In an exclusive article for MoneyChat.in, Chitra Iyer, Chief Operations Officer and Financial Coach of financial planning company, My Financial Advisor, writes about the 10 money-mistakes that she has seen women make over and over again.

The Indian woman is quite possibly among the best money managers in the world. Whether you look at the smallest household in a remote village or an ultra-modern family living in the city, she has always adopted and followed various methods of saving for her family’s needs over generations. From money that is handed to a housewife to manage the household expenses, small portions are cleverly set aside, irrespective of the woman’s knowledge, education or literacy. She is capable of saving money for a contingency or for a need without anyone teaching her the same in a classroom, she just learns it instinctively from her own parents or her financial situation. However, with changing times, despite our cultural reverence for saving, modern Indian women are increasingly prone to financial mistakes. Here are the 10 most common ones; most women would commit a combination of the following mistakes. » Read more..

Has the government bitten off more than it can chew with GAAR?

Amar Pandit

The introduction of General Anti-Avoidance Rules (GAAR) in budget 2012-13 has set off the proverbial storm in a teacup. Foreign investors, who will be primarily affected by this rule, are up in arms, and are lobbying furiously with the Finance Ministry for its withdrawal. So far the latter has refused to budge on the essentials, though it has promised to soften the rules so that honest investors are not unduly harassed by the tax man.

What is GAAR and why has it perturbed FIIs so much? India has a Double Taxation Avoidance Agreement (DTAA) with countries such as Mauritius and Singapore. A large number (by some estimates, as much as 50 per cent) of FIIs have until now routed their investments via Mauritius in order to avoid paying taxes on their investments in India. This status is now threatened by GAAR. » Read more..

Goldman Sachs’ recent announcement that it is upgrading the Indian equity market from underweight to market weight has created a palpable sense of excitement. In a market where good news is hard to come by, many market participants have seized upon this piece of news just as a drowning man clutches at straws. Our view is one of guarded optimism. At the end of the first quarter of 2012, the domestic and international problems that led to the Indian markets nose-diving by almost 25 per cent in 2011 are not quite over.

But first let us examine Goldman Sachs’ reasons for the upgrade. Its analysts argue that the European problems that had weighed heavily on the Indian markets have abated. The month of March has gone by without inflicting much damage: while the Congress Party’s performance in the state elections was disappointing, at least the budget was neutral vis-à-vis the markets. Moreover, Goldman’s analysts derive optimism from the fact that core inflation is softening. They also expect domestic growth to revive in the second half of the calendar year. They have also suggested that as the year progresses earnings estimates for 2013 could get revised upward. And finally, they argue that current valuations are attractive compared to the 10-year average of the MSCI India index. » Read more..

Interpreting ting macro-economic data: Three key pieces of economic data, their significance, and points to keep in mind while deriving conclusions from them

BY AMAR PANDIT, CEO – MY FINANCIAL ADVISOR

A savvy investor should be able to understand macro-economic developments. To do so, he must be able to interpret economic data, which signal changes in the economic environment. Remember that these developments affect the value of your portfolio. The stock market doesn’t just discount sentiments; it reflects macro-economic fundamentals too. Let us try to understand three pieces of data – the Wholesale Price Index (WPI), the Index of Industrial Production (IIP), and the Purchasing Managers’ Index (PMI) – that appear every month.

» Read more..

BY AMAR PANDIT, CEO – MY FINANCIAL ADVISOR

Intro: What the Finance Minister has given with one hand in the form of lower income tax burden, he has more than taken away by hiking indirect tax rates

In this budget the Finance Minister had to deal with the task of reining in a runaway fiscal deficit. So he has indulged in some jugglery. While he has offered some concessions to the salaried class on income tax, he has raised indirect taxes (both excise duty and service tax), which will have a cascading effect on the prices of a wide range of goods and services and adversely affect everyone’s wallet.

Income tax burden reduced

As is customary every year, the Finance Minister offered some tax concession to the salaried tax payer. He raised the minimum tax exemption limit from Rs 1.8 lakh to Rs 2 lakh. This will put an additional Rs 2,060 into every tax payer’s pocket. » Read more..

The budget and your wallet: A look at how this year’s annual budget could affect your personal finances

Amar Pandit

This year’s budget comes against a difficult economic environment of high fiscal deficit (could come in anywhere between 5.6-6 per cent for FY12); high inflation for the past two years, which has shown signs of softening in 2012 but could spike again if crude oil prices remain high; slowing economic growth (third quarter GDP growth came in at a low 6.1 per cent); and problems in Europe that have been eased temporarily due to injection of liquidity by the European Central Bank (ECB) but have by no means been resolved. Let us turn to what is expected from the Finance Minister (FM) on March 16 and what impact his measures could have on your personal finances. In some cases, the impact of his actions will be direct, and in others, indirect.

» Read more..

Skidding on oil
By causing the price of crude oil to rise, the Iran-Israel standoff and ECB’s quantitative easing programme threaten India’s economic and stock market recovery in 2012
Amar Pandit
In 2011, the single-most important factor that caused economic growth to decelerate, foreign portfolio investments to shy away, and stock markets to nosedive was high inflation (weak global growth would rank a close second). At the beginning of 2012 the outlook had improved. Inflation is expected to soften this year due to a positive base effect and lower food prices. The central bank is expected to begin cutting rates. By encouraging consumption and investment, this should lead to a revival in corporate earnings and sustain the stock market rally (driven by strong portfolio inflows at the start of the year). The unfolding of this positive script is however now threatened by rising crude oil prices.

» Read more..

Publication: Mint Money;Mumbai,   Date: October 7, 2011;    Section: Markets & Finance; Page: 17

With loans taking longer to be disbursed, getting a home in the US, even for an American with a good credit history, has become difficult

I was in the US a couple of weeks back and met a lot of professionals in the financial advisory space. A lot of financial professionals that I spoke with talked about hiring freezes in most banks and financial institutions. It was also surprising to see that many financial advisers were talking about increasing investment allocation in India. » Read more..

Publication : Complete Wellbeing; Stay Well, Section: Manage Money Matters; Vol V; Issue 10; August 2011

Spot and plug the little leaks that are draining you of your wealth

Arjun Nair, an advertising industry executive in his late 40s, has been suffering from what I call the ‘Financial Leakage Syndrome’. Although he earns an enviable INR 24 lakh per year, post tax, he finds it difficult to save a single penny. His argument: “Life has become so expensive, plus these taxes and loan EMIs are killing me”. His wife, Deepa, however disagrees with Arjun and says that this has been the case for the past 20 years of their marriage. She strongly felt that they could save much more as a family. I agree with Deepa and believe that there are several ways in which they could have cut down on their financial leakages.

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