आसान बनाएं थर्ड पार्टी मोटर इंश्योरेंस क्लेम

आसान बनाएं थर्ड पार्टी मोटर इंश्योरेंस क्लेम

अगर आपके पास कार या बाइक है तो आपको मालूम ही होगा कि सड़क पर चलने के लिए थर्ड पार्टी इंश्योरेंस होना अनिवार्य है। दरअसल यह बीमा अपने लिए नहीं बल्कि अपने वाहन से किसी दूसरे व्यक्ति या उसकी संपत्ति को पहुंचने वाली क्षति की भरपाई करती है। थर्ड पार्टी इंश्योरेंस के प्रीमियम की दरें बीमा नियामक एवं विकास प्राधिकरण (आईआरडीए) करता है। पहली अप्रैल 2013 से थर्ड पार्टी मोटर इंश्योरेंस प्रीमियम में बीमा नियामक ने लगभग 20 फीसद का इजाफा किया है। इसलिए अगर आप अपने वाहन का इंश्योरेंस रिन्यू करवाने जा रहे हैं तो पहले से ही जेब ढीली करने के लिए तैयार रहें।

आपको यह समझना चाहिए कि किसी भी मोटर इंश्योरेंस के दो हिस्से होते हैं- पहला है थर्ड पार्टी कवर और दूसरा ओन डैमेज कवर। ओन डैमेज कवर के तहत किसी दुर्घटना की वजह से आपके वाहन को पहुंचने वाली क्षति कवर की जाती है। ओन डैमेज कवर की दरें बीमा नियामक तय नहीं करता। कंपनियां जोखिम और बाजार की प्रतिस्पर्धा के आधार पर इसे तय करती हैं। खैर मनाइए कि थर्ड पार्टी इंश्योरेंस प्रीमियम में हुई बढ़ोतरी के बाद कंपनियों ने ओन डैमेज कवर की दरों में बढ़ोतरी नहीं की है, नहीं तो वाहन के रख-रखाव के खर्च में सिर्फ इंश्योरेंस के कारण सालाना 20 फीसद से अधिक का इजाफा झेलना होता।

बीमा नियामक ने साल 2011-12 में थर्ड पार्टी मोटर इंश्योरेंस में औसत 58 प्रतिशत, साल 2012-13 में 15 प्रतिशत और साल 2013-14 में 20 फीसद की बढ़ोतरी की है। बीमा नियामक के आंकड़ों के अनुसार मोटर इंश्योरेंस उद्योग का क्लेम रेशियो साल 2010-11 में 213 प्रतिशत था लेकिन साल 2011-12 में यह घट कर 145 प्रतिशत पर आ गया। थर्ड पार्टी मोटर इंश्योरेंस प्रीमियम में बढ़ोतरी की बड़ी वजह भी क्लेम रेशियो ही थी।

एक अप्रैल 2013 से प्रभावी थर्ड पार्टी इंश्योरेंस की दरें

कार

1,000 सीसी तक --- 941 रुपये

1,000 सीसी से अधिक लेकिन 1,500 सीसी से कम --- 1,110 रुपये

1,500 सीसी से अधिक --- 3,424 रुपये

बाइक एवं स्कूटर

75 सीसी तक --- 414 रुपये

75 सीसी से अधिक लेकिन 150 सीसी तक --- 422 रुपये

151 सीसी से 350 सीसी तक --- 420 रुपये

350 सीसी से अधिक --- 804 रुपये

स्त्रोत: आईआरडीए

थर्ड पार्टी बीमा के क्लेम की प्रक्रिया

किसी भी वाहन के लिए अनिवार्य होने की वजह से वाहन मालिक थर्ड पार्टी बीमा तो ले लेते हैं लेकिन ज्यादातर लोगों को इस बीमा के क्लेम प्रक्रिया के बारे में स्पष्ट जानकारी नहीं होती। सबसे पहले तो यह समझना चाहिए कि यह मोटर इंश्योरेंस के ओन डैमेज कवर से बिल्कुल भिन्न है इसलिए इसके क्लेम की प्रक्रिया भी भिन्न है। वाहन चालक मालिक को दुर्घटना के तुरंत बाद पुलिस को सूचित करते हुए प्राथमिकी दर्ज करानी चाहिए। साथ ही बीमा कंपनी को भी सूचित किया जाना चाहिए। थर्ड पार्टी इंश्योरेंस के मामलों का निपटारा मोटर एक्सीडेंट क्लेम्स ट्रिब्यूनल (एमएसीटी) में होता है और थर्ड पार्टी की क्षतिपूर्ति की राशि का निर्धारण अदालत द्वारा तय किया जाता है जिसकी भरपाई थर्ड पार्टी इंश्योरेंस देने वाली बीमा कंपनी करती है।

थर्ड पार्टी क्लेम के मामले में कुछ दस्तावेजी प्रकिया पूरी करना भी जरूरी होता है। उदाहरण के तौर पर पॉलिसीधारक द्वारा पूरी तरह भरा गया क्लेम फॉर्म, ड्राइविंग लाइसेंस की कॉपी, पॉलिसी की कॉपी, पुलिस स्टेशन में कराई गई प्राथमिकी की कॉपी, वाहन के आरसी की कॉपी, अगर वाहन कंपनी के नाम से रजिस्टर्ड है तो उसके मूल दस्तावेज के मामले में स्टांप और कॉमर्शियल वाहनों के मामले में उनके परमिट और फिटनेस सर्टिफिकेट शामिल हैं।

कैसे बनाएं क्लेम को सरल

दुर्घटना के बारे में आप बीमा कंपनी को जितनी अधिक जानकारी देंगे आपके क्लेम की प्रक्रिया उतनी ही सरल होती जाएगी। इसलिए क्लेम फॉर्म को भरते समय औपचारिकता पूरी करने के बजाए उसमें विस्तार से दुर्घटना से जुड़ी जानकारी दें। अगर संभव हो तो दुर्घटना स्थल से वाहन हटाए जाने से पहले दुर्घटना स्थल की एक तस्वीर ले लें और इसे क्लेम फॉर्म के साथ संलग्न करें। अगर आपके वाहन से कोई घायल हुआ है और आपने उसे किसी नजदीकी निजी अस्पताल या नर्सिग होम में भर्ती करवाया, जहां इलाज के खर्च का भुगतान आपको करना है तो आप इसकी सूचना तुरंत अपनी बीमा कंपनी को दें। इलाज में होने वाले खर्च की भरपाई बीमा कंपनी करेगी।

दलालों के फेर में न पड़ें

दुर्घटना के बाद आपसे ऐसे लोग भी संपर्क करेंगे जो थर्ड पार्टी क्लेम मुआवजे की राशि आसानी से दिलाने का वादा करेंगे। ऐसे बिचौलियों और दलालों से सावधान रहें। अगर आपके दस्तावेज पूरे हैं तो आप सीधे बीमा कंपनी से संपर्क करें। थर्ड पार्टी क्लेम जितनी जल्दी हो सके उतनी जल्दी दर्ज करवाएं। अगर मामला अदालत में है तब भी आपको लगातार बीमा कंपनी के संपर्क में रहना चाहिए। इससे आपको क्लेम के चरण की जानकारी मिलती रहेगी। अक्सर ऐसा देखा गया है कि पालिसीधारक की दिलचस्पी कम होने की वजह से क्लेम के पैसे मिलने में देर होती है। अदालत से समय पर अपने पक्ष में पैसे मिल जाएं, यह सुनिश्चित करना भी जरूरी है।

Planning to buy a car this festive season? Here's a checklist

The months of October and November witness heightened activity in auto sales in India. The car manufacturers and dealers across the country come up with various discounts and offers to support the festive sentiments of consumers.

Most of us delay our decision to buy a car till the festival season in order to take advantage of the offers given during this period.

For example, the most popular offers and discounts by leading car manufactures during this festive season are: Accessories, cash vouchers, loyalty exchange bonus, free insurance etc. In the flurry of these offers, the factors one has to consider before buying a car this festive season are:

Financial impact

Our decision to buy a car should be driven by necessity rather than the discounts on offer. Analyse the following financial impacts before buying a car.

• Understand the implication of down-payment and EMI (equated monthly installments) on future cash flow if availing an auto loan.
• Don't let any cash discounts lure you to stretch your budget and get a bigger car than the one you have set out to buy.
• Buying a car will necessitate other expenses like fuel and maintenance, which will increase the monthly expenses.
• Festive discounts are timed during the last three months of the year around Dussehra and Diwali. A new car bought towards the end of the year will become previous year's model within a couple of months.

Buying such cars though less expensive at the current rate can affect the re-sale value of the car.

Analyse the discounts and check if they are useful to you

As a buyer of new car it is always better to analyse how purposeful a particular discount is. Generally, most of the discounts are product-based. Cash discounts can be more valuable than product discounts as we may not need specific items offered by the dealer/maker of the car.

Here are some of the most popular product discounts during the festive season:-

Insurance for R

s.

 1

It is better to check for insurance's features than avail it just because it is close to being a free product. Most of these auto insurances offered as freebies are not necessarily a comprehensive product covering most aspects of vehicle damage.

Free accessories

Free seat covers, extra navigation system, alloy wheels etc. are some of the popular offers. Accessories offered are always extra features, which may not be essential for us.

Loyalty exchange bonus

This offer may be considered only if we already own a car from the same maker and are looking to exchange for a different model or version of the same brand.

Whether, it's festive season or not, buying a car can have a big impact on our personal finances. Buying a car during the festive season should be based on collective factors of the financial impact and whether the discount offered matches our requirement or not.

Income tax returns: 9 tax saving options other than Section 80C

Tax deduction under section 80D qualifies for mediclaim policies. The premium, which is paid for medical insurance policy for self and family members to protect them from sudden medical expenses, comes under this section. The maximum amount allowed for exemption annually for self, spouse and dependent parents/children is R

s.

 15,000. In case of a senior citizen, the maximum amount extends up to R

s.

 20,000. If you are paying the premium for your parents (whether dependent or not), you can claim an additional maximum deduction of R

s.

 15,000.

80DD:

According to the Income Tax Act, if you are paying a premium to LIC or any other insurance company (approved by the Income Tax board) for the medical treatment of a dependent physically disabled person, you can avail exemption under the section 80DD. Here, the dependent should be none other than your spouse, children, parents or sibling. If the person is suffering from 40 per cent of any disability, a fixed sum of R

s.

 50,000 can be claimed in a year. Similarly, if the disability is 80 per cent, the fixed sum goes up to R

s.

 1,00,000 per year. For initiating the process of deduction you need to submit the medical certificate issued by a medical authority along with the return of income.

80DDB:

If you have incurred expenses for the medical treatment of self or your dependents, you can claim a deduction of up to R

s.

 40,000 or the actual amount paid, whichever is less, under the section 80DDB. For a senior citizen, the maximum exempted amount is R

s.

 60,000, or the amount actually paid for medical expenses. To claim a deduction under this section, you need to submit a medical certificate from a doctor working in a government hospital.

80E:

The interest paid on loan taken for pursuing higher education of self or any dependent is exempted from tax under section 80E. An education loan can be taken for wife, children and minors for whom you are the legal guardian. This deduction is applicable for a period of eight years or till the interest is paid, whichever is earlier. The deduction is only approved for higher studies, which means full-time graduate or postgraduate courses in engineering, management or applied sciences, pure sciences including mathematics or statistics. However, from 2011 onwards, the scope of this exemption has been extended to cover all fields of studies including vocational studies pursued after completing the senior secondary examination or equivalent. No exemption is applicable for part-time courses.

80G:

One often donates on philanthropic grounds to help the destitute. Such an amount can be donated to trusts, charitable institutions and approved educational institutions, and qualifies for deduction under Section 80G. The exemptions can be up to 50 per cent or 100 per cent of the donations made. Funds in which the donations are eligible for tax exemptions include the National Defence Fund, Prime Minister Drought Relief Fund, National Foundation for Communal Harmony, National Children's Fund, Prime Minister's National Relief Fund, etc.

80GG:

If a salaried or self-employed person staying in a rented house does not receive any kind of HRA, they can claim a deduction under this section. However, you cannot avail any such benefit if you, your spouse and/or your child owns any residential accommodation in India or abroad. You can claim the least of the following under Section 80GG: 25 per cent of the total income, or R

s.

 2000 per month, or excess of rent paid over 10 per cent of total income.

80GGC:

Any monetary contribution to any political party or electoral trust is eligible for tax exemption. Thus, your contribution, as a matter of appreciation for their work, will serve both the purposes.

80U:

A resident of India suffering from any kind of specified disability is eligible to claim tax deduction under this section. In order to enjoy this opportunity, one should be suffering from not less than 40 per cent of the following diseases: blindness, low vision, mental illness, mental retardation, hearing impairment. The deduction provided is flat R

s.

 50,000, irrespective of the expense incurred. If the disability is severe, the deduction can be up to R

s.

 1 lakh. One needs to provide a copy of all the certificates issued by a medical authority in order to avail this benefit.

80CCG:

The Finance Act 2012 introduced a new Section 80CCG to offer 50 per cent tax break to new investors who invest up to R

s.

 50,000 and whose GTI is less than or equal to R

s.

 10 lakh. It has been introduced for budding investors entering the equity markets for the first time and is a once-in-a-lifetime benefit.

Hence, there are several sections apart from 80C that can help an individual benefit from tax exemptions. It is time to start looking beyond 80C for tax savings.

Smart ways to improve your credit rating

Whether you are planning to buy a home, or want to get a new credit card, your credit score has immense affect on your loan processing.

 

Save precious time tracking your investments

The numerical figures of 700 and above are fast forming a superpower club that determines what job you should get, what EMI on your insurance & loan you should pay, and what should be the interest rate on your loan.

It also helps determine your marriage eligibility, phone number eligibility and limit and much more. Thus, whether you are planning to buy a home, car or any other product, or want to get a new credit card, your credit score has immense affect on your loan processing as also determining the credit limit.

A credit score, in fact, is a 3-digit number that shows numeric summery of your credit health. Such score is derived by credit bureaus by analyzing your credit history. The score usually ranges from 300 to 900 points and higher scores suggest more chance of getting approval of your loans. But what is a good enough score?

"A score above 700 usually suggests good credit management. A person's credit history, in fact, is a record of how he/she has used and managed credit in the past. Every financial transaction in your life involving credit is recorded in your credit history - from your payment history on your credit card, to your history on paying off your car loan, to any suits that may have been filed on you," explains Arun Ramamurthy, co-founder, Credit Sudhaar, a credit health improvement company which aims at helping individuals become credit healthy.

In India credit scores are calculated by credit information companies such as CIBIL, Equifax and Experian.

Ramamurthy says that credit awareness in India has a long way to go. In fact, Credit Sudhaar conducted a survey across 8 cities in India and sampled over 300 respondents, and found out that more than 85% of the respondents were not aware of credit bureaus. Delhi and Pune led the country with 1 out of 4 respondents being aware of credit bureaus. Bur a whopping 92% of respondents were unaware of their credit scores.

Delhi, Bangalore and Pune had more than 10% respondents knowing their score. The survey revealed that 91% of the customers were not aware of the impact of non-payment of credit dues. While a mere 4% had reviewed their credit score in the last 1 year, 98% of the respondents who took the survey were unable to comprehend the report that was shared with them.

This explains why you not only need to know about your credit rating, but also the ways to repair the same. Here are some tips to improve your credit scores:

Check your credit report:

Credit score repair begins with your credit report. Thus, the first thing to do is to request a free copy of your credit report and check it for errors. "In particular, check to make sure that there are no late payments incorrectly listed for any of your accounts and that the amounts owed for each of your open accounts is correct. Resolve the errors, if any, immediately with the credit bureau and reporting agency," says Gaurav Wadhawani, co-founder, Credit Sudhaar.

Regular payment of bills:

Many people are still not aware of the fact that as simple as paying bills - even phone bills -- on time can play a very important role in improving the credit score. Your payment history on your credit health report amounts to almost 35% of your total score. So, prevention is better than cure. Therefore, it is important to be consistent with the payment of utility bills. "To have a good score, you need to maintain no late payment status for at least seven years," says Wadhawani.

Pay off a debt:

Another easy method to improve the credit score is by start paying off older loans or debts. Even if the debt amount is small, it is essential to get rid of it by making the payment on time. Minimization of outstanding debt helps to improve the credit score.

Less credit cards and less use:

Although having a credit card can actually help you in being an eligible applicant for loans, however, owning numerous credit cards and making huge purchases with them can reverse the situation. Bad credit scores can be improved by reducing the use of credit cards as well as avoiding having too many credit cards. The ideal would to be use between 10% and 20% or less of the total credit available. Whether you are planning to buy a home, or want to get a new credit card, your credit score has immense affect on your loan processing.

The numerical figures of 700 and above are fast forming a superpower club that determines what job you should get, what EMI on your insurance & loan you should pay, and what should be the interest rate on your loan.

It also helps determine your marriage eligibility, phone number eligibility and limit and much more. Thus, whether you are planning to buy a home, car or any other product, or want to get a new credit card, your credit score has immense affect on your loan processing as also determining the credit limit.

A credit score, in fact, is a 3-digit number that shows numeric summery of your credit health. Such score is derived by credit bureaus by analyzing your credit history. The score usually ranges from 300 to 900 points and higher scores suggest more chance of getting approval of your loans. But what is a good enough score?

"A score above 700 usually suggests good credit management. A person's credit history, in fact, is a record of how he/she has used and managed credit in the past. Every financial transaction in your life involving credit is recorded in your credit history - from your payment history on your credit card, to your history on paying off your car loan, to any suits that may have been filed on you," explains Arun Ramamurthy, co-founder, Credit Sudhaar, a credit health improvement company which aims at helping individuals become credit healthy.

In India credit scores are calculated by credit information companies such as CIBIL, Equifax and Experian.

Ramamurthy says that credit awareness in India has a long way to go. In fact, Credit Sudhaar conducted a survey across 8 cities in India and sampled over 300 respondents, and found out that more than 85% of the respondents were not aware of credit bureaus. Delhi and Pune led the country with 1 out of 4 respondents being aware of credit bureaus. Bur a whopping 92% of respondents were unaware of their credit scores.

Delhi, Bangalore and Pune had more than 10% respondents knowing their score. The survey revealed that 91% of the customers were not aware of the impact of non-payment of credit dues. While a mere 4% had reviewed their credit score in the last 1 year, 98% of the respondents who took the survey were unable to comprehend the report that was shared with them.

This explains why you not only need to know about your credit rating, but also the ways to repair the same. Here are some tips to improve your credit scores:

Check your credit report:

Credit score repair begins with your credit report. Thus, the first thing to do is to request a free copy of your credit report and check it for errors. "In particular, check to make sure that there are no late payments incorrectly listed for any of your accounts and that the amounts owed for each of your open accounts is correct. Resolve the errors, if any, immediately with the credit bureau and reporting agency," says Gaurav Wadhawani, co-founder, Credit Sudhaar.

Regular payment of bills:

Many people are still not aware of the fact that as simple as paying bills - even phone bills -- on time can play a very important role in improving the credit score. Your payment history on your credit health report amounts to almost 35% of your total score. So, prevention is better than cure. Therefore, it is important to be consistent with the payment of utility bills. "To have a good score, you need to maintain no late payment status for at least seven years," says Wadhawani.

Pay off a debt:

Another easy method to improve the credit score is by start paying off older loans or debts. Even if the debt amount is small, it is essential to get rid of it by making the payment on time. Minimization of outstanding debt helps to improve the credit score.

Less credit cards and less use:

Although having a credit card can actually help you in being an eligible applicant for loans, however, owning numerous credit cards and making huge purchases with them can reverse the situation. Bad credit scores can be improved by reducing the use of credit cards as well as avoiding having too many credit cards. The ideal would to be use between 10% and 20% or less of the total credit available. 

No credit card default:

Another important measure to improve the credit score is to pay down the credit cards and avoid credit card default. Generally you should try to make the balance of each of your credit card at least 30% below the credit limit. "It is advisable to give preference to paying down the credit cards close to their credit limit at first," informs Ramamurthy.

Timely payment of EMIs

Pending loans and debts put an impact on credit health. Therefore, it is important to pay them back on time. For people bidding to improve their credit score, it becomes all the more important to pay the EMIs on time. If you are responsible and punctual with relevance to your current loan payments, it will surely improve your credit score.

Don't close unused credit card accounts:

Note that a closed account will still show up on your credit report, and may be considered by the score. Also, canceling a credit card can actually lower the credit score. "Alternatively, a better strategy is to occasionally use older credit cards so the issuer doesn't stop reporting the information to the credit bureaus. Having a long credit history increases and improves the score," says Ramamurthy.

No new credit card purchases:

Applying for a new credit when already incurring a bad credit score is a bad idea. New card purchase will raise the credit utilization, which is the ratio between credit card balances and credit limit. The higher the balance, the more affect to the credit score. Therefore, it is advisable to pay cash during purchases instead of putting them on credit. Lowering balances help improve the credit score.

Seek professional help:

If you have tried your hand at fixing your credit report, but have failed to attain desired results, you can also take the help of a professional or credit repair agencies to improve your credit score. 

Last date for e-filing of tax audit extended

The last date for e-filing of tax audit report by companies has been extended to October 31, from September 30.

 

MUMBAI: The last date for e-filing of tax audit report by companies has been extended to October 31, from September 30, according to a notification issued by the Central Board of Direct Taxes.

However, the last date for regular manual filing of tax audit report remains the same - September 30. A spokesperson for the Income-tax department said: "We have extended the time for e-filing of Tax Audit Report in response to complaints from taxpayers of the difficulty in uploading the data online. However, they have to file the report manually before September 30."

Senior chartered accountant TP Ostwal said: "This is an indirect way of asking the taxpayers to do the data feeding for the department. It would have been better if the date for manual filing of return and tax audit report are also extended" .

The office bearers of the Institute of Chartered Accounts of India have sought an appointment with the finance minister to convey the difficulties faced by the taxpayers and tax professionals by its insistence that they file the tax audit report physically on the due date on September 30, 2013.

Financial mistakes young investors should avoid

 I have discovered a common characteristic among the young people who have begun to earn and feel good about it. They do not engage seriously with money or investment decisions. There are several excuses—not enough money; too many choices; very complex; uncertainty about where to start; too much paperwork.

 While they procrastinate about money, they allow their money life to play out by default. Lets consider a few common issues.

First, many young earners think that managing money is complex and is not for them. This is when they have already opened a bank account, taken a credit card, and a loan for a motor vehicle. Money decisions have to be taken by default or design once you start earning. The simplest way to understand personal finance is to see yourself as an asset that generates income.

If you save and invest, you are buffering the income. If you spend more than you earn, you need a higher or an alternate source of income. If you borrow, you create a liability and take away from the future income.

Beyond these four ideas of your assets, the income they make, the expenses you incur and the loans you take, there are no personal finance decisions to take. Evaluate every money decision in this context.

Second, youngsters tend to whine and complain when the world they see and experience is different from the comfort zone that they are used to. They revel in the problem, become cynical, crib about how it makes their life difficult, and spend too little time on solutions. Protective parents make the process of growing up tougher.

The simple rule is that money decisions require action, and this calls for evaluating the alternatives and making a decision. I have known of intelligent students processing complex case studies in class, but unable to fix a healthy meal for themselves at the hostel.

They do not see that this problem also requires a similar solution-oriented approach, with real-life constraints of time, energy, resources and skills. The 2-minute noodle has been a hostel staple for way too long. This quick-fix approach continues in the young people's money lives, where the search is for quick, comforting solutions that are easy to arrive at.

Young investors need to think strategically as if they were a business unit. Without this orientation, they may remain clueless earners, who do not know how to take money decisions.

Third, procrastination about money is simply irresponsible behaviour. There are several youngsters who have not opened their bank statements, haven't deposited the dividend cheques, not filed the tax returns, or completed the KYC process with a mutual fund or broker.

They have a PAN card since the employer insists on it. The taxman would want to know if they can establish how they built their assets, and whether they paid the taxes on their income before doing so.

Those who share transactions for fun also create short-term capital gains that are taxable, and there are penalties for not paying these. Assuming you won't get caught is a bad idea.

Keep empty shoe-boxes to store statements, bills, papers, and notices and take the time to sort them periodically. Form groups to know how to file your tax and do it on time. These habits, if developed early on, will help as you move up in your career and can afford to hire someone.

You can avoid being ripped off if you deal with your paperwork in the early days.

Fourth, several young investors are overconfident about their future incomes. They believe that they can find a new job since a growing economy like India would have opportunities. They also are big spenders since they do not visualise a dark future for which they have to set money aside.

Instead of defining saving as the amount left after spending, it might be a good idea to set some money aside right at the start. The direct debit options that take money away from the salary account, systematic investment plans that ensure money is invested regularly, and deposits that are created when the savings account reaches a limit, are all good options to ensure disciplined saving.

To spend is to make the seller rich; to save is to make ourselves wealthy. It always makes sense to pay ourselves before paying everyone else. Fifth, young investors are very tech-savvy and should find out how modern technology can impact their financial lives.

The high default in educational loans comes from ignorance about technology that credit bureaus can use to aggregate repayment records. When the home loan is rejected because one fails to pay an education loan, it is too late and expensive to make amends.

The core banking solutions ensure that money can be easily accessed, used and transferred without recourse to a physical branch, by using Internet and mobile banking instead. This, however, also means dealing with new risks of password protection, guarding against phishing and Internet frauds, and keeping an eye on salesmen who ask for account access to 'make it easy'.

It is now possible to aggregate all the money transactions into applications that help budgeting, spending, investing, and recordkeeping. The youngsters should leverage their ease with technology to make money transactions simpler and more efficient. Sixth, many young investors start at the wrong end of the investing spectrum.

Several think that speculating in stocks, buying a few IPOs, or conducting derivative transactions are the easiest ways to make money. It is pertinent that various management schools have stock and derivative trading games, not ones on asset allocation.

The former is a high-adrenaline activity that creates a buzz; the latter is a life skill, but quite boring. A solid foundation for creating wealth is through simple and staid products, such as fixed deposits and PPF accounts.

Diversified large-cap mutual funds and bonds can be added to this gradually. Speculation comes last, and should only contribute marginally. Young investors need do build a solid base first.

Young investors have time on their side. Anyone who has dealt with money will be able to tell you how magically compounding can work if good investment decisions are taken early on. It will be a pity if this is frittered away due to procrastination or unwillingness to learn the ropes.
 

10 ways in which you can negotiate your salary

  If you didn't bag the best compensation in the market when you switched jobs, don't worry. The best of professionals come up short when it comes to discussing salary with a new employer.
Here are some of the common mistakes you can avoid while discussing your salary with a potential employer.

1) Accept initial offer and lose Rs 1 crore

Always, always, always negotiate. Women and first-time job seekers are more prone to accepting the opening offer without questioning it. A 10% salary difference in the first job with a CTC of Rs 4 lakh represents a lifetime loss of over Rs 1 crore, assuming a 15% annual hike over a 40-year career.

So, politely restate your case and provide justification for a revised offer. In over 95% of the cases, the employer has not made his best offer right away and is expecting you to negotiate upwards. As a ballpark, ask for a 10% increase.

2) Do your homework on position & firm

Thoroughly research the market and the firm. In negotiations, as in war, the better prepared side wins. Never approach a new employer without finding out the standard market salary for the position offered based on your experience and qualification.

Start with online research, and then talk to professionals and recruitment consultants. You can also speak to people in the company to have an idea about the latest state of its business, operations and the compensation structure. Use this data to justify your stand.

3) Don't use last salary or financial need as pegs

Focus on the value you will bring to the company. Most professionals are browbeaten by the firm's hiring manager, who will peg the new offer to your last drawn salary. This is usually underselling your competence since it does not give you a fair market correction.

Similarly, do not negotiate on the grounds of how much money you need. Convey the value addition you will provide to the profile and firm, and why you deserve a better deal.

4) Have a back-up plan

Know your options if you choose to walk away from the offer. Only if you have a back-up plan can you negotiate without fear and take a stand on a fair compensation structure. This is the reason it's not advisable to quit a job before you find a new one. In today's challenging job market, a few months of savings or an alternate source of income will do wonders for your confidence during the negotiation process.

5) Let the employer start salary discussion

Let the employer talk about salary first. Most newcomers make the mistake of initiating the compensation discussion early on in the game. This exposes your inexperience and sends a negative signal that you are concerned only about the salary, not the profile. On the other hand, if the employer makes the first move and quotes a figure, it sets the floor for the negotiation and the final salary can only be negotiated upwards from there.

6) Don't be eager to share information

Be miserly about sharing salary details initially. Knowledge is power, more so in a negotiation. So, don't be in a hurry to pass on information about your past compensation, precise expectations about salary, bonus etc.

Focus on discussing your achievements, proposed job profile, and your fit with the position and the company. The more you delay it, the greater is the time that the firm is investing in your hiring. This usually translates into a better job offer.

7) Only accept a verbal offer

Get every commitment in writing. If the hiring manager makes a verbal one—review in six months or a guaranteed 20% bonus—it has no meaning. If the firm is reluctant or slow in making its promises in writing, treat it with suspicion.

The firm is either looking at a stronger candidate or has no intention of following up on its promises. Do not resign from your existing job till you have signed a written offer.

8) Avoid wrong advisers

Trust either your own research or independent consultants. The hiring manager's advice to you about the 'great' offer is a clear conflict of interest. So is the advice of the recruitment consultant who is dealing with you.

The inputs from inexperienced negotiators like your friends often miss the point and focus on power play instead of creating value. So, conduct your own research and seek inputs from consultants not related to the ongoing hiring process.
9) Refuse instant rewards

Invest in delayed gratification. If the hiring manager throws in a Rs 1.2 lakh joining bonus to sweeten the deal, recognise that it will not be there next year. So, your take-home salary in the second year will be lesser.

Instead, ask for a Rs 10,000 monthly hike. Though there won't be any instant cash, the cumulative benefits will be much more, as also permanent. Similarly, the new job should add long-term, permanent value to your career and not be a fresh start for the sake of compensation.

10) Don't show desperation

Rehearse your lines to avoid showing your need. As in a dating game or a sales process, any hint of desperation swiftly kills your ability to succeed. Even if you urgently need the job, you will have to find a way to stay calm and respond smartly during the selection and negotiation process.

Seek inputs from trusted professionals to rehearse your responses. Don't be in a tearing hurry to reply to e-mails and job offers from the hiring manager. Respond as you would to standard communication.

Don't forget the extras

Sign-on bonus

If the employer's bureaucratic salary band restricts him from paying your worth, ask for a signon bonus to cover the difference. It is the easiest solution for the employer to match your value without upsetting the applecart. The bond for this should not exceed 12 months.

Relocation cost

Most of the employers would be willing to consider covering your relocation expenses if you were to take up the issue. The amount is typically higher for senior positions, so negotiate accordingly. Check if the reimbursement is for actual expenses and whether it is tax-exempt.

Flexitime & flexiplace

How much would you pay for the privilege of flexitime at your workplace? Or for the opportunity to work from home? Both benefits have a tangible value for you. Discuss these options with the firm to make your offer more attractive.

Six-month review

Depending on the firm's annual performance review cycle, the next increment and bonus could be 12-18 months away. Ask for an early review in, say, six months. It is not a risk for the employer, while it gives you an opportunity to prove your worth and earn a quick salary revision and/or bonus.

Leave

Though often bound by rigid policies, many employers are willing to look at special requests for paid leave. You can explore the options for a longer maternity leave, a sabbatical in 3 years' time, a month's furlough after 18 months, or simply an extra week's leave.