Financial Planning and its Benefits

“Many People Take No Care of Their Money Till They Come Nearly to the End of it, and Others do Just the Same With Their Time.”     

– Johann Wolfgang von Goethe

Financial Planning and its Benefits

As human beings, we are all blessed with the ability to think and act. Our minds are the best supercomputers that have the ability to think and plan for the future ahead. One of the most important things to do, therefore, is to plan your finances in order to keep your future secure. Financial planning is of utmost importance because it concerns not just your own, but the future of your loved ones as well.

When you have planned your financial future, you will no longer have to worry about long term life goals or even unforeseen expenses as a medical emergency, accident or a job loss. If you adopt a disciplined approach towards your money, you can put away that little extra amount each month from your budget and can use it on a rainy day.

Most of all, proper financial planning leads to the ultimate goal of living a comfortable retired life, when there is no longer a pay check coming in. After you have worked hard all your life, you can put your two feet up and enjoy your retired life in style! But all that can happen if you go about with financial planning when you are young.

If you do not know where to begin, here are seven easy steps that will help you go about with your financial planning:

Set Your Financial Goals :

The very first step of financial planning is setting of goals. You have to identify your goals and assign a

value to each of them. Your financial plan must be divided into short term, mid-term and long term goals. Depending upon the stage of life cycle that you are in, your goals can be categorized under the following broad heads:

  • Marriage
  • Lifestyle
  • Owning your own home
  • Education of Children
  • Marriage of children
  • Retirement

While identifying your goals, always keep in mind that you have to take into account emergencies and plan your present and future strategies accordingly.

Plan Your Investments :

Budgeting is a very important part of planning an investment strategy, so once you have identified your financial goals, divide your income into three heads:

  •  Expenditure
  •  Investments
  •  Savings

Your investment strategy should depend upon the following

  • Your risk taking ability based upon your age, income and number of dependents on you.
  • How much of a risk you are willing to take depends upon your appetite for risk.
  • You must also take into consideration your know how about financial instruments and how much time you can spend monitoring your investments.

Do bear in mind that though high risk instruments deliver high returns, as compared to low risk instruments, they also require some amount of technical know how and the ability to track the markets. It is therefore very important for you to study the various investment options and their implications carefully, before you decide to take the plunge.

Managing Risks :

While you can hope and pray that everything goes well in your life, there is no ruling out the possibility of mishaps. In order to safeguard your family in case of any untoward incidents, you need to be adequately insured. The three categories of must have insurance policies are:



  • Life Insurance
  • Health/accident insurance
  • Insurance for loans

The benefits of taking insurance are as follows:

  • In case of your sudden demise or a crippling disease or accident that leaves you unable to earn, your family is secure and does not have to worry about their daily bread.
  • In case of hospitalization for critical illnesses that normally cost a lot, the hospital bills are taken care of without causing a strain on your finances.
  • In case you have purchased an asset (this is most applicable in the case of a home loan) make sure you shell out those extra bucks and take an insurance policy on it. Once again, in case you are not around to pay off your loan, the insurance company continues to pay off the loan to the bank and your family does not have to worry about keeping the roof over their heads.

In case of insurance policies, you should try and take as many till such time you are young. The older you get, the higher is the rate of premium you are required to pay.

Planning for Your Retirement :

When you are young and in the prime of your career, you are so busy earning money and living life king size that it is easy to forget about the travails of old age. That is exactly why you need to start planning for your retirement from your youth.

  • Long term options for investment are best suited for retirement.
  • Investing in equity helps you build considerable wealth over the long term and you can reduce risks as well if you remain invested over the long term.
  • You can also consider other options for investment such as pension plans, public provident fund and the National Pension Scheme.

If you intend to maintain the lifestyle you are leading now, post your retirement, you must take into consideration the inflation factor. You therefore need to invest in a manner that your retirement corpus grows at a higher rate than the inflation rate.

How to create the Financial Plan :

Draw up an organized budget.

This is the first and the most important aspect of drawing up your financial plan. A detailed budget will serve the following purposes:

  • It will list out all your expenses
  • It will show you where you are overspending and can cut costs
  • It will help you spend and save wisely

Cash flow planning

If you keep a hawk eye on what your current cash flow is like and can hazard an estimate about what your future cash flow is going to be like, you can not only deal with your expenses deftly, you can also stay liquid and deal with emergencies in case of any.

Managing your loan

This is the third and most important part of creating a financial plan. Managing a loan involves

  • Allocating enough funds for EMI repayment each month
  • Plan for large repayments when you have some extra cash in hand

Tax Planning :

In order to take care of tax planning, you need to compute your taxable income to get a hold on your cash flows. You can save on taxes effectively if you

  • Use all the possible tax deductions that you are eligible for and invest in tax saving instruments that best suit your purpose.
  • You must make such investments earlier in the financial year in order to get the full benefits.
  • The numerous tax laws of the country may seem complicated, but having a basic understanding of them and tax saving instruments will help you save a large part of what you earn, and can be invested elsewhere for better returns.

Assessing and Reviewing your Financial Plan :

Change, they say, is the only constant in life and thus your life goals will change as you grow older. Naturally then you cannot have one constant financial plan that you can rely on for the rest of your life. You must review your plan at regular intervals to see if your plan is meeting your financial goals. The three factors you should asses your plan on are:



  • Has your risk appetite increased or decreased?
  • Do you need to alter the allocation of your assets in your portfolio?
  • Have your insurance needs altered?

Ideally you should review your financial plan once every six months or at least annually to see whether or not your financial plan is serving your financial goals.

Can you do your Own Financial Planning?

If you have read the above steps we have elucidated for you above, you know by now, that planning your finances is not really rocket science and can be done yourself. So if you are looking for a simple answer to whether or not you can do your own financial planning, the answer is yes. However, effective money management requires quite a bit of effort and mostly a lot of discipline.

Whether you need professional help in managing your money will depend upon the three important factors :

Do you have the Requisite Knowledge?

In order to adopt a “do it yourself” approach when it comes to handling your money, you need to have the financial wisdom to make an effective plan. For instance, are you aware of the inflation rate and how much or corpus do you need to have in order to lead a comfortable retired life? You also need to have the ability the track the markets and assess the merits of the entire gamut of investment and insurance products in order to see what are the products that are a perfect fit with your financial goals.

Do you have Sufficient Time?

Thanks to abundance of knowledge that is available all the time on print, internet and television acquiring the basic financial knowledge is not very difficult. The next and more important factor is do you have enough time to actively track your investments and see whether they need alternations. This may be required either when there is a major change in the macroeconomic environment thus making re-allocation necessary or when there are some changes in your life goals.

Can you afford it?

A professional financial planner may not be the cheapest option for you. However you need to make a judgement call and see whether it is worth spending your precious time and effort on money management that may not be your stronghold, or would you rather make an adjustment to your finances to pay the financial planner his fee and be at peace knowing that he will keep in touch with you to see whether your financial goals have altered and whether or not you need to make changes to your portfolio. Overall, there is no denying that the advice of an expert will help you see your money grow in a manner you may not have been able to manage yourself.

In conclusion it must be said that if you are wary of paying an expert a fee you should try and go ahead with your do it yourself approach and see if you can maximize the value of your portfolio. However if things are getting too complex for you too handle,you might as well hand things over to an expert.

For more information , Kindly contact to our Financial Planning Adviser Mr. Shreyans @ 079 68174040 OR sent your query on

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Forthcoming IPO_Tejas Networks Limited

Tejas Networks Ltd.
Issue Open Date 14-Jun-17
Issue Closing Date 16-Jun-17
Price Band (Rs.) 250 – 257
Minimum Bid Quantity. 55
Issue Size (Shares) 30711605
Market Lot 1

Objects of the Issue:

The Offer comprises the Fresh Issue and the Offer for Sale.

1. Offer for Sale – The company will not receive any proceeds from the Offer for Sale.

2. Fresh Issue – Company proposes to utilize the Net Proceeds towards funding the following objects:

A. Capital expenditure towards payment of salaries and wages of research and development team;
B. Working capital requirement; and
C. General corporate purposes.

Business Description :

Tejas Networks Limited Logo

Incorporated in year 2000, Tejas Networks Ltd is Bangalore cartier mens bracelet leather
based optical and data networking products company. Trjas design, develop and sell products to telecommunications service providers, internet service providers, utility companies, defense companies and government entities in India and over cartier love bracelet 60 countries. These products are used in building high-speed communication networks to carry voice, data and video traffic from fixed line, mobile and broadband networks over optical fiber.

Tejas Networks build hardware and software products related to optical and data networking. The hardware is build using modular approach and the software-defined architecture allows the company to remotely upgrade the hardware with new capabilities and features. Tejas Networks outsource most of its manufacturing to electronics manufacturing services companies.

Tejas Networks offer pay-as-you-grow business model where its clients purchase its products/services incrementally as needed.

Tejas Networks Ltd have filed 326 patent applications, with 198 filings in India, 87 filings in the United States and 6 filings in Europe, out of which 47 patents have been granted.

Company Financials:

Summary of financial Information (Consolidated)
Particulars For the year/period ended (in Rs. Million)
31-Mar-16 31-Mar-15 31-Mar-14 31-Mar-13 31-Mar-12
Total Assets 8,383.03 7,280.56 7,452.00 6,563.40 6,397.81
Total Revenue 6,274.57 3,868.26 4,230.55 3,692.71 2,014.22
Profit After Tax 290.05 (178.66) 27.77 (790.43) (928.90)

Company Contact Information

Tejas Networks Limited
J.P. Software bracelet replica cartier Park, Plot No. 25,
Sy.No. 13, 14, 17 & 18, Konnapana Agrahara Village
Begur Hobli, Bengaluru 560 100
Phone: +91 80 4179 4600
Fax: +91 80 2852 0201

Tejas Networks IPO Registrar

Link Intime India Private Ltd
Link Intime India Private Ltd,
C-13 Pannalal Silk Mills Compound,
LBS Marg, Bhandup West, Mumbai 400078

Phone: +91-22-25963838
Fax: +91-22-25946969

Tejas Networks IPO Lead Manager(s)


Kindly contact cartier love bangle 079 66664040 for IPO subscription

view the website

Forthcoming IPO_Housing & Urban Development Corporation Ltd.

Housing & Urban Development Corporation Ltd.
Issue Open Date 08-May-17
Issue Closing Date 11-May-17
Application Money 100
Allotment Money
Price Band (Rs.) 56 – 60
Minimum Bid Quantity. 200
Issue Size (Shares) 204058747
Market Lot 1
Objective :
The objects of the Offer are: (i) to carry out the disinvestment of 200,190,000 Equity Shares by the Selling Shareholder constituting 10% of our Company’s pre-Offer paid up Equity Share capital our Company; and (ii) to achieve the benefits of listing the Equity Shares on the Stock Exchanges. Our Company will not receive any proceeds from the Offer and all proceeds shall go to the Selling Shareholder.

Business Description :

Our Company is a wholly-owned Government company with more than 46 years” experience in providing loans for housing and urban infrastructure projects in India. We have been conferred the status of

Miniratna (Category-I Public Sector Enterprise) by the GoI. As at September 30, 2016, our total sanctioned loans since our inception was ` 1,570,870.0 million, ` 612,305.4 million of which, or 38.97%, were Housing Finance (as defined below) loans and ` 958,573.2 million of which, or 61.02%, were Urban Infrastructure Finance (as defined below) loans. As at September 30, 2016, our total outstanding Loan Portfolio was ` 361,119.3 million, ` 112,951.1 million of which, or 31.28%, were Housing Finance loans and ` 248,168.2 million of which, or 68.72%, were Urban Infrastructure Finance loans and project-linked bonds.

Hudco Bhawan
India Habitat Centre
Lodhi Road
New Delhi ,
Delhi ,
Phone :

Email :
Website :

Alankit Assignments Ltd
Anarkali Complex
Jhandewala Extension

New Delhi

Listed at
Lead Manager
ICICI Securities Ltd
IDBI Capital Markets & Securities Ltd. (Formerly known as IDBI Capital Market Services Ltd.)
Nomura Financial Advisory & Securities (India) Pvt Ltd.
SBI Capital Markets Ltd
Government of India & Ministry Of Urban Development
Ministry Of Rural Development
President Of India



Click Here for registration

Forthcoming IPO_S Chand And Co Ltd.

S Chand And Co Ltd.
Issue Open Date 26-Apr-17
Issue Closing Date 28-Apr-17
Application Money 100
Allotment Money
Price Band (Rs.) 660 – 670
Minimum Bid Quantity. 22
Issue Size (Shares) 10947478
Market Lot 1
Objective :
The Net Proceeds from the Fresh Issue will be utilized towards the following objects:1.Repayment of loans availed by our Company and one of our Subsidiaries, EPHL, which were utilized towards funding the acquisition of Chhaya;2. Repayment/prepayment, in full or in part, of certain loans availed of by our Company and certain of our Subsidiaries, VPHPL and NSHPL3. General corporate purposes.
Business Description

We are a leading Indian education content company in terms of revenue from operations in Fiscal 2016. (Source :Nielsen Research Report). We deliver content, solutions and services across the education lifecycle through our K-12, higher education and early learning segments. We are the leading K-12 education content company in terms of revenue from operations in Fiscal 2016, according to Nielsen, with a strong presence in the CBSE/ICSE affiliated schools and increasing presence in the state board affiliated schools across India. As of December 31, 2016, weoffered 55 consumer brands across knowledge products and services including S. Chand, Vikas, Madhubun,Saraswati, Destination Success and Ignitor. We believe that these brands have benefited by our strong brand management philosophy which embraces consistent efforts to upgrade content quality and to update contentregularly. Further, in December 2016, we acquired 74% of the outstanding share capital of Chhaya PrakashaniPrivate Limited (our  ?Chhaya  Acquisition?), and we now offer four Chhaya brands including Chhaya and IPP. Our text books and instructional

materials are supported by our offering of technology driven methods of education and digital learning. We sell our knowledge products and services to schools and to students across their life cycle through our extensive pan-India network of sales offices, distributors and dealers. In Fiscal 2016, we sold 35.47 million copies of a total of 11,144 titles. Additionally, Chhaya sold 9.88 million copies of 433 titles in Fiscal 2016. Our top ten best-selling titles accounted for sales in Fiscal 2016 of 2.96 million copies, and 15 of our authors have each sold over one million copies of their titles during the last five fiscal years. We have a contractual relationship with at least 1,958 authors (including co-authors) for over five years as on March31, 2016. Additionally, Chhaya has contractual relationships with at least 24 authors (including co-authors) for over five years as on March 31, 2016. We use our track record of progressing authors‘ careers and providing on-going editorial team support to authors for creating new products and solutions and refreshing existing products to help usretain and attract the best authors. As of December 31, 2016, our distribution and sales network (not including Chhaya) consisted of 4,932 distributors and dealers, and we had an in-house sales team of 838 professionals working from 52 branches and marketing offices across India. Our Chhaya Acquisition has expanded our presence in Eastern India to include an additional771 distributors and dealers as of December 31, 2016. We consider our schools, teachers and student customers to be our ?touch points?, and our sales teams are responsible for forging relationships with our customers across our K-12, higher education and early learning businesses. In our K-12 business, we market our content to educators and schools to place our products on prescribed and recommended reading lists. In higher education and early learning, we market our products directly to distributors, dealers and consumers.

Lead Manager :

Axis Capital Ltd.
Credit Suisse Securities (India) Pvt Ltd.
JM Financial Institutional Securities Ltd


Click Here for registration

Railway Budget 2016

Railway Budget 2016

Overview :

* Budget reflects aspirations of the entire railway family
* Rail Budget reflects aspiration of all
* Core objective is to improve individual experience
* Rail Budget is the vision of PM Modi
* Making all efforts to turn PM’s vision into reality
* Railways facing headwinds on tepid economic growth
* Railways have stood the test of time
* Need to overhaul Railways’ work culture
* Need to bring in new approach
* Will lay out three pillars of strategy
* Looking at new areas for generating revenues
* Need to reorganise, rejuvenate, restructure railways
* Railways facing headwinds from 7th pay panel burden
* Will engage with global agencies for funds
* Absolute deductions planned in expenses such as diesel
* Have significantly reduced cost of power procurement
* Will revisit all rules, structures to overhaul railways
* To improve procurement practises at par with international norms
* New revenues through changes in freight policies
* Punctuality has gone up to almost 95%
* To include implementation reports in Budget
* Carry 23 mln passengers every day
* Special teams to screen railway operations


* FY17 investment seen at 1.21 trln rupees
* Investment rate of capex has increased substantially
* FY17 capital expenditure seen 1.2 trln rupees
* FY17 revenue seen 1.84 trln rupees
* Capex to grow exponentially
* Ramped up capex in FY17
* FY17 operating ratio seen 92%
* Increasing rigour on cost optimisation in FY17
* Freight’s contribution to earnings seen 67%
* FY17 gross budgetary support seen 400 bln rupees
* 44 new projects planned FY17 worth 927 bln rupees


* 87.2 bln rupees saved from last year budget estimate
* FY16 operating ratio seen 90%
* FY16 loss from subsidising passenger fares seen 300 bln rupee


* To be at forefront of infrastructure growth
* Railways will be at forefront of infra growth
* To generate employment for 90 mln man days by FY18
* To commission broad gauge lines at 7 km/day FY17
* FY17 track commissioning aim 2,800 km
* Aim to have zero direct discharge of human waste by 2020
* Reserved accommodation to be available on demand by 2020
* Aim 80 km/hour avg speed of express train by 2020
* Freight speed seen at 50 km/hr by 2020
* To eliminate all unmanned level crossings by 2020
* Taken action on 139 Budget announcements made last yr
* To run semi high-speed trains on Golden Quadrilateral by 2020
* Action initiated on 139 FY16 Rail Budget announcements
* To meet reservation on demand by 2020
* Will take a zero-based budgeting approach
* To take zero-base budgetary approach for freight
* To conduct recruitment online
* To set up Margao, Hazira ports FY17 via PPP
* To spend 8.5 trln rupees over 5 yrs to modernise rail infra
* To hasten electrification of railways working with Power Min
* To build more dedicated freight corridors
* To up FY17 allocation for electrification by 50%
* To generate employment of 140 mln man-days in 2018-19
* 65,000 additional berths generated in FY16
* Taken steps to significantly improve svcs for rail passengers
* Dedicated IVRS system receiving over mln feedback calls daily
* Set up mechanism to get direct feedback from customers
* Responsiveness to customer needs touched new heights this yr
* Initiated IT-based internal audit
* Signed MoUs with some zonal railways
* To move to contract award system online in FY17
* Social media being used as a tool to bring transparency
* Mission to ensure transparent bidding process
* To set up 2 loco units with 480 bln rupee invest
* To set up new loco units with order book of 400 bln rupees
* Aim to have 100 WiFi-enabled stations this yr, 400 in next 3
* To redevelop stations by different models
* Finalised 2 locomotive factories bids under ‘Make In India’
* E-ticket capacity 7,000 tickets/minute now vs 2,000 earlier
* Introduced 1,780 automatic ticket vending machines
* Initiated capacity augmentation on some busy routes


* Plan to electrify 2,000 km track in FY17
* Track laying to be at 13km/day in FY18, 19km/day in FY19
* North-South dedicated freight corridors in Delhi-Chennai
* Plan Kharagpur-Vijaywada freight corridor
* Plan Mumbai-Kharagpur freight corridor
* Decongestion on Jalandhar-Jammu line going on
* To put 3 freight corridor projects on high priority
* Mizoram, Manipur to come under broad gauge network soon


* Will scout overseas for rupee bonds
* To scout international markets for rupee bonds


* Secured funding from LIC at favourable terms
* Bankable projects assured of funding now
* LIC to invest 1.5 trln rupees over 5 years
* 1 rupee invest in rail can impact econ output by factor of 5
* In partnership with SAIL, NTPC, coal ministry on funding
* Signed MoUs with 6 states for JVs
* Got expressions from 17 states to form JVs
* MoUs with zonal railways for quantifying performance
* Forming JV with states for local rail projects
* Availing multilateral financing for station development
* Cabinet approved redevelopment of 400 stations via PPP model
* Bidding process in advanced stage to redevelop 4 stations
* To undertake bidding to redevelop some big stations next yr


* To raise quota of lower berth for women, senior citizens
* To build additional toilets in 475 stations before FY16 end
* Aim 17,000 bio-toilets before FY16 end
* Initiated audit for punctuality of passenger trains
* Disposable bed rolls at all stations for all classes
* 311 railway stations currently under CCTV surveillance
* All stations to have CCTV surveillance in phased manner
* Anti-falling measures in suburban coaches
* To eliminate accidents by adopting latest technology
* Entered into R&D pacts with Korea, Japan to improve ops
* All railway stations to be under CCTV surveillance in phases
* Supporting 120,000 concurrent users now vs 40,000 earlier
* Installed CCTV cameras at 311 stations


“The budget is not just a collection of numbers, but an expression of our values and aspirations.”

-Jecob Lue

Happy Budgeting !





Invest instead of spending this festive season !

The festival season is upon us again, and once again we are readying to usher in Goddess Laxmi into our home with Diwali round the bend. While this is the season to be jolly and bring in gifts and goodies for everyone, we are here with something that may well be a gift for you. If you are financially savvy and investing rather than spending is on your mind this Diwali, this blog post is just for you! We are here to tell you which trends are being buoyed by the festive cheer and will also hold you in good stead, over the medium to long term.

  • India is in a sweet spot

First up, let us take a look at the macroeconomic situation. There is little doubt about the fact that there is an undercurrent of buoyancy at the moment in the Indian bourses. This has largely to do with RBI swooping in with a larger than expected rate cut and the promise of more that is finanlly giving the confidence of an economic revival that has been expeted for so long. This economic revival deluded the markets in the first half of the year, with RBI holding onto the rate cuts  and the slowdown in order flows for most of the corporates in the first half of the year.


Things have however taken a turn for the better in the second half and looking forward we can indeed say that the investor confidence is at its peak. This is despite the fact that the global economic situation is far from perfect. India however remains largely insulated thanks to the fact that there are strong fundamentals backing the markets. India is in fact in a sweet spot as compared to the rest of the emerging economies thanks to the cooling oil prices and commodity prices on the one hand and higher indirect tax revenue that will help the Indian Government meet its fiscal deficit target this year.

  • The consumption theme

In this situation, the one theme that is standing out at this moment is that of “consumption”. The numbers too speak volumes. The BSE Consumer Durable Index  has given nearly 25 % returns from October 2014 to now, while the BSE FMCG Index has delivered returns of nearly 5%. Both these indices have outperformed the BSE Sensex that has given returns of 3.24% in the same time period.

And that is not all as far as statistical evidence is concerned. India is largely a consuming economy with a $1500 per capita income that comes on the base of an economy that is currently valued $1.8 trillion economy. With the per capita income expcted to double before the tturn of the decade, there is expected to be a significant rise in the disposable income of the population at large.

Over the festive season and indeed over the long term, the one segment to look upon as attractive is the “consumer discretionary” segment. Companies in this segment are the big retailers, service oriented companies, consumer durable firms and clothing companies. With interest rates coming down now, the basic cost of import is coming down for most of these companies. This, coupled with lower fuel prices has boosted the confidence of buyers. Investors should however look at the “consumer discretionary” segment to come into its full potential over the next two to three years. Our advice is to study the sector up close from now onwards and increase your stakes gradually rather then going the whole hog right away.

  • Betting on the financial sector

The other sector that we are bullish on is banking. The long and short of it is- when consumption is the dominating theme in the Indian bourses, can finances be far behind? Despite the fact that Indian banks are still bogged down by asset quality woes, there is a definite positive turn in the banking sector as of now. The most obvious reason is the fall in interest rates, the transmission of which start reflecting sooner than later. Though the credit offtake still remains unsatisfactory growing below 10% over the past year or so, this trend may finally change, with the hefty rate cuts.

One can safely say at this point that the large private banks are going to outperform their public sector peers going ahead, as they have their asset quality under control and are being buoyed by the talks of an imprending rise in their FDI limits. The good news is that this time round it is not just the large banks but the smaller wholesale banks that will benefit quite significantly from an interest rate cut.

To conclude therefore, we would like to say that going ahead in the next six months, Indian bourses are looking very attractive and raring to go. With interest rates on the imminent downward jouney, the capex plans are being firmed up by Indian companies and this in turn is giving a boost to the consumption theme that has been India’s dominating trend over the last few years. Therefore, wait no longer! This Diwali season, gear up to gain from the Indian markets. We have already given you the themes that are dominating the markets this festive season. Any other help you need while investing, we at Beeline are more than happy to step in!



Beat inflation by systematic investments in equity !

When policymakers talk about the economy, the one recurrent thing that comes up in all debates is “ inflation”. Now you may think that it is for the policymakers to break their heads over such matters as you are not impacted by it. But that is not true. The “aam aadmi” is the worst impacted by inflation. Let’s see how.

  • What is inflation?

In financial parlance, when the general level of prices goes up, its called inflation. In India the key measure of inflation is CPI or consumer price index. Through CPI the cost of the consumption of a basket of goods over a certain period of time serves as an evaluation index of the cost of living of the economy. This basket includes things such as food, shelter, clothing, transport and the likes. CPI is looked at as a measure of inflation, because it is stable by nature and the basket constituents do not change So to consider an example, if the weighted average of this basket of goods in 2014 was 300 and in 2015 it is 306 the rate of inflation would be 3% in 2015.

Inflation is an important measure to keep track of as policymakers need to reallocate resources as per the inflationary numbers, but how are common people impacted by inflation? High inflation leads to a high rate of interest thus increasing the cost of borrowing for those willing to take a home loan or any other such product. For fixed income families in the lower income group, the sword of inflation can make a deep incision as the prices for daily utilities rises at a rapid rate, and the common man is unable to keep up with the pace.

  • Inflation reduces the value of your investment

That’s not where the impact of high inflation ends. For those saving for the future, higher inflation’s spells trouble as well, as it poses a risk of the rise in cost for saving for any future goal such as owning a home, marriage, education of children and retirement. A common man mostly believes that his investments are “Safe” in fixed income securities, but what he does not realise that he is losing out substantially due to inflation. For example, if the rate of inflation is rising at 9% and Mr A is earning 6% in his savings account, he is oblivious to the fact that instead of becoming richer by 6%, as he believes he is, he is in fact getting poorer by 3%. His wages do not keep up with the rate in the increase of prices, and thus Mr A real cost of living goes up higher as a result of high inflation.

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  • Beating inflation with equities

However, the good news is that you can insulate yourself from the effects of inflation and yet earn good returns, by opting for systematic equity plans. At Beeline, we offer you plans where you can invest directly in equities systematically either in a fixed quantity of shares each month or a fixed amount to be invested in shares. The underlying principle and benefit of this method of investing is that you are protected from the stress of speculation thanks to rupee cost averaging. So in effect, you buy more stocks when the price is lower and lesser when the prices are high.

As the cost of your purchases in equities is averaged over several transactions, you are not only protected from the stress of timing the market but are also beating inflation effectively as equities have been the most efficient asset class to beat inflation over the long term. The trick however is to remain invested over the long term (at least five years) and diversify your investments across large, middle and small cap stocks.

To put things into perspective, consider this example. Over the last three years the average CPI has been 9.36 %. If you would have put your Rs 10,000 each month across a diversified  portfolio of stocks, you would have earned approximately 12.5% on a conservative estimate over the past five years (considering the returns of the BSE Sensex). On the other hand, investment in a five year FD would have fetched you 9.30%. So effectively your real rate of return would have been -0.06%.


This should make it clear to you that what you have been gauging as a safe is actually giving you’re the poorest rate of returns, so make the switch to equities. We, at Beeline, can help you construct the ideal SEP (systematic equity plan) that will give you the required protection from inflation and fetch your superior returns over a period of time.