Top 10 ways to waste your money
1. Carry a credit-card balance
2. Buy on fancy
3. Pay to use an ATM/Petrol bunk Swipe
4. Dine out frequently
5. Let your money sleep
6. Pay too much taxes on investments / earnings
7. Waste Electricity
8. Pay banking fees (for maintaining min balance/cheque returns etc)
9. Buy things that you don’t use
10. Not reviewing your insurance features
Saturday, August 8, 2009
Monday, August 3, 2009
25 lakhs here, what you will do?
Friends,
Many friends of mine usually saying that “if we were having 25 lacs in hand, we no need to work or worry about the jobs”… I used to wonder really what kind of plans they have in their mind with that 25 lacs?, so here with I have charted down my plan with 25 lacs. Pls share your plans as well
Note: Based upon our risk category we need to choose the below ones. If you need any help in choosing pls do let me know
(Asset Class) (Amount) (Expected Return Percentage) (Amount)
1. Fixed Dep/NCD 250000 11.50% 28750
2. Liquid Fund /
Short term funds 500000 8.00% 40000
3. Gold 125000 10.00% 12500
4. MFs
(Diversified Equity/Balanced) 1000000 15.00% 150000
5. Shares 500000 20.00% 100000
6. Cash on hand 125000
Total 2500000 10.75% 331250
Monthly Income (approx) 27604
Many friends of mine usually saying that “if we were having 25 lacs in hand, we no need to work or worry about the jobs”… I used to wonder really what kind of plans they have in their mind with that 25 lacs?, so here with I have charted down my plan with 25 lacs. Pls share your plans as well
Note: Based upon our risk category we need to choose the below ones. If you need any help in choosing pls do let me know
(Asset Class) (Amount) (Expected Return Percentage) (Amount)
1. Fixed Dep/NCD 250000 11.50% 28750
2. Liquid Fund /
Short term funds 500000 8.00% 40000
3. Gold 125000 10.00% 12500
4. MFs
(Diversified Equity/Balanced) 1000000 15.00% 150000
5. Shares 500000 20.00% 100000
6. Cash on hand 125000
Total 2500000 10.75% 331250
Monthly Income (approx) 27604
Mutual Funds – An Intro
Mutual Funds – An Intro
Buying shares based upon the market mode and creating a share portfolio is a cumbersome task which needs lot of work and needs a professional management on every day basis, as a popular say “leaving the job to the right people”… MF houses is the right one which will take care of all this problems
Affordable
Almost everyone can buy mutual funds. Even for a sum of Rs 1,000 an investor can invest in a mutual fund.
Professional Management
For an average investor, it is a difficult task to decide what securities to buy, how much to buy and when to sell. By buying a mutual fund, you acquire a professional fund manager who manages your money. This is the person who decides what to buy for you, when to buy it and when to sell. The fund manager takes these decisions after doing adequate research on the economy, industries and companies, before buying stocks or bonds. Most mutual fund companies charge a small fee for providing this service which is called the management fee.
Diversification
According to finance theory, when your investments are spread across several securities, your risk reduces substantially. A mutual fund is able to diversify more easily than an average investor across several companies, which an ordinary investor may not be able to do. With an investment of Rs 5000, you can buy stocks in some of the top Indian companies through a mutual fund, which may not be possible to do as an individual investor.
Liquidity
Unlike several other forms of savings like the public provident fund or National Savings Scheme, you can withdraw your money from a mutual fund on immediate basis.
Tax Benefits
Mutual funds have historically been more efficient from the tax point of view. A debt fund pays a dividend distribution tax of 12.5 per cent before distributing dividend to an individual investor or an HUF, whereas it is 20 per cent for all other entities. There is no dividend tax on dividends from an equity fund for individual investor.
Buying shares based upon the market mode and creating a share portfolio is a cumbersome task which needs lot of work and needs a professional management on every day basis, as a popular say “leaving the job to the right people”… MF houses is the right one which will take care of all this problems
Affordable
Almost everyone can buy mutual funds. Even for a sum of Rs 1,000 an investor can invest in a mutual fund.
Professional Management
For an average investor, it is a difficult task to decide what securities to buy, how much to buy and when to sell. By buying a mutual fund, you acquire a professional fund manager who manages your money. This is the person who decides what to buy for you, when to buy it and when to sell. The fund manager takes these decisions after doing adequate research on the economy, industries and companies, before buying stocks or bonds. Most mutual fund companies charge a small fee for providing this service which is called the management fee.
Diversification
According to finance theory, when your investments are spread across several securities, your risk reduces substantially. A mutual fund is able to diversify more easily than an average investor across several companies, which an ordinary investor may not be able to do. With an investment of Rs 5000, you can buy stocks in some of the top Indian companies through a mutual fund, which may not be possible to do as an individual investor.
Liquidity
Unlike several other forms of savings like the public provident fund or National Savings Scheme, you can withdraw your money from a mutual fund on immediate basis.
Tax Benefits
Mutual funds have historically been more efficient from the tax point of view. A debt fund pays a dividend distribution tax of 12.5 per cent before distributing dividend to an individual investor or an HUF, whereas it is 20 per cent for all other entities. There is no dividend tax on dividends from an equity fund for individual investor.
Survival
Survival
“SURVIVAL” is the most important word/talk today in this tough economic situation. All corporate companies are charting out plans how we can survive in this tough economy. Of course this is more important for an Individual as well.
Since We are in the IT industry I am taking our job nature and scenario as role model to write this blog…
Replace you
As long as your depending fully yourself for your regular income there is a risk in your earning and it will always leaves you unrest. So do you really wanted to work 50 – 70 hrs per week until your retirement?
So you have to generate another income stream to get yourself from these financial blues. So you need to remove yourself from being directly involved in generating the income stream for your family
Passive Income
Try some other innovative ways to making money, which requires less of your time to generate.
• If you are good in physical fitness and related activities write an aerobic/gym tips book and get the royalty
• If you are a good photographer, auction your photographs in online
• Invest in your friend/relative business and get some margin money out of their profits
• Use your accrued capital to invest in some MIP (Monthly Income Plans) to generate return or buy a rental property
• Rent your property and get some good returns
There are ‘N’ number of ways… use your analytical knowledge to leverage more… if you need any help hope I can assists you in finding a good choice for you
My simple suggestion is don't depend on single income for your life in this kind of tough economic situations
“SURVIVAL” is the most important word/talk today in this tough economic situation. All corporate companies are charting out plans how we can survive in this tough economy. Of course this is more important for an Individual as well.
Since We are in the IT industry I am taking our job nature and scenario as role model to write this blog…
Replace you
As long as your depending fully yourself for your regular income there is a risk in your earning and it will always leaves you unrest. So do you really wanted to work 50 – 70 hrs per week until your retirement?
So you have to generate another income stream to get yourself from these financial blues. So you need to remove yourself from being directly involved in generating the income stream for your family
Passive Income
Try some other innovative ways to making money, which requires less of your time to generate.
• If you are good in physical fitness and related activities write an aerobic/gym tips book and get the royalty
• If you are a good photographer, auction your photographs in online
• Invest in your friend/relative business and get some margin money out of their profits
• Use your accrued capital to invest in some MIP (Monthly Income Plans) to generate return or buy a rental property
• Rent your property and get some good returns
There are ‘N’ number of ways… use your analytical knowledge to leverage more… if you need any help hope I can assists you in finding a good choice for you
My simple suggestion is don't depend on single income for your life in this kind of tough economic situations
Top 10 ways to waste your money
Top 10 ways to waste your money
1. Carry a credit-card balance
2. Buy on fancy
3. Pay to use an ATM/Petrol bunk Swipe
4. Dine out frequently
5. Let your money sleep
6. Pay too much taxes on investments / earnings
7. Waste Electricity
8. Pay banking fees (for maintaining min balance/cheque returns etc)
9. Buy things that you don’t use
10. Not reviewing your insurance features
1. Carry a credit-card balance
2. Buy on fancy
3. Pay to use an ATM/Petrol bunk Swipe
4. Dine out frequently
5. Let your money sleep
6. Pay too much taxes on investments / earnings
7. Waste Electricity
8. Pay banking fees (for maintaining min balance/cheque returns etc)
9. Buy things that you don’t use
10. Not reviewing your insurance features
Friday, July 24, 2009
Which is best? Fixed Deposit or Debt Funds
Unlike fixed deposits, debt funds are not risk-free assured return instruments. They are affected by interest rate fluctuations. Falling interest rates will result in rising prices of the underlying bonds while rising interest rates will result in falling bond prices. So debt funds do better in a falling interest rate scenario.
The higher the maturity profile of a debt fund, the more is its sensitivity to interest rate fluctuations. So short term debt funds are less affected by interest rate outlook than long term debt funds. Liquid funds would be a better option as they invest in short term instruments such as treasury bills, certificates of deposits and commercial papers.
Note: This article has been written in the assumption that you know about Mutual Funds. If you have any other clarifications please get back to me
The higher the maturity profile of a debt fund, the more is its sensitivity to interest rate fluctuations. So short term debt funds are less affected by interest rate outlook than long term debt funds. Liquid funds would be a better option as they invest in short term instruments such as treasury bills, certificates of deposits and commercial papers.
Note: This article has been written in the assumption that you know about Mutual Funds. If you have any other clarifications please get back to me
Market is going up? What I have to do now?
Many of my friends usually ask me about investments, retirement planning, idea in buying a home and etc related to money… And they often called me as money KumarJ, stop stop its not mean I am always running behind money or so… but I will love to make money (of course by genuine way) in smart ways…
Ok let’s come to the topic, so in the last few days many of my friends asked me when I have to invest? Where I have to invest? How much amount I have to invest?
I have answered them some nice ways… here let me share with you as well
When I have to invest?
There is absolutely no good or bad time to invest for your future all time is good… But if you are the someone whom expects a short term returns then you have to be sure when you are making investment? Since every investment clause is having its own up and peak time… you have to be sure you are entering in to the wave while it is up and not down time. If you entered in the down time then you may have to wait patience for until the same to come up…
The amount of patience will be justified by one surplus money, If you have surplus money u might have wait for some time until your investment starts giving you good returns or else you may get out with loss
Where I have to invest?
There are different investment clauses are available in the investments based upon our objective (retirement, pension, child marriage, education, buy a home…) and the remaining available years for the objective will decide our investment clause. And of course your risk appetite also plays an important role in that
But the ground rule in investment is don’t put all your eggs in the same basket… Split your investments and enjoy its returns… by the way of splitting the investment the chances of loss is very less
Many of my friends done a mistake by investing all their money in shares (one single clause) which made them empty hands while the markets went down… And they all invested at a wrong time, when the market is high (peak in the history) they invested. They might have followed the gradual investments not aggressive investment
How much amount I have to invest?
It’s purely based upon your current liquidity. It may vary based upon your age and goals. But the thump rule is as I said earlier don’t put all your eggs in one single basket.
Keep some money for your current liquidity as well, during contingency times this fund could help you to get out the problem. That too for us (IT Guyz) we must reserve some money for our rainy days
In this area you guyz can ask about any investment doubts, I will truly try to answer my level best and willing to share the lessons what myself and my friends learned out of our investments
So keep in touch and post your queries
Ok let’s come to the topic, so in the last few days many of my friends asked me when I have to invest? Where I have to invest? How much amount I have to invest?
I have answered them some nice ways… here let me share with you as well
When I have to invest?
There is absolutely no good or bad time to invest for your future all time is good… But if you are the someone whom expects a short term returns then you have to be sure when you are making investment? Since every investment clause is having its own up and peak time… you have to be sure you are entering in to the wave while it is up and not down time. If you entered in the down time then you may have to wait patience for until the same to come up…
The amount of patience will be justified by one surplus money, If you have surplus money u might have wait for some time until your investment starts giving you good returns or else you may get out with loss
Where I have to invest?
There are different investment clauses are available in the investments based upon our objective (retirement, pension, child marriage, education, buy a home…) and the remaining available years for the objective will decide our investment clause. And of course your risk appetite also plays an important role in that
But the ground rule in investment is don’t put all your eggs in the same basket… Split your investments and enjoy its returns… by the way of splitting the investment the chances of loss is very less
Many of my friends done a mistake by investing all their money in shares (one single clause) which made them empty hands while the markets went down… And they all invested at a wrong time, when the market is high (peak in the history) they invested. They might have followed the gradual investments not aggressive investment
How much amount I have to invest?
It’s purely based upon your current liquidity. It may vary based upon your age and goals. But the thump rule is as I said earlier don’t put all your eggs in one single basket.
Keep some money for your current liquidity as well, during contingency times this fund could help you to get out the problem. That too for us (IT Guyz) we must reserve some money for our rainy days
In this area you guyz can ask about any investment doubts, I will truly try to answer my level best and willing to share the lessons what myself and my friends learned out of our investments
So keep in touch and post your queries
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