Budgeting Helped Me Launched my Business

I wanted to start my own business as an HR consultant and integrator for international and local entrepreneurial projects, but before I made such a bold move, I needed enough courage to understand exactly what I wanted and assess whether I was capable to achieve it with confidence, both psychologically and financially. My starting point was coming up with a financial plan.

Prior to quitting my job in 2015, I worked on a step-by-step business plan for 1,5 years. I attended start-up meet-ups to learn from others, which was especially helpful to find out if I was psychologically ready to take on this new journey. I revived my social network, looked for advice and was provided feedback.

One day I discovered I was finally ready to afford my the new venture for 2 years, even if I would not get any investment, so I decided to make my dreams come true. I quit my job and started volunteering at the University to develop a few projects. During this time, I also did some freelance work for corporate organizations for about six months and continued planning my business and financials in detail. One of the crucial decisions I made along the way was to partner up with a colleague and I learned that it does not matter whether you are running a start-up company or a holding, the skeleton of your business should always stand on legal and financial grounds.

Before officially founding my company I calculated my income, my expenses and the money I needed to save. Also, its always useful to seek for legal and financial advice from professionals while doing a financial plan. My partner and I decided to act smart and made our business plan according to the “minimum spending and maximum gain” principle. We decided to start as a home office with flexible working hours and we did not to enlarge our team until we reached our financial target. Our plan was not to get any credit from any public or private investors for at least one year. We outsourced the creation and brand designing of our business website through social networks so we could have the lowest available price.

Another important part of financial planning is budgeting. To create an effective budgeting strategy, you should track your income and expenses periodically. For example, we realized that our current customers have a tendency to make deferred payment agreement for our consultancy services. For this reason, we created a cash flow statement which helped us for tracking the flow of our income and analyze our expenses. We also avoided having unnecessary spending in our business and/or luxuries in our social lives. Moreover, we decided to focus on governmental foundations for our newly developed projects. We are currently trying to make an agreement with organizations at a fixed fee which may also help us to forecast our income regularly.

Starting your own business as an entrepreneur is not easy. Especially in developing countries! You have to have plan A, B, and C for all unexpected issues and you should get annoyed for doing every piece of the work. For example, at my previous jobs, I was holding managerial positions with medium-sized teams, and I was responsible for building strategy & high-level designs, but not responsible for the operational works. However, in my business, I am doing all pieces of my work to keep moving it forward. My partner and I have also designed alternative channels to bring in new customers such as SMEs, universities, community, and NGOs, rather than just focusing on the bigger companies.

After 1,5 years from starting this journey, I have come to realize that to start a business you need: 1) financial plan; 2) budgeting strategies and 3) social support from family and friends. Starting a business changes your lifestyle and mindset. It has ups and downs, but it is very fulfilling and instructive!

Credit : empowerwomen.org

Single Women on the Rise, but Too Often Missing Key Opportunities to Safeguard their Futures

Fidelity Research Reveals that Despite Long-Term View, Many Single Women Are Not Taking Proactive Steps Today to Plan and Invest for the Future

New research exploring the financial planning and investing habits of single women – those who have never married, those who have experienced divorce, and those who have outlived a spouse – finds that many may need to take a more proactive approach to growing and protecting their finances. Fidelity Investments’® Single Women & Money Study finds that while the overwhelming majority of single women (97 percent) believe it is important to be engaged in managing their money, three factors may be holding them back from taking action: underestimating their knowledge and experience, neglecting to plan for their financial future and saving too heavily in cash.

“Women have more financial earning and decision-making power today than ever before,” said Kathleen Murphy, president of personal investing at Fidelity. “And yet, too many limit the benefits of that power by shying away from taking control of their financial futures. As more women are staying single, and others are taking on sole financial responsibility through divorce or outliving a spouse, it’s critical that women be actively involved and invested in the financial choices that can enable them to live the lives they deserve.”

Single Women Question their Financial Acumen

Despite the fact that single women like having sole control of their finances, their confidence slips when asked about core financial topics. Single women are less likely to consider themselves knowledgeable than other demographic groups when it comes to saving for retirement, creating a financial plan and investing. This perception may be holding some women back from taking the necessary steps to secure their desired financial future.

While most single women associate their finances with positive sentiments like security, peace of mind and being in control, they also see their finances as a cause for stress and worry, more so than their male counterparts. Overall, one-in-three single women say they are concerned about their finances, compared to just one-in-five single men.

Single Women Think Long Term, but Miss Opportunities to Safeguard Their Future

Single women take a long-term view when it comes to their finances. The fact that they are thinking ahead is revealed by the worries weighing on their minds:

Top Financial Worries Single Women Single Men
Affording to live comfortably in retirement 33% 25%
Paying down debt and still saving for the future 31% 24%
Being able to pay bills if faced with a job loss 31% 25%

While single women may be thinking about their long-term goals and the financial challenges they may face along the way, most still aren’t preparing to meet these challenges by taking steps to curb their spending, reduce their debt, and prepare for a job loss. In fact, when it comes to day-to-day budgeting, nearly half (48 percent) admit they tend to spend without thinking about the long term.

Furthermore, single women are the least likely demographic (28 percent) to have a comprehensive financial plan in place to help them set savings goals and navigate paying down debt. And, while they worry about unexpected financial hurdles, nearly half (47 percent) have not put an emergency fund in place to cover three-to-six months of essential expenses.

Single women are also less likely not to have other long-term financial protections in place that can be critical in times of necessity. Across the board, women who have never married are the least likely to have a number of key safeguards in place, compared to those who have had a partner at some point.

Have These Core Financial Safeguards in Place % of Single Women Overall % of Women Never Married % of Divorced Women % of Widows
Comprehensive Financial Plan 28 17 32 56
3-6 Month Emergency Fund 53 46 56 75
Will 38 16 55 81
Healthcare Proxy 35 19 44 72
Estate Plan 24 9 29 64

Nonetheless, many in this group want to become better prepared, with more than half of singles (51 percent) either saying they need to spend more time on their finances or admitting they don’t spend any time managing their finances at all.

It’s Time for Single Savers to Take the Next Step

Despite concerns about being able to live well in retirement, single women may need to shift more attention to making sure their hard-earned savings are working equally as hard for their future. Eight-in-ten single women keep a portion of savings in cash, with more than a third (35 percent) report keeping 50 percent or more of their savings liquid. Many singles report wanting to keep savings on hand in case of an emergency, but single women are also twice as likely as their male counterparts to say they keep their savings in cash simply because they don’t know where to invest it.

“While keeping some savings easily accessible in cash to prepare for the unexpected is important, not putting enough to work for you in the market may mean missing out on potential growth over the long term,” said Alexandra Taussig, senior vice president of women investors at Fidelity. “Today, stowing away funds in a checking or savings account is not enough to keep pace with inflation. If you’re not investing your savings, you may be losing money over time.”

Approximately one-in-five single women shies away from investing out of fear of putting her savings at risk. On the flip side, fear also motivates many single women to invest their money, with 38 percent citing fear of not having enough money in the future as a top motivator to invest compared to only 25 percent of single men.

Divorced Women Feel More Financially Free, in Control

Major life events can often be a catalyst for action with finances. Among divorced women, the overwhelming majority said they feel more in control of their finances now that they’re divorced (84 percent) and have more financial freedom than when they were married (76 percent). Two thirds feel they are in better financial shape today, although nearly half (45 percent) report they have had to cut back their spending to save more post-divorce. One quarter either applied for or started a new job, while 18 percent improved their earnings prospects by working toward a new educational degree.

For some, feeling more financially secure came immediately. For others, this takes time: one third of those who have gone through a divorce said that it took more than a year to feel financially grounded; roughly one quarter report that it’s been more than a year and they still don’t feel secure.

Perhaps the most surprising finding from this group is that only five percent of women reached out to a financial professional for guidance as they were going through their divorce.

“Going through a divorce is as much a financial and emotional experience as it is a legal one,” added Taussig. “Building a support team that includes mental health, legal, and financial professionals can help provide a more holistic view and a better start to the next phase in life.”

When asked what financial choices they would have made differently in their marriage, divorced singles said they wish they had saved more and better educated themselves about how to invest for the long term.

After Losing a Spouse, Widows Share Wisdom

Widowed women are more likely than any other group surveyed to say they feel confident about their finances and in control of their money.

More than half of widowed women say their spending and saving habits are excellent and they have a budget that keeps them on track. They also feel more knowledgeable when it comes to financial topics like setting a budget, paying down debt, creating a will, and saving for retirement. What’s more, while more than half of widowed women feel the same level of control over their finances as before they lost their spouse, nearly 40 percent feel more in control of their money now.

This positive financial outlook may be connected to early planning. Nearly two-thirds of widows say they had a financial plan in place prior to losing their spouse, and eight-in-ten of those women worked together with their spouse to build that plan.

When asked what financial advice they would give to others who may one day face losing a partner, the top five recommendations offered by widowed singles:

  • Know where all important financial and healthcare information can be found
  • Have a will in place
  • Make sure beneficiaries are in place for all accounts
  • Make sure both names are on mortgages, insurance policies and other accounts
  • Don’t delegate financial planning – make sure that you and your partner work together

Best Practices for All Women to Keep in Mind

By making it a priority early to establish strong financial habits women in all life situations can be better prepared to reach their future goals. Here is a short list of best practices to get you started:

  • Get into your financial front seat: know what you own, what you owe and what your goals are for your money to ensure that your investments are working toward the future you envision.
  • Put financial safeguards into place, including a holistic plan that accounts for your individual situation and goals
  • Take the next step from saver to an investor, making sure that you choose investments suited toward your tolerance for risk and time horizon to save.
  • Make it a priority to check-in on your finances at least annually. Don’t hesitate to reach out to a financial professional to answer your questions and help create a comprehensive plan to help keep you on track to meet your goals. AspirePFS professionals are available to help at 9999 312 868 or enquiry@aspirepfs.com—whether you’re a current client or not

Article Credit Fidelity.

Are you serious about your employee health err Financial Health?

employeesRecently I met a relative of mine who has joined a technology company and she was gushing about the myriad employee benefits that the company offers. From free commute, food and discounted merchandise to body massages as well! I was intrigued so asked “What do they have for employee financial health? Do they also teach new joinees how to manage their finance? Well, she drew quite a blank!

To my mind a company which is so high on employee engagement and well being should equally be responsible towards employee financial health. Especially a company with a large percentage of first entrants in the work force. Sadly this is not the case in most organizations. Most of them organize a tax payment helpdesk around June in the name of financial awareness!

Financial stress impacts many facets of an employee’s life.  Employees admit that financial worries have impacted their health, relationships, productivity, and time away from work. Its time companies wake up to making financial awareness part of learning and development goals of the employee. Basics of managing your own finance should be a mandatory training for junior and middle managers. An employee’s financial well being is in the best interest of the employer as well.

There are many reasons why HR does not give the due importance to employee financial health.

Belief: HR feels that employees will already have their own advisors and don’t need advice.

Reality: All sections of employees need trusted and unbiased advice. Junior employees need professional advice so that they can be more discerning of the freely given informal advice in the family circle.  Most mid and senior level executives hardly have time to spend on their portfolios and don’t mind a second opinion

Belief: They feels that finance is a personal matter and company should not really intrude

Reality: Employee financial health impacts companies as any other form of stress and personal upheaval does. It leads to distraction and loss of productivity. Employees appreciate non-binding information and awareness.

Belief: People are adequately informed.

Reality: In my interactions with the salaried class the most baffling finding has been that they all work very hard and are very diligent on checking on their monthly salary credits but how to make this money work hard is something they are not aware.

Companies can be more proactive with financial wellness programs. Here’s how.

Make it mandatory: While most mandatory trainings are attended mechanically, my experience of the same, still there is some impact. Also if you can manage to get an engaging trainer your most difficult hurdle is crossed.

Give learning credits: This could help in generating more interest among the junior employees, and get them to participate in the programs.

Make it Cool: HR could promote financial wellness as a cool and funky thing, the way marathons are promoted. Regular contests, quizzes, and financial clinics should be held for employees.

Make it relevant: There should be targeted programs for different bands in the organisation. Maybe getting the leadership team involved to lay emphasis on the benefits of financial wellness and show the way would be a good starting point.

Finally, with many junior level jobs getting automated, people wanting to retire and follow their dreams beyond 50, and jobs not easily available for people above 45 years, it is high time that employees think about being financially prepared. And employers can contribute to this by helping employees keep their costs down and optimising productivity. This will help reduce attrition and also increase employee loyalty.

Take action today!

#AspirePFS #Aspire EDU #EmployeeEnagagement


Financial planning in your 30s: Here’s how to do it

Here are a few ways to prime your personal finances so that you are ready to take advantage of this phase of your life

Are you financially ready to take on your 30s? The 30s come with a mixed bag of good and bad. This is the phase in life when financial responsibilities expand. But this is also the time when your career and finances are more settled and poised to take off. Prime your personal finances so that you are ready to take advantage of this phase of your life. Here are a few ways to do so.

Make a budget

Cultivate the discipline to live within your budget. As you enter the 30s, there is likely to be greater certainty and growth in your income. But the monetary responsibilities are also likely to expand, putting a strain on your income. Being able to control expenditure is a good skill to have so that you can save and invest for your goals. But this discipline takes time to develop and internalize. Use the time in your 20s, once you have worked out the reckless spending that comes with first earning your own income, to learn to make a budget and live by it. Track your expenses over a few months so that you know where your money is going. Do a realistic categorization between essential and discretionary expenses, apart from payment of taxes, repayment of loans and some savings. Trim your expenses to fit the available income. Test run the budget over a few months and tune it according to your experiences.

Once you have a viable budget, build the discipline to stick with it. This habit will help you deal with the stress of expenses when the financial responsibilities go up in your 30s, and even later.

Ring fence your finances

An unexpected loss or drop in income, an unforeseen medical or other emergency, or worse still, loss of life can derail the ability of a family to meet its current and future expenses. An emergency fund and appropriate insurance products can help you safeguard your financial interests efficiently at a time in your life when you have dependents and additional monetary obligations. An emergency fund should be the first financial commitment when you start earning an income. Build an emergency fund that reflects your expenses and risks to your income. Maintain the fund by periodically adjusting it to reflect expected changes, and refill it on priority basis anytime you use it.

Use insurance to protect your income from the risk of loss of life or from unexpected large expenses. For life insurance, choose a term plan that gives you the cover you need at a lower cost. You will also need health insurance to protect the family, even if there is employer-sponsored health cover.

Erase credit indiscretions

Your credit score and credit history are likely to reflect the mistakes made in managing debt early in your career. But you have time on your side to rectify the errors and rebuild your credit score in preparation for the more responsible 30s. This is the time when you may be considering large loans such as home mortgages. A poor credit score will affect the terms on which you will be able to borrow and this has a long term negative impact on your finances. The steps you need to take to rectify your score include accessing your credit report from the credit bureaus and checking them for errors. Write an application for correction immediately if you spot any errors. Once you know your credit score, and if it is low, work towards building. Work on paying off loans and don’t add to debt. Try to reduce the percentage of credit used against your available credit. If you have stayed away from debt altogether, then that too may work against you. Build a responsible credit behaviour pattern by using credit with discipline and meeting obligations on time. Rebuilding credit and building credit history is not something that you can do quickly.

Spring clean debt

Initial incomes can also be a time of indiscreet borrowing. Most of the debt is likely to be high-cost consumer and credit card debt. Clean up debt outstanding as you approach your 30s. First, the concentration of unsecured debt and credit card debt will harm your credit score. Second, if you don’t close these debts, they will affect your ability to make more serious financial commitments such as a home loan, when you need it. It will also restrict your ability to source loans in an emergency. Try to keep your debt slate clean because in your 30s, your needs may expand much faster than your income and you don’t want your ability to borrow tied up in old debt.

Start saving for retirement

You should start investing for retirement right from the beginning of your career, so that your retirement corpus benefits from compounding even if the multiple claims on your income in the 30s prevent you from adding significantly to your retirement contributions beyond the mandatory savings. Make contributions to the regulatory retirement savings offered by employers, which may have contributions from the employer as well as tax benefits. Expand to other retirement products that allow you to take more risks for better returns, given the longer period available to the corpus.

Change course and upskill

You are the most important asset in your life and you need to maintain your earning capacity in top gear. Use the initial working years to know if you like what you are doing or want to change course. Either way, use the late 20s to skill yourself. Change course if you need to, or up-skill yourself, so that your earning ability goes up in the 30s.

Focus on your investment portfolio

As income stabilizes in the 30s and an emergency fund is built to take care of any risks to income, the investment portfolio and asset allocation should reflect the investment horizon of the goals and the need for liquidity, income and growth. There may be medium-term goals such as saving for down-payment on a house and long-term goals like children’s education and your own retirement. Rebalance the portfolio to reflect changes in circumstances and goals. Set in place facilities to make automatic investments so that the expanding expenses in the 30s don’t forestall the investments that you should be making.

Set the stage for making the most of your 30s. It may seem like a lot to do but you just have to be mindful of money matters and the rest will fall in place.

#MutualFunds #FinancialPlanning

Credit: Valueresearchonline


How to link Aadhar with your Mutual Funds

Image result for aadhar linking to mutual fundsAs per recent government notification under Prevention of Money-laundering it is mandatory to link your Aadhar in all your Mutual Fund folios before 31st December 2017 failing which your folios will be made inoperative.

So I thought I will compile for everyone’s convenience various options to update your Mutual Fund records.

There are few things to remember:

  • Updation of Adhaar has to be done with the individual registrar and transfer agents ( RTAs)
  • Updation can be done both online and offline. Online updation is fairly simple and quick. All you need is your PAN No,  mobile number registered with Aadhar and of course the Aadhar No
  • For investor convenience, RTAs are facilitating single mode submission based on PAN and it will get updated/linked across all Mutual Funds serviced by an RTA. So you don’t need to individually update all folios across various Mutual funds
  • Currently, Aadhaar updation has to be done by the investor themselves. Mutual Fund distributors cannot update the same on investors behalf. Modalities of the process to be followed by a distributor, to update investor Aadhaar via an AMC, are still being put in place. It is likely that you will be able to do this for online and physical distributors soon. However, there is no process in place yet.

Link Aadhar Online:

Here are the links to the different RTA’s to update your folios:






For Individuals-_ https://www.karvymfs.com/karvy/Aadhaarlinking.aspx

For Non-Individuals –



Link Aadhar Offline

Download specified forms from RTA/AMC Website, fill and submit to the nearest RTA/AMC Branch

What you need to watch out for

There could be some glitches. First, the name on your folio should match the name in your Aadhaar; else there is a chance of the request getting rejected. The Aadhaar updation is linked to each PAN holder attached to a folio. If you are a joint holder, you too may be required to furnish Aadhaar details. However, in the online process, there is no separate mention of joint holders. As of now, the updation is happening via investor approval, which means an OTP-based verification rather than a biometric one.

If your mobile number has changed and is different from your registered mobile number in Aadhar you will have to go for the offline route.

Whichever channel you choose to undertake for this, ensure that the link has been made by 31 December 2017. If not, there is a chance that you may not be allowed to transact on your folios.

#AspirePFS  # MutalFunds #Aadhaar

5 reasons why you should not invest in equity mutual funds for short term

Investing in equity funds for the short term could be fraught with danger of losses. If you are investing in equity funds the normal time horizon should be 5 years or more to register decent gains. However, many investors may think of equity funds for the short term without understanding the implications of such a move.

Here are some of the negative fallouts of investing equity mutual funds for the short term:

Heavy tax may get levied: Equity investments are subject to capital gains. The quantum of tax you will have to pay for your mutual fund investment depends on the tenor of investment in the fund. Long-term capital gains tax (LCGT) and short-term capital gains tax (SCGT) are calculated based on how long you are staying invested.

“In case of equity MFs, if you redeem your investment in less than 12 months, then SCGT is applicable on short-term gains at a flat rate of 15%. If the holding period is greater than one year, then the investment does not attract any LCGT in case of equity MFs including ELSS. So staying invested for a year or more means you can avoid paying that extra 15% on your gains,” said Ajit Narasimhan, Head – Savings and Investment, BankBazaar.com

Exit load can get applicable: Exit load are imposed to encourage investors to remain invested for a longer period and discourage them from withdrawing early. Equity funds, typically, have an exit load that is valid for a year after you invest. ELSS comes with a lock-in period of three years.

Narasimhan further added that if you redeem your units within the period for which exit load is defined, you will have to pay that amount. Exit loads are usually around 1%. It might look like a small amount, but on a redemption of units worth Rs 1 Lakhs, an exit load of 1% will take away Rs.1000. “Investors should remain invested in equity mutual funds for the long term to derive better benefits,” he said.

 Financial goals may not get linked: If you have short-term goals like buying a car within a year or so then in such case you must avoid investing your money in equity mutual fund instead keep your money in cash or cash equivalent or in liquid funds.

Many retail investors make this mistake during bull markets when they, buoyed by extraordinary returns, start investing in equity mutual funds for their short-term goals. “Many also invest their short-term surpluses or emergency fund in equity funds, thereby compromising their liquidity. As a result, during subsequent market corrections, they are forced to liquidate their equity fund investments at loss. Instead of being influenced by the emotions of greed and fear, mutual fund investors should follow a proper asset allocation strategy based on their financial goals,” he added.

No gains from compounding effect: You can get good returns on your investment over a short time period but you may not get the benefit of compounding effect if you have not invested your money for a longer term. “Staying invested for a long-term also means better returns because of the power of compounding as well as better rupee cost averaging, which takes away the need to time the market and get good returns over time,” said Narasimhan.

Portfolio may be exposed to risk: One can get good returns on their investment only if they are investing for a tenure of around 5-7 years at least. Failing to do, one may even lose money instead of making gains on their investments. “They should invest in equity mutual funds only when they have sufficient liquidity to meet their short-term goals and emergency fund requirements and for goals that are at least 5 years away,” said Kothari.

#MutualFunds #Investing

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