Less is More!!

In the series of “Less is More” Today we will discuss “More Analysis”

Anyone can make analysis basis information, research and networking thru various sources!! Albeit person himself doesn’t know the credibility of the same😊  I am not disputing the logic and fairness of the opinion, research but I do dispute the relevance of the same on your behaviour and therefore portfolio returns 👍. It’s scientifically proven that your temperament is not even known to you, therefore you tend to get carried away with any opinion or analysis. Your lack of fundamental knowlwdge about market and personal goals makes the life even more confusing 😢.

Investors tends to feel confident with information at hand, no matter is it relevant or not!! That’s totally undesired behaviour. Investors always feel uncomfortable when he/she has credibility issue with his advisor.

Let me give you an example: If you go to a car mechanic and tell him about the problem and its solution too!! How is the workshop engineer going to react? He will certainly say “let me diagnose the issue and recommend the solution or else let me do as you suggested and I am not responsible if the issue persists😊. Similarly, if patient goes to doctor and says I have this sickness and I think ABC medicine be prescribed to me. Doctor will reply – if you already know the prescription, why are you visiting me?

Who are the people who reacts over analysis/ research and networking?

1)      New Investor in an asset class

2)      Oversmart Investor. Seeking to be ahead of market.

3)      Nervous investor

4)      Investor with unclear Goals/Objective

5)      Uneducated Investor. Not aware of risk-reward of underlying investment

6)      Low confident investor

7)      Investor who is not happy with his Agent/Advisor/Broker

If you spend some time on above factors, you will notice that unawareness is the key driver. If you are carrying one of the symptoms you must speak to your advisor to work on this!!

We believes that aware and educated investor is boon to his Investments, family, us and society at large. Aware and educated Investor would be quite peaceful with self and Investments also. Oversmart Investors seldom beat markets but patient investors do👍✔.  While our interaction with most of the clients we do discuss the pitfalls along with the opportunities i.e. Risk – Reward. By doing this, we not only build business relation but build trustworthy and long term relationship. We like it that way only. We may have lost some prospects but we are happy to let go of such clients.  

Jaise Siya- Ram, Radha- Krishna aur Din- Raat hai waise hi Risk aur Return hai. Risk ke bina Returns ki baat adhuri hai.

Let me also speak about the Goals today. Many HNIs tell me I do not have Goal. But they do have goals. A goal always need not be accomplishing a tangible milestone like- Marriage, House, Education or retirement etc. For HNIs who do not have to worry about aforesaid goals, target return is also a goal. Example – 8-9% p.a. return for his entire netowrth (MF, Property,FDs Gold, Bonds etc), lowest risk, stable returns, Philanthropy are the goals that HNIs must think of.

After having goals, the sight changes to goals and not the volatility or the threats👍. Over Analysis, research and networking takes back seat forever😊

Investor needs to realise that wealth that sets you free from uncertainity, agony, panic and tension is true wealth, rest is just money.

What should you do as Investor?

1)      Gain full knowledge of product that you wish to invest in

2)      If you cant gain knowlwdge, hire a good advisor who can share Risk and Return of Investment

3)      If you are new, dont jump, start with small amount and taste water

4)      Do not consider a product, just because some else has made money!! There could be many who have lost money but you don't know them 😊

5)      Avoid copying others. You are unique and your objective/goals, risk appetite and time frame is unique to you only. Above all, your temperament is different from others.

There is famous saying “More analysis leads to paralysis”. And as James Montier says “The amount of information that assails on a daily basis is truly staggering. Unfortunately, we tend to equate information with knowledge. Sadly the two are often very different beasts. We also tend to labour under misapprehension that more information is the same as better information. Experimental evidence suggests that often where information is concerned, LESS IS MORE”

If you need to know more about money wisdoms, feel free to contact me. I am available at 9833778887 or wealthcarein@gmail.com

If you find our blogs helpful, please do like, share and comment

Author –

Bhavesh D Damania

Founder - Wealthcare Investments

EduPrenuer, TV show panellist and Blogger

You can reach him at 9833778887 and wealthcarein@gmail.com

"Risk comes until you know what, where and why you are Investing"

Disclaimer: We respect all individual approaches. Sole objective of this series is to burst a few myth in Investing. There could be genuine reason/experiences and “less is more” may not be appropriate. Investor must consult own advisor to figure out right approach before adopting any of these suggestions.

Less is More!!

In the series of “Less is More” Today we will discuss “More Bank Accounts”

People are attracted to have many Bank Accounts and the reasons are follows!! Although the list is not exhaustive.

1)      Proximity of Bank Branch from Office or home

2)      Higher Interest rate of FDs or savings A/c. Recall advertisement of “6% is more than 4%”

3)      Better credit card offers/ Free credit card

4)      Technological edge. Better Banking website

5)      Old Investments with these A/cs

6)      Existing Home loan or car loans compulsion of having Bank A/c

7)      Branch timing

8)      Transferable Job

9)      Relationship Manager changed Job and therefore the Bank A/c

10)   Brand Value/ Foreign Banks

11)   Safety of “Government owned” tag

12)   Sales campaign by Bank

13)   Manager of staff is known/relative (usually with Co-Op Banks)

14)   All in one service

15)   Cordial/ Accommodative staff

16)   Salary A/c compulsion from the employer side

Few of the reasons enlisted are logical and few are emotional. Having Bank A/c is also a financial decision and must be taken carefully. Changing Bank A/c or opening too many A/c for petty reason are not warranted.

Some of the reasons can be shot down with expression of self resistance. Example: If the Bank insists upon you to open an A/c with them since they are issuing you loan or credit card. Branch timing and proximity are a thing of past, you don’t need to visit branch for most of the things these days. ATM booth will eliminate many more reasons to reach out to branch in future. Sales campaign, Relationship Manager moved job, and staff is known, has not direct advantage to you!!

Salaried people who have transferable job can now change the base branch to local branch without changing A/c number, instead of opening new A/c. Also they must resist Salary A/c opening with different Banks as, most HR allows them to do so now.

People who have old investments with Bank A/c can also close the extra A/c by retaining the passbook copy, closure letter and unused cheque leaves. This is sufficient to update new Bank records in Investments.

People wishing to change bank due to better tech-enabled services also must note that, your existing Bank is also in competitive world and will certainly launch better functionality and interface. Do not switch.

People, who fear of default tend to diversifying into many Banks. It may be noted that except for Co-Operative Banks there has been no case of such kind. Indian Banking systems are robust and are well capitalised so one can be sure of safety of money. I am firm believer that one should not have any deposit A/c with Co-Operative Banks, no matter it offers better service, rates or anything else. Other Banks do give better ambience, experience and technology and above all peace of Mind and Safety. That is enough reason to not have A/c with Co-Operative Banks😊

Having too many A/c leads:

1)      Average Balance maintenance

2)      Periodical KYC updation

3)      Periodic reconciliation of A/c

4)      Charges towards SMS, debit card etc services

5)      Better use of unwarranted liquidity maintained in these Bank A/cs

6)      Undue hassle of maintaining relationship and attending to sales calls, SMS and emails.

7)      Less chances of fraud or misuse in inactive A/cs

8)      No relationship so no offers so no temptation or compulsion to engage 😊

9)      Upon death, updating status or closure of A/c also leads to cumbersome process to follow.

I know of people who are fully convinced of having 1 or Maximum 2 A/cs are not able to take out time and close extra A/c due to busy office schedule, distance and lack of records. There are people who have no idea about their own or deceased family members Bank A/cs. It can be proved by -roughly INR 20000 crore are lying as unclaimed Bank monies. That’s staggering number lying in Bank A/cs. Ensure that your hard earn money is not unclaimed in future🙏

In nutshell, Decide today to keep only 1 A/c (or Maxumum 2 A/cs), choose the A/c that best suits your futuristic need also!! Take that decision today and act on it👍

If you need to know more about money wisdoms, feel free to contact me. I am available at 9833778887 or wealthcarein@gmail.com

If you find our blogs helpful, pls do like, share and comment

Author –

Bhavesh D Damania

Founder - Wealthcare Investments

EduPrenuer, TV show panellist and Blogger

You can reach him at 9833778887 and wealthcarein@gmail.com

"Risk comes until you know what, where and why you are Investing"

Disclaimer: We respect all individual approaches. Sole objective of this series is to burst a few myth in Investing. There could be genuine reason/experiences and “less is more” may not be appropriate. Investor must consult own advisor to figure out right approach before adopting any of these suggestions.

Less is More!!

In the series of “Less is More” Today we will discuss “More Advisors”

Greed and Fear are at peak for most Investors during her investment journey! It is usually found, the most, with HNIs and retails investors(thumps up). Ultra HNI and HNI feels they can outsmart the market and retail investors are figuring out ride to riches and luck. Mass affluent Investors (not HNI nor retail) are the one’s who are usually goal oriented and satisfied with the market returns and steady path.

I will take liberty to expand the meaning of the Advisor. Anybody who is not or less competent to advise but you still follow that person and act on his advise is an Advisor for you. Agree??

Who are these so called advisors? Your friends, colleagues, stock broker, relatives, random unknown person. Before you follow them, just ask yourself – What is at stake for them in advising you? Nothing😊. You are putting your hard earn money at stake with his advise.

Let’s examine the other advisors who are into it as full time activity. These are Wealth Managers from Banks, NBFCs and broking firms and there are individuals who are into MF, Insurance, FDs Bonds etc sales. Most Individual advisors suffer from lack of knowledge and expertise in advising and asset allocating therefore end up providing irrelevant or not so good advise. The Wealth Managers from Banks, NBFCs and Broking firms are different!! They have different objective than your’s. They seek to achieve their targets, Bonuses and Income so their advise may not be suitable for you. Do not wish to elaborate it as most you know about experiences with these Wealth Managers.

Glaring difference between the Individual Advisor and Wealth Managers are as follows:

1)      Individual Advisors are likely to be relationship centric rather than revenue centric(short term Self goals)

2)      Wealth Managers may be great in content (Intellect, research, tools etc) but they seldom have Intent(willingness to help you achieve your Goal instead of self goal)

3)      Continuity of relationship with same person is usually not found with these Institutionalised Wealth Mangers. They keep changing jobs etc.

4)      Wealth Managers usually talk about the returns and under play risks.

5)      Wealth Managers can’t remain agnostic to product or manufacturers.

Too many advisor for you would mean many cook in kitchen!! Dispair of many advisors are -- more confusion than real diverse view, many agenda and chaos, most often than not. Its observed that investors with many advisors are more confused rather than clear and tend to short change their investments basis multiple and diverse advise😊. Besides, better risk adjuested return, Investor seeks peace of mind and consistency of views, which is usually missing with many minds at work👍 .

Smart and successful Investors have one PRINCIPAL advisor who handles the maximum Investments, who helps investors in rejecting many investment ideas and chose the right one (Needless to say own wisdom will be a great boon)!! Princiapl advisor will be able to provide you outlook on various asset classes, post which you can deal with product’s advisor i.e. Insurance agent, Real estate agent etc.

You need one advisor for 1 product who is subject matter expert. What I mean by product is -- Real estate, Equity broking (should you at all be in stock investing), Mutual Fund and Insurance. Its important to deal with subject matter expert who can have detailed analysis of the offering. Principal advisor can give you broader picture, perspective and guidance and product advisor will help in selecting right product.

We at Wealthcare Investments share broader perspective of all asset classes with clients and also help them chose right products. Some engaging clients do seek and appreciate but few don’t bother to discuss!! We have shared with most of you since last 10 yrs 1) That Real estate is unlikely to give returns 2) When there were Tax free Bonds available in primary market, we made clients to invest in them.3) We were negative on equity since 2018 and quickly booked profits of Small & Midcap funds and got into Asset allocation funds etc. 4) Since 2017 we have mentioned about bullish outlook on gold – Today gold has moved from approx. 27000 per 10 gms to 41000.

As an Investor, you must look for advisor who has rare combination of Intent and content both. If you find an advisor like that, you only need one advisor!!

If you need to know how to grow your money slowly but surely, feel free to contact me. I am available at 9833778887 or wealthcarein@gmail.com

If you find our blogs helpful, pls do like, share and comment

Author –

Bhavesh D Damania

Founder - Wealthcare Investments

EduPrenuer, TV show panellist and Blogger

You can reach him at 9833778887 and wealthcarein@gmail.com

"Risk comes until you know what, where and why you are Investing"

Disclaimer: We respect all individual approaches. Sole objective of this series is to burst a few myth in Investing. There could be genuine reason/experiences and “less is more” may not be appropriate. Investor must consult own advisor to figure out right approach before adopting any of these suggestions.

Budget provisions on Personal taxation!!

Many investors are trying to figure out the tax implications and modalities around 4 main points, which are as follows. 

1)      Should I be in existing regime of Taxation or move to new regime?

2)      What will be the implication of DDT (Dividend Distribution Tax) abolishment on my investments?

3)      Introduction of TDS on Mutual funds?

4)      NRIs will be Taxed on his global income in India

I am trying to provide some guidance so that your information is correct and updated. Thanks to media and social media messages, people are more confused than clear. Also people are not able to get everything at one place. I have tried to put all information in one place for you. 

Let’s examine all the concerns in same order.

1)      Should I be in existing Tax regime or change to new regime

If you are enjoying various tax saving sections of IT Act, than you may consider to stay in existing regime as moving to new Tax regime, will not allow most the provisions to be used!! If you are salaried, you can switch between old and new regime every year also. But if you are non-salary Tax payer, you can change only once in life time, unless you have shown nil income in previous FY in future. On the face of it, New Tax regime looks attractive from saving taxes unless salaried people who are receiving too many perquisites under the cost to company package. Pl see attached file for exemptions to be continued in new Tax regime also. This will help you figure out which tax regime you wish to stay.

2)      What is the impact of DDT abolishment on my Investments?

Budget has abolished the DDT at the source. Meaning now on, company or Mutual fund or any investment which pays dividend to the investor will not deduct the DDT but pay full dividend amount to the investor. Investor will have to club this dividend income to his/her total income and pay tax at the applicable Tax rate.

People who are in lower tax bracket can benefit from this move. But HNI and Ultra HNIs will have to shell out more tax as compared to DDT now. Therefore, HNI and Ultra HNI Investor may have to switch the investments from Dividend Payout Option to Growth Option. If Investor needs regular cash flows to fund their living than they can be better off with Systematic withdrawal plans (SWP) of Mutual funds. It may be noted that Investors in Equity, PMS, AIFs or REITs etc. products will have to re-examine their strategy as Dividend Income will be taxed at their personal tax rate, resulting in lower returns from these investments. Suggest you to examine the real modalities with the product vendor or manufacturer as there are various types of AIFs, REITs and INViTs.

3)      Introduction of TDS in Mutual funds?

There are speculations and rumours that there will be TDS in Mutual Funds dividend and redemptions. Whatever I have understood and researched, its going to be only on the Dividend Payout of Mutual Funds. There shall be no TDS on the redemptions from Mutual fund. I think this is correct also. Capital Gain Tax was re-introduced in FY 18-19 and there was no provision of TDS since then. Now that DDT is abolished and assessee will have to pay the tax as per his/her tax bracket, TDS is brought in so that assessee will be reminded to pay taxes on such dividend income and Income Tax department can track such lapses. However, pls note that the debate is still going on and its still not clear whether TDS will be deducted on redemption or not.

Whatever the case may be, TDS is not new thing for us and compliant tax payers have nothing to hide so it TDS will be adjusted against total tax liability👍

4)      NRIs will be Taxed on his global income in India

There was also lot of confusion about the Taxes on NRIs. Let me share the article from Economic Times –“The government has clarified, via a press release that in case of an Indian citizen who becomes deemed resident of India under the changes proposed by Union Budget 2020, income earned outside India by him/her shall not be taxed in India unless it is derived from an Indian business or profession. Necessary clarification, if required, shall be incorporated in the relevant provision of the law.

The clarification has come after the Finance Bill, 2020 has proposed that an Indian citizen shall be deemed to be resident in India, if he is not liable to be taxed in any country or jurisdiction. This is an anti-abuse provision since it is noticed that some Indian citizens shift their stay in low or no tax jurisdiction to avoid payment of tax in India, says the release issued today.

The new provision is not intended to include in tax net those Indian citizens who are bonafide workers in other countries. The intrepretation of the proposed provision that those Indians who are bonafide workers in other countries, including in Middle East, and who are not liable to tax in these countries will be taxed in India on the income that they have earned there, is not correct, as per the press release.”

Above paragraph puts an end to various speculations.

I must re-iterate that I am not CA or a Tax consultant. I have tried to gather information from various reliable sources and trying to address some of the concerns of the Investors in this article. You are requested to consult your CA/ Tax advisor on the same. Sole objective of the article is to provide latest, updated information about the subject concerns and clarify various doubts that you may have. Having idea about the provisions, will help you understand and discuss with your Tax advisor prudently. We are not responsible for any error, inaccuracy, omission etc. in this article.

In case you have further query, pls feel free to call me on 9833778887!! I will be happy to answer queries to my best ability.

I hope the article helped you. Pls do share with your contact and help others too.

Author –

Bhavesh D Damania

Founder - Wealthcare Investments

EduPrenuer, TV show panellist and Blogger

You can reach him at 9833778887 and wealthcarein@gmail.com

"Risk comes until you know what, where and why you are Investing"