Tutor profile: Aishwarya G.
Subject: Personal Finance
Have I chosen a good term Plan?
A commonly used rule of thumb to calculate your required insurance cover is ten years' income, but there could be other influencing factors too. Some of these factors could be your children's education needs and liabilities. You should take into account all these factors and their financial implications to make a reasonable estimate of how much insurance you need. While choosing a good term plan, two important factors need your attention: 1. Claims settlement ratio: This is the total number of death claims approved by an insurance company, divided by the total no. of death claims received by the insurance company...Higher the better. 2. Premium amount: Term insurance is an efficient, low-cost product. However, the premiums can vary widely between different insurance firms. Go for the one charging a relatively low premium. Both claims ratio and premiums for different insurance firms can be easily found and compared online these days. Choose the one which offers a reasonable combination of high claims ratio and low premiums.
What is lollapalooza effect?
The dictionary definition of 'lollapalooza' is: one that is extraordinarily impressive; also: an outstanding example. The Lollapalooza tendency comes into action when more than one of the previously mentioned tendencies work together towards an outcome. For instance, when once asked what brought about the current economic mess, Munger replied, 'It was a Lollapalooza event - a confluence of causes that is how complex systems work.' One of the more pronounced examples of the lollapalooza effect is visible in auctions, wherein some tendencies work together - often, not in the interest of the bidder. Says Charlie Munger, 'Well the open-outcry auction is just made to turn the brain into mush: you've got social proof, the other guy is bidding, you get the reciprocation tendency, you get the deprival super-reaction syndrome, the thing is going away... I mean it just absolutely is designed to manipulate people into idiotic behavior.' In investing: Like in any other field, it is important to understand how these tendencies work together to affect your choices and decisions. If you think you can ignore the lollapalooza effect when it comes to investing, here's a final piece of advice from Munger, 'Maybe you think this doesn't happen in picking investments? If so, you're living in a different world than I am.' Avoid this tendency and get better at investing.
What is the journal entry for Revaluation Reserve as per IFRS 15?
It is Fixed Asset A/c Dr To Revaluation Surplus A/c
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