Invest in Gold every week or month - Madurai Finance

Considering the cost of Gold and Silver (every precious metal) is increasing, it is not a good way to go and buy gold in bulk. I will not have ability to purchase gold in one shot for many sovereigns. Because that is going to be very costly.

Instead, here is a strategy to accumulate more gold at home, without any strain to your pocket or wallet or bank account.

1) Set a day in a week or a month for purchase of gold.
2) Fix a reliable Gold Jewellery shop.
3) Enquire the return policy of gold in the jewellery shop and make sure they take back gold for the market rate and no commission out of it.
4) Purchase gold or silver periodically like 1 gram to 2 gram to 4 grams every period - say week or month, depending upon your capability.
5) Remember to buy only gold coin for this purpose, which is only 3% making charge (lowest) and 1% VAT. Prefer to pay in cash, so that you don't get 1% more for Card purchase.
6) Say for example - you buy 4 grams of gold every month OR 1 gram every week - you end up with 6 sovereigns of GOLD at the end of the year.
7) Cultural point - we associate our daughters with gold for some reason. Hence, when the child gets born, and you start doing this activity of purchasing gold in denominations, you end up with 120 sovereigns of gold by 20 years of your daughter's age!
8) In this, you don't have to worry about Gold price going down or going up. Your cost gets averaged and you don't get disturbed by any ups and downs. Mental peace and also you get the asset of GOLD, which is never changing and always increasing ASSET.

Isn't that amazing?

Investment Planning Advice for Indian Middle Class

Investment Planning is the key to sucessful investing. It is a scientific process, which, if done in the right sprit, can help you acheive your financial goals. Here are the basic steps of Investment Planning

Step 1 : Identify your financial needs and goals

The starting point of a sound investment plan is to begin with a clear understanding of you financial needs and goals. Typically, any financial need or goal would translate into determining the tenure of your investment (investment horizon). All investment needs and goals can therefore be translated into short-term (less than 1 year), medium-term (more than 1 year) and long-term (more than 5 years). Here is an example of the financial goal of a typical household (a couple with two childrens).
Financial Goals Expected Cost (at today’s prices in Rs) Time Frame Investment Horizon
Son’s computer 0.5 Lakhs Next month Short-term
Daughter’s school admission 0.35 Lakhs 6 months Short-term
Vacation 0.5 Lakhs 1-2 years Medium-term
Buying a second car 5 Lakhs 2-3 years Medium-term
Son’s education 2 Lakhs 10-12 years Long-term
Daughter’s education 2 Lakhs 12-15 years Long-term
Retirement 20 Lakhs 20-25 years Long-term

Step 2 : Understanding investment choices

There are three basic investment categories: Equity, Debt and Cash. Any investment can be classified into one of these three categories, or asset classes. The key to investment success lies in understanding how each asset class performs over the various investment horizons, the choices within each category and the risks involved in making investment decisions in each of these choices.

Equity or Stocks are ownership shares investors buy in a corporation. When you make equity investments, you become part-owner (to the extent of your shareholding) of the company you have invested in. However, there is no particular rate of return indicated while investing. The current value of your holding is reflected in the price at which the stock/share is traded in the stock markets. Hence, these constitute a relatively riskier form of investment.

Debt instruments or Bonds are loans investors make to corporations or the government. They promise a fixed return at the time of making the investment. Also the promise of getting the money back is dependent on who is making the promise. In case of the Government, the promise will certainly get fulfilled, but if the issuer of debt is a company or an institution, the quality of the issuer needs to be adjudged, to ascertain its ability to keep the promise. Debt investments, therefore, provide you with the promise that your principal will be returned along with the interest payable thereon.

Cash includes money in bank savings accounts and other liquid investment options.

Asset Classes Instruments Risk
Cash Savings deposits in a bank, Liquid Mutual funds Low
Debt GOI Relief Bonds, Public Provident Fund, National Savings Certificate, Company Fixed Deposits, Debt-based Mutual funds ,Debentures/Bonds Low to Medium, depending on the type of issuer. In case the issuer is Govt, the risk of default is negligible
Equity Equity-based Mutual Funds Stocks/shares issued by various companies High

Step 3 : Decide an appropriate mix of various investment choices (Asset Allocation Plan)

Making an asset allocation plan is about determining the proportion of investments in each of the three basic asset classes. Essentially this depends upon your profile as an investor. Whatever stage of life you are at, you would need to invest part of your money for security and liquidity. A part of your investments should generate regular income and part of it should contribute to growth and capital appreciation. The proportion however, will vary based on individual goals, time horizons available to meet those goals and one's risk profile (the tolerance reaction to any down turn in the stock/debt markets).

The key to investment success lies in determining the appropriate mix of the above mentioned categories and not just the individual investments that are done within each category.

Automatic Millionaire

Automatic Millionare

I recently read a book called Automatic Millionaire. It was all truth and well experienced facts. I realize that is very easy to become a millionaire and it
is possible. It is not a one-night activity. If you want to become a millionaire in a day, then you need to inherit or you need to win a lottery... However your chance of becoming one that route is very less. Probability is very less to win a lottery.

But, there is definitely a slow and steady way for meeting our financial needs and dreams. To achieve our goals on the road and also live life happy during
our retirement.

Making the saving and investing AUTOMATIC is the key way and best way to become an automatic millionaire.

Here are some quick pointers for doing things automatic...

1) Pay yourself first: If you are going to wait for the left-over money for saving, after you pay your bills, it is going to be difficult to save.
You won't find money to save and you will keep worrying that there is no money for saving. and you will keep worrying that you are living paycheck-to-paycheck. You have to cut a check or make arrangements for automatic debit from your checking account, like a bill payment - for saving money.

That is the best way of limiting your spending and paying yourself for the hardwork you are doing.

2) Spend Less and Save More: Be conscious about what you are spending. This can be achieved by budgeting and becoming conscious about your long-term and short-term goals.

3) Make saving automatic: Have the money, even little money like $50 go automatically from your checking account to savings and investment accounts, without your knowledge. This will make sure you have less money to spend and this will set expectations very well.

4) Make the money do the magically compounded and grow your nest egg: Let the money work for you, while you work on some other things. If you make your money under your control and treat as a servant, he will be a best servant and work for you very hard. If you keep pushing in small amounts of money periodically and diversify the investments in appropriate accounts after proper research, you will have a huge nest egg, in your retirement times. That is going to be real financial freedom. We will talk about nest eggs later, but for now - this is the gist of becoming automatic millionaire.

Key points while investing and building financial portfolio...

Three things to be kept in mind, while planning for a financial portfolio and/or planning for a free financial future...

Three aspects are:
Liquidity
Safety and
Asset Allocation for wealth building

Liquidity:
This section is nothing but having liquid cash.
Anytime you need money, you can make use of this cash. In other words, this liquid cash is considered as Emergency or Contingent fund. We never know - there might be a medical emergency, there might be a car breakdown, or an immediate travel need etc., We never know we might need to travel and that might be a huge expense suddenly. Considering all these, we need to be ready for liquidity. Say around 3 to 6 months of the salary/expenses has to be in reserve. Count the number of dependants and multiply the number of months of expense you need to have in reserve. Say if there are 2 dependants, 6 months of expense would be suffice.

Safety:
If you dependants, you might want to make sure your deppendants are safe and sound, even after you expire. Even after you expire, your family should live happily and there should not be any shortcoming for them, except for your absence.

Have enough life insurance, to cover your loss.

Asset Allocation for wealth building:The third section is a huge one, and it itself is a big chapter.
Spend Less, Save More and Invest Diversified...that should be your goal, when you think about asset allocation. Equity Investment in early years, bonds and safe deposits in later years - that is your second statement rule in the asset allocation for wealth building.

Happy Investing...

Personal Finance: Every cent and dollar matters!!!

This article is about your personal finance.

Be aware of every cent which goes out of your pocket. Being aware of the money you have and where it is going gives you more idea, knowledge and awareness about the money you have. More awareness and knowledge gives more control and intelligence to you. It allows you to make important decisions without any problems.

It is very important you log and maintain the files either soft copy or as a ledger for your home itself. Your home has to be run like a business. Need to be aware of the income and expenditures. Need to log them periodically. Accounting is not a big deal.

It has very few parameters and it is very easy to manage in home. Personal finance is no big deal!! If you spend time and want to have control over your finance, you can do it!! We are no experts, but we can definitely help!

If you have any questions, please mail us!! Mail at mailto:info@newmadurai.org

Thank you

Madurai Money Advice

This quote is teaching lot of lessons -

The amount of money you have has got nothing to do with what you earn... People earning a million dollars a year can have no money and... People earning $35,000 a year can be quite well off. It's not what you earn, it's what you spend (save.)"

Paul Clitheroe

Money Saving Tips for everyone

Money saving tips for everyone - 1

Make sure your office and home/apartment is nearby.
Office should not be more than 10 minutes drive. This will help in couple of ways.

Time - You can save lot of time, if you reduce the commute time. People travel by train or by bus or by their own car or motorbike.
People commute from 10 minutes to 30 minutes to 1 hour and some people even 1.5 hours. Look for an apartment near the office. Do not live far away from office.

For any home need or personal work in home, you can manage by being close to the home and office. Lot of things could be managed, even if you are in office.
You can drive to home and achieve it.

Money - You could lot of money - commute cost - could be gas/petrol/diesel price. Or it could be the bus/train fares.

How to become RICH and build wealth!!!

All about investment, financial planning, mutual funds, stocks, shares

Contrary to popular belief, building wealth doesn't necessarily require a large inheritance or an unexpected windfall. What it takes is planning, perseverance and good investing habits. The following time-tested financial plan strategies may help put you on the road to building your own wealth.

Use SYSTEMATIC INVESTMENT PLAN to see the potential benefits.

Have a financial goal
Spend time planning your financial future and know what you're working towards. Set clearly defined weekly, monthly, yearly and lifelong goals. Whether it's owning your own home or early retirement, you have to know where you're going if you want to get there.

Evaluate your financial goals regularly
While establishing your goals is an important step, regular evaluation of them is also critical. Just as your life changes over time, so too will your goals and objectives. Marriage, the birth of a child or even a job change are just a few of the events that may require you to revisit your goals and the investment strategies that may help you achieve them.

Spend less than you earn
Living below your means is one sure way to have the money you need to save and invest. Get into the habit of spending less than you earn and paying yourself first through a systematic investment plan. This way the money is invested before you have a chance to spend it.

Minimize your debt
Every dollar you spend paying interest on debt is money lost. Even a 10% return on investments isn't going to amount to much if you are paying 18% in interest charges. Instead, consolidate any debt you have to one credit card. By setting a target date and establishing a regular payment amount, you can reduce your debt and eliminate unnecessary interest expenses.

Invest early, wisely, often and as much as you can afford
Even a small amount of money invested wisely has the potential to grow into a big return over time. This is because investing early allows you to take advantage of the power of compounding gains.

Seek out the professional guidance you need
Developing and maintaining an efficient investment strategy takes time, knowledge and resources — a combination that is not easy to come by. Your financial advisor is there to provide the professional, objective guidance you need to create a plan that addresses your investment needs and can be changed as your life does. Taking advantage of this expertise is a critical step in helping you realize your goals.

Personal Finance: Emergency Fund

Always be sure to make and keep an emergency fund of Three Month Salary in a safe savings account. This money has to be reachable and we should be able to take it out anytime you want.

If the emergency fund is not a three month salary, at least you should have the expenses needed for three months and to support the family and the money to pay your credit cards in this period of time.

If you don't have emergency funds, your credit cards will suffer and it will lead to severe credit card debts.

If you are a family man, with your non-earning wife and dependant child/children, then definitely emergency fund is needed.

Personal Finance: Control your expenses

There are various ways you can save and increase your personal cash flow.
Controlling your expenses is one way of increasing your earnings.

Maybe you can't control your spending when you walk into an electronics store - or maybe you always have to have an extra pair of shoes and get tempted to buy the extra pair of shoes, even though you have three pairs already. It is all about controlling your senses, documentation and clarity in thought.

If we have sat down and calculated in our excel sheets about how much money is coming in and how much money is going out and what is the cash flow and what is my earning potential, then we won't do the mistake of buying something which is not needed or which is not affordable, considering the money we have in hand.

Madurai Personal Finance: Set Financial Goals

In the back of your mind, you know you'd like to retire, save some money for your kids' educations, go on a vacation or two and do a few other things. But writing these plans down can help give clarity to those goals. Keep these goals handy, so when you're tempted to spend, you can decide if it's really worth the trade-off.

The financial goals might be:
College studies for children
Marriage arrangement for children
House or Land Buying
When to retire
Medical Expenses for you and spouse
Buying a movable or immovable property
Starting a small businessetc.,

Be sure to list down your financial goals and stick to it.

INSURANCE, INVESTING, MUTUAL FUNDS, STOCKS and SHARES, SMALL BUSINESS, 401K, Provident Fund, NSC, NSS, KVP, Savings, Certificate of Deposit, Real Estate investment