Custom Search

The mindset of today’s young professionals is changing radically. They would like to have a semi-retired life in their late forties or early fifties by taking up a hobby instead of a regular job.

Somewhere within all of us, there is a dream to reach a point in life where we have enough wealth to be able to choose the work we would like to do and the pace at which we would like to work, if at all we feel like working; a point also referred to as financial freedom. Financial Freedom is also interpreted as being able to spend whatever amount you like, on whatever things you like, month after month.

Here is a step by step guide to Retire Early.

How long you expect to live?

First of all, you need to decide on “How long you expect to live?” This is going to be the starting point for your retirement plan. This you can decide by your health history and your family health history.

Will you run out of money?

You need to accumulate enough money required to live up to that age. You need to calculate the corpus amount required for retirement based on when do you want to retire?, how much you need to spend every month after retiring?, Inflation, tax, investment returns and the like.

There are two things which can make you run out of money in between. One is inflation and the other one is medical expenses at the old age. So you need to be very careful in assuming inflation when planning for retirement. Also you need to be adequately covered with right health insurance policies.

Retirement corpus Break up:

You need to divide your retirement corpus into two portions. One portion of it is the corpus required to retire at the regular age. It could be 58 or 60. The other portion is the corpus required to live between the early retirement and the regular retirement. Say if you want to retire at 50, what would be the corpus required to live between the age of 50 and the regular retirement age of 58 or 60.

First you need to accumulate money for your regular retirement. Then you need to proceed to accumulate for your early retirement. This way you break your targets and it psychologically gives you a lot of comfort in achieving early retirement.

Don’t fall for get-rich-quick schemes

To retire early, definitely you need a sizable corpus. Don’t look for any short cuts and get-rich-quick schemes. Only with the increased risk comes the increased return. If any scheme assures low risk and high return, then it is going to be another scam. So stay away from those schemes.

Don’t fear stocks

You need to consider investing in a well diversified portfolio for long-term. Diversified Equity mutual fund schemes are better. By investing in a diversified equity portfolio you will be taking calculated risk and not blind risk. Equities will beat all other asset classes in the long run. So it is an important option for those who want to retire early.
Reduce your annual cash requirements for when you retire by working out a careful budget
The monthly income required after retirement is going to be an important criteria for deciding the retirement corpus. If you are comfortable with lesser income you can retire sooner. So you need to be careful in drawing a budget for cash requirement post retirement.

Investigate a better return on your savings

Better return on your investment portfolio will help you retiring early. So maximize the return on your portfolio as far as possible.

Cut your current spending so you can save more

Money spent is money saved. Spend less; save more; invest smarter and retire sooner. There are more number of ways to spend smarter to save more. (Link this article here
Earn more now
Time is money. Don’t waste your time. Invest your time in revenue generating activities. Apart from your regular income source, there are other opportunities which you can exploit. You can create blogs; you can be a freelance writer; you can do internet marketing. There will be numerous opportunities based on your knowledge and skills if you take time to think and implement.

Take advantage of tax-deferred opportunities

Tax deferment is an important tool for early retirement. Tax deferment means less tax now. If you pay less tax and you will have more money to save. You need to pay tax on FDs on maturity even if you renew them. Income funds and MIPs could be a better alternative to this. You need to pay tax only when you actually redeem.

Find out some ways to have an income

Even after retirement you can have an income by way of a hobby or interest. You need not work on a regular schedule. Say you can be a trainer, you can be a blogger, you can be a consultant, or you can be an advisor in your chosen field. It generates money as well as it keeps you engaged after retirement. One of my clients has written a book and he is able to generate income from the copyright of that book year on year. If you are able to generate this kind of income, then you can retire early.

What is Portfolio Management Scheme?

Portfolio management scheme popularly known as PMS are specialized investment vehicle for lump sum investments. The portfolio manager invests the money in shares and other securities and manages the portfolio on behalf of the client. One can invest fresh money in Portfolio Management Scheme and the portfolio manager will construct a portfolio by deploying that money. Also one can transfer his existing share portfolio to the Portfolio Management Scheme provider. In that case, the portfolio manager will revamp the portfolio in sync with his investment philosophy and strategy. Once the Portfolio Management Scheme account is opened, the client will be given with a web access to his portfolio. The client can look at where the portfolio manager is investing client’s money. Also one will be able to generate reports like Investment Summary, Portfolio Transaction List, Performance Analysis, Portfolio Statement and Quarterly capital gain report. As a result, Portfolio Management Scheme relieves investors from all the administrative hassles of investments.

Portfolio Management Scheme Vs Direct Stock Market investment:

One can directly invest in stock market. Then what is the advantage of investing in the stock market through a Portfolio Management Scheme. Investing in share market demands knowledge, right mindset, time, and continuous monitoring. It is difficult for an individual investor to meet all these demands. But a Portfolio Management Scheme meets these demands easily. The Portfolio Management Scheme will be managed by an experienced professional. It saves the time and effort of the individual investors. Hence it is advisable to outsource the stock market investment to a sound Portfolio Management Scheme operator instead of managing it on our own.

Portfolio Management Scheme VS Mutual Funds:

Mutual fund is also a good investment vehicle. It should also form part of your total equity investment. But mutual funds are mass products. So they will be conservative by nature. As per SEBI regulation, mutual funds have some investment restrictions. There is a maximum limit on the percentage of amount invested in an individual stock. Also there is some maximum cap on the exposure in a particular sector.

Once the fund manager reaches the maximum limit prescribed by SEBI, he is forced to invest in some other stock or some other sector. That is why we see a large number of stocks in a mutual fund portfolio. Where as a Portfolio Management Scheme will invest in 15 to 20 stocks. This concentration makes it more attractive and aggressive. Managing a 25 lakhs Portfolio Management Scheme portfolio will be more flexible when compared to managing a 2000 crores mutual fund portfolio.

Portfolio Management Schemes relatively have more flexibility to move in and out of cash as and when required depending on the stock market outlook.

Basically the conservative portion of your equity investment can go into mutual funds. The aggressive portion can go into Portfolio Management Scheme.

How to choose a best Portfolio Management Scheme?

There are so many Portfolio Management Schemes in the industry. So it is really very difficult to choose a good Portfolio Management Scheme provider. Here are some factors to be considered before choosing a Portfolio Management Scheme.

1) Yardstick for Performance:
One should not just go by the past performance alone. Making an analysis on various Portfolio Management Schemes in the industry with their past performance along with the risk adjusted return and the consistency of performance will be useful in selecting the best Portfolio Management Scheme.

2) Minimum Investment Criteria:
Investors need to avoid Portfolio Management Schemes where the minimum investment is less than 25 lacs. Even there are Portfolio Management Scheme operators who keep minimum investment for their schemes as low as 5 lacs. But these kinds of Portfolio Management Scheme operators will have more number of PMS accounts. When the quantity (the number of PMS A\cs) goes up the quality (the performance) may relatively come down.

Therefore it is better to choose a Portfolio Management Scheme where the minimum investment is 25 lacs or more. So that our PMS A\c will be directly handled and managed by the top level portfolio manager and not managed by the juniors and analysts. If you are planning to invest less than 25 lacs, then the ideal investment product for you would be mutual funds.

3) Conflict of interest:
Portfolio Management Schemes have been run by some stock broking companies as well as investment management companies. There is a conflict of interest in Portfolio Management Schemes run by share broking companies. The main business of a share broking company is to earn commission income by facilitating the share market transactions.

Portfolio Management Scheme is an additional business for them. It is not their core business. Hence there may not be enough focus on the Portfolio Management Scheme business. Also they may indulge in doing undue and unnecessary churning of the clients’ portfolio to earn more commission income. This will cause additional expenses and short term capital gain tax to the client.

The core business of investment management companies is managing the investments of their clients to earn management fees. So, with the Portfolio Management Schemes run by investment management companies, there is no conflict of interest or vested interest. Therefore it is always advisable to choose a Portfolio Management Scheme offered by investment management companies.

4) Role of Professional Financial Planners:
A professional financial advisor or financial planner will study and analyse the Portfolio Management Schemes run by various stock broking companies as well as investment management companies. If we approach them, they will guide us in choosing the right Portfolio Management Scheme depending upon our requirements and other factors.

Also a professional financial advisor will continuously monitor the performance of various Portfolio Management Schemes and advice the client on a regular basis on the performance of the Portfolio Management Scheme where the client has invested vis a vis the other PMS schemes in the industry. After a certain period, if necessary he may advice you to move from one Portfolio Management Scheme operator to the other.

ESOPs and Portfolio Management Scheme:
ESOPs are provided by the companies to its employees based on their service. Most of the employees are of the opinion of keeping the ESOPs as it is forever because it is their company shares. But logically it is too riskier to invest in a company to whom you work for. Because, your employment income as well as investment income will depend on the performance of a single company.

So it is not advisable to keep your investments in a company where you actually work. So it is at all times advisable to transfer your ESOPs to a Portfolio Management Scheme. They will revamp it to construct a well diversified portfolio.

Portfolio Management Scheme is an aggressive investment product and really suitable for those investors

• Who have a share portfolio and find it difficult to manage.
• Who have enough exposure in Mutual funds and looking for a different and good investment option
• Who have sizable ESOPs.

The concept of Rural Marketing has been evolving continuously over the years and can be classified into three major phases – pre 1960s when it was synonymous with agricultural marketing; 1960s-1990s which saw the growth in the marketing of non-farm rural products; and post 1990s, where the prime focus of the companies is to market FMCG and consumer durable goods in rural areas as a result of rise in income levels as well as the number of middle class families.

With about 60% of the Indian population living in rural areas and representing half of the country’s buying potential even today, the Indian economy can be developed by improving the living conditions in rural areas. Rural illiteracy is the prime area of concern and various projects have been undertaken time and again to improve the rural conditions. A recent study by NCAER (National Council for Applied Economic Research) reveals that the number of middle/ high‐income households in rural India is expected to grow from 130 Million to 172 Million by the end of 2012 as compared to nearly 71 million of urban India.

Despite the fact that India is unarguably one of the largest consumer markets in the world, it is difficult to tap the market. Various marketing theories and concepts have been directly implemented in India, but have met minimal success. This is due to wide variations in size and potential of different segments owing to various parameters like income levels, diversity in language & religion, geographical diversity etc. Even, a company like Kellogg’s had to face the consequences of the unpredictability of the Indian market. The sales of cereals were abysmally low and forced the company to introduce new eating habits in the country. However, in the meantime, a major chunk of the already existing cereal market (which was small in size), was taken away by imitators who introduced local cereal flavors at much lower prices. As a result, Kellogg’s had to realign their marketing strategies and introduce inexpensive biscuits meant for breakfast. It is therefore essential for the marketer to look beyond time tested concepts and reevaluate the entire approach. In order to tap the rural market adequately, the traditional marketing concepts should be modified. This is when the importance of Packaging, Retailer, Education and Empowerment comes into picture.

A rural consumer is always a budget seeking consumer. It is essential to first match a product’s expectations and its pricing structures. It is to be noted that most of the rural population comprises of daily wage workers who tend to have minimal stock of money. Depending on her daily income, she fixes a budget for the purchase and makes a decision after taking other parameters like after sales service, warranty period etc into picture. Thus, the products in the rural market should be able to meet the basic needs of the consumer, as a rural consumer shall not be willing to pay additionally for extra benefits. This makes pack sizes and price points all the more important. For instance, a rural consumer would prefer buying a shampoo sachet to a large bottle which could be used for over a month. Packaging should also be done accordingly in smaller units and lesser priced packs, thereby making them affordable.
Physical distribution becomes arduous due to high costs involved and the non availability of retail outlets. Melas & Haats, and Rural Marketing Vehicles (RMVs) could prove to be better means of distribution as the rural consumers prefer ‘touch and feel’ experience.
In rural markets, a consumer’s buying behavior is widely influenced by social customs and traditions. Higher levels of illiteracy and lack of exposure to traditional media practices further add to the problems. Hence, the advertising mix should be customized and contain other alternative forms like street plays, wall painting, posters etc.

A retailer’s importance should be clearly understood because he plays a vital role in influencing the customer’s decision making process. A rural consumer frequents the same shop in order to buy as per her daily requirements. As a result of the lack of brand awareness among the rural population, the amount of purchases is positively correlated with the extent to which a retailer pushes the product belonging to a particular brand. Effective incentive schemes and trade promotion activities should be developed to maintain a long lasting relation with the retailer.

The levels of unemployment are very high in the rural areas. Hence, any marketing strategy which involves the scope of income generation would be more preferable. The success of “Self Help Groups”, which helps in generating income apart from operating like direct to home distributors, is a reflection of this viewpoint.

The concept of “e-choupals” introduced by ITC is noteworthy in the context of Indian Rural Marketing. The presence of these e-choupals is increasing at a rapid rate. It helps in raising the income levels of farmers by providing better prices for their produce in comparison with auctions. These also provide high quality seeds and online advice on various agricultural practices. These practices enable the farmers to increase the consumption levels of the products and services offered by ITC.

A clear understanding of the “Value for Money” concept in the rural areas shall be the major differentiating factor between a successful brand and its competitors. This has been proved by HLL (Hindustan Lever Ltd). HLL discovered that Indians in the rural areas used soaps for multiple purposes. This resulted in the design of all-in-one soaps which was a huge success.

In the present scenario, the clear understanding of the fact that “Customer is king” is the major differentiating factor between a successful brand and its competitors. Many companies have implemented a Customer Relationship Management (CRM) strategy in order to cope with the ever increasing demands of the customers. The competing firms are in a race to outdo each other in terms of developing new strategies and technologies that enable the management of customers, their information and the business as a whole.

The CRM strategies should aim beyond the fundamentals like 360 degree view of the customer, automate sales processes, increasing customer satisfaction, improving sales cycle, reaching to new customers, retaining the previous customers etc in order to reflect rapidly changing business conditions and technological advancements. The benefits of CRM could be more measurable when the individuals interacting with the customer directly are able to access valuable customer information. This would help in better understanding of the customers and effectively building relations with them in the long run.

Marketing Automation applications help the marketer in creating, planning and executing their campaigns optimally. By the effective use of CRM, marketers can access the necessary information which, in turn, shall enable them to analyze which campaigns shall work and which segment is to be targeted for a particular offer, with minimal wastage of money and time. Sales Force Automation (SFA) helps the reps to understand the buying behavior of the customer. It also helps in optimizing sales across all sales channels. Customer Service applications help in providing superior customer service through multiple channels like the Web, sales reps, field service etc. These channels could be used to add value, reduce costs and effectively build customer relations.

Generally, different departments within an organization refrain from sharing customer data. This leads to loss of efficiency. Hence, an organization must understand the importance of integrated customer information, which shall ensure that the data is reliable and complete. Global companies must additionally ensure that the customer files from different countries are all integrated. It is important to know the revenue generated by a campaign and the channels that are working successfully. The integration of customer information helps in genuine flow of information to the marketers.

Component approach and Package approach are the two strategies used to achieve data integration for a successful CRM implementation. The component approach connects the data of individual departments into a single system. The data is then shared across all the platforms which is accessed by different departments from multiple sources using the appropriate software and various applications. On the other hand, a package approach uses a single database for the entire data which is referred to by every department using the same application. The latter approach is generally preferred for its convenience.

An integrated CRM strategy can be implemented in stages after focusing on the key Business processes that are either of highest priority or causing maximum problems. This helps in addressing the problems of interacting with other departments and sharing information across the teams.

Most importantly, the success of an Integrated CRM strategy depends on transformations at four different levels. Firstly, the departments should be restructured and should no longer exist as independent entities. Secondly, these departments should discover more effective ways of interaction when they begin to work together. Thirdly, the work culture must undergo a major change. Employees should change their styles of thinking and should begin to work with other divisions and departments around the world. Lastly, the company must be aware of all the technological changes and must be updated in order to help the employees in fulfilling their tasks. The ever increasing usage of social networking sites like Facebook, Twitter etc is an indication of the fact that CRM can be done through online communities of customers in the near future. Companies can set up their accounts on various websites and understand how the users interact with each other and their perceptions of a brand.

In short, CRM is all about change. It is necessary for an organization to move from a product centric approach to a customer centric one. It is of utmost importance to address the organizational issues which hinder the process of serving the customer. Also, CRM strategies should be well aligned with the mission of the organization for fruitful achievement of business objectives and better customer relations. CRM is a reiterative process. Regular assessment and adjustments of the strategies is necessary to ensure its long term success. Improved customer segmentation, service strategies and customer satisfaction should be the long term goals of any successful CRM strategy. Executive sponsorship is most important for the success of a CRM strategy. The investments made on these strategies have lower probability of success if CRM initiatives are not in the agenda of senior executives. Hence, it is essential to ensure their active participation during the development of these strategies. Since CRM is a continuous process, it is also necessary to develop a long term strategic plan which shall also contain solutions to several ups and downs of the business cycle.

The conclusions drawn from CRM can act as the base of future decisions. For instance, a fair understanding of past customer sales, their levels of satisfaction and service requests would help the marketer in designing the new promotional activities catering to the highest profit providers of the organization. When marketing campaigns are designed with the help of adequate customer knowledge and have the ability to deliver keeping individual preferences in mind, they deepen the levels of customer loyalty to a greater extent.

Are you a job-seeker who is looking for more responsibility and pay, seeking more leverage in obtaining a work/life balance, or contemplating a move into management -- and are considering returning to school to get your MBA? Or perhaps a job-seeker exploring changing careers by going back to school for your MBA? Or perhaps a consultant looking to add a credential to your dossier. Or perhaps a college junior or senior contemplating going straight through and obtaining your MBA right after your undergraduate degree?

Regardless of your reasons, if you are contemplating attending graduate school to obtain your MBA, you should read this article before you make your final decision. This article will take you through all the important issues you need to contemplate before making your decision of whether -- and when -- to obtain your MBA.

What is an MBA? It's a Master of Business Administration degree, granted after one to two years of graduate-level university study that provides training in the theory and practice of business management. The MBA is basically a document that certifies that you have a general competency in all the major functional management roles you'll find in the modern corporation. An MBA is a career accelerator across a number of industries and MBA graduates can usually command higher salaries.

Ideal Time to Get MBA
When is the best time to enroll in an MBA program? The obvious answer is to enroll at a point in your career when the MBA is necessary to take your career to the next level, but the choice is never that simple.

For the college undergrad, the biggest question you need to ask yourself is why -- why are you interested in going straight through and getting your MBA right after your bachelor's degree? The top-ranked programs will not even admit you if you don't have at least several years of experience, and a freshly minted MBA with little or no job experience is often in a much tougher job hunt than a recent college grad with little or no job experience.

For the job-seeker, the question about getting your MBA involves how as much as when. Will you keep working while earning your MBA in a part-time program or do you have the financial resources to quit your job and return to school full-time? Will your current employer help finance your MBA? Do you need the MBA as part of a career change -- and if so, how are you going to do it?

Finally, there is the question of the economy. Some people think it's a good hedge to get an MBA during an economic slowdown -- a safe haven -- rather than face the tough job market; however, when the economy is bad, even having an MBA is no guarantee of obtaining a lucrative job offer. The best advice? Talk to recruiters and MBA career placement counselors -- and read the current trends in magazines such as Business Week, Success, U.S. News and World Report.

MBA Enrollment Trends
The number of MBA degrees conferred annually has seen explosive growth over the last few decades, going from under 5,000 MBAs in 1960 to more than 100,000 MBAs in 2000 -- and now averaging more than 150,000 annually, according to the National Center for Education Statistics (NCES). Enrollment is also influenced by the economy, and as the economy turns toward a downturn, both recent grads and displaced workers head back to earn their MBAs.

Because of the growing number of graduate business programs that confer more and more MBA degrees, the degree itself is not as special or highly-valued as in the past. An MBA alone will not be the magic key to the door of career and job-hunting success.

Types of MBA
One of the questions you'll need to answer is whether you are interested in a general MBA, which is often shorter in duration, or a specialized MBA, which may take longer but make you more marketable.

Regardless of the type of MBA, the core topics you'll encounter include:


Quantitative analysis



Organizational behavior
Specialized MBAs offer more advanced study in a particular area of business (such as marketing) or a particular industry (such as higher education).

Finally, you'll need to determine the value of the "name" of the program you are considering. If you are searching for a big push that fast tracks your career, snagging an MBA from one of the top schools in the country may be the ticket. But, if you're looking to simply get ahead and move your careers along, don't discount the many MBA programs that are unranked but that offer you the degree and value you need. (See the link for Business Week, below, which is one of several organizations that rank MBA programs.)

MBA Costs -- and Returns
According to one salary guide, an MBA is worth about $10-30,000 a year over a bachelor's degree, but the salary increase you could see may be much less -- or much more. Factors that can affect your salary include:

whether you stay with your current employer or seek a job with a new employer.
the amount of relevant experience you have for the job you are seeking.
the reputation of the graduate school you attended.
the type of job you are seeking -- and the level of supply/demand for workers.
the industries where you are seeking a job.
the location of the jobs you are seeking.
But don't forget to factor in the costs as well, with the average cost of graduate study leading to an MBA at about $40,000. Tuition and expenses add up to about $54,000 per nine-month academic year (resulting in an investment of more than $100,000 for the full-time two-year MBA) at Wake Forest University, one of the premier MBA programs. You'll find tuition closer to $12,000 at lesser known programs with generic MBA degrees.

What an MBA Can Do for Your Career
If you're looking for the MBA to help you get into the executive suite, it may be just the ticket you need. According to a study by Accountemps, a global temporary staffing service for accounting and finance professionals, 80 percent of executives responding to the survey said that a graduate degree in business is still important to reach senior management ranks within most companies.

And there is growing evidence that having an MBA not only gives you more leverage in dictating new job titles and salary, but also gives you leverage in achieving a better balance between work (read: fewer hours working) and life outside work.

Final Words of Wisdom
Whatever you do, don't jump into an MBA program without doing all the necessary research and introspection. And once you have made the firm decision to attend a graduate business program, make sure you read one of our other articles: Criteria for Choosing a Graduate Program.

There are numerous other good sources of information about attending graduate school -- and about the MBA in particular.

Quintessential Careers Sources:

See also our article: Considering Graduate School? Answer These Five Questions Before You Decide.

For application help: Mastering Your MBA Application.

Other MBA-Related Sources:

MBA Trends -- a listing of articles pertaining to MBA trends, degrees, programs, etc., published in previous issues of Business Week. -- a comprehensive MBA program directory and information source. Includes a great glossary of MBA terms. -- the official site of the Graduate Management Admission Council. Contains some great information, resources, forums, and worksheets to help prospective MBA students determine the best programs and schools for you.

MBA-Related Books:

For the most recent editions of the best MBA and graduate school-related books, please go this section of our online bookstore: Graduate School Books.