Be the CEO of your Life: March 2010

Tuesday, March 23, 2010

Union and Delhi Budget-2010...Moving in a Direction

I am happy with the movement happening in financial planning in India. Finally, government have started sparing the salaried person and started sharing the burden of national expenses on high income but zero tax paying self employed people.

Lowering of Income Tax slabs and increasing excise duty means that rather than taking on individuals which have the weakness of leaving money, they have started taking on good and services. So be it LCD TV's, Cars, Electricity or Cooking gas, self employed people have to pay as much as a salaried person.

Let me explain this in detail:

If govt expenses are Rs 100, they were taking all those from Salaried people before in form of income tax. Now, they lower the tax rate, and thus gets only RS 80 from these people. The rest 20 bucks from increased indirect taxes like excise, service tax etc.

But this Rs 20 is shared by everyone and actually mostly by self employed people who never pays income tax

Similarly in Delhi Budget, the bias seems to be going with more goods coming under tax net which eventually lead to more people leading to pay for government expenses.

Though people are complaining about increased prices of fuel and other commodities, it spreads economic burden on all rather than only few salaried individuals. People also compares our rates with USA rates and how USA manages with such lower taxes and fuel prices, the reason is because there everybody pays income tax. This difference should be clearly understood. When VAT was introduced some years back,it was speculated that the black economy would end but it has failed to do completely. In this scenario, I think increasing indirect taxes is the only way to bring more people under tax bracket.

Finally, good sense seems to be prevailing among policy makers.

Saturday, March 20, 2010

Models of B-Schools in India

With over 50 years of history of management education in India, we are surrounded with several issues and concerns which directly or indirectly affect the future growth and quality of management education. By default or otherwise, however, We need to look into all these matters this stream of education has contributed a lot in improving the overall economic and employment growth of our country, but the issues and concerns remain valid even today.

In order to upgrade their career prospects, every year lakhs of students in India seek admissions to B-Schools. The questions, however, remain-how to select the best amongst thousands of B-Schools and whether degree/diploma in MEA is worth it? What factors should be used to assess and evaluate the quality and value of the institute? The same is the case with recruiters and other stakeholders-where and how to go about to find out the best? The issue is how to measure those who are better than others or how they are similar to each other or different, though all end up with offering the same PGDBM or MEA degree.

This has further been complicated with the mushrooming growth of B-Schools affiliated to different regulatory bodies like AICTE, UGC, Deemed University etc.

The same is the case with the state aided or university departments, as they cannot decisively be termed as better than the rest, except for a few. While the tuition fees may be comparatively low in the university system, they do not have the freedom and autonomy to revise or improve the course curriculum or the admission system. There are other factors and issues. It is a myth and some institutes claim to be the centres of excellence, as they simply have huge infrastructure and charge exorbitantly high fees. In many cases, students are further confused with the difference between MEA and PGDBM degrees.

In the following paragraphs, an overall picture of the existing status of management education in India is given.

Models of B-Schools: Different models of B-Schools existing in the current scenario are:

1. Department of a University: Of late, most of the universities have established a separate department of

management for MBA programme.

2. Deemed Universities: Over hundred deemed universities have been established and recognised by the. University Grants Commission (UGC) to . teach and offer MBA degrees. Transparency of academic activities and good governance are questionable. However, there are always exceptions, and some of the deemed universities have performed very well. For example, IITs in India have independent department for MBA programme. The quality of teaching and the students of IITs are much better and are comparable to those of the top B-Schools of India.

3. Institutes affiliated to Universities:

Many private B-Schools are affiliated to some universities for their MEA programme and degrees. But in most of the cases, it turns out to be universities providing only distance learning degrees which may not benefit the students at all.

4. Autonomous Institutes:

Most of them are approved by AICTE and award PGDBM degrees. Quality of education provided by these institutes varies depending on the quality of governance of the institutes. IIMs were created as autonomous bodies in active collaboration with Government of India and State governments and provide PGDBM courses. IIMs are considered to be the premier institutions in India.

5. Distance Learning Programmes:

Open Universities like IGNOU, Kurukshetra University, Annamalai University and many other universities provide distance learning MEA degrees. Normally, a distance learning course is not considered to be of much use.

With different kinds of models available for management education, students often get confused about which one they should opt for. Moreover, the information generally available about the institute is not always true. In order to attract students, many a time, some institutes give their success stories in their advertisements, particularly highlighting the infrastructure, faculty, placements, networking with foreign universities, foreign tour etc. Added with advertisements, the institutes also publish brochures, giving information which, at times, is not reliable.

In a divergent country like India, where due to existence of regional disparities in distribution of the management institutes, lots of students from small towns and cities come out every year who largely depend upon the information provided in the advertisements and brochure of a institute, filled with hopes and aspirations to pursue management education, but in the end, they feel disappointed as they do not find what they read about prior to admission.

Admission system: The multiple system of entrance test for admission is yet another area of concern and issue for immediate attention. The admission/ entrance tes t in the management institutes depends upon the requirement of a particular institute. The test varies according to the institutes and their affiliation or associations with the regulatory body. Many institutes have developed their own entrance test. It is difficult to give the list of all entrance tests, but we believe that there may be more than 30 such tests. To name a few are: CAT (Common Admission Test), MAT. (Management Aptitude Test), XAT (Xavier Aptitude Test), FMS Test (test for admission into Faculty of Management Studies), GMAT (Graduate Management Admission Te~t), CET (Common Entrance Test), IRMA-AlEE (Institute of Rural Management Anand: All India Entrance.Exam), MHCET (Maharashtra Common Entrance Test), G-CET (Gujarat Common Entrance Test), admission tests carried out by the State Technical Education Boards, University regulated tests ete.

CAT is used by all the IIMs and most of the top management institutes. CAT is considered as one of the best competitive exams to judge the potential of the candidates.

There is, however, lack of standardisation i.e. one common system of admission in a management institute in India. It is really a matter of concern that for the same level of degree, different standards of entrance tests have been introduced by different institutes. These tests are of different standards and as a result, the quality of intake of students also differs. This kind of practice is perhaps prevalent nowhere in the world and we are unique in following it. This will never allow us to standardise our quality of management education in our country.

Fee Structure: This is yet another area to be looked at. The fee structure of management education in India varies and ranges from Rs. 11 thousand per annum in a few schools to Rs. 9 lakh per annum. While some university departments or affiliated institutes have low fee structure due to being Government funded, others have low to very high fees structure which, at times, does not seem to be justifiable. The variation has generally been seen in autonomous institutes. We have not come to any kind of understanding as to what should be the appropriate cost/fee structure for a good MBA education. So far, no rational basis has been established and Institutes are arbitrarily charging fees at their own discretion.

Faculty Recruitment, Development and Retention: One of the issues being faced is in the area of faculty related issues namely faculty recruitment, retention and development. In a very short span of time, we have witnessed a massive growth in the number of B-Schools, however, the number of faculty has not grown at the same pace. This has led to a gap between demand and supply of qualified, competent and experienced faculty. Good quality of faculty is a major pre-requisite for all the good business schools, however, because of this gap in demand and supply of faculty, good quality of faculty is found to be missing. Faculty to student ratio, in different institutes, varies from 1:6 to 1:25/30, which has an impact on quality of imparting education. The institutes have, therefore, resorted to poaching of faculty from the peer groups and this has in turn led to the retention problem.

In addition, the governance of the institution has contributed to the present climate. In order to meet requirement of a large number of faculty, the B-Schools have compromised on the quality of faculty recruited, by not giving any consideration to the fact whether they are qualified for imparting management education or not. MBA is a highly professional education which requires faculty with high competence not only in terms of having a Ph.D. degree but also in terms of having the required experience in academics & industry / corporate sector. Unfortunately, this is not available in most of the institutes as almost 50% of the faculty recruited, do not have the required experience and in many cases, even fresh MBAs have been recruited to fulfill the requirements.

Faculty, as academicians by nature, need to and want to work in an environment where basic facilities are available for research, attending conference, seminars, writing papers, MDPs and many other activities in addition to teaching which is not found in most of the institutes.

The need of the hour is to strengthen the faculty development strategy & programme and train the faculty irrespective of the background they may be from. The strengthening of FDP is an absolute must-have in the given situation, both for meeting the requirements and improving the quality of management education in India.

Pedagogy & Research: Quality education is a consequence of effective pedagogy amongst other factors. Lack of skill and knowledge in designing courses in the management education area, is much more important than the content or teaching techniques. We do realise that the lack of teaching techniques, in a large number of management institutes is evident, which has a direct impact on the quality of education.

Generally, Indian B-Schools rely mainly on Harvard Case Studies based on American or European situations which are different from Indian cultural values and business environment. But management theories of 'Western B-Schools are not relevant to India and so Indian B-Schools should stick to their own management philosophy. To enhance students' critical and analytical thinking in Indian business context, the students should be allowed to discuss case studies related to Indian business environment. But lack of availability of such case studies is a major problem. Though some premier institutions claim to have a pool of case studies and many other institutes have taken steps towards writing their own case studies, these practices have not become popular yet.

One of the main strengths of the best B-Schools is their strong research base and its impact on society. Scientific status of a discipline depends on the quality of research it produces. Research not only enriches the quality of teaching, but contributes to the advancement of the discipline also. Although management education has been on academic scene for nearly half a century in the country, there is regretfully, not much to write home about the quality and the volume of research undertaken by management schools and scholars in India.

We strongly believe that the future of management education in India is closely interwoven with the quality of research it produces. Research which reflects scholarship; research which advances the discipline; research which promotes management knowhow; research which encapsulates and aligns management with Indian ethos, values and culture; research which deals with management beyond business and research which anticipates future priorities and concerns, has not come yet. While there should be opportunity for management scholar to pursue research in his area of interest, schools could also identify their own research thrust. At macro level, there should be nationally and regionally coordinated programmes in important, identified and publicized areas of management, relevant to Indian economy and society.

MDP: Management Development Programmes carried out by the B-Schools, not only give them the edge of industry interface, but also help them financially, by generating revenue for the institute. In India, one of the main strong points of the JIMs and other top institutes like MDI (Management Development Institute, Gurgaon), is the MDPs carried out by them, which helps them maintain a strong relationship with the industry through interaction like MDP . JIMs have a very strong relationship with the industry as well as with the Public Sector Undertakings (PSUs) of India, which acted as a saviour during their campus placements during the economic recession of 2009.

Barring a few institutes, MDP has to go a long way in making its presence felt in most of the B-Schools.

Standardisation through Accreditation and Survey Methodology: One of the indicators for India's success will only be known when the institutes are accredited by the global associations of accreditations. By getting rated and ranked in the national environment is not likely to raise the quality and standard of management education, unless they compete, qualify and are accredited by the international accreditation bodies. So far, Indian Institutes have not been able to place themselves in top 100 global ranking. It proves that Indian management education still has a long way to go as far as global recognition is concerned.

Similarly in case of international accreditation, apart from JIM, Ahmedabad and Management Development Institute (MDI), Gurgaon, no other Indian institute has been accredited by international organisation as far as our knowledge goes. JIM, Ahmedabad has the accreditation of the European Quality Improvement System (E.Q.U.I.S.). MDI is the first Indian Business School which is internationally accredited by the Association of MBAs (AMBA), London and MDI has also been granted South Asia Quality Assurance System (SAQS) accreditation and National Board of Accreditation(NBA)

To have a global platform and attract students from outside the country, it is necessary for the Indian management institutes to try for these global accreditations.

Conclusion: It is obvious that we lack proper planning in establishing management institutes in India vis-a.-vis the manpower requirement. In the absence of implementation of provisions established by the regulatory bodies, the chances of improvement are very bleak. Apart from applying the present provisions meticulously, there is a need for -improving the provisions in qualitative terms and not just in

quantitative terms.

History of management education shows that there is a big gap in quality between the institutes established during 1950/60s to 1990s and institutes established in the later period. It is observed that as the number of institutes in India started increasing, the quality of management education started deteriorating. It is very obvious that the institutes established in the first two generations i.e. from 1960s till 1990s were few in numbers, but they have been maintaining their quality of education till now, or rather, have improved it. They have the best faculty and are hub of research. They take pride in their alumni.

But after 90s, the management education in India got surrounded by a mix of B-Schools. Some are, no doubt, doing well, but many others lack quality.

In absence of proper implementation of the provisions by the regulatory bodies, due consideration has not been given in separating the best from the rest. As a result, the students graduated from different institutes have different levels of competence. Students graduated from some of the management institutes cannot be even termed as management graduates in the real sense of the term as the quality of such institutes is at much lower level.

This problem needs to be resolved. Proper standardisation of management education and presence of single regulatory body are the need of the hour. Improvement is a continuous process. Majority of the business schools should keep on improving with time and try to move to the next level of excellence. Expansion without preparation and quality maintenance is not proper. Lots of new B-Schools have brought in improvements in infrastructure and boast of their state-of-the-art facilities, but governance, leadership, faculty quality also equally matter and are valuable factors. Though standardisatipn is an important factor, diversity and innovation in curriculum are also required.

We need to look into all these matters and aim at building a management education system of excellence in the country.

Thursday, March 18, 2010

Career Counseling

Lot of people ask me tons of questions regarding career. So I have compiled all of them together here.

satys asked, Do employer reject candidate in sr. mgt round? i.e 2nd round, after technical round is clear?
Answers, Yes, it is possible. So please dont think that you have got the job simply because u have cleared initial rounds

hanumantharao asked, i want to improve my communication skills, actually i have stage fear. please suggest for improvement. Thks.
Answers, Hi, please refer to responses to other queries. we have already covered this

kalchek asked, I am a student from a top US business school. Of late, I've been extremely low on confidence after being unable to clear any interviews. I've clearly been lacking on the softer aspects of being able to influence and negotiate hard. Is there something I can work on to improve these skills, or is my career over?
Amit answers, Hi Kalchek, no your career is not over. Please read stephen covey's book - the 7 habits of highly effective ppl

Prem asked, Nowadats each company wants experienced candidates not freshers but if fresher will not get a chance how will he become experienced?What should a fresher should do in such a scenario?
Answers, Hi Prem, One can showcase the development one has undergone in one's student years to get a good break. Your CV and how you perform in the interview will determine the break

mukti asked, Sir,I am Mukti, I like to know from you, what are the main crriterias employor see in the candidates?
Answers, Hi Mukti, pls refer to earlier responses - I have already dealt with it

girish11 asked, Sir do you think bpo jobs have a career in future
Answers, In the globalised world, the bpo is here to stay

girish11 asked, Hi sir my name is Girish i am doing my gradyuation from mumbai university can you tell me what are the best possible opion to get into Banking Industry.
Answers, Hi Girish.. you could think of entering the banking industry either frm the tech side in data analysis or frm the management side by studying management

prabhakar asked, I am doctorate in Agriculture and working with Indian MNC in product development field. My problem is fluent english.
Answers, Hi Prabhakar.. we have already dealt with this.. please refer to earlier responses

SMEdreams asked, does Obssesive cumpulsive disorder affected people get any reservation in seats ...
Answers, Hi SME, No. Unfortunately, OCDs do not get covered for reservation.

Chitra asked, I am in Presales. Can u suggest some techniques to improvize my Business Communication. Wht is the difference between Business & Normal communication
Answers, Hi Chitra, You have asked a very valid ques - business communication involves many things that maynot be required in normal communication. For eg, in normal communication, we do not use business language / jargon. It will help if you pick up a book that is specific to your domain and master the kind of language / grammar used

Prem asked, I have study background of hindi medium and now it is very difficult for me to talk in english with someone. Kindly suggest how can I improve my spoken english skill?
Answers, Hi Prem, it is not only a problem of Hindi medium, but for all people who are non-native speakers of english. the first thing we need to do is to stop thinking in our native language. make a conscious effort to think in eng. then follow it up by following the principle of reading, writing, speaking and listening to eng. the more you do this, the better your english will get

Bhabtosh asked, Dear Sir, Thank you for being with us, my question is regarding high level communication, how to improve judgement of your own communication skills, everyday, we watchh something new in this market, how to get automatically improved according to it?
Answers, Hi Bhabtosh, We need to keep our eyes and ears open - listen and watch people who communicate well and try to learn from them; read as much as possible; and apply it all consciously. We can continue to grow, learn and improve as long as we live

Rawki asked, What does an employer look for in an interview? How to sound like the one who indeed need a job.
Answers, Hi Rawki, An employer wants to know 3 things: 1. can you do the job 2. if yes, then do you have the drive to do the job 3. will you fit in with the culture of the company keeping these in mind, pls present yourself accordingly

sapna asked, hi, i m very straight forward person & speak very straight which usually go against me,i can't speak sweetly or diplomatically,what to do?
Answers, Hi Sapna, there is a difference between being simply. truthful / straightforward and doing so selectively. If you are selectively straightforward and measure your words before speaking, it will no longer go against you. Instead, your words will be valued because of how authentic they are. remember, being straightforward is not a bad thing, no matter what others say

asim asked, i am very poor in writing as well as speaking . can you help me how to improve .regards
Answers, Hi Asim, please refer to the answer i have given to similar questions before

kamal asked, Hi,I am working with an insurance company from the past 2 years and i have an experience of 4years...my question is what to do if the company is going against you despite your manager backing...should i quit or fight against the company's laws through my performance
Answers, Hi Kamal, in your position, I would do a mix of both.. while in the company, I would continue to prove myself through my work, make myself indispensable and fight diplomatically for my rights. At the same time, I would look out for better opportunities. but dont quit till you get something good

Velu asked, After B Tech Biotech what to do ? M Tech or MBA ?
Answers, Hi V elu, This is a personal choice - are you someone who thrives on research? Or are you someone who wants to manage and lead people? Make your choice accordingly. But follow the path of your interest and do not go by what others are doing or saying

AJAY asked, I WANT TO IMPROVE MY COMMUNICATION SKILL.PLS ADVISE ,AS HOW IT CAN BE ACHIEVED??
Answers, Hi Ajay, please refer to the response i gave to suresh

Vivek asked, Is it a good idea to move from technology to management in an IT company
Answers, Yes Vivek, it is a good idea, particularly if you don't see yourself as someone who can be with the tech team all your life. Once you enter management, with experience, you can even go from one industry to another

Santosh asked, How can we train students based in Rural areas?
Answers, Santosh.. you have asked a very valid ques... the best way to reach out to students in rural areas is to heavily leverage technology.. use VSAT, video conferencing, etc and also suppliment it by training support staff who are on-site

suresh m asked, Amit, Is there a book or a way you would suggest me/everyone to improve his/her communication skills?
Answers, Hi Suresh: Communication is made up of two things: your language and your personal effectivenss. trying following Raymond Murphy for grammar and read "The 7 Habits of highly effective people" by stephen covey for personal effectiveness

Uday asked, I am working with IP past 3 years but still my communication skill is bad. I intreact with customers through english language only. But sometimes i am not confident about that. can u pls help me out to improve the skill?
Answers, Hi Uday, it is important to work on: 1. grammar.. refer to books by Raymond Murphy 2. Improve your pronounciation - listen to English news channels in the evening, and then the next morning, read out the same news from the newspaper - see the difference in pronounciation. 3. but the most important thing that will give you the required confidence is the ability to think in English. Please start thinking in English and not your native language

abu asked, iam degree final year what i do next
Answers, Hi Abu.. it depends on your interests.. what would you like to do? Can you tell me something more about yourself?

ganeshj asked, Hi, I have about 9 years of experience in sales as at various levels both in India and abroad. At present I am employed as a senior manager in a reputed financial servies company, although it is a mid-career move and sacrifies have to be made, I would want to shift to the IT industry. Please advice as to what skill sets would be required and is it advisable to make such a shift?
Answers, Hi Ganesh, I would like to go into more details of this. Please mail me at amit@purpleleap.com

red asked, if we employ smart , dynamic person then the work done will b gud but that person will look out for other things and if we employ average person then that person might stay but the work done will not b gud. where to draw the line??
Answers, Red.. that's a very valid point.. companies follow to kinds of policies... 1. At the start-up stage, you need dynamic people to set up the business. 2. Once the processes are in place, the business has been established, then companies like to have a lot of average people on board to simply run the business

Shri asked, I have SIX years of IT exp.But I am not getting calls?
Answers, Shri.. you are not getting calls for what? What kind of profiles are you applying for?

Murali asked, is it wise to move out od IT after 10 years of IT experience?
Answers, Hi Murali... moving out of IT after 10 years of experince.. can be both a good and bad decision depending on what you do next. You could study further to help you move up the corporate ladder, you could open your own business, etc. Whatever you do, ensure that your next step is meaningful and creates value in your life without sacrificing on money

maruthi asked, Sir currently i am working as manager in educational consultancy in Hyderabad. I am weak in grammar. Can u tell me how to master in grammar.
Answers, Hi Maruthi, there are many ways of improving grammar... one of my favourite writers is Raymond Murphy. He has a trilogy - Beginners', Intermediate and Advanced English Grammar. According to your requirement... please go through the book.. it is very user friendly

xkcd asked, i have a very poor comm skill.i am a graduate from one of the premier institute of india in engg. i am a mechanical engg. i am not able to express myself when it comes to explain to biggies of the firm i work in. i get jittery. what shud i do?
Answers, 3. please tell yourself that what other people think of you is not important.. if they are unkind in their opinions, it is their problem.. motivate yourself to do your best

xkcd asked, i have a very poor comm skill.i am a graduate from one of the premier institute of india in engg. i am a mechanical engg. i am not able to express myself when it comes to explain to biggies of the firm i work in. i get jittery. what shud i do?
Answers, 2. If you are in a public-speaking situation and you are not comfortable looking into the eyes of the people around.. look at their hairline. It will create the impression of eye contact and you will feel less jittery

Wednesday, March 17, 2010

Investment Planning and Financial Advisory

Hi All,

Lot of people ask me how to save tax, what is the best investment planning strategy. So I have compiled a list of FAQ's on this. The questions were asnwered by Anuj Shokeen, leading financial advisor. He can be contacted at

anujshokeen@in.com

So let us start

carl asked, Hi, my wife and I take home 1.10lakh every month. We need to buy a house in Bombay costing 60 lakh, make other long term investments and also save some liquid cash. Please tell me how we should go about this. Also, is this advisable considering my wife might have to stay home once we have a child (2 years down the line). We currently have about 4 lakh in savings, and 3 lakh as investments.
Answers, i would advise you to consult a financial planner.

malcom_bh asked, Hi Trideep, I am investing Rs 2000 each in Tata Infra, HDFC Top 200, ICICI Discovery and Reliance Growth. My horizon is 15 years. Can you please advise me on this about possible change in the strategy
Answers, Continue with HDFC Top 200 and Reliance Growth, while switch your investments from ICICI Discovery to ICICI Dynamic, while stop Tata Infra and instead invest in DSP Top 100.

RahulG asked, I would like to save 50 lakhs towards my daughter's education. She is 6 months old. I have taken a termn plan from LIC for 50 lakhs for 30 years paying premium of 15000, and started SIP in HDFC top 200 of 4000 PM. Can i achieve my goal in 20 years of time? PLease provide your valuable insights/recommendation?
Answers, IF you are saying that you would require 50 lacs 20 years from now, then you you need to enhance your SIP to rs 7,000 a month. However if you want to educate your daughter with an equivalent of 50 lacs as of today then she would require a sum of 3.3 crores (current cost 50 lacs projected 20 yrs at a rate of 10% inflation) and your SIPs would give 33 lacs. I woud advise you to either reduce your goal amount or enhaance your investments with suitable advise

bharat asked, dear sir, please suggest two good & cosistence performers of diversified equity fund ,balance fund.income fund for medium term investment plan. should i redeem or stay invested in jm core-11,sundaran bnp paribas select focus equity, dws investmnet opportunity fund.
Answers, HDFC Top 200 and DSP Top 100 for diversified equity, HDFC Prudence for Balanced. move out of JM Core 11. while you can hold on your other investments.

mahesh asked, for gross income Rs.40000 pm with age of 30 years & just married what you suggest as investment catagories
Answers, Congratulation on the new chapter in life. At your age and circumstances I would advise you to first prioritize and quantify your goals with the advise of a financial planner. This is the most important step to investing. As a thumb rule you can invest approx 65-70% in equity (via MFs) 15-20% in gold (ETF) and the rest in debt instruments.

Sonali asked, Hi Trideep, I am Investing 2000 in DSP blackrock top 100, 2000 in HDFC top 200 growth, 2500 in reliance rsf. My target years of investing is 20-25 years. what rate of return i should expect ? Advise if any change is needed.
Answers, All your scheme selection is good, continue with your investments as all the schemes are top performers. The traget return in equity should be around 12% p.a., all above that should be considered as a bonus.

sanjai asked, Iwant to invest Rs.30000/- in HDFC Tax Saver Fund for Tax purpose. Is it correct decision? Otherwise what is the best option for me. I am a Banker (35 Yrs)having one 6 yr old daughter.
Answers, HDFC Tax saver is a good scheme, you can also look for fidelity tax advantage.

Asokan asked, I am 50 years old. How much is the risk if I dab in share trading? Or How should I be invested?
Answers, Equity share trading is a high risk game. Risk is a function of your appetite and tolerance, appetite can be irrespective of age, however tolerance is a factor of ability tpo replace lost capital, as you age your ability to replace lost capital goes down. Hence I would advise you to stay invested in equity portfolio (max 50% of your portfolio) and the remailder in debt.

Kireeti asked, How much it costs to get the financial planning done from a 3rd party? Kindly suggest some 3rd party Financial planners from Bangalore?
Answers, various financial planners charge fes ranging from 2000-80000. However what you should do is to see how comprehensive is their plan and also the strength of their recomendation.

SHYAM asked, wHAT WILL BE THE IMPLICATION OF DIRECT TAX CODE ON LONG TERM CAPITAL GAINS WHEN THE SAID CODE COMES INTO FORCE
Answers, At the draft stage the direct tax code aims to consider capital gains as normal income and hence the normal tax rates would be applicable. THus there is a possibility that the indexation benefits of capital gains could be taken away if this code is implemented as it is.

BVENKATM asked, AMONTH SUNDARMA S.M.I.L.E, UTI DIVIDEND YIELD, UTI DIVIDEN YIELD, RELIANCE REUGLAR SAVINGS EQUITY, HDFC TOP-200, BIRLA SUN LIFE MIDCAP PLAN-. OUT OF THESE SIX, SUGGEST ME 2 LARGE CAP AND 1 MIDCAP FUND FOR MY SIP PORTFOLIO.
Answers, out of these only HDFC Top 200 is a pure large cap fund. however for SIP, you can go for HDFC Top 200 and DSP Top 200, for Mid caps you can add to Birla SL Midcap.

RAMANA asked, DEAR SIR,is there any MF which covers under 80c and give us good returns.
Answers, HDFC Tax Saver and Fidelity Tax Advantage would be my pick

nmah100 asked, my MF investments over the past 5 years have remained almost flat, except for some dividends. Would you recommend that I liquidate and start all over or hold to my portfolio (65% equity and 35% Bonds/deposits). I am 37 yrs of age and have time on my side.
Answers, You can hold onto your investments, while you can move out of your bad schemes and move into good schemes. however MF's on an average have grown @ 16% to 20% over the past 5 years.

adad asked, I ve invested in L&t infrastructure (20000), Fortis future leaders (20000). Returns are negative till date. Shouls i hold or switch to another funds?
Answers, Move out of both the funds as they are too risky. better switch to HDFC Top 200 and DSP Top 100.

Aftab asked, Hi Sailesh, unknowingly i have invested in a ULIP plan of Bajaj Allianz New Unit Gain, the premium is Rs.12,500/- yearly, the policy was started in April 2009, please advice.. shall i continue and pay the next premium or cancel the policy?
Answers, hi, continue with the premium payment. Dont surrender the policy. Over the next 7-8 years you should be able to make good returns.

aish_786abhi asked, Which mutul nd is best for investment only for 3 years
Answers, hi,for 3 years the best option would be a balanced fund. These funds invest 65% and more in equities and balance in debt. HDFC Prudence and DSP BR Balanced Funds are my best picks.

SUPPANDI asked, Sir, can you please suggest some good short term debt mf's
Answers, hi, if your invesment horizon is less than a year, then you can consider funds like HDFC Short Term Income Fund and Templeton India Short Term Income Plan.

klas asked, Please suggest plans to invest Rs 20L for me due for retirement after two months so as to lead moneywise a happy retired life.
Answers, hi, first ensure that the money that you will need to meet your day to day expenses are kept aside in a bank FD. The rest can be invested in equity funds to ensure that there is no erosion of capital. Inflation will eat into your capital over a period of time and hence it is always better to have atleast 10%-15% of your corpus in equity funds to growth the same.

mahesh248 asked, I have investment in TATA-AIG invest assure-II (amount Rs.18000/annum) and LIC's market plus (Rs.10000) (growth) ulips. now completed 3 years in both the plans. Can i continue with the same plan or can i switch to other plan..
Answers, hi,continue with your plan. Complete the 3 year mandatory period then see if you are making any money exit from the same

anil.gupta123 asked, sir , i have 50 thousand ruppes .i want to make it grow but without risk . i have invested in stocks but ia ma in deep loss .so i fear to invest any more . kindly suggest what to , i want the money to invest it for 1 year for a gain of 12 -15%
Answers, hi, if you want to make your money work harder for you then you will have to take risk. Equity funds are the answer to your question. I would first of all advice you to increase your investment horizon from 1 year to atleast 5 years. This will ensure that you minimise the chances of losing money in equity. Also, take help of a professional investment advisor to help you select the good funds that will help you make the returns in the range of 12%-15%. I have given the names of few funds earlier in my chat.

Salil asked, I am investing Rs. 2500 each in ICICI Prudential Infrastructure Fund and Reliance Regular Savings Fund for the last 2 years and i am planning to continue with these two funds for another 7-8 years. What you suggest? Also should i book profits from time to time or should allow the money to grow. Also want to start one new SIP for around Rs. 3000 pm. for long term. Please advice
Answers, hi, continue with your investments, try and add 2-3 more schemes in your portfolio. Yes,keep booking profits at regualr intervals to balance your asset allocation.

raghuram asked, hi sir. I am getting 4L annual as salery how to make my earnings divided for investment with target of house purchase, childern education,marriage, after retirement security, what type of investment methods & funds you suggest
Answers, hi, the answer to your question lies in doing a comprehensive financial planning for yourself. The plan will tell you how much you need to save on a regualr basis to meet all the goals you have mentioned. It will also suggest ways and means to reach your goal in case your savings are not adequate. Take help of a profesional planner to help you with the same.

hasnainali asked, Heloo , To gain Rs 1 cr in next 20 years , what should be my monthly investment in MF?
Answers, hi, assuming your investment earn you an average return of 12% p.a.you need to invest a sum of Rs 10,000 (approx) to become a crorepati in next 20 years.

Ashu asked, Hi Sailesh. Could you please suggest some good pension plans? What is your opinion about NPS(National Pension Scheme)? Also I want to invest 5-Lacs now. Please suggest how to go about the same in Shares/MF/Pension plans. Thanks
Answers, hi, NPS has not become popular with investors. As an alternative, you should get retirement planning doen for yourself that will tell you exactly the corpus you need to accumaulate by the time you retire to ensure that it generates adequate income year after year to meet your post retirement expenes. Pension plans offred by insurance companies are not the ideal solution.

sbkulkarni asked, i am 43 yrs old. i have invested in sip (rs.1000 each) in hdfc top-200, reliacnce reg saving fund, birla sunlife front line equity, idfc pre equity, sundaram financial opportunities, select focus, kotak 30. and 1 lakh in uti ulip. i need not have to plan for income tax as i hv savings of more than 1 lakh per annum in PF, please review and comment. i would like to go for 250000 term insurancewhat is yr opinion.
Answers, hi, so many funds! All are good. Stay invested. Dont like the idea of having Rs 1 lakh in UTI ULIP. While I appreciate your decision of taking a term plan, the sum assured of Rs 2.50 lakhs is on the lower side. I am assuming here that you do not have any other insurance policy in your name. It would be a good idea to add one more zero after Rs 250000.

montecito asked, Hi sailesh, I have two questions for you : 1. Is Mutual Fund better or Ulip ? 2. I want to invest 10000 rupees a month which funds should i pick ?
Answers, hi, if investment is your objective then mutual fund is my answer. Divide the amount equally between well managed and diversified equity fund. Stay away from ULIPs.

chemistanand asked, Hi Shailesh, I am earning 100K per month and would like to invest around 50K monthly. Can you advice me apart from MF &Shares what is the better bet with income tax exemptions?
Answers, hi, consider investing your savings of Rs 50k into mix of equity and gold funds. You can buy gold worth Rs 10k every month through gold ETF. the remaing Rs 40k can be invested in well managed diversified equity funds like HDFC Top 200, DSP BR Top 100, Franklin India Bluechip and Sundaram Select Midcap. For tax saving you can consider fund like Fidelity Tax Advantage Fund among others.

shuklaji asked, which is the best and safest investment option..FD or shares?
Answers, hi, the safest investment is defineitely bank FD when compared to equities. However, one needs to have both the investment in portfolio. By playing 100% safe you may not be able to build wealth for yourself. Some amount of risk is necessary to make your money work harder for you.

mahesh asked, dear Mr.Sailesh Gud Afternoon, I am 40 years old and i have 2 lacs rupees, is it better option to repay my home loan or plz suggest me where to invest
Answers, hi, I am always in favour of repaying the loan over any other alternative invesment. Its always good to have a healthy balance sheet with minimum or zero debt. Whatever you save on EMI, should be channelised into equity funds to buld wealth over the long term.

gunz asked, Hi Sailesh...I have received around 30000 rupees as bonus..Can you advice me on how to invest this amount to get good returns in the near future? Is open eneded MF's a good option?If yes which MF would you suggest?
Answers, hi, if your invesment horizon is 5 years and more and you are willing to take high risk then invest your money in diversified equity funds. Funds like HDFC Top 200, DSP BR Top 1000 Equity fund are among the better managed funds.

LML asked, HI I AM SELF EMPLOYED- I HAVE INVESTED 20000 EACH IN HDFC TOP 200 , RELIANCE REGULAR SAVING AND DSP BLACK ROCK I WANT TO INVEST FURTHER - AROUND 60000 LET ME KNOW IF I SHOULD CONTINUE WITH THE SAME FUNDS OR LOOK FOR OTHER FUNDS
Answers, hi, consider funds like Franklin India Bluechip and Sundaram Select midcap. I am assuing that your investment horizon is atleast 4-5 years.

anilanil asked, i wants to invest some surplous for short term in instrument which can be liquidated easily within 3-4 days. expected return is 10-12% p.a. pls suggest some such instrument.
Answers, hi, the best investment for you is liquid funds. the returns of 10-12% are impossible from liquid funds. Hence, my advice to you would be to reduce your return expectation to somewhere between 4%-5% p.a.

Karan asked, I want to invest 5000 each month. What is the safe bet which can help me build a nice corpus in next 10yr or so. Secondly, what is the best way to invest when i m looking for both safety n good money growth?
Answers, hi, if you are looking at 10 years horizon and wish to grow your money then the best option would be equity funds. But these are high risk investment. The best strategy would be to divide the money into 2 halves - invest 50% in safe product like Bank FD. Invest the balance half in high risk, high return generating product like equity funds. This will take care of growth with safety.

bhaskarwar asked, Hi Sailesh, I am investing Rs 2000 each through SIP in TATA Infrastructure, HDFC Top 200, Reliance Growth and ICICI Discovery Fund. Can you suggest changes if any?
Answers, hi, I would prefer a large cap diversified equity fund like DSP BR Top 100 Equity over TATA Infrastructure Fund. Rest all are good.

VarunSingla asked, Is it better to invest in Gold ETFS ?
Answers, According to me investment in gold should be done through Gold Exchange Traded Fund (ETF). Every unit of Gold ETF is backed by half or one gram of physical gold. The units of Gold ETF are held in demat form. Hence, there is no botheration about safekeeping of gold that is associated with physical form. Also, the gold held by Gold EFTs are backed by physical gold of 0.995 fineness which is secured and insured. Gold ETF score on the wealth tax front too; they are not considered as wealth for Wealth Tax purpose. Physical gold is considered as wealth for wealth tax purpose. Also, Gold ETFs are treated as long term capital assets if held for more than 12 months from the date of purchase. One can avail of the indexation benefits claim concession from long term capital gains tax, if any. Don’t rush into buy gold. Invest a small a sum every month. Spread your investments over the next 6-12 months.

sds asked, My age is 31. My monthy salary is 38k of which i have i have home lone premium of 15k.I have one endowment and one money bag LIC policy. I also invest 5000k yearly in market plus. I have also one money bag policywhich has yearly premium of 12000 yearly.I have ULIP policy of HDFC (HDFC Youngter plan II)having monthly premium 2000 resp. CCan you please advise me on the investment that i have made and how i can balance my portofolio.
Answers, Hi, you seem to be investment savvy or rather insurance savvy. You have lot of insurance policies in your portfolio which is fine. Insurance should be there in your portfolio to protect you from the risk of dying too early. The investments like shares, mutual funds will help you meet your life goals. My advice to all the investors through this chat is that first they should get an investment plan made for themselves and then move onto the selection of products that will help them achieve their goals.

Peter asked, I am Anil, and my monthly take home is 19k. Please advice any investment plan which is sutable for me. Thanks
Answers, Hi, there is nothing like a best financial plan. Every financial plan is different and suited to the need of a particular individual. Having said that I would like you to be crystal clear of your life goal like retirement, buying a house, children education and their marriage, etc. Since its a specialised task I would advise that you take help of an expert financial planner to help you with your financial planning. I can assure you that once you have done the planning, the process of investing will be very simple and easy. Don’t jump straight to buying investment products like mutual l funds, insurance and bonds. Know what you need to reach your goals on time and then take action accordingly.

NAYAN asked, ONLY IN INVESTING MF, FD, POST, BANK INTEREST, STOCKS, CAN MAKE SENSE. WAT ABOUT PROPERTY?
Answers, hi, properrty is a good investment avenue. Historically, property and equities have given the highest returns. Property investment requires relatively large capital investment to begin with. Also, in India there is not regualator in the property market. So a lay investor is at the mercy of real estate agents. Also not research is avaialble on the property unlike equity. Hence, it is a relatively difficult job to buy property. Real Estate mutual funds when launched will be a good option to invest in prpoperty.

Balu asked, Dear Shailesh, what is your views on ULIPS(after IRDAs reduction of charges)do you think they have gotten better. And also 7-years highest NAV stuff which some insurers are peddling now?
Answers, hi, I am not in favour of ULIPs. I prefer to keep investments and insurance separate. The job of insurance companies is to provide insurance to protect the life of people. Investments are best handle by mutual funds and portfolio managers. I am not sure how 7 years highest NAV guaranteed products will be managed. Its better to wait and watch the performance of these products. As far as insurance is concerned go for the term plan. Stay away from ULIPs

raj asked, i want to invest Rs 50000/- for my 3 yr old child, time to invest min 10 years . shall i invest one time or invest with SIP. as u suggested i am planning for hdfc top 200 & franklin. thx
Answers, hi, its a god idea to start an SIP in HDFC Top 200 and Franklin India Bluechip fund for your 3 year child. Assuming you are going to spend the amount on his/her higher education, you have more than 10 years time horizon which is very good for equity investments. I am confident that if you follow the practice of SIP over the next 10 years you will be able to build a sizeable corpus for you child's education.

Kireeti asked, Can we consider the normal influation while caluclating future education and marriage costs?
Answers, hi, the cost of education and marriage is growing faster than the cost of day to day living. In my calculations I take the inflation as 10% for children education and marriage cost.

skh asked, what is your opinion about ICICI dynamic fund?
Answers, hi, its a good fund. IF you have any invesment in it continue with the same.

hasnainali asked, Sir , I am investing 2000 each in HDFC top200 , SBI tax gain , 1000 in DSP BR top 100 via sip .Investing time horizon is 15 years. can you pls inicate me ultimate corpus after 15 yrs.total invetment will be 9 Laks.
Answers, hi, assuming an average return of 12% p.a. over the 15 years, you the value of your investments will be approx Rs 15 lakhs

sid asked, which one u suggest for a period of 5 years - ELSS or RD or FD or Gold
Answers, hi, all three are good for 5 years time frame. I would adivse that allocation to gold be capped at 10%. The balance 90% can be equally divided between ELSS and RD.

Ashok asked, My taxable income is under 20% tax slab. if i invest 3 Lakh in FD, the tax on the intrest earned when added to my income will fall in 30% slab. Is it wise to go for FD. I guess there is TDS for FD also.
Answers, hi, please check if you have considered deduction of Rs 1 lakh under section 80C in your calculation. If yes and still you have to pay tax, then there is no other option but to pay the tax. TDS is tax deducted at source - that doesnt reduce your tax liability.