New Year Resolutions

Its that time of year when everyones down to making resolutions for the new year and plan not to stick to them by the first week of the next year. But Resolutions do need to be made, and if you by any rare chance end up sticking to them you might just come out a winner. I am here jotting down some of my "New Year Financial Resolutions" and just like everyone else i vow to see them through next year(at least i hope to).

1. I plan to make a contingency fund in my savings, for any emergencies and keep at least 15% of that amount at home at all times. Just one thing the money i plan to keep in the bank, will be kept in a savings account linked with an Fixed deposit account, this way i will earn interest as well on the amount.

2. I plan to stop keeping revolving credit on my credit card, i am just paying too much interest on it. Just plan to pay of everything on time and try to minimize the use of credit card.

3. I don't have a PPF account yet and plan to open one in the new year and start putting money in it every month.

And one very important financial resolution apart from the all the other that i have



Mutual Funds

Not everyone can research the equity markets and invest and sell when required. Some of us are just too busy or just don’t have the aptitude for it. Some people have the money to hire a specialist to take care of their investments. Well Mutual Funds give everyone one of us the specialist support that we need. Mutual Funds are run by professional fund managers, who take care of a corpus of funds gathered together from the money of several individual investors. Now day’s mutual funds come in a wide variety of forms, some invest only in blue chip companies, some in debt funds, some in sectored funds. Many type start a bigger confusion, so don’t be confused, to invest in any mutual fund you need to make research at least and can have peace of mind then. Take out a little time jot down on a piece of paper what you are looking for, are you able to take little bit of risk(Calculate what is your risk profile here), Are you looking for a pure equity exposure or debt equity mix, You could also start buy looking at a fund which invests in one sector for example technology, banking or even the latest craze of investing in infrastructure companies. Personally I feel in today’s scenario where there is a boom in the infrastructure industry and any fund, which has a good track record of managing a fund and has a great mixture of funds should be where to invest in.

In the following series with the same topic i will discuss about good investment Mutual funds and some fund details.

Investment Oppurtunities - 2

I am here continuing my article on Investment Opportunities, those who are closely following this article i am also starting a survey on what type of opportunities do you invest in, so please do take the same at the bottom of this page

5. Equities : Just Dive into the Market, their are a lot of opportunities out their, but since not many of us have the time to study through the market, start investing small, and please don't turn into a day trader from day 1. Get a Demat Acccount, with any trading company preferably a big name and start researching the market. I do a lot of my search on moneycontrol.
Initially only invest in some good blue Chip Companies. Then Probably move onto some failrly unknown names. Some Websites can also give you trade calls. You can subscribe to that as well but one piece of advice be very careful and don't invest too much money in a single stock. Keep it across sectors.

6. Gold : The sparkle of Gold has always been a great attraction for most Indians and India is one of the largest consumers of Gold in the world. Gold always seems to shine out, its a good investment. I am not talking about jewelery that Girl's love to wear. If you are thinking of investing in Gold, you can either buy pure Gold from the Banks like ICICI, SBI, Indian Bank among others. They all sell pure gold in tamper proof seals. One thing although banks sell gold they don't buy them back an RBI ruling forbids it. Also there are Exchange trading funds available in the market in which you can invest as a form of gold investment like any other equity. They invest in gold and reflect the international price of the commodity in the market. Some of these are Kotak Gold ETF, UTI Gold ETF etc.

Keep reading this column i am going to discuss more about some Mutual Funds in the next part.

Investment oppurtunities

Everyone i meet wants to find out where to invest to be included in my blog, although i was avoiding this topic from a long time. Well to be frank i can only say that i will have to put up a disclaimer here, that what ever options i give below are purely my opinion and my research and that please invest based on your own judgment. The below are not in any particular order,

1. ULIP's : Unit Link Insurance Plans, they provide protection, investment, some people don't approve them as a good investment as there are too much loading involved as compared to a mutual fund but what the heck why are you even comparing it with a mutual fund. Just let it be for what it is and its an investment option which normally you have to pay for a period of three years and after which you can leave it there to grow untill you need the cash, at least it is better then the endowment policy from which you cannot withdraw for the period it is left.

2. Term Insurance Policy : You have got dependents and when you take insurance plans, the basic purpose in mind is that they need to be secured, well most of the insurance policies are just too costly, for a 10 L mortality cover ULIP, you could end up paying Rs. 1L as premium per annum, but then there are term policies, although there is no return from this policy if you survive the period insured for, but what you do get is a big coverage say for a premium of Rs 6000 approx. per annum you could well be insured for Rs. 20L for a period of 20 years. So do look at this as a pure insurance and not an investment.

3. PPF : Public Provident Fund, you keep investing Rs. 70000/- for 15 years and the interest rate is 8% per annum. Its good retirement planning kind of an investment and you can also take a loan of 25% of the value against it after staying invested in it for 3 years. The interest rate is compounded annually. And dont forget the fact that it carries a sovereign guarantee.

4. Mutual Funds : If you cant follow the market and cant make heads or tails out of it then let the experts do it for you and for a fees of course, they manage your money as a part of a huge corpus of several investors. There are just too many type of mutual funds and recently there has been a splurge of New Fund Offers (NFO's) in the market. choosing the right fund is an issue. My only advice here is dont go into a fund just because you can buy it at a lower NAV, but study its year on year performance and what kind of returns it is giving, make your decision then and if it is an NFO, try to study funds in the similar market profile, see what returns they are offering, or even if you cant find any similar funds then study the profile of the Company which is offering it and the fund manger, it helps.

I am going to continue this article next time and also am planning to write an article on Mutual funds so please do keep reading.

Property Investment Hot Locals

Property Investment is the hot new topic in personal finance circles. Real Estate seems to be getting hot by the day. People are buying property if for no other reason then just to give it on rent and start earning an additional income. The builders are coming up with new projects everyday. Some property investment areas are really hot and coming up. I am listing down some very hot areas below for investment in 2008.

1. Delhi : One very costly place but always worth an investment. It pays to invest in Delhi. Anyone who doesnt have a property in Delhi can tell you that. People owning property in Delhi dont very much appreciate this fact but its a good investment.

2. Mumbai : Hot but costly beyond any one mans reach but a good investment no doubt.

3. Pune : Some good companies have come up in Pune as well and the property scene in this place is hapening right now. With more industries lining up to set up their office on Pune. Its a good place as well.

4. Greater Noida : One International Airport and an F1 track apart from a lot of industries, an export zone, a National highway, a express way and the likes, what more would can you ask for in an investment oppurtunity.

5. Chennai : A good place to invest with very good connectivity to a lot of industrial zones and a hapening town is not a bad place for investment at all.

6. Jaipur : 4 hours drive from Delhi, National Highway, A not very populated township, very good historical spots in and around the place, industrial zones, an airport and tourist attraction. Just one town where you can invest and bear fruits of your investment later.

How to Ensure a Stable Portfolio

This is a very volatile Market and dreaded investors like me can't make up their minds whether to stay invested, to buy more or to sell everything off. The Stock Market is very volatile, one day news comes in that it has shot up by so many points and sometimes it has suddenly fallen flat on its face. Well just to be careful in these eventful days we should keep the following in mind...

1. Invest Systematically.

2. Invest for the Long term

3. Invest, no matter at what level the market is, you should only keep in mind the basics of the company that you are investing in and nothing else. If that is inline then you have nothing to worry about.

4. Maintain your asset allocation, Keep a good Debt to Equity Ratio at all times.

Get Rich before you get Old.

Retirement Rules

Everyone OF us Should Start thinking about their Retirement as soon as they start Earning, just to have some security in your mind about the Future. With the way things are going on India and the globe, these high paying high stress Jobs, Cost of living getting costlier with every passing day. Health Of people deteriorating faster. People do need to keep retirement planning in their mind. I myself have been thinking about it a lot lately, earlier whenever i cam across such a issue i would just say i will think about it when the time comes. And Now when i am 30 i have started to get the feeling that i am late and i should have done something about this earlier. Any ways with this post i am not trying to tell you where to invest (which i will try to do in the near future). I am just going to give you some simple rules for the same...

1. Never Spend More then you earn.(As i told earlier i have already been accused of doing the same)

2. Start Saving Early, (I just started thinking but i know i am Late), it helps build a corpus over the years.

3. Make A goal about your Retirement Planning (Like how much you need to save before you can retire) and then try to achieve the same.

4. Try to make financial stability a bigger priority then show off. Theres no need to buy that costly Mobile if you don't need it.

5. I was reading somewhere and i found this Quote it really gets its point across " no matter what, you don’t want to be old, weak, ill and poor." Need i say anymore.

6. Always keep some savings at hand so that you dont have to dig into your retirement savings in case of financial crisis.

7. Buy your Own home.

8. Consider the tax implications of everything you do.

9. If you are starting your business make some one else pay for it, and you can put in the work required.

10. Always keep acquiring Business skills that are in demand and this way you can always be employable.