Tendulkar's Principles apply in investing - Consistency and discipline

"Dream Big and try consistently to get it" that's what the great Sachin Tendulkar says.And same thing applies to your financial goals too. I have a big dream to become a crorepati. And I am sure; you too must be nursing the same ambition.

Ok. Now that you and I have a dream we better get up and start working towards it. We have to figure out the shortest and the surest way to become a crorepati. A few ways, of course, are: 

1. Winning a lottery
2. Winning the KBC show
3. Getting it in inheritance
4. Saving and investing with a plan that can get you there

Unless I am really lucky or extra-ordinarily talented my chances of becoming rich are slim by the first three ways. The fourth way seems to me like something that we can do to achieve our goal.

  

I want to become a crorepati in 10 years

 Time is running out on you. Though 10 years is not a long duration, it is not too short either. So your dream can still be achievable.

Gold: Mr Dependable in Crisis!!

Invest in gold as it has edge over equities: Investment in gold works both in hedge market fluctuation and inflation. Gold prices are less volatile than equities and gold gives a good return even in falling markets. Gold can be bought in physical form or in the form of ETFs (Exchange Traded Funds). It is easier to buy, hold and sell gold in ETF form. In case you don’t have a demat account, then gold funds are also available like other mutual fund units through SIP. Investment in gold is tax efficient too. As there is no income during the holding period, the tax liability is nil. You can also take a loan against gold as security for temporary needs at a reasonable rate of interest within minutes. If you need to sell, then the long term capital gain tax rates are also lower than normal rates. Moreover the cost of purchase gets increased by inflation index. Thus zero tax liability in holding while your money is appreciating more than the rate of interest or inflation in general and lower tax liability in case of sale also – that’s the advantage of buying Gold. Buy gold for long term needs, happiness and security. Buying gold coins from banks or MMTC at a premium from market price does not help. You may not be able to sell it at a premium too – your sale might be below the market price. Hence buying in ETF form is best or buy jewellery, to make your loved ones happy.

Source-taxplanner

How to calculate your life insurance coverage???

All of us know that life cover is the first step to financial planning, but the right quantum of life cover is something that seems to elude most. The calculation of Human Life Value (HLV) helps avail the right amount of cover. The right assessment of life risk and sufficient life cover is something we owe to our near and dear ones who depend on us for financial support.

Read more...

http://www.rediff.com/getahead/slide-show/slide-show-1-money-how-to-calculate-your-life-insurance-coverage/20111104.htm

Anil Rego

CEO, Right Horizons

Go High with Corporate Bonds!!!!!!!

Many companies use two ways to raise the money required for business growth. The way in which they do this is through issuing shares or issuing bonds. With shares you become a part owner of the company but with bonds you become a lender to the company. Corporate bonds are one of the main ways for them to raise capital. The question arises: just how safe are corporate bonds?

As with all bonds, corporate bond prices are sensitive to universal fluctuations in interest rates. CARE, Crisil or Fitch rate most bonds. Any with a rating of B B B or higher are considered to be investment grade. Those rated lower would be considered as a “junk bond.” The higher the rating the lower the rate of return the issuer can offer. While an investment-grade corporate bond may still default you can be more confident in its ability to repay its debt.

At the end of the day corporate bonds are only as safe as the company in which you invest. Read annual reports to learn about the company’s cash reserves, their outstanding debt and profit projections. Look for realistic responses to economic changes.

Benefits of Investing in Corporate Fixed Deposit

• Fixed Return on investment

• Relatively Safe return on Investment

• No Income Tax is deducted at source if the interest income is up to Rs 5,000 in one financial year. Investment can be spread in more than one company, so that interest from one company does not exceed Rs. 5,000.

SIP v/s Lump Sum Investment...Which one is better????

Betal : Systematic investment plan (SIP) or lump sum investment is the million dollar question! especially, in recent times when the stock markets move up by 500 points in one week and crash by another 500 points in the very next week.

King Vikram: Consider this: If Rs5000 was invested every month through an SIP in HDFC Equity Fund (HEF) since 1 January 2008, when equity markets were skyrocketing before it tanked, you would have got a return of 39.22% by end-2010. However, if you had invested the entire Rs1.80 lakh as a lump sum, you would have earned just 10.80%. A similar SIP, however, started on 15 March 2009 when markets started to rise, would have yielded 43% till date compared with 69% if you had invested the entire amount as a lump sum. We compared SIP and lump sum returns for a couple of large-cap-oriented equity funds, HEF and Templeton India Growth Fund, and a mid-cap-oriented fund, IDFC Premier Equity Fund, over the past five years and the difference in returns were negligible.

Analysis-: In rising market lump sum investment wins but in volatile market SIP is better in all the aspects.

As an investor you always look forward to investing in an asset class that would maximize your returns and history shows that equities as an asset have been most rewarding. Investing in equities isn’t a cakewalk though. It requires a lot of patience and research to build a fortune with equities. We at Right Horizons, through the Systematic Investment plan {SIP] make it possible for you to benefit from investing in equities.