As much , that i focus on creating wealth , feel sharing your wealth is an important part of wealth creating , came across a really good article on "The Art of Giving"
The Art of Giving
"Rivers do not drink their own water, nor do tree eat their own fruit, nor do rain clouds eat the grains reared by them."The wealth of the noble is used solely for the benefit of others? Even after accepting that giving is good andthat one must learn to give, several questions need to be answered.
The first question is when should one give ?
Yudhisthir asks a beggar seeking alms to come the next day. On this, Bhim rejoices, that Yudhisthir his brother, has conquered death! For he is sure that he will be around tomorrow to give. Yudhisthir gets the message.One does not know really whether one will be there tomorrow to give!The time to give therefore is NOW.
The next question is 'how much to give?
One recalls the famous incident from history. Rana Pratap was reeling after defeat from the Moghals.He had lost his army, he had lost his wealth, and most important he had lost hope, his will to fight.At that time in his darkest hour, his erstwhile minister Bhamasha came seeking him and placed his entire fortune at the disposal of Rana Pratap. With this, Rana Pratap raised an army and lived to fight another day.
The answer to this question how much to give is " Give as much as you can!
The next question is what to give?
It is not only money that can be given. It could be a flower or even a smile. It is not how much one gives but how one gives that really matters. When you give a smile to a stranger that may be the only good thing received by him in days and weeks! "You can give anything but you must give with your heart !
One also needs answer to this question whom to give?
Many times we avoid giving by finding fault with the person who is seeking. However, being judgmental and rejecting a person on the presumption that he may not be the most deserving is not justified."Give without being judgmental!Next we have to answer '
How to give?
Coming to the manner of giving, one has to ensure that the receiver does not feel humiliated, nor the giver feels proud by giving.'Let not your left hand know what your right hand gives? Charity without publicity and fanfare, is the highest form of charity. 'Give quietly!While giving let not the recipient feel small or humiliated. After all what we give never really belonged to us.We come to this world with nothing and will go with nothing. The thing gifted was only with us for a temporary period. Why then take pride in giving away something which really did not belong to us?Give with grace and with a feeling of gratitude.
What should one feel after giving?
We all know the story of Eklavya. When Dronacharya asked him for his right thumb as "Guru Dakshina".He unhesitatingly cut off the thumb and gave it to Dronacharya. There is a little known sequel to this story.Eklavya was asked whether he ever regretted the act of giving away his thumb when he was dying. His reply was "Yes ! I regretted this only once in my life. It was when Pandavas were coming in to kill Dronacharya who was broken hearted on the false news of death of his son Ashwathama and had stopped fighting.It was then that I regretted the loss of my thumb. If the thumb was there, no one could have dared hurt my Guru? The message to us is clear.Give and never regret giving!
And the last question is 'How much should we provide for our heirs?
Ask yourself, 'Are we taking away from them the "gift of work? - a source of happiness!"The answer is given by Warren Buffett:"Leave your kids enough to do anything, but not enough to do nothing!
"I would conclude by saying:Let us learn the Art of Giving, and quoting Sant Kabir:"When the wealth in the house increases,When water fills a boat,Throw them out with both hands
Source of this article :
http://www.soulsearchers.co.in/index.php/2009/06/the-art-of-giving-by-gurudev/
Thursday, July 23, 2009
Wednesday, July 1, 2009
Some useful links while filing IT returns
For visitors in Banglore, find your IT ward details here
http://www.incometaxbangalore.org/jurisdiction/juri_indiv_sal_blr.htm
For all, you can compute your tax , from total taxable income here
http://law.incometaxindia.gov.in/TaxmannDit/xtras/taxcalc.aspx
Download ITR form from here
http://www.incometaxindia.gov.in/download_all.asp
Little-known tax benefits
http://moneytoday.intoday.in/index.php?option=com_content&Itemid=1&task=view&id=5747§ionid=1&issueid=72&latn=2
Check your PAN details
https://incometaxindiaefiling.gov.in/portal/knowpan.do
http://www.incometaxbangalore.org/jurisdiction/juri_indiv_sal_blr.htm
For all, you can compute your tax , from total taxable income here
http://law.incometaxindia.gov.in/TaxmannDit/xtras/taxcalc.aspx
Download ITR form from here
http://www.incometaxindia.gov.in/download_all.asp
Little-known tax benefits
http://moneytoday.intoday.in/index.php?option=com_content&Itemid=1&task=view&id=5747§ionid=1&issueid=72&latn=2
Check your PAN details
https://incometaxindiaefiling.gov.in/portal/knowpan.do
Tuesday, June 2, 2009
Exchange Traded Funds
For a person who is starting to invest in stocks, it would be good idea to start off, with exosure to the stocks that are part of the an Index Thought it would be good, to expain about a different animal called ETF at this point , which has the flexibility to be bought on the exchange in realtime at the prevaling NAV ,but at the same time has the functioning capabilities of a Mutual Fund (Since you buy units ). Though not so popular yet with investors , would highy recommed investor to have an exposure to these instruments, may be not the sectoral ones but definitely the index based ones .
How do these ETF work :
These are similar to a MF in that , there is a Asset Management Company (AMC) which manages this traded fund . But unlike a MF , where all new purchases and redemption by the investor is done with the asset management company , here the Investor can buy and sell unit on the stock exchange ( hence the name Exchange Traded Fund ) and hence the advantage is ,Investor need not have to wait for the end of trade to figure out the NAV of the unit , since NAV changes realtime , based on the price movement of the underlying stock .
Pros:
1) Investor can buy/sell , any time there is a dip/spike in the market , without having to wait for the end of trade .
2) The fund expenses are less than expenses of a Index funds currently avaliable in the market
3) The NAV of the unit does not change even in case a "Big Investor" sell his entire holdings , as the units are not redeemed by the AMC , but rather sold to someother investor through a market trade
Cons:
1) Investor would need a demat account and a broker ( or a online trading account ) to buy ETFs
2) There needs be buyers in the market , when the investors intend to sell his units , as the AMC does nor redeem it .
How do these ETF work :
These are similar to a MF in that , there is a Asset Management Company (AMC) which manages this traded fund . But unlike a MF , where all new purchases and redemption by the investor is done with the asset management company , here the Investor can buy and sell unit on the stock exchange ( hence the name Exchange Traded Fund ) and hence the advantage is ,Investor need not have to wait for the end of trade to figure out the NAV of the unit , since NAV changes realtime , based on the price movement of the underlying stock .
Pros:
1) Investor can buy/sell , any time there is a dip/spike in the market , without having to wait for the end of trade .
2) The fund expenses are less than expenses of a Index funds currently avaliable in the market
3) The NAV of the unit does not change even in case a "Big Investor" sell his entire holdings , as the units are not redeemed by the AMC , but rather sold to someother investor through a market trade
Cons:
1) Investor would need a demat account and a broker ( or a online trading account ) to buy ETFs
2) There needs be buyers in the market , when the investors intend to sell his units , as the AMC does nor redeem it .
Friday, May 29, 2009
Super Top Up for Health Insurance
Here is another article on Health Insurance. Apart from the usual medical insurance , popularly called Mediclaim , we have another new product in the market , which could be a ideal way to increase your cover http://www.apnainsurance.com/health-insurance-india/super-top-up.html
Especially those of us who already have medical insurance , either bought by our self or provided through our employer this is good way to enhance the amount of cover . And as earlier I would recommend that you buy a individual policy , instead of a family floater.
Especially those of us who already have medical insurance , either bought by our self or provided through our employer this is good way to enhance the amount of cover . And as earlier I would recommend that you buy a individual policy , instead of a family floater.
Thursday, April 23, 2009
PPF as Retirement Planning tool
I have started seeing PPF , as part of the bigger picture and would request readers to do that . Yes , contributions to the PPF , help you save tax as part of 80C . But if you see PPF from the context of retirement planning , that would be a great tool too. PPF could be your debt component of the retirement planning along with may be Pension plans,MF,Direct equity exposure , which form your equity component of retirement planning .
What better instrument to be in for retirement planning , then something which could compound your contributions over 15 year period to start with and which can be extended to keep compounding until you retire .
You will find people who say that, Equity exposure , would be the most appropriate way for retirement planning , i would not disagree , but feel that PPF would de-risk to some extent your retirement corpus
What better instrument to be in for retirement planning , then something which could compound your contributions over 15 year period to start with and which can be extended to keep compounding until you retire .
You will find people who say that, Equity exposure , would be the most appropriate way for retirement planning , i would not disagree , but feel that PPF would de-risk to some extent your retirement corpus
Repo Rate, Reverse Repo,CRR
We quite often keep hearing these terms and also keep hearing that with change in these , there is a possibility that Interest Rates offered by banks may either increase or decrease. So what are these terms that we keep hearing , here is my understanding.
Repo Rate
Whenever the banks have a shortage of funds they borrow from the RBI. Repo rate is the rate at which banks borrow money from RBI. A reduction in the repo rate will help banks to get money at a cheaper rate.
Reverse Repo Rate
Reverse Repo rate is the rate at which RBI borrows money from the banks. An increase in Reverse repo rate can cause the banks to lend more money to the RBI.This can cause the money to be drawn out of the banking system or economy .
Cash Reserve Ratio
Cash Reserve Ratio (CRR) is the amount of money that the banks have to deposit with the RBI. If RBI decides to increase the percent of this, then the available amount with the banks , for lending to general public reduces. RBI uses this method (increasing of CRR rate), to drain out the excess money from the banks.
How does "drain out the excess money" control inflation ?
Well the logic used is that , when there is too much money floating in the economy , people are willing to pay more for commodities or simply put , when lot of money chases a commodity , price of that commodity keeps increasing ( especially , when there is limited supply ) . So pulling out money from the market using the CRR , or by making cost of borrowing money more, by increasing the interest rates , RBI tries to control the amount of money( Liquidity) in the system . Hence tries to control inflation from the demand side , as there is nothing much it can do about the supply side
Repo Rate
Whenever the banks have a shortage of funds they borrow from the RBI. Repo rate is the rate at which banks borrow money from RBI. A reduction in the repo rate will help banks to get money at a cheaper rate.
Reverse Repo Rate
Reverse Repo rate is the rate at which RBI borrows money from the banks. An increase in Reverse repo rate can cause the banks to lend more money to the RBI.This can cause the money to be drawn out of the banking system or economy .
Cash Reserve Ratio
Cash Reserve Ratio (CRR) is the amount of money that the banks have to deposit with the RBI. If RBI decides to increase the percent of this, then the available amount with the banks , for lending to general public reduces. RBI uses this method (increasing of CRR rate), to drain out the excess money from the banks.
How does "drain out the excess money" control inflation ?
Well the logic used is that , when there is too much money floating in the economy , people are willing to pay more for commodities or simply put , when lot of money chases a commodity , price of that commodity keeps increasing ( especially , when there is limited supply ) . So pulling out money from the market using the CRR , or by making cost of borrowing money more, by increasing the interest rates , RBI tries to control the amount of money( Liquidity) in the system . Hence tries to control inflation from the demand side , as there is nothing much it can do about the supply side
Wednesday, April 15, 2009
Individual v/s Family Floater Health Insurance
Remember when I bought my first Mediclaim Policy, there was nothing called a Family Floater and Individual Policy were the only once available . In recent years we see this new innovation hitting the market
The Individual Policy are no brainers , where by based on your age you buy a policy , the premium is decided by your age and as per terms of the insurance company there could be some exclusions . So the bottom line for these policy is "YOU" or the person who is insured and nothing else mattered. These policy also provided you with no claim bonuses , which gets carried forward every year, when you renew the policy.
Family Floaters are different , here the entire family is covered so the insured amount is higher . Any member of the Family can use the entire insured amount.The thought behind such a policy was that all members of family may not fall ill simultaneously and since this is somewhat like a group policy it is cheaper too. These policy also provided you with no claim bonuses , which gets carried forward every year, when you renew the policy
These are the broad outlines.Family Floaters have been very popular and I'm sure all the General Insurance companies are aggressively promoting it . But are the below mentioned fact ever clearly stated to the buyers , is something to be considered
these are from http://www.apnainsurance.com/health-insurance-india/indiviual-floater.html
"There are other disadvantages to a family floater policy as well. The policy will be renewed only till the senior most member reaches the maximum age of renew ability allowed by that company. As it stands today, at that stage, the other family members will need to take a fresh policy without having the benefit of their claim history and pre-existing disease coverage that comes from continuous renewal of the policy.
The same thing applies to children who reach the maximum age (normally 25 years in most cases) after which they will need to buy a separate policy for themselves without the benefit of the earlier continuous coverage that they have got under the family floater policy.
Most policies also make no specific provision for continuing cover of the surviving members in case of the unfortunate death of the senior most member"
So remember to get these clarified , in writing , before you opt for a Family Floater or keep life simple and buy individual cover for all members of the family
The Individual Policy are no brainers , where by based on your age you buy a policy , the premium is decided by your age and as per terms of the insurance company there could be some exclusions . So the bottom line for these policy is "YOU" or the person who is insured and nothing else mattered. These policy also provided you with no claim bonuses , which gets carried forward every year, when you renew the policy.
Family Floaters are different , here the entire family is covered so the insured amount is higher . Any member of the Family can use the entire insured amount.The thought behind such a policy was that all members of family may not fall ill simultaneously and since this is somewhat like a group policy it is cheaper too. These policy also provided you with no claim bonuses , which gets carried forward every year, when you renew the policy
These are the broad outlines.Family Floaters have been very popular and I'm sure all the General Insurance companies are aggressively promoting it . But are the below mentioned fact ever clearly stated to the buyers , is something to be considered
these are from http://www.apnainsurance.com/health-insurance-india/indiviual-floater.html
"There are other disadvantages to a family floater policy as well. The policy will be renewed only till the senior most member reaches the maximum age of renew ability allowed by that company. As it stands today, at that stage, the other family members will need to take a fresh policy without having the benefit of their claim history and pre-existing disease coverage that comes from continuous renewal of the policy.
The same thing applies to children who reach the maximum age (normally 25 years in most cases) after which they will need to buy a separate policy for themselves without the benefit of the earlier continuous coverage that they have got under the family floater policy.
Most policies also make no specific provision for continuing cover of the surviving members in case of the unfortunate death of the senior most member"
So remember to get these clarified , in writing , before you opt for a Family Floater or keep life simple and buy individual cover for all members of the family
Thursday, April 9, 2009
Safer online usege of Credit Cards
If online use of Credit Card has been your concern , I do understand that earlier this years RBI made it mandatory for online sites to add a addditional layer of authentication , but the problem with this is that only India based websites have this additional layer, that leaves your card open for a misuse on all non India based website ( which is pretty much the entire internet )
This virtual Card offering from HDFC , takes card of this too http://www.hdfcbank.com/common/onlineservices/netsafedemo/demo_new.htm
If you find anything better let me know
This virtual Card offering from HDFC , takes card of this too http://www.hdfcbank.com/common/onlineservices/netsafedemo/demo_new.htm
If you find anything better let me know
Rule of 72
I always used to wonder how long it would take for money to double at any given rate of interest. I seem to have found this easy way out
Assume that you are promised 8% rate of interest .Now, as per this "Rule of 72" , you would need to divide this number 72 by 8 to get at that (72/8 = 9). That would mean, you would need 9 years for your invested money to double in value , provided you invest it for that period of time and let the amount compound annually.
Please correct me if i'am wrong
Assume that you are promised 8% rate of interest .Now, as per this "Rule of 72" , you would need to divide this number 72 by 8 to get at that (72/8 = 9). That would mean, you would need 9 years for your invested money to double in value , provided you invest it for that period of time and let the amount compound annually.
Please correct me if i'am wrong
Monday, April 6, 2009
Sweep Account
These are Hybrid Savings Bank accounts that are being provided by public as well as private bank , they are being offered for some time now
How do these account work:
Most of the banks have a pre defined amount say Rs.10,000 as the limit .Any amount above this would be automatically be swept into a FD, mostly in multiples of Rs.1000. You can even chose the durations of these FD (Fixed Deposits )
Let us say you have Rs.30,000 in you account, that would mean Rs.10,000 in saving account and Rs.20000 as 20 FD of Rs.1000 each , In case you issue a cheque of Rs.11,000, then one of those FDs would be encashed and used to honour your cheque.
Advantage :
The advantage of such an account would be , your money starts to work a bit harder , instead of Savings Bank interest rate , you money starts earning higher interest rate of an FD
Most of the Pubic sector bank have lower limit for the swap to be triggered compared to the private sector banks .
Corporation Bank : http://www.corpbank.com/asp/0100text.asp?presentID=1355&headID=19
SBI : http://www.sbi.co.in//viewsection.jsp?id=0,1,19,113,185
These are just a few , would recommend that you , always try to open a sweep account instead of a normal savings bank account
How do these account work:
Most of the banks have a pre defined amount say Rs.10,000 as the limit .Any amount above this would be automatically be swept into a FD, mostly in multiples of Rs.1000. You can even chose the durations of these FD (Fixed Deposits )
Let us say you have Rs.30,000 in you account, that would mean Rs.10,000 in saving account and Rs.20000 as 20 FD of Rs.1000 each , In case you issue a cheque of Rs.11,000, then one of those FDs would be encashed and used to honour your cheque.
Advantage :
The advantage of such an account would be , your money starts to work a bit harder , instead of Savings Bank interest rate , you money starts earning higher interest rate of an FD
Most of the Pubic sector bank have lower limit for the swap to be triggered compared to the private sector banks .
Corporation Bank : http://www.corpbank.com/asp/0100text.asp?presentID=1355&headID=19
SBI : http://www.sbi.co.in//viewsection.jsp?id=0,1,19,113,185
These are just a few , would recommend that you , always try to open a sweep account instead of a normal savings bank account
Monday, March 30, 2009
Help at hand to manage your MFs
I have always found it tough to to keep track of my Mutual Fund investments not that there are too many , but the fact that i have them with different AMC http://www.amfiindia.com/ means that i would need to login into different websites to keep track.
This is where http://www.camsonline.com/ comes in handy. CAMS is a back office services provider for many of India's leading AMC and if you take care to mention your email address , when you apply for any of MFs, from the CAMS online site it is possible to get a detailed holding of all your MF(across AMC, across folios) through a single email , either as a secure attachment or as a link.I feel this an extremely useful feature.
This is where http://www.camsonline.com/ comes in handy. CAMS is a back office services provider for many of India's leading AMC and if you take care to mention your email address , when you apply for any of MFs, from the CAMS online site it is possible to get a detailed holding of all your MF(across AMC, across folios) through a single email , either as a secure attachment or as a link.I feel this an extremely useful feature.
Sunday, March 29, 2009
LIC's licindia.com
Of all the public sector insurance companies , the website hosted by LIC is something which totally surpised me( for a change, pleasantly). I could only wish all other public sector insurance companies could only take clue from LIC , to change, the way they use internet .
On this LIC site we can not only pay our premiums but can view our previously paid premiums.This may not seem as much , but considering the alternative where you may have to try to get to a LIC office which kind of opens at 10 AM it is a luxury.
I have a National Insurance , Mediclaim policy , it is nightmare to get this renewed each year and wish each year when the time comes for its renewed that National Insurance ( which is currently seems to be spending a lot of money on print Ads ) just changes its pre historic website and help me renew my policy ( but unfortuantely this is just a dream for now )
If you have not tried this feature , would strongly recommend that you try this and i'am sure that paying LIC premiums would be a breeze
On this LIC site we can not only pay our premiums but can view our previously paid premiums.This may not seem as much , but considering the alternative where you may have to try to get to a LIC office which kind of opens at 10 AM it is a luxury.
I have a National Insurance , Mediclaim policy , it is nightmare to get this renewed each year and wish each year when the time comes for its renewed that National Insurance ( which is currently seems to be spending a lot of money on print Ads ) just changes its pre historic website and help me renew my policy ( but unfortuantely this is just a dream for now )
If you have not tried this feature , would strongly recommend that you try this and i'am sure that paying LIC premiums would be a breeze
Saturday, March 28, 2009
Why do people do not invest in PPF
I would consider PPF as one of the finest avenues of investment , especially as one of the strategies to achieving your retirement planing goals along with any pension plans,MFs and direct exposure to stocks that you may have
I have spoken to quite a lot of people about this and found these are reasons that people generally have avoided or do not have a PPF account
Do not even know there exits something called PPF
People know that compounding is an amazing way to make your money work harder , they know it is something which works wonders when seen from an long term prespecive.Yet you ask them about instruments available in India , which will allow them to compound their investment , you will suddenly encounter a silence.
Money gets locked in for 15 Years
This true ,yes of course you can avail loans and all those , but I would believe for real benefit of PPF to be availed , you would need to let the money be there for 15 years. and if you look at PPF as part of your retirement strategy , you would not feel that lock-in of 15 years is a disadvantage , but rather something that just help you accumulate your retirement nest.
Government can change the Interest rate any time
This true , PPF interest rates have changed from the time I had opened my PPF account . but times have changed , it is the age of coalition government and end of single party rule and hence would consider that going forward , it would not be so easy for governments to tamper with PPF interest.So may be we start taking advantage of these uncertain political times to build our PPF account.
So would recommend that your open up your PPF account today , if you still do not have one and if you do have one start maximizing your contribution towards your PPF. unlike a ULIP , which hugely rewards the agents there are no such incentives for an PPF agent , hence this product is rarely recommended or aggressively promoted
I have spoken to quite a lot of people about this and found these are reasons that people generally have avoided or do not have a PPF account
Do not even know there exits something called PPF
People know that compounding is an amazing way to make your money work harder , they know it is something which works wonders when seen from an long term prespecive.Yet you ask them about instruments available in India , which will allow them to compound their investment , you will suddenly encounter a silence.
Money gets locked in for 15 Years
This true ,yes of course you can avail loans and all those , but I would believe for real benefit of PPF to be availed , you would need to let the money be there for 15 years. and if you look at PPF as part of your retirement strategy , you would not feel that lock-in of 15 years is a disadvantage , but rather something that just help you accumulate your retirement nest.
Government can change the Interest rate any time
This true , PPF interest rates have changed from the time I had opened my PPF account . but times have changed , it is the age of coalition government and end of single party rule and hence would consider that going forward , it would not be so easy for governments to tamper with PPF interest.So may be we start taking advantage of these uncertain political times to build our PPF account.
So would recommend that your open up your PPF account today , if you still do not have one and if you do have one start maximizing your contribution towards your PPF. unlike a ULIP , which hugely rewards the agents there are no such incentives for an PPF agent , hence this product is rarely recommended or aggressively promoted
What this Blog is all about
I would like to use this blog to introduce you to things that worked for me in my personal finance planning and share with you all my thoughts. I always believe that knowledge needs to be shared and this would be my way of sharing my knowledge
Subscribe to:
Posts (Atom)