Nurture - Get rid of the duds

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Was reading this article in Forbes from Sanjoy Battacharya , he was so correct , when he writes that, it is so tough to get rid of the non performing stocks in your portfolio, we would invariable wait for those stock to at least get back to our purchase price . And Battacharya also goes on to write that , the other reason we fail to get rid of these duds is our "EGO", as we would then have to accept that we were wrong , and that my stock selection was wrong . To accept one is wrong is something unacceptable to the EGO.

Taking forward this "Get rid of the duds" , was fascinated by a articles on GetrRichSlowly.com by JD about minimalistic living , living with few wants and fewer material possessions and how some people are even trying to own not more then 50 item ( all included )
http://www.getrichslowly.org/blog/2009/10/09/minimalist-money-6-steps-to-simplify-your-financial-life/

Similarly , on IWillTeachYouToBeRich.com , Remit , points us to be aware of the biases in life that we unknowingly carry with us and tells us to get rid of those
http://www.iwillteachyoutoberich.com/blog/10-scripts-email-signu/

All these three different guys are point to one thing and one thing alone "Get rid of the duds" be they be stocks,possessions,thoughts.

FMP Fever

MF funds are back with a flood of Fixed Maturity Plan (FMP) . What really are FMPs , as i understand ,they are closes ended plans ( that is ,you can only buy them when , AMC opens the subsciption , and can either hold it till maturity or may be sell it on the stock market , where it will be listed ) , which invests in rated corporate bonds and and other such instruments , which ideally have term equal to the term of the FMP .

Currently MFs are coming up with FMPs of duration of as low as 35 days, 3Months to 370 days to may be 36 Months.

With the current interest rate scenario , which has a upward bias , it is not a good idea to lock into a instrument with a longish term and FMP may just fit right for this scenario.

With too many MFs comming out with FMP issue , it would be quite a pain to track , which offer is open for subscription , I usually use http://www.mutualfundsindia.com/ to track FMP NPOs.

HDFC,DSP Blackrock and many other provide you a way to buy these online without any hassel ,but for some reason Fidelity MF had some problems after their first couple of FMP subscription online ,and since then they have taken it offline

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Keeping cost low

Once a individual has overcome the initial intertia to start investng , it would help investor to keep a eye on the cost involved . The cost could be what you pay you broker/online broking account , what your MF agent ( if there is still such a guy around ) .

One of the best way , atleast for me , regarding my MF investing has been that , i have been able to keep my trading account completely isolated from my MF holdings, thanks to more and more Asset Management Companies (AMC) going online , allowing investors to invest from their website.

The backend of most of these MFs , CAMS and Karvy , have been equally proactive to provide investor with an option to see their entire portfolios across AMCs as a single consolidated PDF file and on demand, that too free.

So if you ask me, i would say , use the AMC websites to purchase you MF units , you can even use these sites to start off your SIPs. if not, a trip to the CAMS or Karvy office with physicals forms is not a bad idea .

Bottomline, be in firm control of your folios and not be at the mercy of your online trading websites , atleast not for your MF folios.

Shopping at the big retail stores

I do shop at these big retail stores for the range of convenience they provide . But there is something that i'am geting increasingly concerned . These big retails change your shopping habits , for one i see they never carry smaller SKUs or smaller packs of most stuff and you invariably end up buying the bigger pack ,though you wanted a smaller pack and so does it goes to the brand that you pick , these retailers do not carry all the brands so you end up buying brands that they carry instead of which you want .

Let me give you an example, I usually buy these mosquito repellent which are available in different pack , 30 day pack is what like to buy , and i find that big retailers are trying to move you to 45 days or 60 days pack , for retails it make sense as the same shelf space is trying to generate higher revenue for them, which is good for them , but not for the customers .

Watch out for this , next time you shop .

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Saving on Auto Pilot

Have been reading on Ramit Sethi's blog where he stresses on setting your Savings/Investments in a Auto Pilot mode and i started wondering how can we in India do that ..

1) Increase PF Contribution : For those of you who are employed and for whom your employer provides you with a Provident Fund , first figure out if you can increase the contibution from the current 12% to say any percentage more ( Maximum would be 25% ) . your employer will not match you , but just that you have started to contribute more money that would be compounding at 8.5% interest .

2) Mutual Fund SIP: Start a SIP of any 5 start rated Mutual fund( http://www.valueresearchonline.com/toprated.asp) , choose first of the month as date of SIP

3) Open a Recurring Deposit: You can open a recurring deposit , try to keep desposit date in the first week of the month . Now you even have a Recurring deposit , whose interest is variable .

4) Use a Online trading account: Some of the trading accounts ( Sharekhan.com does) allows you to set a SIP for stock(s) .That is to buy a certain script on a specific day of the month .May be for a start, try to buy NIFTY BEES (benchmarkfunds.com/static/Nifty/overview.cgi)

The Intent in all these is not only to automate , but also to make you "Pay Yourself First".

If you can think of any other ways of doing this , Please do comment .

The Art of Giving

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/

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&sectionid=1&issueid=72&latn=2

Check your PAN details
https://incometaxindiaefiling.gov.in/portal/knowpan.do