MyWay Wealth Weekly Update (Issue #14): The Wealthy & Wealth of India and more…

Our favourite holding period is forever.

-Warren Buffett

Recently, IIFL investment managers teamed up with Wealth-X to create ‘India’s Quantum Leap’ on the wealth and wealthy of India. This week, I’ll be borrowing a few statistics from this report to present you with a fresh and a new perspective on wealth & the journey associated.

India is expected to add the fourth-highest number of High Net Worth Individuals in the next five years, only behind the star economies of U.S., China, and Japan yet ahead of the European powerhouse – Germany.

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8 Personal finance changes that have kicked in April on-wards

Take a look at these 8 changes:

1. Re-introduction of LTCG at 10% on equity and equity mutual funds: Equity and equity oriented mutual funds were tax free but now, all long term capital gains above Rs. 10 lacs are taxable at 10% flat tax rate.

2. Dividend Distribution tax: Dividend for equity/equity oriented mutual funds are tax free. However, from this year the same will be taxable subject at a 10% dividend distribution tax. While dividends in the hands of investors will remain tax-free companies paying taxes will have to pay the tax proceeds.

3. Standard deduction introduced: Standard deduction is a flat income deducted from the salary prior to the calculation of taxable income. Standard deduction is provided upto Rs. 40,000 from salary income to employees. Pensioners will benefit from the move who did not use to get travelling or medical expenses (If you are a pensioner, read our blogposts on “Pension” to know more).

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Tax saving

Top Tax-Saving Funds

Tax season is as certain as sunrise.
You’ll be better off having a hat at all times!

“Request for submission of proof of investments”: This is the email subject I woke up to this morning. I realized that many, just like me, are just so engrossed in the frenzy of daily tasks that we sometimes forget our essentials – like saving tax through 80C deductible investments.

It would be too redundant to list out a comparative table enlisting tax-saving options with their pros/cons and prove how ELSS mutual fund is the best tax-saving avenue in terms of the lowest lock-in period and highest return expectation.

However today, let’s cut to the chase and let me present our top ELSS mutual fund picks for the year 2019 which will not just help you save on taxes, but also help build you some decent wealth.

Fund NameFund Type3Y Returns5Y Returns
IDFC Tax AdvantageAggressive13.9%16.4%
L&T Tax AdvantageAggressive14.5%16.3%
Aditya Birla SL Tax Relief 96Low-Aggressive14.0%19.2%
ICICI Pru LT EquityModerate12.0%16.1%
DSP Tax SaverModerate13.7%17.6%

While these are our top picks for the year, you may choose to invest in the fund that matches your risk-appetite. Remember, the risk reduces as you move from small cap to midcap to large-cap allocations.(Source: Morningstar; data as on 17 Jan 2018; returns are annualized)

While ELSS is the only tax-saving investment option with a lock-in period as low as three years, the equity component has been the largest wealth creator when it comes to asset classes.

While equities work like a gold mine which takes years to mine, but at the end delivers a fortune, it only helps to see what has been moving this mine in the past week.

Nifty Data

Now that you know the necessity of ELSS go ahead and invest through MyWay Wealth.

Cheat sheet to utilizing your bonus in the best way possible

It is that blessed time of the year when your salary account gets credited with a bit more than usual. But do you remember how long that feeling lasts? Probably you will feast yourself with a vacation or buy yourself a nice gadget. However, remember within a very short period of frivolous spending your extra income disappears. During this entire process, seldom is we think about ‘investing’. I will discuss a few pointers on how smartly you can use this money to make it work better for you:

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Build Wealth: Shubharambh

Everybody wants to build wealth but most people don’t know where to start. The best time to start building wealth is when you are earning. But as it sounds easy the process seems so daunting – saving money after all the expenses, planning how much to save, doing all the paperwork etc. All these tasks seem to be very difficult and hence we procrastinate.
The ultimate stepping stone towards building wealth should be kept now.

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A gift for retirement – National Pension Scheme

The average life expectancy has increased to 70 years, so a quick question went through my mind what if I have been gifted such a long life, shouldn’t I plan for a healthy and happy retirement? Shouldn’t I be prepared for the future?
I am pretty sure that this question might have crossed through your mind too. The answer for the same is National Pension Scheme.

What is NPS?

National Pension Scheme is a defined contribution-based Pension Scheme launched by Government of India. NPS is regulated by Pension Fund Regulatory Authority of India (PFRDA). It is a voluntary scheme for old age security.

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mutual funds

Aren’t Mutual Funds Risky?

Although Mutual funds are regulated by the Securities and Exchange Board (SEBI) of India,  people are skeptical of investing their money in Mutual Funds. The reason for this phenomenon is “Safety of your investments”. Since Mutual Funds are linked to the market, investors doubt the safety of their funds and the guarantee of their returns. This article addresses the concern and lists out reasons to prove that investments in Mutual Funds are safe even though they are risky:

Regulated

As stated before, SEBI regulates Mutual Funds with the intention to protect the interests of the investors. SEBI sets guidelines that help investors in comparing various funds and also have categorized Mutual Funds into – Equity, Debt, Hybrid, Solution Oriented, and Others. This makes the entire system simplified and uniform.

Diversification

Mutual funds have definitely capitalized on the quote “Don’t put all your eggs in the same basket”. Mutual funds wisely invest your funds in various instruments such as stocks, bonds, company shares, etc. Thus reducing the risk that could arise from investing in a single stock.

Reduces Risk

Mutual Funds are managed by Professional Fund Managers. They make decisions regarding the buying and selling of funds based on research and abide by the standards set by SEBI. They constantly evaluate the investments and address risk by diversifying asset portfolios.

Inflation-beating returns.

Mutual Funds account for inflation. The inflation rate in India has been between 4% – 7% and with Mutual Funds, investors have the potential to earn more than 15% in returns, which easily beats inflation. Thus the real interest rate (i.e. nominal interest rate – inflation i.e. 15% – 7%) is more in Mutual Funds when compared to FDs.

Flexibility   

Emergencies such as accidents or health issues are uninvited guests in anyone’s life. One way to face them is to be able to access your money easily. With Mutual Funds, you can withdraw your funds anytime and the amount gets credited to your bank account. Also with MyWay Wealth, you can invest for a specific goal (retirement, child’s education/ marriage, vacation) or just park your money aside with 3-year investments.

A fund for every investor.

Investment decisions have to be made based on the investor’s risk appetite & investment horizon and with Mutual Funds that is possible. Mutual Funds provide tailor-made funds that suit your financial needs. Right from short term funds to long term funds, Equity Funds (High risk, high returns) to Debt Funds (low or moderate risk and returns), you can find them all under one roof of Mutual Funds.

“Everything you want is on the other side of fear” Jack Canfield

Now that we know Mutual Funds are not as risky as they seem to be, let’s overcome the fear. Don’t Delay – Invest Today!

invest in gold

Make wiser investments in Gold

“Gold has two significant shortcomings, being neither of much use nor procreative”

-Warren Buffett

One of the most prominent investors of our time, Warren Buffett is known for his advice on investments is telling people to trade in anything but “gold”. However, we Indians love gold and just cannot let it go. It would be hard to find a person who has not invested in gold in one form or another. There are those who buy gold jewelry for different occasions like weddings, festivals, etc., while others look to make a profit.
“Gold is not an investment at all!” said the Vanguard founder and former CEO, John Bogle in an interview with CNN. “Gold is speculation. It has absolutely no underlying intrinsic value,” said the American investor, who is known for promoting Mutual Funds. An investment that only recently became popular among the average investor for its low-cost and high earning schemes.
Did you know that you can invest in gold through Mutual Funds? This investment vehicle collects the money and invests in physical gold without the hassles of storage and low yield. There are two ways you can go about it. One is to invest Gold Exchange Traded Fund (ETF) and the other is to simply invest in Gold Funds. Let’s see how they differ from each other :

 

Gold ETF

Gold Fund

  • Investor trades in the physical gold through an exchange.
  • A Mutual Fund scheme which invests on the Gold ETF and other related assets.
  • Can be purchased from the stock exchange and requires a Demat account.
  • Can be purchased in Mutual Funds without a Demat account.
  • Gold ETFs are priced transparently based on international gold prices.
  • Gold Funds invest in Gold ETFs and other related assets, their NAVs are dependent on gold prices as well as prices of other assets that funds hold.
  • Gold ETFs typically require a minimum investment amount of 1gm gold which is close to Rs 3,000 at current prices.
  • Gold Funds allow a minimum investment of Rs 1,000 (as monthly SIP).

 

If you were determined to purchase gold, do so with the better investment vehicle. Since Gold Funds are professionally managed, they are preferred over physical gold, even though it holds less liquidity. Using the MyWay Wealth App, any person can trade in these funds with his specific appetite of risk. Explore More on Top Rated Gold Funds

So go for the real gain, not just for the gold!
Think MyWay Wealth!

MyWay Wealth Weekly Update (Issue #13): Fresh perspectives to regular decisions & more!

At the very outset, wish you a very prosperous 2019.

Last year has been quite eventful with many not-so-pretty events unfurling. However, the good news is that Indian equities continued to remain wealth creators. While 2017 was extraordinary and 2018 delivered relatively low, Nifty still managed to deliver an annualised 15.4% in the past two years.

For those of you bored of the routine, here’s a short video that sums up 2018 and our hopes for 2019 in a manner much more fun than you would have ever seen – Click Here.

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Gold or Mutual Funds?

Gold or Mutual Funds?

As women, we love to show off our gold jewelry as they define our social status, lifestyle and earning capacity. Weddings, anniversaries or Akshaya Tritiya, we rush to get our favorite ornament made of gold.
We hear our moms and grandmoms say, “Buy Gold, it would help when you are in need of money”. Meaning, traditionally Gold is not just a piece of jewelry but is considered as an investment.
Then why does the business magnate, Warren Buffett, does not invest in Gold?
He says: “It doesn’t do anything but sit there and look at you.”

Do investments in Mutual Funds fetch better returns? But do I choose Mutual Funds or Gold?
Let me list down the differences between the two, this will help you to make the right choice.

Investment in Gold

Investment in Mutual Funds

  • Gold is not affected by market conditions.
  • The process of investing gold and managing investments is an individual’s responsibility.
  • Fear of theft or loss of purity is more as Gold is a physical asset.
  • Diversification can happen only if one chooses to invest not just in Gold, but in silver, or other mining products.
  • Value of Gold is more hence the amount you invest in Gold would naturally be high.
  • Gold remains to have the same value unless someone buys it at a higher price.
  • Gold incurs making charges and wastage
  • Mutual funds are affected by market conditions so there is potential to earn higher returns.
  • Mutual Funds are handled by Professional Fund Managers who perform research and guide your investments in Mutual Funds.
  • Mutual funds are invested in stocks, bonds, or Gold ETFs, they are electronic or online investments.
  • Mutual funds provide the option of diversification as it allows investment in bonds, cash, or commodities like gold and other precious metals.
  • Initial Investment in Mutual Funds can be as small as Rs. 500 Read More: Let your money grow
  • Investments in Mutual Funds earn high returns as time passes. Mutual Funds Providing >15% returns.
  • Mutual Funds have no such charges, in fact, investment in Direct Mutual Funds don’t even have commission charges.

Does this mean I cannot invest in Gold? No, they are better ways to invest in Gold.

Yes, MyWay Wealth, India’s most trusted app for Direct Plan Mutual Funds, allows you to invest in Gold through Digital Gold – 24K Gold, where:

  • You can buy the desired quantity or amount of gold above Rs. 1000 and purchase it at the live price quoted.
  • Track your gold value & transactions anytime from your gold tracker.
  • Sell any amount of gold above Rs. 1 & get the amount credited in your bank account within 72 hours.
  • Get gold coins/bars delivered to your doorstep when you have more than 1gms of Digital Gold.

 

Start Investing in MyWay Wealth