Planning funds for your children

Do the below make sense for children's future planning?

Mutual funds:
If we can get a MF which gives

- 10% return annually, then by investing 7750 per month, we can get a crore in 25 years.
- 12% return annually, then by investing 5625 per month, we can get a crore in 25 years
- 15% return annually, then by investing 3450 per month, we can get a crore in 25 years.


PPF:
Make a PPF account for your child.
It gives 8.7% yearly.
Lock in period of 15 years
Max - 1L
Parent will not get tax benefit if he/she already has a PPF in their name (max of 1L tax benefit - all accounts summed up together)

What are your thoughts on the same?

Recurring Deposit - Planning for retirement

Did you know that recurring deposits can be a good investment option for retirement?
Many banks have deposit rates ranging from 8-9.5%

If one invests
17k per month in an RD giving 8.5% - in 20 years the person would have a crore
50k per month in an RD giving 8.5% - in 10 years the person would have close to a crore

Use the crorepati calculator at
http://wealth.moneycontrol.com/jtcrorepati.php
for the same.

This is a safe investment option and obviously one needs to check on tax on the same.

Just one of the options if people want to consider.

What do you think?

Edited 30th March 2015:
Added another article on generating a monthly pension using RDs

Warburg Pincus Group buys Future Capital Holdings from Biyani

Warburg Pincus Group buys Future Capital Holdings from Biyani

Biyani has sold out Future Capital Holdings to the Warburg Pincus Group at Rs 162
These are strong Shareholders with success with Bharti Airtel etc

Keep a watch on this stock.

Power companies (after FSAs)

Since CIL will sign FSAs with power companies, the companies will have adequate supplies to move ahead with their expansion plans.
In FY10-15 period, Adani is expected to scale up its capacity to 2,566 MW, Sterlite to 3,720 MW, India Bulls to 3,780 MW and Lanco to 5,040 MW.

These will be biggest beneficiaries (along with Reliance Power)

Time to re-look at these stocks?

What do you think?

Do you think if they make a pact of 20 yrs with CIL, will they keep power prices at same rate? I guess the answer is known to all.....

Govt, PSUs and policies

So, the power company honchos meet the Govt and ask them to guarantee coal supplies.
Govt directs Coal India to sign FSAs (Fuel supply agreement) for as much as 20 years with each of them.

Now, as per FSA, CIL has to provide atleast 80% of the coal (for the next 20 years) !!!!! wow!!!!
And I think there's some penalty also .....if it isn't able to meet the demand.

WOW!!! I mean WOW!!!!

So CIL may also import (at market price) to meet these demands.
CIL also sells below market price....

TCI (owning 1%) has launched a legal case against CIL
CIL and Govt has curtly asked them to sell the stake if they don't agree to FSAs and losses (huh???? Why don't they just ask all FIIs to leave and go?)
They have a web site as well -- http://www.coal4india.com/

See their interview - http://www.moneycontrol.com/news/business/plan-to-launch-legal-action-against-coal-india-tci_688982.html

I think LIC, CIL, ONGC, IOC n friends (HPCL/BPCL), SBI (funding air india) are all being losing their sheen because of Govt directives
These companies touted as Maha-ratnas are really jewels in their own way
But they may lose their shine

LIC buying ONGC stake at higher than set price and lost money almost immediately (since the price fell)
ONGC and IOC and friends giving subsidies
CIL with FSAs
SBI with funding Air India and increasing NPAs

What do you think?

LIC - Keep some money for my policy maturity too please...

LIC buys 4.6% of the ONGC auction out of the 5% which was opened for auction by the Govt.
The Govt price was 290 Rs (already at a premium to market value).
The average bid by LIC came at 303 Rs (huh......)

LIC made a loss of 900 Cr in two day as shares of ONGC closed @ 280 Rs

Read:
http://www.moneycontrol.com/news/business/valuelic-investmentongc-dips-by-rs-900cr2-days_676359.html#toptag

So:
- We buy LIC policing trusting LIC to put it in sound savings
- Govt needs money (after our taxes)
- Govt directs LIC to buy these stakes
- LIC follows directives and loses money
- Net Net we lose money since its our investment

Is this bad?
No.

Then whats bad?
Govt may look for fiscal deficit every year and more and more stake will be auctioned (of PSUs)
If no one buys, guess who will buy?

uh oh.

Reminds me of some auto ad on TV where the guy looks in the mirror and slaps himself ....*slap*

RIL - Sirf naam hi kaafi hai

Assume you have a huge cash pile with you.

You can invest it
OR
You have the choice of investing or putting it in FD/NCDs till you decide what to do with it.

Person who opts for option 2 will be appreciated as being prudent.

RIL is doing just that.

Have a look @
http://economictimes.indiatimes.com/special-report/mukesh-ambanis-ril-not-buying-despite-its-huge-pile-of-cash/articleshow/11087027.cms

25 Bn USD of cash ----- uh

News:
RIL buys stake in Nuclear Design Company -
http://www.hindustantimes.com/business-news/CorporateNews/RIL-buys-stake-in-Terra-Power-US/Article1-785831.aspx

RIL buys stake in US Shale gas company
http://energybusiness.in/ril-acquires-stake-another-shale-gas-company/

It has many ventures

- RIL Pet Chem
- Oil, Gas and Refinery
- Retail (Includes Gold, Grocery, Shoes etc)
- Retail Outlets to sell Petrol
- Internet Telephony (4G)

RIL has the following unique problem:
What to do with so much cash?????

While other companies struggle with the following question:
Where to get cash from????

Isn't that an issue we all dream we should be in?

Will you buy RIL for the sheer cash size it has?