MONEY NEWS ONLINE
Curated news items for a quick read
TOP CRYPTO NEWS (INDIA & CHINA) THIS WEEK
How investors should react to China’s ban on all cryptocurrency activity
Watch the CNBC video on the subject here.
China has created a stir by banning crypto operations
China has been a bit of crypto mining activity due to availability of low cost power, which is the major cost component in mining activity.
They created a huge stir today by banning all mining activity.
Ex-RBI Governor spells out RBIs concerns on cryptocurrency
The office-bearers have been tight-lipped and fuelled rumours and controversies on India’s stand on cryptocurrency.
Ex-Governor Subbarao spells out the concerns in detail to throw light on a hitherto dark area.
immortalised in Budapest
Nobody knows who is Satoshi Nakomoto – if it is a single person or team. But the entity has been immortalised.
Anything that is seen as revolutionary is worshipped.
Indians continue to buy cryptocurrency despite the uncertainties looming ahead
Indians are using P2P transfers, spot trading and other methods to buy cryptocurrency, after the ban by State Bank of India on crypto bourses. Options from other banks are available.
Cryptocurrency Hyper Fund under RBI scanner
Hyper Fund was launched in mid-2020 to provide a decentralised financial infrastructure.
However, MLM and ponzi schemes launched by the entity to lure investors have attracted negative attention from the banking regulator.
What lies ahead for cryptocurrency in India?
The indicators from the government and RBI are not encouraging, despite the strong lobbying by crypto-enthusiasts and other stakeholders.
Anything we discuss just amounts to speculation till the Cryptocurrency Bill is tabled in Parliament in the winter session.
Investing in Bitcoins in India
Bitcoin is becoming synonymous with cryptocurrency, being the first in its category. Indian remain enthusiastic about investing in bitcoin.
PERSONAL FINANCE NEWS UPDATES – 15th Sep’21
Are returns on a mutual fund linked to total AUM of the fund?
I frequently come across this question on Quora and Facebook groups? Which mutual fund scheme is “BEST” for investing a spare amount of —?
There is no ‘best scheme’ in investments. Investments need to be tied to your financial goals, so it is not a “One Size Fits All” game.
Do you think smaller funds yield high returns in the long run, or the reverse is true?
Are you adequately insured by
The focus on health insurance has been high in the last 18 months.
Check carefully what are you insured for by your employer, and is the coverage adequate for emergencies? You need a smaller emergency fund, if health insurance is adequate.
Financial Literacy at a young age
RBI and educational institutions have jumped into the game of financial literacy for kids.
MONEY NEWS THIS WEEK – 11th Sep’21
Can you buy digital gold and exchange it for jewellery later?
The gold deposit scheme did not do very well in India, as Indians are emotionally attached to jewellery. The scheme returns your gold in the form of coins and bars. The scheme was created to bring gold stacked up in households in circulation in the economy.
What if you can buy digital gold and convert it to jewellery later?
How can account aggregators ease your life?
What are Market-Linked Debentures?
This is presented as a product for high net worth individuals, with a high risk appetite.
10 cryptocurrencies to buy in September, 2021
The platform does not recommend an cryptocurrency till the governmental stance is not clear.
But for those interested, here is an article.
Financial mistakes doctors should avoid
We’ve looked up at the medical fraternity to allay our fears, and save our lives for the last 18 months or more.
What about the risk that the doctors face? All of us who have a doctor in the family or friend circle know what the family goes through.
I hope they have consulted the best financial planners to adopt the right path, and avoid making mistakes.
NEWS THIS WEEK 4/9/2021
Account Aggregator System Goes Live. What is it?
Will all cryptocurrencies finally crash?
Indian crypto-investors and potential investors swing between hope and disappointment in news reports. The latest news item said government may approve cryptocurrency as an asset class, but it is not clear how they define cryptocurrency.
The bombshell comes from the seer who predicted the 2008 crash. He says ‘cryptocurrency is a limited supply of nothing’, and will eventually crash.
A new platform to share user data
Data is the new oil. Data becomes precious when it is about financial behaviour.
Yes, we have had credit scoring agencies for individuals like CIBIL, Equifax, Highmark and Experian.
RBI has approved a new platform to host user data, which may include data from telecoms in future, other than financial institutions. The beneficiaries of this data would be fintech platforms, banks, microfinance institutions and startups.
Difference between budgeting and financial planning
Both the terms sound scary, if one is not money savvy or if one sees money as a flow of income and expenditure.
Engaging a financial planner can yield long-term results over a period of time.
However, a monthly or annual budget is something everyone can do. It is just about spreading available money over different heads of expenditure, and making necessary adjustments to make both ends meet.
Budgeting is a basic life skill which should be taught in schools.
Entry age to National Pension Scheme increased to 70 years from a previous 65
You can enter the National Pension Scheme till the age of 70. The previous entry age was 60 years.
Why millenials should be sensible about debt?
The lure of the credit card, the confidence that one can afford it and lifestyle dreams all pull people a few notches down on the ladder of prosperity.
The issue is we equate prosperity with how much we spend rather than how much we save.
The amount of interest paid in 10 years could compound into a huge sum over 30 years, only if you care enough to save and invest it.
POSITIVE PAY & OTHER DEVELOPMENTS THIS WEEK
Positive Pay made compulsory for cheques above Rs. 5 lakhs
Positive Pay was introduced on 1st Jan’21. Customers are expected to inform the bank if they issue cheques above Rs. 50K, for a second level of protection against frauds.
However, the system remained optional. Some banks were calling customers to confirm details.
In the last week, Axis Bank sent out emails saying that informing the bank for a cheque above Rs. 5 lakhs to be cleared is mandatory. Other banks may soon follow suit.
One needs to be connected with the bank via netbanking or mobile banking. Else, a personal visit to the branch may be necessitated.
Thought: Electronic payments will become the norm, except where a business transaction necessitates a cheque payment.
LIC will revive lapsed policies for a limited period.
This comes as a limited period offer, but might be relevant to many who have missed the premiums last year owing to financial difficulties.
We also know from experience that life insurance is something we cannot give a miss in pandemic times.
Indian rich can become ‘accredited investors’ and enjoy dedicated financial products
The criteria here is an annual income of INR 2 crores and/or a net worth of Rs. 7.5 crores.
They can choose the accreditation scheme, and can choose to withdraw if they want to.
Raghuram Rajan says stablecoins have a future
Rajan is lost about cryptocurrency like Bitcoin.
But he recommends the supporting blockchain technology, and the manner in which it can change the payments system forever if employed by governments as stablecoins.
He foresees newer uses of the technology emerging as we move along.
How I plan to achieve financial independence and move to my native place
This is a reader story shared on freefincal.
This has been the story of many people ‘working from hometown’ or wanting to do so permanently.
The step-by-step approach is commendable and can be a guidepost to many on the same path.
STOCK MARKET INVESTING IN PANDEMIC TIMES
CYCLIC NATURE OF STOCK MARKETS
Found some very interesting quotes by Minsky. It gives a backdrop to whatever you will read in the news articles below.
- If the economy is stable, people get optimistic
- When they get optimistic, they increasingly get into more debt
- When they pile on debt, economy becomes unstable.
- If the market never crashes, they are not risky
- If they are not risky, markets become expensive
- When markets get too expensive, they crash.
Unfortunately, markets are ruled more by emotion and perception than balance sheet analysis. Yet, there are very few options which can give the kind of growth sensible investing in the markets does.
Market correction may be deep and sharp
Rajat Sharma labels the market growth as insane. India is growing at 18%, when the U.S. market as 10%.
It may be driven by undue optimism, and a correction may not give investors time to respond.
Will the healthcare segment run high for the next few years?
Abhay Agarwal, growth in the healthcare segment will continue unabated in the next 10-15 years.
Opinions differ, as is reflected in the article above this.
Chasing corporate lenders may be counter-productive
Saurabh Mukherjea advises against sinking your money in banks which lend mainly to corporates, and do not have an ethical management team.
In his opinion, it amounts to burning money despite the hopes pinned on previously reputed banks.
5 lessons for successful investors
The lessons are being repeated, but rarely followed. The key to making money in the stock market lies in inaction, not too much action.
- Invest for the long term
2. Be regular
3. Keep an emergency fund
4. Do not let emotions interfere.
ROLE OF A FINANCIAL ADVISOR
What is a financial advisor?
This video tells you in brief the role of a financial advisor.
Covid nudges Indians to engage
a financial advisor
However much we pine for normalcy to return, Covid19 has transformed our thinking process forever. No longer do we take things for granted.
Many of us have faced unexpected large medical expenses, job loss, salary cuts or a change in the manner families functioned as a unit.
Complexity of wealth
as the size of
Rohit Shah, Founder & CEO, Getting You Rich says he is able to read the body language of a client, when s/he says “Now I can’t manage this. I need help.”
In this piece, Raghavendra Nath, the CEO of Ladder Up Financial Advisory elaborates on his statement of how complexity of wealth management increases with size.
HOW & WHERE ARE INDIANS SAVING MONEY?
Where are Indians saving money?
Provident Fund appears as the topmost preference – even in rich households.
Gen X and Y forced to take care of parents’ finances
The last 18 months have ended up transforming health and money mindsets, out of sheer necessity. Circumstances did what we were procrastinating.
In some cases, sons and daughters have had a hard time sorting out a parent’s finances after their sudden demise.
How much to save for your financial goals?
There are three aspects of saving and investing for financial goals-
- Estimated amount for the goal
- Capacity to save
- Investment vehicles and the returns they provide
There are many thumb rules, but this article gives a step-by-step approach to planning your investments.
E-RUPI & CENTRAL BANK DIGITAL CURRENCY
What is E-rupi?
E-Rupi is a kind of digital voucher. It will be sent to mobile phones as a QR code or SMS-string to recipients of social welfare schemes. It eliminates the middlemen and possible corruption. An additional benefit is that it is spent only for the intended purpose.
Central Bank Digital Currency to counter crypto
Crypto has had its moments of glory, and continues to attract young investors.
However, governments across the world do not want to lose control over money, and are countering it by introducing their own digital currency. CBDC will be an approved currency, not an asset that appreciates or depreciates in value. An additional benefit is reduction in cash management costs.
MISTAKES THAT IMPACT RETIREMENT PLANNING
Top Life Insurance mistakes people make
IMO, the topmost mistake is to combine life insurance with other financial goals, and treat the life cover as a ‘bonus’. Life insurance is an income replacement for the family, in case an untoward incident happens. Let it remain sacrosanct to the extent of the envisaged amount.
Letting lifestyle inflation costs impact retirement planning
Lifestyle costs are increasing at a rate higher than the inflation rate of 6-7%. Most of us are addicted to certain items or activities, or find it socially embarrassing to withdraw from a certain event. It leads to an inordinate increase in lifestyle costs, if we do not rein those in time.
Exiting mutual funds without consulting a financial planner
There are number of factors to be considered before exiting a mutual fund.
- Change of fund manager
- Change in investing strategies or sectors targeted by the MF
- Impact on long-term financial goals
It makes sense not to use a dip in the stock market, or unforeseen needs as the reason to exit a mutual fund investment.
HOW TECH IMPACTS CONSUMER OF FINANCIAL PRODUCTS
How will Central Bank Digital Currency impact financial transactions in the country
Central Bank Digital Currency is being embraced worldwide by the big players, owing to the sovereign sanction that it carries.
Payments and other transactions on this platform cuts through several layers of connectivity, and becomes amazingly fast.
It may not pose a threat to bank deposits, as CBDC is not an interest-earning product. Yet, payment operators have a lot to fear.
You are being targeted
Marketing communication has become increasingly personalised. All because data is the new oil.
AI professionals have been embedded into different verticals of financial institutions to help them understand the business, and then apply algorithms to create a personalised experience for every user of financial products and services.
Do you stand to gain or lose?
Balancing financial inclusion and security for financial inclusion
The entire financial system in India is geared for last mile connectivity in the last seven years. The challenge is to manage security and avert frauds with increased levels of digital transactions.
Tech gets those on the periphery into the whirlpool of connectivity and inter-operability, but also exposes them and many more to being duped by tech-savvy fraudsters.
HEALTH INSURANCE TODAY
Common health insurance mistakes people make
Do you give incorrect information for small benefits?
What are the errors which can lead to non-payment or less payment by insurance companies in times of need?
LIC launches Aarogya Rakshak
LIC launches a new health cover – AAROGYA RAKSHA
While it covers a limited number of diseases, it offers ambulance and health check-up benefits. It offers a lump sum amount irrespective of actual medical expenses.
It is available on individual as well as family floater basis.
Sanaa Health Insurance makes health insurance easier
Sana Health Insurance is a start-up which lists around 150 health insurance policies on its site.
It makes the task of comparison and buying easier.
Deepak Parekh asks IRDAI to allow insurers to sell pension and health policies
Distribution networks play a key role in penetration of markets.
There is no denying the fact that population segments in remote and underprivileged sections need health insurance and pension plans more than ever?
Will IRDAI allow life insurers to sell health insurance?
LET’S TALK ABOUT LOANS
Are you considering a Covid Loan?
Banks are providing personal loans to tide over illness – the kind of emergency expenses people face in pandemic times.
Best interest rates on gold loans
Gold loans remain the quickest way to raise money in times of need. But are you aware of the interest load it brings on your future finance?
Where do you find the best home loans?
Check out the rates of interest offered by banks, for home loans below Rs.30 lakhs.
Are you the guarantor on a loan?
Have you wondered why your credit score is low, despite never having defaulted on a payment?
Did you stand as guarantor on a loan?
IS YOUR FINANCIAL PLAN ON THE RIGHT TRACK
Have you got your financial plan audited?
Yes. There are firms and practitioners specialising in finding the gaps in your financial plan.
Are you investing a part of your money in non-traditional products?
Cryptocurrency showed dreams of unusually high returns in a short time. Many entered the fray to make a quick buck.
However, governmental action in many countries is changing trends.
Can you suffer a loss in bonds?
Bonds remain the most popular product offered to retired people, being considered low-risk.
However yields do fluctuate, and the mechanism is not well-understood by the layperson.
Do you have adequate life insurance?
The pandemic has brought a renewed focus on life insurance. Term plans are more popular than they have ever been before.
At the same time, insurance coupled with investment products is being discouraged.
BITS & BYTES ON BITCOIN
Cryptocurrency – the devil lies in the definition
The major fear is that private cryptocurrency will be banned. What exactly is private cryptocurrency?
Are Bitcoin and Ethereum insignificant enough to be banned without causing ripples in the economy?