Factors to be considered before choosing health insurance

Hi Friends,

A lot of you have helped me in my venture of becoming a health insurance advisor for Apollo Munich. When I thought of buying a health insurance policy for myself, I considered the following before choosing my policy:-

1) Ethical Management- It should be from a group which is ethical. An unethical group running a health insurance business is a strict no-no. They will not pay you when the claim arises.

2) Network Hospitals- Choose a health insurance company which offers you the maximum network hospitals. It should have a tie up with atleast 3 out of the top 4 hospitals in the city that you are residing apart from all other major hospitals across all cities.

3) Cashless Hospitalisation- Choose a health insurer which provides for cashless hospitalisation at most of the hospitals. If it does not provide cashless benefits across the major hospitals, there is no point of buying a health insurance policy. What is the use of going for a health insurance in the 1st place if you have to opt for reimbursement? The objective of taking a health insurance is that it should not put you under any financial constraints when your near and dear ones are hospitalised.

4) Claim Processing- Choose a health insurer which does not take a lot of time in processing the claims.

5) Have an insurance agent instead of buying the policy online- You should have a professional accountable agent  who will take care of your claim processing in case of a need arising. When you are getting an agent for free, its better to make use of the agent than to feel good about buying a policy online and not knowing what to do when the claim arises. Do not choose an agent who looks like a patient himself.

6) Choose a decent renewable cover- Most of the people compare policies on the basis of premiums. It is an exercise in futility. Make sure that you go for a policy which gives you a good cover, is renewable for lifetime. Healthcare costs are increasing at an average cost of 17-19% per annum. Its very important to have a high health cover and not focus on the premium too much. As they say, do not be penny wise and pound foolish.



Your Friend,
Vivek

Welcome to the one stop shop for all your financial needs!!!!!

There is a brilliant saying, "If you are doing business only for yourself, one day you will be the sole customer." I have been inspired by 3 celebrities in life namely Sachin Tendulkar, Roger Federer and Aamir Khan. The main reason why I am a major fan of these 3 people is because they have given happiness to so many people across the world and they have taught us to dream big. People do not get that ecstatic feeling watching them because of their wealth but because they are passionate and crazy for their profession. They have taught us to go after our dreams, money is just a by-product. They do not work for money, money works for them. They work for producing magic.

It really hurts me when I see how people have started giving importance to money in life just to meet their short term targets. It hurts when I see people mis-selling financial products to people for their major cut. It hurts when people focus on short term goals and not building lasting relationships. I firmly believe that when you are into the business of selling, it cannot be target based. 

For this sole reason I chose a marketing profession in the financial world where I tied up with the best of companies and institutes when it comes to work ethics such as BMA Wealth Creators Ltd, LIC of India, HDFC Ltd, Bank of India and I started teaching at the prestigious institutes iLead and Edusure. I have always believed that financial freedom is one of the most important ingredients towards a happy and prosperous life.

I really want to thank all the important people who have made this dream come true. I am giving it my best shot to take humanity and work ethics to the next level. Each and every of the 1668 page views till date makes a difference to my life and motivates me everyday. Its a commitment that I shall ensure that all of you earn great wealth and great happiness. I shall always perform to the best of my abilities.

Love you friends,

Vivek

Why It Makes Sense To Buy Gold

“The desire for gold is not for gold. It is for the means of freedom and benefit.” These words by Ralph Waldo Emerson sum up the reason why the yellow metal continues to hold favour among investors across the globe. While retail investors seek freedom from inflation, large buyers (read Central banks, hedge funds) seek freedom from currency devaluation. In this era of Quantitative Easing (QE) and artificial monetary support, markets are rewarding gold for its sheer quality of maintaining purchasing power. If one cuts off the incessant money printing across the globe, gold would be reduced to a worthless asset in the end. To put it simply, it is not the value of gold that is going up, but the value of currencies that is coming down. 

The US Federal Reserve’s balance sheet was just under $900 billion in early 2008, but it has expanded to just over $2.8 trillion currently. The gold mine production rate has remained flat in comparison. 

More importantly, balance sheet inflation continues at the same pace. The Fed recently announced another round of QE policies that could see around $1 trillion being added to the Fed’s balance sheet every year till they decide to stop printing money. With the re-election of Japan’s Liberal Democratic Party, the nation is poised to witness an easier money policy in a bid to boost economic growth. It is such synchronised efforts from Central banks across the globe that has further accentuated gold’s role as a monetary alternative. The fiscal role of gold is gaining more ground with the Basel Committee on Banking Supervision as it is considering defining gold as a ‘tier 1’ asset in line with cash and AAA government securities. It is expected to open doors for gold to compete with cash and government bonds on bank balance sheets.

Yet, gold remains one of the under-invested assets. Currently around 1 percent of global financial assets are invested in gold. We believe gold is far from being in a bubble phase. Gold price performance in all G7 currencies in the past five to 10 years stands testimony to the fact that it’s a broad-based rally. 

Fixed Income and equities have generally found more favour with investors as these are income-generating assets. Fixed Income provides interest; equities provides dividend. Gold generates neither. However, things have been changing with real interest rates moving into the negative territory across the globe and dividend yield on equities being far from encouraging further investments. With even currencies being consciously devalued, gold is emerging as an alternative to fiat money with more fundamental value to provide to investors.

However, one would note that gold prices have not really moved significantly higher in the recent past in spite of such easy money policies. To understand why, let’s look at the US QE programme. 

When the Fed engages in QE, it does so by buying assets in the open market, such as Treasury notes or mortgage bonds. When the Fed buys a government bond in the open market, it creates the money to pay for it out of thin air and the payment is credited against a commercial bank’s account at the Federal Reserve. However, since banks have largely refrained from lending it out into the economy, the velocity of money has not matched the pace of money supply. In most cases the money is either deposited with the Central bank or with other banks. Hence, the money that the Fed creates is not in circulation. However, when these large sums of money do start flowing into the economy, we would see inflation rising, which would further fuel demand for gold. 

But is QE really the only answer to the current global crisis? If yes, then it would be difficult to explain why the US economy continues to struggle. The rate of economic growth and the distribution of income and wealth in a country are closely related to export growth. A weaker currency acts as an important stimulant for favourable exports growth. Hence, most of the economies have engaged in a race towards devaluation. 

India has been thriving on its domestic demand advantage for a long time now. However, a large part of this strong demand is focussed on buying gold that is hurting foreign exchange reserves. The government has been trying several tactics to reduce gold bullion imports as it has started taking its toll on the country’s current account deficit. Apart from hiking the customs duty, the government recently barred banks from financing gold purchases. To dissuade retail investors from buying physical gold, the RBI is considering promoting gold investment in dematerialised form. While most of these investment alternatives do prove to be viable investment options, they fail to address the fundamental reason for the surge in gold imports like high inflation and macro economic instability.

The banking crisis of 2008 left world-renowned corporate houses bankrupt and prompted unprecedented Central bank actions across the globe, which have led to most of the toxic debt getting transferred from private balance sheets to government balance sheets. The race towards competitive devaluation is set to intensify, leading to further deterioration in the value of currencies. Here we say again, “Gold is good money”. Most commodity bull markets run for 16 to 17 years and gold is just concluding 12 consecutive years of positive returns. Investors still have time to enjoy the freedom and benefits of investing in this unique asset class that acts as a hedge against governments’ mismanagement of money.

Source : Forbes

Your Friend,

Vivek

The top 50 Service Brands in the Country

Merry Christmas and a Happy New Year!!!!!

Dear All,

Merry Christmas and a happy new year to all my friends, clients, students,teachers, family, critics and everyone who has supported me in life. Its been a brilliant journey so far in wealth management for all of you as well as teaching the students about the intricate details of money management and achieving financial freedom in life.

Its a commitment like always to be able to bring about a change in people's financial lives. I shall strive to do my best and make sure that I help you in your goal of wealth creation which has been my motto throughout. I have always maintained my stance that to do well and be happy in life, you need to focus on 2 things:- 1)Building Relationships and 2) Creating Wealth. If one is able to achieve these 2 goals in life, there is no stopping him or her from leading a happy and blissful life.

Have a great new year and let us commit to ourselves to take the country forward. If each one of us can display passion and sincerity in the way we work and conduct our lives, we can bring about the change that we want in this country.

All the best!!!! Cheers!!!!!

Your Friend,
Vivek

How many stocks should you have in your portfolio?

Hi Friends,

A lot of people  tell me that they have a lot of stocks in their portfolio. When I ask them how much they had initially invested, they are clueless and say that they have been investing for a long time. The demat account is huge and their homes are flooded with random annual reports of companies whose very look and tone speak volumes about the unprofessionalism and their bleak future.

These are the very people who complain about stock markets not giving adequate returns. My reply to them is simple and curt: If you are going to buy crap, you should expect crap in return.

Warren Buffett had once famously quoted, "When people overdiversify a lot, they are not diversifying their risk but they are diversifying their ignorance."

So, how many companies should you have in your portfolio?

The answer is very simple: "Have as many companies in your portfolio which you can manage for efficient returns and which are established names. To put it simply, one should not have more than 15-20 companies in his/her portfolio." Choose the sector which you feel is going to be the breakout sector in the near future, analyse the top 3 companies in that sector and buy only one company from that sector.... I repeat "Buy only one company from the sector which you feel is a great sector and a great company to be in." If you are having  Tata Steel, Jindal Steel and JSW Steel in your portfolio and you feel that you are a proud shareholder of 3 great companies, its time to reflect on the blunder that you have made. If there is a slowdown in the metals sector, all the 3 companies will take a knock.

Hence it is very important to choose one company from a sector which you think can weather the storms of adversity or financial meltdowns and stick to it through thick and thin, if you are planning to invest long term. Always remember that the stock market is not a casino. If you are expecting a return of 50-100% return in a year in stocks, they would shut down the casinos.

A little bit of this and a little bit of that will do nothing but will confuse you totally. So if you have a great company like L&T in your portfolio along with a losing stock, the gains that you make from a blue chip would be offset by the losses in a company with bad fundamentals.

Hope this article helps all of you who are scared of analysing your portfolios due to the junk that has been bought. Have a concentrated portfolio just like the Warren Buffets or the Rakesh Jhunjhunwalas. All the rich investors worldwide have a concentrated portfolio.

Your Friend,
Vivek

A study of the claim settlements of different life insurance companies.