Systematic Investment Plan ?

If you’ve invested Rs.1 lakh in Sensex on 1’st January 1990 and did not disturb it until 30^th November 2015 (26 years, 25.91 to be precise) it would have multiplied 33 times and become Rs.33.38 lakhs. This works out to an annualized return of 14.49%.

We saw that over 26 years Sensex got multiplied by 33 times. Let us assume you missed the best 40 days spread over the above 26 year period. Then your money would have multiplied by mere 2 times instead of 33 times. 40 days over 26 year period is just 1.5 days per year! So hopping in and out of the market can dent your returns very significantly. Regular investing and staying for a long time (which would include the best days as well) is the way to build sustainable wealth.

Please see the complete data below:

Stayed invested for 26 years: 33times, 14.49% per annum

Missed 10 best days: 12 times, 10.14% p.a

Missed 20 best days: 6 times, 7.22% p.a

Missed 30 best days: 3 times, 4.75% p.a

Missed 40 best days: 2 times, 2.54% p.a

It is clear that if you’ve even missed the 10 best days, instead of getting 33 times your wealth, you would have got only 12 times. Just missing 10 best days in nearly 3 decades costs you so much.

It is interesting to note that by just missing 10 or 20 best days over 26 year period; market gives you only fixed deposit kind of return.

For missing 30 or 40 best days; you just get savings bank account returns.

Markets tend to go up sharply on a few days, then consolidate for long periods and then go up sharply again over a few days. So just missing these days can bring down your returns drastically. It is impossible to predict the best days in advance and we would come to know of the same only in hindsight.

I also read somewhere that some of the best days of the markets come immediately after its worst days. It looks like many a time the worst and best days are lumped together in a short period of time.

There is no way to prevent worst days and time the best days.

Not many get rich from stock markets because they lack patience, hop in and out, losing many of the best days.

So don’t try to time your entry into the market. SIP is the way. What matters is how long you stay invested so that you catch as many best days as you can and maximize your returns.

Start early. Invest regularly. Stay the course. Get wealthy.

LIC Policy " Revival"

"Revival" means "To bring back to life". In case of LIC 'Revival' is required when a policy gets lapsed if the premium is not paid within the grace period (minimum 1 month if mode of payment is Yearly/Half-yearly/Qly and 15days if the mode is monthly). If a policy gets lapsed, it can be revived any time within 5 years from the date of first unpaid premium (FUP) the lapsed policy can be revived under the following 5 different schemes.
1. Ordinary Revival: Under ordinary revival scheme a lapsed policy can be revived by paying all unpaid premiums (from the date of 1st unpaid premium) in lump sum with interest @existing rate. (Current rate of interest is 8% p.a.). Form no 680 also called DGH (declaration of good health) and medical report is required if necessary.
2. Special Revival: If a policy holder is unable to pay all the premiums in lump sum, he can also revive his policy under special revival scheme. In this scheme the date of commencement will be shifted and the policyholder has to pay only one premium according to his age( on the time of revival). Form no 680 also called DGH (declaration of good health) and medical report is required if necessary. The following conditions are to be satisfied for the revival of LIC POLICY under Special Revival Scheme.
a). Special revival can be done only once in entire policy term.
b). Special revival is allowed only within 3 years of lapsation.
c). Policy should have not acquired any surrender value i.e. This option can be exercised within 3 yrs from the date of commencement of the policy.
3. Instalment Revival: In case of the policyholder is unable to pay all the unpaid premiums in lump sum and special Revival scheme also doesn't suit him. He can use this scheme to revive his policy. Under this scheme he can revive his policy by paying the following amount immediately:
A). In the yearly mode of payment, half of the yearly premium.
B). In the half yearly mode of payment, one half yearly premium
C). In quarterly mode of payment, 2 quarterly premiums.
D). In monthly mode of payment, 6 monthly premium
Rest of the unpaid premium is to be paid in instalments within two years along with the regular premium DGH and medical reports (if necessary) are required according to the policy term.
4. Survival Benefit – cum- Revival Scheme : Money back type policy can be revived by using the survival benefit ( S. B. ) which falls due in it, in case of the S.B. due date is earlier than the date of revival. If the revival amount is more than the S.B. amount, the excess amount will be demanded. If the revival amount is less than the S.B. amount. The remaining amount will be given back to the policyholder. The additional requirements for revival and S.B. settlement are to be satisfied.
5. Loan-Cum-revival Scheme: A policy can be revived by taking a policy loan in case of the policy acquires the surrender value on the revival date. The policyholder can get the loan on the basis of premiums paid by him up to the revival date. If there is any shortfall in the revival amount, the policyholder will have to pay it. If the revival amount is less than the loan mount the remaining will be paid back to the policyholder.

Five Tips On How To Avoid Overspending (Article)

1. Plan a budget        
2. Drawing up a budget can appear quite cumbersome. However, it will hurt you a lot less than paying off unwanted bills. So, allocate a realistic sum for festive shopping. Make your shopping list and then divide the total spend among the various items—clothes, shoes, gifts etc. Try not to spend on arbitrary goods, even if they are available at a discount. 

 

2. Assess your need

While making your shopping list, ensure you include only those things that you really need. Look for deals, for the goods on your shopping list, but be mindful of not splurging on impulse shopping, goaded by 'discounts'. During festive seasons, retailers come up with several seemingly interesting schemes to draw in customers. However, they might not always be in the customer's interest.

For instance, advertisements like '10% discount on gift shopping of more than Rs 3,000' hold a strong pull. But do you really need to spend Rs 3,000 for a Rs 300 discount, when you had allocated just Rs 1,500 towards gift spends? Is it a gain of Rs 300 or a loss of Rs 1,200? Question your buying decision—is the purchase of value? It will help you evaluate your buying decision. 
 

3. Make it a family affair

The allure of shopping, at times, can be too good to resist. So, if you can't control the urge to shop when it's raining discounts and 'sales' are aplenty, it is suggested you don't go for shopping alone. Involve your family. Take it along for shopping. And before you do that, discuss your shopping list with your family.
Your family is most likely to rein in your urge to spend by pointing out why, despite the discount, you really don't need another centrepiece, or a wall hanging. When you are making the shopping list, ask your family members to cross out what they think is unnecessary. Friends too can be of help in preventing you from turning into a shopaholic.
 

4. Wait it out

Allow the initial excitement around a discount/special offer to settle, before you make a purchase. Sit on the offer for a couple days and give that heady feeling some time to concretise. What seems irresistible at first sight, after a while, quite often, loses its lucre. So don't rush into buying things.
 

5. Opt for cash on delivery

Plastic money and Net banking are often a big reason why people overspend, say experts. The ease of making payment through cards and via the Net can blind one to the fact that he is losing his money. This is especially evident when making online purchases. With an avalanche of the hypnotic '50% off', 'up to 70% off' ads, there is little the shopper can do, particularly when all it takes to avail of them is just a plastic card.

Replace the card with actual fiat money, and the spell breaks. So, it is best to opt for cash on delivery when you order things online. The sight of parting with your money will deter you from ordering things you do not really need.   
**Source: ET Wealth (21^st Sept 2015)