Four Graduates - AarKaay, Peecee,DeePee and CeeKay were placedin the same company at the same salary 5 years ago. With the decision to make their first job count, they started making investment of the same amount. But one of them overtook the rest. Here’s why:

Particulars AarKaay PeeCee DeePee CeeKay

Started Investing 5 Years ago 4 Years ago 3 Years ago 1 Year ago

Monthly SIP amount in `10,000 ` 10,000 ` 10,000 ` 10,000

Equity Mutual Funds

Returns* 17.73% 16.94% 9.14% 10.58%

Investment Value ` 9.7 lakh ` 6.9 lakh ` 4.2 lakh ` 1.3 lakh

*CRISIL AMFI Equity Fund Performance Index, Returns as on March 28, 2018

Higher return, thanks to the power of compounding, is just one of the reasons why you must startinvesting as soon as you get your first salary. Let’s look at the other benefits:

AarKaay could take highe risks sincehe had limited or no responsibilities

Equity Mutual Fund may be high onthe risk-o-meter, but they have thepotential to deliver better returns in the long run

AarKaay, thus, assumed risks, tapped the Equity market and built his wealth faster

CeeKay is struggling to meet his goals; whereas, AarKaay and PeeCee are in a much more comfortable situation

They have now developed the habit of spending rationally and saving regularly

The can , thus, manage their finances better than the other two

To match the investment value of AarKaay. PeeCee, or even DeePee; CeeKay will have to invest a higher amount

Moreover, CeeKay Does not even have the time to rectify his investment mistakes, if any

Better risk appetite Efficient money management Greater Investment flexibility

( source: UTI Swatantra)

Annual Subscription ` 10/-Pages :4

R. N. I. No. : MAHENG / 2000 / 1238 Postal Regd. No.:PCW/027/2018 - 2020'Licence to Post without Prepayment' to Postage Licence No. WPP - 77 / 31.12.2020Posting at PSO, Pune GPO - 411001, Date of Publication & Posting 06.12.2019

Volume - 21 Issue - 08 December 2019

Regd. Off. : Ackruti Sankul, Shop No. 118 / 119, Sadashiv Peth, Next to Bank of Maharashtra, Tilak Road Pune - 411030, Tel.: 24320168, 8087030279, Email: mf_support@vijayfinancial.comVisit Our Web Site : www.vijayfinancial.comFINANCIAL CONSULTANTS PRIVATE LIMITED

SINCE 1994

OF SERVICE EXCELLENCE

SINCE 1994

OF SERVICE EXCELLENCE

Registered

continue page no. 2Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

December 2019 (2)

Use your money wisely

If you think making money is difficult, especially in these turbulent times, wait till you try to make it last. It takes all of one's financial acumen and enterprise to save, invest and help it grow. More so for celebs and stars, who are wont to churning out copious amounts of wealth and creating unwieldy portfolios. Handicapped by lack of financial expertise and paucity of time, they often end up entrusting their wealth to inefficient wealth managers, or worse, unscrupulous ones. At other times, boosted by success and faux confidence in their own abilities to manage money, they take wrong investing decisions. Then there's the heady pitfall of power, which makes them believe their money will last forever. For these and several other reasons, the world touts a long list of celebrities who have acquired untold wealth, only to lose it all. Some have learnt their lessons and recovered, while others fail to do so. Despite the incongruence in the quantum of wealth made by such celebs and the average salaried professional, there are financial lessons to be learnt by all.

Making money is easy, learn to make it last

Don't spend more than you earn. Invest to make it grow

A behavioural anomaly that has been the nemesis of many a millionaire is the belief that they will never run out of money. Be it the

German tennis prodigy Boris Becker or Hollywood actor Nicolas Cage, they spent their money faster than they could make it. One of

the top earners in Hollywood at one time, Cage was worth 1,075 crore and owned 15 residences across the world, besides several

luxury cars and rare artefacts.His downfall was primarily the result of his lavish lifestyle and extravagant purchases like a dinosaur

skull, an island, and Shah of Iran's Lamborghini.The simple financial rule is that if you keep spending more than you earn and don't

invest in instruments that help your money grow, you will eventually run out of it.

Don't take risks in retirement. Keep investing

When Amitabh Bachchan decided to set up a film production and event management company, Amitabh Bachchan Corporation Ltd

(ABCL), he had already retired. The firm drained his resources, so he took bank loans, which he couldn't repay and ended up with a

bankrupt company. At 57, he had no films or endorsements, no money, had legal cases against him, and tax authorities put up a

recovery notice on his house. He was forced to restart his career and managed to repay all debts. Today, his net worth is Rs 2,866

crore.The clear learning here is not to take undue financial risks after retiring or launch projects without sufficient expertise and

financial backing. One also needs to keep investing in retirement to ensure that the money keeps growing at a pace faster than

inflation.

Loans don't go away if you ignore them. Repay at the earliest

Becker, who once had a net worth of Rs 1,400 crore, and continues to rank among the top 10 highest earners in tennis, was

reluctantly forced to auction 82 trophies and personal souvenirs in July this year. One of the primary reasons for his downfall,

besides a lavish lifestyle, was his refusal to repay loans and pay taxes, which ran into several hundred crores of rupees. He could

have saved himself this predicament by simply paying on time the money he owed. It is important to understand that loans keep

becoming bigger because the interest component keeps adding up. So repay all your debts at the earliest to keep them from eating

into your wealth.

Avoid addictions. They destroy both your wealth and career

World heavyweight boxing champion at 20, the legendary Mike Tyson had career earnings of Rs 4,910 crore. However, too

much wealth and fame at an early age rendered him incapable of controlling his spending or taming his addictions. He spent

excessively on 110 luxury cars, several mansions, and exotic pets like tigers, squandering away Rs 2,500-2,870 crore. Later,

severe alcohol and drug addiction, court cases and convictions ruined his career. He is not the only star to be felled by

addictions, the others being Hollywood stars Lindsay Lohan, Robert Downey Junior, Charlie Sheen, and Indian music composer

O.P. Nayyar.

Don't get attached to a loss-making investment

The 'King of Good Times', Vijay Mallya, is a clear instance of the destruction wrought by emotional attachment to a loss-making

investment. Clinging to Kingfisher Airlines, which was launched in 2005 and grounded in 2012, led to his downfall as the

company kept piling losses. Mallya defaulted on bank loans that were taken to keep it afloat. Compounding this error was the fact

that he continued to maintain his lavish, extravagant lifestyle.This wisdom applies just as well to stock investors, who refuse to

get rid of a loss-making stock in the hope of recovering their money someday. To ensure that you don't drag down your entire

portfolio due to a single stock, it is important to cut the losses and make a clean exit.

( source: Economic Times)

( source: UTI Swatantra)

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

December 2019 (3)

The 40s mark a pivotal point in an individual's financial

journey. Like every stage in a financial life-cycle, it comes

with its own opportunities and challenges. The 40s are

when most people reach a sweet spot in their personal

finances with their incomes going up and expenses

stabilizing. It is a time when people look at giving a decisive

push to their saving and investment plan to meet many of

the big-ticket goals which are not that far away.

This stage of is also one where the ability to money life

rectify mistakes is restricted because there is only limited

time available to make amends. It is, therefore, the time to

secure your and pave the way to a better financial health

future. To be able to do that you should recognize some common errors that show up in your financial situation in the 40s

that you should watch out for and rectify as soon as possible.

Not investing right

Having too little equity: A portfolio of investments that is too safe may be a disadvantage as you enter the stage of high

income and savings growth. Goals such as retirement have many years before they have to be met and they can benefit

from growth assets such as equity. Even goals like education of children have enough years ahead to benefit from equity

investments. If your savings are not working hard enough and earning better returns, then that will affect the amount you

are able to accumulate for the goals and may even fall short of what you need. This may mean that your contributions to

the goals have to go up and take away savings assigned for other goals.

One way to prevent this is to adjust your investment plan as your financial security increases in your 30s. Take greater

allocation to growth assets so that you have a base on which you can build in the 40s. “If the goals have at least six to

seven years to go then equity is an important part of asset allocation in the early 40s."

Having too much real estate: Another common portfolio error that can be difficult to deal with in the 40s is one that is

skewed towards real estate. Owning a self-occupied home is a goal many work towards but beyond that, at this stage in

life, real estate is an illiquid asset that does not help meet goals. “Many people in this stage of life have asset allocation

skewed towards real estate. Being an illiquid asset, it does not help meet goals when funds are needed."

If your money is tied up in real estate, you may have to borrow to meet goals. The interest and repayment obligations will

take away from the available income and limit how much you can invest and benefit for growth at this stage.

Undisciplined spending

High consumer loan or credit card debt can hold you back in the 40s. The repayment is a drain on savings and takes

away from the investments that you could otherwise make. Have a plan in place to pay down debt quickly. Focus on high-

cost debt and consider tax benefits available on some debt such as mortgages while deciding which loan to tackle first.

“Most people in their 40s will be servicing mortgages and it is important to bring debt down quickly so that the savings can

be channelized towards goals." A tight budget to find additional savings and allocating them between debt and

investments is recommended. One way to determine if you are on track on reducing debt is to check if the proportion of

income that is going towards servicing debt is coming down steadily.

This is also the age where you may be tempted to keep up with the Joneses and spend more on lifestyle. This can either

lead you into debt or eat into the savings that would otherwise have gone into important goals like retirement. Sen sees

this more in people with high incomes.

By this stage, you need to have a clear strategy for your retirement plan and your saving for the goal can't be ad hoc. A

quick way to ensure that you are making the best use of the peak earning years in the 40s is to keep track of your savings

rate. The savings rate is the proportion of income that is being saved. A rising savings ratio in the 40s indicates that you

are better placed to take care of your goals.

Not prioritizing goals

“Retirement may be the last in terms of time sequencing of goals but it is the most important at this stage." People in the

early 40s can straddle both goals—retirement and children's education. In cases where funds are scarce and the person

is on the wrong side of 40s and retirement is not that far away, then it is clear that retirement stands taller than higher

education. Maximize your retirement contributions to mandatory schemes where you may have employer contributions

and tax benefits but don't assume that's enough. Check the corpus you would need and see if your retirement savings

and investments are adequate to get you there. If not, this is the time to supercharge savings to take advantage of the

time still available to retirement and invest in growth assets like equity.

The education of children is another important goal that has to typically be met in this decade. Ideally, you should start

investing for this goal when children are young. If you have fallen back on this goal, then prioritize catching up in this

phase of life when income is high, but not at the cost of retirement. The trend of sending children abroad for

undergraduate education as against post graduate education earlier. “Very often you end up using investments

earmarked for other long-term goals and this is not the right thing to do."

Find ways to increase savings by cutting back on lifestyle and other expenses. Also, avoid the temptation to raid your

retirement accounts, which by now would have a healthy balance, to meet immediate needs, including paying for

education or repaying debt. Even if the intent is to catch up with retirement later on, the retirement corpus will be hit by the

loss of the compounding benefits. Moreover, the investments made closer to retirement will be in safer assets and that

affects the earning potential of the savings.

Unlike retirement, education is a goal that can be funded by an education loan which gives tax benefits; also, the

responsibility of repayment can be shared by the children.

Ignoring emergencies

“An emergency fund, and medical corpus are required for protection of income, along with life medical insurance

insurance. Not having an emergency back-up can have serious consequences at that age, especially if it is a single-

income household." Otherwise, you may end up using your long-term investments during times of emergency and derail

other goals.

Insurance is another important protection against the unexpected at this stage. Adequate life insurance and emergency

fund that reflects current income and level of expenses, goals and liabilities is important. The insurance cover provided

by the employer or policies taken when you were younger may not be enough now, with your needs changing with age.

Review the existing cover and update it as required. It is best to opt for protection plans that give the cover required at the

best price.

Providing for with health insurance is also important. This is one expense that will keep increasing health emergencies

over your lifetime. Assess if the cover you already have is enough, particularly if it is provided by the employer. This is a

protection that you should take as early as possible to protect your income and savings from being spent on health

expenses.

The focus of financial planning when you are in your 40s should be on stability. Get help at this stage if you don't already

have it. It will help you look at the linkages between the different aspects of your financial life and make the most of your

income and savings at this critical mid-way point in your earning life.

(source: Mint)

Four financial mistakes to watch out for in your 40s

( source: UTI Swatantra)

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

December 2019 (4)

Our BranchesOur BranchesFINANCIAL CONSULTANTS PRIVATE LIMITED

You can sit in the comfort of your house and invest yourmoney, thanks to VIJAY FINANCIAL'S HOME SERVICE.

The LARGEST RETAIL FINANCIAL PRODUCTS DISTRIBUTORS IN PUNE. We will come to your house with a world of financial products, give ourunbiased

investment advice and suggest the best investment options suitable to you. Every month, more & more investors are availing of our Home Service.Are you one of

them ? If not, contact your nearest branch of Vijay Financial TODAY

HOME SERVICEHOME SERVICEHOME SERVICECLIENT FIRST

SINCE 1994

OF SERVICE EXCELLENCE

FINANCIAL CONSULTANTS PRIVATE LIMITED

VERY IMPORTANTDear Investor

As per SEBI circular Investors need to submit copy of their card and register PAN

their (Know Your Client) with Mutual Funds. Kindly update your KYC PAN/KYC

(Know Your Client) details in your mutual fund schemes investments.

In case you have changed or planning in change your.... Residential / Postal

address. Mobile number or Land line Number, email ID ....then please do let us

know about the same at the earliest, so that we can update your contact details in

our record.

This would enable us to keep in touch with you with regards to your investments

with us.Thanks & RegardsVIJAY FINANCIAL

TO UPDATE PLEASE CALL US IMMEDIATELY.

You can’t rely on someoneelse for your retirement.

CALL US ON

9822037532

AND

TO GET A RETIREMENT PLAN TODAY

“FEEL CONFIDENT ABOUT YOUR RETIREMENT

If you would you like us to cover some specific concepts/ideas/topics,please feel free to speak to us at +9822037532 or write to us at

vijay@vijayfinancial.com

Vijay Financial Consultants Pvt .Ltd better and better with every monthly issue.

We would be obliged not only when you read this editorial, but also whenshare your valuable feedback and suggestions. Your feedback andsuggestions will be considered a massive contribution in making

YourRetirementSTART INVESTING FOR

( source: UTI Swatantra)