NRI's and Money

I personally know a lot of NRI's, One being my own real brother. And the one thing that i have found as a common problem among NRI's is the investment, what and where to invest money. How to secure their future and how much they can have to return to India and live a secured life and this is especially true for all those NRI's living in the gulf.

They tend to have a lot disposable income and don't want to misuse it. Most of them seem to be looking at property as a convienient way of investing. With people living abroad property investment has a lot of hassles involved like who will take care of the property, when is the right time to sell property, monitoring Government policies in the areas of your investment etc....
NRI's need to keep in mind, what are their real needs, why do they want to transfer money to India. Do they wish to relocate to India in the near future. Would you rather feel at ease if you had money in rupees instead of some foreign currency? Or you just want to diversify your portfolio by cashing into the Indian booming market?

Once you are clear on the objective, you should see whether your present asset allocation is in line with your requirement. Never shy away from using an expert opinion about your asset allocation since you are not in the country and might not be able to keep up with the current affairs.

Indian Currency is expected to depreciate by 3 to 5 % every year, with this decline in mind all the returns should be calculated also keeping in mind the fact the cost of living at the point of time when you plan to start digging into your savings.

Also a lot of times, it is noticed that NRI's tend to do investments in India through one of their family members who are living in India. The reason usually being that the interest rate for NRI deposits. So they feel investing in India through relatives bypasses this drawback

This is a wrong strategy, firstly the interest on NRO deposits is not capped. NRO deposits is the same thing as investing in India through relatives, since your money is converted into Indian rupees. NRo deposits are available up to 9.5% interest rate.

Their are certain risks involoved in investing through relatives :
1. The money belongs to the relative and their is no proof of the money being yours.
2. The relative could be taxed for receiving the money from you

Also one more thing the restrictions to investing your money is only applicable to FD's and they can very well invest in any other form of investment instrument. So when ever you NRI's think of investing in India be careful.

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