How to Make Yourself Financially Stable While Facing Job Loss?

There are so many twists and turns in everyone’s life, and it can be the worst nightmare to anyone in case of losing his job, and this may result in big strain on your financial situation. You can’t do enough for yourself and your family in the case you get a pink slip. The situation gets more critical if you have the responsibilities of your family and you are the sole earner of the family who has to pay the monthly installments, i.e. ( EMI ). Most of the organizations pay you up to three months’ salary before asking you to leave the job, but this is also not available when you quit the job on your own decision.


Here are some tips you can do in the case of a job loss-

Do not stress out and frighten yourself

First of all, you need to know that job loss is not the rocket science; it is not that much rare as you think, it can happen to anyone even in the good times. So, tell yourself that you can get through this though the situation seems quite critical.

In the time of such case try not to make any financial decision that may result in wrong one in upcoming days. Do not make decisions so quickly like cash in your retirement plan; sell your long-term investments etc. don’t take any action without making any proper plan with your less income. A Good Financial Planner/advisor can help you in making an appropriate plan and finding out the alternatives towards your short-term and long-term goals.

Setting up a goal: First step to Financial Planning ( Video )

Start finding out the work

Most of the unemployed think that they could easily find a job and then take a gap before starting to search for jobs. This can be a horrible idea as you are misconstruing the job market, especially when in the time when unemployment is high and the economy is trying to recover from a decline stage. According to the experts, a big gap in your employment history is not at all impressive for you.

Don’t pull out your retirement funds

The situation of job loss is temporary while your retirement funds are for 30 to 40 years of your life so try not to pull out tax-deferred funds to pay for today’s bills. Also, it is not as easy as it seems you will have to pay the income taxes on the withdrawal of funds and probably 10% of the withdrawn fund as a penalty tax if you are under the age of 59. Taxpayers could lose up to 30% to 40% of the withdrawn amount in taxes and penalties.

Cut off your expenses

Make a list of all your expenses starting from the prior ones to the costs which are less important. For example- rent, groceries, utilities, installments, loan premiums, clothing and so on. Then, try to reduce your expenses like not making any big purchase, not eating out more, ask creditors about delaying the payments for some days. Also, you can stop contributing to your retirement funds temporarily but try not to make a withdrawal from the pension funds.


Go for a loan

Due to the unemployment, it is a very tough situation for you and can make you suffer from the lack of confidence and depression. It is mandatory to take care of yourself mentally and physically during the period. So, don’t feel shy to ask for the help from your real friends and relatives. Try to lend some amount of the money from them to make your financial situation better. Make easy repayments or pay them back when you successfully overcome the situation of job loss.


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Do not make any short-term investments

Sometimes, it has been seen that during tough times, people make short-term investments in the hope of generating a quick profit from it that may help them in overcoming the situation. Your unemployment period is short term, but your investment should be for the long-term. Try not to sell your stocks/MF to get money from it because it will make you suffer loss while selling the stocks/MF when the market is down. You can talk to your financial advisor about the situation and save yourself by not making any short-term investments.


Setting up a goal: First step to Financial Planning ( Video )

“The most important thing about having goals is having one.” It seems so easy, but many times can be the most difficult step. It is quite shocking to me how so many people run around living life and going to work without being aware of what thing is that they are working for. Before you can even begin to start financially planning for your life, you need to know what it is you want to get out of life.

Going throughout life without a goal set is much like trying to navigate a ship in the middle of the ocean without a compass as every direction looks like it could be a right way and it is hard to tell if you are being led the wrong way.  Having goals gives you the vision to work for. Goals also act as an accountability of your performance.With a goal set, 6all of a sudden you have something to track your progress.  It allows you to look back on your performance and make changes to help you get back on course.


Your financial goals must be measurable and reviewed consistently. This is why setting specific financial goals is important, because you will be able to measure it. If your goal is to save Rs 23,00,000 in the next six years for a car you know you will need about Rs 22,000 per month so every month you can measure it and see if you are on track or need to make changes.

You should also review your financial goals on regularly, if it is a short term goal you will probably have to do a check up monthly, if it is long term, like retirement, a quarterly or semi-annual review will be enough.

Your goals should be tangible so that it would be easier to plan for their attainment. You can start it by listing out your short-term and long-term financial goals.

Short-term goals are the things you want anyway in the next 5 years like cars or funds for a wedding, etc. but always be aware that the short-term goals will give you less pliability in planning. So, if your short-term goal requires extraordinary returns on your investments, then it’s a high time to do a little planning and decide your priority. At the time if it is very much important for you to buy a car then you can shift some of the goals to fulfill it later on, or you can cut down the cost of a goal.

car goalNow plan for long-term goals which you want to have it any how after 5 years or you can stretch it up to 10-30 years period like education for children, available emergency fund, care for family members, retirement, buying or selling business, estate planning, personal objectives such as vacations, long trips or second home etc.

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Set up a plan in regards to your financial goals. You need to set up a savings or debt paying plan; this could be a monthly or bi-weekly plan. You will have to work backward to figure out how much you need to save to reach those goals, the shorter the time frame, the more accurate you can be. Base your plan on your current financial situation, do not account for raises and bonuses or any extra income in the future that you currently do not have, otherwise, you may set yourself up for disappointment if they do not come in.

And most importantly, always try to check out your plan and where you have reached to fulfill it. It will make you updated, and if you need any changes or correction, you can do as well.

Rs. 4 Lakh In Reliance Banking Fund Turns Over Rs. 1 Crore In Less Than 15 Years

If a someone had invested Rs. 4 lakh in 2003 in Reliance Banking Fund, his corpus would have turned over Rs. 1 crore in less than 15 years, means investor’s wealth has doubled in every 2.8 years in this fund.

Reliance Banking Fund is a sector fund focused on the banking and financial services sector. This is an open-ended equity fund having no entry and exit barriers. The fund aims to generate a superior return through active fund management.

The fund has outperformed its benchmark, Nifty500 Banks Index, by almost 450 basis points since its inception.


Reliance Banking Fund, which had an asset under management of Rs. 3034 crore as of July 31, 2017, is one of the flagship funds of Reliance Mutual Fund. Started on May 26, 2003, the Reliance Banking Fund’s net asset value (NAV) has grown from Rs. 10 to Rs. 265.42 on August 7, 2017, delivering a compound annual growth rate (CAGR) of 25.52 percent over 14 years.

It means investor’s wealth has doubled in every 2.8 years. For example, if an investor had invested Rs. 4 lakh in 2003, his corpus would have turned over Rs. 1 crore in less than 15 years.

About Fund Manager

FUND MANAGERInvestment Philosophy

    • Reliance Banking fund is a focused banking and financial services sector oriented fund investing across market caps within the sector.
    • The fund is well diversified across sub-segments like Private Banks, PSUs, NBFCs, Housing Fin Co’s, Broking houses, etc.


    • The fund endeavors to generate superior alpha through active fund management.
    • The alpha generation is attempted through tactical allocation across various sub-segments and differentiated investment ideas.


    • The fund thus attempts to lower risk through diversification while retaining the alpha creation potential.




Banking and financial services sector have been one of the best performing sectors in India. Continued reforms by the government and increasing financial inclusion have benefited this sector over the years. More and more people in India are now moving from the informal lending to formal lending, which has helped the banking sector in increasing its penetration.

With returns from gold and real estate falling, more and more domestic savings is now channelized to financial savings, which has benefited the banking and financial services industry.

Retail investors can invest in the fund through SIP (Systematic Investment Plan) route, which is considered a good medium to create long-term wealth.

A monthly SIP of Rs.10000/- in this fund on May 28, 2003, then your total investment of Rs. 17.10 lakh by July 28, 2017, would have grown to Rs. 95.37 lakh, a staggering 22 percent CAGR.

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TOP Holdings of Reliance Banking FundR6.1

Risks: Sector funds fall in the high risk, high return category of funds. If the particular sector does well, the sector funds deliver strong returns but if the sectors performs poorly than the returns could be below that of the broader markets. These funds are considered riskier than regular diversified funds.

Mutual Fund investments are subject to market risk. Please read the offer document carefully before investing.

Please check the Scheme Information Document

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No financial information whatsoever published anywhere here should be construed as an offer to buy or sell securities, or as advice to do so in any way whatsoever. All matter published here is purely for educational and information purposes only and under no circumstances should be used for making investment decisions. Readers must consult a qualified financial advisor prior to making any actual investment decisions, based on information published here.

Know more About P/E Ratio and its Significance

We all know about that there are ups and downs in the stock market every day, we often hear about that the market is more than its value today or under-valued today also, that this or that stock is expensive or cheap etc. So what does that really means in the subject to stocks?

For example, if the share price of a company is Rs.100 and share price of another company is Rs.500 that is the share price of one company are more than another one that does not mean the company having high share price is expensive than the company having low. Share prices of the companies are always identified regarding EPS (Earnings per Share).



EPS is the portion of the profit of the company allocated to each outstanding share of common stock. EPS works as a calculator of profitability of any company. More often, sometimes the data sources make the calculation easier by using a number of shares that stands out at the end of a particular period. The term EPS represents the part of the net gross of a company, taxes and stock dividends. EPS is also a calculation of company’s profitability on the shareholder point of view.


When one is purchasing shares of any company then he is purchasing the future earnings on a stock of that company. Also, if the EPS is high you have to be prepared to pay the high price and if it is not, then you will not get prepared to pay a high price. EPS is calculated by dividing post-tax profits from the number of shares in issue.

P/E ratio

For a long time, the investors and stock analysts use price-earnings ratios which are named as P/E ratios. P/E ratios are the ratios of share prices to earnings. P/E ratio is calculated by the price of a share of a stock divided by EPS (Earnings per Share) of the stock.


The P/E ratio is used to help the investors to know the time period in terms of years in the value of earnings a company will need to make the production to get its current market share value.

Two types of measurement issues are there while calculating P/E ratio. First one discusses the period at which price of the shares and earnings are calculated. The price shown in a P/E is generally the current market price of the stock such as weekly or monthly average ratio. Second one concerns about earning for the future predicted earnings for the next year.

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Limitations of P/E Ratio

P/E ratio shows nothing but the EPS growth prospects of a company to the investors and that is the big limitation of P/E ratio. The company having high growth rate seems comfortable to buy even having high P/E ratio, perceiving that increase in EPS will somehow assist the P/E back down to a low level. If the company has not that much growth rate, you may look after the stock has lower P/E ratio also it is often not easy to know whether a high P/E multiple is due to the growth or just the stock gets overvalued.

P/E ratio once calculated using an estimation of further earnings is not able enough to provide the information whether the P/E is suitable enough for the current growth rate of the company. To fulfill this limitation, another type of ratio is used named PEG (Price Earnings to Growth) ratio.


PEG Ratio is calculated by dividing PE to EPS growth rate over the next year. PEG ratio propose that the P/E is in the line of growth when a PEG is greater than one it means that the stock is overpriced.


Undoubtedly, the P/E ratio is very famous and easy to calculate, but also there are many drawbacks that the investors should keep in mind while using it to evaluate values of the stock market. Straightly, no single ratio can give you all the information you want to know about stocks. So, try to use multiple types of ratios to get full-proof information about stock and its valuation.

The Fall and Rise of the U.S. Economy, from the Wall Street Crash until Now

In his inaugural speech, president Trump painted a gloomy picture of an America that was broken and is in dire need of fixing. In fact, as this graph shows, the U.S. economy he inherits has been improving steadily over the past six years, with unemployment showing in an equally steady decline.


The graph pulsates and changes color to indicate the state of the nation. Larger circles indicate higher levels of unemployment, and vice versa. Green means GDP growth, more so if darker green. Red indicates crisis moments, when the Gross Domestic Product contracts – by more, as the shade of red darkens.

The graph starts in 1929, an ominous year for the economy of the U.S., and indeed the world. The Wall Street Crash sets off the Great Depression, which causes hardship on a scale not seen for generations – before or since.

Unemployment almost triples, from 3.14% in 1929 to 8.67% in 1930, almost doubles again by the next year to 15.82%, and adds another 8% by 1932. The rate peaks in 1933, when almost a quarter of the workforce – 24.75% – is out of a job. By that time, the benefits of president F.D. Roosevelt’s New Deal start to kick in.

Nifty 50 Journey to 10,000 level

But the massive programme for Relief, Recovery and Reform (which also included the beginning of Social Security) did not translate into a smooth or swift recovery. Unemployment stubbornly stayed in the double digits throughout the rest of the decade, and even ticked up four and a half percentage points again, to 18.91% in 1938. Only by 1941 did the unemployment rate dip below 10% again, and the mobilisation effort that followed U.S. entry into war the next year led to the historically low unemployment rate of 1.2% in 1944. Never since has the U.S. unemployment rate ever been as low as that – nor ever as high again as 11 years previously.

Post-war America, in the public imagination, turned from military victory to the commercial conquest of the world, bringing stability and growth in the domestic economy. Point in case: the Employment Act of 1946, which extended the federal government’s powers to fight inflation and unemployment – although the bill stopped short of advocating full employment, as so nearly achieved a few years earlier. But in reality, as this graph shows, peace did not bring immediate prosperity. Between 1945 and 1949, GDP contracted and unemployment crept up again, to 5.9%. But from 1950 onwards, growth returns, and unemployment goes down again.

By 1954, the Dow Jones had returned to pre-Crash levels, officially ending the Recession. Apart from two ‘red’ years this decade – 1954 and 1958 – the economy keeps growing and growing, all the way to the early 1970s. Unemployment gradually drops to a low of 3.6% in 1968; but starts to creep up again even before the Oil Crisis, which turns the start of the next decade red, and leads to ‘stagflation’ – low growth plus high inflation.

President Reagan oversees an even bigger contraction of GDP in the early 1980s, but the rest of the decade sees a recovery to growth and lower unemployment – only perforated by the Savings and Loan Crisis of 1989, a financial meltdown that was felt well into the 1990s. However, the Clinton years witness another long stretch of economic growth, the establishment of NAFTA and the balancing of the federal budget.

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The presidency of George W. Bush was hit by the stock market crash of 2000, and by 9/11 a year later. The ensuing war on two fronts – in Afghanistan and Iraq – doesn’t seem to have a negative impact on the home front, where growth stays strong and unemployment stays low. But the fact that the European Union overtakes the U.S. as the world’s largest economy in 2007 could be seen as a sign of underlying weakness – but that warning is soon rendered obsolete by the financial crisis that erupts the next year. Dubbed the Great Recession, it sees a serious contraction of the economy and a spike in unemployment spike at 10%. Measures taken by president Obama avert an even worse crisis, and the economy starts to grow again, although the so-called ‘jobless recovery’ leaves many ordinary Americans wondering when or even whether they will reap the benefits of the improving economy.

Unemployment has now fallen to what has come to be considered a natural low, of 5%. Could it ever return to the catastrophic levels of the early 1930s – or the near-full employment of the mid-1940s? As the Trump era begins, it remains to be seen whether the new president’s policy changes will extend the virtuous cycle of rising growth and falling unemployment – or punctuate it with a red mark for recession, followed by rising jobless rates.

source : howmuch

Know the Portions of Your Rs.100 Bank Deposit.

In all the noise about rising bad loans, a deposit deluge in the aftermath of demonetization and the collapse of credit growth, it’s time to take stock of where public funds are lying right now in the economy.

In a report from the Reserve Bank of India, the credit-deposit ratio as of the month of May was 72%, which means that out of Rs.100 deposited in the bank, Rs.72 used for lending and the rest Rs.28 was used to buy government bonds. In the same time of the previous year, banks have used Rs.76 out of Rs.100 deposit for lending and had left the rest Rs.24 in bonds. This is as per the stock of deposits on the 30th of the month.

1001Source : Centre for Monitoring Indian Economy

Taking a look at the additional credit-deposit ratio, which shows what portion of the new flow of deposits, is getting placed in the credit. And this reflects the slump in credit growth in 2016-17.

By the time of March-end the additional credit-deposit ratio was 42%, this shows that more than half of the deposits that came in were placed in government bonds. These are low-yielding and very safe assets. This could be easily understood by the fact that the deposit stream following the demonetization of Rs.500 and Rs.1000 currency bills left a little choice to the banks to buy nothing but the government bonds as the loan demand is very less. Moreover, during the demonetization period, this was even lesser in the month of November, it was 1% only which aroused to nearly 13% in the month of December.

Trouble in India’s Credit System of banks having foremost NPAs

Now, if we talk about the month of May where the credit-deposit ratio was 72%, the large amount of share is still placed with industry through the loans accompanied by credit to services as well as individuals.

Share/Portion of Rs.100 Deposited

Out of every Rs.72 lent, nearly Rs.17 only went to personal loans and services each, and approximately Rs.28 or 29 went to build or run the factories. A share of Rs.10 went to agriculture. The share of personal loans has aroused in one year to approximately 25% of total non-food credit from 21%. On the other side, the industry has dropped to 38% from 41% while farming maintained its portion of nearly 14%. Basically, only Rs.25 of every Rs.100 deposited in a bank comes back to the people in the form of loans like home loans, car loans and other credits.

It is known that the banks are burdened with a big heap of bad loans. Approximately Rs.14 of every Rs.72 lent is now classified as stressed portion, which means it neither originate any income for the banks or due to the late payments by the borrowers to lenders.