Dividend Mutual Funds Equity Schemes are generally sold by giving sales speech that these funds can generate regular income for the investor. However, this regular income (dividend) will reduce now as Dividend Distribution Tax is introduced in Budget 2018. DDT is imposed on Dividend Mutual Funds Equity Schemes from April, 1st 2018.
If you have already invested in Dividend based mutual funds or planning to invest in these type of schemes this post is for you. In this post, we will discuss Dividend Distribution Tax (DDT) and disadvantages of investing in Dividend Mutual Funds. We will also compare DDT and LTCG applicable on dividend and growth based mutual funds respectively.
Dividend Mutual Funds Equity Scheme – Should You Invest?
A dividend based mutual fund is no longer recommended for investment post-budget 2018. Few pointers in this direction are given below.
Dividend Distribution Tax
A new tax called as Dividend Distribution Tax is introduced in Budget 2018. The rate of this tax is 10% on the dividend paid. On the top of this tax, 12% surcharge and 4% Cess is applicable. DDT is applicable only to a dividend based equity mutual funds after 1st April 2018.
DDT will be paid by the fund house on the behalf of investors. This means dividend income on the hand of investor will reduce. Please note that dividend income on the hand of investor will be still tax-free.
Let’s try to understand DDT calculation by example. Suppose a company is paying Rs.100 as a dividend to the investor. DDT is, in this case, would be calculated as follow.
DDT = 100 x 10% = Rs.10
Surcharge of 12% is applicable on DDT = Rs.10×12% = Rs. 1.2
Cess @4% is applicable on DDT and Surcharge = 4% (Rs.10 +Rs.1.2) = 0.448
As you are getting Rs.100 as Dividend and DDT is Rs.11.648. So, NAV of fund will go down by Rs.111.648.
So, the effective rate of DDT is 11.648%.
Quantum of Dividend
When you invest in Dividend based mutual funds, you cannot control the quantum of a dividend. Distribution of dividend and quantum is based on the fund manager discretion. Fund Manager tries to meet an expectation of investor. However, if fund manager failed to fulfill expectation of investor or dividend amount is reduced investor cannot do anything.
Dividend based on Profit
Dividend based equity mutual funds pay a dividend only from accumulated profit amount. If a fund is not doing well or if the stock market is down your dividend pay-out will get affected or you may not get dividend.
So, DDT and other disadvantages make Dividend Mutual Funds less attractive option for investment.
Growth or Dividend Mutual Funds?
Well, in order to compare growth and dividend mutual funds let’s compare LTCG and DDT. You must be aware that Growth based mutual fund is also under a tax regime. LTCG (Long-term capital gain) is applicable on growth based mutual funds. The effective rate of LTCG is 10.4%. LTCG is applicable to the capital gain amount exceeding 1 Lakh in a fiscal.
Few differences between Growth and Dividend Mutual funds post-budget 2018 are given below.
Looking at above points, it can be concluded that growth based mutual fund is better choice for investment compared to dividend mutual funds.
What is your choice of investment Dividend Funds or Growth Funds?
Do share your views and recommendation in the comment section.
Mohnish Pabrai is an Indian-born American Entrepreneur and popular stock market investor. Mohnish Pabrai is die-hard fan and follower of Investment guru Warren Buffett. He has spent $650000 in 2007 just to have lunch with Warren Buffett. He has made a career in the stock market by mimicking the investment style of Warren Buffett. Mohnish Pabrai is the managing partner of the Pabrai Investment Funds. The Stock Portfolio of Pabrai contains 3 stocks. Here is detailed information about Mohnish Pabrai’s Stock Portfolio and success story.
Mohnish Pabrai Success Story
Pabrai was born and brought up in Mumbai. He attended Elite Private School. After completion of high school, Pabrai came to the United States in 1983. He studied Computer Engineering in the USA. After graduation, he worked in Tellabs. In 1991 he started his own IT consulting company TransTech. He was deeply interested in stock market investment. In 1999 he started Pabrai Investment Funds.
The main reason behind the stock market success of Pabrai is following learning from Warren Buffett. In a short span of time, he became one of the most recognized investors in the world. His net worth is approximately $60 million. It is claimed that his net worth is increased at an annual rate of 16% from 1992 to 2012.
Pabrai is a master in identifying multibagger stocks. He has created massive wealth from the stock market in the USA and also in India. In order to help you here is Mohnish Pabrai Portfolio.
Mohnish Pabrai Portfolio
Mohnish Pabrai’s Latest Portfolio consists of 3 stocks. Data shows that the Pabrai Fund has given very good returns in the last few years. Detailed information about Mohnish Pabrai’s Portfolio is given below.
Stock
Holding Value
Qty Held
Edelweiss Financial Services Ltd.
88.3 Cr
11,522,642
Sunteck Realty Ltd.
–
–
Rain Industries Ltd.
–
–
Note – Above portfolio is made from information available from the public domain and may not be accurate.
Mohnish Pabrai Investment Style and Advice to Investors
Identification of Stock for Investment
Stocks are not a piece of paper. Buying a stock means buying a fraction of ownership in the company. You should not buy a single share of stock if you are not willing to buy entire business. You should buy a valued company and stay invested in it forever. Mohnish Pabrai is holding stock of Rain Industries and Kolte Patil Developers since so many years.
Few Bets, Big Bets
Usually, you find multiple stocks in the portfolio of any investor. However, you will find very few stocks in Pabrai portfolio. This is because he believes in few bets, big bets. He has selected all these stock carefully. All of these stocks are likely to become big bets in future.
Value Investing
Pabrai always explains that one should become value investor. He says that you should try to get $1 worth of assets for much less than $1. It is basic truth and in order to do that, you should know what is the fair value of a stock for investment.
Moat
As per Mohnish Pabrai it moat is most important. Moat means company’s ability to withstand in a competitive market and generate sustainable growth/profit. A moat is very important if you want to buy and hold a stock forever.
Hope you like the investment style and philosophy of great investor Mohnish Pabrai.
Loans are beneficial, especially to middle class and poor people. You can fulfil your dream by taking loan. Loans can help you to avail facilities such as home, car, study etc. There are different types of loans available in India. You can select a loan based your requirement. However, it is good ideas to explore the various loan options before taking loan. Here is information about 20 Types of Loans in India.
Loan is money which a borrower takes from the lender with the promise to return back in fixed period of time. The borrower will also pay an additional interest amount along with the principal amount.
20 Types of Loans in India
Home Loan
Home loan is most common loan available in India. Home loan is given by bank in order to purchase property. Home loan is available with two variant fixed interest and variable interest. It is good idea to purchase variable interest rate loan. Home loan gives you tax benefit also.
Interest rate: 9 -11%
Collateral: Physical property
How much can you get? – 85% of property value
Pros and Cons
You can avail bigger loan if your income level is high.
If you are student and seeking money for higher education you can apply for Education Loan. Education loan is available for Indian and foreign education. You can avail tax benefit under section 80E for the education loan.
Interest rate: 11-14.5%
Collateral: Varies from bank to bank.
How much can you get? – Depends upon collateral value.
Pros and Cons
Longer repayment
Tax Benefits
High Interest rates
Car Loan or Vehicle Loan
If you want to purchase new vehicle you can opt of vehicle loan or car loan. You can avail this loan from bank. You need to submit income proof in order to avail this loan.
Interest rate: 9.6-10.6%
How much can you get? – Up to 90% of vehicle value depending on your income documents.
Personal Loan
Personal Loan is loan given by bank or financial organization without any collateral. This loan is given purely based on your credit profile and credit score.
Interest rate: 15-25%
Collateral: Not required
How much can you get? – Based on your credit profile.
Pros and Cons
Banks cannot get hold of your assets if you default.
Loans are disbursed quickly, but need a formal application.
Given only to the salaried, self-employed or professionals.
Bank will provide overdraft facility against asset. This facility can be used by individual to fulfill emergency requirement.
Interest rate: 1-2% higher against submitted asset documents (Usually FD)
Collateral: Asset documents
How much can you get? – Depends on asset value.
Working Capital Loan
If you are in need of working capital to run the business you can opt for working capital loan.
Interest rate: 12-17%
How much can you get? – Depends on your income documents and financial statements.
Pros and Cons
Faster processing
Higher Interest rate
Low repayment duration.
Loan from unorganized sector
Last option for availing loan is from unorganized sector. This option is not advisable in majority of case. It is very difficult to avail this type of loan and it is very costly.
Interest rate: 20-25%
How much can you get? –
Pros and Cons
Difficult to obtain this loan.
Interest rate and payment terms are unreasonable
Over to you –
Hope you have got information about loan type you are looking for.
Which Loan option is suitable for your requirement?
College students running out the pocket money can easily make money from online jobs. If you are a college student and serious about making online money here is legitimate & trusted online jobs. All these online jobs are easy and can be started without any investment.
In order to start this online job, you don’t need a college degree or even experience certificate. You just need your laptop with internet connection and few hours per day. You can earn $200 (Rs 15,000) or more monthly from this online jobs.
Why Choose Online Jobs as a Student?
1. Flexibility
Juggling studies and work can be challenging, but online jobs allow you to work at your convenience. No longer will you miss classes or give up on sleep!
2. No Investment Required
Numerous conventional jobs involve initial expenses, but the ones we will cover require only an internet connection.
3. Skill Development
These positions enable you to develop essential skills such as communication, time management, and problem-solving, enhancing your resume.
4. Work from Anywhere
Whether you’re in your dorm, a coffee shop, or at home, you can earn money from anywhere!
Online Jobs for college students
Online Data Entry
Online Data Entry is one of the easiest jobs that can be started from home without any investment. Students just need to make data entry as per the requirement. On the validation of your job, you will get a money. In order to search online data entry jobs, you can refer to following websites.
As a student, you can participate in online job survey and earn money. The sites which pay money for a survey is known as Online Paid Survey Sites. You need to be careful while selecting the job survey site because some of the sites are running a scam. You need to complete a number of surveys on these websites. Once you reach to payout limit you will be paid.
Online Ad Clicking
You can also make online money by online jobs of ad clicking. The sites used for making money using Ad clicking is known as PTC job sites. These type of sites will pay you money for clicking and viewing the advertisement. One of the simplest form of online jobs. The payout for viewing site will be very low $0.1 – $0.5.
Online Jobs with mTurk
College students can also make money by completing several mechanical tasks. These tasks are like writing an email, making a presentation, typing or converting documents. This type of tasks is offered by mTurk website. The payout offered for these type of job differs from $0.5 – $10. You can start your online jobs of mTurk by visiting following websites.
If you are creative in nature you can use Fiverr to earn money. Fiverr is an online marketplace for digital services. Any job done online in this marketplace will pay you $5. The job offered on this site is logo design, marketing services, whiteboard, promoting website etc. You can login to Fiverr website and start your online job today.
Content Writing
On the internet, we find many bloggers who are looking for fresh, creative and informative content on daily basis. So, the next online job for the student is content writing. You can offer content writing services to bloggers or to online websites. Some legitimate website which pays for content writing work is given below.
Iwriter
freelancewriting
Google Adsense
If you are hardworking and ready to invest your time you can generate money from online advertising Google Adsense. Google Adsense is a pay-per-click program. In order to make money using Google Adsense, you need a website or blog where you can place your advertisement and generate money. It requires a lot of time and patience to generate money from google Adsense. On and average you can make $100 to $5000 from Google Adsense.
You can work as Online Virtual Assistant and make money online. Virtual assistant job means the online job of secretary. You need to do multiple tasks like managing clients, arranging meetings, sending appointments, organizing events, making phone calls etc. It is a more difficult job but it can be done from home. Following websites offers online jobs as a virtual assistant.
zirtual
ivaa
indeed
Tips to Succeed in Online Jobs
1. Be Consistent
Success doesn’t happen overnight. Work regularly, and you’ll see results.
2. Keep Learning
Upgrade your skills by taking free online courses on platforms like Coursera or Udemy.
3. Network and Market Yourself
Join Facebook groups, LinkedIn, and freelancer forums to connect with potential clients.
4. Manage Your Time Wisely
Use tools like Trello or Google Calendar to keep track of tasks and deadlines.
5. Stay Motivated
Set goals and remind yourself why you started. Motivation is key to staying on track!
Over to You –
Making money online as a student is easier than ever, and the best part? You don’t need to invest a single penny! Whether it’s freelance writing, tutoring, or social media management, there’s something for everyone. Just stay consistent, avoid scams, and keep learning.
FAQs
1. What is the best online job for students with no experience?
Freelance writing, online surveys, and virtual assistant jobs are great for beginners.
2. How much can a student earn from online jobs?
Earnings vary. Some make a few dollars daily, while others earn hundreds per month.
3. Are online jobs safe for students?
Yes, as long as you avoid scams by researching companies and not paying upfront fees.
4. How do I start an online job with no investment?
Pick a job, create a profile on platforms like Fiverr or Upwork, and start applying!
5. Can I do multiple online jobs at once?
Absolutely! Many students juggle different gigs to maximize earnings.
Now go ahead and start earning online! Happy hustling!
