# Millennium Behaviour: Crypto & Stock Investments

March 2020 was the time when the deadly corona virus had started uprooting the strong pillars of health system across the globe. The wave later named as COVID 19 didn’t spare even the mighty nations like USA, the sophisticated fashionable region like Europe and the pioneers of change in future economy like India and China. . Complete lockdowns, unprecedented causalities, gory scenes of people crashing on ground and scattered dead bodies sent shivers down the spine.

Courtesy: Photo by David McBee on Pexels.com

The lock down did everything wrong for the businesses and the people in general spreading scare and people prayed for two time meals for their families in the under developed countries. Air traffic, Transport Industry, Entertainment and other such events paved way for a thriving business for consumer items, online shopping platforms

However a new breed of investors better known as Millenniums proved the game changer for stock markets as well as the cryptocurrency during the torturous times. All Governments pushed enough liquidity in the system to bolster the crippled health system as well as providing relief to the suffering people across the globe.

With dollars dropping in their accounts and work from home culture developed by the companies provided these youngsters an opportunity to experiment and remain busy during the lazy hours. The high number of D’mat accounts/trading accounts opened by the stock broking companies surpassed all records. Money started flowing in the stock markets as the stocks struggled to regain their lost glories.

DOW/SENSEX along with other global indexes crashing down to the historical lows in March 20, started picking up in the second half of the year. The brave souls who weathered the storm for a few months were duly rewarded for heir patience and perseverance as the markets started their upward journey..

Liquidity played major role in convincing the new sets of customers to venture out and try their hands in stock market which was a relatively safe investment. but a large number of youngsters showed inclination towards cryptocurrency which inspite of being riskier game provided handsome return in short period of time

Image courtesy: Bing.com

Dow Zone crashing down to 23800 level in March 2020 picked up smartly and has already achieved historical heights by climbing to 34000 level. Amazon, Tesla, Google and other stocks doubled in valuation in a short time of just 9 months.

Bitcoin trading @USD 9000 and Ethereum available for less than USD300 in the early part of 2020 galloped and by the end of the year, there was multi dimensional growth in these coins. Though the main role of investment remained with the institutional investors but there was a considerable interest by the millenniums too. The Bitcoin has gone beyond USD 60000 and Ethereum beyond 4000 levels taking these coins beyond the reach of common investors. .

The businesses are closing down, the factories are running at reduced capacity, the offices have been working @50% , restaurants, malls and markets all closed in India. The hospitals and health infrastructure is overwhelmed with the number of COVID infections spiraling up as positivity ration has attained monstrous dimensions of more than 35%. More than 10 variants threatening the nations have caused anxiety forcing countries to close their borders for international traffic.

The situation more or less is similar across the globe with a little bit of relief coming from different versions of corona vaccine available now. Its not going to be an easy job for the authorities to vaccinate their large population in short future but there is a hope to curbthis menae for the time being

Like in 2020, one thing is apparently evident that the lockdowns and restrictions are going to encourage the new breed of investors to try their hands in the stock markets. We can see the global indexes rising with each passing day either in the name of vaccination or better financial results shown by the companies for the year ended 31 march 2021.

Image courtesy: Bingo.com

DOW crossing 34000 and SENSEX touching 50000 levels again is an indicator to the continued interest of millenniums and liquidity in the system. Companies ae also taking a cue by dolling out dividend, splits or bonus shares to their investors. This rosy picture certainly brings in more investors to hoping for better returns from their investments

On the other side hundreds of exchanges and thousands of coins and tokens in the crypto market keep luring the young investors for putting in their money to reap rich dividends.

There have been reports from all across the globe about poaching and hacking by the hackers.as the system is prone to frauds and stealing. It is not a Bank account or stock trading account where any mischief can be taken care of by the regulator. A slight oversight can see your wallet getting emptied and you have no recourse for the recovery as all the transactions are made through a code where no regulatory authority is involved.

Number of transactions in cryptocurrency have increased manifold not only in US, Australia, Europe but country like India where the Government has been planning to ban the Crypto currency through its Parliament.

The volumes have increased by more than 100 % resulting in total traded value in India. The unprecedented turnover of more than 350 million in a single day on wazir x created a sort of history in the first week of April Bitcoin the leading digital currency despite suffering reverses last week after scaling heights of +$65000 is trading @ $57000. is being speculated to touch $100000 in a near future.

The times when everyone is closeted in his room not daring to venture out for a stroll in open air, this idea of investment in stock market and crypto seems to be worth trying.

Stay safe and have a better luck

Hold On!! Markets Crash Again

It reminded me of March 20 when the global markets crashed on the apprehensions of coronavirus alleged to have been transmitted from Wuhan, China. Indexes alarmingly collapsed to lower levels and stocks sent shivers down the fragile spine of investors globally.

However, the brave souls who showed confidence and resilience in the financial markets were soon rewarded as the markets rebounded scaling new heights after a few months. Dow Jones, Nasdaq, Sensex, and all global indices not only retrieved their lost glories but also attained unprecedented levels.

Dow crossing 31000 and Nasdaq easing past 13000 levels was like leading from the front. The investors reposing confidence in the fundamentals having invested with due diligence were suitably rewarded as the stocks picked up during the pandemic multiplied their wealth multiple times.

Tesla, Amazon, Zoom in USA and Reliance, Bajaj Finance, TCS from India jumped to higher levels. Exactly after 11 months, we have witnessed another collapse again. It started from China and like a virus butchering the US, Australia, and Asian markets in no uncertain manner.

India following the Asian markets lost 1939 points on BSE and more than 500 points on Sensex. It was a double shock for Indian investors as many lost big money on Wednesday due to a glitch at the NSE resulting in interruption of business for more than four hours. Poor guys!! suffering losses for none of their faults. Huge losses accrued to the traders and today’s fall has added miseries to these investors again. US markets will be opening later tonight to decide the direction of global markets on Monday.

Bond yields to the extent of 1.61% have made the big investors exiting stock markets and preferring bonds for safe investment. This migration of funds will certainly impact the market sentiments. All markets will be watching Dow movements tonight and any good news will help recovery on Monday.

My genuine advice for the investors to maintain their composure and sit tight by selecting a few Cherry picks with cheaper valuation on the way. However, traders to sit on the sidelines for a few sessions and watch only the movements in this volatile turbulent market. Those who can’t resist the temptations must keep themselves covered by marking a stop loss to minimize the exposure. Avoid playing index and bet on the fundamentally strong stocks with lot of promise and potential. There are many in the market that you need to identify

Good luck! Friends

Success usually comes to those who are too busy to be looking for it….

# 7 Differences Between Rich and Feel Like a Rich?

When we talk of a rich person, a highly sophisticated guy travelling in a latest mercedes driven by a well dressed chhauffer, spending lavishly and living in a spacious house situated in the posh locality comes in our mind?

Most of the people will vouch for him being a rich person from all worldy possessions. Whereas, this is not always the fact as we will deliberate upon

1. There is miles of difference between looking rich and being a rich in real life. The visible wealth could belong to a borrowed money. We have been hearing a beautiful phrase since our childhood about those people who have little money or knowledge but they show off by spending more to look rich. “An empty vessel makes the most noise”
2. It’s not always that a person wearing gold ornaments all over the places or riding an expensive vehicle could be a rich man.
3. A rich man would love to create assets but the look like rich man will end up amassing liabilities in the name of assets

3) Frugality could be another yard stick as truly rich man would love to preserve the hard earned money by travelling economy or wearing ordinary clothes but the rich looking man would love to spend more to match in style

4) A rich man believes in creating duplicates by sharing his knowledge but on the other side a looking rich like person would love to spend and keep his activities a close guarded secret

5) A rich man would talk little but love to be heard by millions and on the other side the feel like rich man will flaunt his possessions everywhere without bothering about people listening to him

6) A rich man is an ambitious individual who achieves everything by taking along his team. He will be a family man but on the other side a feel like rich man will adopt an individualistic approach without bothering about the team. He rarely finds time for the family

7) A truly rich man has abundant wealth of patience, knowledge, confidence, a strong sense of philanthropy and desire to excel besides the money of course.

Dear readers: Do you agree with me? This is how I perceive and sum up my observations about the richness Please share your own personal inputs to enrich others. Do you think the front workers i.e Doctors, Nurses,Police, teachers, Food delivery guys and others helping us in the current pandemic situation are the Rich people? We are beging for our health and safety from these brave souls

3 Tips# How to Achieve Financial Freedom. Money Matters

Financial freedom generally denotes having resources, investments, and cash so that you can afford the kind of life you want. Individuals can take small steps each day towards this goal by following a budget and paying close attention to their finances.

How to move about?

Let’s find our way to Financial Freedom!! It’s not only your income but the habit of savings that make you financially independent. Don’t wait for your salary hike or scaling of the business. Just realise the significance and strength of small savings!! Regular savings of @10% per month can accumulate funds aggregating more than a month’s salary in your account in just 10 months? Not a big science only simple mathematics, you need to believe in yourself!

“You don’t have to see the whole staircase, just take the first step.”

– Martin Luther King, Jr.

http://www.moneyxtensions.com

Are You Managing Your Money Well?

Look back at your total salary last year? Were you not managing your life comfortably? You have already received your annual increment and maybe a promotion too, Right? Additional few dollars dropping in your Bank account has not made any difference except the frequency of dining out or buying a household item to improve your lifestyle. You have already exhausted by spending comfortably throughout the month and there is still a week to go when the next salary gets into your account?

How do people react ?:

This is what a decently employed person keeps doing till he confronts a serious problem of virtually no balance left in the account. He has to resort to quick high-cost borrowing for each and every activity involving money. This could be for hospitalization, child education, home repairs, loss of a job or any other emergency requirement.

#1. The only way to save is Auto Debit/Transfer:

Open another account with your bank and start saving by setting up auto debit instruction in your salary account today. This is the only and best way to avoid spending whatever you get in your Bank account.

For example, the net salary of Rs.50000/- is credited into your account on the 7th date of every month. An auto tranfer of 10% i.e Rs.5000/- will be automatically clicked on the same day leaving behind Rs.45000/- in your account. Hopefully, you will organize yourself to ensure all expenditute within the said amount.

#2 Set Up/Plan Your Budget:

No business, No state, No Country, and for that matter no family can survive without planning a budget. It’s a simple exercise of matching your likely expenses with the income/salary being credited in the Bank account every month. Though the living expenses remain on tips it is advisable to adopt a habit of writing in your diary every month. This will provide you an opportunity to have a look at the expenses for exploring chances of taking leverage on cutting down expenditure during a particular month.

“The goal isn’t more money. The goal is living life on your terms.” –Chris Brogan

Never allow your debt to surpass 10% of annual income; If your total annual salary/income comes out to be Rs.1200000/- then the short term debt should not go beyond 120000/- at any given time under any circumstances.

Earning and spending without having a clearly defined budget is like driving a vehicle carrying your family without knowing the destination and checking on the fuel required for your journey.

”If we command our wealth, we shall be rich and free. If our wealth commands us, we are poor indeed.”

– Edmund Burke

#3 Explore Extra Income Source:

The current pandemic condtions have made the world wiser and adaptable to the new environment as everything has kept moving though not as smooth as it should have been.

There is no dearth of finding an additional source of income that can supplement your resources for enjoying financial freedom. It depends on your resolve only that can initiate and identify utilizing the extra few hours at your disposal. This could be earning a few dollars by using your professional qualitifcation, hobbies by subscribing to the portals like freelancer, Udemy, and many others paying for the services on offer 24x7x365:

1. You can also explore the option of doing some online drop shipping business that doesn’t require you to maintain any inventory or account books. You can use your selling instincts by availing of marketing options to bring customers to your store. Leave everything from packing to the delivery upto the supplier. In the end, a handsome return to keep your retirement plan moving
2. Never miss an opportunity to use your credit card judiciously to earn points for earning cash backs or other such gifts by observing strict discipline.

Hi friends, do you have any other way of accomplishing financial freedom. Your feedback will be an enriching experience for me as well the readers. No one is a complete individual or professional in any field and I am not the exception.

Have a wonderful day ahead,

https://www.success.com/10-meaningful-quotes-about-achieving-financial-freedom/

How! To Make Your Gold Ornaments Work For You? Gold Loan

Do You Need Urgent Money?

You have the easiest option of converting your idle gold ornaments lying in the locker for years into cash. Leave aside your emotional inhibitions and look for getting liquid cash within a few hours. It doesn’t require voluminous paperwork for satisfying your Bank either. You can carry the old/out of fashion and out of use gold jewelery to the nearest Bank or Gold Financing Company for a quick Gold loan on easy terms in a few minutes.

Is there any Maximum limit?

Every NBFC/Bank has its own prescribed policy for fixing the maximum and minimum loan exposure it usually ranges from Rs.1000/-to Rs.50 lakh. for a single customer. Muthoot Finance the leading player in Gold Loans has no upper limit: https://www.muthootfinance.com

How Much Will It Cost?

Gold Loan is a secured loan offered on a very affordable low-interest rates ranging from 7% to 19% depending upon the amount of loan and its repayment period. You can repay the loan along with interest in 36 installments, being the maximum permissible time limit. SBI has a customer-friendly gold loan scheme: https://www.sbi.co.in/web/personal-banking/loans/gold-loan

What will be the maximum eligibility?

RBI has a fixed LTV(Loan to Value) ratio of 90% meaning thereby that Banks can finance loans to the extent of 90% of your gold value that is derived from the average 22ct. gold Jewelry price prevailing in the market over the last 30 days. Maximum eligibility of loan amount depends on the weight of your gold ornaments which is multiplied by the per gam rates of the gold. Normally, Banks come up with a per gram rate on regular basis. Let’s take an example :

Weight of Your jewelry: 150gm; Rate fixed by the bank: Rs.3100/ per gram

Total eligibility of loan: 3100×150=Rs.465000/-

Can Gold Coins/Gold Biscuits also be pledged?

Please note that the RBI has not allowed loans against gold bullion i.e gold bricks, gold biscuits, etc. Banks will accept only gold ornaments for extending loan facility

How and Where to Go?

Though a number of companies have started online gold financing business, I will recommend you to visit any branch of the authorized Bank/Company in your vicinity for availing of the loan facility. Muthoot Finance, Mannapuram, IIFL, HDFC Bank, ICICI Bank, Federal Bank, and a host of other NBFC’s extending this facility have hundreds of branches to cater to the needs of customers. You can google for the nearest branch

What is the standard procedure:

Generally, all Banks/NBFC’s have a uniform operating system in place as appended below:

• Carry documents, like, PAN Card, Aadhar Card, Passport, Bank account statement, and a canceled cheque for fulfilling the KYC norms.
• You need to deliver gold ornaments to the authorized representative/BM for verifying the purity and quality of the gold. They have a prescribed laid down procedures to carry out this process in a few minutes’ time.
• The ornaments are subjected to physical scrutiny and weight measurement in your presence. You will be briefed about the quality of gold and permissible loan amount with all terms of sanction.
• Different parameters define the schemes floated by the companies. With the maximum eligible amount, you will be charged the highest slab of interest rate but with a minimum amount of loan, you will be paying the lowest interest rates. However, You can take a call depending upon your requirements and ease of repayment.
• No complicated documentation!! It takes just a few minutes before the amount goes into your account
• Wait for the message on your mobile phone for the credit entry in your account but don’t forget to collect a copy of the sanction letter specifying all details of the pledged gold ornaments and terms of sanction.

What about the safety of the Jewelry:

All the Banks/NBFC’s have a robust security system taking care of the safety norms. The pledged ornaments are sealed and signed before finding their way into the vault. No one except an authorized representative has access to the strong room where all the ornaments are stored. There is virtually no chance of any pilferage or mixing up the packets.

When do the companies auction ornaments?.

• Your loan account needs to be adjusted by paying regular monthly installments. In case of any delinquency resulting due to non-payment of three installments, the account is treated as NPA(Non-Performing Asset) in compliance with RBI guidelines.
• You will be reminded of your liability through personal calls, notices, registered notices, and finally, the gold will be auctioned as per the policy.

Who auctions the gold ornaments?

Auction: Though not a pleasant experience for gold ornaments occupying a specific emotional value in the hearts of every Indian, the lenders exercise their option of auctioning the pledged securities after exhausting all available avenues as under:

You will be informed at least 21 days before the date of auction preferably by a registered post on the last available address in the company records. You still have an option to get your ornaments released by visiting the concerned branch of the company at least one day before the auction.

Notice of auction will be carried out in the two local newspapers. One of the newspapers may be in vernacular language in which you have signed the documents

The company will conduct auction through independent, professional and Board approved auctioneers only

The company can not participate in the auction process but an authorized representative of the company will remain present during the process of the auctioning.

A complete record like date, time, venue, details of sales, details of bidders present, maximum bid amount, details of the maximum amount bidder in whose name the bid has been concluded shall be prepared for all audits and future verification by the regulator i.e RBI

Auction price per gram shall be in line with the gold jewelry prices on the preceding day subject to the quality of the pledged gold

The borrower/customer can participate in the auction and place his bid like any other bidder on the same terms and conditions.

Any balance of this auction proceeds is utilized to settle mandatory taxes and auctioneer’s commissions. It is a mandate agreement to comply with the Sales Tax Laws of the state where the auction is conducted

After carrying out the auction, the company will inform the customer about the total amount auctioned along with any other relevant details. The surplus amount, if any, after payment of a prescribed fee to the auctioneers, local taxes, and any other related expenditure, will be credited into the account of the customer.

The auction process will be made transparent as per the guidelines of “The association of gold loan companies for public auction(India)” under the overall prescribed RBI policy on gold loans,

image courtesy: bing.com

The Banks don’t insist for any declaration for end use of the loan amount sanctioned against the gold ornaments. You can use it for any purpose like investments, child education, payment of high cost debt, domestic ceremony or whatever you feel like. This is another simple way to repair your credit history.

Some of my friends from countries other than India might be surprised to find the entire post dedicated to the Indian conditions only. Yes, you are right! but believe me, all parameters are more or less the same in all the countries for availing gold loans by the customers. I can come back again on this topic if need be. Till then enjoy reading and keep me posted with your valuable feedbacks

https://www.muthootfinance.com

Stay Safe and keep reading

How $100 Turned $324000! Unbelievable Crypto Growth. Risky Rewards!

All the traditional old stories attributed to financial advisors advocate for saving enough and controlling expenses being the only way to amassing wealth for a relaxed impending retired life in 20 to 30 years. The art of compounding keeps adding valuation to your investments at consistently good rates for the funds to grow on the expected graph.

Traditional instruments being Bonds, Mutual Funds, Bank Deposits, Shares will never eat into your entire capital as turbualence here and there may reduce the average returns only. The assets lying in your portfolio are safe, secure and easily accessible for encashmnt or swapping at any point of time.

We have seen over the past few decades that all the global indices grow at around 11 to 12% per annum. Leave aside the bubbles of markets crashes happening at irregular intervals causing anxieties in the minds of investors, the compounding factor brings a good wealth for you even if you stay invested passively. These are the strong plus points for those believing in safe and assured returns from their investments. Alas! this route of accumulation of wealth takes longer journey to your retirement at the age of 60 years.

Photo by David McBee on Pexels.com

However, for the possibility of your retirement occurring anywhere between 40 to 50 years of age, you will have to think differently!! The idea of putting your money in the most volatile and riskier options could be scary for the obvious reasons but we have been listening from the experts “More the risk- More the profit”. Your money will grow in proportion to your risk only.

The year end rally saw the cryptocurrency prices soaring sky high prompting me to contemplate allocating some money in this newly found love of cryptocurrency in general and Bitcoin/Etherium in particular. Though not a guaranteed return option yet an investment that can get you closer to your relaxed retirement sooner than planned. The risk to reward ratio is incredible as you will see in the following illustration.

Cryptocurrency has come a long way since the year 2010. From virtually nonexistant pricing, Bitcoin has touched $42000 recently. Bitcoin came into existence through its founder Santoshi Nakamoto in 2009 as the first blockchain-based cryptocurrency in the world. It was considered as an attempt to create an alternate arrangement for money transactions directly without using the usual authorized medium of Banks or financial institutions. Feeling threatened by the presence of cryptocurrency seemingly an alternate to the Fiat currency, all countries have remained in unacceptable mode to regulate this cryptocurrency so far.

The price of Bitcoin remained inconsequential for the initial few years but July 2010 saw this unregulated little-known currency moving up from $ 0.0008 to $0.08. A big jump by all means!! Did anybody ever contemplate investing in Bitcoin even in 2010? I think no one would have ever visualized that this scarce commodity will create a magic in few year’s time and investors will carry this currency to astronomical heights.

Despite some of the exchanges closing down due to intervention of the regulatory bodies in various countries, a sudden spurt in price transpired in 2013 when a bitcoin trading @$13 reached a maximum $220 by the end of the year. Bitcoin after attaining a mind-boggling price of $19780 in December 2017 cruised along with prices going down to the $3500 levels right through 2018 but bouncing back to five figures in 2019.

Starting from the third quarter of 2020, cryptocurrency market has shown a tremendous spurt in prices, and the level of $28000 for a bitcoin achieved in December looked invincible. But look at the way this currency has behaved right from the start of the current year. We have witnessed milestones after milestones getting crushed in every session as the price skyrocketed to $42000 a bitcoin levels in the first week of January 2021.

While there is a Maximum limit of Bitcoin i.e 21 million to be mined and 18.62 million have already been in circulation as of date. This limited supply has created the gap between demand and supply impelling the institutional investors to join the party in a big way. The news of more than 78% accessible bitcoins having been possessed by the institutional investors left retail investors vying for the remaining 22% available in the market. As anticipated, this continued demand-supply gap may swell the prices beyond the purview of small investors in the future.

Over the last ten years, this currency has grown from a meager $ 0.08 to $42000, growing to (42000 is a 52499900% increase of 0.08.) Unbelievable. An investment of 100 (roughly 1200 bitcoins) in 2010 would have become $50400000 as of the first week of January 2021. look at the table “A” below for more comprehension. Etherium, the number two altcoin in the market has also been showing tremendous growth in the company with its more illustrious elder brother Bitcoin. Etherium is the platform being used by a large number of small tokens in the market and is likely to remain in demand.

Name of Currency	Price 2010	Price 2015	Price 2020	Price 2021	Investment in 2010/15	Number of Bitcoin & value
Bitcoin	$0.08	$360	$28000	$42000	$100	1200=$50400000
Etherium	NA	$0.43	$753	$1393	$100	233=$324569

TABLE–A

Friends don’t you feel tempted to invest in this lucrative option despite being a risky proposition. To start with, let me put the various sentiments, both negative and positive about the future prospects of cryptocurrency in the words of leading businessmen/institutions to disseminate a fair idea before taking a dip in the crypto markets:

In the words of Warren Buffet, “I don’t have any Bitcoin. I don’t own any cryptocurrency, I never will,” he told CNBC in 2020. He has always been talking against this currency as these investments don’t follow the strictest terms of his legacy.

Photo by Pixabay on Pexels.com

Another negative news on the volatility witnessed over the last few days as the UK regulatory has been quoted as saying :

“Individuals investing in crypto-currencies such as Bitcoin should be prepared to lose all their money, a United Kingdom regulatory agency warned. The Financial Conduct Authority (FCA) issued the warning after a sharp run-up in price in the last few months and a sharp decline over the weekend..https://moneywise.com/a/why-warren-buffett-hates-bitcoin

Slowly but surely most countries are opening up to cryptocurrency. We have regulated crypto exchanges like Coinbase, Bitflyer, Binance, Kraken, Huobi Global, etc to conduct business and a country like India has also started doing unprecedented business as all Banks allow transactions linked with cryptocurrency nowadays. I am not talking about the trading part which requires relevant skills and professionalism before jumping into this most volatile and risky business. However, this is an opportunity for those having a big risk appetite to venture into this portfolio for investing for a longer horizon.

The big brains of highly accredited professionals working with the leading Banks and Financial Institutions have been talking of a great future for this cryptocurrency.

US investment bank JP Morgan has created a crypto-currency to help settle payments between clients in its wholesale payments business. JPM Coin is the first digital currency to be backed by a major US bank. The crypto-currency, which runs on blockchain technology, has been used successfully to move money between the bank and a client account.

http://www.bbc.com/news/business-47240760

To conclude, I would love to present a very encouraging statement from the CEO of Pay-pal:

“I really like Bitcoin. I own Bitcoins. It’s a store of value, a distributed ledger. It’s also a good investment vehicle if you have an appetite for risk. But it won’t be a currency until volatility slows down.” —David Marcus, CEO of Paypal

Friends, looking at the briefly explained pros and cons of investing in this very tricky, speculative, and turbulent crypto market, you can take an informed decision before taking a call to venture into this unpredictable market. Short term players with fragile financial backup and a tendency to exit or enter the market frequently are prone to greater risk and must avoid spending restless nights after investments. However, as illustrated above, customers with high risk appetite may spare a few thousand to initiate into this market to reap rich dividends in the longer run.

What do you think of holding crypto currency in your portfolio as an alternate opportunity for a long term investment?

Stay Safe Stay Connected

           
Disclaimer: The material and information contained on this website/Blog is for general purposes only. You should not rely upon the material or information on the website as a basis for making any business, legal or any other decisions. Any reliance you place on such material is strictly at your own risk and responsibility

Do You Know? Crypto Bitcoin Moved to Indian Markets

Free image: courtesy pixabay

Cryptocurrency or Bitcoin may be a atypical phraseology for an ordinary Indian citizen but you will be surprised to know that all the authorized exchanges in INDIA have recorded an extraordinary growth in the Cryptocurrency business since March 2020. Any conjecture amongst the investors or the Bankers has been removed by the Supreme court order dated 4th, March 2020, setting aside the circular issued by RBI in April 2018. Though no formal regulatory has been issued by the RBI for explicating the matter, the Banks/Customers/Exchanges have already started conducting the business.

There are pros and cons attributed to this unregulated currency but statements coming from the sources like Bill Gates creates confidence:

“Bitcoin is a technological tour de force.”– Bill Gates.

The founder of Microsoft has a great passion for this currency and already holds a considerable quantity of Bitcoins: https://tradingbeasts.com/featured/cryptocurrency-quotes/

There has been an unprecedented increase in business over the last few months in India. The previous eight months starting from March 2020 till date have witnessed the growth of cryptocurrency business in India by more than 600%. Reportedly, the Indian cryptocurrency business with a monthly turnover of more than 23 million dollars stands at number 2 in Asia and number 6 in the world. Mind-blowing?

Launched in 2009 by an unknown person using the alias Santoshi Nakamato, Bitcoin is the new paperless currency that doesn’t have control by the Govts or Banks. It is a digital currency and you can not touch it with your hand. You can buy anything from hotel booking to furniture through this currency.

ATM’s and other dispensing centers facilitate convenient use of cryptocurrency by the customers in many countries. You can use your smart phone or computer to send or receive money without involvement of any Bank. The technology has brought a revolution in the Financial markets with more and more institutions coming out to provide commercial services to their customers.

Free image courtesy: pixabay

With a limited possibility of mining maximum 21 million of Bitcoins, the persistent demand of Bitcoin results in high volatility in the market. The market data suggests 18.75 million Bitcoins are already in circulation as of today. Big institutional investors have been amassing this coin continuously as the price is gradually moving beyond the reach of retail investors. The price of one Bitcoin has scrambled up from 8000$ to 27000$ within 12 months. That makes one Bitcoin equal to 27000×78= Rs.2079000 (Twenty Lac and seventy-nine thousand). Isn’t it a huge amount for one unit of Bitcoin? However, you can buy a small fraction of Bitcoin also.

Unlike, the currency notes and coins minted and printed by the Governments in the closely guarded printed press, these cryptocurrency coins can be mined by the miners from the convenience of their bed rooms. Highly sophisticated computers are used by the experts through a complicated “Blockchain” process popularly known as Mining. This being a technical and labour intensive exercise requires immense concentration. Anybody sitting at home can mine this currency and earn a value of 6.25 BTC for creating one block. By any standards, Its a huge compensation!!

The cryptocurrency markets are in operation 24x7x365 as the blockchain technology has made this market very competitive now. There are more than 6000 coins trading in the markets through hundreds of authorized cryptocurrency exchanges. Every coin has its distinct value and utility. Some of the most popular and traded coins in the markets are indicated below:

1. Bitcoin: BTC:
2. Etherium: ETH
3. Bitcoin Cash: BCH
4. Ripple: XRP
5. Litecoin: LTC
6. Binance: BNB
7. Cardano: ADA
8. Polkadot: DOT
9. Bitcoin SV: BSV
10. Steller: XLM

Free image courtesy pixabay

There are still many countries that have not regulated this currency for valid reasons and genuine apprehensions. Being a parallel economy without any control of the Central Bank or the Governments, this may land in the hands of terrorists or antinational activists. They have their own perceptions of losing the entire control over the currency and its regulatory authority. Most of the countries don’t want this to happen in their own interests.

From India’s perspective, strange statistics forewarn about the pattern of investors investing or trading in cryptocurrencies. More than 50% of investors in the crypto currency markets in India have an annual income of less than 10 lac.

This being a very risky volatile market with turbulences occurring at regular intervals, you must ensure to be circumspect and discreet in handling the transactions. Any impulsive act can make your money vanish in seconds. You can not approach your Bank or RBI for complaining about any pecuniary loss perpetrated by the swindlers through fishing and other fraudulant modus operandi.

Friends, Stay Safe Stay Connected but keep reading

Disclaimer: The material and information contained on this website/Blog is for general purposes only. You should not rely upon the material or information on the website as a basis for making any business, legal or any other decisions. Any reliance you place on such material is strictly at your own risk and responsibility

Learn Investing. Stock Analysis and Be Your Own Advisor

Hi Friends, We all understand that a Retail INVESTOR can’t tabulate and analyze each and every relevant information about any company before opting to buy shares from the stock market. In fact, he is always prompted by his inner instinct to put his hard-earned money in the stock market after observing a few trading sessions or hearing some hot news about the company. Sometimes a tip from the so-called experts or friends may lure him to try his luck by investing in the recommended scrips. Statistics prove that such investors end up losing money which keeps them away from this most efficient high yielding investment avenue in the future.

The Truth:

(1)Less than 10% of investors earn money from the stock markets but those who do are long time investors earning big returns

(2) Most Demat accounts opened by customers turn inactive after carrying out a few transactions in India

(3) More than 75% of Demat accounts are inactive as per the SEBI guidelines in India. The only reason of these abnormal figures could be customers losing money during the early few trades forcing them to leave the market. Strange!!

THE FACT: Only those investors earn big who show resilience and continued confidence by remaining invested in the stock market for longer periods of time.

Extracting observations from the experiences of successful investors and utilising my personal sweet/sour/bitter encounters over the past few years, I have tried to come up with a visibly foolproof technique of venturing into the stock market by small-time investors. Hope this will not only mitigate the risk of losses but help in ensuring good returns by investing wisely. This is going to be a simple exercise that does not require any calculator or assistance from your financial advisor or experts. Great!!

Please grab a pen and a piece of paper to scribble down some personal information while sipping tea/coffee or a fresh lemon juice sitting in a cozy relaxed environment. Don’t worry!! It’s not that personal. Be comfortable!!

Can you take me through your day’s journey by writing down the products you have used today. I am sure the list of products will appear somewhat like below:

I have tried to reorganize the list of your daily use products from Breakfast to Dinner in four tables as exhibited above. Simple! There is nothing techincal about it. You will agree that these items are more or less the same which are used by everybody around you in your neighbourhood. Please have a close look at the names of companies manufacturing these products or providing services to their customers through a network of outlets spread across the country..

Now coming to the companies manufacturing these daily use products or providing services, you will appreciate that these are established brands and market leaders in their respective categories. They have established brand value, continued patronage from their customers, ever-increasing sales, persistent dividends, increase in value and, a great future. Don’t you feel safe and privileged to be associated with the names of these big market leaders?

I will prompt you to visit the screener.in website and see for yourself how encouraging the results must be about these companies over the past few years. Please click: https://www.screener.in/ to find out information about any listed company without spending even a penny.

Another look at the shareholding pattern will make you more enlightened with the following information: Yes! You can google this information easily:

1. Promoter’s Contribution
2. Contribution of MF/Financial Institutions
3. Pledge of Shares if any by the promoters

Promoter’s confidence in their own company can be gauged from the shareholding pattern. Companies with promoters contribution of 50% and above without any incident of pledging their shares are considered a good bet for investment.

Similarly, those companies where Mutual Funds/Financial Institutions have considerable stake stand to gain the confidence of retail investors. The Mutual Fund Companies and Financial Institutions consider buying shares of any company after thorough scrutiny and future potential by the highly paid and qualified analysts/fund managers. Your task is made easier by the professionals working with these Funds as they have the responsibilty for safety and regular growth of investments received from their investors.

Are you feeling confident now? Come on! have a deep breath and find out the crucial information about the companies as suggested in the foregoing para. Enlighten yourself by spending a few minutes on the data and come out with a glow on your face. I know you are feeling a lot more informed and convincing to take an informed decision.

I will not recommend for you to rush and grab these shares with whatever money you have in your Bank account. You need to plan your investments by identifying 5 companies initially. Start investing through SIP only. Set aside Rs10000/- every month and start investing through SIP at least for five years. However depending upon availability of funds, you can identify, a few more stocks for investment after a few months. The growth could be smaller as compared to the more risky portfolio of small and medium cap companies but the experience will make you richer and more assured to consider investing in these companies in the future also.

Friends! Please note that volatility is the inherent nature of stock markets all over the world. All securities being traded in the stock market tend to fluctuate many times during the day. In case you keep tracking the market movements every minute, there is every possibility of getting tempted to exit or enter the market at the wrong time. This habit can trap a retail investor in selling or buying shares accruing avoidable losses.

Proffer your investments a breathing space to grow!!!

Warning:: Don’t keep watching your portfolio every hour/every day

Friends, I have tried to be very honest and straight on the subject but there could be some information that you might have anticipated but left out inadvertently. Please let me know to cover it in my next effort.

Stay safe and keep reading

Financial Freedom Step wise Financial Planning, Savings,investments,wealth creation

Financial freedom!! A stage that culminates your long career into a happy relaxed retired life when you don’t have to work for your sustenance anymore. Your savings work for you to live your life happily as the wealth created by you over a span of 30 years starts generating a passive income. This could be, a regular flow of interest from Bank Deposits/ Dividends from the Stock market/Mutual Funds or Rent from the property you own. Looks interesting!! However, the fact remains that most people fall short of their targetted goals due to a lack of planning of their personal finances.

Financial freedom can easily be accomplished by managing your Personal Finances well. Sit down with a piece of paper and pen to scribble the details about your income and expenses at the end of every month. Find the difference between your income and expenses. Yes! This is your cash flow statement. You ought to know about your monthly income and expenses like your salary, Rent, Utilities, car expenses, Interest/Insurance, etc. A perusal of your monthly expenses will provide insight into the nature and relevance of each and every amount spent during the month. well!! You are already on your way to financial Freedom if your cash flow is positive. However, friends, if your expenses are more than your income then you need to sit down and find out where are you going wrong.

“Do not save what is left after spending, but spend what is left after saving.”- Warren Buffet

SOS:Income-Expenses= Negative. If you are spending more than your income, the cash flow is going to be negative indicating you are either using your credit cards or raising loans from your resources for making both ends meet regularly. You don’t appear to have control over the expenses and taking the liberty to spend more than what you are earning. Do you believe this is a happy situation in the long run? Certainly not!! You are destined to be doomed if you don’t check your Finances immediately. Let’s take a case of income expenses statement of Mr. A for Nov 2020:

November 2020: Income	Dr	Cr
salary		50000
Expenses Nov.2020
Utiilities	20000
Rent	15000
Car Loan	10000
Insurance/Petrol/Interest	12000
Cash Flow	57000	50000

Income-Expenses=Cash Flow::: 50000-57000=(-7000)

The above illustration reveals a negative cash flow of Rs.7000/- as the expenses happen to overshoot total income. Mr.A needs to check expenses or raise his income level to be more comfortable with his finances in the future. Now let’s have a look at the table, you will find that the chances of curtailing expenses are possible through Utilities/Rent only as other expenses are more or less of fixed nature. Mr. A will have to either shift to some alternate location where he could rent a house at lower rent or cut down his expenses on utilities to bring back his cash flow from negative to positive.

With a little bit harmonization in your expenses, you can see your life turning into bliss. This is how you need to manage your personal finances for achieving Financial Freedom. You must remember and need to pursue your goals with FIRE::

FIRE: Financially Independent Retire early:

Management and planning of Personal Finances warrant you to Become Financially Literate. There is nothing technical about it but continuous monitoring of your income and expenses will do the trick for you. Once your path is illuminated with the wisdom of Financial Literacy, you can be assured of attaining freedom sooner than expected. Incidentally such an important subject doesn’t find a place in the curriculum of school or college studies across the world. The sole purpose of education remains in producing Clerks/Engineers/Doctors only and no effort is made for equipping the students with tools for managing personal finances.

May the fault lies in our education system which never enlightens us on managing money matters. Normally every child looks up to his parents for all Financial decisions till he actually starts earning. The child never grows up to tackle financial matters independently. Moving from schooling to college degrees, he keeps improving his grades without ever being told about the intricacies of this very important subject of Personal Finance. Campus placement or getting a good job remains the only exciting factor in his mind

let us start with the expenses part which plays important role in budgeting your finances. Your instinct for spending more goes berserk on finding liquid easy access to money. You must understand that the credit cards and other avenues are designed to meet your emergent temporary requirements. The credit cards are meant for day to day bills only. No long term borrowings!! In no case payment of the credit card bill be made in part or with a minimum amount. Banks/Credit Card Companies play with your mindset always trying to tempt customers for making a minimum payment of bills. You feel temporarily relieved of the pressure by not making full payment of the credit card bill but this trap leads only to make you broke in the future as interest rates charged by the Credit cards companies on the unpaid balances are astronomical.

The balances keep accumulating and suddenly, you will find the credit card companies declining further usage as the limit has been exceeded due to the interest factor. I would recommend auto-debit of credit card bill linked with your Bank account

Let’s understand the two types of credit which you are using in your life. There is good credit and bad credit to name the two. Good credit provides you liquidity at a cheaper rate for the creation of appreciating assets, whereas bad credit will make you pay higher rates for the creation of assets decreasing in value. You need to buy/invest by using bank Loans/Finance Companies only when the asset created by such finance is of appreciating nature. Buy a house/Gold/Stocks or any other investment which is bound to increase in value, it’s a good borrowing.

However, if the asset is of diminishing nature like Car/TV/Costly Electronic gadgets/Furniture etc then you need to re-evaluate the project as rates on this credit are high and the value of items is bound to decrease in the future. This is certainly a bad credit. Since none of these articles are of emergent nature, you can plan and buy by saving from your monthly expenses

Which type of credit do you think will be better? The answer looks imminent when you find items purchased by good credit increasing in value every year and at the same time, the bad credit besides being costly helps only in adding articles getting depreciated in value over a period of time.

Now coming to Positive Cash Flow, You will find a certain amount in your Bank account after spending for expenses at the end of every month. These surpluses can be used for making extra payment for reducing your loan liabilities or investing in a phased manner to achieve life goals like child education/New House/Investments/Retirement Fund etc. . Why not start saving today with the howsoever small amount it may be. This beautiful proverb says it all: “Little drops of water make a mighty ocean”.

Nature teaches us a great lesson about the significance of small consistent efforts in our life but a steady stream of savings is required for achieving our life goals. Little by little, birds make beautiful nests and little by little small towns become big cities.

There is a need to evaluate your Balance Sheet at the end of each year. This will show whether you are on right track or not. The consistent increase in Net worth will pave way for making your life beautiful. There are only two ways to keep your net worth curve moving up: Firstly by increasing your Assets and secondly by decreasing your liabilities.

Liabilities		Assets
Car Loan	125000	Bank Balance	75000
Credit Card	50000	PF	60000
		Car	150000
		Mutual Funds	50000
Net Worth	160000
Total	335000	Total	335000

Assets-Liabilities= Net Worth:::(335000-175000=160000)-Mr B aged 30 years

You will see in the above illustration that Mr. B has a net worth of 160000/- and he is well on way to becoming financially independent. An increase in net worth every year indicates the wealth you are creating for yourself and the family for the future. Time to think about long term goals after allocating enough amount towards an emergency fund. Here is a live example of how the principle of compounding works for your consitent savings/investments to pave for a beautiful future.

Principal Value PV	Inflation Rate i	Time n	Future Value FV
50000	6%	30 years	FV=PV(1+6/100)n
			287175

Table(A)

Table (A) provides you the future value of Rs.50000/- after 30 years with 6% inflation.. You will agree that the value of money keeps decreasing every year. You can’t buy for Rs.100 the same stuff after one year which you are buying today. Similarly, the value of your salary/income will not be the same after 30 years. It will be decreased substantially. That means you need to earn more to keep pace with the rising prices after 30 years. Now please refer to the table below: You will find that your salary amount of 50000/- after 30 years at inflation rates of 6% will have to grow substantially and the calculation comes out to Rs. 287175. Does that mean you will have to earn Rs.287175/-pm after 30 years to live the same life which you are living today.> Agreed?

Principal Value PV	Interest rate i	Tenure n	Maturity Value MV
5000	10%	30 Years	MV=PV(1+10/100)n
			1.14 cr

Table (B)

For maintaining the same standard of living as you have been enjoying today, you need to earn Rs.287175 after 30 years but who will pay you this amount after your retirement. You will have to take care of yourself.

Friends,You need to accumulate huge funds which could generate a passive income of Rs.287175 per month, when you are retired and want to live a comfortable happy life. Table (B) as shown above will lead your way to achieve goals by investing wisely with consistent small savings. Average returns in stock markets range anywhere between 10 to 14 % annually and you can earn 10% on bonds/other safe investments also. Let us start investing Rs.5000/-PM expecting average return@10% being the lowest for 30 years You will be astonished to find the huge amount accumulated at the end of 30 years.

Just hold your breath and see the astonishing figures on your screen!!

Is it not interesting? You get an unbelievable amount of Rs.1.14cr on your retirement after 30 years. Is it not sufficient to provide you passive income of Rs.287175/- PM. This is how the compounding of savings works but you need to be consistent and prudent in choosing the right investment avenues.

Friends, I hope you liked my way of expressing financial freedom. I have not touched upon Emergency Fund or Mid Term Goals as these have been covered in my earlier blogs. Your feedback with critical comments is welcomed for making this blog worth gaining knowledge about Personal Finances

Happy Reading

Retirement:Anxious Moments

Some people have misconceptions about the basic facts of retirement and life thereafter. However, these misunderstandings can lead to the difference between a retirement you had wished for and a retirement you settled for. As the date of retirement draws closer in developing countries like India, anxiety is writ large on the faces of prospective retirees. Some unfinished work like children’s Education/Marriage or outstanding liabilities makes the life tough for those who did not plan their goals in advance.

Barring the employees working in Govt departments/PSU’s or a few other fortunate, who get Pension and family pension to live their retired life peacefully, we don’t find such privilege to the private sector workforce. Most of them working in unorganized private sector hardly get anything worth living after their retirement.

The ratio of Govt to Private sector employees is 100 to less than1.3 i.e 0.1% in India. Pension in the private sector is either not available or not enough for sustenance. These less privilleged ones have to fend for themselves or depend on their children.

Another section of people working in the orgnized private sector gets a few benefits like gratuity/PF etc. The lump-sum amount they receive as gratuity/PF doesn’t get enough interest or passive income and erosion of capital starts through regular withdrawals for meeting day to day expenses.

Let’s come to various misconceptions and lack of initiatives for planning a relaxed and happy retirement by the employees in India

Misconceptions: All Employees

1. Most people think that their children will support them in retirement. Apparently, Such expectations are not wrong as the traditional Indian societal structure imbibes this culture for centuries. But the time has gone when the whole family pooled its resources and helped themselves in living their life comfortably. The cost of education/lifestyle/medical/luxuries has skyrocketed these days. Parents are keener to ensure all-round growth of their kids and spend a lot on their education/sports/hobbies besides planning for their own retirement. Children are hardly left with any surplus money to feed their retired parents. However, there are a few fortunate who find a regular stream of support from their children
2. They believe that their near and dear ones will come to help in case of need. This again is a misconception as no one has the time or spare money to help others. Everybody is tight with his own budget
3. Many think to start a business after retirement forgetting that they lack the basic requirements of being a successful businessman. Different attitude and temperament is required for running a successful business. They have neither the experience nor the shockers to absorb losses which are eminent to happen in any business during the initial years of operations. There is every possibility of losing money. received as retiral benefits
4. Having seen the potential of stock markets and finding a few friends talking about shares, there is an urge to fall prey to earn easy money. The Stock market is not everybody’s cup of tea and speculative trading/investment on the recommendations of friends/ Youtube channel/News Channel/Internet will bring miseries only.
5. Although there are very few chances of getting a suitable job after retirement but some retiring people think that there are a lot of opportunities for experienced professionals in the market.

How Employees think about retirement:

1. They don’t anticipate the future financial needs like urgent medical attention
2. Ironically a few think of living in present never bothering for the future as if it is not going to happen
3. They are happy living comfortably on day to day expenses setting the stage for imminent discomforts in future
4. No long term planning when it was required
5. They contemplate renting out a part of their accommodation if need be. A very casual approach
6. They may sell a part of the equity of their house to meet emergent needs which again is an option hardly considered due to various constraints

What Employees should have done:

1. Should have Visualised plan how they would like to live a retired life
2. Reach out for help from friends and professionals to plan for various goals of life
3. They had three opportunities to initiate a retirement plan. First between 25 to 35 years, Secondly 35 to 45 years, Thirdly 46 yrs onwards. It is better to start late than never irrespective of income
4. They should have Insurance plans in place like Term Insurance which has a very low premium, Health Insurance to safeguard against medical urgencies, thirdly Income Protection plan
5. Think differently to explore passions and rebuild the relationship which they could not do while working for 40 years,
6. It’s good to think of settling first in life and then plan family but you need to plan in such a way that your kids complete their education and possibly get married before your retirement
7. All categories of employees must follow the Budget Rule 30:50:20 meticulously and start planning from the first salary.

What the Retiring Employees should do NOW:

1. with an advanced medical system and a healthy lifestyle, the life span has increased by a few years. There is every likelihood of living for more than 20 years after retirement. They should get a family floater medical insurance covering both husband and wife for a minimum of 10 lakh insurance cover which is essential to meet emergency medical conditions
2. They should not spend lavishly and must preserve the money received as retiral benefits. Invest wisely to earn some extra passive income
3. Firstly building their careers and then bringing up their families, most people remain preoccupied hardly finding time to keep in touch with their relatives/friends and other close relations. This is the time to revive those relations and participate in family get-togethers regularly.

Friends, Can you share any experiences on the subject as this particular scenario brings inconveniences for those who fail to plan their life goals well in advance

50/30/20 Budget Rule: Time to Change?

Senator Elizabeth Warren in her book “All Your Money” published in the year 2006 logilcally brought out a Plan popularly known as “50/30/20 Budget Rule” which is internationally acknowledged and accepted formula for Financial Planning . It is almost 15 years when she analysed the threshhold limit of Expenses and Savings prescribed to achieve the financial goals in one’s life.

With a complete changed scenereo over the last 15 years, scope of future expenses like Child Education,Retirement Fund,Emergency Fund and buying a house has made a sea change. Various faculties of higher education viz. IT/Medicine/MBA etc has become very costly. Gone are the days when future education was planned by the parents and kids would pursue on the dotted lines. The kids are more enlightened about planning of their own lives these days. Who knows which degree will they decide to pursue after ten years.

With commercialisation of sports, a few kids are crazy to pursue their career in sports which is again a very costly affair as the trained coaches/sports gears/diets demand a great commitment and heavy expenditure.

Similarly emergency fund equaling three months salary as suggested in the existing thumb rule does’nt appear sufficient to ward off the problems likely to happen in view of tough times like COVID-19

Recently, we have witnessed how the prevailing Pandemic conditions have subjected the whole world to unforeseen, unprecedented and unpleasant circumstances making the life uncomfortable not only for general public but also for the high paid individuals and businesses alike.

Accordingly with more emphasis on savings, a simple plan ie 30(Savings) /50(Living Expenses)/20(Wants and Desires) has been contemplated to provide more viable solution in such a way that you achieve all your life goals comfortably. Let’s discuss this new formula minutely as under:

It is very difficult to save after spending on household chores as suggested on various platforms including the book under reference. Before starting to spend anything out of your net income, you must reserve 30% upfront as Savings and use the balance i.e 70% for Living Expenses and Wants/Luxuries subsequently as under:

• Savings 30%: We need to allocate this fund under three categories: i) Emergency Fund 10%: life throws unexpected challenges sometimes when we lose our job/ business or face a medical emergency and there are not enough savings to confront these unforeseen circumstances. Create an emergency fund equivalent to at least 8 Months of Salary. Likelihood of getting any alternate employment in three months is remote and the family may find itself under great distress. This fund can be used during the uncertain times without resorting to easy high cost credit from Banks. ii) Child Education: As discussed herein above, increasing costs of education warrants to save 10% to afford higher education for your kids. You can utilise the corpus for upfront payment or as a margin for raising education loans for higher technical education overseas. This Fund will certainly help in fulfilling the dreams of kids who aspire to make their career in sports
• iii) Retirement and Home: With more health conscious society and quality of life, there is every possibility of living longer after retirement which require continued cash flows, You need to save at least 10% for accumulating corpus for retirement which could generate enough cash for living expenses.

• Living Expenses: 50%: These expenses pertain to day to day livelihood of the family. Groceries, Health Insurance, Insurance, Car EMI,Utilities,Rent/Mortgage are the major expenses required for your survival. As per the existing thumb rule this amount looks sufficient to enjoy a comfortable life.
• Wants/Luxuries 20%: We need to provide for Shopping/Dining out/Costly Electronic gadgets/Sports/Holidaying etc. Regular savings in this portfolio will help you to enjoy all worldly pleasures with ease without falling back on emergency fund. This Fund will also vindicate the saying”Dont compromise with your present for the sake of Good Future”

Contemplated Budget Rule

I would feel honoured to hear from my illustrious friends about viability of the proposed/contemplated Budget Rule and its applicability in normal as well as extraordinary times in one’s life. Your valuable suggestions will make this exercise worth consideration by the people who matter in studying the art of Financial Planning.

Personal Finance-1

As discussed earlier, Personal Finance is an exercise to plan your Finance so that you have enough money for your immediate Financial needs, savings for higher education of your children and planning for retirement. All Financial planners recommend for early action on your planning but I think this planning can be started at any stage of your life but sooner the better as the insurance premiums keep increasing with age and the gap between your current and retirement age keeps decreasing making it difficult for your money to grow enough .However you need to have resources to generate income to fulfill all these goals. It could be through your salary,business or any other regular stream of income. The art of managing your income, expenses and savings comes from within by becoming finacially literate which does’nt cost you much. A rough calculation on a small piece of paper willl be enough every month to provide you the much needed expertise in personal finance. Lets start from the first step:

1. Minimum Emergency Fund: You need to create this fund to overcome the unforeseen circumstances. You may be contemplating to leave the job and looking for better job options or there could be a slump in your business due to sudden defaults by the debtors/unfavourable market conditions. In such circumstances you can’t afford to stop living your life style, maintaining the social status, pursue education of your children and other routine expenses. To maintain a buffer, you need to have a minimum bank balance equivalent to 4 to 6 months of salary/income in your Bank account. This will provide you comfort level to search for the new job or to tide over the adverse market conditons. If you are drawing a monthly salary of 10000$, you need to maintain an emergency fund in your bank account to the tune of 40000$ to 60000$. You will agree that this cushion will not let you down when you are not getting regular salary/income
2. Insurance: Most of the planners rank this item at number four in priorty but I would prioritise to suggest obtaining of Life Insurance or Term Life Insurance Cover for the earning member of the family to safeguard against any future risk to life or permanent disability. There is no need to get LIC for all the members of your family. The total quantum of Life Insurance Cover should normally be 8 to 10 times of annual salary/income. For example if your salary is 100000$ per year then the total cover should be 800,000$ to 100,0000$. Fortunately the amount of insurance premium for a Term Life Insurance Cover is very small and it keeps increasing with the age. This amount is sufficient to ensure that your family does’nt feel the financial issues when you are not around and continuity of education of your children is guaranteed. Besides a Medical Insurance/Health Insurance cover needs to be taken for all the family members as the ever increasing medical/hospital bills can cause turbulance in the entire budget of the family and whole financial planning could be paralysed. I will prefer for a Medical Insurance coverage of 500000$ under a family floater scheme which does’nt cost you much and every member of the family is covered by a single policy.
3. Savings: Having covered the uncertain part of your life upfront, I will prefer you to save a minimum 25% of your Net income and keep aside to invest for creation of wealth. This investment will start earning for you and take care of all your sustenance expenses when you are not working after retirement. You can invest these funds in high yield Securities, Stocks, Real Estate, Mutual Funds as per your interest and opportunities available
4. Monthly Household and Life Style Expenses : This takes away the major piece of your cake as your Bills, School Fees,Grocery,Utilities, Car maintenance, Hotel Bills and Club Memberships consume maximum part of your budget. You can allocate 60% of total income under this expenditure. Though Credit cards make a second line of defence to meet the unexpected unplanned expenditure for buying a computer/Bike for the children but effort should be made to pay off the bills regularly and in no case the part payment ever be made for the credit card bill as the balance will attract a huge rate of interest. The Credit Card companies will keep coxing you for the minimum amount for obvious reasons Under all circumstances, the allocation of 60% should be used for payment of all bills including credit card bills

Hope to come back again tomorrow with further inputs but I will wait for your feedback and suggestions to make this exercise more interesting and simple.

Have a great day!!

Google Pay US users can now send money to users in India and Singapore

Google Pay users in the U.S. can now send money to GPay users in India and Singapore, Google said on Tuesday, making its first push into the …

Google Pay US users can now send money to users in India and Singapore

Looks an interesting development and Indian NRI’s may have the convenience of remitting money back home while sitting in their bed rooms.

Supreme Court rules balance sheets can amount to acknowledgment of debts under Section 18 of Limitation Act

Great relief for Bankers as they had to keep limitation live by running after the defaulters and defaulters used to avoid and evade signing the BC for wrong motives The Supreme Court on Thursday ruled that balance sheets can amount to acknowledgment of debt under Section 18 of the Limitation Act
— Read on www.barandbench.com/news/litigation/supreme-court-v-padmakumar-nclat-balance-sheet-acknowledgment-of-debt

New Tax Regime or The Old One??

This beautifully worded and very well explained blog from Etmoney may help many tax payers in India who are still not clear about the option they should exercise every year.

www.etmoney.com/blog/new-tax-regime-or-old-what-should-you-pick/.

PayPal Q4 Transaction Revenue Rose 11.8% in 1st Quarterly Report Since Adding Crypto

PayPal Q4 Transaction Revenue Rose 11.8% in 1st Quarterly Report Since Adding Crypto In the last quarter of 2020, PayPal acquired 16 million in web …. Crypto is going to be a darling currency for everyone to embrace in future?

PayPal Q4 Transaction Revenue Rose 11.8% in 1st Quarterly Report Since Adding Crypto

India’s Zetwerk raises $120 million to scale its B2B marketplace for manufacturing parts

When you want to buy a refrigerator or a television, you can walk to the nearby electronics store or visit an e-commerce website like Amazon. But …

India’s Zetwerk raises $120 million to scale its B2B marketplace for manufacturing parts