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Walnut – Innovative Expense manager

Personal Finance

Shitanshu Kapadia

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November 21, 2014

I often search for application which will track my expense automatically. Well today my search is completed I have come across Walnut an Innovative Expense Manager. Let me share with you detail of Walnut with you.

Walnut- Innovative Expense manager

Walnut is free expense manager app that helps you to track your expense automatically. This app works in background it does not even require to open the app or to make data entry. It tracks your expense automatically.

You must be wondering how it is possible to track expense without making data entry. Well that’s what the innovation is, Walnut analyze the SMS from your inbox and based on keyword tracking makes entry of credit and debit. It is perhaps easiest expense tracker I have ever come across. Walnut is always in auto-mode and deeply understands your SMS Inbox. Walnut does not require access or connection to any bank accounts.

Walnut only looks at incoming message from business like bank, merchants etc. It does not analyse any personal messages. Walnut also gives insight of your financial transactions from single day to years at one place at one click.

Walnut – Features

Walnut provides intuitive visualizations and smart insights
Month wise summary of cards and bank accounts
Walnut will remind you of pending bills
It will give Spending Analysis
See all your SMS offers together in one place!
Search facility to search transactions, bills, events or any business message
It consolidates all business messages into a better view – No more LM-, DM-, AM- Now
It keeps related message at single place for easy tracking

Currently Walnut support following banks and business –

HDFC bank, debit and credit cards
2. Axis bank, debit and credit cards
3. ICICI bank, debit and credit cards
4. SBI bank, debit and credit cards
5. Citibank credit cards
6. Amex credit cards
7. IndusInd credit cards
8. Vodafone, Idea, Airtel
9. BookMyShow, OlaCabs and many more

Walnut works like magic you must download it. This app is supporting only android based smartphone.

To know more about this app you can go through FAQ section.

Kisan Vikas Patra (KVP) is Back – Should You Invest?

Personal Finance

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November 19, 2014

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kisan vikas patra

Kisan Vikas Patra is re-launched by government on 18th Nov, 2014. Main reason of re-launching KVP back is to boost house hold saving rate. Once upon a time KVP was very famous investment option. Let’s see what features KVP offers to investors.

Kisan Vikas Patra Features

Double your money in 8 years and 4 months
Interest Rate offered – 8.7%
Minimum Investment 1000 Rs/- Maximum investment No limit
No Tax Benefit
Interest earned on maturity is taxable
Lock period for 2 years and 6 months
Investment can be done by Individual only
Single and Joint option possible in KVP

Kisan Vikas Patra is Beneficial for Whom?

Kisan Vikas Patra is beneficial for rural area, mainly to people who don’t have facility of banking. You don’t need any bank account to invest in Kisan Vikas Patra. KVP can be purchased by cash also. It is possible to transfer KYC also. Rural People and farmer can take benefit of this scheme however for Urban Investor many other options are available.

Other Superior Investment Option Compare to KVP

PPF

Kisan Vikas Patra gives returns of 8.7% and doubles money in 8 years 4 months. Compare to KVP, PPF also offers 8.7% return but it is tax free. In Kisan Vikas Patra we have no limit on investment while in PPF we have maximum limit of 1.5 Lac.

Senior citizen saving scheme

Senior citizen saving scheme offers 9.2% return and it also offers tax benefit under 80C. Post tax deduction return in senior citizen saving scheme is also higher compare to Kisan Vikas Patra.

Fixed Deposit or FMP

Smart investor can prefer investment in fixed deposit, FMP or corporate fixed deposit compare to KVP. Fixed deposit offers nearly 9% return. Post tax deduction return in fixed deposit is higher compare to KVP.

kisan vikas patra

Should I invest in KVP?

KVP is typical post office type scheme which offers fixed return and no tax benefit. Smart investor will not invest in KVP. Smart investor will have other better investment options like Equity, FMP, FD, PPF etc.

How to do Successful Retirement Planning?

Retirement

Shitanshu Kapadia

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November 18, 2014

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Today everyone wants happy and healthy retirement life, but very few people do planning for the same. If you are one of them it’s time to do retirement planning. Please refer to our previous article to know how much money is required for your retirement.

Once you come to know about the requirements of your retirement fund it is time to work towards achieving the same. Here is a systematic way for retirement planning.

Retirement Planning

Retirement planning entails knowing the best investment assets, strategies, and risk-mitigation
techniques. Here are steps to help you go about this process:

Step -1 Determine how much money you can invest for retirement?

The first step in doing retirement planning is to determine how much money you can invest for retirement on a monthly basis. As you know your monthly income and expenditure you can easily figure out this amount. Once you know this amount it is time to select asset class for investment.

Step -2 Select Asset Class for Investment

The second step in doing retirement planning is to select the right asset class for investment. You need to select an asset class based on your risk appetite. Make sure you consider equity and debt both for investment. Consider past performance and other factors like benefits and drawbacks before making a selection of asset class.

Advisable investment for retirement is PPF, Equity & Mutual funds. Avoid taking retirement plans. Diversify your investments & reduce risk.

A Public Provident Fund is a government-backed savings investment scheme that offers a guaranteed return. This is a good option for investors looking for a secure investment. On the other hand, the value of equity investments can increase, so they’re more risky than other investments, such as PPF. But the former has the potential to generate higher returns over the long term. Mutual funds pool money from investors, investing it in various assets like stocks, bonds, and money market instruments.

An individual retirement account (IRA) is a tax-advantaged account that ensures you have enough money when you retire. A traditional IRA allows deducting contributions from taxable income. Your money grows tax-deferred, meaning you won’t pay taxes on any earnings until you withdraw them in retirement.

You can set up a gold IRA. Gold holds or even increases in value during market volatility. A gold IRA company like Goldco can help with retirement in a few ways, helping you diversify your portfolio.

On the other hand, Roth IRAs don’t offer a deduction for your contributions, but your earnings grow tax-free. You can withdraw your contributions without penalty, but you’ll pay taxes on any earnings if you withdraw them before retirement age.

Step-3 Start Systematic Investment

Once you are through with asset class selection, it’s time to do an investment. Rather than doing a lump sum investment at a single go, it is advisable to do a systematic Investment on a monthly basis.

Make sure you are disciplined in doing this investment if not, you can plan to adopt the automatic SIP option.

Step-4 Review and Make Changes

You need to regularly review the performance of the asset class. If asset class is not performing up to make you need to make appropriate changes in investments.

Follow the steps given above and I am sure you can achieve happy retirement life. A simple graphical representation above steps (PDCA) is given below.

Important Factors to Consider for Retirement Planning

Start Early – Sooner is better. You need to start preparing for your retirement at an early age. The simple fact is that if you start saving early, you will likely save more. Another reason for starting early is your investment will have more time to grow (power of compounding).

Inflation – Inflation kills. The inflation rate is a very important factor for retirement planning. Inflation rates keep on changing. A higher inflation rate means more money is required for retirement.

Invest in Health – Health care expense is likely to rise as you grow older. You should start investing in health from a retirement perspective. I suggest going for a health insurance policy along with retirement planning. This will help in reducing unlikely expenses on health during retirement.

Hope the above stuff will help you in retirement planning.

Do share with us your thoughts in the comments below.

How much money is enough for retirement in India?

Retirement

Shitanshu Kapadia

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November 9, 2014

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How much money is enough for retirement in India?

Retirement is point where you stop employment or business and rely on accumulated wealth for future. So, how much money is enough for retirement in India? Everyone wants to get answer of this question. Let’s try to get logical answer of this question.

You need to answer few basic questions to calculate your retirement fund. I am sure if you are able to answer these questions you will get answer about how much money is enough for your retirement. So, Let’s Start.

How much money is enough for retirement in India?

What is your current Household expense?

How much money you spend every month for household expense, utility bill, food bill, home management maintenance etc? I have calculated my household expense and it is approximately 26,000 Rs/- per month. So yearly I spend about 3.2 Lac on Household expense.

How much money you spend on Vacation?

This is the amount which you spend on your vacation every year. I spend nearly 0.5 Lac every year on vacation with my family.

What amount you spend on Entertainment and Transportation?

We usually spend a certain amount for entertainment and transportation. I spend nearly 0.5 Lac for entertainment and transportation.

What are your current Medical Expenses?

Medical expenses are actually unplanned expenses but if you monitor it closely you can take out rough estimate that how much money you are spending on it. I spend nearly 0.5 Lac per year on medical.

What are your Tax liabilities?

How much money you pay as tax and how much you are expected to pay after retirement? I have estimated that amount and approximately 1 Lac is required for tax.

How much money is required as Emergency Expense?

It is always advisable to keep good amount of money handy as emergency fund. I usually keep six month of my household expense 2.1 Lac for emergency.

What will be inflation adjustment?

Inflation means reduction in your buying power. Inflation cause increase in value of goods, so that you have to pay more money for same goods. Let me give you example before 10-20 years we use to purchase milk at 5 Rs/- per liter but today milk is sold at 30 Rs/- per liter. So while calculating retirement fund you must consider inflation adjustment. I am considering 1 Lac per annum as inflation adjustment.

At what age you would like to retire and what is your expected survival age?

Let’s consider that I will still work for 20 more years and then take retirement. Let’s also assume that my survival age will be 80 years.

Hope you have answer all question given above. Let’s do sum of your all current requirement.

So, if I retire today I need 8.8 Lac rupees every year to live comfortable life. To generate yearly income of 8.8 Lac I need retirement fund of 1.1 Cr.

1.1 Cr retirement fund Invested in instrument giving 8% return will lead to 8.8 Lac yearly Income. With income of 8.8 Lac, I can run the show for few years but down the line inflation effect may cause increase in my monthly requirement. So what to do?

Best is to calculate retirement fund based on years remaining for retirement. So, If I take 20 years is remaining for my retirement than I need to figure out what will be value of 1.1 Cr after 20 years. If I consider inflation rate of 6%, I need 3.52 Cr for retirement after 20 years.

Conclusion:-

For middle class people like me 3.5 Cr is enough as retirement. Remember Inflation and interest rates plays major role in deciding retirement fund for you.

I request reader to follow procedure given above to know how much money is required for their retirement.

If you find any difficulties in calculating your retirement fund, you can get in touch with me.

Do share your views on above!