Sunday, December 13, 2015

What is Income Protection and Why do we need it?

We know for a fact; plans and dreams are built on the potential income which we will earn over our lifetime.

Loans for University, Car Loans, Mortgages, Personal loans for Weddings, etc are all built on the potential income earned by the individual or the family.

In the last few decades, this has encouraged people to now start thinking about having Income Protection.

Now there are two potential reasons why a person can lose income:
1. Loss of Employment/Economic Downturn
2. Loss of Income due to Bad Health

If a person losses his/her job on average they can get a job within 6-9 months, even if not at the same level maybe with a 20-30% pay cut, hence it has been a recommendation to always hold liquidity to cover expenses for 6 months as a buffer.

But, if a person falls sick or gets disabled it would immediately put a stop to income.

Now the question usually asked is... well all my expenses for treatment would be covered by my Medical Insurance... Reality: Medical Insurance (individually purchased or by the company or government) would usually pay bills related to the treatment; but what about the daily expenses?
The family would still have to cover mortgage payments, education fees of the kids, might need to change lifestyle and or the house, other expenses like car loans.

Hence, Income Protection... Ensuring the family continues to get the income which the family would require in the event a person falls ill to be able to meet the financial commitments and to continue living the same lifestyle.

#sanjaytolani #speaker #author #28000 #incomeprotection #income #financialplanning #mdrt #topofthetable

Note: All proceeds from the books are donated to charity.

Friday, December 11, 2015


So one of the most important questions asked about Life Insurance is...

I mean, would it not make sense to invest the money in Hard Assets instead? Hard Assets give you higher returns...don't they?

Well, to get maximum return out of a Life Insurance policy, ensure you buy it "1 DAY before you die"; it would generate the maximum return; no asset class can match that rate of return. #LOL

But then that rises a bigger question... Which day is that??? Unfortunately, not all of us know (some claim to know) when that day is. So the best day to buy Insurance was "YESTERDAY", as our last day could be today.

Question: Do you want the same regret tomorrow? "I wish i had insurance yesterday"

"NOW" is when you have the power to protect your hard earned wealth and income.

Your delay... Your Loss...

If you want to know "How much is enough?" you can read more in "28000 - Make Every Day Count"

#sanjaytolani #speaker #author #mdrt #topofthetable #lifemember #orderonline #charity

Note: all proceeds from sale of the book goes to charity.

Tuesday, December 8, 2015

RMB Is Now a Reserve Currency. What It Means for Treasurers

The International Monetary Fund (IMF) announced Monday that the Chinese renminbi (RMB) has met the criteria to be included in the Special Drawing Right (SDR) basket of currencies. Effective October 1, 2016, the RMB will join the U.S. dollar, euro, Japanese yen and British pound in the SDR basket.
For corporate treasury and finance professionals, this news could make the RMB a more attractive option for both payment and funding.

Debra Lodge, head of RMB business development, North America at HSBC, believes that adding the RMB to the SDR basket could change the way that some U.S. companies view their foreign exchange risk both onshore and offshore. “This may challenge large U.S. companies—who purchase inventory from China—to rethink their purchasing strategy and shift to buying goods with RMB or simply add RMB into their currency hedging portfolios,” she said. “The bottom-line, U.S. companies will need to be RMB ready as the currency continues to reach key milestones in 2016.”

Additionally, some experts believe that U.S. companies may look to the RMB as the U.S. is expected to raise interest rates any day now. “We will see more U.S. companies considering raising capital in RMB, especially as many expect that the U.S. will raise rates in coming weeks,” said Martin Maciak, head of development, Americas at HSBC Global Banking and Markets.

However, for the RMB to truly progress into a global currency, some changes will likely need to take place in China. “There are still many capital controls in place that prohibit the currency from being freely used and until that happens, it can't be mentioned in the same breath as the USD, EUR or JPY without an accompanying asterisk,” said Alfred Nader vice president, Latin America and the Caribbean Western Union Business Solutions and an expert on the RMB. “Because of this, you won’t see a rush towards the RMB anytime soon. You will see a trickle, and the Chinese will have to be content with this until they loosen their capital controls. After all, a trickle is better than nothing.”

View from Asia

The SDR basket was a major topic of discussion during a plenary on the RMB at the recent Sibos conference in Singapore. A quick poll of attendees found that 62 percent believe that the RMB should be added to the SDR basket.

But not all experts believe the RMB belongs in the basket at this time. During the Sibos plenary, Amol Gupte, region head of treasury and trade solutions, APAC for Citi, said that while he expected the IMF to include the RMB, he didn’t think it should. “The reason I say ‘no’ is, I’d like to see much more capital account convertibility before it becomes a reserve currency,” he said. “If you are a reserve currency, you want to incent a foreign investor not just to own their own currency but to own somebody else’s currency as well. That’s what a reserve currency is. To do that, you need a lot more trust, transparency and liquidity for it to really succeed. I think it still needs to mature.”

Gupte asked attendees to consider what exactly will happen once the RMB achieves SDR basket status and becomes a reserve currency. “Sure, there will be some countries that will buy the RMB as a reserve currency, but that’s not going to change anything in my view,” he said. “You think of world reserves today; about 70 percent of the world reserves are in the dollar, about 15 percent are in the euro, 5 percent in the sterling, 5 percent in the yen and 5 percent in everything else. Is that going to change by a big magnitude if the vote is ‘yes’? I don’t believe so.”

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