quick reads

The big news: Activists say ordinance on jallikattu would be unconstitutional, and 9 other stories

In other headlines: The Army chief said India would conduct more surgical strikes if provoked, and the khadi commission chief defended the use of Modi’s photo.

A look at the headlines right now:

  1. Jallikattu is illegal, passing an ordinance to allow it would be unconstitutional, say animal activists: PETA and FIAPO have written to the Tamil Nadu government and Narendra Modi, urging them to enforce the ban on the bull-taming sport during Pongal.
  2. Do not use social media, use complaint boxes or contact me, says Army chief: General Bipin Rawat said Indian forces would conduct more surgical strikes if provoked.
  3. No rule that only Gandhi’s picture can be used, khadi commission chief says: This whole controversy around Narendra Modi’s photo being used is ‘unnecessary and out of the context’, said VK Saxena.
  4. David Guetta’s Mumbai concert rescheduled for today, Greater Noida show moved to New Delhi: The tickets meant for Friday’s show in Mumbai will be valid for the rescheduled event on Sunday, organisers said.
  5. US Congress approves budget measure to begin repealing Obamacare: The House of Representatives voted 227-198 to draft a legislation by January 27 to abolish the Health Care Act.
  6. Zakir Naik’s NGO challenges Home Ministry ban in Delhi High Court: The Centre has been asked to produce relevant records to explain the need for an immediate ban on the Islamic Research Foundation.
  7. We cannot summon the PM, says Parliament’s Public Accounts Committee: Contrary to its chairman’s remarks, the panel said only officials can be called to give evidence, not ministers or the prime minister.
  8. WhatsApp’s end-to-end encryption is not entirely safe, says report: A security backdoor exists that could let Facebook intercept your messages.
  9. N Chandrasekaran will take the company to new heights, says Ratan Tata: The former TCS chief’s appointment as the new Tata Sons chairperson was a ‘well-deserved recognition of his proven leadership capabilities’, he said.
  10. Election Commission reserves its order on the Samajwadi Party symbol: Both SP factions presented their cases during the hearing, which lasted for more than four hours.
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A quick look at how much you spend on indulgences will give you an idea of how much you can save and invest. For example, if you spend, say Rs. 1,000 on movie watching per week, this amount compounded over 10 years means you would have spent around Rs 7,52,000 on just movies! You can try this calculation for yourself. Think of any weekly or monthly expense you regularly make. Now use this calculator to understand how much these expenses will pile up overtime with the current rate of inflation.

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It is no rocket science

The fact is that financial planning is simpler than we imagine it to be. Some simple common sense and a clear prioritization of life’s goals is all you need:

  1. Set goals and work backwards: Everything starts with what you want. So, what are your goals? Are they short-term (like buying a car), medium-term (buying a house) or long-term (comfortable living post-retirement). Most of us have goals that come under all the three categories. So, our financial plans should reflect that. Buying a house, for example, would mean saving up enough money for up-front payment and ensuring you have a regular source of income for EMI payment for a period of at least 15-20 years. Buying a car on the other hand might just involve having a steady stream of income to pay off the car loan.
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  5. Don’t put all your eggs in one basket: This is something any investment adviser will tell you, simply because different investment options come with different benefits and risks and suit different investment horizons. By investing in a variety of instruments or options, you can hedge against possible risks and also meet different goals.

How and Why Mutual Funds work

A mutual fund is a professionally managed investment scheme that pools money collected from investors like you and invests this into a diversified portfolio (an optimal mix) of stocks, bonds and other securities.

As an investor, you buy ‘units’, under a mutual fund scheme. The value of these units (Net Asset Value) fluctuates depending on the market value of the mutual fund’s investments. So, the units can be bought or redeemed as per your needs and based on the value.

As mentioned, the fund is managed by professionals who follow the market closely to make calls on where to invest money. This makes these funds a great option for someone who isn’t financially very savvy but is interested in saving up for the future.

So how is a mutual fund going to help to meet your savings goals? Here’s a quick Q&A helps you understand just that:

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  2. Can I withdraw money whenever I want to? There are several mutual funds that offer liquidity – quick and easy access to your money when you want it. For example, there are liquid mutual funds which do not have any lock in period and you can invest your surplus money even for one day. Based on your goals, you can divide your money between funds with longer term or shorter term benefits.
  3. Does it help save on taxes? Investing in certain types of mutual funds also offers you tax benefits. More specifically, investing in Equity Linked Saving Schemes, which are funds that invest in a diverse portfolio of equities, offers you tax deductions up to Rs. 1.5 lakhs under Section 80C of the Income Tax Act.
  4. Don’t I need a lot of money to invest in MFs? No, you can start small. The returns in terms of percentage is the same irrespective of the amount you invest in. Additionally, the Systematic Investment Plan (SIP) allows you to invest a small amount weekly, monthly or quarterly in a mutual fund. So, you get to control the size and frequency of your investment and make sure you save before you spend.
  5. But aren’t MFs risky? Well many things in life are risky! Mutual funds try to mitigate your risk by investing your money across a variety of securities. You can further hedge risk by investing in 2 to 3 mutual offers that offer different growth stories i.e. a blue-chip fund and a mid-cap fund. Also remember in a mutual fund, your money is being managed by professionals who are constantly following the market.
  6. Don’t I have to wait too long to get back my returns? No! Mutual Funds, because of the variety of options they offer, can give you gains in the short or medium term too.

The essence of mutual funds is that your money is not lying idle, but is dynamically invested and working for you. To know more about how investing in mutual funds really works for you, see here.

Disclaimer: Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

This article was produced by the Scroll marketing team on behalf of Mutual Funds Sahi Hai and not by the Scroll editorial team.