King Solomon’s Investment Advice
March 8, 2014 Leave a comment
“The naive believe everything . . . but a wise man looks well into a matter.”
How is Alimony Calculated?
February 24, 2014 1 Comment
Though there is no fixed formula for calculating the alimony payable after divorce, the following points determine the quantum:-
Even if the wife is earning, the court will take into account the husband’s financial status. If his income is very high, the wife will be given some alimony.
If wife is not earning,the court will consider the reasonable needs of the person. The alimony will be fixed to allow her a standard of living equal to that of her husband.
Alimony is for the upkeep of the divorced spouse. As soon as she remarries, the man may stop paying. However, he may still have to pay for the upkeep of the child.
In the rare case of the husband not earning due to a disability while the wife has an income, the man can be awarded alimony by the court.
If there is a child ,the court will award the expenses incurred for the child’s maintenance, including food, clothing and education, befitting the standard of the family.
Any property bought during the tenure of the marriage is owned 50% by the wife. This does not include inherited or previously purchased property,as the law stands today.
Debt Trap
February 24, 2014 Leave a comment
Here’s a small allegory for you:
X is a youngish executive with an annual income of 10 lakhs. Over the last few years, he has taken loans for all sorts of reasons. So much so that last year, his annual EMIs amounted to a total of 5.4 lakh. What is worse is that he is also unable to cut down on his expenses by much. Last year, he spent a total of almost 16 lakh.
To finance the spending and the EMIs, he took fresh loans of 5.25 lakh. He has borrowed from everywhere — on the many credit cards he has, against his property, informal loans from friends and relatives, from his employers etc.etc. In just the last year, he has actually borrowed almost as much as the old EMIs he has paid. So, he is now roughly borrowing as much as he is repaying in interest and principle.
X’s problem is that he an incurable optimist. Every year, he is convinced he will get a big salary hike and bonuses and then starts spending under this assumption. Of course, the increased income never lives up to his fantasies. So, he eventually finds himself out of pocket. He then makes some attempts to control his expenses, but is never successful. The inevitable result — even more loans. This year is no different. He is so convinced that he will get a big bonanza from his employer that he has gone ahead and taken a vehicle loan to buy a car. Read more of this post
Managing Your Health Insurance Premium Costs
February 23, 2014 1 Comment
A more equitable health insurance market is leading to a heavier burden on younger ,healthier policyholders.Many health insurance policyholders have seen their premiums go up 15-35% in this financial year, as insurance companies, including public sector firms, revise their premium rates.
The new health insurance regulations implemented by the IRDA in October last year,including the abolition of claim-based loading and the introduction of the lifelong renewability clause,are some of the main reasons why premiums have risen sharply.The first refers to the practice of increasing subsequent premiums for those who make claims. The lifelong renewability clause is to ensure that older people with health issues continue have access to health insurance.Apart from this, the new health insurance guidelines also allow insurance companies to raise premiums only when a policyholder moves to a new age band. Moving away from claim-based loading and mandating lifelong renewability means that younger people pay more. There is some cross-subsidisation otherwise it becomes impossible for senior citizens to afford health insurance.Most claims come in the age group above 60 years but companies cannot load premium beyond a point for this age group. Read more of this post
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