How not to miss your payment due dates

I'am sure everyone of us have quite a few bills that we have to pay once a year , which make them so much harder to remember . These could include our Life insurance premiums , Health insurance premiums , Accident insurance premiums , Property taxes ,Vehicle insurance premiums, could be renewal of some annual maintaince contract, Well is there a way we could make our life a little easy to remember these . Well Yes , try and use the reminder calender for example use the google calender , make sure you take care of these when you set the reminders

a) Set a recurring reminder , so you get a reminder every year

b) Make sure you set the reminder atleast a week to ten days ahead of your due day , so that you have enough time to pay the amount.

c) Include enough details in your reminder , so that you know exactly what the reminder is for and approximate amount you would need to pay.

So the little time spend to set these reminders , would be well spent , if you could avoid late payments fee or policies being lapsed .

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Reduce fix cost overheads

Further to my earlier post , regarding keeping cost low . I would say , we would need to keep an eye on cost , not just during investing , but in other aspect of spending too,Take you mobile phone plan , if you are an employee of a MNC or rather of a well known Indian corporation , do make it a point to check with your HR for corporate Mobile Tariff plans . Not only will these corporate plans have lower monthly rentals ,but would also have very competitive call rates and also they will not have CLIP charges associated and also have a feature called CUG ( Closed User Group ) free calling , That is unlimited free calls between number on coporates plans of same company.

So if the service provider is OK , you can pick more then one connection or change plans of exisiting connection to the corporate plans , so that people who you frequently calls say spouse , parents , use the other connection , and you can end up with unlimited free calls at a fraction of the cost

Any recurring cost , be they Internet connections Plans, Magazine subscriptions,Cable TV subscription plans , there is always scope to optimise and cut on wasteful expense .

The bottomline is to keep recurring cost low , because , in long run benefits of optimising recurring cost would be phenomenal , as it could also help you get into a "optimise" mindset

Let us try to do the simple things first .

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 .