Mutual Fund hai to Sahi hai... Start as low as INR 500

I started investing very late may be after 10+ years of working after college but my friend started investing immediately after his college and now his investment value has grown up by 21% to 29% in last 10 years. I wish the investment I started now, could have been started few years back if not 10 years.

Mutual Fund Return Bag

We heard lot of people saying saving and investment are same but that is not correct. Investment may require savings but investment gives you long term benefits in future, saving remains static same like money do nothing lying in your wallet or purse- it is saved there but doesn't grow. If you think your money and resources should do same hard work as much as I do then give an opportunity to grow your funds by investing.

This is true that Mutual Fund (MF) are subject to market risk but lot of people also have this myth that MF are only good for those who are interested in risky investments or share market or equity investment. But the good news is that- mutual funds are made to meet different investors requirement. So, you will find there are different types of funds available for investment in market and you can choose from amount of investment to type of return to type of risk you want to bear.

Through this article we will try to understand more about Mutual Funds.

What is Mutual Fund ?

Mutual fund is a fund collected from different investors who have invested with a motive to earn some gain or return from their investment.

Where the funds collected by Mutual Fund company gets invested ?

Mutual Fund company invest according to the scheme opted by investor and guidelines regulated by SEBI in equity, debt, government bonds, money market instruments, financial instruments available in market or combination of any of these. This could be open share market if it is equity scheme, debt market if it is debt investing fund and so on. If the fund selected by investor is to invest in equity share market as well as debt, then it will invest according to the defined protocols suggested for that particular fund.

Why I should be investing through Mutual Fund and why not directly Share Market or other market ?

It's a diversified pool of investment where fund manager is an expert and knowledgeable investing professional. The diversification in investment value reduces the risk of volatility present in share market. So he and his team managing the fund try to ensure investor investment value always give higher or better returns in the investment market. Here, investor investment value is measured as NAV.

To understand diversification better, please read through this example- To manage the risk in industry and seasonal business, MF manager would invest in two different kinds of seasonal business segments- Coffee/ Tea and Ice Cream, so in this scenario Coffee/Tea will be more profitable in Winter and Ice Cream sale/ profit will go up during summer season. Due to this seasonal effect the returns earned on investment made on these companies would become consistent throughout the year, because loss of one is set off by profit of other company.

So, to reduce the risk of volatility and inconsistencies in returns mutual funds are better than direct investment in shares, plus investment is made in diversified portfolio which reduces your risk of loss of money in long run.

Can I start an investment with small amount ?

Yes, you can start and I would suggest as early as possible and stay invested unless it is really required to pull back the money.You can start as low as Rs.500 and in few MF scheme you can start accumulating or investing in mutual fund units with Rs. 100 also. You can start Systematic Investment Plan popularly known as SIP. You can change the SIP amount as and when required based on the scheme opted, discuss with your investment adviser or broker with whom you like to associate.

Can I take out the money when required ?

Yes, you can take out the money, however few mutual fund schemes have exit load of 1% of investment value so check before you invest or take out the money. One can refer the scheme document or investment adviser.

What returns I can expect through MF investment ?

First you should focus on continuation of return, however general ROI % varies from fund to fund and type of fund and risk selected by investor. Debt fund usually gives lower % return due to less risk involved thereon i.e. 6%-8%. Equity MF schemes offers 10% to 25% depending upon scheme, market, and period of investment.

How to select good Mutual fund for investment ?

You can review the past trend for selected mutual fund for returns, investment portfolio etc. For this you may take help of money control.com (refer the suggested links) or www.valueresearchonline.com to review the details of Mutual fund and making sound decision.

Connect back via comment if you have any query on this subject or if you like to know anything else that I can help you get answers.

How to Become Rich

I want to do this, I want to do that, become rich or wish one fine day Money Grows on Tree

You must have found lot of people talking about becoming rich and having financial freedom either with their jobs or in business or while smoking, talking, chatting. For this they must have be talking something about doing some business, insurance agent, starting envying someone making money, to ending by going back to their jobs and next day starting again from where they started.

But whenever they try to do something they fail because either they fall short in commitment,  planning, passion or it was just a wish and not a strong desire to succeed. Definitely you can't grow Money but definitely make it Work for you.

So, even if you are short of money and time, as a beginner follow these basic steps:

1. Identify your potential, what you are GOOD at,
2. Set a TARGET what you want to achieve,
3. Check what resources are Available to you,
4. Start working on it with Commitment, Hard Work, Persistence
5. Start Tracking, Don't Loose Focus

What are 10 Financial tips and area where you can learn and earn :-

1. Stock Market- May be a good idea if you have an understanding of companies business, financial numbers, stock trends. Like Warren Buffet said investing in companies requires long time to ripe the benefits of patience.
2. Mutual Fund - If you are not good at stock market investment which involves a lot of risk, go for Mutual fund investment where your money is managed by specialized financial advisers and professionals. These mutual fund adviser invest the fund in diversified areas of market like equity, debt and other government instruments. So you as an investor based on your risk appetite can decide where to invest your money. Mutual fund investment usually target to maximize the profit for investor and for themselves. Good Example of MF investment- If MF House or Manager invest in FMCG company, they may like to have consistent stable return on investment. They may invest in Tea/coffee and Ice cream companies so that with seasonal changes the return on investment (ROI) is not effected, which means when one business. (Tea/Coffee) is down in summer Ice cream business or share will perform and vice-versa.
3. E-commerce portal- Use and learn different ways of doing business on e-commerce along with learning and earning money and reputation in society,
4. Find and work on Niche Ideas : Find Solution in Problems of people
5. Learn the art of investing- Learn to invest along with saving, observe, follow and invest small and learn for bigger dream plans
6. Don't hesitate to ask or seek professional advice- atleast it is better than loosing money.
7. Stop spending unnecessarily unless it is required
8. Invest in learning and yourself that can help you achieve more and become richer
9. Share your knowledge and Network, because Network = Net Worth in current market.
10. Don't Just Plan - Start Now

Always remember there are No Shortcut for success...

Do share this post if you like someone else also to read this article. I would be happy to connect more and share my experience & knowledge to learn further from you.

AY 2018-19, Extension of income tax timeline -31 Aug 2018

Hurray !! Extension of income tax timeline from 31st July 2018 to 31st August 2018

Those who could not file return by 31st July 2018 or awaiting some information has a good news, CBDT at the request letter written by ICAI has extended the timeline by one month. This means date of filing income tax return under section 139 (1) is 31st Aug 2018 now.

What if you have tax liability to be paid ?

Assesse who are having tax liability under the income tax should pay their dues within July 2018 itself else you have to pay additional interest under section 234B and 234C @1 % for August 2018 month.

Is it okay if I file late ?

1. Yes, so long you are happy paying extra money to the government in the form of interest and penalty
2. Rest all provisions remain same for non-filing of income tax return under section 139(1).
3. Refer Previous post to understand more on this.

How I can file Income tax return ?

1. You can file your income tax return (ITR) either using online portal, which is an easy way of filing the return. You can also file ITR by uploading the .xml ITR format 
2. For doing online filing of income tax return, first login to your account by clicking Registered User Login link and then fill online return. But here ensure all details are reviewed by you before it is e-validated or submitted by you.
3. If you want to fill an excel format, do click ITR form link to download filing form applicable to you. After downloading fill the excel form and upload back to Income tax website after you review it.

Please connect back with me if you have any question on this article or have any feedback for the author. I will be happy to answer as soon as possible and 

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File Your INCOME TAX RETURN (ITR) by 31st July 18- Avoid penalty - Rs. 5,000 to 10,000

If you are an individual and you are wondering and feeling relaxed thinking Income Tax Return (ITR) filing is same as previous year and you will file your ITR only on last day or due date i.e. 31st July or even after that as a belated return i.e. after 31st July 2018.

Then, please take a pause and read below article carefully and reduce your tax burden.

If you are planning to file income tax after 31st July 2018 i.e. for previous year (PY) 2017-18, do note you will get penalized by Income Tax authorities by Rs. 5,000. Yes you read correctly and your vision is also correct.

Who must file tax returns?

1. Individuals who are having an annual income greater than Rs. 250,000 or more and they are under 60 years of age. 
2. and those between 60 and 80 earning Rs. 300,000 or more, 
3. and those above 80 earning Rs. 500,000 or more
4. If you’re an NRI with an income of Rs. 250,000 or more earned in India during the last year, you need to file return too. Regardless of the brackets mentioned here, you should file your returns to reclaim excess taxes paid, or for several of the other reasons mentioned below.

Do I get benefited for filing in due date ?

1. Yes, one you don't have to pay penalty for non-filing of income tax return i.e. Rs. 5000 from Assessment Year 2018-19 for the income earned in PY 2017-18.
2. Second, if you have paid excess tax and refund is expected - you will receive your refund with interest calculated at the rate of 0.5 per cent per month starting from April 1 of the assessment year.

Is it okay if I file late ?

1. Yes, so long you are happy paying extra money to the government in the form of interest and penalty
2. Interest is charged for late filing of ITR computed @1% p.m. that has to be paid at time of filing giving its detail starting 1st Aug 2018 as first month till the month in which filing is done. This means six months delay means- 6% on outstanding taxes.
3. Penalty of Rs. 5000 also has to be paid for filing after 31 July 2018 and upto 31st Dec 2018
4. After 31st Dec 2018, penalty goes upto Rs. 10,000
5. However if the total income is below Rs. 500,000, penalty amount is restricted to Rs. 1000

Belated return can still be filed with above fines. 

Click this link for more information on ITR compliance- https://www.incometaxindia.gov.in/

Hope this article will help you understand the changes made in ITR compliance and urgency of filing ITR. 

Please connect back with me if you have any question on this article or have any feedback for the author, i.e. how to improve your reading experiences.

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How to start an E-commerce business in small way

Many of us want to start a business that could earn you good money and reputation but lot of us are either not sure what to start or if someone knows, same person don't know how to start and make money.

So, my advice here is always follow your passion, instead what others are doing and how they are making money. So, if money is the only criteria - drop that business plan and look for better options that works well with your passion.

One of the quick way to reach and expand your customer base is E-commerce business. But like all other businesses, e-commerce is also not different and it comes with it's own challenges, hard work and efforts. For this you can either open a website like Amazon or Flipkart or snap deal and work as an agent or mediator between direct seller and online buyer. However this option is already been aggressively controlled by these big players and running a business like them would be a big challenge. Thus, we would suggest the second option which is as under. Following below are few of the tips to start a small size e-commerce business.

1. First identify the product or item that you want to sell online via Amazon/ Flipkart.
2. Select only those products which you understand better or else do detailed research before you plan to sell something in market.
3. Check online or nearby area to understand the cost and product available in market.
4. Talk to Flipkart or Amazon helpline team to understand the charges/cut that you as an online seller have to pay them on sales made through them.
5. Decide from where you plan to purchase this product based on the quality, cost and possible margins available if product is sold online. Here an advice, always try to buy something that can be purchased easily or shipped to you at no or low cost. So buying from a local manufacturer located within same city or same state could be a good idea.
6. Before you buy and sell - understand all the legal and other requirement of selling with Amazon or Flipkart, like courier, packaging, commission, payment terms, return policies etc.
7. All these things are very easy to understand from these website or you can also call them at numbers given on websites. For instance you can call Amazon Seller team @ 1800-419-7355.
8. You can also compute the margins one can make on selling such selected products and items.
9. Register yourself under GST law by applying on https://reg.gst.gov.in/registration/ and obtain GSTIN before you plan selling online, because it's a must. For this you can do it of your own or you can also take help of a Chartered Accountant or other GST practitioners. 

Hope this article of mine, gives you a brief understanding on " How to start E-Commerce Business in a small way". 

However, do note there are plenty of people making a turnover of crores in a year and all of these started very small. Trust me India being such a huge country, e-commerce is still a huge business area to explore. Start early if you really see value in this business because internet is next big business future.

Connect back here if you have any question on this article or have any feedback, I will be happy to answer as soon as possible and share this post if you like or wants other to read this too.