life cover of ₹2 crore and a policy term of 30 years. Radha received the amount within three months. This helped her manage daily expenses as well save for the bigger goals like her child’s education and marriage.”

After this conversation, my perception about life insurance changed. I now acknowledge that anybody can face a crisis in life. It is always beneficial to plan income protection for your loved ones such as parents, spouse, siblings, and children.

Term insurance policy allows you to achieve just that. The proceeds from the term plan will allow your family/ dependents to maintain their lifestyle, meet their financial goals, and pay off liabilities in case of the policy holder’s unfortunate early demise. Interestingly, Term Insurance
is now available with “return of premium” option also. The first step to having term insurance, is knowing the benefits.

So, what are the Key Benefits of Term Insurance?
1. Term Insurance offers high life covers at lower premiums
One of the major benefits of term insurance is its low cost. Additionally, the premiums are lower when you buy it a young age. Thus, the earlier you buy a term policy, the lower the premiums.

2. Simplicity of Term Plans
Understanding term insurance is easy. It is a pure life cover. This means that there is no investment component. One needs to simply pay premiums against which the insurer covers the life risk of the policyholder for a fixed duration.

3. Tax Benefits of Term Insurance
Tax savings should not be the main reason to purchase a term policy; nevertheless, both the premiums as well as the payouts offer tax benefits and exemptions respectively as per prevailing tax laws.

Benefits under Section 80C
Life insurance premiums up to Rs. 1.5 lakh per annum are exempt as per section 80C of the Indian Income Tax Act subject to fulfilment of certain conditions specified. This is also available for the life insurance premiums paid for your spouse and/or children.

Benefits under Section 10 (10D)
Term insurance plans offer certain payout on maturity and/or death of the policyholder. The maturity amount, or the death benefit, are fully exempt under the provisions of 10 (10D) of the Income Tax Act 1961.

4. Death Benefit Options
While term policies provide a lump sum maturity amount, you can get plans that combine lump sum and monthly incomes, and also those with an option of lump sum with monthly income.
This helps your family manage regular expenses and also manage the inflation impact.

5. Riders of Term Policy
Term insurance policies come with optional riders that enhance the benefits of a basic term insurance plan on addition of a nominal premium. For example, opting for a Accidental Death and Dismemberment allows the life assured to stop paying premiums if he or she suffers from dismemberment. The policy will not lapse and the cover continues.

6. Whether to take insurance online OR through Renascent Wealth?
Following advantages reach you, when you plan and obtain insurance through Renascent Wealth:

• Need analysis based on specific individual parameters, rather than standard templates.
• Scientific approach to customise insurance coverage which is most suitable to you.
• Ensuring adequate insurance coverage to create good income protection.
• Qualitative and factual underwriting to ensure hassle free claims.
• Selection of reliable Insurance Co. based on credibility, financial strength, claim settlement ratio and economy of premium.

The post Benefits of Term Insurance appeared first on Renascent Wealth.

The post Why Increase SIP ? appeared first on Renascent Wealth.

Money never settles at one place. It moves from one asset to another, thereby creating valuation cycles across asset classes. This is how the financial system works. Investor preference may vary based on one’s risk appetite. No one fund can be a ‘one size fit for all’ option. However, there are some funds that are built to capitalise on such money movement from one asset class to another.

Balanced advantage fund is one such category.

The balanced advantage strategy run on the principal of generating returns by efficiently adjusting investment from one asset class to another. Building the balanced advantage strategy may sound easier, but it is a complex procedure.
Every asset class has different attributes and one needs to have a good understanding of various dynamics of different assets. Therefore, investors need to consult a financial adviser or look for balanced advantage funds offered by various mutual Funds

Volatility is the essence of the market. There are many factors that trigger volatility such as RBI policy, high frequency economic indicators, government policy reforms, global macroeconomic developments, geopolitical events etc.

Many a time, volatility triggers psychological pressure on investors and compel him/her to take uninformed/undue actions. Investors tend to lose money in such times. This is the premise on which the balanced advantage strategy has been built to help remove the psychological pressure on investors and compel him/her to take uninformed/undue actions.

These funds follow an investment style that involves diversifying the exposure into more than one asset class and judiciously adjusting asset allocation. They aim to reduce the impact of market volatility on the portfolio. These funds may help remove psychological barriers of greed and fear from investors. The strategy involves adjusting equity allocation based on valuations. This means as the valuations get expensive, these funds would reduce allocation to equity and move into debt.

Likewise, when the valuations turn cheap, they would increase allocations back to equity. One of the benefits of such funds is that, there is no exit load for shifting from one asset class to another within the scheme. There are a number of options available to the investor when it comes to investing in these funds.
Investors may take exposure as per their understanding of the underlying asset class. As multiple assets are involved in such type of investing and each asset class has its own dynamic, one should avoid managing it by themselves and may take guidance from professionals.

WISH YOU HAPPY INVESTING!

The post How Balance Advantage Funds Work appeared first on Renascent Wealth.

1. Till 31 Mar 2023, Debt Mutual Funds if held for more than 03 years enjoyed long-term capital gains @ 20% tax with indexation benefit.
2. As part of amendments made in Finance Bill, 2023, w.e.f 01 Apr 2023, capital gains made on Debt Mutual Funds (with less than 35% equity exposure) will be taxed differently.
3. Therefore, any capital gains (whether short term or long term) will be taxed as per the investor’s tax slab w.e.f 01 Apr 2023; similar to how bank fixed deposits, term deposits are currently taxed.
4. However, the new change is estimated to have a negligible impact if any on most retail investors, as their investment duration in Debt Mutual Funds Viz. Liquid, Low Duration, Short Duration, Medium Duration is typically between 0 to 03 years.
5. The change in tax rate will have no impact on Equity, Aggressive Hybrid, Balanced Hybrid, Balanced Advantage & Arbitrage mutual funds, since these funds will continue to have the benefit of equity taxation which is comparatively more attractive. MF investment plans of our investors constitute these funds, and pure Debt Mutual Funds (with less than 35% equity exposure), plus holding time of 03 years & beyond have not been part of the investment plans. As such, the new change need not be worried about.

For details, please see the tabulation below: –

The post Taxation On Mutual Funds appeared first on Renascent Wealth.

Ascertain your own income protection based on following guidelines:

The post Income & Risk Protection appeared first on Renascent Wealth.