The choice of the best investment options for you will depend on your personal circumstances as well as general market conditions. For example, a good investment for a long-term retirement plan may not be a good investment for higher education expenses. In most cases, the right investment is a balance of three things: Liquidity, Safety and Return.
Liquidity - how accessible is your money?
How easily an investment can be converted to cash, since part of your invested money must be available to cover financial emergencies.
Safety - what is the risk involved?
The biggest risk is the risk of losing the money you have invested. Another equally important risk is that your investments will not provide enough growth or income to offset the impact of inflation, which could lead to a gradual increase in the cost of living. There are additional risks as well (like decline in economic growth). But the biggest risk of all is not investing at all.
Return - what can you expect to get back on your investment?
Investments are made for the purpose of generating returns. Safe investments often promise a specific, though limited return. Those that involve more risk offer the opportunity to make - or lose - a lot of money.
To a large extent, the choice of the right investment option will also depend upon your financial goals. For example, if you want to invest for funding your vacation next year, don't choose an investment vehicle that has a three-year lock-in. Similarly, if you want to invest for your daughter's marriage after 10 years, don't invest in 1yr bonds for the next 10 years. Instead, choose an option that matches your investment horizon.
Thursday, April 16, 2009
Top TaxSaving MutualFunds 2009
Under the Income Tax Section of Government of India, Mutual Fund Investments are subjected to tax exemptions. Hence during an investment, most investors include tax-saving funds or ELSS (equity linked saving schemes) in their portfolio to get the added benefit of income-tax deduction.
Please do ur own research before u come to a decision and don’t blame me if they don’t perform according to ur expectations. Also note due to the market crash most mutual funds have lost loads of money on investments made during last 2 yrs and some have even lost half the capital invested.* standard disclaimers apply.
While NAV (Net Asset Value) is a true reflection of your Mutual fund value, it should not be treated to compare among peers nor should it be a major factor in analyzing a Mutual Fund because of the following reasons:
1) It simply depends on the MF alone on how it has diversified its portfolio and 2 independent MF's can have substantial difference in their NAV's.
Example: an FMCG fund NAV cannot be compared to a Small Cap fund on the basis of their NAV's as the stocks are different, weighatges are different...
2) Fund performance, track record, Fund Manager, Sectorial weightage, Stocks.... are some of the major factors to analyze before u buy in any MF.
Tax Saving Mutual Funds India generally maintains the following rules of the SEBI while granting tax benefits on their schemes -
Please do ur own research before u come to a decision and don’t blame me if they don’t perform according to ur expectations. Also note due to the market crash most mutual funds have lost loads of money on investments made during last 2 yrs and some have even lost half the capital invested.* standard disclaimers apply.
While NAV (Net Asset Value) is a true reflection of your Mutual fund value, it should not be treated to compare among peers nor should it be a major factor in analyzing a Mutual Fund because of the following reasons:
1) It simply depends on the MF alone on how it has diversified its portfolio and 2 independent MF's can have substantial difference in their NAV's.
Example: an FMCG fund NAV cannot be compared to a Small Cap fund on the basis of their NAV's as the stocks are different, weighatges are different...
2) Fund performance, track record, Fund Manager, Sectorial weightage, Stocks.... are some of the major factors to analyze before u buy in any MF.
| Name of the Fund | Risk Rating | Overall rating |
| SBI Magnum Taxgain | 2 | 1 |
| Sundaram BNP Paribas Taxsaver | 1 | 2 |
| HDFC Long term Advantage Fund | 4 | 3 |
| HDFC Tax Saver | 1 | 4 |
| Franklin India Taxshield | 3 | 5 |
Tax Saving Mutual Funds India generally maintains the following rules of the SEBI while granting tax benefits on their schemes -
- Any special tax benefits for the mutual fund company and its shareholders (only section numbers of the Income Tax Act and their substance should be mentioned,without reproducing the text of the sections).
- Tax benefits are to be declared under the column of "objects of the offering".
Words of caution
Please note that investing in equity or equity mfs at this moment can be a bit risky, thanks to worldwide recession. Due to heavy uncertainty noone can time the bottom of the markets or guage the trend . Please break up ur investments and dont invest in lumpsome.Difference between Visa and MasterCard
Should you get Visa or MasterCard? Is one of them better than the other? Will one of them help your credit rating more than the other? Many people ask themselves these types of questions when they think about getting their first credit card or additional ones. The fact is, few differences exist between the two credit card brands today, but you can benefit by having a better understanding of the two companies and using their competition to your advantage.
The two leading credit card companies in the world today are the competitors Visa and MasterCard. They both operate along very similar lines.
First, you should know that neither Visa nor MasterCard actually issue credit cards themselves. Neither company deals with consumers or merchants directly. Instead, they create and run the worldwide computer networks that process the billions of transactions that occur each day from people who use their credit cards at millions of merchants and ATMs. Both companies make their money from financial institutions to whom they license the ability to market the MasterCard or Visa system to consumers and merchants.
MasterCard and Visa have been fierce competitors for years, each vying to be faster and more global than the other, just like Hertz and Avis, and McDonalds and Burger King. Each time one brand creates a new twist on their credit cards, the other soon follows to match it. Both companies now offer nearly identical benefits, such as travel insurance, car rental insurance, product warranty extensions, and so on.
Furthermore, both cards are accepted worldwide by nearly the same number of merchants. MasterCard says its cards can be used at more than 23 million locations around the globe, including 1 million ATMs and other locations where cash can be obtained. Visa says its cards are accepted at more than twenty million locations in more than 150 countries.
In general, most merchants throughout the world accept both cards, or if a merchant takes only one of the brands, another merchant down the block takes the other. The point is, your chances of being locked out of eating or buying a gift or getting a hotel room because you have only one brand of credit card are usually minimal -- other than at a few noted events where one card or the other may have negotiated to be the sole credit card to be accepted. But such instances are far and few between.
Which Card is Right for You?
Given the above, is one card better or more right for you? The best answer depends on whether it’s your first, second, or additional card, as follows:
If You’re Applying for Your FIRST Credit Card
In this situation, you can make a choice based simply on selecting which issuing bank you prefer to work with, or which promotional offer you like the most, without regard to the brand on the card. Perhaps you like Chase or Citibank or HSBC, or perhaps you like the 0% APR with no-annual-fee offer you found online. It's six of one, a half-dozen of the other.
If You’re Applying for Your SECOND Card
In this situation, it is strategically smart to select the opposite brand card from your first card AND to choose a different issuing bank. The rationale for this is that when you have two different cards, you will find that the two banks will compete for your business (assuming you maintain good credit). You will get offers for 0% balance transfers, higher credit limits, and other perks as the two banks vie for your increased use of their card. And just in case you find a merchant who only takes one brand of card, you can now be assured of having all your bases covered.
If You’re Applying for ADDITIONAL Credit Cards
Many people apply for more than two credit cards because something specific motivates them to get a third or a fourth card. You may want a separate card to use for your business charges, or to compliment your airline frequent flyer program. In these cases, your selection is largely predetermined by whichever card has attracted your attention to fulfill your specific needs. You might even shop around among issuing banks to be sure you find the best offer, no matter which credit card brand stands behind it.
In short, choosing between Visa and MasterCard is no longer a frustrating question for anyone applying for a first credit card. You can’t go wrong with either brand. And if you already have a first credit card, it can be a very smart move to apply to get a second card from the other brand. If you treat your credit well, you’ll soon be having two (or more) banks begging for your business -- and that's a good thing!
Copyright 2005 Ed Vegliante. Free reprint of this article is allowed provided the resource box remains intact with a live link back to http://www.credit-card-surplus.com
The two leading credit card companies in the world today are the competitors Visa and MasterCard. They both operate along very similar lines.
First, you should know that neither Visa nor MasterCard actually issue credit cards themselves. Neither company deals with consumers or merchants directly. Instead, they create and run the worldwide computer networks that process the billions of transactions that occur each day from people who use their credit cards at millions of merchants and ATMs. Both companies make their money from financial institutions to whom they license the ability to market the MasterCard or Visa system to consumers and merchants.
MasterCard and Visa have been fierce competitors for years, each vying to be faster and more global than the other, just like Hertz and Avis, and McDonalds and Burger King. Each time one brand creates a new twist on their credit cards, the other soon follows to match it. Both companies now offer nearly identical benefits, such as travel insurance, car rental insurance, product warranty extensions, and so on.
Furthermore, both cards are accepted worldwide by nearly the same number of merchants. MasterCard says its cards can be used at more than 23 million locations around the globe, including 1 million ATMs and other locations where cash can be obtained. Visa says its cards are accepted at more than twenty million locations in more than 150 countries.
In general, most merchants throughout the world accept both cards, or if a merchant takes only one of the brands, another merchant down the block takes the other. The point is, your chances of being locked out of eating or buying a gift or getting a hotel room because you have only one brand of credit card are usually minimal -- other than at a few noted events where one card or the other may have negotiated to be the sole credit card to be accepted. But such instances are far and few between.
Which Card is Right for You?
Given the above, is one card better or more right for you? The best answer depends on whether it’s your first, second, or additional card, as follows:
If You’re Applying for Your FIRST Credit Card
In this situation, you can make a choice based simply on selecting which issuing bank you prefer to work with, or which promotional offer you like the most, without regard to the brand on the card. Perhaps you like Chase or Citibank or HSBC, or perhaps you like the 0% APR with no-annual-fee offer you found online. It's six of one, a half-dozen of the other.
If You’re Applying for Your SECOND Card
In this situation, it is strategically smart to select the opposite brand card from your first card AND to choose a different issuing bank. The rationale for this is that when you have two different cards, you will find that the two banks will compete for your business (assuming you maintain good credit). You will get offers for 0% balance transfers, higher credit limits, and other perks as the two banks vie for your increased use of their card. And just in case you find a merchant who only takes one brand of card, you can now be assured of having all your bases covered.
If You’re Applying for ADDITIONAL Credit Cards
Many people apply for more than two credit cards because something specific motivates them to get a third or a fourth card. You may want a separate card to use for your business charges, or to compliment your airline frequent flyer program. In these cases, your selection is largely predetermined by whichever card has attracted your attention to fulfill your specific needs. You might even shop around among issuing banks to be sure you find the best offer, no matter which credit card brand stands behind it.
In short, choosing between Visa and MasterCard is no longer a frustrating question for anyone applying for a first credit card. You can’t go wrong with either brand. And if you already have a first credit card, it can be a very smart move to apply to get a second card from the other brand. If you treat your credit well, you’ll soon be having two (or more) banks begging for your business -- and that's a good thing!
Copyright 2005 Ed Vegliante. Free reprint of this article is allowed provided the resource box remains intact with a live link back to http://www.credit-card-surplus.com
Sunday, April 5, 2009
Need BOOST for your StartUp's :Startup 2009 conference
Startup 2009 will showcase 10 top startups competing for bragging rights, buzz, and a $50,000 prize.
Silicon Alley Insider presents this first annual forum for outstanding entrepreneurs and early-stage companies to meet VCs, investors, journalists, and other members of the East Coast startup community.
http://startup2009.eventbrite.com/
Startup 2009 will be a one-day conference featuring interviews with entrepreneurs, expert panels, networking, and a 10-company startup contest.
Silicon Alley Insider presents this first annual forum for outstanding entrepreneurs and early-stage companies to meet VCs, investors, journalists, and other members of the East Coast startup community.
http://startup2009.eventbrite.com/
Startup 2009 will be a one-day conference featuring interviews with entrepreneurs, expert panels, networking, and a 10-company startup contest.
Tax saving schemes – India (Subjecting to current rules)
We get tax exemption under section 80C upto Rs 1,00,000. Govt gives us this exemption to indiretly force us to plan for our future. The investments we do can be categorized into risky and risk-free.
Risk-free investment gives us fixed returns where as risky will vary. It is always advised to properly diversify the risky investments.
Risk-Free Investments:
EPF : The Employee Provident Fund, or provident fund as it is normally referred to, is retirement benefit scheme that is available to salaried employees. Under this scheme, 12 % of employee’s salary is contributed towards the fund. This percentage is decided by the government. The employer also contributes an equal amount to the fund. However, an employee can contribute more than the stipulated amount (not sure about upper limit). So, let's say the employee decides 14% must be deducted towards the EPF; in this case the employer still pays 12% of your basic salary. Current interest rate 8.5%. The amount accumulated in the PF is paid at the time of retirement or resignation. Or, it can be transferred from one company to the other if one changes jobs.
PPF : Public Provident Fund, You need not be a salaried individual to open a PPF account. Any individual can open a PPF account in any nationalized bank or its branches that handle PPF accounts. You can also open it at the head post office or certain select post offices. The minimum amount to be deposited in this account is Rs 500 per year. The maximum amount you can deposit every year is Rs 70,000.Current intrest rate 8%. The accumulated sum is repayable after 15 years.
NSC bonds: National Security Certificate, issued by post-office.It is sold in denominations of Rs 100, Rs 500, Rs 1,000, Rs 5,000 and Rs 10,000. So, if you want to invest Rs 30,000, you will have to buy three certificates of Rs 10,000 each.Current intrest rate is 8% and compounded half-yearly (twice a year), where as PF intrest rate is calculated anually. Note that it has 6 years locking period.
FD: Fixed Deposits for above 5 years are also considered for tax exemption.
Risky Investments
Mutual Funds : These are investment companies which have some dedicated experts for investing in stock market, etc.. . If you don’t have any idea about stock markets, etc... but still want to enjoy the advantages of stock trading , etc.. You can rely on the Mutual Fund companies and buy MF's from them. Note that all the MF are not considered for tax exemption, only the once with more than 3 yrs of locking period are considered.There are some risk and risk free investments which also cover insurance, all those can be categorized into 3 as follows:
Term-Insurance policy : You have to pay some amount every year (premium) for some X years. Unfortunately if you die before X years, your dependents get the assured amount depending on the premium. If you are alive at the end of X years, you don’t get any amount.
Endowment policy: You have to pay some amount every year (premium) for some X years. Similar to term-policy if you die before X years, your dependents get the assured amount depending on the premium. If you are alive at the end of X years, you get some amount. Note the difference between the term and endowment.
(Risk-free investment)ULIP: Unit linked plan, it is combination of term-policy and investment in stocks (kind of Mutual Funds). (Risky as investments in stocks are subjected to market risks).Please note that we should not ever go for Endowment or ULIP. I have attached a document which describes the truth behind the endowment policy. If you want to go for ULIP instead take a term-policy and mutual funds separately. High percentage of commission is given to insurance agents for endowment and ULIP that is why they always try to make us buy them. We should treat insurance and investment separately. So always go for term policy.
Home loans EMI you pay, have principal part and interest part. Initially interest part is more and gradually decreases. (say u take 25l@12% for 20 yrs, EMI is 27500. for first month principal part of EMI is 2500 and interest part is 25000)the principal amount is considered under 80E and interest is considered under section 28 (limit is 1,50,000)Say you take the loan with your father / spouse, then all are eligible for income tax benefit. EMI is broken in percentage of ownership percentages. You can also change (add n remove the owners of house) at any point of time.
The ONE and ONLY Warren Buffet
Even those who are not very familiar with the world of the stock market have probably heard of Warren Buffet. He has been called the most successful investor of all time. He netted over $42 billion personally with an investment partnership he started with only $100.
Though he is widely recognized as being an investor, the bulk of Buffet's wealth was built through intelligent use of leverage offered by his insurance companies.
One of the greatest attractions of Buffett for investors is that his investment methodology is easy to understand. However, it is far more difficult to apply because it calls for large amounts of patience and calm when your stocks move against you. It is also difficult to apply because it requires an orientation towards research and the ability to understand the complexities of accounting and finance. But for those willing to invest time and effort into mastering this approach, superlative investment performance over the long term is guaranteed.
Warren Buffett follows a value investing strategy based on Benjamin Graham's approach. His investment strategy of discipline, patience and value consistently outperforms the market and his moves are followed by thousands of investors worldwide. Warren Buffett seeks to acquire great companies trading at a discount to their intrinsic value, and to hold them for a long time. He will only invest in businesses that he understands, and always insists on a margin of safety.
Regarding the types of businesses Berkshire likes to purchase, Warren Buffett once said,"We want businesses to be one:
(a) that we can understand;
(b) with favorable long-term prospects;
(c) operated by honest and competent people; and
(d) available at a very attractive price"
Though he is widely recognized as being an investor, the bulk of Buffet's wealth was built through intelligent use of leverage offered by his insurance companies.
One of the greatest attractions of Buffett for investors is that his investment methodology is easy to understand. However, it is far more difficult to apply because it calls for large amounts of patience and calm when your stocks move against you. It is also difficult to apply because it requires an orientation towards research and the ability to understand the complexities of accounting and finance. But for those willing to invest time and effort into mastering this approach, superlative investment performance over the long term is guaranteed.
Warren Buffett follows a value investing strategy based on Benjamin Graham's approach. His investment strategy of discipline, patience and value consistently outperforms the market and his moves are followed by thousands of investors worldwide. Warren Buffett seeks to acquire great companies trading at a discount to their intrinsic value, and to hold them for a long time. He will only invest in businesses that he understands, and always insists on a margin of safety.
Regarding the types of businesses Berkshire likes to purchase, Warren Buffett once said,"We want businesses to be one:
(a) that we can understand;
(b) with favorable long-term prospects;
(c) operated by honest and competent people; and
(d) available at a very attractive price"
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