basics investing stock markets

Basics to Keep in Mind while Investing in Stock Markets

basics investing stock markets

I am a fan of stock markets. But that is not the case with many people I discuss it with. The reason – they might have either lost or fear losing their hard-earned money. However, if you ask me, you will never lose sleep if you follow some basic rules of investing in stock market. Let me lay them down:

Invest With Your Surplus Money:

Never invest your core money in the markets. By that I mean the cash that buys monthly ration, pays your rent or bills, fees for kids, savings for exigencies and future necessities. After you’ve taken care of your expenses and set aside a safety margin, invest the remaining in stock market.

In my initial years of investing (right after I got out of engineering), I went for fixed income instruments – primarily PPFs and FDs. As I started earning more and expenses stayed more or less the same, I ventured into the markets. I bought some shares of prominent companies and also invested in a couple of mutual funds that were doing well. Over the years, I learned from my experiences and changed my tactics. Recently, I had record profits month-after-month.

Do Your Own Research Not Go by Recommendations:

You might be tempted to go by the recommendations that analysts come out with on a daily basis. However, nothing beats your own research. Moreover, you don’t need to be a top-notch finance graduate having vast experience to understand the markets.

An example: Just think about what runs the economy? Banks, right? Guess what, they have been doing exceedingly well since Mr Modi came to power. The whole Reforms and Demonetization process will strengthen the banking system and add to our GDP in the long run. If you look at front-line Banks and how their stock prices have moved, you would get the picture.

Go for Quality Stocks:

There are many ways to identify opportunities that can give you handsome returns in the short-to-medium-to-long term. However, without going into the technicalities, just go for companies that have strong fundamentals, quality management and have done well in the past.

One of my techniques is to look for sectors that will perform well in the future. For example, the Budget this year gave a lot of thrust on affordable housing, which meant the Housing Finance and Infrastructure Development companies were expected to do well. And they did! In fact, one could have easily made phenomenal returns by just investing in the sector-focused mutual funds post-budget.

There can be Dips too, Maintain Calm:

One of the basic mistakes that many of us do is to buy when markets have been performing well and sell when they dip. Though this is the basic human nature – of greed and panic – but maintaining calm is the very basic principle of investing. Even if you bought shares at a high price and they go down after your transaction, just keep calm. If it is a company that has proven its worth, it would definitely pay you one day.

I have a few shares of Reliance Industries since last 8 years. During the recession years of 2008-09, they went down terribly, but I never got rid of them. In the last year or so they have shown some traction and the counter has moved from about Rs 900 to around 1,400 recently. I added a few more to my holdings in the past and I am now looking to profit from my investment.

Don't Get Greedy if a Stock Performs Well:

While some investors go for a buy-and-hold strategy, I am not a fan of holding a stock for long. Ths is because you never know when the markets would take a turn for the worse. Having said that, there is nothing wrong with the earlier strategy; just that I prefer to book my profits when I am comfortable with the return.

I have a good number of shares of Manappuram Finance since late last year. I practiced holding onto it for a few years, but since my buy, it has moved up and gone down to my buy price a couple of times already. I could have done much better by selling when it went up, especially because I have a huge amount locked-up in that non-performing stock. So take a call based on individual experiences.

Never Put All Your Eggs in One Basket:

The most important advice: Just don’t buy one share or invest in one mutual fund. Spread your holdings across multiple stocks and mutual funds (and that too across multiple sectors). If you don’t have that much corpus to invest, start with top-performing mutual funds (after doing basic research) and invest using the SIP route. This would ensure any ups-and-downs in the markets are averaged out by your recurring buys.

I have stocks across more than 10 sectors and investments in more than 15 mutual funds (again, across sectors). This ensures if a couple are not performing to my expectations, the others more than make up for the loss. I always keep an eye on what is working and what is ready to be offloaded.

To conclude, there is no guarantee that you would make quick bucks in the stock market; but if you've covered the basics, you will surely make good money over time.

Alok is an Engineer (Gold Medalist), MBA in Finance from IIFT, and FRM certified. He has worked with many renowned Investment Banks in the US. He also writes at alok-singhal.com


money habits helps develop till 25

Money Habits You Must Develop Till 25

money habits must develop till 25

Fresh out of college, new job and with a fat paycheck - the experience can be overwhelming. With this newly acquired financial freedom comes great responsibility. To start with - break old money habits and adopt new. This rise in disposable income can bear fruit if we start managing our finances at an early age. And what better time to start it than our 20s?

Incorporate these habits in your life and say hello to financial stability very early on in life:

Say No to Borrowing

Let’s start by erasing the bad habits first. Act mature and stop relying on your parents and friends. In college, our allowance is tight. Hence we borrow from friends. There is no commitment on paying back, late fee, or interest. It’s a casual arrangement between friends. But don’t let this habit grow out of control. Manage your expenses in your own paycheck. Borrowing is a bad habit and in some cases, it can turn into an addiction. It’s easy money. It’s especially important to control borrowing when you are a compulsive shopper. This applies to piling up expenses on your credit card as well.

Cut your coat according to your cloth, as they say.

Make a Budget and Use Technology to Stick to it

It’s really easy to manage money these days. With online payments, apps, and mobile banking, we can streamline our finances. Set auto payments on rent, telephone, internet, and electricity bills. The forgetful ones can set reminders too. There are many tools available to set budget. Get an overall view on savings, spending on rent, food, travel from it. Adjust it to suit your lifestyle. Use apps to track your spendings. Cut the unnecessary expenses after evaluating your quarterly spending behavior. I recommend MoneyView app for managing expenses. Most important tip - save before you spend. Transfer funds into your saving account the day your paycheck arrives. Save at least 5%-10% every month.

Investment is your New Friend

Don’t merely save. Invest. At this young age, premiums are low. And returns can be high if we play smart. Compounding offers big benefits especially when you invest in your 20s. Make mutual funds, SIPs, and stock market your new friend. Learn more about them. If anyone in your family invests in the stock market, seek their guidance. Plan for buying your own house. Take a good insurance and retirement policy. These small steps would go a long way in fulfilling your long term dreams. Start soon and reap better returns.

Don’t Succumb to Social Pressure and Spend Beyond Means

It’s tough to break the habits we adopted while growing up. Most of the singles live away from their families making it tough to control the carefree spending habits. As singles, we hang out at malls, pubs, and movie theaters. High-cost places where most overspend. It’s is difficult to resist the temptation when we hang out with our friends. But it’s not impossible. Set a limit to the number of outings. Don’t spend because of peer pressure. Everyone has a different lifestyle and different goals. Learn to say ‘no’ when need be. Remember it’s easy to spend money but difficult to pay the bills.

Don’t Lend and Forget

In addition to borrowing and overspending, lending can also ruin your financial health. Lend money responsibly. Ask for the pay-back plan. It’s difficult to say no to friends who helped you earlier. But don’t let the gratitude derail your finances. Lend but don’t forget to ask for your money back.

Have at least One Financial Goal Every Year

Goals are important. They help us to look closely at our finances. Set at least one goal for a year. Big, small or break up a bigger goal into yearly targets. A few examples -

  • Small goal - gift diamond ring to mom
  • Big goal - save for the down payment of car
  • Break-up goal - buy a home by 30 and save 1.5 lakhs every year

Setting goals and achieving them bring a sense of achievement. It doubles the joy of earning money.

The early 20s is the time we set the foundation of our lives - family, house, and kids. Make a firm foundation by imbibing the above habits into your life.

A Company Secretary by profession, Saru found her true calling in writing. She blogs at sarusinghal.com which she religiously updates every Monday for the last five years.


mothers day gifts won't cost you a rupee

Heartfelt Mother's Day Gifts that Won't Cost You a Rupee

mothers day gifts won't cost you a rupee

Mother’s Day is just around the corner. And in case you are bored of giving the usual gifts to your loving mothers. Worry not! There are many heartfelt gifts you can use to make this day special. What’s best - all these are free! Celebrate Mother’s Day this year with these warm gifts to show you care. Make it special for your mother with one of these beautiful gestures

Breakfast in Bed

Mothers are the early risers in the family. Surprise them by waking up earlier than them on Mother’s Day. Make her favorite breakfast item. If your culinary skills don’t allow to cook a detailed meal, don’t fret. Fix a quick breakfast - toast, tea, and fruits. Work on the presentation. Assemble the breakfast on a fancy tray with a flower on the side. And you’ve done enough to impress your mother! Start the day with this special gesture.

Complete her Pending Tasks

Ask any mother, they all have a long list of pending tasks - cupboards to be arranged, pressure cooker that needs a new gasket, broken handle of the dresser that needs fixing, or cleaning of an exhaust fan. The list goes on and on. Relieve her of these tasks. She has taken care of you for a long time. It’s your time to payback. Ease off her workload and complete these pending tasks. This would give her more free time for a month or two. I did it once for my mother. She was happy beyond words.

Teach Her to Use an App

We use technology to connect with our friends and family. Go a step ahead and make it special for your mom. Download an app she needs and teach her to use it. It can be as simple as the Weather App. Or any other thing she is passionate about. A few suggestions - WhatsApp Video Call, Skype, Pedometer++, or an App for Hindu Days or Festivals. If you still can’t figure out the app, simply ask where she needs assistance, and find the right app for it.

Organise a Lunch for your Mother and Her Friends

Surprise your mother by throwing her an intimate lunch. Invite her friends too. Go with a homecooked meal. Make her favourite dishes. Ask your siblings to pitch in, if possible. Give your mother a chance to bask in the warmth of your love in front of her friends. It will surely make this day special.

Make a Promise to Quit a Habit She Hates

Mothers worry a lot. So why not make her life a little easy? Gift her a promise. Promise her to leave a habit that stresses her out. Say no to fast driving. Vow to eat on time. Give her an assurance that you would give away a bad habit. This would be the best gift to her on Mother’s Day.

Write a Letter or a Poem

There is no better gift than the gift of words. Pour your emotions on a piece of paper. Write a heartfelt letter. For creative souls, write a poem. Preferably use your mother tongue. It adds more charm. Give it to her and ask her to read it in front of you. If you are away from your mother, recite it over the phone or on a video call.

Spend Time at Her Favourite Charity or Organisation

Nothing says ‘I care’ more than participating in a cause someone believes in. If your mother is a part of a charity, volunteer for a day. Go with her and participate. If your mother is religious, go to the temple with her. Extend your support - pledge to become a member.

Take Her for a Walk in the Evening

Walks provide a good bonding time. Go for an evening walk with your mother. Talk, listen and share. Give her your undivided attention, like she gives you hers. Put your phone on silent. Get to know her better. Use this day to connect with her.

Pamper Her with Home Spa

Organic is the new buzz word. It’s natural, safe and cheap. Use homemade scrub and pamper your mother. Give her a manicure or a pedicure. Tell her to relax while you care take of her.

But in case you’re pressed for time and can’t do any of it - simply call her and say ‘thank you’ for being a great mother. She, like always, would appreciate your gesture with an open heart.

And on this note, Happy Mother’s Day to all of you.

A Company Secretary by profession, Saru found her true calling in writing. She blogs at sarusinghal.com which she religiously updates every Monday for the last five years.


bad money habits kids

Are You Passing Bad Money Habits to Your Kids?

bad money habits kids

We don’t like to discuss money matters in front of our children. We tend to postpone this serious discussion till the right age. Little do we know, like all the basic manners, good money etiquettes should be taught from the very beginning. And like all other habits, children pick money habits from their parents. So be careful. And keep the following pointers in mind while dealing with money to ensure you don't pass on bad money habits to kids:

Never Succumb to Your Child’s Tantrums

Most parents fall into the tantrum trap. Sometimes parents say ‘yes’ to put an end to an embarrassing situation in a marketplace. And sometimes it is hard to see your child crying. But no matter what your situation is, don’t cave in. When you give in to your child’s demands, he tastes the easy way to get things done. And this is not the case in the real world. Teach them money is limited and we have to put it to the best use. Control is the key. Be a little strict with your child.

Give Allowance with Accountability

Pocket money is a great way to teach money management skills at an early age. But without accountability, it hardly serves any purpose. Give pocket money and follow a few rules:

  • Before handing out the pocket money, ask how they’ve spent the last month’s allowance.
  • Don’t give money before the due date. Let them wait. Ask them to manage money better the next time. Tell them that you too get money on a specific date.
  • If they make repeated mistakes with money, deduct the penalty from their allowance.

Don’t Fight Over Money in Front of Kids

This is a strict no-no. It sends a wrong signal that money is the root cause of all problems. And money alone can fix it. Don’t do that. Never fight over money. Whenever you and your spouse have disagreements over a financial matter, sort it out in a closed room.

Never Hand Out Credit Card to Teenagers

I’ve seen parents trusting their teenagers with credit cards. By nature, credit card is easy money. To children, it’s one swipe and an initial to buy a pair of jeans, which actually cost more than your day’s salary. It doesn’t project the importance of hard earned money. Instead of handing out the credit card to your child, give them cash. Better - let them earn it by doing chores.

Make Them Wise Shoppers

My mother used to take me for grocery shopping. I learned bargaining lessons at the age of 6. Some may say it’s early. But it actually made me a better shopper. As a teenager, I could get a better deal, better than most adults around me. Take your children for grocery shopping,  to local mandi and retail stores. Give them live lessons on negotiations and bargaining. Take them along when you have to return a defective product. They should know that shopping is not always pleasant, what problems they may come across, and how to handle them.

Teach Work Ethics by Paying Them for Chores

Fruits of labor are the sweetest. Let your child learn this at an early age. Give them chores depending on their age and pay them. But don’t be lenient. Give them a taste of real world’s work environment. Let them follow the rules, work hard and earn their reward.

Open Bank Account and Teach the Value of Savings

Piggy bank or a bank account cultivates the habit of savings. While a piggy bank is a household way to do it, savings account gives them a sense of ownership. Children take pride in having a bank account. It nurtures the habit of savings. Open your child’s account, teach them the basics of online banking, and take them to a bank whenever possible.

The Quintessential Money Talk

Don’t delay the money talk. There is no right or wrong time. Cultivate money manners from the beginning. A 6-year-old child needs to know the value of toys he owns. He should know enough to take care of his belongings. Similarly, a teenager should know that he can’t have all the things his friends have. Impart the necessary knowledge as per your child’s age. And you are the best judge of what to tell and what to avoid.

Is there anything specific you follow while dealing with money in front of your children? Please share in comments below.

A Company Secretary by profession, Saru found her true calling in writing. She blogs at sarusinghal.com which she religiously updates every Monday for the last five years.


money management tips new job

4 Money Management Tips For Those With New Jobs

money management tips new job

“Vishal boy! Those days were amazing!” he said.

My friend and I were reminiscing our younger days. “We had all the time, but no money,” he said. “I wish I could time travel and give our younger selves some money to enjoy more. We have money today, but no time.”

We laughed.

“We have money today, but what about a decade from now, when bigger responsibilities will demand 80 percent of our incomes?” I asked.

“I haven't thought about that yet. Let’s cross the bridge when we come to it,” he said.

I hope it’s not too late for him when he reaches the bridge. Will it be the same for you?

Today, you’re starry eyed. You’ve got a good job with good money. You’re all set to climb the corporate ladder. Movies, dining, ‘wanderlust’-ing… after all, you only live once.

But while you overdose on fun now, are you prepared to lose it all when responsibilities increase? Or will you work thrice as hard and neglect your children (when you have them) just to earn enough to enjoy vacations and premium seats at first screenings of flop movies? After retirement, will you be at the mercy of your children for basic amenities like food, clothing, shelter and WiFi?

I hate to be the harbinger of bad news. But your current lifestyle will land you in bucket loads of trouble within a decade. You’ll always be short of money to do the things you enjoy, no matter how much your job pays you. You’ll keep making ‘sacrifices’, and complain that life isn't fair.

But there is another way. One where you can have enough money to do what you like. You can make people you love live luxuriously without sacrificing too much along the way. You can be free of money worries for the rest of your life. All you have to do is something your peers don’t.

Behave responsibly with your money.

You’ve heard it from your parents and elders, right? “Be responsible with money.” But what does it mean? And how should you do it?

Below are 4 tips to handle your money wisely, and reap astonishing returns in the coming years.

 

Don’t Spend First

The difference between the rich and others is that the rich invest first and spend the rest. The others spend first and invest the rest. Money grows only when you make it work for you. It’s similar to a muscle which strengthens when you work out, and becomes weak if you eat more junk food and exercise less.

You’re young now, free from responsibilities like household expenses, children and more. Sow the seeds for a secure future. Develop a habit to invest 20 percent of your income in a Mutual Fund or similar investment vehicle. How will that yield huge returns? Read on.

Remember the Magical Law

Warren Buffett made 90 percent of his income after the age of 50, because of one magical money law - compounding.

Here’s how it works. If you invest only ₹5,000 a month in a scheme which offers 12 percent returns annually, your money grows by ₹7,200 at the end of the first year. Not a big amount, right? But the next year, the principle amount on which you get returns is ₹1,27,200 (₹60,000 + ₹67,200), which comes to ₹15,264. Thus, in 2 years, you’ve invested ₹1,20,000 and earned ₹22,464. That’s 18 percent growth, higher than any FD or savings account can offer!

But here’s the beauty. If you continue investing in this scheme for 5 years, you’ll invest ₹3,00,000. But your money will grow to ₹4,26,911, an increase of 42 percent! Do this for 10 years, and your ₹6,00,000 becomes ₹11,79,275, a whopping 96 percent growth!

All this for the discipline of just investing ₹5,000 a month, even when your salary doubles or trebles.

Invest in Skills

The corporate world no longer wants people who do what as they’re told. Plus, the abundance of manpower has caused a plateau in salaries for entry level jobs, even for MBAs.

Hence, don’t depend only on your job to earn a living. Invest in skills you can monetize. Enjoy drawing or writing? Learn graphics designing or content writing to pick up freelance gigs on the side. Enjoy playing music? Learn an instrument and start playing for a band, or coaching classes for others to learn the same.

This won’t just give you an alternate source of income. It will also divert your mind from frustrating events at work. It will ensure you’re not at the mercy of a horrible boss just to make ends meet. It will give you freedom to do what you love. Who knows, you could soon become an entrepreneur!

Value Time More

Money might seem like the most important currency in your life now. But the most valuable currency in the world is not money. It’s time. See, you can use time to make more money. But you can’t buy time even if you have all the money in the world.

The rich invest more in time. As a result, they make more money. It’s not the other way round. Be highly productive and do meaningful work instead of feeling like you’re running in circles. Always aim to create more time, so that you can focus on doing more constructive activities. They will enable you to make more money for less effort.

Life is long if you know how to live it. The fear of missing out may direct you to spend your money in enjoying material benefits. But if you can regulate your desire to splurge right now, you’ll reap rich rewards later. You’ll live on your own terms, leisurely and content. Your own house, your own car, a vacation wherever you want to go… you can have it all. You’ll never be at the mercy of others.

All you have to do is follow the above mentioned points with some self-discipline. After all, you only live once, right? Make the most of it.

Vishal is the founder of Aryatra, a venture to help individuals improve their productivity and live more fulfilled lives. He also is a digital marketing consultant helping businesses generate revenue from their online presence.


invest gold

How to Invest in Gold?

 

invest gold

Festivals, auspicious occasions or as an investment, gold is a favourite buy in Indian households. Whether you buy it as jewellery, gold coins or gold bonds, it is an investment that never loses its sheen.

In this article, we explore the traditional and the new ways of buying gold.

Gold in India – Brief Overview

We all know, Indians love buying and hoarding gold. Passed on from generations, the coveted yellow metal has become a symbol of wealth, stability and status in our country. This characteristic to accumulate gold is actually a good one for the financial stability of each individual and also the country as a whole. Stock markets can crash; banks can go bust; oil price can tank in a matter of few months, but gold is the last commodity that will get hit in times of great financial crisis. In fact, one of the indicators for economic stability is the amount of gold reserves in a country. India has about 550 tonnes of reserve gold compared to the US which has a whopping 8133 tonnes of the precious metal.

On the contrary India is one of the largest consumers of gold importing almost 1000 tonnes per year! What’s happening here?

We accumulate gold and don’t circulate what we already have. This creates a need for imports that impacts our current account deficit. Imagine the situation where every Indian earns a salary but does not spend the money? The economy will actually collapse as there will be no circulation of currency and hence no growth. Capitalism works on liquidity and gold is not insulated to this phenomena. Indians hoard the gold for years, decades and in some cases centuries (like Temple Gold!)

As an amazing fact the Padmanabhaswamy Temple in Kerala is the wealthiest shrine in the world with estimated wealth of 1.2 trillion USD. This is still conservative and proves ancient India was extremely rich! What’s the use now? Most of the gold we have personally accumulated is not circulated which impacts our import bill and ultimately the country’s economy.

Gold Monetization Scheme

To counter this lack of circulation, the government has introduced the scheme for monetising your existing gold. At the moment most of it sits in lockers, accumulating dust. Through this scheme government wants to pay you interest on the gold you have if you deposit it with a bank much like a bank fixed deposit. Wow? No, there is a significant flip side to this.

The government will actually take your physical metal and issue gold bonds of equal value. So you will mostly lose your physical jewellery but not the actual value because of the issuance of the gold bond. The bond can be redeemed at the prevailing gold price at any time. You will also earn some interest, could be a neat 2% but nothing is confirmed as of now. Again there could be a psychological resistance for most Indian to give away physical gold for bonds (which is a piece of paper, like a share), but the government hopes that this mindset will gradually change.

Doing this, the country can gradually reduce this yellow metal's imports and still satisfy the demand of gold in the country. The advice is not to convert all your gold to this scheme, but you can consider doing a part of it for that extra income through interest.

Sovereign Gold Bond Scheme

To actually decrease the import of physical gold, the government is now giving an option to buy a bond which is nothing but a piece of paper. So for the ones who would like to buy gold as an investment, they could actually consider buying the bond rather than physical biscuits, coins etc. This will have three benefits:

  1. Safer as you don’t need to worry of keeping physical gold at home or in your locker.
  2. Easy to redeem
  3. You can potentially earn interest on the bond (yet to be confirmed by the government)
  4. Good for the country as it will reduce the need to import physical gold.

As a note, the Gold Bond scheme is different from Gold ETF which is much like a mutual fund. While you can earn an interest on a gold bond, the Gold ETF does not earn you any interest. Gold ETF is like a share of a company, you can buy and sell units of the ETF. On a flip side, the bond scheme has a lock-in period. This is yet to be confirmed.

So, the next time you go out to purchase gold for Navratri, Dhanteras, Akshaya Tritiya, Diwali or any other special occasion you can consider buying the bond instead of the actual gold!

As they say all that glitters is not gold, therefore you needn’t be worried about ISO marks anymore!

Final Word: Balance Practicality and Emotion

We Indians are an emotional lot. Sometimes we need to break some emotional barriers and make our lives better. Monetizing a small portion of your gold will help you earn some extra money and also help the country reduce the deficit due to gold imports. Is it time to open up those ancestral lockers?

Arjun Balakrishnan is an investment fanatic who loves writing about investment topics. He regularly writes at Investment Gyaan.


spend bonus

How to Spend Your Bonus in 2017

spend bonus

It is that time of the year when many of us working in the corporate world eagerly wait for the Annual Bonus payout. But the preparation to spend it starts much in advance, even before the money hits the bank account.

Depending upon which firm and at what level we are working at, the target payout ranges anywhere from 5-10% of the annual salary. For mid-level employees that most of us are, the in-hand comes out to be about a few thousands to a lakh rupees, after accounting for the variability and tax outgo. Since bonus is a major payout compared to our regular salary, we would want to put the payout to good use!

Here is how we should go about spending it, in the order of priority:

Pay Off Your Debt:

Most of us have some or the other loan active at any point in time. Why not get rid of it first, or at least lessen the burden of the interest rate? If you have multiple debts outstanding, get rid of the ones with the highest interest rates first. However, do inquire about the prepayment charges before you make the move.

The last ones to be paid off should be those which come with tax benefits, say student loan or home loan.

Save for Emergencies:

One should always account for the emergencies, which come unannounced. The least we can do is to be prepared for them to the extent possible. If you have money saved for any unforeseen incident, you would have made sure you don’t have to run around asking people in your time of need.

The best way is to set aside the cash in liquid options, so the drawdown is not a nightmare when tough times hit you. Start an Emergency Fund.

Invest in Future:

Home is a basic necessity of life and saving for it right from the young age has become increasingly common. You don’t want to get married and then start thinking about your permanent abode. Rather, start as soon as you can and slowly build the corpus. My favourite is the exposure to equities or invest in Mutual Funds via SIPs if you are conservative. The biggest benefit is that once you are ready to settle down, you would be able to pay a large portion of the outgo upfront.

Upgrade Your Skills:

This might seem unnecessary, but the importance of staying ahead in the game can’t be ignored. When the job market becomes tough, the ones who sail through are those who’ve stayed competitive. Even after my high-paying initial jobs, I dropped off for my full-time MBA from a renowned B-school in India and then did my FRM certification a few years hence. That way I have made sure to make the cut in many job interviews in my career.

Have Fun with the Leftover:

Don’t forget, you’ve earned the Bonus! So, go out and enjoy whatever you have been dreaming about since long. It could mean taking a small break from work and going to your dream destination or just treating yourself with a new gadget for the hard work for the year gone by.

Essentially, do what makes you happy. And celebrations are a must.

Alok is an Engineer (Gold Medalist), MBA in Finance from IIFT, and FRM certified. He has worked with many renowned Investment Banks in the US. He also writes at alok-singhal.com


financial resolutions new financial year

5 Financial Resolutions for the New Financial Year

financial resolutions new financial year

April marks the start of a new Financial Year. Every new beginning gives us a chance to change for the better. This would be the perfect time to make financial resolutions for this financial year and for the life ahead for a secure and healthy financial future ahead. Here are 5 financial resolutions you must take this year:

I will Create an Emergency Fund

This resolution helps you remain prepared for the rainy day. Having a healthy corpus of at least 6 months’ expenses towards emergency fund is desirable since it helps you with a sufficient financial cushion towards any unforeseen event. So, if you have not yet created an emergency fund, making one should be your first priority in this financial year. Also, being a smart investor, invest this emergency corpus in relatively high-yielding, low-risk instruments like liquid funds etc.

I will Plan my Tax-Saving Investments over the Year

A disciplined and consistent approach is key to investing to achieve a desired set of goals. Being a finance professional, I do receive many phone calls in the month of March to guide people for tax saving instruments and this story continues every year. However, when you rush to invest in Feb-March,  you have fewer options available and end up investing in the instruments yielding lower returns. Also, investing at one go at the year-end stresses the finances during the respective period.

Hence, make sure you plan your tax saving investment at the beginning of the financial year itself. This will allow you to take more prudent saving  and investment decisions and keep you stress free.

I will Start Saving in a Systematic Manner

For a majority of the population, investing is only for the purposes of tax saving. Little do they realize that there is a larger investment scenario beyond tax savers. One must start saving and investing at an early age to reap the benefits of compounding. However, even if you could not start earlier, it’s always better to start now. You must enroll for systematic investments like Recurring Deposits, Systematic Investment Plans (SIPs) in Mutual Funds, etc. which help you inculcate a financial discipline with periodical investing. These small investments don’t make much difference on monthly basis but indeed go a long way in building a healthy investment corpus. 

I will Stay Informed about My Investments

When it comes to managing our money, lack of knowledge about various investing opportunities often restrains us from earning at least reasonable returns. Also, many of us are not aware of the investments already made, since they are generally made at the advice of a friend/ tax planner/ CA. Once the investment is made, we believe that the job is done.

But, if we monitor our investments, we can better plan our finances by including the redemptions and returns from such investments into our financial planning. Being an informed investor is the most important way to protect your money and, in fact, grow it steadily.  So, make sure, you prepare a complete list of your investments with details of redemption/maturity/returns etc. to help yourself make better investment decisions.

I will Keep Track of my Finances

As I become more savvy with managing my finances and investments, it is important that I track my finances regularly. There are some wonderful free apps like Money View which make this work simpler.

I resolve that I will keep my financial resolutions for this year and for the rest of my life. Do you?

Simardeep Singh is a Chartered Accountant based in Delhi. He loves sharing his knowledge about personal finance and investment. He blogs regularly at www.simardeep.com.

 


get fit summer

7 Ways to Get Fit This Summer Without Sweating Your Money

get fit summer

We can't improve our fitness without altering our present lifestyle. But wait, don't confuse improving fitness with spending more money. It has nothing to do with how much we spend. It's all about channelizing our actions in the right manner and making small changes that last a lifetime. While running, walking and yoga are free of cost, we lack the motivation to stick to the routine. Make the following changes and fit into summer wardrobe with a better body.

Stick to Homemade

When it comes to losing weight, 80% is food and 20% is exercise. The proportion reflects the importance of eating right. Even if we burn 700 calories in the gym, one wrong meal can flush the effort down the drain. The best way to control our calorie intake is to eat at home. One home cooked meal has half the calories of the same dish available in a restaurant. And we can’t ignore the amount of money we could save while eating at home.

Invest in a Good Chopper

Summer is for light eating - salad, juices and water based food. It keeps health in check and provides the required hydration. But if we want to have a good summer body, we all know it’s made in winters. Start by investing in a good chopper. Then, replace one meal of the day with salad. Once we have a handy tool to chop the vegetables, we won’t feel lazy to make quick salad recipes. Salads are filing. A big bowl of vegetables fills the entire stomach and has fewer calories. The moment our stomach is full, it sends the signal to our brain to stop eating. Invest in a good chopper which comes under INR 2000 and save thousands on gym membership, which, by the way, most of us never use.

No Time for Counting Calories, Count Steps

Most of us have a sedentary lifestyle. To be active, we must walk at least 5000 steps. It’s not a lot provided we make some changes here and there. And to provide the necessary nudge, download an app. Apps are free. Download the app on your phone, keep the phone in your pocket and the rest is automatically taken care of. Some changes which I recommend to increase the steps -

  • Take stairs. If your office is on the 5 floor, use the washroom on the ground floor.
  • Park your car at the far end of the parking lot.
  • Stop being lazy, use every opportunity to get up and walk. Answer the doorbell, keep the dishes in the sink as soon as you are done with the meal, don’t wait for the maid to take the trash out, or simply walk your dog.

As far as the app is concerned, use Pedometer++. This is a free way to get in shape. For motivation, participate in their challenges or add your friend as a fitness buddy.

Find the Right Substitutes for High-Calorie Meals

Forget high-calorie food and do away with your cravings. Well, it’s easier said than done. In my experience, cravings can only be avoided if we are not forcing ourselves out of it. Rather than avoiding the food altogether, I find its substitute. For my sweet tooth, I have added honey roasted nuts. I control my street food’s craving with yogurt in which I mix Tamarind Chutney and Boondi. Know your cravings and find right substitutes for it.

Make the Best Use of YouTube

YouTube is free Fitness Counsellor. There are thousands of fitness videos that we can follow from the comfort of our bedrooms. Search for exercise videos and practice alongside. Subscribe to a good fitness channel. Fitness Blender is an amazing channel. They have tons of ‘no prop workout’ videos. The only cost is your internet connection.

Plan Weekly Menu Ahead or Meal Prep

The best way to manage what we eat is to plan ahead. Note ‘what to cook’ on your phone or tablet. Make the plan twice a week - Sunday and Thursday. Write in detail what you would eat for breakfast, lunch, snacks and dinner. If possible, prep it. Do what suits you. If chopping the vegetables in advance suits you, do that. Some people put items in separate containers as per meal plan - it’s good, too. I, on the other hand, open my refrigerator and pantry and make a list. It saves times and keeps my grocery list updated. By using this method, my grocery bill as well as dining out bill have reduced significantly. When on weight loss regime it helps to keep an eye on the calorie count.

Drink More Water

The importance of drinking water can’t be denied. Water keeps us hydrated, flushes the toxins from our body and improves the skin. Drinking water like all other lifestyle change is a habit that we nurture. Drinking 8 glasses is recommended. Achieve this target first. Then slowly add more. Add one more bottle to your routine. Drinking water helps in weight reduction. It fills the stomach and hence, the urge to eat often is reduced.

By making these changes, I reduced 19 pounds in 4 months in 2015. And I have maintained my weight since. Incorporate these changes and be ready for summer with a fit body.

A Company Secretary by profession, Saru found her true calling in writing. She blogs at sarusinghal.com which she religiously updates every Monday for the last five years.


When is the Right Time to Redeem Your Mutual Funds?

Investing is all about ‘getting in’ and ‘moving out’ at the right time. Going by the law of probability, one has an equal chance of getting both right or wrong. Common sense dictates that one must make investment during lows of the market and exit at the highs of the market to earn a decent return. But the general tendency is to buy at high prices, when the stock is experiencing euphoric buying and sell at low prices when the stock is going through the phase of panic selling. Let us help you take the right decision to redeem your mutual funds at the right time.

A disciplined and consistent approach is key to investing with the aim to achieve the desired goals. Hence, we must minimize discretion in the decision-making process. Discussed below are certain guidelines to redeem mutual funds: 

When the Fund is Continuously Underperforming

While daily monitoring of the investment portfolio for long-term goals is never suggested, one must monitor the portfolio once in a while (every fortnight or monthly) for its performance in order to reach the desired investment objective. When one fund continues to underperform as compared to the benchmark index or other funds in the portfolio, it is a good time to consider redeeming the fund. But, in order to continue staying invested in the markets, one must always consider switching the fund instead of redeeming and getting the amount in the bank account.

However, one must be careful to track the performance over a longer tenure and not get swayed by a month’s underperformance or outperformance of the fund. 

When the Investment Objective of the Fund Changes

Such changes are not a regular feature in the industry. Investment decisions are mostly taken by us in tandem with the investment objective and investment profiles of the mutual funds. For example, an aggressive investor chooses to invest in a small and midcap fund while a conservative investor may choose to invest in the gilt fund investing only in Govt. debt securities.

Hence, when a large cap fund widens its investment horizon to small cap shares as well, you may consider redeeming the fund, if the daily volatility in the portfolio value affects you.

When the Fund Manager Changes

A fund manager is a professional money manager who manages the fund portfolio. He is the one who makes the investment decisions based on the market conditions which are best suited for the scheme and its investment objective. More often than not, the performance of the schemes is driven by the acumen of the fund managers.

 Even when the fund may be performing well in comparison to the benchmark indices and also against other funds, the outperformance may or may not be sustained if the existing fund manager moves to some other fund house. 

When Your Investment Objective is Met

One must plan for both short-term and long-term goals and make systematic investments to fund those goals. These goals may include planning for an exotic vacation, child’s education, child’s marriage, buying a house etc. One must invest in a diversified portfolio consistently over a period to build an investment portfolio matching the amount and tenure to fund these goals. Thus, once that investment objective is met, one must consider redeeming the fund to fulfill the desires and plans linked to that goal.

 Mutual fund investments can be redeemed by submitting a physical request at the investor service center of the fund house, the office of the Registrar and transfer agent like CAMS, Karvy etc. or by making an online request through fund house’s website or mobile application.

My decisions for my investment portfolio are logical and not emotional. What about yours?

Simardeep Singh is a Chartered Accountant based in Delhi. He loves sharing his knowledge about personal finance and investment. He blogs regularly at www.simardeep.com.