Raj Tomar

Just imagine, all your life you pay >50% in TAXES and for huge life & health insurance PREMIUMS, but post-retirement (>65Yrs | >10Cr Citizens) if something happens, you ONLY pay from your savings because Health Insurance does NOT apply.

Health Insurance PREMIUMS:
1️⃣ FY23-24: Rs.109,000Cr
2️⃣ FY22-23: Rs.081,997Cr
3️⃣ FY21-22: Rs.073,052Cr

There has been a clear and shocking increase of 24.6% YoY ⬆.

Number of LIVES COVERED under Individual HEALTH INSURANCE:
1️⃣ FY22-23: 5.28Cr
2️⃣ FY21-22: 5.16Cr
3️⃣ FY20-21: 5.31Cr

There has been NO increase but DECREASE ⬇ in the number of policies sold.

✨ Hence, it is emphatically clear that
✨ You & Me are paying higher premiums
✨ which is an OOPE
✨ Out-Of-Pocket-Expense

PS: The only other simultaneous increase has been in the ARPOBs of a hospitals. (ARPOB = Avg. Revenue Per Occupied Bed/Day)

🎾 Do you think opening the health insurance to more than 10Cr Senior Citizens with >65 Years of age can help contain this huge Premium INFLATION?

In theory, it can!!

▪ 10Cr Sr. Citizens
▫ 5Cr Sr. Couples
▪ 2.5% buy Health Insurance (say only urban seniors)
▫ Avg. Coverage = Rs. 10Lacs
▪ Avg. Premium = Rs. 100,000/ Year
▫ Total Revenue Generated in the 1st Year= Rs.12,500Cr

It is obvious that this revenue will only grow YoY with-

◼ Premium inflation and with
◻ More Sr. Citizens joining the bandwagon.

✅ Now, do you think the Health Insurance companies will DECREASE the PREMIUM growth rate from 24.6% to say 10-15%?

If NO, then it is a very obvious signal that Healthcare is never going to be AFFORDABLE.

Now, to the MOST IMPORTANT QUESTION,

👴 What should be included in a POLICY dedicated to Senior Citizens?

For eg.- A few medical & supporting equipment, Healthcare at Home, more Doctor Consultations, Tele-Consultations etc.

What is your point-of-view?

How to recover the interest paid on your home loan:

Say you took a ₹80 lacs loan for 20 yrs at a rate of 8.5%

The total EMI that you need to pay is ₹69,426

The total interest you will pay is ₹86.6 lacs over 20 yrs

You borrowed ₹80 lacs and paid even more in just interest

Here’s how to get it back if you have some surplus left:

↳ Save 12.5% of the EMI that you pay every month
↳ That will amount to about ₹8,700 every month
↳ Invest the same each month for 240 months
↳ Assume you get a return of 12% p.a.

At the end of 20 yrs this will amount to ₹86.9 lacs.

This is one way to get your home loan interest free.

Of course it depends on your personal circumstances.

But if you can save just 12.5% of EMI more, this will work.

Data Reveals PM Modi Has Best Record On Inflation Among All Prime Ministers
The reforms, fiscal discipline, and supply-side focus of the Modi government translated into exemplary inflation management. https://lnkd.in/g-aMpxY2

Accounting vs finance

You pay ₹60.02 when you buy ₹50k shares on Zerodha:

Here’s a list of all the charges you pay on Equity delivery:

↳ SEBI charges: ₹10 / crore
↳ STT/CTT: 0.1% on buy & sell
↳ Brokerage: Zero for Equity delivery
↳ Transaction charges: NSE: 0.00325%, BSE: 0.00375%
↳ Stamp charges: 0.015% or ₹1500 / crore on buy-side
↳ GST: 18% on (Brokerage + SEBI charges + transaction charges)

Different charges apply to:

↳ Intraday equity
↳ F&O - futures
↳ F&O - options
↳ Currency - futures and options
↳ Commodities - futures and options

You can calculate the brokerage for every trade with their brokerage calculator.

The second policy listed in the Mint-Beshak Health Insurance ratings. Why is it good?

Coverage of non-medical items, no disease specific limits and (relatively) quick discharge approval.

What is Dupont Analysis?
Here’s everything you need to know:

Dupont analysis is a framework for understanding the drivers of Return on Equity (ROE).

It was created by DuPont  in the early 20th century and is still used as a tool for performance assessment and financial management to this day.

Dupont Analysis breaks down ROE into three major components:

• 𝗣𝗿𝗼𝗳𝗶𝘁 𝗠𝗮𝗿𝗴𝗶𝗻 - A measure of Operational Efficiency
• 𝗧𝗼𝘁𝗮𝗹 𝗔𝘀𝘀𝗲𝘁 𝗧𝘂𝗿𝗻𝗼𝘃𝗲𝗿 - A measure of Asset Use Efficiency
• 𝗘𝗾𝘂𝗶𝘁𝘆 𝗠𝘂𝗹𝘁𝗶𝗽𝗹𝗶𝗲𝗿 - A measure of Financial Leverage

This method helps to understand how efficiently a company is using its equity to generate profits.

𝗛𝗲𝗿𝗲’𝘀 𝗮 𝗯𝗿𝗲𝗮𝗸𝗱𝗼𝘄𝗻 𝗼𝗳 𝘁𝗵𝗲 𝘁𝗵𝗿𝗲𝗲 𝗰𝗼𝗺𝗽𝗼𝗻𝗲𝗻𝘁𝘀:

Return on Equity (ROE)
=
Net Profit Margin
×
Asset Turnover
×
Equity Multiplier

With the components broken out, you can now see if the driver of ROE is profit margins, efficient use of assets, or significant use of debt.

Example:

Net Income = $1,000
Revenue = $10,000
𝗣𝗿𝗼𝗳𝗶𝘁 𝗠𝗮𝗿𝗴𝗶𝗻 = 𝟭𝟬%

Revenue = $10,000
Assets = $5,000
𝗔𝘀𝘀𝗲𝘁 𝗧𝘂𝗿𝗻𝗼𝘃𝗲𝗿 = 𝟮

Assets = $5,000
Equity = $2,000
𝗙𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝗟𝗲𝘃𝗲𝗿𝗮𝗴𝗲 = 𝟮.𝟱

𝗗𝘂𝗽𝗼𝗻𝘁 𝗔𝗻𝗮𝗹𝘆𝘀𝗶𝘀 = 𝟭𝟬% 𝘅 𝟮 𝘅 𝟮.𝟱 = 𝟱𝟬%

📈 In the world of saving on taxes while making your money grow, Equity-Linked Savings Schemes (ELSS) shine brightly for smart investors. When it comes to managing our money wisely, ELSS is appealing not just because it helps us save on taxes, but it also has the potential to significantly increase our savings over time.

Why ELSS is a Top Pick:

1️⃣ Best of Both Worlds: ELSS stands out because it efficiently reduces your tax bill and can also increase your savings through its investment in the stock market. This makes it a perfect option for those who want to grow their wealth and save on taxes.

2️⃣ Quick Access to Your Money: ELSS has the shortest lock-in period of just three years among tax-saving options under Section 80C. This means you can get to your money relatively faster, all while it has the chance to grow.

3️⃣ Easy to Start Small: You can start investing in ELSS with small amounts regularly through Systematic Investment Plans (SIPs). This helps you save in a disciplined way, even if you’re on a tight budget.

4️⃣ Spreading Your Bets: By investing in a mix of different stocks, ELSS funds spread out the risk and tap into the growth potential of various sectors and companies.

As we focus on improving our financial health, adding ELSS to our investment mix can really help in reaching our goals of saving on taxes and building our wealth.

The combination of saving money on taxes and the chance for financial growth makes ELSS a great choice for those looking to make the most of their investments in a smart way.

🤔 Something to Think About:

While ELSS is very appealing, it’s important to make sure it fits well with your overall financial plan and how much risk you’re comfortable with. Like any investment in the stock market, there could be ups and downs, so having a solid plan is key.

Although the lock-in period is only three years, financial experts often recommend staying invested in ELSS for a minimum of 5 to 7 years. This extended investment horizon allows investors to ride out market volatility and benefit from the compounding growth of equities, maximising the return on their tax-saving investment

Recently RBI introduced two credit card reforms. It asked banks to:

1) Allow you to change your billing cycle. You can optimize this for expenses. See example.

2) Warn people what paying just minimum amount due means. See example. Interest free period gets reversed.

If you want to learn about business, the late 1800s and 1900s offer absolute gems.

Here are the best books on some of the most successful businessmen of all time:

1. Titan - The Life of John D. Rockefeller

Inflation-adjusted, Rockefeller would be worth over $400 billion.

2. The Autobiography of Andrew Carnegie and the Gospel of Wealth

Andrew Carnegie was an industrialist best known for his company Carnegie Steel.

In today’s dollars, his net worth would be around $300 billion.

3. The House of Morgan - An American Banking Dynasty

J.P. Morgan was an American financier and investment banker who shaped corporate finance and Wall Street like no one else.

4. The First Tycoon - The Epic Life of Cornelius Vanderbilt

Cornelius Vanderbilt was an American business magnate who built his wealth in railroads and shipping.

5. Henry Ford - My Life and Work

Henry Ford founded Ford Motor Company and developed the assembly-line technique of mass production.

Ford was an inventor. When asked about his wealth, he allegedly answered, “I don’t know, and I don’t care!”

Don’t wait till July, check your taxability now. Today is the last day to pay advance tax:

What is advance tax?

Tax paid in advance instead of a lumpsum payment at the end of the year.

Who has to pay this tax?

Salaried people, freelancers and businesses whose total tax liability is more than ₹10k in the financial year.

But wait my employer already deducts TDS so I have nothing to worry about?

That’s true, but do you have any other income say:

↳ Income from rental from property
↳ Income from capital gains
↳ Income from dividends
↳ Income from interest

You have to pay tax on all these incomes also.

So, let me break it down in a simplified manner:

↳ Say your total income from all sources for the FY i.e.. from Apr to Mar is ₹25 lacs
↳ Say, tax payable on this income is ₹7 lacs as of Mar
↳ Your TDS deducted on income till Mar is ₹5 lacs
↳ So you still need to pay the balance ₹2 lacs

If you wait till July to pay this tax when you file your taxes, then you are liable to pay penal interest.

Why?

Because you were supposed to pay tax before Mar 31st if you had any balance remaining.

Look at the example below for a sample calculation in case someone had a tax liability of ₹3 lacs

In term insurance choose regular pay or limited pay? Regular pay = pay each year. Limited pay = pay more, but for fewer years.

Which is better

Nifty Small Cap 250 is down 13% & Nifty Small Cap 100 is down 14.4%, even the worst active small cap fund has done better than the index.

Dont blindly follow the passive strategy, your portfolio needs both :)

BREAKING. ICICI Prudential AMC Ltd stops lumpsums into its midcap and small cap funds. SIPs/STPs up to Rs 2 lakh per month allowed. With effect from 14th March.

There is so much of debate around the HDFC Banks Stock price.

Here’s the Net Profit growth of the bank for the last 20 years.

You really think the bank will not be able to increase the deposits or be able to cross sell to the HDFC Ltd clients?

The real size of Africa

Africa has the same number of people as – 1.4B. It also has a younger population than India. It’s is also well-diversified although less advanced than India.

The GDP of the two regions are also comparable – $3T for Africa and $3.8T for India. But Africa has much more natural resources than India. It is a naturally blessed with everything. It also has more than 10x the land area of India.

While everyone talks about Asia and how this is Asia’s century, is making slow and steady strides. The foreign investors are waking up to Africa’s potential. Its young population coupled with its natural resources make it the continent of the future.

Africa’s biggest challenges are self inflicted. Civil Wars and poor governance has not let the region grow. But its young population are waking up to the economic realities. They want economic .

Young Africans are hopeful about the future. Whenever I talk to them, they sound optimistic. They know they can become rich and successful. Africa might take more time than others, but it’s on the right path.

𝗛𝗲𝗿𝗲 𝗶𝘀 𝘄𝗵𝗮𝘁 𝘁𝗵𝗲 𝗙𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝗗𝘂𝗲 𝗗𝗶𝗹𝗶𝗴𝗲𝗻𝗰𝗲 𝗖𝗵𝗲𝗰𝗸𝗹𝗶𝘀𝘁 𝗜𝗻𝗰𝗹𝘂𝗱𝗲𝘀:

▶️ General checks

▶️ Analytical procedures

▶️ Internal controls check

▶️ Property, plant, equipment, and intellectual property checks

▶️ Inventories check

▶️ Account receivables check

▶️ Revenues check

▶️ Loans and interest expenses check

▶️ Account payables check

▶️ Commitments and contingencies check

▶️ Salaries, employee costs check

▶️ OPEX check

▶️ Equity check

▶️ Loans and financial liabilities check

▶️ Intercompany transactions check

The Indian rose to 8.4% growth in the December quarter, attributed mainly to a robust growth in manufacturing and construction sectors, as it maintained its status as the world’s fastest-growing major economy.

However, the growth during the fiscal third quarter period was a major step up from the 4.4% recorded in the corresponding period of the previous fiscal year

Correction: Lumpsums have been stopped at SBI Small Cap since 2020

He listed some differences between the two.

GOALS

📌In trading he called for REALISTIC GOALS
In investing he called for PERSISTENT OPTIMISM
He said, “We do not trade in what we invest, and we do not invest in what we trade”.

METHOD TO BE FOLLOWED

📌He also remarked, “The biggest profits will be made (by investing in a stock) when there is no large institutional shareholding (in the stock) and most people will tell you about the stock and tell you why not to buy it.”

📌When investing, however, a person has to be disciplined and have a gameplan.

📌In trading, he said that a person should have a broad idea of the direction of the prices and remember that “trend is your friend”.

HANDLING UNCERTAINTY

📌In trading, it is best to play knowing your advantage or the lack of it, rather than leaving winning to pure chance.

📌He added that take the first loss and exit, and do not wait accumulating losses and hoping that the trade will turn in your favour.

📌For handling uncertainty in investing, he said, that we must have conviction and be patient. “Patience may be tested but conviction will be rewarded,” he added.

FOCUS

📌The focus for a trader should always be on the movement of the prices,

📌In investing, the focus should be more on an internal compass. “Buy on broad direction, add on affirmation and exit (should be) an independent decision,” he said.

WHEN TO EXIT

📌When a bet goes wrong and there are losses in sight,

📌He said that a trader should remember that “bhaav bhagwan, hum kadardhan”.

📌For an investor, on handling losses, he said, “Sell on irrational exuberance or sell on failure of hypothesis”.

Trading requires SKILLS and is tough but Investing requires PATIENCE.

Mutual funds are betting highly on THIS sector. A sector with a Rs. 37,200 Crore market in India!

I’m talking about the healthcare sector 🏥
So the real question is, based on recent mutual fund trends why is the healthcare sector taking the limelight right now?

▪️ High M-o-M growth in mutual fund inflow compared to other sectors.
▪️ The sector is growing at 22% p.a. due to innovation in health-tech
▪️ The increasing technology adoption in Healthcare could be a driving force for its growth. The use of Telemedicine and electronic health records are a few examples of an increase in technology in healthcare
▪ The total amount of money invested in Digital health has reached an all-time high of Rs. 2,900 crores

But that’s not all.

Mutual fund houses are investing heavily in the infrastructure sector as well. This is mainly because of the increase in government spending, especially based on the Union Budget 2024.

▪ The sector is contributing to 17% of GDP.
▪ It’s expected to grow by 21% in the next 6 years.
▪ The government’s focus on infrastructure has clearly been shown in the union budget which increased by 10 Lakh crore in the last Financial year.
 
Besides healthcare and infrastructure, these sectors are popular too. The top sectors where mutual fund ownership vis-à-vis the BSE 200 is at least 1% higher were:

⚗️ Chemicals (10 funds over-owned) e.x.  Aarti Industries, Deepak Nitrite Limited
💡 Capital goods (14 funds over-owned) e.x.  BHEL, AIA Engineering
🚗 Automobiles (10 funds over-owned) e.x.  Maruti Suzuki, Tata motors
💰 Non-banking fin corps (10 funds over-owned) e.x.  Bajaj Finance, IRFC

The overall growth in various sectors of the Indian economy is because of:

◾ Growth in Foreign Direct Investment, hitting $17.51 billion last year alone.
◾ Govt. plans on spending ~₹143 lac cr on infrastructure by 2030
◾ Govt. leveraging tech to reshape India’s healthcare system (Ayushman Bharat Digital Mission)
and more.