Investing Audiobook: A Guide For Indians

What Every Indian Should Know Before Investing is a book by Vinod Pottayil that serves as a comprehensive guide to investing for Indian citizens. The book covers a wide range of investment options available in the Indian market, including fixed deposits, mutual funds, stocks, real estate, and more. It also discusses important financial topics such as life insurance, health insurance, and financial planning. The book is written in simple language with easy-to-understand explanations, making it accessible to beginners and those new to investing. With its exhaustive coverage of investment avenues and financial insights, What Every Indian Should Know Before Investing is a valuable resource for anyone looking to secure their financial future and make informed investment decisions.

Investment options: FDs, RDs, NSCs, SCSC, PPF, EPF, Mutual Funds, Gold, Real Estate, Stocks, etc

When it comes to investing, there are a plethora of options to choose from. Here is a detailed description of some of the most popular investment options in India:

Fixed Deposits (FDs)

FDs are a type of investment offered by banks and other financial institutions. They are considered low-risk as they provide guaranteed returns. The interest rates on FDs are usually higher for senior citizens. FDs offer flexibility in choosing maturity terms, and some FDs also offer the option of loan against the deposited amount.

Recurring Deposits (RDs)

Recurring deposits are offered by banks, which allow individuals to deposit a fixed amount at regular intervals. RDs have a minimum tenure of 5 years and offer guaranteed returns. They are a good option for individuals looking for disciplined investing.

National Savings Certificates (NSCs)

NSCs are fixed-income investment schemes offered by the Indian government through post offices. They are popular among small and mid-income investors as they provide a tax break and low risk. The interest rate is fixed and the investment has a lock-in period of 5 years.

Public Provident Fund (PPF)

PPF is a long-term investment option introduced in India in 1968. It offers an attractive interest rate and tax benefits. The tenure of a PPF account is 15 years, with the option to extend in blocks of 5 years. The minimum investment amount is Rs. 500, and the maximum is Rs. 1.5 lakh per annum. PPF accounts can be opened with post offices or banks.

Employees' Provident Fund (EPF)

The EPF is a retirement benefits scheme available to all salaried employees in India. Both the employee and the employer contribute a fixed percentage of the employee's salary to the EPF account. The accumulated amount can be withdrawn at retirement or when changing jobs.

Mutual Funds

Mutual funds are investment vehicles that pool money from multiple investors and invest in various assets such as stocks, bonds, etc. They offer higher returns and greater liquidity compared to some other investment options. Mutual funds are classified into different categories such as equity, debt, and hybrid funds, based on their investment objectives and risk levels.

Gold

Gold is a precious metal that is highly regarded as an investment option in India. It offers high liquidity and has a history of beating inflation. There are multiple ways to invest in gold, such as buying jewellery, coins, bars, exchange-traded funds (ETFs), gold funds, and sovereign gold bonds.

Real Estate

Real estate is another popular investment option in India. It offers the potential for high returns and capital appreciation. Individuals can invest in real estate by purchasing property, investing in Real Estate Investment Trusts (REITs), or through real estate crowdfunding.

Stocks

Stocks, also known as equities, are one of the most popular investment options in India. They offer the potential for high returns but come with higher risks. Stocks can be purchased through stock exchanges such as the Bombay Stock Exchange (BSE) or the National Stock Exchange (NSE).

New investing avenues: Peer-to-Peer Lending, Cryptocurrencies, National Pension Scheme, etc

New investing avenues

Peer-to-Peer Lending

Lendbox is an example of a peer-to-peer lending platform. It offers curated options for every risk appetite, with a minimum lending amount of ₹10,000. It promises high-quality lending with consistent returns and the ability to track your lending progress through an app. However, it is important to note that the RBI does not guarantee any returns or principal for the amount lent on P2P platforms.

Cryptocurrencies

Cryptocurrencies are a relatively new investment avenue, with Bitcoin being one of the most well-known. They are based on blockchain technology, which is a distributed consensus system that eliminates the need for third-party services in financial transactions. While cryptocurrencies offer a secure and decentralised way to send and receive money, they can be highly volatile, as seen in the recent Bitcoin tumble. Additionally, the crypto industry in India has faced challenges, such as the $230 million heist at WazirX, which has raised regulatory concerns.

National Pension Scheme (NPS)

The National Pension Scheme (NPS) is a government-backed, long-term savings plan for retirement. It offers exclusive tax benefits and flexibility in choosing contribution amounts and pension funds. NPS is open to Indian citizens between 18 and 70 years old, with different options for government, corporate, and NRI/OCI subscribers. It provides a safe and transparent way to invest in your retirement.

Financial planning: Health Insurance, Life Insurance, Writing a Will, etc

Financial Planning

Health Insurance

Health insurance is a crucial aspect of financial planning, protecting you from financial woes in times of medical crisis. It covers emergency hospitalisations, planned procedures, and often includes benefits such as cashless hospitalisation, coverage for outpatient expenses, daily allowances, and more.

When choosing a health insurance plan, consider the following:

• Ensure the plan offers adequate coverage for your needs, with a sum insured ranging from 7 lakhs to 15 lakhs for individuals and families, respectively.
• Opt for a trusted brand with a good reputation, a wide network of hospitals, and a high claim settlement ratio.
• Check for benefits like no room rent restrictions, coverage for pre and post-hospitalisation expenses, alternative treatments, and lifelong renewability.
• Compare premiums and choose a plan that offers the best value for money without compromising on coverage.

Life Insurance

Life insurance is another essential component of financial planning, providing financial security for your loved ones in the event of your untimely demise. It offers a fixed sum assured amount in exchange for regular premiums and can help your family maintain their lifestyle, achieve financial goals, and cover expenses such as loan repayments and children's education.

When selecting a life insurance plan, consider:

• Identifying your goals and choosing a plan that aligns with them, such as term insurance for high coverage at affordable rates or Unit Linked Insurance Plans (ULIPs) for investment and insurance.
• Ensuring the right life insurance cover, which should be at least ten to fifteen times your annual income, taking into account factors like loans, children's education, and ageing parents.
• Choosing a reputable and trustworthy life insurance provider with a good claim settlement ratio.
• Buying life insurance early to take advantage of lower premiums and securing coverage for a longer period.

Writing a Will

Writing a will is an important step in financial planning, especially as you accumulate assets and properties. It ensures your wishes are carried out and reduces expenses, effort, paperwork, and potential disputes within the family.

When drafting your will:

• Consult a legal professional or online will-maker to ensure it is done correctly and includes precise personal details, beneficiary information, and asset specifics.
• Include three declarations: revoking all earlier wills, confirming you are of sound mind, and stating that you are not under any pressure.
• Appoint an executor who is trustworthy, understands your wishes, and will carry out your instructions faithfully.
• Be specific and detailed, mentioning all bank accounts, properties, investments, and insurance policies.
• Update your will regularly to reflect any changes in your assets or life circumstances, such as the birth of a child or marriage.

Investment advantages and disadvantages

The audiobook "What Every Indian Should Know Before Investing" by Vinod Pottayil is a comprehensive guide to investment options in India, covering various sectors such as fixed deposits, mutual funds, SIP, government schemes, pensions, and real estate. Each chapter in the book follows a consistent format, discussing advantages, disadvantages, how to start/invest, investment meter, tax impact, and concluding with a logical flow chart.

Advantages

One of the key advantages of the book is its accessibility. It is written in simple language with straightforward calculations, making it easy for anyone to understand complex financial concepts and investment options. The book also provides valuable resources and links to external information, ensuring that readers can explore topics further if they wish.

The book is well-structured and comprehensive, covering not only investment options but also essential financial planning topics such as provident fund, making a will, and calculating liabilities and growth potential. It also includes chapters on health insurance, life insurance, and writing a will, which are considered complex topics but are explained in a simple and lucid manner.

Disadvantages

One potential disadvantage mentioned in a review is that the book is aimed at beginners, and those with existing knowledge of investment may not find it as useful. Another review mentions that the book could benefit from more specific details and statistics, such as average stock market return rates and the impact of the 2008 financial crisis on different financial products.

Overall, "What Every Indian Should Know Before Investing" is an excellent resource for beginners looking to gain financial literacy and understand the various investment options available to them. It provides a holistic view of investing and financial planning, empowering individuals to make informed decisions about their financial future.

Taxation and other financial goals

The book, 'What Every Indian Should Know Before Investing' by Vinod Pottayil, is an extensive guide to investing and financial planning for Indians. It covers a range of investment options and their respective tax implications, empowering readers to make informed decisions.

The book's chapters are well-structured and follow a consistent format. Each chapter covers a specific investment option, such as fixed deposits, mutual funds, SIPs, government schemes and pensions, and real estate. The advantages and disadvantages of each option are discussed, along with practical information on how to start investing, tax impact, and a logical flow chart summarising the key points.

One of the standout features of the book is its focus on taxation. For each investment avenue, the author provides insights into the tax impact of investing, ensuring readers fully understand the financial consequences of their choices. This comprehensive approach to taxation sets the book apart from other personal finance guides.

In addition to investment options, the book dedicates several chapters to financial planning. These chapters cover essential topics such as provident funds, making a will, and calculating liabilities and growth potential. By addressing these topics, the book ensures that readers have a holistic understanding of personal finance beyond just investing.

The author, Vinod Pottayil, recognises the importance of accessibility and simplicity in financial education. The book is written in simple language, with straightforward explanations and examples that make complex financial concepts easier to grasp. This approach aligns with the author's goal of improving financial literacy among Indians, ensuring that readers from all backgrounds can benefit from the knowledge shared in the book.

Overall, 'What Every Indian Should Know Before Investing' is a comprehensive and practical guide to investing and financial planning. By addressing taxation and other financial goals, the book equips readers with the knowledge and tools they need to make informed decisions about their financial future.

Frequently asked questions