Tuesday 9 June 2020

   “Do not work for money. Let your money work for you.” 

Surprised..! But, you read that right. Your money is capable of working round the clock and doesn’t have to keep a 9 to 9 schedule. Make your money work for you when you’re sleeping and even vacationing. Why, you ask?


  1. It will free you up.
  2. Unlike us, money can work 24×7
  3. It will reduce your Business & Salary dependency.
  4. You will build wealth over time.

 Why we do Business or a job? To earn money. What happens when we need more money than we are already earning? We expect high profits or a pay-rise.

As the years go by, our expenses go up due to inflation. Moreover, it’s also human psychology to have desire to improve once standard of living. It means, expecting high profit in business or a pay-rise in job is inevitable.
This is where the problem begins to become bigger. The more money we need for ourselves, the more we are becoming dependent on our work life.
If you are one of those people who love to continue the way your doing now, there is no problem. You will work harder, and the expected pay-rise will eventually come.
But if you are like ones who wants to generate passive income, they must learn to how make money work for themselves. Why? Because it will make them less dependent on the income from business and job.
The harder the money works for you, more free you become from work life. Moreover, money-working in parallel to your job can also build tremendous wealth for you.


There are only two ways to make money work:
  1. Buy assets – which generates income.
  2. Buy assets – whose value appreciates with time.
In both the cases you will note that one has to “Buy assets” to make money work.
How the money works? By generating an alternative income source, or by making the invested capital appreciate with time.
But this is not anything new, right? ‘Income generation’ and ‘capital appreciation’ are concepts which we all know. But knowing the concept is not enough. Probably this is the reason why less people can claim that “they know how to make money work for them”.
Where is the problem, why even after knowing the concept people are not able to make their money work for themselves?

Following are the assets to buy for income generation:
  1. Fixed Deposit: Fixed deposits can also generate monthly income. Start an Fixed Deposit(FD) with a standing instruction of crediting the interest in savings account each month.
  2. Mutual Fund with Dividend Option : These are monthly dividend plans offered by mutual funds. One such mutual fund scheme is HDFC BAF, these funds can pay monthly/quarterly/annual dividends as directed.
  3. Annuity: It can generate guaranteed income after retirement. How one can automate the process of annuity purchase? By investing each month in a pension plan.
  4. Real Estate(Commercial Property): Commercial Property can generate monthly income and capital appreciation.
Following are the assets to buy for Capital Appreciation:

  1. Pay off your debt: How paying-off debt can generate capital appreciation? Actually it cannot. But what it does is perhaps better than capital appreciation. Paying off debt slows down the rate of growth of our debt. This bigger and costlier will be the debt, more will be the associated expense. By paying off such debts, the expense can be drastically reduced.
  2. Invest in Equity & Debt Mutual Funds: These are mutual funds which has a good portfolio diversification, and can generate above average returns when held for long term like 10+ years. Start a SIP in such a mutual fund and keep contributing till eternity.
  3. Real Estate(Open Land): Investing in open lands and leave it for long can create healthy wealth over long period of time. As there is say " Land never depreciates".


In order to make money work for your, start with saving a big chunk of your income. Once enough saving is accumulated, Do this to start accumulating more and more assets. These assets in turn will generate income, or will fast-appreciate in value.
Income plus capital appreciation is turn will build wealth. This is the most practical version of making money work for you.

Tuesday 7 April 2020

Coronavirus & Investing:- Ways to tackle the Market Crash
At home, work or even while commuting, the topic that is dominating every conversation today is Coronavirus and its impact on one’s health, the stock markets and wealth.
Coronavirus or Covid-19 has spread faster than expected. With more than Seventy thousand deaths and more than Thirteen lakh affected across globe, there is no cure so far. In fact, the World Health Organisation declared it to be a pandemic, a  first since the outbreak of Swine Flu or H1N1. 
Like every other time, i.e. whenever reports of any pandemic outbreak came into light, the impact of Coronavirus is high across the financial markets, with major world indices witnessing sharp corrections in the last two months. Taking cues from its global peers, SENSEX has lost 27.29 % or more than 11,200 points in the last Two months. We analyzed from last two months data.

Country Indices As on 11th Feb 2020 As on 6th & 7th April 2020 Gain/Loss (%)
United States Dow Jones Ind 29276.34 22679.99 (6th April) -22.53
United States S&P 500 3357.75 2663.68 (6th April) -20.67
United States NASDAQ 9638.94 7913.24 (6th April) -17.9
United Kingdom FTSE 100 7499.44 5739.19(7th April) -23.47
Germany DAX 13627.84 10442.10(7th April) -23.38
Hong Kong HANG SENG 27241.34 24253.29(7th April) -10.8
Japan NIKKEI 225 23685.98 18950.18(7th April) -20
India SENSEX 41216.14 29968.11(7th April) 27.29

These corrections have created massive panic among investors, with many of them selling significant portions of their equity investments to buy fixed income instruments like fixed deposits. In contrast, another section of investors are in the dilemma of ‘to buy, or not to buy’ at such discounted prices. 
In this blog,  we have analyzed how the markets had reacted in the past to such reports? How much time did they take to bounce back to make wealth for investors? 

How the Market Reacted during Past Pandemics?

Since the outbreak of Coronavirus, the markets saw sharp corrections, and the selling pressure will continue for some more time. But, this is not the first time! During previous pandemics too, markets fell sharply only to emerge stronger than ever before. However, you have to be stay invested to benefit from it.  And, there is enough data to support this claim

We looked at the SENSEX performance during the past pandemic outbreaks of SARS, AVIN Influenza, Ebola, Zika, and a bit later Swine Flue. We also analyzed what happened after the markets stabilized.

Here is what we found:
Past Pandemics and Sensex
Estimated Period of Outbreak Virus Outbreak Returns During Outbreak 1 Year Return Post Outbreak 3 years Post Outbreak Returns
Jan to March 2003 SARS -10.07% 77.68% 269.99%
Jan to August 2004 AVIN Influenza -12.23% 47.42% 195.04%
December 2013 to Feb 2014 Ebola 1.06% 44.44% 36.09%
Nov 2015 to Feb 2016 Zika -13.39% 13.36% 55.93%
1 Jan 2015 to May 2015 Swine Flu -6.91% -4.24% 26.83%
Similar to Coronavirus, outbreak of SARS had its impact on global as well as Indian stock markets. Sensex fell by 10 percent in three months. But, one year from then, it generated an absolute return of more than 77 percent. This means if you would have invested Rs 1 lakh in the index early in January 2003, when fears of SARS hovered over the markets, within a year, the same investment would have grown to become Rs 1,77,000. 
Markets reacted in a similar way to Ebola, Zika, and AVIN, i.e. correcting sharply and then bouncing back aggressively. 
However, with Swine Flu, it took time for recovery because as the scare of the virus was cooling up, the fear of global economic slowdown spooked the market. But once the recovery began, the losses got wiped off quickly and the 3-year returns from the time Swine Flu broke out were 26.83 percent
As you can see from the data above, the markets sooner or later do recover. But until that happens, most of us would be wondering what we should do. The questions we are getting are mostly in these 4 major buckets and here is our view on those.
1) Should I redeem now and re-enter later?
The issue with this approach is that you never know when is the right time to re-enter. There is a saying that more money is lost in waiting for corrections than corrections themselves, so it’s better to be in the market than exiting now, enter later approach. There is another saying which reinforces this approach. Time in the market makes more money than timing the market. What all of this means is that you are more likely to benefit if you stay invested and ride out this period of volatility.
2) Should I Invest more now?
While the common saying is don’t try catching the falling knife, this is a good time to add more to your existing investments if your asset allocation plan allows it. What it means is that if you are under-invested in equities or the value of your Equity Portfolio has come down drastically, you can use this time to bring the mix to the level you want to maintain as per the desired levels. Adding to your Equity Portfolio at a lower cost would bring down your overall costs and chances are high that this action would set your Investments for success. 
3) I want to Invest more. Should I wait for more correction? 
Well, if your current asset allocation gives you the flexibility to invest more, waiting might not be a great idea. That’s because sharp correction may be followed by equally sharper rise too. So waiting for further correction may deprive you of lower prices. Missing out on a chance of getting your asset allocation right at lower prices won’t leave a good feeling if you witness a sharp recovery without getting a chance to invest 
4I don’t have the cash to invest more, how do I just witness doing nothing?
It’s perfectly fine to be inactive. It is not necessary you buy or sell just because someone else is doing the same. If you have SIPs running, they are already doing the job of making sure you invest in these falls and your overall costs are going down. However, you can definitely increase your SIP amount for the next 6-12 months if you don’t have any lumpsum cash at hand. If markets see more of a gradual recovery, you will still be able to take advantage of these volatile times. So either start another SIP in your existing fund or modify your SIP and increase its amount. 
Bottom line: This too shall pass
If you look at the history of equity markets, there have been plenty of crashes and for a variety of reasons. From pandemics like this to bursting of bubbles. But after every crash, there is a recovery and it will happen in this case too. A cure or a vaccine for coronavirus will be found and life will go back to normal, just like it did in the past. It might take a few months or even a year, but our ability as humans to survive these kinds of challenges is high.
So keep calm and before you redeem your investments, take a pause and think in 5 years down the time, you wouldn’t even remember this phase, just like past pandemics. At the same time don’t go overboard with investing. Let your asset allocation dictate how much or if you should invest. Crashes and all-time highs will happen in the future too so use this time to be ready for whatever happens in your investment journey.

Saturday 21 March 2020


Many people aren’t fully aware of the advantages of mutual fund investments. In this article, we are going to discuss all the advantages and disadvantages of mutual fund investment.

A mutual fund is the best option for a layperson to invest in a diversified portfolio. You can easily invest in any asset class like equities, bonds, T-Bills, CPs, CDs or money market instruments using this instrument.

With so many schemes available, mutual funds have the potential to fulfill almost every investment objective closely related to your life goals, whether it is planning for a house, a car, retirement, any emergency or tax savings.

The smartest and easiest way to invest in mutual fund is through an online investment platform You just need to click https://www.bmkwealth.in/login.php
  • Client Registration form to create an investment account
  • Select financial goals, be it tax saving or other life goals
  • Pick up the mutual fund scheme to invest
  • Give necessary additional information for the investment
  • Bank transfer the money directly to the fund house
The investment process is automated without any fees or hidden charges.
But, you should not pick mutual funds based on advice that doesn’t come from a reliable source or just for showing tax investment certificate. We strongly advise you to carefully analyze the associated merits and demerits of the mutual fund.
Only then you will be able to know about the suitability of mutual funds as an investment instrument and foster healthy investment practices. 
This article helps you understand the advantages and disadvantages of mutual fund investment, which you will face while picking up mutual funds for regular investment or for saving taxes.

Advantages of Mutual Funds

1. Liquidity to Enter and Exit Anytime

Liquidity helps you get money from your investments as and when you require. It is relatively easier to buy and sell a mutual fund scheme as compared to other investments like Real Estate, PPF, Ulips and NPS.
The only barrier is in the case of close-ended mutual funds, like ELSS which have a lock-in period of 3 years. But post-lock-in period you can sell your units without exit load at any point of time to fund your needs.

2. Diversification for Spreading Risk

The diversification offered by mutual fund investments it helps you manage risk by investing in more than one asset class like equities, debts and money market instruments based on your financial goals.

3. Expert Fund Management

Mutual funds save your time and help you manage the challenges of asset selection, fund allocation, monitoring, and management. 
Investing in Mutual funds doesn’t require you to be an expert, as this saves your time and energy that goes in e-market research or to keep watch on timely entry or exit decisions. Your fund manager takes care of all the challenges.
You simply need to invest and be assured that the rest will be taken care of.

4. Flexibility to Invest in Smaller Amounts

Mutual funds have inbuilt flexibility to help you invest as per your cash flow position. The investment does not require you to make all the purchases upfront. But you can definitely do a lump sum purchase if you have money.
If you are receiving a monthly salary then you can go for a SIP where you invest a fixed amount monthly or quarterly. You are flexible to plan as per your budget and convenience.
SIP can be as low as Rs. 500 per month and unlike lump sum investments this gives you the benefit of rupee cost averaging.

5. Schemes for Every Financial Goals

You can find schemes suitable for anyone, from a high net worth investor to salaried individuals, matching the individuals’ income, expenses, risk-taking ability, and investment goals.

6. Safety & Transparency

Unlike Bitcoin, corporate bonds, money market instruments, and shares, all information about mutual fund is easily available online.
AMCs are strictly regulated through statutory government bodies like SEBI and AMFI, which ensures safe and healthy investment practices.
You can easily verify the credentials of the fund manager, his qualifications, years of experience and AUM, solvency details of fund houses.

7. Lesser Cost When the Fund Invests Collectively

Fund houses invest in assets collectively, hence save on transaction and other costs as compared to a single transaction. The savings are passed on to investors as lower costs of investing in mutual funds.
Plus, the asset management services fees also comes at a lower cost as it gets divided between all the investors of the fund.

Benefits of Tax Saving Mutual Funds

ELSS mutual funds also provide tax benefits to the investor. Mutual fund tax-saving benefits include

1. Best Tax Savings Option

Mutual funds help in better tax planning along with the higher returns from investments. You can get a deduction of up to Rs. 1.5 Lakhs under section IT 80C.
ELSS tax saving mutual funds have the potential to deliver higher returns as compared to other tax-saving instruments like PPF, NPS and Tax-Saving fixed deposit.

2. Lowest Lock-in Period

Tax-saving mutual funds have the lowest lock-in period of only 3 years as compared to a minimum of 5 years for other tax-saving options like FD, ULIPs, and PPF.
Plus, you have the facility to stay invested even after the completion of the lock-in period.

3. Lower Tax on the Gains

From the taxation on gains perspective, ELSS is neither totally tax-exempt like PPF nor fully taxed as in the case of returns from FD or NSC.
Gains from ELSS funds accrue after a period of three years; hence it is treated as long-term in nature. Gains from ELSS are taxed at the rate of 10% for gains over Rs. 1 Lakhs, which is lower than the 15% tax rate charged in the case of short term capital gains.


You should keep the benefits, highlighted above, in mind while investing in a mutual fund.
There are certain disadvantages of mutual funds like the risk of over-diversification and transaction charges. However, BMK Wealth Management online investment platforms can help you invest wisely depending on your financial goals.