The Indian Middle Class

The above image is how the average Indian has been and will be spending his money. As per McKinsey, the average middle class indian wants to spend money on better living standards. They say that "Even India’s most affluent consumers will outnumber not only the comparable segment in China but also the entire current population of Australia" They go on to say that "Above all, consumers will increase the amounts they spend to improve their economic prospects and quality of life—for better health, education, transport, and communications."

This shows the how well the India is progressing so three cheers to Indian Society and get ready for the King of Good times.

Portfolio Management and Investment Analysis

Just on my usual rounds of the internet and i came across this link where they have shared a couple of e books. They seem to be good and worth anyone's while who would be interested. Their is one particular book on Investment Analysis and Portfolio management that i really liked, Although i haven't been able to read it completely yet but it seems very useful.

And of course the credit for these books goes to the original up loader, although i cannot comment on the legality of uploading these books and one more thing the up loader does say that these are solely for academic purpose and not to be used for any commercial uses so please keep the same in mind.

The link is here.

Income Tax returns, PF and RTI

Does the government Owe you money like PF, Income tax returns, Pensions??
No one seems to be able to tell you when and how you will get this money.......

Well there seems to be some good news and the good news is in the form of "RIGHT TO INFORMATION ACT".

What is RTI?

Well in the supreme courts words ""The “right to information” is defined in sec. 2(j) as a right to information accessible under the Act which is held by or under the control of any public authority and includes a right to (i) inspection of work, documents, records, (ii) taking notes, extracts or certified copies of documents or records, (iii) taking separate samples of material, (iv) obtaining information in the form of diskettes, floppies, tapes, video cassettes or in any other electronic mode or through printouts where such information is stored in a computer or in any other device.""

It basically means that the government Babu who earlier denied giving you any information about the whereabouts of your money has to now give you the same in written. That is the power of the RTI act.

Not many of us are aware of how to utilize this to our benefit and especially when there is money involved. Well i will try to explain in a few paras below...

1. Any application for the same needs to be submitted, although there is no format for the same but you can use a format prescribed by the State of Maharashtra as it is much more clear and cons ice.

2. The language of communication can be Hindi, English or any local language.

3. You need to file this application with Public Information Officer of the Government body, which they have to appoint as a compulsory thing.

4. You need to add a Rs. 10 Postal order stamp on the application.

5. Dont forget to add a photocopy of the necessary documents like the ITR form in case you are looking for your Income tax returns or a copy of the PF application in case of PF accounts or maybe just the PF number.

6. Always keep a copy of the application with you for records.

7. Never use complicated words or misleading words always try to keep your language as simple as possible and to the point.

After filing the application the PIO is bound to give you a reply within 30 days of filing the application. If you do not get your reply you can first send him a reminder and then escalate this issue to the CIC (Chief Information Commissioner). Also if the PIO is not able to justify the delay in giving response to your application or giving wrong information the CIC can fine him for Rs.250/ day.

I found this example of an application on the net maybe it can help

The Public Information Officer
Recognised Provident Fund Commissioner
New Delhi.
No. SV ghsds Road

Subject: Pending of provident fund transfer

Description of the information required: I had applied for transfer of my PF from account number xxx with company

abc to account number yyy in company pqr. Company abc tells me that the amount has been paid to you vide cheque
number 12345 dated 5th May 2007. However, the transfer has not been effected into my account number yyy. I want
the following information:
a. What is the progress of the file?
b. Which officer dealt with this file and with whom is the file pending?
Place: Delhi


I was checking out the net and have come across these great calculators which are very handy. Although most of them show the unit of Currency as Dollar ($) but if you mentally substitute $ with Rs. they are very handy in their way

1. Inflation Calculator : You need to know what the cost of any item will be after a specified number of years, for example, how much would be the cost of a Rs. 100/- medicine after say 5 years or 20 years. Well heres a calculator that does just that, just type the amount and the rate of Inflation (I would recommend the expected inflation rate be kept at 5.5%). And see how much it will cost of after 5, 10,15,20,25 etc years. Inflation Calculator

2. Reaching Your Goal : How much time will it take for you to reach. Have you planned that by the time you retire you should have 1 crore in your bank, well see how much you need to invest in how many years, will you reach your goal. Reaching your Goal

3. Cost Of waiting : What would it cost you after retirement if you wait before you started saving some really good amount of money. So just check it out its a real eye opener and tell you to start saving as soon as possible. Cost Of waiting

4. Loan balance Calculator : Well this is the one i really like, i always wanted to know what is the amount remaining on my car loan, and this really tells me that. Its really worth visiting, and dont forget to substitute $ with Rs. Loan Balance Calculator

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Happy Republic Day

A Very Happy Republic Day to All Of You

Contingency Fund

A lot of times during the course of this blog i have spoken about the Contingency fund and even if you see my New Year Resolutions i have planned to start one, but frankly i haven't been able to get myself to start one yet but now i have laid out a plan for myself and i don't know if it could be useful to anyone of you but its certainly workable for me as far as i can see......

1. Small Starting : I am going to put aside small amounts as soon as possible. Anytime i have any change left over in my pocket even if it is just Rs. 10/-, I am going to put it in my piggy bank.

2. Auto Deduction : From hereon i am going to request my bank to deduct a small amount from my account as soon as the salary is transferred to my account on a monthly basis. Maybe open a recurring deposit account.

3. Fund to be treated as a bill : This Contingency fund that i plan to make will be treated as a bill to which come what may i have to make a payment just like any other bill eg. Credit Card, Electricity, telephone. This will make me spend only what is left over for other expenses.

4. Reduce an Expense : I plan to reduce my personal telephone bill, and put that amount into my savings, this way i will not have to put in an extra amount and i can make a saving.

5. Reduce outings : I plan to reduce my weekend trips out for lunch or dinner to only twice monthly instead of every weekend and save that amount.

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Doubling your Money

How many of you wonder how financial professionals can so quickly mentally calculate how much money you’ll have in 30 years based on an return on the investment? Well, the magic can be easily attributed to the Rule of 72.

In order to use the Rule of 72, all you need to know is how to divide various numbers into 72. For example, 9 divides into 72 8 times. 10 divides into 72 7.2 times. Etc.

Once you have become the master in the basic division tables for 72, you can start to apply this k to calculations like investment returns. Divide the annual rate of return (percentage) into 72, and the answer will be the number of years it will take to double your money.

For example, if you assume your investment is earning 8%/year every year (and 8 divides into 72 9 times), then your money will double every 9 years. If you are earning 4%/year, your money will double every 18 years (72 divided by 4 equals 18).

This is an easy technique to quickly estimate what your net worth will be down the road given a certain rate of return. It may even help you decide what sort of investments to choose, based on their risk to reward ratios.

If you have Rs. 10,000 invested at 3%/year for example, it will become Rs. 20,000 in 24 years (72 divided by 3 equals 24), and Rs. 40,000 in 48 years (24 times 2).

If instead you invest the same Rs. 10,000 at 6%, it will become Rs. 20,000 in 12 years, Rs.40,000 in 24 years, and Rs. 80,000 in 48 years. A small change in percentage can make a huge difference.

The downside of this calculation method, is that rarely do investments give the same return year after year. You can achieve an average annual rate of return of “x”%, but in the end the total calculations won’t entirely work out with your Rule of 72 plan.

So all in all it’s not a very accurate method of planning your finances, but a useful tip for on-the-fly calculations, and maybe even a party trick.

In the End since this week has been so about markets a graphical view of how happy the markets looked today...

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Reasons For Market Crash

Why Did the Markets Crash?? I am listing below some of the reason that i understand

1. Relent less selling by the FII's.

2. Lot of Investors turning into traders and taking long positions in the futures Market.

3. Overall Change in the Global Investment Climate

4. Fear of the US Economy headed towards a recession.

5. Commodities Market Being Very Volatile.

6. Increasing Presence of Hedge funds across all asset classes increases chances of volatility.

It is expected the markets might fall another 10% before recovering So gear Up.

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What's happening to the Markets

If the Markets keep going down like this on a daily basis, very soon most of the money that people like me thought we had, would have eroded to nothing. And then we keep hearing on the News that this is just a reaction to the Overseas markets. My Question is why is our market dropping more then anyone else's. We have lost about 10 - 12 % while no other market seems to have lost 10%. Its very surprising, that our markets are losing so much money. And to top it all up i got a mail today, giving me the chills that the Reliance Power IPO is not "POWER ON now Its Power Gone". As i had written in my earlier POST , that i had applied all the money i had in the IPO and now I am losing sleep over it. Any ways i read this really nice article on Money Control by their editor, the LINK is here, its a good read and gets your hope high as well.

The fundamentals of our market are really very strong and we need to be optimistic, so keep your fingers crossed and if you have the money start investing in those stocks that you really wanted to invest in and do it fast before they go back up.

Crashing Market





Need i say more

Go look for the whys, wheres and how your self. I am in mourning

Where Are the Markets Headed

Came across this article on the net on where the markets are headed in the near future...., its based on the Fibonacci series(Its a mathematical sequence of numbers). I think i did see a similar article in one of the news paper but this one is well written so do go through it, its worth a read and let me know what you think.

Lower interest rates

Well its the equity markets season and i am talking about loans, some would wonder why. Well it so happens that i know for a fact with the market running low and very little oppurtunity to sell, not everyone is in a good shape right now and are wondering about taking loans to spend money or maybe loan to just buy into the market. And the first think when that comes in your mind when you think of loans is the interest rate.

Home Loans are most probably going to go down by at least 50-75 basis points. And that seems good news for all the people thinking of buying a roof over their heads. The RBI is planning to cut these rates. And as i have pointed out earlier as well, property is a good investment.

Personal Loan, well with such high interest rates and so low a demand, banks are thinking of lowering the interest rates in order to increase demand for them. Their is a very big market for personal loans just for the fact that they can be used for anything like investing, partying, marriages and whatever and are relatively easier to get, especially for salaried individuals.

The Auto Loan industry doesn't seem to be going anywhere, with the market for 2 wheeler market at a low(The Nano effect i guess) and the car loan market at a very satisfactory level banks don't seem to want to decrease this kind of a loan in the near future at least.

Over all its best to wait for sometime now if you are planning on taking any type of loan since you could end up saving some money on account of lower interest rates very soon.


Thanks to Moneycontrol for the image

Equity Markets Falling and falling so hard its starting to hurt. Everything falling head first and please do note that this was not just the Indian Markets but a worldwide fall. And everyone was so very optimistic about the Indian Market. To top it all up people seem to have invested whatever money they had in the Reliance IPO, so should we start to feel scared and fear losing all our money.

Well personally i don't think so, firstly this could be just a reaction to the overseas markets and the market will recover in the next few days. And that come what may you could probably make at least some listing gain. As i told earlier as well, Reliance does not give losses to its investors, so i am keeping my fingers crossed and hoping for the best.

Anyways, no one can so accurately predict the market, so sit tight and in the long run you will gain, so don't panic and start selling.

Hey Everyone

Hey Everyone,
I Didn't Die after all these days. I have been busy doing some really good things for the blog. First thing you must have of course noted is the change in the layout design. I hope it looks good cause i wouldn't want it any other way. Second and something very important to me is the change in the domain name, that is if you see your address bar you will now be seeing . I have now shifted to this new domain name, although this will in no way effect if you are still coming through the old link, it will automatically forward to this new location.

I am hoping now to be more regular with everything in place, of course the blog is still hosted on blogger. You can now also subscribe to my posts through feedburner. I am now hoping to become a professional blogger and would really like to see some number of readers.

Guys and for a fact about something i really want to inform everyone, i have applied for the Reliance Power IPO, although i didn't have enough money to apply for the complete allocation of a single individual investor but i did apply a few. You know personally i feel that Reliance has never let down a single share holder and i am hoping they wont do the same this time as well. I would also like to point out that Reliance Power as on date has no real plants actually generating power but they hope to start producing some very soon. And hence you cant really calculate the returns on your investment but the market seems very optimistic.

I do invest in equities and have a small portfolio which i am trying to build up and as on date my portfolio is on a positive side by 60% and i hope to keep it the same. Its not that all my shares have risen some shares that i own are also in the negative but overall portfolio is very positive. Any ways will write more tomorrow. And sorry for not being able to write for so long, but please do keep reading.