Finance...

[dev]

Hi,

I've started this thread to share tips tricks on saving our hardearned money & investing it wisely...

to start with... Here's an interesting article to help U become an 'automatic' millionaire... http://finance.yahoo.com/columnist/article/millionaire/1150

[dev]

Hi,

I would like to know how many of the 'with kid hubbers' here teach their kids abt the economy, stock market & other investment options(other than for bank deposits & investing on a house) when they are still young(say around 12-13 yrs)... I am asking this coz I've not seen any schools teaching all these until std 10... even after tht, we learn it only if we elect the commerce group...

My parents taught me to save but not to invest... I believe this is the biggest mistake that we do... When young, we are happy to see our bank balance grow & we don't even think abt investing it... only when in the later 20s/early 30s we realise what early investments could've done for us... Wouldn't it be better had we been taught abt it all early?... Would be happy to hear more from you all in this regard...

[a.ratchasi]

Good to see a thread on finance, dev.

I thought of starting one myself to share the below and was pleasantly surprised to see one the next day itself.

:thumbsup:

Articles on Investment (http://www.rediff.com/getahead/money.htm)

The sidebar on the left has other subcategories.
Try those too.

[dev]

How to Keep Your Cool in a Hot Real Estate Market (http://finance.yahoo.com/columnist/article/moneymatters/1142)

[abbydoss1969]

A great thread!
Our parents in south india never teach us how we can invest and multiply money, maybe it is do with our spiritual tradition where making money is seen as somewhat of a baser instinct.

Firstly, we should start early, possibly in early twenties itself, because of compounding interest works for you.There was as issue on outlookmoney on this.
I also think every body should have a home, and mutual funds investment. as early as possible.

[abbydoss1969]

<a href="http://outlookmoney.com/scripts/REP002C1.asp?type=now"> <http://outlookmoney.com/scripts/REP002C1.asp?type=now

Go to this link to find more about power of compound interest!

[Alan]

This is a very good thread. Congrats, Dev for strting such a sensible topic.

I vote for PPF & Treasury Investment Schemes, although the interest rates are decresing day by day. Earlier it was up to 12 % , then 9 % and now its 8 , I think. :(

[dev]

Indiabulls (http://www.indiabulls.com/)

[svasu_ani]

pls post some tips on investing in equity market....in US and in India. and also if you can provide website reference will be helpful

Anitha

[dev]

Equitymaster.com & moneycontrol.com are the few I visit for news on Indian markets... For analyst opinion on Indian market refer to chats by Mr.Ramesh Damani... You can find his chats in moneycontrol... If you want to invest in equity, I strongly suggest that you do your research about the company and the industry before you invest... In India, I believe, logistics, media & agriculture are likely to go up in the long term...

For US market , you can try yahoo...

[dev]

I vote for PPF & Treasury Investment Schemes, although the interest rates are decresing day by day. Earlier it was up to 12 % , then 9 % and now its 8 , I think. :(

Alan, can you pls explain the reasons for opting for such schemes... I mean the advt & disadvt... I believe these are options for riskaverse investors... right?...

[Shekhar]

dev,

I wish you had started a topic on "How to acquire personal finance" :wink: :D

[dev]

Shekhar,

If you find that title would suit this thread better, I'll change it... :wink: :)

[Shakthiprabha.]

If one is looking out for being a millionaire, I am not sure how much this would help.

For a safe, secure, relatively reasonable earnings though, many NRIs are resorting to Investment in real-estate. Its reaching in a boom in Bangalore. Shortly chennai and hyderabad is expected follow the suit. I personally know many, who invested as little as 3 to 4 lakhs, in the period of 3 years earned around 12 lakhs.(Thats almost 3 times the investment)

The only measure one should ensure is to see that SOMEONE is there to watch out whats happening in and around ur land/flat (Buying a flat and renting out, is also a good option)

Again, since the cities are expanding crazily, the geological location of ur site is of greatest importance.
Investing in a land JUST outskirts of the city, waiting in another 2 years to enter into the city limit WOULD BE THE IDEAL BUY.

Here in South India, atleast after the Chitfund scam etc, many people fear to invest with any finance companies or for that matter even wait for bulls n bears to make ur deal.
The safest and solid (not liquid though) way is to invest in REALESTATES.

Happy realestating.

[Alan]

I vote for PPF & Treasury Investment Schemes, although the interest rates are decresing day by day. Earlier it was up to 12 % , then 9 % and now its 8 , I think. :(

Alan, can you pls explain the reasons for opting for such schemes... I mean the advt & disadvt... I believe these are options for riskaverse investors... right?...


One should go to the Treasury & invest the money. The only disadvantage is that you may have to wait in a long queue before getting the money. So, you can't take it out for an immediate purpose. But for middle class ppl like us, its one of the best investment schemes.

[dev]

It's true that investment in land(esp in places like bangalore) is proving to give one of the highest returns... & it's safe as well to a reasonable extent...

Alan, agree that it's a very good option for the middle class as it is very very safe, though the returns are comparitively less... But sadly, these kind of investments play a part in not letting the middle class grow richer... I believe it would be wise to invest a part of the savings in such safe investments & invest the rest in riskier investments, as it's always that higher risk gives higher returns... Having said these, it all depends on ones financial situation & ability to take (calculated)risks...

[dev]

Sensex hits 10000 for first time ever !
The Sensex has touched 10,000 mark amid buying across the board.

At 3:18 am, the Sensex is up 239.62 points at 9982.20. It has touched an all-time high of 10,002.83. It crossed 10,000 mark for the first time ever.

The Nifty is up 60.85 points at 3,001.45. The CNX Midcap Index is up 58.40 points at 4,345.85.

The markets bounced back on short covering and fund based buying in frontline stocks.

A look at Sensex journey till 10K mark:

* 9000-10000: Sensex takes 48 days to move from 9,000-10,000
*9500-10000: Sensex takes 22 days to move from 9,500-10,000
*9,000-10,000: Biggest Contributors - L&T, ICICI Bank, HDFC, ITC
*9,000-10,000: Biggest Contributors - ONGC, BHEL, Tata Mot, Hindalco
*9,000-10,000: FIIs Pump In $3.15 billion In Indian equities
*9,000-10,000: Nalco biggest index gainer; up 50%

Courtesy: http://news.moneycontrol.com/backends/News/frontend/news_detail.php?autono=201239

[Anoushka]

[tscii:0254636992]Got this as a forward from a friend.... thought it would be useful.

Do the following with money:
1) Value it
2) Control it
3) Save it – a certain percentage - don’t wait till you have enough money – you will never have enough – income rises, expenses also rises
4) Invest it
5) Make it
6) Shield it – Mutual funds are good – let the professions who constantly monitor the market handle it.

The myths
1) You cannot be rich because you were not born into wealth
2) You are not the right race

The truth
1) Wealth is a process rather than a destination
2) Wealth is about building net worth
3) Wealth is about – if you lose your job how long can you survive
4) Without health money is useless (note 1 in 4 get cancer – the main cause is stress)

Top 10 mistakes
1) Not starting early enough
2) No financial vision or plan (preferable written)
3) Not having a proper budgeting program
4) High interest debt
5) Following the masses
6) Not building cash reserves
7) No record keeping
8) Spending money on DOODADS
9) Lack of knowledge
10) Short term thinking


Positive financial habits
1) Write down every expense on a daily basis
2) Pay yourself first
3) Avoid credit card unless you are willing to pay the balance on time
4) Wait for two weeks for major purchases
5) Review all bills and statements for errors
6) Shop around before increasing debt
7) Read more money related article per day
8) Limit your TV viewing time
9) Shop with a list and stick to it.
10) Always be ready to refinance your debt when rates are cheaper.
11) Consider higher installments for all debts
12) Use discount cards whenever possible
13) Don’t spend your next pay rise, save it
14) Eat in
15) Buy generic. Branded does not always mean quality
16) Avoid convenience stores like 7-11
17) Do it yourself as far as possible – laundry, cutting grass, wash car etc.
18) Budget your expenses
19) Have a piggy bank for loose change
20) Don’t support Lottery, Quick pick.......


Financial Independence means
1) Can walk away from job without any dent in finances
2) To live dream lifestyle
3) To shop without looking at the price tag
4) To ensure a long term financial plan is in place for growth and protection


8 steps to financial independence
1) Calculate how much you are worth
What I own---------------------------What I owe
Car ---------------------------Car loan
House ---------------------------Housing loan
Jewelry ---------------------------Credit cards
Savings ---------------------------Along
Property ---------------------------Court Marmot
Pension
Shares
-------------- --------------------------- ---------------

-------------- --------------------------- ---------------

3) Record all financial transactions daily – through research it seems that people who do this are wealthy. God likes those who manages their money properly, He will give more money to those who manages properly.
4) Set financial goals to clear debts and accumulate wealth
5) Choose your team of financial advisors – friends in banks etc.
6) Create a cash equivalent reserve – 10%
7) Pay 10 % to charity – world’s wealthiest are the most charitable.
8) Invest into stocks and properties
9) Participate in a business that gives you residual (passive – money coming in while you sleep)


Three types of incomes
1) Active income (the more you work the more comes in) – not so good.
2) Portfolio income (OK but volatile)
3) Passive income (highly recommended)

Who makes passive income?

Employee --------------------------- Business owners


Self employed --------------------------- Investors

The left group are 90% of the world’s population who make 10% of the income
The right group are 10% of the world’s people who make 90% of the income
Employee – working for someone else
Self-employed – private doctor, mee seller etc
Business Owner – big restaurant owner – runs without his/her presence
Investor – invest in stocks or properties.

Multiple sources of income is important – just as Malaysia got away from it’s dependence on rubber.


Portfolio income
1) Invest in stocks for long term. Buy stocks in companies that :
a) Has identifiable consumer monopoly
b) Financing is conservative and balanced – gearing ration less that 2. i.e ratio of debt over income.
c) High retention of earnings
d) Has a management team that is qualified
e) Has the ability to maintain positive cash flow i.e. income minus expenses is positive. Note some companies have huge income but also huge expenses – keep away from them.
f) Ability to reinvest funds for new opportunities, business expansions
g) Has ability to arbitrate costs during inflation
h) Return on equity (ROA) positive.
2) Invest in Unit Trust – let qualified people handle the money
3) Invest in Bonds and securities – low rate of return but very secure
4) Investment in properties
a) Buy only at of below market price
b) Location is very everything
c) Ensure you get positive cash flow
d) Don’t over gear in financing property
e) Must predict capital gain within 2 years – don’t listen to rumors that the area will develop in 5 years.
f) Feng Shui important
g) Properties that need repairs are good – can bargain
h) Avoid setting sun
i) Stake out the property
j) Houses versus apartments
k) Choose freehold as far as possible
l) Avoid raw land
m) Bargains can be found in auctions

[/tscii:0254636992]

[Alan]

Very informative, Anu. Thanks a ton for sharing!