We save and invest throughout our life for our future and our goals. We invest for buying our dream house, for our kids education, marriage, for a peaceful retirement, and the like. And we also understand the uncertainty quotient attached to our lives. For this reason, we try to secure our dependents' future with insurance, so that in event of our untimely death their goals are not compromised for lack of money. On the same lines, it is also essential to ensure that our dependents get the full and timely benefit of our investments.

Mutual Funds have gained popularity over time because of the innumerable benefits attached, including easy and hassle free operations, be it investing, redeeming or switching investments. Mutual funds provide the option of having accounts in joint names and to provide for nominees, to ensure a smooth Transmission process, i.e. the process of passing on the unitholders' investments to their dependents. It is a very simple process when there is a nominee, or when there are joint holders.

Whether your dependents wish to hold on to, continue investing or redeem the investments, after you, the first step would be transmission of the units in their names. So, we have the transmission procedure detailed below:

The transmission process is dependent upon the holding pattern and the registration status of nominees, if any, so there will be a different process to be followed under different scenarios.

Scenario 1: When the investment is held jointly

When a Mutual Fund investment is jointly held by 2 or 3 holders, then in the event of death of the primary holder, the other holder/s will have to transmit the investment in their name, and it becomes mandatory for them to appoint a nominee. The transmission process is simple, the other holder/s have to submit a letter (in a prescribed format) to the AMC along with a Death Certificate of the deceased unitholder in original or a notarized copy attested by a gazetted officer will also do. In case the bank and KYC details of the other holders were not submitted earlier, then the related documents will also be required.

Scenario 2: When the investment is held singly, with a Nominee/s registered

When there was a single unitholder and the investment is to be transmitted in a nominee's name, then to create a new account in his/her name, along with the above, the following are required:

> Bank account details of the nominee, along with a Cancelled Cheque

> PAN Number and KYC details of the nominee

Where the Nominee is a minor, then the following additional documents will be required:

> Proof of date of birth of the minor nominee

> A letter from the guardian, stating the minor's custody and his/her relationship with the guardian, along with a court order, if applicable.

Scenario 3: When the investment is held singly, and there is no Nominee:

The transmission process becomes a 'task' when there is neither a joint holder nor a nominee. In this case the claimant's will have to submit the details and documents as described in Scenario 1 and 2 above, along with the following additional documents:

> An indemnity bond from the legal heir/s on a stamp paper, franked for value as applicable in the respective state of execution of the Bond.

> Individual affidavits from the legal heir/s on a stamp paper, franked for value as applicable in the respective state of execution of the affidavit.

To note, if the transmission amount is less than the threshold limit (set by the AMC), then the claimant will be required to submit a document proving his/her relationship with the deceased unitholder. The process gets further complicated if the transmission amount is greater than the threshold limit, the claimant will have to submit a notarized copy of the probated will or a legal heir certificate, in this case.

To conclude,

1. Looking at the tedious process in Scenario 3, it is advisable to always keep your mutual fund investment either in joint name or register a nominee.

2. Many times what happens is, nominees are unaware of investments made or of any nomination thereof. There are various anecdotes which narrates of instances when after a long time after the death of the investor, his old wife or kids came across the MF investments of the dead husband or father, as the case may be, and those untouched investments made them rich overnight. But your family might not be lucky enough, and they may never come across your investment, or at least when they need it the most. It is extremely important that your dependents know about the investments so that they can get your investments' value in time, if need arises, so you must always Keep them in the Loop.

{s}
[[script type="text/javascript"]]
$(document).ready(function(){
new DiscussionBoard("divDiscussionBoard", "1128", "http://www.njwebnest.in/esaathi/index.php/discussion").load();
});
[[/script]]
{/s}

Mutual Funds for wealth creation:
If you'd ask about that one thing that all investors want from their investment in return, is Returns, the more the merrier. And Equity MF is the undisputed king in terms of returns over long periods of time. Equity Mutual Funds offer an immense potential to generate wealth on back of the underlying asset class: Equity. The last 5 year, 10 year and 15 year returns of the average of all Diversified Equity mutual fund schemes are 19.65%, 10.88% and 21.56% (Source: NJ Research).

Mutual Funds for Saving Tax:
Every year, we look to invest for saving tax, and quite often we fall for products which do save tax, but do not generate enough returns, and we generally get stuck with the investment for years because of the long lock in periods. Mutual Funds offer an excellent opportunity to investors for saving tax, in addition to the stupendous wealth generation potential it offers, as narrated above. An investment of upto Rs 1.5 Lacs in a year in ELSS MFs are exempt from tax u/s 80C of the income tax Act. So an investor can save tax of upto Rs. 46,350* a year by investing in ELSS schemes, *(For a resident individual falling under the 30% tax bracket, for FY 2018-19). Talking about returns, the last 3 year, 5 year and 15 year returns generated by the average of ELSS schemes are 10.08%, 18.93% and 21.62% respectively (Source NJ Research). And lastly lock-in, ELSS has the least lock-in period across the tax saver category, of just 3 years.

Mutual Funds For Emergencies:
People save money for the uncertain future, you don't know what's going to happen next, there can be punctuations in income, expenses uncalled for, medical emergencies, and the like. People usually maintain some balance in their saving bank accounts for emergencies, saving account is the preferred choice because of the liquid nature of the same. Mutual Funds offer an alternate to investors to cater to emergencies, in the form of Liquid Funds, wherein investors get liquidity as well as slightly better returns than saving accounts.

Mutual Funds for Regular Income:
People generally invest in fixed deposits with interest payout option to get a regular monthly income, or buy a property with the view to get monthly rental income. However, in the former case, the interest rates are too less and at times investors end up eroding the principal value of their investment; in the latter case, 1. The rental yield in India is in the range of a meager 2-3%, and 2. Property prices have also remained flat lately. Mutual Funds offer a better alternate to investors seeking regular income, in the form of Balanced Funds with SWP option. Here, the fund comprises both debt and equity, wherein equity works to boosting the returns and debt works to protecting the downside. So, assuming an investor withdraws at the rate of 8% a year, and the returns are 12%, so the extra 4% gets added to the principal, after providing for the monthly income.

Mutual Funds For One-time investors:
An investor can invest a lump sum amount in a Mutual Fund scheme, like people invest in FD's. You can invest in a single MF scheme or in a mix of schemes or in a diversified scheme or in a hybrid scheme, depending upon your investing requirements.

Mutual Funds For Regular investors:
Mutual Funds offer an incredible opportunity to investors to invest for the big goals of their life by taking small steps. Through the SIP mode, an investor can start investing with an amount of as small as Rs 500 a month. SIP has made investing easier, the investor has to pay a small amount each month, so gradually over long periods he actually invests a substantial sum of money and because SIP makes volatility work to the benefit of the investor, it has helped investors create massive wealth over time.

Mutual Funds for Life's Goals:
Whether it's about your Retirement goal which is lined up 20 years ahead, or it's about your daughter's higher education after 5 years, or about buying a car after a year, or may be parking your extra cash for a day, Mutual Fund caters to it all. Because of the varied options of investing available with respect to the underlying asset class, Mutual Funds offer an opportunity to actualize the life goals of all investors with different risk appetites and investment horizons.

For Estate Planning:
Lastly, Mutual Fund is not just an investment avenue for your life, it also aids you in passing on your wealth to your next generation. Unlike in the case of your other assets like property or gold, where estate transfer involves a lot of hassles, Mutual Funds offer a very simple process for the same. The joint holders of the investment or the nominees have to simply submit the required documents to the AMC and get the units transmitted in their names.

To conclude, people generally associate Mutual Funds with stocks, but the reality is you do not have to look beyond a Mutual Fund for any of your investing needs. Mutual Funds offer an alternate to almost all investment products and that too with superior returns in most cases.

{s}
[[script type="text/javascript"]]
$(document).ready(function(){
new DiscussionBoard("divDiscussionBoard", "1125", "http://www.njwebnest.in/esaathi/index.php/discussion").load();
});
[[/script]]
{/s}

Hari Prasad Verma was an assistant to a renowned builder in his town Saharanpur. Hari was living a lower middle class life. One day, on the way to office, Hari bumped into his long lost friend, Vimal Singh Rathod. Vimal was running a successful business in Delhi and that meeting was all about Vimal's success story. Vimal talked about his business, his setup, his vision, his current life and so on. Hari was impressed by how Vimal achieved success in such a short period of time. Hari was overwhelmed with Vimal's success and that night when he went home, the conversation kept hovering in his head. Hari fell on the bed but kept thinking about Vimal and then his own work and his own future plans, etc. He starts imagining:

• Hari invests all his current savings into some stocks.

• Suddenly, he jumps to a scene when his money has quadrupled.

• Then, he has started a new business.

• Next he sees himself opening a big factory with many workers.

• In the next scene, he steps out of his Mercedes in front of his present office and his boss, the lawyer sees Hari and is by now fuming with jealousy.

Hari chuckles at his boss' misery and has a wicked smile on his face. Then suddenly his wife nudges him “What's is the matter? Why are you smiling? Like all other dreams, Hari's beautiful fantasy was also smashed! If wishes were horses, all us would have made great riders! The reality however is that no person can become successful overnight. As an investor too, it requires many years of demonstrated traits before one considers himself as successful. So before we start enjoying the fortunes made from selling the eggs of chickens yet to be hatched, purchased from money yet to be saved, let us step back and look at what it really takes for us to be successful investors first.

How to be a successful investor?

Those who have triumphed over all odds, and form the league of successful investors, share certain common characteristics. The article isn't about any secret investing tips, rather it aims to acquaint you with those basic human virtues which can help you in joining the success league.

1. Have Patience: Patience tops the list, it can not just help you in your finances, rather it can help you overcome many challenges in life. Because Patience helps you think with a mature mind, analyse the possible solutions, their pros and cons, and take an informed decision, which is mostly for good. Panic on the other hand leaves you at the mercy of the situation and you end up ruining everything. The idea is not to panic at short term volatility and having patience to hold on for long term gains.

2. Have an Investment Strategy: Those who have aced it, have an investment strategy and they stick with it. Different investors have a different history, they live in distinct circumstances and they have their individual preferences and goals, and on the basis of these factors, they have a different investment strategy. As an investor you should devise your own financial plan or investment approach, with assistance from your financial advisor. This strategy is the road which will take you to “your” goals and will make sure that you do not go astray or loose direction.

3. Be Decisive: Be a decision taker and not a trouble maker for your Portfolio. Successful Investors take the right decisions at the right time, which may be hard, but are right for their financial health. Being decisive is also about not being tentative and not procrastinating things or decisions endlessly. It is about taking decisions in time and not letting time put costs on you and your decisions. Being decisive is also about having clarity in thought, in your objective and the options available before you. Being decisive would mean that you take decisions with clarity and with conviction.

4. Have Conviction: We talked about conviction in making decisions but conviction is also required for you to stick to your plans and strategy over time and be committed to it. A successful investor is here for the long haul, he is not the one who gets scared of easily. If he stumbles in between, he'll rise, shrug off the mud and run as a stronger and a better person. Your conviction in your plan, in the underlying asset class of equity and the long term growth story of India is the primary foundation on which your future wealth will be created. Do not let this get diluted by any interim events and uncertainty.

5. Understand & Take calculated Risks: Successful investors are not the ones who refuse to take any risk, rather they are ones who take calculated and measured risks and whose worst outcomes are acceptable to them. You might not lose if you do not risk, but you won't win for sure. If your choice is to stay 100% invested in say bank deposits and PPF, then surely you may not loose money in nominal terms but also be sure that you will not again anything more. Taking risks is however not limited to your exposure to any asset class. It goes much beyond. It is also about you stretching yourself in business, exploring new ideas in your work, changing roles or jobs for growth and so on. Thus, pushing your limits, taking bigger responsibilities and growing yourself are much more important risks you need to take to be successful financially in addition to investing positively for long term wealth creation.

6. Be Committed: Any successful person knows the importance of being committed to a chosen goal or target. For an athlete, it can be an Olympic medal and in the preparation for the same, he puts in lot of hard work, sacrificing all good things like comfort, entertainment, food, family ties and so on. Imagine, for an investor what can be the goal and the demands for achieving the same? To be truly wealthy for a middle class, service professional like me, I would imagine it would take commitment in the form of being austere, sacrificing luxuries, being disciplined and saving to maximum possible extent, down to the last rupee month after month. Thankfully, it will be much easier than the last drops of sweat an olympic aspiring athlete will shed in training in a day.

7. Keeps Emotions aside: Any investor would love his family, love his food, he would hate when someone spoils his evening tea, he cries in movies and he is proud of his kids, all because he is a human being. Emotions are what make us who we are. But an investor can only be successful if he keeps these emotions aside. He has to know and draw a circle around his money /wealth matters and not let his emotions enter that circle. You can image your emotion as Ravana to be kept outside the circle to protect your precious wealth at home. Every financial /investment decision you make – whether to buy, sell or hold, has to be driven by logic, facts and research. Bias, gut feelings, tips, hope, greed, etc. have no existence in numbers and they are left out in counting.

{s}
[[script type="text/javascript"]]
$(document).ready(function(){
new DiscussionBoard("divDiscussionBoard", "1111", "http://www.njwebnest.in/esaathi/index.php/discussion").load();
});
[[/script]]
{/s}