Second in the series for tools for investments:
Let me start with listing few of the traits:
1) You can not shelve huge amount for savings at once, but can take afford small amount periodically.
2) You have no understanding of equity market.
3) All your savings always lie in bank deposits.
4) You have more or less risk aversion, and want minimal risk.
5) You can stay invested for period of 5 – 10 years.
6) You always seem to be waiting for the “right time” to invest
If you have more or less similar traits, Systemic Investment Plans (SIPs) are appropriate for you. SIPs are just like recurring deposit schemes of the banks. Through SIPs you will be investing in Mutual Funds at regular intervals and can leave the worry about following things:
1) Timing the market. If market is going low, you will be buying at cheaper rates and if market is going up, you are getting returns.
2) Selecting the right mutual fund every time you have lump sum money available with you.
3) You are investing in equity, small amount every month, so cost will be averaging over the period of time. Cost averaging will keep the risks at bay.
4) Avoid panic sales
5) Invest as little as Rs.500 / Rs.1000 per month
6) Becoming a disciplined Investor
7) Taking advantage of Power of Compounding
So, you convinced that SIPs are ideal for you. Next step, decided which mutual fund you want to start with, consider few of the following things:
1) Fund House – performance of various funds of that fund house
2) Fund Manager – look at the performance of various funds managed by him.
3) Track Record of Fund – This will give you the confidence that this product is in market from quite some time and has survived so far implying, chances are that it will survive further also.
4) Investment Portfolio of Fund – My personal preference, when it comes to investing through SIPs is to avoid sectorial funds. Reason, simple, the sector which is hot now may fall in next one year, and SIP is a long term investment. So, I prefer diversified portfolio based funds for SIPs.
There are many sites available where you can get all this information. My favorite is though www.moneycontrol.com. I also consult www.indiabulls.com before making my call and invest for at least 3 years in any fund and then leave it aside for another 3 – 5 years.
Friday, August 29, 2008
Wednesday, August 27, 2008
Things I always waste my money on!
I generally live by frugal means. I don’t like to waste my hard earned money, but I am not perfect:(. There are so many things that tempt me beyond my self-control and I buy them impulsively. On my last birthday, 3rd August, I took a resolution that I’ll restrain myself from buying at least two such things this whole year.
Finally I found some time, and listed few of the things I am always tempted towards.
1) Wallets - One of the biggest blunders I do quite often with my money, buying all those wallets. I have fascination for wallets, and I have approximately dozen wallets with me. I only use one at a time, and rest all just be there in my store.
2) Strange Dresses - Buying all those dresses from the places I visit, that I have almost never wore in my life. I don’t have any more space in my closet now.
3) Key chains – I love key chains. I have approximately 100 of them. I will stop buying any more of them.
4) Balloons – I love balloons. They are not very expensive either. But I guess I am grown up now and should stop buying balloons. :(
5) Handcrafted Stuff – My biggest weakness. Will not buy those hand made bags, bangles and other decorative stuff any more.
6) Sun Screens – We have long summer, and I have delicate skin. But I hardly use all those sun screens that I buy when summer begins. And sun screens generally don’t last more than 2 seasons. Bye bye extra sun screens.
7) Buying gifts for others – One thing I have hard learnt, gifts need a big occasion. There are other ways to pamper your loved ones. Will try them for my near ones rather then gift therapy from now on.
8) Stationary (dairy, pens, pencils, markers and what not) – I am not a student any more and don’t need those smart diaries and pens. May be limiting them to one diary and few pens. :(
As I am writing this, I know how tough this is going to be. Let’s see how far I can go with my resolutions.
Finally I found some time, and listed few of the things I am always tempted towards.
1) Wallets - One of the biggest blunders I do quite often with my money, buying all those wallets. I have fascination for wallets, and I have approximately dozen wallets with me. I only use one at a time, and rest all just be there in my store.
2) Strange Dresses - Buying all those dresses from the places I visit, that I have almost never wore in my life. I don’t have any more space in my closet now.
3) Key chains – I love key chains. I have approximately 100 of them. I will stop buying any more of them.
4) Balloons – I love balloons. They are not very expensive either. But I guess I am grown up now and should stop buying balloons. :(
5) Handcrafted Stuff – My biggest weakness. Will not buy those hand made bags, bangles and other decorative stuff any more.
6) Sun Screens – We have long summer, and I have delicate skin. But I hardly use all those sun screens that I buy when summer begins. And sun screens generally don’t last more than 2 seasons. Bye bye extra sun screens.
7) Buying gifts for others – One thing I have hard learnt, gifts need a big occasion. There are other ways to pamper your loved ones. Will try them for my near ones rather then gift therapy from now on.
8) Stationary (dairy, pens, pencils, markers and what not) – I am not a student any more and don’t need those smart diaries and pens. May be limiting them to one diary and few pens. :(
As I am writing this, I know how tough this is going to be. Let’s see how far I can go with my resolutions.
Tuesday, August 26, 2008
What will you buy as a souvenir while travelling?
We all love holidays, don’t we? Seeing a new place is always exciting and I love to bring gifts for everybody when I am holidaying. And Every time I get “not-so-ravishing” comments for the gifts I decide not to buy anything for anybody next time onwards, but given how generous I am when it comes to gifts, I forget my resolution and it becomes a vicious circle.
One day while analyzing my monthly budget, I realized that whenever I travel, I always overshoot my allocated budget, and major contributors are gifts for others and the souvenirs from the place. That’s quite obvious because rest of the things, (like stay, travel) is generally pre planned. And given I am not such a big foodie, food never consumes my money. :)
This time I have decided to think about this little more and lay down some rules to follow while travelling, mainly not to overshoot my budgets. Some of the things that I have come up with so far are:
1) Buying clothes native for that place are big no – no
2) Buying the handcrafted stuff from that place has to stop. They take up more money later to fit in my living room; else they go in my closet unused.
3) Do little research on the place before going, specifically looking at the weather condition prevailing there. Use it to decide what all to pack.
4) Purchasing something that is too delicate not allowed.
5) Things that can’t fit in my bags need not ne shopped for.
6) Only those gifts are allowed that can be used in my native place.
7) Decorative stuff as gift items is strict no. Everyone has their own taste for decorating their homes.
I am quite sure there can be many more things to be avoided. I can always append this list later, but this might be a nice starter for now.
One day while analyzing my monthly budget, I realized that whenever I travel, I always overshoot my allocated budget, and major contributors are gifts for others and the souvenirs from the place. That’s quite obvious because rest of the things, (like stay, travel) is generally pre planned. And given I am not such a big foodie, food never consumes my money. :)
This time I have decided to think about this little more and lay down some rules to follow while travelling, mainly not to overshoot my budgets. Some of the things that I have come up with so far are:
1) Buying clothes native for that place are big no – no
2) Buying the handcrafted stuff from that place has to stop. They take up more money later to fit in my living room; else they go in my closet unused.
3) Do little research on the place before going, specifically looking at the weather condition prevailing there. Use it to decide what all to pack.
4) Purchasing something that is too delicate not allowed.
5) Things that can’t fit in my bags need not ne shopped for.
6) Only those gifts are allowed that can be used in my native place.
7) Decorative stuff as gift items is strict no. Everyone has their own taste for decorating their homes.
I am quite sure there can be many more things to be avoided. I can always append this list later, but this might be a nice starter for now.
Monday, August 25, 2008
Love yourself – not what you wear or carry!
I have a long time friend who visited me this weekend. While we were chit chatting about different things going on in our life, we also touched upon the finances. It started with her comment, “Your standard of living has improved so much since we last met, you are still the same, very cautious with money. You have not changed even a bit in past so many years.” And we were casually discussing ideas that I put in my money, when she told me about her finances:
“I don’t know how you manage to save! I am working from last 7 years non stop and no matter how much I earn, I always seem to be short of money. Credit card bills, telephone bills, and my salary vanish almost as it comes. Inflation is at all time high, I am worried whether I’ll be able to support my expenditures like this, I don’t know how can you even save when you earn slightly lesser then me?”
And I know her, so I simply asked, “Do you want to know truth or good!” and she said “good” blinking and we moved on with other topic.
She needs no one to tell her the truth, she herself knows it. But still, she told me to list down her 10 habits that she uses to waste her money on (and believe me, she told me that whatever I am listing as anti-frugal, it’s so much required)and also said that I should publish them on my blog. (OK, I am keeping my promise :) ). Here is my list:
1) Who needs to buy 10 new pair of branded clothes every month?
2) Who needs to have kilograms of non-precious jewellery in their closet?
3) Who needs the latest and expensive most mobile phone to stay connected (and it means changing your set every 2 months)?
4) Who needs uncountable pair of shoes?
5) Do you really need extra iPod, when you have phone that has almost similar capabilities?
6) Dining and wining out at costliest most restaurants almost half of the month is by no means a must?
7) 6000+ monthly telephone bill is unexplainable, even if you get breakup of all calls?
8) You are subscribed to your office transportation, why can’t you get up 15-20 minutes earlier and catch it up all working days, rather then driving 7 – 10 times a month.
9) Makeup, I think you are pretty good even otherwise, costing thousands every month?
10) Last but not the least to say, those extravagant beauty parlor trips? I mean shampooing you hairs or oiling them can be done yourself. Don’t visit specialist for them please!
God! No one can teach you frugal living and managing wealth, but time. All the best! :(
“I don’t know how you manage to save! I am working from last 7 years non stop and no matter how much I earn, I always seem to be short of money. Credit card bills, telephone bills, and my salary vanish almost as it comes. Inflation is at all time high, I am worried whether I’ll be able to support my expenditures like this, I don’t know how can you even save when you earn slightly lesser then me?”
And I know her, so I simply asked, “Do you want to know truth or good!” and she said “good” blinking and we moved on with other topic.
She needs no one to tell her the truth, she herself knows it. But still, she told me to list down her 10 habits that she uses to waste her money on (and believe me, she told me that whatever I am listing as anti-frugal, it’s so much required)and also said that I should publish them on my blog. (OK, I am keeping my promise :) ). Here is my list:
1) Who needs to buy 10 new pair of branded clothes every month?
2) Who needs to have kilograms of non-precious jewellery in their closet?
3) Who needs the latest and expensive most mobile phone to stay connected (and it means changing your set every 2 months)?
4) Who needs uncountable pair of shoes?
5) Do you really need extra iPod, when you have phone that has almost similar capabilities?
6) Dining and wining out at costliest most restaurants almost half of the month is by no means a must?
7) 6000+ monthly telephone bill is unexplainable, even if you get breakup of all calls?
8) You are subscribed to your office transportation, why can’t you get up 15-20 minutes earlier and catch it up all working days, rather then driving 7 – 10 times a month.
9) Makeup, I think you are pretty good even otherwise, costing thousands every month?
10) Last but not the least to say, those extravagant beauty parlor trips? I mean shampooing you hairs or oiling them can be done yourself. Don’t visit specialist for them please!
God! No one can teach you frugal living and managing wealth, but time. All the best! :(
Sunday, August 24, 2008
Taking things for-granted
This whole week was very bad. I had to take two offs from my work because of the mouth ulcers I got. And need not to say that I hate being at home because of any kind of illness. :(
While I was killing my time in front of my TV set, (I was at a place with no Internet connection :( ), I was missing my home the most. I always took my home for granted. I mean, off from work, I know I have to head home, done with outing, head back for your home, do anything in this world, and you know you are going to go back to your home. But when I was not there and couldn’t come back to that place, then I realized how much I love my home. I took it for granted and thought that it’s anyhow always there for me.
And it’s not only my home, there are so many things that I take for granted. So I decided to list few of the things that I could recall:
1) Home
2) Partner
3) Parents and Siblings
4) Health
5) Confidence
6) Sun Light
And I am sure there are so many other things. I guess the last item illustrates that I am already off the track in my listings. :)
But how this helps, I mean how I can help myself by this list. Well in lots of ways actually:
1) Start loving all these things more.
2) Start thanking the almighty power for these supports in my life
3) Start taking good care of these things
4) Or may be stopping taking some of these things for granted.
How about you? Can you list some of the things that you take for granted? How can you improve your attitude (or may how can I) towards these things? I am really curious to know.
Saturday, August 23, 2008
Personal Finance – How it helps!
This week, I got some time to review my monthly and annual budget and what I saw was very disheartening, I am very tight on my monthly budget. And my annual goals some how seems to be absolutely out of place, I by no means can achieve them this year. I applied all the mathematics that I could think of but all in vain.
I felt so depressed and felt why am I doing all this? I mean I spend my time on keeping an account of everything and dealing with money judiciously. I can be like rest of the people and enjoy my life smoothly without worrying too much about the future. But then, instead of worrying and thinking about others, I rather listed why I am short of my goals this year:
1) I got married recently, so used lots of my funds in process
2) I am in the process of setting up my new home, so I need at least the basic stuff for my place
3) Inflation is quite high
4) My husband has different spending habits then mine.
These points highlighted the main reason; my budget was not prepared for reason 1, 2 and 4. And this is something causing the problem. I guess, next year I’ll be able to take into consideration these things as well and set achievable goal.
This also gets me to one of the main learning: Just because I practice good Personal Finance doesn’t mean that:
1. I’ll never miss my targets.
2. I will never face hiccups in the process.
3. I will never have unpleasant experiences.
The only things that sound personal finance will help me with are:
1) I’ll be more prepared to deal with financial problems.
2) I’ll have data to look into past and see where I went wrong, so that I could learn from
3) I can better plan for my future.
So personal finance is basically not a magic pill, rather it’s an institution that equips you with necessary knowledge and tools to deal with problems and be better prepare for future.
I felt so depressed and felt why am I doing all this? I mean I spend my time on keeping an account of everything and dealing with money judiciously. I can be like rest of the people and enjoy my life smoothly without worrying too much about the future. But then, instead of worrying and thinking about others, I rather listed why I am short of my goals this year:
1) I got married recently, so used lots of my funds in process
2) I am in the process of setting up my new home, so I need at least the basic stuff for my place
3) Inflation is quite high
4) My husband has different spending habits then mine.
These points highlighted the main reason; my budget was not prepared for reason 1, 2 and 4. And this is something causing the problem. I guess, next year I’ll be able to take into consideration these things as well and set achievable goal.
This also gets me to one of the main learning: Just because I practice good Personal Finance doesn’t mean that:
1. I’ll never miss my targets.
2. I will never face hiccups in the process.
3. I will never have unpleasant experiences.
The only things that sound personal finance will help me with are:
1) I’ll be more prepared to deal with financial problems.
2) I’ll have data to look into past and see where I went wrong, so that I could learn from
3) I can better plan for my future.
So personal finance is basically not a magic pill, rather it’s an institution that equips you with necessary knowledge and tools to deal with problems and be better prepare for future.
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