Budget 2012 introduced RGESS ( Rajiv Gandhi Equity Saving Scheme ), a scheme which allows tax rebate/tax deduction for investment in specified equity schemes. Since there already exists another similarly structured scheme called the ELSS ( Equity Linked Saving Scheme ) under which an investor can claim tax rebate u/s 80C up to Rs. 1 Lakh, it is important to understand the differences between the two.
While we are on the topic of loan guarantee, (See previous post- Guaranteeing a loan? Be careful!) it is important to know why and when will the lending bank insist on a guarantor to approve your loan.
Jay and Vijay are around 35 years of age and are childhood friends, who went to the same school and later passed out from the same engineering college. Jay settled down for the standard software job and now, 13 years later is in the middle management position and draws a handsome salary. Vijay wanted to be an entrepreneur, started his own company which unfortunately is not doing that great and the performance is inconsistent. He does not have a fixed regular income. Hence, when he approached a bank for a home loan, the bank asked for a guarantor. Vijay approached Jay to help him out, and Jay signed up as a guarantor without much thought.
I still remember the first class of my MBA finance course. Stressing on the importance of our chosen stream of specialization, our professor had said “One who studies finance need not know about HR, IT or marketing, but even those who study or will make a career in the above mentioned areas will still have to be financially literate to be able to manage their finances efficiently.
It wouldn’t be surprising if most of us hold at least one of the above mentioned Insurance policies- and keep holding them just because we do not know what to do with them.
Having understood the benefits of global diversification (see prev. post – Why should you diversify your portfolio globally?), here is a list of the various options available for investors.
We all are aware of the benefits of diversification and all of us try and maximize the returns and reduce the risk by maintaining a good mix of stocks, mutual funds, gold, real estate, fixed income and getting it managed professionally.
Talking of global investments, one might argue or question whether it is really required. We are a developing economy, growing at a fast pace. And when there are so many areas to invest across diverse sectors in our country, why look at investing outside your own country just to diversify a bit more? After all, understanding the global markets, evaluating the investment options, the regulatory laws with respect to investments, keeping in mind the currency fluctuations and the tax laws-it is not easy.