1. First of all you are dependent on your employer. That does not sound too great, does it?

2. Your employer could just do away with medical insurance completely. Period.

3. Suddenly your parents could be excluded – and if they are above 65 you will struggle getting them medical insurance AT ALL.

4. Your employer could exclude your spouse and children (do not look horrified, it happens far more regularly than you wish to accept).

5. What happens if you have quit a job on Friday, decided to join on the coming Wednesday, but your heart decides to attack you on Monday? Remember between jobs you will have no insurance.

6. If you lose your job – and you are perhaps most vulnerable, you lose your insurance too. When you have just lost your job, the chances are insurance premium is NOT likely to be your topmost priority.

7. The waiting period for your spouse and children could be different from the waiting period for you. This means your wife may be without cover for say 3 years because you have changed your job.

8. If you move from a large company (say 15000 employees) to a small company (say 700 employees) – which could suddenly see a reduction in coverage amount.

9. Rarely, if at all, do companies increase the sum assured to cover INFLATION.

10. Many companies take medical insurance without realising the impact of non payment of claim.

…10 points per post!!

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Well for those who took up a job in 2007/8 (means born in 1985 or later) markets have not been a great – at best it has been lukewarm. All those who started a SIP in 2009 or later are still waiting to see some returns over the bank fixed deposit rates.

Those who listen to their ‘psu’ or ‘government’ oriented elders in the family even starting a SIP must have been difficult. Now they must be facing the wrath of the family saying ‘see your portfolio is down by 30% – in the bank you would have earned….’ blah blah blah.

So these kids are under tremendous pressure -on one side from parents who do not understand equity investments, media which loves action, and other classmates saying ‘see I told you not to listen to Subramoney (take your pick) see what has happened.

What should they do?

1. Remain calm: if you are investing for a long term (let us say for a goal 5 years away) just continue your SIP.

2. Remember if you look at equity on a daily basis, you could get scared – just stay away from the idiot box or the pink paper whichever is your mode of poison.

3. When somebody asks you to buy a Pension Plan, ask for the asset management charges. Recently one mutual fund has launched a Retirement Plan – and I have seen websites and ‘advisors’ doing a detailed analysis WITHOUT talking about the asset management charges. Did I say ‘It is difficult to make a person understand something if his livelihood depended on ‘not understanding it’ ? well here that is another problem…

signing off for now…:-)

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- PSU jobs are safe and the best

-dealing with a government agency is good, because they will not cheat you

Sure Psu jobs are the best -ask the retiree from Air India who has not been paid his dues…for the past few years.

So if you were an AI employee and you were dependent on the PF /gratuity for your old age – you have been reduced to being a pauper. You are now dependent on your kids for your food and shelter.

Ha ha…you played safe and had bought a house, did you say?

And that too from a government agency named CIDCO – and the house is at Nerul? Well for some reason you have not got the NOC for occupying the flat…eeek…no money, pay the EMI but no flat….like a friend said

“bad luck itna kharab ho gaya”…Of course Cidco has its story of what went wrong and Air India has its own story of ”what went wrong” – The transaction started in 1992…most employees would have finished paying the EMI in 2010 (you normally get possession when you START paying the EMI!!).

I do not have all sides of the story….but it must have really hurt the employee, what say? If you do Google around you will find that DNA has done a story on this on 25 nov 2011……..

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Can you believe this…if you are a middle class Indian?

I found it a little amusing…but not difficult to believe. When I spoke to him, I just heard some of his expenses – Rs. 3000 for a gift for a colleague’s wedding, EMI on a car, and EMI on a motorcycle. Rented house – supporting his parents so paying Rs. 23,000 as rent.

These were too adhoc, so I did not want to be judgmental. So I asked him to maintain accounts for at least a couple of months before I could comment….and here are the expenses:

i was not as stunned to see this. This guy is about 28 years of age – works as an accountant – and as he himself admits, he is well paid. He is still a bachelor, says he is not a big spender – and has ZERO savings – except for some mutual funds (80C), nsc, and ppf.

I said my life style is very different, cannot comment on yours.

However readers are welcome to comment. He reads my blog….:-)

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Unless your parents have set the Thames, Ganges, Kosi, Nile on fire, chances are they have not managed their investments well. They may have done well, but it may not have been their strategy – could be luck!

So here are somethings that your parents / elders / teachers may tell you…and you should…ignore! Let me list 10 of them first:

1. Do something, do not just sit there: at least my mom has told me this a million times! In investing as in playing a sport – leisure/ recovery time  is just as important. Like a war – you prepare for 361 days and fight for 4. While investing you invest and then sit tight for long periods of time. You do not ‘have’ to do something. If you do something it has to be as a part of the overall strategy.

2. PPF, LIC, National savings certificate, etc. are safe investments: Well they are the best way for the government to get an unending source of money, nothing else. Post inflation and post tax all these investments WILL SURELY yield a NEGATIVE return. Remember it is the borrower who can decide the rates. Extremely unfair, but that is the truth! These are at best SAVINGS products, not investment products.

3. Maximise your PPF: If you have Rs. 70,000 to invest in a year, only about Rs. 1000 should go to PPF. However if you are investing about Rs. 5-6L a year, max your PPF.

4. If your funds are not doing well, churn: Yes winners rotate, but losers stay at the bottom! …but if there is a well managed fund and it is not performing, do not churn. Look at the fund manager, see if there is a change. Check whether there is a cultural change in the organisation. See the portfolio composition. If there is no change here, stay on in the fund. See why did you like it in the first place. Sadly investment monitoring is a process monitoring not a result monitoring.

5. Read the newspapers, be well informed, and act: The new theory is be well informed, but think for yourself! The media is not a place where you can learn. The standards are not exactly the highest in terms of quality. Also there is too much sensationalism even in the financial news. The best thing is to perhaps not read the pink papers…many have turned yellow.

6. Good things are expensive. The more expensive they are the better the thing. Perhaps true for all products OTHER than funds. The only thing within your control are the expenses that the fund manager charges. Also the way Sebi has structured the charges, as the size of the fund increases costs REDUCE. So a fund with a bigger corpus (say Rs. 9000 crores) equity fund will charge you less than a fund with a smaller corpus of say Rs. 3000 crores.

7. See your funds returns, if it is not good churn: Not to be confused with point no. 4: If your fund is not performing well, learn with what to compare. In a year where the Sensex has given you a return of -4.5% p.a. if your fund has fallen by only 1% – your fund is doing well. People compare previous year return to current year’s return. Learn how to compare, then compare, and then decide what to do.

8. See the fund ratings and invest in 5 star rated funds: The stupidest move! Star ratings are sold for getting ads. Not for the retail investor to use. As the total number of funds increase, the total number of 5* rated funds will keep increasing! Raters say ‘past is not an indicator of the future’ but anchors keep saying ‘buy it, it is a 5* rated fund’. The rating is one of the most cruel jokes on the investor. It means, nothing for investing. Just ignore the ratings. I am seriously considering starting a rating agency – and my lowest rating would be 5…then keep going up to 10! So my WORST fund would be 5* and best would be 10*. How does it matter? So be careful about the rater!!

9. Indexing works in developed markets, not India: If you do not want to worry and make mistakes, stick to an index funds like Templeton India fund (Sensex). It will not give you sleepless nights. Indexing will work in India over the next 10 years for sure.

10. Active management of a fund will help you compete with the best (please buy my news magazine is what they mean!). They also help you beat a recession, etc. Complete bull. Markets are a baby of ups and downs. The best fund managers can and do add value, but it does not mean they can beat the index consistently and avoid a bear run. Normally their performance is compared to the benchmark.

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Anybody who comes on television says ‘there is a huge demand for infrastructure, so invest in infrastructure’ -brilliant argument, completely wrong.

Experts, if you have forgotten your basic Economics, here is the answer:

Demand = Need for a product + Ability to pay+ Willingness to pay.

Let us look at another product: Pensions.

Who needs it? All of us – above or below the poverty line. So invest in a company selling pension funds! Correct? Complete bull. UTI and Templeton have a pension plan – and they cannot sell. All insurance companies have pension plans…and they cannot sell (some people buy, but that is because the commissions are attractive for the sales man)….

So go to the basics. India needs infrastructure. Till we learn to pay for it, and pay a fair price for it, it is only ‘need’.

Look at education. There is ‘need’ and there is willingness (parents, albeit!) to pay for a MBA…so it is a Rs. 40,000 crore industry. So is there need for infra? yes. Is there need that all buildings over the age of 30 are demolished and rebuilt so that our cities look good? Yes. Is there need for more trains? Yes

Is there demand? NO. Not at fair prices (the provider has to make money after paying salaries, rent, interest, …etc.). Same as pensions.

So infra may not be a great investment……and why mutual funds and insurance companies will NOT MAKE MONEY for another 20 years HONESTLY selling pension schemes.

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These are not about the troubles I have gone through. God knew (knows) I am perfectly not capable of handling problems, so does not give me any. Like they say God tests those whom he loves…..

This post is about the girls I knew / know and some of their lives…

Of course most of the girls that I knew from school, college, place of stay,…etc. would have gone through a normal life….but some have not.

Some of the girls have gone through a love marriage – an euphemism in retrospect.

Girls who married young and wrong. Girls who lost their parents and were subject to mental, financial and physical abuse. Girls who married young, wrong and went through abuse. Girls who went through abuse, came out of it stronger and are living a nice life again. Girls whose step parent abused her, but was supported by a friend to stand up and come out of it.

Girls who married right, fell ill and their beloved husbands gave up a lot to help them come back to normalcy.

Girls who told me about the abuse when it happened, and girls who were too embarrassed to tell the world what happened. One girl who spoke to me last week and brought tears to my eyes because of the flash back of what she had gone through.

Girls who shrieked ‘Sir …here is your son-in-law’ to a girl who said ‘I wish you were my real father…I lost him when I was still in primary school’

To girls who tweeted…Sir aap nana ban gaye….’Y’ got a daughter…

And of course to girls who said ‘You must be a cool dad’  to which my daughter said..’Please tell her, I am the judge, not she’

and of course to my daughter who gave me a card on Father’s Day…and said ‘your dear daughter Mridula’…and I said ‘why did you have to write your name?’ she said ..”because I know you have other daughters, but they may not have given you a card’…

i have not mentioned names for obvious reasons, nor is this that I wish to say this is a note for women’s day or some such day…just a mushy mushy post, I am not sure whether I have done anything like this on this blog of mine…not even sure whether I should..

will do a story on the boys too…but that is not mushy..

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• As we had said earlier, the market is now decoupled. Even though the markets went down yesterday in US Indian markets have gone up.
• Indian markets have gone down, in keeping with Global Trends…Kospi is down, Hangseng is down….so is Nifty
• Markets are down…this is the single biggest fall..it is down by 500 points (the shrillness in the voice remains the same whether the index is at 9000 or 21000 for the sensex or it is for the 4500 Nifty)
• It is a great time to be buying gold….everybody is buying it…and experts say it will reach…..by Dec…
• Do you realise that Mr. Ratan Tata has lost Rs. 900,000 crores in market capitalization in the past 6 days?
• Markets have hit a low of 4800…and there is a good chance that it will hit a further low of 4500…
• Markets have hit a high of 20840..and is within a spitting distance of the previous high…

I am convinced that I can create a software with about 50 sentences which it will pick and produce stories.

Now let us look at the sentences in an astrological mag:

• Those single may be attracted to a person of the opposite sex
• Children will bring joy for some
• Children do well academically, but take care of their health
• Parents health may cause concern
• Job will be fine, but boss may cause some irritation

Get the drift of what I am saying?

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He talks of his father selling his land. He talks of not having a house to live, but still studying for his IAS.

His father says I would have sold my kidney to make my son an IAS officer. And the son says proudly that his father used to go walking, but insisted that the son should go by auto…because he has an exam.

I quite liked the sacrificing spirit. However, I did not like the video on 2 grounds:

1. The father (and presumably) son duo did not know anything about IAS as a career – except that the guys had tremendous power.  Normally to the normal person authority means huge sums of money (this is a Bihar story, so dowry too).  If he is planning to be an honest officer, is this job of a great attraction? Frankly I do not know or do not have an answer. After all each person has to answer that question for himself / herself.

2. Parents spending on kids is fine, but within limits. For one such ‘success’ of getting into IAS, surely the world is full of IAS dropouts and rejects. How will such fathers recover their investments? I really do not know. Even this kid did not look like a 22 year old. He must have been about 26-7….so there is an opportunity cost also.

Should parents sell off everything to educate their children? Not asking people who have money for EVERYTHING…

Asking those parents who have (say Rs. 5 Lakhs) – should they give it to his FATHER who needs the money for treatment of cancer, or his daughter who wants it for her MBA (or marriage) or use it for his own retirement?

Not easy answers, needs some soul searching and cruel decision making powers. To me it is scary!

3. Also look at the huge risk involved. If the son has an accident (therefore incapacitated to hold a job, or dies) what happens to the father’s old age.

It is easy to applaud the results of a risky journey, it takes a risk manager to understand the risks that the person undertook while doing the trip.

All the best to the IAS officers…and may this kid do well.

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Today they can sign cheques of US $ 150,000 without batting an eyelid when their kid says ‘dad I want to study abroad’…

In the 1960s, 70s, 80s – it could have been a good decision to go abroad to study, but is it still a good decision?

Well most kids I know have COME BACK FROM UK without being able to find a job. Fair enough! These economies cannot create enough jobs for their own residents, there is no way how they can help you. Far from it.

Yes Oxford, London School of Economics and Cambridge are great brands….but a little lower you do not find great quality. So what do you do?

Similarly in the US – unemployment and underemployment are big worries….read on

http://finance.yahoo.com/news/Unemployed-face-tough-apf-2863640197.html?x=0&sec=topStories&pos=main&asset&ccode

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