Is Virgin going to make India hot ?

Last weekend when the entire country was glue to the TV watching Filmfare awards there was another major launch happening at Mumbai, that of the launch of Virgin Mobiles. Sir Richard Branson was there to launch the same. Surprise that he was there to launch a mobile service, Seems like there is more to it than meets the eye. Virgin has tied up with Tata Teleservices for the distribution of the same. Just after the Vodafone takeover of Hutch when we all thought that all the fizz in the telecom race is going to settle down here is something interesting brewing up. Virgin announces credit points for all the incoming that the subscriber will receive in his moble. The more you talk the more credit points get accumulated. Airtel had recently announced 1 re per call, Vodafone announced 75p per call, BSNL announced 50p per call and here is Virgin annoucing that it will pay the user for each incoming call. Woah ! All these companies should think on lines of extending their services to 3 g and so forth rather than look at a pure pricing strategy. As for now once again we can see some sparks flying in the telecom space.

Just when the whole world is going Gung Ho about an Indian company (TATA) coming in to take over a Global Brand like Jaguar, everyone wants to be a part of that brand TATA. TATA had recently took a major stake of private jets fleet from an auction at Singapore last month to build a corporate jet fleet for India Inc. And now the king of the Skies of Britian comes calling to TATA. There is more to it than meets the eye. Virgin has a great network and track record of setting up domestic airlines in Australia, Britian, Europe, South America and Africa as well. Some years back TATA also had great plans for Indian Skies in Tieup with Singapore Airlines and Chennai was supposed to be the hub for that. Somehow due the political climate at that time being not to inestor friendly things didnt take off well. And is this another lease of life to those plans of TATA or is there any sort of alliance in the making from the two sky  mavericks of Airlines Sir Richard Branson (Virgin Atlantic) and Vijay Mallya (King Fisher) only time will tell.

Virgin’s presence in India will be a great plus to the Aviation Industry and the Indian Consumer bcos here is a company that thinks out of the box . Here is a company that has promised to put private space travel in the aviation map of the world for the First time and that too cheaper. What more Sir Richard Branson himself has claimed to be in the first flight to space as a kind of assurance to his dream plans (Entreprunuer to the core, daring to dream big and bold ) . As per virgin atlantic’s agenda for the space program they are supposed to go on orbital flight by the end of 2008. India is known for its strengths when it come to space exploration and cryogenics. And space research is one place where entreprunuership has not moved any boulders and we need visionaries like Richard branson to break the mindset.

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If HOPE is time, then how long we need to hold our investments ?

I heard a gentleman throwing lot of ideas on the subject of "Hope" in life. I was then seriously looking at the dimension of HOPE with regard to investments.

In life, there are areas where we have total control & areas where we have no or little control.

Someone buys a real estate property in a remote location. Mobilising funds to buy and doing the needful to own the property is under his/her control. But generating return out of the investment made is certainly beyond his/ her control. The individual just is on a HOPE….. that it will appreciate in value over time.

I buy a stock, upon thorough analysis. Funds, adequate information, at what price to buy all these things are in my control. But I cling to the rope of HOPE…… when it comes to the return aspect. Hoping that xyz company will deliver solid returns.

I buy a mutual fund. I can choose the brand, texture of the fund and things like that. But I keep HOPE….. on the fund manager to make me happy.

I board an investment vehicle, hoping that it will beat inflation and still give me a decent value for money. HOPE again !

If that is the case, is HOPE time ?Looks like ! But HOPE till when ?

On Investments HOPE is something tricky. Some people invest and keep waiting hoping for better and better returns. This is disgusting. Isn’t it ? Have a clear goal, invest for reaching that goal & be clear on the rate of return. Once we get the desired appreciation do not HOPE for greater returns. Instead protect the appreciation and reach your goal.

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“Life is a Marathon, not a 100 M Sprint” So is Investing

How people invest, in general ?

“A friend of mine, asked me to buy this stock”
“You can buy that stock, as it is recommended by this newspaper”
“I am trying to copy cat a Fund Manager’s Portfolio”
“I bought this because it is less than Rs.30/- (cheap!!!!)”

When I hear such statements, I just cannot control laughing at them……..

It is advised in general to buy value, rather then follow a particular trend or go by gut feeling. But……..People go by market trend, glamourous brand and speculation. Sehwag or Tendulkar ? That is the big question. We have seen both these players battle it out in the middle. We have seen more of the latter. But at this point of time, I would put my money on Sehwag, for the simple reason that he has tremendous growth potential. Likewise it has to be value when choosing a particular stock

Do plenty of research before deciding what or what not to buy. “Everything has got a price tag” – I firmly believe in this. If you buy on a tip / trend, without analysis, chances are very high that we are taking wrong footing. A tip / hint is a way to making fast money, quite dangerous. We all should realise that Life is a MARATHON not a 100m dash. So is Investing ! Quick Profits are glamorous but short periods are dangerous for investments, especially in equity.

Leave your investments time to grow. Expect realistic returns. This is apt especially to not so affluent investors. Investing is a Profession by itself. It requires discipline, dedicated time and adequate knowledge. If some one cannot spend, 4 to 5 hours every day, then better stop investing in the market directly. Leave the job to a Fund Manager. Opt the Mutual Fund route. It pays to take a decision now !

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“Do not go out when it’s raining without an umbrella” – Secrets of Insurance

  • Is Life Insurance a costly affair ?
  • Are people getting into long periods of commitment beyond their paying capacity ?
  • Is Insurance a burden ?
  • Is Insurance giving low return ?
  • Is Insurance a sickening affair ?

Not really. If at the time of buying, we give a serious thought about the various options available. “Buy term and invest the rest” is the slogan, outside India. In India, people are yet to give this concept a serious look.

A 45 year old male, can get a pure risk cover of Rs. 15,00,000/= at approximately Rs.12,500/= for a twenty year term. Insurance certainly is not a costly affair.Most of you may be paying half this amount every year to protect your glamourous four wheeler. Is your life less worthy than your car ?

There are quite a number of instances, where people book a flat to get into a liability of Rs.12,000/= every month for 20 years. Is our lives less worthy than a flat ?We need to check the answers with a young widow or a child who lost his/her father early in life.

A two wheeler rider with a helmet on his head is not a pessimist nor he is supposed to be expecting an accident while riding. He is called a smart guy.

A check list that needs to be looked at :

1) Upon getting the first employment, get a pure cover with maximum term (it could be 30 years) at that point of time. The amount of cover should be atleast 5 times that of your income. Review this as and when a) income goes upwards and b) after marriage / child birth
2) No point in covering the life till 100 years. Whole life cover is certainly not the best option. Concept of Insurance is to replace financial loss, in case of any unfortunate happening. Get a fair idea of how long the family is dependent on you, financially. Then decide the term of insurance
3) Beyond 35 years of age, cost of Insurance is high relatively speaking. Earlier the better
4) Look at the rider benefits available like a) Critical Illness b) Serious Illness c) Accidental Death Benefit d) Additional Sum Assured……
5) Choose Annual Premium payment mode than other options like quarterly / half yearly
6) Choose a reliable Insurer with good track record. Claim repudiation number is a good measure of credibility of the company and its agents
7) Reveal facts about your health. It is important to be faithful to a doctor, lawyer and TO THE INSURER
8) Stop treating insurance as an investment vehicle. It was not meant to be …

Some Thoughts on Retirement Planning



Hi Friends, today we have a new blogger joining us in serving his tiome on earth… He is Ganesh. Ganesh comes from an extensive financial experience. He is a Financial planner for High networth individuals (HNI). This happens to be his maiden post. Great to go ganesh…There is nothing certain except DEATH ! This should never stop anyone from planning for the later years !A Gentleman aged 65 years, who was my neighbour, requested me to get a job for him. He said his monthly requirement is a minimum of Rs.10,000/-, for which he had no other option than to take up a job. This person was with a pharma company, retired from the rank of a Regional Manager. Surprising !!!!!!

Similarly, a relative of mine often gets himself into troubled waters, by taking more loans than what he could pay. I have two more cases of aged people, struggling for day to day living, with whom I am interacting on a daily basis.But the eseence of the experience is one and the same.

If they had saved something for the later years, they would have been self sufficient or rather happy. This is where the concept of RETIREMENT PLANNING is apt.

What is Retirement Planning all about ?

It is a two step process

1) Build a corpus, by contributing atleast 10% of annual income, on a regular basis, every year

2) Invest this corpus at a later date, to get safe and steady returns for covering the risk of living too long

For building a corpus, there are Options to choose from :

a) Conventional Pension Plans

b) Systematic Investing in Equity Mutual Funds

c) Market Linked Investments like ULIPs

d) Investment in Real Estate

Depending on one’s risk taking ability & income, these options have to be considered. Some times, it would be better to have more than one option like real estate and conventional pension plans, in order to have an effective risk reward ratio.

Do’s & Dont’s

1) Start as early as possible (Boris Becker won wimbledon at the age of 17, investing is certainly not tough like winning wimbledon )

2) Review once in 3 years

3) Give Investments time to grow

4) Beat Inflation

1) Don’t utilise the fund for emergencies

2) Don’t diversify too much

3) Don’t underachieve retirement corpus

As the great Financial Educator Robert T Kiyosaki says “ONE BITE AT A TIME IS HOW YOU CAN EAT AN ELEPHANT “. A little contribution towards retirement corpus on a regular basis, started early, can definitely end up becoming a huge elephant.