Posts tagged ‘Financial Planning’

January 2, 2012

Financial Resolution for the New Year

The new has already knocked the door and we are celebrating it like never before and we should do this. But while celebrating we should move to new year new approach towards our life, so is to our finances. We should ensure that we are having some realistic financial resolutions this year. Not some very big and artificial ones like previous years just to forget once more. Those who don’t have such habit of making a resolution and sticking to it forever should start with some easier ones.

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September 29, 2011

What is Rupee Cost Averaging

There are many investors who prefer to invest in lumpsum into an asset class and forget about it. And there so many investors who are not able to invest in an asset class at one go. So they do it by investing a fixed sum regularly.

When one invests in any asset in one go s/he buy the asset at prevailing price at that time. S/he is not get affected by price of asset at the buy price as her/his buying price is fixed. But one who invests a fixed sum regularly s/he buys assets at different prices.

In financial market there is always volatility. So price of assets changes. Some times the price increases and some times the prices falls. And an investor who keeps investing regularly is forced to buy the assets on the prevailing prices.

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September 28, 2011

Different Avenues of Investments

In the modern financial system there are so many investment avenues to choose from today in financial market and it has become difficult for anyone to decide about these avenues. Some of these investment avenues offer attractive returns but with high risks and some offer lower returns with very low risks. An overall analysis of these investment avenues with risk and return trade is presented in this article. These investment avenues are:

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September 27, 2011

Plan Your Retirement

One day everyone has to retire from the work. So it’s quite obvious that the capacity to earn will go down after the retirement or in maximum of cases, the earning capacity is often nil. But life does not stop after the retirement. It continues so the need for financial support is most sought after. After the retirement you need a secure source of money. “How will you have a secure source of income?” this is a question that often haunt everyone prior to retirement as well as after the retirement. The answer to this question is that it is you and your own money that works for you. To this end you need to get your finances and retirement planned. Always remember that there is no age criteria to start financial and retirement planning. But yes it is advisable that as early you start better and easier it is to achieve your financial and retirement goals.

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September 27, 2011

Power of Compounding

Wherever you invest your money- stocks, mutual funds, bonds, fixed dopiest, bank saving account or any combination of these, the reason behind this is to save money for future purpose and let them an opportunity to grow over the time. A long time period is given to investments with a purpose to provide opportunity of compounding. The power of compounding is such that it converts a few pennies into millions over the time. Because of power of compounding a small sum of money gets an unimaginable size given enough time. Compounding is main reason behind any investment. Compounding helps investments to grow bigger. Compounding is the king.

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September 27, 2011

Take Care of These Rules before You Invest

Investment is an activity that requires so many things ingrained from knowledge, skills, resources and experiences. But it is known to you that it can be done without any hush-hush by taking care of some basic things and rules. Those basic roles are as below:

  • Have an investment plan and goal in place before you make investments.
  • Don’t have over expectation from any investment. Never ever think that any investment is going to give you 10 times return in few months.
  • Learn to ride on the tide. This means try to cash market fluctuations grabbing right opportunity to earn some money.
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September 26, 2011

Get Out of Debt Trap

One often takes the route of debt to satisfy his/her needs when the needs are beyond his/her financial capacity. At that point of time s/he feels blessed but if this is not managed properly, this blessing turns out to be a curse and then s/he feels cheated and finds her/him caught in a trap of debts.

Various Forms of Debt

There are so many kinds of debt available in the market; formal as well as informal. You can borrow in such ways:

Credit Cards: These are the most risky debt available in the market. The cost of credit card loans ranges between 35%- 50% per annum. Use only when it is necessary.

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September 26, 2011

Introduction to Systematic Investment Plan

Systematic Investment Plan (SIP) is a simple, time-honored strategy designed to help investors accumulate wealth in a disciplined manner over the long period of time and plan a better future for them. This disciplined approach of investing provides with the following benefits:

  1. Power of Compounding
  2. Rupee Cost Averaging
  3. Convenience
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September 25, 2011

Make Tax Planning Part of Life

To meet your both ends meet you earn some money. Being part of the financial system and economy, the government levy a tax on you like it levy on everyone. So you have to pay some taxes. These taxes depend on how much do you earn. Like others you too don’t enjoy paying your hard-earned money to the government and wish to pay lower taxes to the government. You wish to bring down your effective tax rate lower. Is it possible to bring down the effective tax rate for you? Might be you know the answer too. My answer is yes. You can bring down your effective tax rate by proper tax planning.

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September 24, 2011

Various Types of Risks and Measurement

Market risk is the risk of adverse deviation of the mark–to–market value of the trading portfolio, due to market movements, during the period required to liquidate the transactions. In simple words the market risk can be defined as the risk that is associated with the investment in form of realized returns being different to the expected return. The period of liquidation is critical to assess such adverse deviations. If it is longer, so do the deviations from the current market value.

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