MoneyVedam

W.e.f April 2013, SEBI (Securities and Exchange Board of India) has mandated that Investment Advisers (including individuals & companies) must offer their services in a fee-based manner. Prior to this notice, Investment Advisers (including Financial planners) could offer their services on a fee-based or commission-based manner to their clients. It helps to understand various fee-structures prevalent in the industry. Fee-based planners usually earn their remuneration only on the basis of fees they charge their clients. They do not earn commissions by selling products to clients. The main advantage of fee-based financial planner is he/she offers an independent financial advice, placing client's needs and interest ahead of all other factors. No pushing of unsuitable insurance policies or low-yield mutual funds, client is free to buy recommended products from any provider directly. As planner receives fees only from client, there is no conflict of interest. Commission-ba...

Just like any sport, there are some simple rules to keep in mind while investing. These A-B-Cs would go a long way as guiding light in an investor's life to build his/her long term wealth. Rule #1: Which one comes first - Expense or Savings? Most of us learn to spend and save like our parents. Bring home an income, spend on expenses and then save the remaining. The equation takes the form: Income - Expense = Savings While this approach looks perfectly practical, the nature of this savings is volatile depending on lifestyle choices one makes. Certain choices could also result in zero or negative savings, leaving nothing for the future. One approach to long term wealth creation would be to make a simple change to the equation as follows: Income - Savings = Expense In this approach, the nature of savings is fixed and stable through out the income earning phase of the investor. Another big advantage here is savings rise along with income levels through the income earnin...

Investing has become an integral part of today's fast growing urbanized world. Every income earner is learning to invest in assets of his/her comfort and choice. And the investment choices are only growing by the day. Each investor uses his/her own methods to invest in various assets and there is no one formula or means to attain success. This pegs the question whether investing is an Art or Science. To understand this better, it helps to draw analogy from a sports such as Tennis or Cricket. When we start out, we learn to play the sport by following certain rules and applying prevalant methods in practice. Gradually the rules blend in and we start formulating our own strategies, both tried and untested. Then we perform our little experiments and collectively these result in gaining some money and losing some. This approach is more scientific at this stage and most investors take some time to get here. Some investors go beyond the scientific stage and become natural at investi...