Tuesday, September 16, 2008

Points to Ponder - IRCTC

Computers are ubiquitous and it hasn't left Indian Railways behind. IRCTC is a site for booking train tickets online.

Unlike the booking of air tickets, IRCTC accept your debit cards as well. So, those who don't like credit cards (for any matter), can use this site to book tickets online without any fuss. Even now, I can see so many people standing in a long queue to book their tickets! If you know how to create a e-mail online, then you can book a train ticket as well.

It will take about 5 minutes to book a ticket online when you have all the other information handy. You can use many other sites to check for the availability and then carry on to this site to book the ticket online.

Better use e-ticket option
There are two options in the site. one is i-ticket and the other e-ticket. When you choose i-ticket, the ticket booked will be delivered at your doorstep. When you choose e-ticket, the ticket will be instantly delivered through your printer! Even if you don't have a printer, go to the nearest xerox shop which takes print-out, and take one. This does saves time and you needn't have to wait to get your ticket.

Booking Wait listed tickets - Beware!!
Now, IRCTC has come up with an option for booking wait listed tickets as well as e-ticket. But, If you book the wait listed ticket and it is not confirmed on time, you will considered ticket less.
So, Have this in mind while booking the wait listed tickets.

Can I take a print-out of the ticket from my mail?
IRCTC does a good job in making a secure connection gateway with various banks and books your ticket online. It also sends an email to you regarding the ticket booked.
If you want to take the print-out of the ticket, Go to the booked tickets and enter your ID no and take the print out. Don't ever take the print-out of the mail sent by IRCTC.
I saw few people in train having the print-out taken from the mail sent by IRCTC. TTR was completely against that and asked for the fine. More than the fine, the horrifying time that you spend in there will make you miserable.
The problem is actually, the mail doesn't contain the ID (License,Passport etc.,) number and TTR is supposed to check the ID number for confirmation.
If you are booking tickets for your friends/relatives and you are not traveling, Please make sure to copy the needed print-out in some format and attach that in your mail to them. Don't ever just forward the mail sent by IRCTC. This will make the journey more merrier without any hassle with the TTR.

Money lost while booking ticket - This will not happen
Sometimes, when you are booking the ticket through IRCTC, money will be taken from your account but the browser says there was some problem while booking the ticket. Don't worry. This happens once-in-a-while in IRCTC and they reverse the money taken from your account in couple of days.
But before you try to book the same ticket, please check if the ticket is booked under the Booked tickets. If this is the case, you might end up booking the same ticket twice and there will be no refund.

For these things, the service charge is around Rs.10/- per ticket per person. you can book for max. 6 persons at a time (one of them should carry ID with them) and for each person added, the service charge of Rs.5/- will be added.
If you have a bigger group, you can book in a group of 6.
Other than this there will be service charge from the bank/card as well.
But considering the advantages we get by booking tickets from home, it clearly outweighs booking tickets through counter on all cases.

Thursday, September 11, 2008

Why Avoid ULIP?

I will demystify the ULIP plan, which is widely used everywhere now-a-days!

To state it fast and simple, it is a plan with both Investment and Insurance with Tax benefit. Sounds cool? But it isn't really. Lets see how.

ULIP is Unit Linked Insurance Plan, which means they are going to invest in shares (similar to mutual fund) and also give insurance in the meantime as well. There are charges (hidden) everywhere. There are Fund Management charge, Mortality charge, Allocation charge etc., for a ULIP plan and this will be more in the first few years based on the plan.

Usually, based on the plan,
I year - 15% to 65%
II year - 3% to 15%
III year - 3% to 15%

There is not much charges from the third year in plans offered by few companies out there. So, where these high charges go? Do they really need this much for managing your fund?

1. There should be some amount for giving you insurance and this can't and shouldn't be invested. So, it constitutes fair percentage based on your age. As your age increases, the amount to insure you also increase naturally.

2. For managing your money. Proper allocation of funds in shares by analysts.

3. Fees for agent. Agent may be your friend/cousin. He will get a big share when you invest in ULIP under his guidance.

4. Other charges based on the fund you are choosing.

Does it provide ample insurance?
If you think it provides ample insurance for you, then the amount going to investment will be less and vice versa. Finally, I have seen many thinking of ULIP as a investment opportunity. Even the agents, who has to clarify these things, are making things more complicated by projecting huge returns at the end of 3 years. I can assure you that this will not be the case. There are stories in the net showing how they even lost their money in spite of market moving up at the same time.

Take this case.
John invests Rs. 1 Lakh in ULIP plan every year for 3 years. He takes an insurance for 1 Lakh.

We will see how much will get invested in share market as his share.

Commissions from 15000 to 65000. For 1 Lakh, Mortality charges will be Rs. 150/-
S0, totally Rs.35000 to Rs.85000 gets invested and he gets shares worth it under him.
If you see the average of commissions in ULIP plans, it comes to around 50% in the first year. Thus, we will take Rs.49850/- as his share to market in the first year.

I year -> Rs. 49850/-

Commissions from 3000 to 15000 in the second year. On an average, it is around 5% in the second year. Mortality charges would have increased in the second year. So, let us take it as Rs.175/-

II year -> 94825/-

Commission from 3000 to 15000 in the third year. on an average, it is around 4% in the third year. Mortality charges would have increased and let us take it as Rs.200/-

III year -> 95800/-

Most of them are investing in ULIP for tax saving purpose and want money after 3 years. This is because the minimum lock-in period in case of tax-saving instruments is 3 years.

If we consider a secure investment like PPF, it gives 8% interest in a secure manner. Considering Share market also gives the same interest (for the sake of discussion), John may end up losing Rs.43644/- after 3 years without considering any profit on his principal.

When will I get at least the amount I put in?
Here, John has invested 3 Lakhs (A lakh every year). To get back 3 Lakhs at the end of 3 years, Stock market should have performed really well to give 40% return every year. Sometimes, the stock market may give 40% in a year. But it won't be consistent.
At the end of 3 years, even your principal is not returned to you in full!!

If I consider 8% secure return on my principal amount, I need to get a return of 55% in the stock market every year, which is almost impossible.

I can hear you saying, I get insurance coverage during this period. For getting insurance coverage, please use a Term Insurance. To see the advantages of having Term insurance, you can see this post.
Even if you consider this insurance taken as term insurance, you need to either get 35% return to find no return on your capital or 50% to get 8% return on your capital.

The best one to choose among the lot for tax saving is
PPF - For secure returns without insurance.
ELSS - For high returns with risk without insurance. (This is a mutual fund)
Term insurance - For insurance

Don't combine both insurance and investment. They are different and are meant to be different.

Friday, September 5, 2008

Google Chrome - First Look

I downloaded Google chrome and using it for the past few days.

Google chrome is the new browser just released by Google, which is going to compete against the giants Microsoft's Internet Explorer and Mozilla Firefox.
Recently released Firefox 3.0 made records in downloads.
Google chrome released its BETA version recently as a open source only for WINDOWS Operating system to get some quick feedback.

A quick snapshot of Google chrome is here.

Really Good things about Google Chrome:

(1) No Browser Crash Anymore :
When you open many sites in the browser, it might cause it to act slow or crash sometimes. The crash sometimes happen when it downloads some data recursively or some large data or for numerous other reasons. Yesterday, I was using Google chrome. I opened a page which had some flash page running and it was actually crashed! But it didn't crash the whole browser. Yeay!!! I love it...
Actually, it displayed that there was something crashed in all the other windows without crashing the whole browser.

(2) Google Touch :
There is a Google touch in here. A browser from web developer's cabin. It shows Loading page at the bottom.

(3) Get the cached page :
Sometimes the site you are looking may be down. The world's best search engine would have caught it just before it was down and it will give you that cached page from Google.

(4) Great Look :
I should rather say, Different look. The new page shows the snapshot of frequently opened pages. It also shows 'Recently closed pages' and 'Recently Bookmarked Pages'. Also, the tabs are opened at the top of the page. The new tabs are opened just near the page unlike Firefox which is worthwhile to mention here.

Few Enhancements I would really like to see:

(1) Much faster loading of the page. We don't compromise on speed any time and this doesn't mean it is slower than its counterparts.
(2) Error Console for debugging. This would be of great help to Web developers. I think its getting ready for the release.
(3) Beware, when you close the window with many tabs in it, it just closes it without any word. May be a word of caution would do good.
(4) There is no Menu bar. This may affect those who are used to Menus!

It is great move from Google to get the browser with so many products.
Want to get this browser right now - Click here

Finally, I am writing my first post using 'Google Chrome' Browser!