Finwise Personal Finance Services LLP is an AMFI-registered mutual fund distributor. This website finwise.in (and the contact details given on this website) are of Finwise Personal Finance Services LLP. We do not, directly or indirectly, provide any form of financial assistance, lending services, or loan facilitation. We are not affiliated with, nor do we endorse, any digital platforms or applications—specifically including but not limited to “FinWise: Financial Assistant” or the website <fin-wise.co>—that purport to offer such services. Any unauthorized use of our trademark ‘FINWISE’ by third parties is expressly disclaimed and is currently subject to legal action. Users are advised to exercise due caution and verify authenticity before engaging with any financial service provider.
Today’s Finwise Woman is someone who is surrounded by aromas, both at her job and when she is not (her passion is to see the world)! Anusha Iyer is Creative Fragrance Director and is based out of South Africa with her spouse.
She says
“It’s been about 20 years since I started working and I’ve been managing not just mine but also our household finances till date. My goals in life were to have my own house, be debt free and travel the world. Successfully managed to achieve the first two and the latter is work in progress. Having become a travel addict and with a long-term goal of maintaining our current lifestyle I realized it’s time for me to up the game.With Finwise am looking forward to a great partnership to help achieve my dreams!”
Our next Finwise Woman is Mandira Chowdhury, a retired Govt. employee who takes pride in being in charge of her own financial affairs, while pursuing her joys – her grandson and classical music.
She says,
“As a working woman,
(in those days, it was not as common as it is today), I always had exposure and
enough interest to understand finance and various options available to me.
Added to this, I was
married into a progressive family with a strong mother-in-law. I was
always aware of our investments and was part of healthy discussions regarding
it.
Therefore, when I lost my husband a few years back, I knew where to pick up the threads. While it is a blessing to have a concerned and affectionate family, consisting of my daughter and son-in-law, I take great pride in having the last say in managing my money while recognising the need for impartial and trustworthy professional advice. Prathiba has very ably and patiently helped me in my journey so far.One never knows what life has in store for us, best to wake up and take charge of your financial life now!”
Our fifth Finwise Woman is a someone who has lived life on
her terms, and built financial security for herself through sheer perseverance.
Kavita Krishnamurthy is a successful executive, working as a General Manager in
a logistics firm, and a mother of one.
Kavita says,
“As a senior executive, and parallelly an independent mother, I have learnt to be cognizant of managing my funds well and conserving my resources optimally. Without any such backing and support for my future, some far sight and advice taught me well to keep my future secure and dependable.
Financial awareness and the right investments have been largely catalytic in helping me manifest these goals. It is indeed a matter of pride to reflect upon how far I have come in life thanks to my prudence and ability to take anything thrown at me and make something worthwhile out of it.
Being on top of your finances is not a choice, it is a compulsion, especially so for us women!”
Our next story is about another doctor, a scientist from the
reputed Tata Memorial Cancer Hospital, Omshree Shetty.
Dr. Omshree says,
“Come to think of it,
how many women have access to top class education and circumstances
conducive to building a career? Given the opportunity it is important to make
the most of it and build a strong and independent financial base. It is a
non-negotiable step to be able to have choices in life and exercise them.
Being a professional myself, I am a strong advocate of seeking professional help in areas outside one’s expertise to help one live a fulfilling life.In this era of women empowerment, the true sense of independence that women can enjoy is financialindependence and that can be accomplished with careful planning and smart investment. So be wise, invest smartly and live with peace of mind and happiness.”
Today’s first Finwise Woman story is about another strong
woman, who, in an era of male dominance, has been an inspiration for many other
women. She is Dr. Neela Dabir, Dean, School of Vocational Education at the
internationally reputed Tata Institute of Social Sciences.
Incidentally, while her spouse is a very successful surgeon
in his own right, she is usually the one involved in the finer details of their
personal wealth.
Dr. Neela says
“I have always been
interested in money matters, and I go the extra mile to keep myself updated
with the latest information and trends. In fact, my CA appreciates that I
understand the financial matters for both of us. Being on top of things and
constantly monitoring the how and why are important to me and give me a lot of
peace.
I truly believe that it’s important for financial decisions to be joint, failing which, one must at least be informed of where the money is being spent or invested. Every one learns to cope when forced to, but doing so voluntarily can take away a lot of unwanted stress and mistakes when you can least afford it.It is equally important to hire the right professional who places your interest on top and I have Prathiba and Finwise doing that for me by bringing all our finances together meaningfully and helping us live our dreams, while knowing that our financial future is being secured.”
The second person whose story we share today is Brindha Rao,
a blogger and avid gardener. She says
“SAHM. The title I bestowed upon myself to raise my daughter. That does not mean I can’t understand or talk money. My husband has always made me an equal partner in all our financial decisions. And now Finwise has helped us plan our daughters education and hopefully our retirement. I know I am in safe hands with Prathiba’s judgement about our finances. The best that comes out of financial planning is that you get to live and spend at measure and without guilt. Thank you Finwise, I am a wiser and more financially sorted person now.” Feel free to share with other successful women that you know who you think are also financially savvy. #FinwiseWoman #WomensDay #financialindependence
In celebration of International Women’s Day (March 8, 2019),
this week, we share stories of some successful women, who over the last few
years, started their journey with Finwise and took charge of their financial
lives to make it more secure for themselves and their families.
As one of them said, “In this era of women empowerment, the true sense of independence that
women can enjoy is financial independence…”
We hope the stories of these women inspire you to take
similar actions to free your and families’ financial futures.
The first woman whose story we share today is that of
Priyanka Chaturvedi, a successful career professional in a senior role in KPMG
India. Priyanka says,
“As a working professional, mother-of-two, I am conscious that although I am financially independent for my needs, the prime ‘bread-winner’ of my home is my spouse. Therefore, while my not being around (read ‘dead’ or ‘incapacitated’) may not have any financial impact on his life, reverse the story and I would be in the deep end of things!
Financial
awareness, prudence and planning for myself and my children’s future thus is
top priority, almost as important in my list as vaccinating my kids!!
Finwise
helped us write our will which opened our eyes to the stark realities of life;
we aren’t getting younger and responsibilities will increase in the years to
come.
So,
while you must enjoy the present and not get too bogged down by 5- or 10-year
plans, do prepare for what lies ahead. Children’s education, retirement, major
illnesses (God forbid), those world-trips that you want to take when the
children fly the nest… A larger home… Everyone has their unique list!!
Prathiba is helping me plan my retirement way ahead of the ‘retiring’ age and that’s helping me sleep better… I am more relaxed now that some of life’s contingencies are planned for!!”
Feel free to share with other successful women that you know who you think are also financially savvy. #FinwiseWoman #WomensDay #financialindependence
I have been conducting financial wellbeing camps at
corporates for a few years now, and a couple of questions invariably crop up at
the end of the session. One, can you
give us a few good MFs to invest in?
Two, what about investing in direct plans, they are cheaper right? Three my advisor doesn’t call me frequently to
review my funds, shouldn’t he be?
Three questions which sound very different from each other, but are connected to the need of the customer to have access to expert advice so that they can follow a DIY approach to investing. This is natural and a good thing even, when the person concerned has adequate time and knowledge to use this information for his benefit. This is where many of them overestimate their ability and have perfect reasoning too. Let’s dwell deeper into each of these questions.
Can you give us names
of a few good MFs to start investments in?
This is a very difficult question to answer, without having
any other details. Typically, before
recommending an investment to someone, we need to know what is the purpose of
investment. This gives us advisors two important data points, which are
The importance of the goal
can you postpone it without grave consequence? Example. foreign trip. The same may not be true for child education.
The time available for investments
This is crucial to understand as well, to enable making the decision of whether to invest in equity or debt
What about investing
in direct plans?
This is a good way to invest, and yes, it is cheaper to go
for direct plans. This comes with a
condition though, only and only if you have the knowledge and time to devote to
this. Many HNIs and corporates use direct plans, but they have no problem
paying a professional for advice and recognise their limitations in being
effective without advice.
Unfortunately, this is not true for most retail clients, where paying a fee for advice is not an easy decision. As they say there are ‘no free lunches’, if you read about a particular investment on media it may be relevant today, if you invest and forget to check its relevance on a periodic basis, you have no one but yourself to blame. In such a situation, the money saved by going direct may not be worth it when you could have had a financial advisor to guide you and put your interests first and review your investments on a periodic basis for such risks.
My advisor doesn’t
call me?
I meet someone who
said “my advisor never calls me to review my funds or with suggestions”. In the course of the conversation, I realised
the client had invested funds for which the compensation to the distributor was
a few hundred rupees (this info is readily available in the consolidated
statement received by investors every month from NSDL/CDSL). His expectation of having a review and
constant interactions were therefore not in line with what was feasible.
Note though that even if he had invested substantial amounts, constant conversation and change is not required. Investing (once done post adequate due diligence) is very boring and as long as you or your advisor is monitoring it periodically, there is no need for constant action. Hence, it is better to get clarity on the nature and frequency of interactions when you sign up for advice.
The value added by good advice goes much beyond helping you choose a scheme to give you returns in line with your needs. It is more holistic in nature and helps you solve your financial puzzle. You will be guided through turbulent times, because remember, investing is going to be volatile. Your advisor will be able to temper your expectations so that market down turns are not a shock it can otherwise be. Another important aspect where a good advisor adds value is assess your risk appetite and tailor your investment plan accordingly.
How do I find such advisors you ask? Interact with them to find out how the advisor plans her own finances, and ask them the above questions. If they answer with a string of names for the first question, they are not the type of advisor you are looking for. Understand how often you would be interacting, and how they would be getting compensated. Also, check which category you would figure in their current list of clients, these questions should help you zero in the right person for you.
Finwise is a personal finance solutions firm that helps individuals and families plan for their financial goals, follow their passions and achieve financial independence. For consultations, please reach us at getfinwise@finwise.in or +91 9870702277/9820818007.
The interim budget was presented on 1st Feb 2019 and has already receded to the background in most conversations. Now that the dust has settled as well as clarity obtained on a few new proposals, it is a good time for us to look at and quickly recap how this year’s interim budget weighs upon our personal finances.
The one thing which is usually on every salaried person’s wish list from the budget year after year is tax breaks, and this time we did see some welcome changes. A lot of positive moves for those in lowest tax bracket and some for the mid and high-income category too.
No tax if taxable income below Rs. 5 Lakhs, standard deduction raised from Rs. 40,000 to Rs. 50,000
Rebate of Rs. 12,500 has been given to people with taxable salary of upto 5 lakhs, thereby ensuring that people belonging to this group will pay zero tax. Note that if your taxable income is higher than Rs. 5 lakhs you will continue to pay 5% tax for income from Rs. 2.5 lakhs to Rs. 5 lakhs.
The key word here is taxable
income, meaning income after considering all deductions. This means
that people with gross incomes higher than Rs 5 lakh, in fact upto Rs 10.35
lakh can end up paying zero tax, assuming the person has made maximum
investments basis eligibility.
Sample illustration on how to calculate taxable income post all deductions
The attached table clearly
illustrates how a person with gross income of 10.35 lakhs will still avail of
the rebate and end up paying no tax. This is for someone with no HRA, donations
or education loan, a person having any of the above will end up paying no tax
on even higher incomes than Rs 10.35 lakh. The fact that a person earning close
to Rs 90,000 a month can end up paying zero tax if she plans her investments is
a huge positive.
The standard deduction which was at Rs 40,000 has now been increased to Rs 50,000. This benefit is available to people across all income slabs and not just < Rs 5 lakh pa.
Limit for deduction of tax at source (TDS) for interest on FD has been raised from Rs 10,000 pa to Rs. 40000 pa
This will come as a relief to
many pensioners as well as people having FDs as a contingency asset. With lower
limits of TDS, one needed to fill forms and submit it on time to avail of non-deduction
of TDS. This will be a welcome change making the process hassle free.
No tax on second self-occupied house on notional rent
People having two houses were
required to pay tax on notional rent on the second house, even when they choose
not to rent out their premises. This is a very thoughtful benefit and has been
extended given the fact that the number of working couples who are forced to
work in different cities to pursue their careers and build their lives is
increasing. Hence going forward, people who have two houses due to various
reasons can now breathe a sigh of relief.
You can reinvest your long-term capital gains in two houses instead of one.
If long term capital gains
accrued on sale of a house does not exceed Rs. 2 crores, then you can avail
capital gains re-investment benefit across two residential houses instead of
one under section 54. This benefit is available to an individual only once in a
lifetime. This again is a thoughtful benefit extended, keeping in mind inter-generational
purchase of houses, due to greater nuclearization of families.
However if the capital gains exceed
Rs 2 crore than old rules will still apply and to avail of the benefit you will
have to invest in 1 residential house.
In our opinion though, in case
one is not obliged to re-purchase a house (to meet familial needs), it will
make better sense to invest capital gains in Sect 54 EC bonds for a period of 5
years rather than locking up capital in in low-yielding real estate. Post the
lock-in period, one can look at financial assets which have potential to make
much higher returns.
Pension for unorganised sector workers
In our opinion one of the highlights of the budget was the pension scheme announced for unorganised sector workers. We all see our maids, drivers and numerous other people struggling to make ends meet and retirement is definitely not on their priority. Pradhan Mantri Shram Yogi Maandhan Yojana promises a minimum pension of INR 3000 pm at age 60 on minimum monthly contributions. A 29 year old, will need to deposit INR 100 a month to avail of this pension. This scheme now provides a much needed social security net for the huge number of unorganized sector workers across the country and each one of us should ensure that our safety nets ie. our domestic helps avail of this scheme so that they too can have their own safety nets.
Finwise is a personal finance solutions firm that helps both residents and NRIs plan for their financial goals, follow their passions and achieve financial independence. For consultations, please reach us at getfinwise@finwise.in or +91 9870702277/9820818007.
While the basic steps of financial planning are similar for most people there are certain situations which are exclusive to NRIs. What I have seen from interactions with a few of them are as follows.
Are you sure about retiring in India?
While most NRIs are very clear that the children will be educated abroad and in all probability, will never return to India, they are unsure about their intentions of settling back in India post retirement. This can be challenging for retirement planning and deciding if it makes sense to hold on to real estate assets accumulated in India.
Have you insured your health adequately?
Most NRIs have huge global cover currently and hence are in a good position to take care of any medical emergencies should they arise. These are typically provided by the company and hence it can be a cause for worry. What would happen in case of a sudden loss of job? It would mean you dip into your savings for medical emergencies.
In most cases, while people are aware of the need for a personal cover, they have put it off till they retire. Health insurance is available only to healthy people. It is possible that by the time you retire, there is some ailment which has crept up. This will make it difficult to get insured or at the least have undesirable exclusions in the policy.
Have you taken Critical Illness insurance?
Health insurance will cover your medical bills. What happens if you are unable to retain employment due to a critical illness? While this is an important insurance for everyone, all the more so for NRIs, since losing income in an alien land can be even more traumatic. Also note that, while this is expensive in India, it may be affordable in other countries. Do check and ensure you take adequate CI cover. For more details on this subject, you can read an earlier blog of mine.
Have you done Estate Planning?
Again, this is true for most clients, since somehow coming to terms with the fact that death is inevitable is never easy. But in the case of NRIs, this is crucial, especially, when you have assets as well as dependents in multiple countries. Do understand that assets in different countries are governed by different laws. Hence, make a will in India for your Indian assets. Separately, consult with specific experts in countries where you have properties and other assets and plan for them as well.
Have you considered tax implications outside India while making Indian Investments?
As an NRI you may be paying tax on your global income. What is tax free in India need not necessarily be tax free in the country where you reside. It is very important therefore to consult with both your Indian advisor and your advisor in the place of your residence. It is important to seek and heed to the advice of both professionals before you decide on a particular investment.
Do you believe investing in India can only be done in INR?
There are attractive options available in India to park currency of your choice. Check what these are and compare return and risk before you choose your instrument of choice.
Have you closed your EPF account on leaving your Indian employment?
Since it is etched into us that EPF investments give tax-free assured-returns, there is a lot of inertia in taking any action on this. In most cases its good and ensures a huge corpus gets accumulated for retirement. But as per new rules, interest paid on EPF accounts once there is no fresh contributions is fully taxable.
Have you taken care of these minor but time-consuming changes?
If you have multiple bank accounts as a resident, you need to review and close them or convert them to NRO or NRE status. Schemes like Sukanya Samruddhi which is available for residents is not for NRIs, hence you will have to look at closing such schemes. It may be a good idea to have a check list of things to be done on your next visit to India and keep adding to it.
Managing all of this remotely on your own can be challenging if you are an NRI and having a trusted financial advisor who can advise you on these matters as well as execute, will help manage the situation.
Finwise is a personal finance solutions firm that helps both residents and NRIs plan for their financial goals, follow their passions and achieve financial independence. For consultations, please reach us at getfinwise@finwise.in or +91 9870702277/9820818007.
Finwise Personal Finance Services LLP is an AMFI-registered mutual fund distributor. This website finwise.in (and the contact details given on this website) are of Finwise Personal Finance Services LLP. We do not, directly or indirectly, provide any form of financial assistance, lending services, or loan facilitation. We are not affiliated with, nor do we endorse, any digital platforms or applications—specifically including but not limited to “FinWise: Financial Assistant” or the website <fin-wise.co>—that purport to offer such services. Any unauthorized use of our trademark ‘FINWISE’ by third parties is expressly disclaimed and is currently subject to legal action. Users are advised to exercise due caution and verify authenticity before engaging with any financial service provider.
