Dispelling 4 Myths About Estate Planning

Some individuals wrongfully think they do not have significant assets that they can pass on to the future generations and undermine the importance of managing family wealth in india. This faulty approach apart from resulting in disputes between the person’s dependants can also lead to taxation issues. One of the most important aspects of private wealth management is estate planning. Whether you live in a modest one-bhk apartment or own multiple properties in posh locations around the country, designing and implementing an estate management plan must top your list of to-do-things. Estate planning in India is still not very popular, primarily due to the many misconceptions associated with it. To help spread awareness on the topic, the post lists some myths about estate planning and corresponding facts to penetrate the shroud of mystery engulfing it. Take a look.

1. “I’m too Young for Estate Planning”

Many people start thinking seriously about estate planning only when they reach a certain age or amass a certain amount of money in their bank account. Age, however, has very little correlation with estate planning. One thing is for sure; life is uncertain, which is why you must start estate planning at an early age and even with a lesser income.

2. “I Need Legal Help to Draft Documents” 
  

Though there is no denying the fact that drafting complex legal papers will require legal help, it is perfectly okay to adopt the DIY approach (especially if your family and financial situation is simple) to draft a simple will and power of attorney. Several sites offer templates to draft these documents. If you have a health condition, contact your hospital to get a health care directive.

3. “An Estate Plan Just Concerns Property and Belongings”

Many people wrongly believe that the scope of an estate plan is limited to managing their property and belongings. A detailed estate plan apart from covering these aspects also deals with personal matters, such as deciding the guardian of the kids in case the person dies or becomes incapacitated and is no longer in a position to care for their child. The person in their will can also mention their preferences about the type of medical treatment they intend to receive if they are unable to express their wish themselves.

4. “Estate Planning is a one time Process”

Many people wrongfully consider estate planning as a one time process and discount the importance of revisiting their estate planning strategy. Estate planning, however, is an ongoing process and changes in the person’s situation such as a death in the family, a change in their marital status (marriage or separation), birth of a child, an inheritance, or sale of business can impact their estate planning, which necessitates the need to revisiting the strategy.

Conclusion 

Estate planning helps you and your dependents get ready to face unforeseen situations. When embarking on a journey with your wealth manager to designing your customized estate management plan, stay clear of these myths to take informed, unbiased and prudent wealth management decisions.

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4 Ways to Save tax Legally for Salaried Individuals

The good thing about paying taxes is that you know the funds collected by the government will be used to finance existing and future projects in the infrastructure and health domain. However, the not so good thing about paying taxes is that it leaves you thousands of rupees poorer. That said, there is always a way out. Many taxation service providers in India offer professional consultation services to help their clients save tax by claiming deductions allowed by the government. If you are a salaried individual looking to save tax, hiring professional taxation services in India can be the way forward. Continuing the discussion, the post lists some ways in which you can save tax. Take a look.

1. Request Your Employer to Restructure Your Salary
   
   If you are spending money due to job related obligations, request your employer to restructure your salary. Some examples of such expenses are: buying a uniform, spending to entertain clients and buying and reading magazines for self development (as a part of your job responsibility). Your employer must pay for such expenses. Technically speaking, the amount you receive from the employer is not a part of your salary, which is why all such receivings are exempt. Request your employer to provide you a proof every month, which you will have to submit to claim deductions.
   
2. Invest to Reduce tax Burden
   
   Under Section 80C deductions, there are several investments that come with tax rebates. For example, you can claim deductions, if you:
   
   • Contribute to your EPF account
   • Deposit in your PPF account
   • Invest in different schemes such as: Senior Saving Schemes, National Saving Certificates and Sukanya Samriddhi Account.
    
3. Claim Deductions on Leave Travel Allowances and Medical Expenses
   
   You can claim exemption on some allowances provided by your employer to cover personal expenses such as  treatment costs. To claim exemption on this allowance, you will have to submit a copy of your medical bills. You can also claim exemption on medical expense of dependants. The amount must not exceed INR 15,000 in a financial year. Leave travel allowance provided by your employer is also tax-free, given the condition that:
   
   • You traveled when you were on leave
   • The travel destination is within India
   • You took the shortest traveling route
   • You did not travel more than two times in a block of four years. 
      
4. Claim tax Benefits on Rent Payment
   
   If you live in a rented accommodation, you can claim deductions on HRA, that can be partially or fully exempt from tax. If you live with your parents, you can pay them rent (which they must include in their return) to claim HRA exemption. To be able to claim this deduction, collect your rent receipts and compile them in a file. If your rent payment exceeds INR 1 Lakh in a financial year, you will have to submit a copy of your landlord’s PAN card and rent agreement.

Conclusion 

These are just some ways in which you can save tax. Buy health insurance for yourself or your family members to claim deductions up to INR 25,000. It is also advisable that you consult a professional tax services provider in India to learn about more deductions and design a tax saving strategy.

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4 Signs You are Dealing with the Wrong Tax Preparer

Understanding income tax laws is not easy for a layman. Every individual who earns, however, must pay their taxes, for which they have to file a tax return. That is why many taxpayers, especially HNWs who are short on time, hire a tax preparer to file their income tax returns. The bad news is that not all tax preparers have similar experience and knowledge as some are just luring taxpayers with false promotions, and offer no value for their fee. To ensure you do not end up hiring the wrong tax preparer, here are four tax preparer red flags to avoid.

1. Suggest You Deposit Your Money in a Different Account

It goes without saying that your tax refunds must go into your account. There are a few tax preparers who might suggest you to deposit this money in a different account, with reasons that the refund would arrive faster or it would be more convenient for you to get your money this way. Chances are, if you are not getting your money in your account, you are never going to get it. 

2. Promise of High Returns in the Same Situation

Tax refunds or deductions have not increased significantly over the years, instead there has been a rise in the percent of payable taxes in the past few years. That said, if a tax preparer is promising that they can get you higher tax return than last year, when the situation has not changed, they might be showing you incorrect figures. 

3. Fees Based on Refund Percentage 

Tax preparers who charge their fee on the basis of refund are more likely to be fraudsters. The fee of a tax preparer should ideally be based on other factors such as the type of tax return and its complexity. If the tax preparer you are working with, or about to hire, base their fee on the refund amount, watch out, as you might de dealing with the wrong person. 

4. Insist on Signing a Blank Form

Even if a tax preparer is filing the tax return on your behalf, you are liable for whatever information there is on your tax return form. Signing a blank paper is like signing a blank check. You may never know if the information that your tax preparer has entered is correct or false. Stay away from tax preparers who ask you to trust them and sign on the dotted line without worrying about the information present in the paper.

Conclusion

Many tax preparers offer false promises such as higher tax refunds and a guarantee of a refund by a certain date to sell their services. A few may even ask you to pay a health insurance penalty directly to them. That is why it is essential that you do not trust individuals who give you unreasonable promises, and look for those who would help you get your taxes right. If you need help to file your taxes, better hire a licensed professional such as an attorney, or a CPA (Certified Public Accountant). 

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Guide to Sector Investing: Enhance Your Financial Portfolio

Sector investing is considered one of the successful ways to enhance financial portfolio, while mitigating investment risks. Sectors are comprised of various companies with common business verticals, such as natural resources, technology, and financial services. The reason why sector investing could be the right approach to secure private wealth is the constantly changing nature of business sectors. If a particular sector is not performing well in the market, you can always move on to another sector, and then buy back your investment once you have made a substantial profit. To give you an overview on how sector investing works, here is a guide on the ways to enhance your portfolio with sector investing.

Sector Investing Strategies
Sector investment strategies depend majorly on your personal and financial objectives. Here are three ways you can implement sector investing.

Enhancing Portfolio
Portfolio enhancement is associated with utilizing a part of your investment to invest in a particular sector. This strategy either diversifies your investment projects or lets you venture into a new one.

Managing RisksRisk management is another approach towards sector investing, which focuses on reducing the overall investment risk to your investment portfolio. The reason why investors go down this path of investment is supported by the fact that the correlation between different industry sectors can be lower than those between general categories.

Completing the Portfolio
Portfolio completion targets those sectors that are missing on your portfolio. This strategy poses a challenge to identify promising opportunities in a sector that is not listed on your investment portfolio. A due diligence on your part and help from a wealth management firm can help you overcome such challenges.

Benefits of Sector Investing

Here are a few benefits of sector investing:

    Successful portfolio diversification

    Mitigating investment risks

    Exposure to significant expertise across the global credit markets

Challenges Ahead

    Lack of industry knowledge and developments

    Inability to identify promising investment opportunities

Need Help Investing?
If you are looking to invest your private wealth in multiple sectors, seeking the services of a reliable private wealth management firm will go a long way. A wealth management firm will help you make calculated decisions regarding your sector investment decisions. Though sector investing holds strong promises for a successful investment, you can try conventional options, and the firm can help you with any kind of investment you wish to make. If you need other financial services including private banking services anywhere near Gurgaon, Mumbai, and Bangalore, you will find reputed wealth management firms such as Client Associates.

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5 Timeless Tips to Successful Wealth Creation

Wealth creation, contradictory to the common notion of being a high-risk and time consuming process, is easy - provided you stay committed and make calculated decisions. Many high-value individuals were able to achieve their financial goals by staying focused and constantly exposing themselves to newer and better ways of wealth creation. There are a variety of wealth creation strategies that you can consider such as investing in a startup business. If you are wondering how to execute your wealth creation strategy for maximum profit and success, this post shares five timeless tips you must follow. Take a look.

Trust Your Gut
Once you have a wealth creation strategy on paper and are ready to execute it, the first step you must take is to listen to your gut. Your mind develops a sense of right and wrong over years by gaining experience through hardships. That is when your inner voice tells you something is wrong, and it is a wise decision to go over the part you doubt again.

Maintain Your Reputation
Building a brand name is essential to build relationships with other individuals and maintain a quality network. People will be willing to do business with you based on how ethical and successful your business seems. Your reputation is what helps you have an edge over any other business.

Follow Your Passion
Some of the most successful businesses are where an individual followed their passion, and not some mainstream business idea. The reason behind the success is that when you follow your passion, you make it a point to work wholeheartedly to ensure exponential business growth. When your passion is at work, your wealth is bound to multiply as per your expectations.

Don't Let Losses Discourage You
Wealth creation comes with both profit and loss. When you achieve a set goal of a profit margin, it is a sign that things are doing well. Any loss that you incur while executing your wealth creation strategy should not discourage you from moving forward with your plans, given that you smartly drafted the strategies.

Save More than You Spend
It is important to take a disciplined approach towards wealth creation for a guaranteed success. You need to maintain a balance between your expenditure and savings. You should ideally save more than you spend. In addition to this, you should track all your expenses and stick to the budget.

Conclusion
When it comes to multiplying your private wealth, the timeless tips mentioned in this blog will go a long way. Whether you wish to save for your retirement so that you can continue with the current comfortable lifestyle, or want your future generations to lead the same blessed life that you have, these wealth creation tips will help you. If you are looking for a wealth management firm to help you with your wealth creation strategies, there are reputable firms such as Client Associates, who have been helping high-value individuals for years.

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4 Factors to Consider when Hiring a Wealth Manager

A huge amount of money invested in a planned way ensures capital’s safety, and could generate a passive income. Whether you need to invest your money for later ROI or you need to find ways to multiply your wealth, a wealth manager could help you with both these goals. Before hiring a wealth management firm, there are a few basic yet essential factors that you need to consider to ensure your financial security and growth. This post lists four of those factors that need your consideration when hiring a wealth manager. Read on.

Your Personal and Financial Objectives
The first factor you need to consider are your personal and financial objectives. These objectives act as a basis for your wealth management planning, and let you plan an investment strategy to fulfill these goals. The objectives may include money for expanding your family, buying a house in future, or setting aside college fund for your kids. If you have a clarity about these objectives, it will be easy for you and the wealth manager to meet the expected goals.

Short-Term vs Long-Term Goals
The advice of a wealth manager is helpful, only when you are clear about the timeline of investment. If you wish to achieve short-term gains, a wealth manager can help you find investment opportunities that have high liquidity rate. If your goals are to receive long-term ROI, your wealth manager can find opportunities that hold potential for returns in the future.

Resource Network of the Firm
When it comes to hiring a reliable wealth management firm, you need to make sure that the firm has highly-qualified wealth managers and private bankers with years of experience assessing the market and helping high-value investors multiply their wealth. A rich resource network means that the firm will be able to provide you with diverse investment opportunities in different sectors of the market.

Scope of Services Provided by the Firm
Reliable wealth management firms provide wealth management services, along with other related services. The wealth management services may include family wealth planning, estate planning, and private equity investments. A good wealth management firm must have wealth managers who are efficient at protecting and multiplying your wealth.

Find Reliable Wealth Managers in India
If you are planning to invest your wealth, you will find reputable wealth management firms in India that offer an extensive range of wealth management services to high-value individuals. Though you may have abundance of wealth now, to make sure you enjoy the same lifestyle after the retirement, you need to seek the services of a wealth management firm. The firm will also ensure that your future generations have sufficient capital to get quality education and start their ventures.

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4 Factors that Drive Estate Planning to Benefit your Future Generations

Estate planning is the process where individuals prepare for the transfer of their wealth and assets after his or her death. Assets, life insurance, pensions, real estate, cars, and personal belongings are all part of one's estate, which they may pass on to their future generations. When transferring wealth to successive generations, you need to have an efficient strategy at place. An ill planned succession risks negative financial consequences for the family fortune and could lead to unnecessary stress and conflict among family members. To avoid any mistake and ensure that the process goes down smoothly, you can hire a family office in India that provides specialized family office services. To get you started, here is a list of four factors that you must consider while planning an estate. Read on.

1. Asset Evaluation

In order to ensure everything that can be liquidated is included in your asset planning, you need to do thorough evaluation of your assets, whether they are real estate, life insurance, superannuation funds, investments, vehicles or any other prized possessions. Prepare a comprehensive inventory of all the assets so that it is easy for you decide what you need to pass to your future generations.

2. Will Preparation

Making a will is an important part of the estate planning process, as it provides for the division of your property and also, if applicable, the care of any minor children. In addition, you must also have a living will as a part of your estate plan. This document gives instructions, dealing with the medical care that you wish to have or not have in an event where you are unable to act on your own accord.

3. Reduction of Taxable Assets

Estate and income taxes could take a significant portion of the assets you allot to your beneficiaries. A family office has lawyers and investment bankers to identify profitable investment opportunities that are tax deductible. This would ensure that your future generations are are not left with significant tax payments and are only entitled to the returns.

4. Your Beneficiaries’ Needs

The whole purpose of estate planning is to ensure that your successive generations have enough to lead a comfortable life or have enough capital to start any business venture they want. When designating beneficiaries, consider their future needs and spending habits. For instance, you can earmark trust funds to cover the expenditure of college tuition or special needs expenses.

Family Office in India for Estate Planning

Estate planning is something that an individual must not neglect, and to ensure that all your private wealth is passed on to your generations, you must have a detailed estate plan, especially when the stakes are high. An integrated family office has lawyers, taxation officers, and investment bankers, all in one place to ensure that your estate planning is done so as to provide maximum benefits to future generations.

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5 Master Tips for Long-Term Wealth Creation in India

Wealth building is something that many people desire in India and across the globe, though only a few achieve the feat. The roadblock to wealth creation in India is probably not will, but the lack of right approach to investments. People believe that wealth building is a “get rich overnight” scheme, which is not the case given the fluctuating economy and volatile market conditions. Wealth creation in India is not a destination one can reach, rather it’s a path you need to traverse for years to accumulate the desired retirement fund or wealth. Continuing the discussion, the blog post discusses five strategies to incorporate in your wealth creation plans in India and elsewhere.

1. Focus On Diversifying Your Portfolio
When it comes to investments, avoid putting all your eggs in one basket. Doing so can put your financial future at risk as industrial revolutions come and go and you never know until what time a specific “industry bubble” is going to last. Invest your money in a range of financial products such as shares, mutual funds, bonds and bank FDs in different sectors. This one habit is certainly going to pay off. Once you have a diversified portfolio, you are in a position to get steady returns for years to come.

2. Believe in the Power of Long Term Investments
There is a good reason why it’s called “investment”, as it yields sizable returns in future. If you expect to get the profitable market ROI, you can’t expect your investments to boom and start showing results in three or say, five years. For investments to start yielding, you need to think about the broader picture, something similar as 10-15 years down the line. Wealth creation is a time-intensive process, therefore, you need to stop believing and investing in anything that promises four or five times returns in a limited period of 3-4 years as there is no such “get rich quick” scheme in the market.

3. Make Optimum Use of Tax Rebates
Paying income tax may feel frustrating at once, however, the rebates can help you in building long-term wealth in India. Tap potential sources in which you can invest and get a higher rate of interest. The key here is to invest more to get more returns without increasing the tax amount you need to pay. If, for instance, you are planning to invest in ULIP or endowment plans for tax rebates; switch to a PPF account or ELSS funds. By doing this, you will be able to make optimum use of your income tax exemption limit and still have a sizable portion of money left to invest.

4. Start Investing Early
Many people make the mistake of not investing until they feel the amount of investment is good enough to fetch desirable returns. Wealth creation in India or anywhere for that matter is a long term process. In other words, you need to start taking baby steps today to reach there tomorrow. Warren Buffett started this way and credits the investment success to his early start. In a nutshell, it goes without saying that to climb the wealth ladder, you need to start right now for achieving your financial goals. If you get stuck in two minds, consult a reliable financial planning firm and they will help you take more informed investment decisions.

5. Track Your Investments and Reassess Your Decisions
Though you should always look out for opportunities to diversify your investments, you also need to ensure that investment doesn’t end up as an expenditure. For that to happen, you need to pause at regular intervals and analyze your highest and lowest performing investments. Once you start the practice, you will get a better picture of promising investments to keep and drop the rest. Market conditions are volatile, therefore, always seek professional assistance from financial planning firms before deciding the future of investments.

The Bottom Line
Wealth creation in India or any other place for that matter requires more than wishful thinking. Whether you have a prior knowledge of investments or not, building wealth at once may appear a herculean task to you. Instead of taking amateur decisions, hiring a financial planner always pays off in the end. Once you have an expert working with you, there will be no guesswork and all your investment decisions will be aligned in the right direction through research and data.

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A Sneak Peek into 5 Smart Tax Saving Instruments

Choosing a tax saving instrument that’s optimal for you can be a little perplexing. The reason is you need to analyze everything from the returns, flexibility, liquidity to the cost of the investment. Simultaneously, you need to ensure that the investment meets your financial goals. To help, we decided to list five smart ways you can save more tax. If you are don’t have the time for tax planning or find it confusing, you can seek the assistance of a professional firm offering taxation Services India.

1. (Equity Linked Savings Scheme) ELSS Funds

ELSS funds are one of the most transparent and highly liquid tax saving instruments with a 17.8 percent average return record in the past three years. Although these equity schemes present a market risk equal to other diversified funds, they offer better returns than 3- to 5-year PPF investments.

2. (Unit Linked Insurance Plan) ULIP

Unit Linked Insurance Plan or ULIPs come in the form of stocks, bonds, and mutual funds. The tax instrument offers certain risk cover to the policyholder and greater flexibility over direct mutual funds. Another advantage is that you can use these investments before three years, and either as equity or debt, and vice-e-versa. ULIP investments cost less than direct mutual funds and are suitable for people across all life stages and all types of investors.

3. National Pension System (NPS)

The NPS or National Pension System now offers an additional of Rs 50,000 of tax deductions, which makes it an attractive tax saving investment for many people. NPS entails two types of accounts: Tier I and Tier II. Tier is like a pension product, whereas Tier II operates like a savings account, which means you can withdraw money from it when you want. Once you choose a pension plan, however, you cannot switch to another before a year.

4. Senior Citizens’ Saving Scheme (SCSS)

The Senior Citizens’ Scheme is an ideal tax saving instrument for senior citizens. Although it has an overall investment limit of Rs. 15 lakh, it offers one of the best interest rates, at 9.3 percent, in the list of post office schemes. The maturity period is 5 years, which you can extend by 3 years.

5. BANK FDS AND NSCs

If you are a senior citizen who has already used the 15-lakh investment limit in the Senior Citizens’ Saving Scheme, you can further use the option of FDs (Fixed Deposits) or National Savings Certificate. NSCs offer a rate of interest in the range of 8.5% - 8.8%. The interest rates of fixed deposits depend on the lock-in-period. If you don’t have the time for assessing other tax investment schemes, and the deadline is near, invest in FDs and NSCs.

There’s More!

There are various other investments such as PPF, VPF, and pension plans, which you can use to gain good returns and save a significant amount of tax. Speaking to a professional taxation service provider in India can help learn more about your options. In addition, such providers often offer other services such as wealth management, which you can use to multiply your wealth and protect your investments. 

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Avoid These 4 Pitfalls When Managing Wealth

Wealth management should top your list of to-do-things, whether you have millions stacked in your bank account or modest savings and resources. Following a private wealth management strategy, apart from helping you manage your finances, is also one of the effective ways to ensure a hassle-free retirement life. Wealth management industry in India offers a range of solutions for entrepreneurs, salaried individuals, and those with family wealth, to help them plan their finances and secure a secure future. You can, therefore, avail the services of a wealth management professional to chart an investment strategy. While designing the plan, make sure to avoid the pitfalls discussed below to get the most out of your investments. 

1. Cash flow mismanagement 
The most significant aspect of managing your cash flow is maintaining a correct mix of inflows and outflows. It is also advisable that you invest a certain percentage of your income every month to ensure you have significant funds stacked as savings by the time you retire. Invest in tax saving instruments such as ELSS mutual funds, PPF, NSC, and National Pension Scheme. Additionally, consult your wealth manager to devise ways to carry forward and offset losses that you may have incurred during the financial year.

2. Mismanaging debt 
Too much debt reflecting in your balance sheet is a disaster waiting to happen and can topple your financial planning strategy. To address this issue, you need to manage short-term debt such as credit card outstandings, student and personal loans, keeping it at a level lower than liquid assets you own. If you have too many short term loans pending, consider raising a debt consolidation loan with a low interest rate to pay off all the outstandings. 

3. Failing to manage windfall gains
Windfall gain refers to any unexpected income due to unplanned property inheritance, unexpected gains from the sale of property or shares, or a lottery win. They say make hay while the sun shines, similarly, using additional funds prudently can pave a path to financial freedom. To make optimal use of the funds available to you, first and foremost clear all outstanding debts. Next, consider investing in tax saving instruments and acquire additional assets. Set aside some funds for your emergency corpus and revisit your estate management strategy to change it according to your financial condition.

4. Not having an estate management plan
Many individuals consider estate management a futile exercise and an activity for the elite. The belief is as far from fact as imaginable. A dedicated estate management strategy is for everyone who owns any property (including a vehicle, a house or stock option). Many others who follow a dedicated strategy commit blunders such as forgetting to fund the trusts or changing beneficiary designations in their life insurance plan and failing to draft a power of attorney for health care and property. Avoiding these pitfalls is imperative to planning a successful succession strategy.

Conclusion
A carefully planned and executed private wealth management strategy is your doorway to financial freedom. Make sure you hire the services of an experienced wealth manager that can help you take steps according to fluctuating marketing conditions and business cycles. When you’re successful in finding one, communicate your financial goals and objectives to help them design a strategy unique to your needs.

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10 Quick Tips on Wealth Management

Everyone dreams of owning a big house, luxurious car, and enjoying a great retirement. An average person spends more than half of their life trying to earn and save more. The realization often comes too late that all the energy spent yielded less than half of what they expected. It's never too late to craft a promising future for yourself and family if you rope-in wealth management services. 

What is Wealth Management?

Wealth management, as the name suggests, is about managing your money with a view to improve your financial situation. The set financial goals are achieved by intelligently optimizing your financial assets using different methods and strategies, while taking potential risks and other factors into consideration.

Aren't Wealth Management and Private Banking one and the Same?

In India, people often confuse private banking with wealth management. Private banking is a personalized banking service given to account holders that have high net worth. Private banking slightly overlaps wealth management. Along with special banking services, it offers personalized financial and investment advice to privileged account holders. Together with financial and investment advice, the wealth management advisor utilizes the client's assets to procure as much profit as possible.

Professional help is advisable in case of a large financial portfolio, whereas, if your assets are minimal, you can easily manage your money and reach your financial goals with the following handy tips:

1. Always research and gather knowledge as much as possible

2. Invest where the probability is high and risk low

3. Before making any investment, know all the potential risks it entails

4. Invest less than you earn

5. In the beginning, invest small amounts

6. Invest in different places (don't put all your eggs in one basket)

7. Try different investment strategies to see what works best

8. If investing in shares, religiously follow stock market

9. Invest when you are comfortable and confident

10. Patience is the key to big returns

Conclusion

Don't confuse wealth management with private banking. Wealth management helps you to achieve the predetermined long or short term financial goals by optimizing existing financial assets. Private banking offers special banking services and financial or investment advice. Unlike wealth management, it does not go deep into planning and optimizing financial assets. You can easily manage small assets on you own, however, big financial portfolios require a reputed and reliable wealth management service provider or personal wealth management advisor. Some of their functions include finding the best investment trends and options in the market, managing different accounts, investing only after your approval, and keeping a tab on the progress. However big or small your financial assets are, these ten tips will always help you to craft an assured and secure future.

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Top 5 Tips for Building Wealth When You are Young

You may not believe this, but it’s actually not difficult to build wealth. It might not be quick and may take some time for you to build wealth, but it’s possible. Unfortunately, a lot of people are still unable to build wealth, reason being that they either do know what it takes to build wealth or they do not implement those wealth building principles in their life. While there is not much that can be done to motivate those who know how it’s done, we can certainly help you with a few wealth building tips. Let’s begin

1. Have a Strategy

Talk to any wealth manager or any person who has a first hand experience of making money, and they will tell you that building wealth begins with a well-planned strategy. While making a plan list down your long term and your short term goals, your current finances and the amount you expect to earn in the near future. This will help you get a realistic idea of what the amount of wealth you can expect to make out of your current earnings and savings.

2. Don’t Splurge

Credit cards have spoiled the spending habits of people. Many people spend more than what they can afford and then wait for their salaries to pay the pending dues. If you have this habit, you need to stop this immediately or else you will never be able to build a corpus that you would require at the time of buying anything big such as a car, a house, or for a vacation.

3. Segment Your Earnings

List down your financial goals and segment your earnings basis these goals. For instance, your goals may include saving for your child’s education, saving for a vacation, saving for your retirement. Keep aside money from your earnings for each one of these. This will help you save the burden of making a lump sum amount from your earnings and also help you keep a better track of your earnings.

4. Start Small

Most people do not save or do not start the wealth building process because they think the amount they can invest is too small. No amount is small, if you can save on a regular basis, or if you save the the same amount for longer time horizons. If you don’t believe what you just read then find out what’s the power of compounding. It will help you understand how a small saving can yield handsome returns if invested for regular intervals and longer time horizons.

5. Stay Informed

Lack of awareness of the investment options available is one of the reasons why people either don’t invest or fail even after they make an investment. As an investor your job does not end with hiring a wealth management consulting firm, you yourself need to find out more about the products that you are investing in. Before investing in a product find out as much as you can about its past performance. For instance if you are investing in shares find out the dividends, bonuses, and returns is has yielded in the past.

Last Few Words

Don’t let procrastination come in your way of building wealth. Now that you know what it takes to build wealth you must not procrastinate and get down to business. Take a pen and paper, make a comprehensive plan and start implementing it. If you think financial planning and wealth management is not your cup of tea, get in touch with one of the wealth management consulting firms in India who can help you with the process.

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4 Factors Why Wealth Management is necessary for Family Offices

Family offices are an outsourced solution for financial and investment management of affluent families or individuals. Primary factors to establish a family office include: need to preserve family wealth, consolidation of assets, ensuring transfer of wealth to future generations and dealing with unexpected liquidity influxes. Private wealth management advisors are employed by family offices to review and resolve issues pertaining to family finances, administration, legal and taxation. Wealth management has also gained prominence because of the aspirations of the affluent families to more control their investments, fiduciary affairs, and lifestyle management. Let’s partake in reviewing some factors which deem wealth management necessary for family offices-

1. Private Wealth Management

Wealth managers offer a financial diagnosis for family offices, defining strategic asset allocations according to aspirational needs and risk appetite. Based on this, wealth managers source most appropriate fund managers and investment ideas to the client. Once the client is onboard with the investment mandates and benchmarks, wealth managers allocate assets and complete the transaction. They also prepare a thorough report of the investment execution and performance, for the client to review and compare their investments in a uniform manner.

2. Asset Reporting

Family offices need to have a tab on their assets, acquisition costs, depreciation, and disposal. Wealth managers review and provide information such as the asset breakdown by type, and comparison of previous to current month data, depicting the percentages of holdings allocated to each asset class. They help in tracking fixed assets for financial accounting, preventive sustenance and theft preclusion. Moreover, wealth managers provide due diligence to the client regarding-

●    Assets listed in Access
●    Asset Chain of Custody
●    Asset History Report
●    Assets needing audit
●    Retired assets report

3. Estate Planning

Wealth managers manage an affluent individual’s assets, in the case of their incapacitation or death. They supervise the transfer of assets to heirs and settlement of estate taxes if any. Estate planning negates the possibility of a clash of interests amongst heirs. Wealth managers offer extensive estate management services like-

●    Creation of will
●    Setting up of trust accounts in the name of beneficiaries to limit estate taxes.
●    Establishing a guardian for living dependents
●    Reducing the taxable estate by establishing annual gifting
●    Setting up of the durable power of attorney (POA) to supervise other assets and investments.

4. Alternate Asset Classes

Alternative assets are gaining popularity amongst family offices, due to their unconventional nature in terms of the investment portfolio. These assets include rare coins and stamps, artworks private equity, trading strategy indices, venture capital and hedge funds. Investing in such alternate asset classes help diversify an investor's portfolio. Being non-traditional investments, they help in sustaining market volatility. Due to their lower liquidity and mispriced value, alternative assets offer excellent arbitrage opportunities. Investing in alternative asset classes isn’t appropriate for everyone. As a result, it is necessary to take the help of wealth managers, who review client’s risk tolerance and investment objectives before offering ideas to invest in new opportunities.

Last Few Words

Family offices are more than just one individual, and their wealth needs to be sustained to reap dividends over a substantial time period. To maximize their wealth management efficiency, services of wealth management firms is a necessity. Wealth managers understand your investment needs and goals, thereby providing appropriate investment guidelines to maximize wealth, and deal with unexpected liquidity influxes.

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5 Mistakes that You Must Avoid When Investing in Stock Markets

Many investors keep making the same mistakes without realizing what went wrong. The reason is simple - they lack a basic understanding of how investments work, and most importantly they do not have someone to guide them. In this blog post, we discuss some of the common mistakes that most investors make and ways to help you tackle these problems.

1. Lack of Proper Planning

“Failing to plan in planning to fail”. It’s your hard earned money and you can’t just lose it like that, and therefore, the most important thing to do, before you start investing, is to have a proper plan. Work with a financial advisor to discuss your investment goals, limitations, time horizon and more to get a realistic picture of what returns you can expect. Advance planning can also help you stay prepared for any untoward incidence, for instance, if the markets started crashing you will be in a position to take calculated decisions, instead of just randomly buying and selling stocks.

2. Getting Impatient, Too Early

Though people start investing with a long term view in mind such as their child’s education, their retirement, for buying a house, they often start getting restless when the stock markets behave erratic. People who invest in stock markets with a long term view of 10, 15, 20 or more years in mind should not be concerned about how the markets are performing in the near term. Historically, the stock markets have always delivered better returns as compared to most investment options, and therefore it is advisable to stay calm if the markets are not performing well in the near term.

3. Using too Much Margin

While the margin money (usually the money one borrows from the broker) can help you make more money, the downside is that it can also wipe out a substantial amount of your money, if the markets don’t move in the direction, you thought they would. You should use margin only if you have the time and knowledge to closely monitor your positions, or if you are sure that you will be able to repay the borrowed amount to broker in case an emergency occurs, and you afford selling your positions at losses.

4. Making Investments Based on Tax Consequences

Though you should be smart enough to keep yourself updated about the various tax benefits that the government has to offer, you should not base your investments on tax consequences alone. Instead, it’s more important for you to invest basis the underlying value of the stock. Similarly, while you must be concerned about the advisory fees and commissions, as they can eat into your profits, you must stop bothering about them and try to explore opportunities of cheaper broking services, once you think you are getting a good enough deal.

5. Failing to Diversify

You must have heard the saying “Don’t put all your eggs in one basket.” It means do not risk everything on the outcome of one option. Failing to diversify, however, is one of the biggest mistakes investors make. They invest in a single stock or sector hoping that they will be able to maximize their returns, but when the markets move against their position, they have to suffer huge losses. It is, therefore, recommended that you must diversify their portfolio even if that means investing in a few stocks that give lower returns. This will help you create a well-diversified balanced portfolio that gives you far better results than most of the other asset classes.

Last Few Words

Most investors due to lack of knowledge and time prefer hiring the services of a professional advisor. If you are also planning to hire a professional advisor the best option is to go with a multi family office firm that has been trusted by some of the biggest and wealthiest investors. These multi family office firms usually cater to Family owned businesses, Senior Corporate Heads, various entrepreneurs in India and others.

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The Importance of Professional Asset Tracking Services to Business

Defining Asset Tracking

The value of the assets that an organization holds at any given time plays a major role in determining its market valuation. Businesses should, therefore, take pro-active steps to monitor their assets to regulate performance, and take measures in time if they feel that the asset valuation is dipping at an abnormal speed. Businesses can count on professionals providing asset tracking solutions in India for monitoring assets movements. Businesses can then focus on their core activities.

The Need for Asset Tracking Services

Availing professional services helps businesses plan their processes smoothly and in-detail. Some of the other benefits of seeking expert services are;

1. Lower Administrative Costs

Businesses hiring the services of a professional asset manager, usually report a dip in their administrative costs as employees no longer need to track assets. A lot of man hours are freed, which the administrative team can invest in core activities or organizing other revenue-generating functions. An efficient plan also helps avoid wastage and losses.

2. Get More Accurate Results

Businesses can track their assets with the click of a button if they instal asset tracking software instead of using excel sheets to generate results. Using specialized tools also helps in streamlining the entire process to save time. Moreover, results generated by automated systems are more accurate than those which depend on humans to feed data.

3. Enhanced Accountability

Businesses run the risk of losing assets over time if they fail to manage them professionally. Putting together an asset management program helps the organization allocate assets optimally, and also makes it possible to keep a track of such allocation, increasing accountability of the system. In a nutshell, businesses can track losses as soon as they occur and also have better control over employee behavior, as they will think twice before misusing the organization’s assets.

4. Improved Overall Efficiency

An asset tracking program generates useful and actionable data which helps organizations optimize use of physical space available to them as an enterprise. The system also forecasts future trends to help business plan different processes in advance.

Conclusion

Investing in an asset tracking program should not be seen as a short term investment. The decision can yield favorable results for your business for many years, and also help prepare well in advance to meet future challenges and uncertainties. For best results, organizations should always look to the services of professionals specializing in providing private banking services in Gurgaon, Mumbai, Bangalore, and other cities.

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Common Mistakes People Make at the Time of Estate Planning

Estate planning is still at a developing stage in India. This is mainly due to the lack of awareness about the importance of estate planning. There is a common notion that only people, who have an abundance of assets can make a will, and their assets will be equally divided among their heirs. On the other hand, there are others, who procrastinate their estate planning thinking that they will do it at a later stage. In this post, we would discuss some common mistakes people that make when it comes to estate planning.

Mistakes People Usually Make

As mentioned earlier, a common notion people have that estate planning or making a will is only for wealthy families in India. While this may have been the case in the past, it isn’t necessarily same today. As India has been witnessing a thriving economy over the past decade, an increasing number of people are looking to make diversified investments and create wealth for themselves and their families. This is why estate planning is important so that assets can be transferred to your family seamlessly in the future.


Not Considering the “What If” Scenarios

People often feel that their financial situations are good enough, and don’t have to plan in advance. They commit the mistake of not considering different scenarios that may crop up in the future such as property disputes, health issues, bankruptcy and others. These circumstances are also a reminder that making a will is essential since your financial situation is likely to get affected by them. 

Putting it off for later

“Better late than never” is often used as a motivational phrase. Sadly, this does not hold true in the case of estate planning. Preparing for the worst case scenarios is essential for people, who have dependents. Keeping that in mind, it is recommended that you spend some time in evaluating your assets and then making a decision about how you want to allocate them equally with the minimum tax consequences. 

Overlooking Digital Asset Allocation

In today’s tech-savvy world, not just those from wealthy families in India, but others too have an online presence. Whether it’s in the form of your cloud-based bank accounts, or your digital assets, you should plan out well in advance to share the passwords and other important details with your spouse or your business partners, after you are gone.

Failing to Plan for Own Future
Planning for the future is not just limited to making a last will and testament to passing on the assets to your heirs. It is also equally important to ensure that in the case of any contingency, for example, health issues or otherwise so that your assets can be used for your own treatment and rehabilitation. This way there will not be any financial burden on your caregivers to pay back.

Last Few Words
Wealth creation shouldn’t be the only goal of property owners. Effectively managing wealth is an ideal way of ensuring future. Contingencies come up when you least expect them. Being prepared keeping an eye in the future is the best way to deal with it. This way, not only you take the financial burden off your family’s shoulders, but also get to decide how exactly you want your estate managed.

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Do You Know How ‘Power of Compounding’ Can Multiply Your Investment?

Very few investors realize that they can create a good corpus with as less as 10% - 12% annual returns. All it needs is a little bit of patience and a strong belief in the power of compounding. Simply put, gaining from compounding interests involve reinvestment of income and the principal, year after year. To get a better understanding of how compounding interest helps substantially increase the returns by a marginal increase in the rate of returns, we have this table listed below. It shows the difference in return if an amount of one lakh is invested at different rates (8, 10, 12, 15 percent) for tenures of 10, 15, 20, 25, and 30 years.

 Magic of Compounding

	Return on Investment (In Lacs)
Tenure (years)	8%	10%	12%	15%
10	2.16	2.59	3.10	4.04
15	3.17	4.17	5.47	8.13
20	4.66	6.72	9.64	16.36
25	6.84	10.83	17.00	32.91
30	10.06	17.44	29.95	66.21

As you can see an amount of 1 lakh if invested at 8% p.a. for 30 years yields a cumulative return of around 10 lakh, whereas the same amount if invested for a similar tenure at 12% and 15% yields a return of around 30 and 66 lakhs respectively, which are almost three to six times of what one would have gained at 8%. Therefore, a wise decision would be to invest in an asset class that gives you an average 12%-15% of return, and let it compound year on year for great returns.

Let’s take a look at some asset classes that have a historical record of yielding average returns of 12% and more.

Real Estate

The expectations that most people have from this asset class is sky high, and that’s because real estate has always delivered great returns when invested for longer periods. A study in 2013 showed how some areas in Delhi/NCR rose by 600% in a period of 7 years, the annual rate of return being a whopping 32%. Many people are not clear as to how gains from real estate investments are taxable, and this is why they delay their decision of buying and selling a property. In such a case investors should consult an established taxation services firm in India to clear their doubts.

Equity

There are periods when investments in stocks yield a return of more than 20%, and therefore, expecting a return between 12% and 15% is not unrealistic. Research suggested that any investment in equity for a period of seven years has a 64% probability of earning more than 15% and a 74% probability of earning more than 12%. All you need to do is not panic even if there are prolonged periods of no return.

Last Few Words

Now that you are aware of the power of compounding and the asset classes that you need to invest in to create a corpus for yourself start investing. However, before you invest it is advisable to consult a tax expert from any of the reputed taxation services firms in India to get an idea of the taxes that you will have to pay on your returns.

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