Articles on personal finance

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Childrens Education and Marriage Planning Posted: 25 Oct 2009 08:07 PM PDT We as human beings don’t have any stronger aspiration than giving the best of everything to our children. “Every child is a Star” says the advertisement of a company. All of us dream of making our kid a star. And to accomplish this dream we are ready to do whatever it takes. The biggest challenge lies in converting this dream into reality. Every parent wishes to make their child a Doctor or an Engineer or a MBA or something else when he/she grows up. To realize this dream, setting aside money for the kid’s education is a top priority for parents.

Buying Insurance over Other Investments: Opportunity Cost or Opportunity Lost Posted: 25 Oct 2009 01:21 PM PDT It’s March, the tax planning season is at its peak and Ajay (person earning 6Lakhs pa working in an MNC) has started his yearly ritual of scouting for investments for saving income tax. Ajay tells his financial planner Pankaj that he is looking for an insurance plan which is very low on risks and will give good returns. Pankaj is a smart financial planner and tosses a question to Ajay which puzzles him. Pankaj asks Ajay “Do you buy a general insurance product for your car which gives you car insurance plus returns at the end of the year?” Ajay says “Car insurance plans are meant for protection against risks like accidents and not for returns.” On hearing Ajay’s answer, Pankaj smiles and says “Bingo, you are absolutely right. Don’t you think the same applies to life insurance also? Returns should be best left to investment products and not insurance. Life insurance should be bought only to cover the risk of loss of life and remaining surplus money should be routed through investment products for superior returns. A person should not mix insurance and returns.”

Posted via email from Ranjan's posterous