How to Start Investing

The first step of investing is always the hardest & most people falter at this stage itself, now a days we hear & read so many things about Finance from websites & News channels that our brain stops us from taking any actual action at all - The main problem here is CHOICE, Human brain goes on the defensive when it has to choose from multiple choices as compared to Yes or No CHOICE.

Too many people advise about Equity - Equity all the time, I have a different perspective on this, but first a question Would you have succeeded in your life if you had directly taken the admission in 10th Standard at the age 16? No you would have failed miserably & that is what is happening in the Personal Finance space now you can not jump you will fall on your face & hurt yourself similarly Equity investments are risky & the risk capacity needs to be built overtime & can not happen overnight,

Personally I would recommend starting with small steps,Most of us will have money lying in Savings bank Account & or Short Term Fixed Deposit Receipts You can shift this to ULTRA LIQUID MUTUAL FUNDS, These funds yield approx 8.25% interest but you can withdraw money anytime which is a fantastic benefit, so you get the liquidity of Savings bank Account & Returns of Fixed Deposits.This is a good thing to start off with.
Stay with this thought I will be shortly uploading the necessary forms etc. on the website http://www.chintamoney.com/ so you can start your financial journey  easily.

80-20 Rule For Personal Finance

This is a very Important Rule which means 80% of your results are due to 20% of your efforts, but the sad part of this rule is it means for the remaining  20% result we need to spend 80% of your time, I believe this rule applies to Investments very much.and the rule applies more as 90/10 rule.where you have to make only a small effort to start out on a good financial life.It takes only 1 working day to start a mutual fund  & PPF account also a Term life policy/Health Insurance policy would take you not more than 1 week to decide but we keep giving excuses to delay this & loose the 90% of our Financial benefits by not doing anything because we are afraid of loosing that 10% benefit.  

The most important thing about investments is to start the same but most of us will falter at that step.....

You can start your investment/Financial Planning through only 4 things,

1.MutualFund

2.PPF.

3.Term Life Insurance plan.

4.Good Health Insurance Plan.

believe me you do not need anything more than this for a good & secure financial life.I will be providing articles on the above steps as i get time.

So start your Financial journey today, if you need any help ask, post a comment & I will try to answer,

Best of Luck.................

Tips on Taking Loans/Mortgage

TAKE LOANs CORRECTLY:

Personally I do not approve of taking heavy loans but for those who want should try to DO IT BETTER, giving some tips on how to do things differently.

TOTAL FUNDING: Normally people take the flat in under construction projects & get the disbursement amounts as per the Completion of project this results in PRE-EMI payment which actually not allowed for interest claim in Income tax, however if the builder has good reputation in market for timely completion of projects, you can negotiate with the bank to Disburse the full amount of loan at one go. But only after you negotiate with the builder for Receiving interest on the money paid in advance-you should negotiate for at least 50% above the interest charged to you by the bank. other way round you can get the Sq Footage rate down or negotiate for better amenities.

GO FOR THE MAXIMUM: You should get the approval/Disbursal for the maximum amount possible even though you have money in hand, it helps if you make the same payment as Prepayment later you can claim the same in Income tax J especially now since the prepayment penalty is no-more. 

INCREASE THE ELIGIBILITY: While we know that Loan eligibility is restricted to 70-80% of Home Value, It can be extended by giving additional securities e.g. NSC certificates, Other Valuables as collateral securities for the Home loan, this aspect works because the Home loan rates are normally the cheapest. (I repeat - I am personally against taking Heavy loans)

SOME SMART PRODUCTS: SBI & HSBC have a very different Home loan product, where at the cost of small increase in interest rate you get access to a SMART LOAN, In this product Along with Loan you also open a Current account with the bank where you can deposit all the excess money lying with you, The bank will reduce the outstanding loan amount equivalent to the balance in the current account e.g. Home Loan 30 Lac-balance in Current account 5 Lac then bank will charge interest only on 25 Lac Rupees , this helps in reducing the payment period significantly at the same time having the cash at disposal for any emergencies (product names SBI MAXGAIN,HSBC SMART LOAN)

LOANS FROM NATIONALISED BANKS: While I know that dealing with nationalized banks can be real pain, pl. note you are taking liability for almost entire earning life, I suggest that you take the loans from nationalized banks as their Prepayment & Interest rate calculations are better for the individual buyer in the long term.

Will do an detailed article later on for how Smart loans & Nationalized Bank loans save you money

Income Tax Calculator

For Income Tax Calculator Click on below link...

Income Tax Calculator

Hidden Opportunity in Share Markets

Everybody follows share markets with or without the KNOWLEDGE so there is always a learning opportunity.... I came across some very special class of shares a few days ago while going through the listings on share market transactions, and was suprised why I did not see them earlier.

These shares are called DIFFERENTIAL VOTING RIGHTS SHARES, these are special class of shares where the voting rights for the shares are low, but all other conditions remain same as normal shares,

However the price of these shares is very low compared to the normal shares.there are 3 such shares available right now in indian shares market.

Pantaloon.
Gujrat NRE Coke,
Tata Motors

These shares are available @ significant discount to the normal share price & so the Dividend to be received is very good in terms of %

Shares	Market Price	Market price to DVR Difference	Dividend	Dividend Yield
Pantaloon -Normal	152		0.9	0.6%
Pantaloon-DVR	112	26%	0.9	0.8%
Tata Motor-Normal	293.5		4	1.4%
Tata Motor-DVR	154	48%	4.2	2.7%
GUJ NRE COKE-Normal	17.15		1	5.8%
GUJ NRE COKE-DVR	12.05	30%	1	8.3%

Psychopath CEO

Over the weekend, Got to read this article really extraordinary, what do you think.

Can Performance Pressure Do this ?http://www.psyfitec.com/2012/05/is-your-ceo-psychopath.html

Where to Invest Your Bonus

BONUS 

This is the time when most people will get their Bonus in the banks & start thinking about how to invest/Spend.

Well here are some ideas.

Create a Emergency Fund: The basic rule for any financial planning is to create an emergency fund which is an amount equal to around 3-4 times your normal monthly expenses (including all the EMI) to kept separately in avenues where they can be withdrawn in very short notice, You can create such fund by investing in Sweep In FD or Investing in Ultra Liquid Mutual Fund. 

Prepay Loans: Any Expensive Loans which you are currently paying e.g. Credit Card debt etc where the interest rate payable is higher than what you can earn by investing can be repaid.

Tax investments: You can make that tax investment, which normally is done in last months;  You can take the Term Insurance plan which you were planning, The health insurance plan which you were planning can be purchased in this money.

Plan for Future: Do you have any specific goals to be achieved over long term for which you want to save,start saving for them, If the goal is less than 5 years away invest in Debt Mutual Funds/Monthly Income Mutual Funds in one go, But For goals More than 5 Years away, you can go for Equity Mutual Funds, But pl. note You must never invest in Equity in one go, what  you can do is to invest the Amount in a debt Fund  & transfer the  amount over next 6 months in equal installments.

Spend: in case you want none of the above.