[aargee]

Originally Posted by absynthguzzler

Suppose i was happy with my 10lac per annum salary and the lifestyle I'm leading now in the current world. I get a 10% rise every yr as well. Do you think with the annual increases, i would still be able to have my same lifestyle 20yrs from now? Or should i actually be earning more than just the 10% increments over the course of my working career.

Well, as a matter of fact, with ever increase with income, the expense also raises. If you really want a control on expenses (life), keep the same standard of living & in few years you can see yourself more worthy & who knows you could even have a second income.

But your expenditure also depends on your lifestyle too. 10 years back as a bachelor someone could save upto 70% of their income too, over the years when they get married, the percentage of their income could drop, unless the income is adjusted accordingly. With children the expense is definetly bound to shoot up & again one needs to adjust with the incremented income. Again, all this is possible only if the same standard of living is maintained; ofcourse taking care of Wifey's (???) & childrens requirements.

Trust me, its a category under "easier said than done"

Originally Posted by Gansan

PF membership may now be optional, but was compulsory when I joined my employer. It is a kind of nest egg - not to be disturbed lightly. Calling it safe is an under statement; AFAIK, PF/PPF funds can't even be attached by a court of law!

I heard this somewhere but wasn't sure. Thanks for the clarification.

[clevermax]

@Srishiva:
@Jaguar:
@aargee:

Thanks for the clarifications! It seems I should consider PO when I have some savings to invest next time...

[Lalvaz]

Originally Posted by aargee

The only draw back I see is that the withdrawl can be done only after 15 years, which is way too long investment.


Nope; the interest on PORD is not charged at the time of maturity

Originally Posted by Gansan

PF membership may now be optional, but was compulsory when I joined my employer. It is a kind of nest egg - not to be disturbed lightly. Calling it safe is an under statement; AFAIK, PF/PPF funds can't even be attached by a court of law!

I'm referring to the Employee Provident Fund Scheme not the Public Provident Fund scheme. The EPF gives 8.5% tax free returns currently and one can withdraw only on retirement or while changing jobs.
The PPF gives 8% tax free returns currently and can be withdrawn after 15 years.

Interest on Postal schemes is not taxed while paying out to the investor, but the interest income needs to be declared in the Income tax returns and is taxable. Therefore its not as tax efficent as the Fixed Maturity Plans that I was referring to.

[Eddy]

EPF is going to be taxable from next year. At least, thats what I have been hearing.

[aargee]

Originally Posted by clevermax

Thanks for the clarifications! It seems I should consider PO when I have some savings to invest next time...

For your convenience, check out the scheme here. Though it is TN small savings, it will be available at all PO outlets; take help of an authorized P.O agent to open a PORD. The agent gets about 1% commission that he/she should share half with you.

[Lalvaz]

Originally Posted by Eddy

EPF is going to be taxable from next year. At least, thats what I have been hearing.

Quite right, the change is expected to happen from next year when we move from the EEE to the EET regime. However your investments till then should continue to earn tax free returns.

[sbraj]

Originally Posted by Eddy

EPF is going to be taxable from next year. At least, thats what I have been hearing.

Yes. EPF, PPF have been EEE (Exempt, Exempt, Exempt) so far. Recent media reports indicate that Finance Ministry is planning to make it EET (Exempt, Exempt, Tax).

[Reisender]

@Eddy,
Where you saw read that EPF/PPF will be taxed? Man thats too bad! One more tax??

[Eddy]

@Reisender: This has been common talk among the circles. It was confirmed by a financial advisor recently.

And yes, only the new investment will come under the purview of IT and not the existing ones.

[ampere]

Does that mean, when you get back your PF, you pay tax on that amount?
Thats too bad !

[ashthedivx]

Originally Posted by aargee

For your convenience, check out the scheme here. Though it is TN small savings, it will be available at all PO outlets; take help of an authorized P.O agent to open a PORD. The agent gets about 1% commission that he/she should share half with you.

I believe various banks do offer such recurring accounts, I remember speaking with ICICI. Though he was a bit flimsy while offering the service still ICICI do serve the same. I understand Banks might not earn more on such accounts but still they do offer as a product.

Originally Posted by Reisender

@Eddy,
Where you saw read that EPF/PPF will be taxed? Man thats too bad! One more tax??

Originally Posted by Eddy

@Reisender: This has been common talk among the circles. It was confirmed by a financial advisor recently. And yes, only the new investment will come under the purview of IT and not the existing ones.

As far as I know, it's something where-in all PPFs will be taxed which are started from 1st April, 2010.

[deardaljit]

This is by far the best thread ! I am intensely impressed to know how financially wise our car enthusiasts are ! How priceless is their advice ! They have very deep understanding about the financial matters and life matters too ( apart from matchless automobile knowledge )
I salute you all

[vishnurp99]

This is a very good thread. I really believe in living within means but don't want to be a kanjoos at the same time. I also believe that the investments you make will decide where you are in 20 years time which is when i will have teenage children.

I am really confused regarding whether i should invest in property now. The property prices seems to have appreciated by 100% in the last 5 years. I can raise around 25 lakhs without any liability courtesy parents/some savings etc. I can go ahead and get a loan of another 40 lakhs for which EMI could come to around 20K. I feel that this EMI is a safe EMI for me.

Is it a good idea to invest in property as a investment right now? if i go ahead and do this then my savings will go to 0 and i will have to start saving again from my monthly salary. I am 27 right now and i am reasonably confident that my income would increase from here atleast by 100% over a period of next 5 years but could hit a glass ceiling after since i am in IT.

[abdriver2000]

Originally Posted by vishnurp99

This is a very good thread. I really believe in living within means but don't want to be a kanjoos at the same time. I also believe that the investments you make will decide where you are in 20 years time which is when i will have teenage children.

I am really confused regarding whether i should invest in property now. The property prices seems to have appreciated by 100% in the last 5 years. I can raise around 25 lakhs without any liability courtesy parents/some savings etc. I can go ahead and get a loan of another 40 lakhs for which EMI could come to around 20K. I feel that this EMI is a safe EMI for me.

Is it a good idea to invest in property as a investment right now? if i go ahead and do this then my savings will go to 0 and i will have to start saving again from my monthly salary. I am 27 right now and i am reasonably confident that my income would increase from here atleast by 100% over a period of next 5 years but could hit a glass ceiling after since i am in IT.

20k EMI for a 40 lakh loan??!! What is the tenure you are looking at?

[pramodkumar]

Originally Posted by vishnurp99

This is a very good thread. I really believe in living within means but don't want to be a kanjoos at the same time. I also believe that the investments you make will decide where you are in 20 years time which is when i will have teenage children.

I am really confused regarding whether i should invest in property now. The property prices seems to have appreciated by 100% in the last 5 years. I can raise around 25 lakhs without any liability courtesy parents/some savings etc. I can go ahead and get a loan of another 40 lakhs for which EMI could come to around 20K. I feel that this EMI is a safe EMI for me.

Is it a good idea to invest in property as a investment right now? if i go ahead and do this then my savings will go to 0 and i will have to start saving again from my monthly salary. I am 27 right now and i am reasonably confident that my income would increase from here atleast by 100% over a period of next 5 years but could hit a glass ceiling after since i am in IT.

The experts in the market say that there is another recession to hit us in the next 6 months, i would like to stay put until then and look for great bargains that time, here in kerala what used to be a 2 lac rupee property 5 years ago is close to 2 crore now, i would say the appriciation here is definity 100 times. Property seems like a good investment but a loan will put you in a rat race, where all your decissions in future would be based on your job and income security.



Pramod