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How can you invest smart and be rich

Last updated on: March 19, 2012 19:26 IST

Tax The Budget announcements have been made.

The finance minister changed the tax slabs giving more money in the hands of the people.

What effect will the Budget have on investments?

How can you invest smartly and save more?

Has the FM given with one hand and taken away from the other?

Are you aware of the investment options available in the market?

How best can you plan your finances?

What are the crieria for evaluating an investment option?

In an hour-long chat on rediff.com on Monday, chartered accountant and Income Tax expert Chetan A Gandhi offered some valuable tips.

Here is the transcript:


ravi asked, sir is taking a child policy is a good investment, for the childs future
Chetan Gandhi answers,  at 2012-03-19 15:50:36Taking a child policy for investment may prove to be a good investment since underwriting risk from Insurance company is very low, as ASSUMPTION is used by Insurance company that,the Longevity of child living or surviving is long,under the circumstances,risk for Insurance company to anticipate Insurance claim money is not likely to happen in Immediate future, so premium payable is very low, and from investment point of view it may prove to be beneficial,since the bonuses earned on the said policy in most probability will be grater than the premium paid!!This will again depend on type of policy , term insured, and bonus rate offered by concerned Insurance Company.Further, the decision to buy child insurance policy may prove to be a good decision - it may achieve to be multi task - Compulsory savings,tax benefit and of course Risk cover in the event of any mishap!!.You may seek a professional advise from your CA or Financial Planner, who will have all your financial data.Premium so paid for insured child will be available to parents as a deduction from their total taxable income.
BDQNEERAJ asked, SIR, IS GOLD THE BEST INVESTMENT FOR COMING 4 YEARS
Chetan Gandhi answers, Precious metal is always proved to be an volatile investment asset class.It will depend upon the risk profile of the investor.One can consider as some portion of investment of the total portfolio not very large.May buy only in the form of Krugerrand or a biscuit form to cut the melting loss and making charges loss.
rajpune1 asked, how do i generate 50 lakhs in next five years, any investment plan
Chetan Gandhi answers, You have not mentioned how much you will be investing?There is no Aladdin lamp to generate the amt mentioned.One may consider investing in brad base euity/ capital market, but again I will strongly encourage one to seek advise of a professional financial planner, preferably highly experienced Portfolio Manager, who has proven track record of high performance and has excelled academically too, and has high mathematical analytic ability- strong ALGORITHM and is regularly studying all the listed companies financial results i.e. Balance sheets etc.In western countries and now in India too most of the fund managers do massive mathematical simulations and then advises the clients or financial institutions or Mutual funds to invest in particular assets class, it may be equity,precious metal or commodity like oil exploration fields or precious metal mines in unexplored field.One thing has to be born in mind very clearly - NOT TO SPECULATE and no day trading under any circumstances.Mark Twin opined in 18th Century that,..."DO NOT SPECULATE WHEN YOU CAN NOT AFFORD IT. AND .. DO NOT SPECULATE WHEN YOU CAN NOT AFFORD IT..'!!I will encourage you to resort to an informed decision for your hard earned money for wealth creation.My best wishes are with you.
rajpune1 asked, how do i generate 50 lakhs in next five years, any investment plan
Chetan Gandhi answers, One need to determine what is the current economic environment,political stability and finance bill/policy to affect desired investment plan.
invest asked, Sir, Can you please let us know which is the best way to invest for long term?
Chetan Gandhi answers, One need to define long term.3 years, 5 years,10 years and so on.In my humble opinion Equity market, good mutual fund to having entry and exit load may prove to be good long term investment avenue.
invest asked, Sir, Can you please let us know which is the best way to invest for long term?
Chetan Gandhi answers, Good Mutual fund.
DeepakGotli asked, Investments are subject to market risk please refer the offer documents carefully before investing...
Chetan Gandhi answers, Yes, one must read all small print before investing, as it is mandatory requirement of SEBI to all companies coming to capital market for IPO etc, to inform comprehensively all risk factor that, may effect the concerned investment.Buyer beware!
ax asked, Sir! what is the best investment plan for retirement and child future?
Chetan Gandhi answers, Growth oriented investment to keep one ahead of inflation,loss in value of currency and maintains the same purchasing power, to enable said investor to maintain their current standard of living.One may consider some portion in Real estate, some in euity market and some in good insurance policy.
abhinav asked, @ramesh: L&T fin holding good stock for long term. i bought it during its IPO
Chetan Gandhi answers, One can never go wrong with L & T.You hold it unless you have to sell.You are sitting on gold mine!
priyankaa asked, Dear Sir, Please elaborate - Rajiv Gandhi equity scheme intrdouced in budget
Chetan Gandhi answers, It is in the bill form, there is very little you can do and past experience indicates, many schemes are announced any very few gets enacted and implemented.Pl wait till it is passed.It will be hard to explain at this juncture or time.tks.
Ashish asked, hey my pay pack is 7 lakh. Can you suggest me the patten of savings I should opt?
Chetan Gandhi answers, SIP, Systematic Investment Plan, will help to achieve good saving,growth and will prove to be good investment in long term.
Lovable asked, @Ramesh :- Buy on every dip ...very soon it will touch 25 then 30 & within 1 year 100
Chetan Gandhi answers, Day trading has never paid any body, unless one is lucky.I will never encourage any one for day trading.
ramesh asked, how isi L&T fin at 50???
Chetan Gandhi answers, L & T for long term investments, at any level is good buy.One should be disciplined to hold it for long term.
manish asked, abhinav yes it is and company having good order book and rely growing well it is my view
Chetan Gandhi answers, That is correct.This indicates you have habit of doing good company research,reading financial results and director report etc.will always help doing co research before investing.
abhinav asked, @janus: it is not tanking. market correction post a disappointing budget.
Chetan Gandhi answers, Well there are only minor corrections and coffers are empty, so it will be too much to expect.But still the Income tax exemption limits are reviwed may help.
janus asked, why is the Indian stock market tanking so heavily?
Chetan Gandhi answers, If one do not speculate, still In my humble opinion, BSE & NSE are the best in Asia.I will reiterate, in next 5 to 10 years,Indian Capital Market will give returns no market in world will be able to give.If invested wisely, one will make tons and tons of money in Indian Capital market.
sunilk asked, hello sir, is this good time to invest RIL ?? long term for 3yrs+
Chetan Gandhi answers, You can take some exposure of your total portfolio and sit tight.
Lovable asked, Hello Chetan :- Which is best Investment Plan for Child...
Chetan Gandhi answers, EDUCATION.Give them good education is the best investment as a parents you can do. One may consider long term investment in a group or good Mutual fund investment.
deepa asked, Sir, I purchased Lancro infra @ Rs.22 any chance for a hike
Chetan Gandhi answers, I am not following this scrip, I do not wish to mislead.
bumba asked, for investment purpose is it good to invest in real estate at present scenario?
Chetan Gandhi answers, I expected some corrections, but it has not come.Holding capacity of investors and builders are massive.Greed is enormous.If at all one wants to consider, Real Estate as one of your asset in portfolio then certain portion of total funds may be considered.
Abhi asked, which mutual fund to buy for 15 years?
Chetan Gandhi answers, There are many.It will depend upon what time frame you are considering.MF by HDFC,HSBC,Franklin etc may be consider.I will encourage investor to seek advise from experiance financial planner to protect hard earned money, net of Tax
Abhi asked, which mutual fund to buy for 15 years?
Chetan Gandhi answers, Best route is SIP.Systematic Investment Plan of any good MF.
Samit asked, I have invested rs 60000 pa in Birla sun life Child Bachat plan for my son for 20Yrs. I have paid premium 2 times. Is this a good investment? shld I continue this?
Chetan Gandhi answers, Well, it will be hard for you to exit and incur loss.You may continue, in long term you have good chance to enjoy good returns.It is too difficult to predict 20 yr from now.They do broad base investment, so I would not worry too much, of course these are my personal perceptions.
priyankaa asked, @Sam123... thats correct and they say this applies to NEW retail investors... does that mean ppl who start investing in equity for the very first time from 2012-13 onwards....
Chetan Gandhi answers, One should invest in equity only if one has through product knowledge, other wise just refrain and invest in mutual funds to avoid loss.
Sunil asked, Hi Chetan, Which is best Child & Investment Plan
Chetan Gandhi answers, Hi Sunil, as I have mentioned to earlier reader best investment for child is give them THE BEST EDUCATION!!As far as insurance plan, one may consider -LIC's Jeevan Anurag,Komal Jeevan,Child Fortune Plus Plan #194 etc.Do seek advise from learned Insurance agent or experienced financial planner.
Arch asked, Sir which investment is better whether Gold investment or Mutual fund investment ? ? ? ?
Chetan Gandhi answers, Good MF.
Sam123 asked, priyankaa....i am not sure how they are going to track if someone is holding the equity investments for 3 years or not...better to ask MF houses to launch special MFs for this purpose.
Chetan Gandhi answers, I agree with you.One may consider investing in good MF.
Ratnesh asked, Hi; is the tax exemption of Rs. 10K on interest applicable on the interest earned through auto sweep facility in banks??
Chetan Gandhi answers, yes
mb asked, hi!My father is of 60,he wants to invest where he can get monthly returns.what are the best options available?
Chetan Gandhi answers, Nationalized Bank MIS.
sans asked, how to save money
Chetan Gandhi answers, Cutting down lavish wasteful expenses and changing the life style.Living within means, one will save.
kasu asked, sir, please let me know that TAX FREE Infrastrucutre bonds(other than 80CCG)have any lockin period or can be sold any time
Chetan Gandhi answers, It will always have lock in period.One need to check the offer document.
kiran asked, Hi Chetan : Please share your thoughts on how to go about investing safely with returns of 20 % on investment post budget
Chetan Gandhi answers, Well, one need to be conservative to get such returns, one consider broad base investment in equity ( Mid Cap,A group mix, post budget and try to structure balanced portfolio - assuming direct exposure in equity market - to achieve the desired ambitious target of 20%pa.Market does give on an average 15%+, if do not speculate.remain invested for long term, in final wash, one is certainly like to achieve this target.I am very bullish on Indian Capital market.
ssp asked, Sir, I am investing in Mutual fund via SIP in following scheme. HDFC Top 200-G (Rs.3000/Month), Reliance RSF Equity-G (Rs.3000/Month), DSP Blackrock small & Midcap (Rs.1000/Month), Sundaram Select Mid Cap (Rs.500/Month), HDFC Prudence (Rs.500/Month). How is my portfolio? Do i need any change in the MF?
Chetan Gandhi answers, Wow, you are doing good, even if some MF manager in their enthusiasm has bad scrip, over all you will do very well.All the best.You should do well.
Mohit asked, I am investing 1000 each in HDFC Tax Saver, HDFC Top 200 and Birla Sun Life Midcap Plan A - are these funds good.
Chetan Gandhi answers, Yes, they do lot of research before launch and got good scrip in their MF, and periodically they do churn & evaluate the portfolio in launch funds.
deepak asked, Could you pleease tell me some tips to repay Home loan within less period? and how/where to save money to repay Homeloan?
Chetan Gandhi answers, Best tip is to SAVE, SAVE and SAVE.Repay as fast as you can the Housing Loan, even if one needs to incur penal interest.Saved money may be invested in Good MF.
smart asked, Tell me the various options every one can invest to become rich (Percentage wise). Conside age is 30. ex PPF,PF, SIP,RD,GOLD,...
Chetan Gandhi answers, Well one wish they had money tree!You are young and has time in your hand.Save in PPF regularly, exhaust limits,SIP, you will do well.
vijaya asked, What is the prospect and future in investing in equities of A-scrips especially in Bnak stocks considering the present budget impact
Chetan Gandhi answers, Long term one will do very well.Stay long term invested.
Ways asked, Various smart ways one should invest ro earn more.
Chetan Gandhi answers, MF
kamal asked, I would like to invest in the equity market Rs.10000 every month as a SIP method for 5 yrs. Kindly advice me which equity is good for long term.
Chetan Gandhi answers, It will hard for snap advise, it will depend on your Age,risk profile and your future family need and current standard of living.Any A group shares and mid cap will help one for achieving growth
liveMan asked, Should the Shares be brought based on the historical performance or How should one judge before buying any shares?
Chetan Gandhi answers, Past performance may be used as one of the parameter for investments.One may also consider the product, management and co's market share too before investing.
dadu asked, Sir, i am investing RS.1000/- into following MF schemes. 1)DSP Blackrock 2)HDFC-top 200 3)ICICI Dynamic retail growth 4) franklin india blue chip fund. Kindly suggest about my selection of MF for long term (5 yrs).Regards.
Chetan Gandhi answers, You are doing good, will do well in 5 yr for sure, hopefully!!
BRUNDABAN asked, sir, is FD and NSC are still a good investment for long term
Chetan Gandhi answers, Will depend on your age,your life style These are most secured safe investments.
JawaharLal asked, What is best option for tax saving LIC or NSC?
Chetan Gandhi answers, LIC, sir.
JawaharLal asked, What is best option for tax saving LIC or NSC?
Chetan Gandhi answers, You have blend of 3 - tax savings, investments and risk cover! Premium paid are coming back in form of bonus, in my humble opinion, LIC is definitely better investment then NSC.
Nitin asked, I earning 8 lac PA pl share few tips
Chetan Gandhi answers, Net of tax income try and save as much as you can for growth oriented savings, will lead you to wealth creation.
Tulip asked, what is best investment option for safe investors?
Chetan Gandhi answers, Equity - MF and some portion may consider real estate.
som asked, What is the percentage of savings/investments in diffrent schemes: Mutual Funds, ETFs, Stocks/equities, FD's.
Chetan Gandhi answers, this will depend upon what do u want to do with your money in next 3, 5 and 10 yrs time, what obligations you need to honor?Reasonable spread will help you in good savings and growth.
Chetan Gandhi says, Reader, thank you for your questions, must good bye,Thank you.With Kind Regards - Chetan

Union Budget 2012-13: Complete coverage