Need help?? Your guide on Gratuity

Success for the article on PF withdrawal has inspired me to write an article about Gratuity. And obviously this is really important to know as many companies provide this benefit under the umbrella of CTC, but the employee is not aware of, how to get benefit of gratuity.

This article is an attempt to provide insight about Gratuity to those individuals.

“Gratuity” is a reward for the long term service. It’s the benefit that employee gets for sustained loyalty towards the organization and employer.

Eligibility for an Employee:
An “Employee” who has rendered continuous service for more than five years is eligible for “Gratuity” benefit.

Benefit:
Gratuity rewards an employee in a big way. The amount of gratuity will be 15 days pay for every completed year of service. Yes it’s completed years which counts here. So if the person is leaving the company after 6 years and 7 months then he’ll get gratuity for 7 Years and the employee leaving company after 6 years ad 5 months would receive gratuity for 6 years. So keep this thing in mind and then put down your resignation at appropriate time.

The amount is calculated on the Basic Salary + DA , the employee is drawing at the time of exit.

Below is the simple calculation to gauge the amount that you should receive as gratuity.

How to find multibagger ideas in Stock Market?

The recent downfall in the stock market has created opportunity for the investors to start looking into Equity. Often people come up with the question on how to find the multibagger stock which would create wealth for them?

Today I’ll provide tips and tricks of finding hidden gems from the stock market.

Business you understand:

Ask yourself one question, if you would have got enough money, time, and skills to start on the business which business you would have picked to become next Narayan Murthy?

Identify all such businesses which you understands, which you would like to do or would have done, if given a chance. This is really important, because it’s about achieving your dreams.

Companies in your business:

Once you identify these businesses that you want to start with, identify companies having presence in the same sector/business. Make a list of such companies based on their size. i.e. largecaps, midcaps, smallcaps. Now start comparing these companies based on different parameters like,

- Management:

o       Check management skills by reviewing their interviews, their confidence in the company, how they started the company?, Ownership in the company. Do they love their business?

-    Last 3-5 years results :

o       Check past performance of all these companies. (EBITA , Profit)

-   Corporate Governance:

o       Try to figure out the strength of the company by checking obligations made against it. It at all that is true then how they are dealing with it?

-    Future growth, Scalability :

o       Make sure that the management is right on track with expansions and they have vision to take the company to the next level.

You can add your own parameters as well, which you would try to meet for your own business. Once you find answer for all these parameter you’ll get true hidden gems for your self.

Own a stock or business:

I know it’s not possible for everyone to start business not that they don’t have skills but there are constraints like, personal commitment, finance, family, good job, risk and many other things. But, Is it stopping you from executing your idea? I don’t think so. Now with this exercise you’ve ignited the energy to live your dream. Now you’ve found the same company/business which you would have established, if given the opportunity. More over, these companies have decent experience, growth prospects and management who are equally passionate about the business as you are. In other word, it’s basically you own part of the company, doing the same business and still not sacrificing on your current commitments.

Sounds like excellent deal? Yes it is.

It makes sense to mention here, “Warren Buffet owns stake in many companies/business. He is having CEO and MD of different company reporting to him. But guess what, He is still able to sleep in the afternoon? “Yes that’s correct.

Hope this would help all the readers in finding their own hidden gems !!

Please click here to become expert in riding investor behavior in stock market.

Happy Investing !!