NPS to save additional tax

Be ready with your NPS account ! if your employer is convinced, you may start getting additional tax benefits.

http://economictimes.indiatimes.com/personal-finance/tax-savers/tax-news/you-can-save-additional-tax-through-nps/articleshow/11753274.cms


To know more about  NPS, click here

Single premium or yearly premium

" Term insurance policies" are the way to go for those who look for life insurance . If you are confused on whether it is better to opt for a single premium term policy over yearly premium , you must read the following post .

Also, do not forget to go through the comments on this blog post.

http://www.subramoney.com/2012/01/buying-term-insurance/

Know your priority!

Life is all about choices. When it comes to spending your hard earned money , its again about your choices.

Recently was having a conversation with a friend who was keen to loose weight. (He is above 30, weighs almost 90 kg and is 5 ft 6'. ). One of the options before him was to join a gym near his house. The gym charges Rs 1500 pm as membership fees. A cheaper option @ Rs 500 pm was available but a bit far from his home.

Now, the friend told that it was way beyond his limit to pay Rs 1500 Pm and he would better accumulate that money every month to buy a treadmill.

To give the financial profile of this person. He earns around 70 k a month , out of which 40 K is eaten up by the EMI ( house and car). He spends at least 3k a month on dining out and needless to say the remaining money is consumed by  other expenditure.

Recently he used his bonus money to furnish his house with a wooden cot and jazzy dining table ( both totalling to 100k ..yes one lakh).This person who pays at least Rs 25k/pm  in interest alone and Rs 3 k/pm in dining out thinks that they go into building assets ( house ,car and tummy :-)) and feels that 1500 per month is an unaffordable 'expenditure'.

Even after a long conversation, he stood to his point!. Life is all about choices we make.

Peeping into 2012

Here's an article which states that 2011 has been the second worst year for the Indian markets in last 14 years!.

Although ,such plain statistics do not matter a lot for the individual investors, the fact is 2008 has been the worst year. 2009 the best i.e the one which followed the worst. ( in the last 14 years,-I am not sure why 14 years were picked up)

So , what do you expect after the second worst year.. No predictions :-))

http://business-standard.com/india/news/2011-second-worst-for-investors-in-14-years/460101/

5 years , still no gains

Whenever someone asks , what do you think is a long time horizon from an investment perspective, my answer has been always, time span > 5 years.

Imagine some one who started 'investing for the long term' in 2007 ( that too buying stocks in one go , holding it for 5 years , they would  not be so happy now)- The so called long term  stocks bought in 2007  most probably would still be in RED.
Now, the questions that may arise are -Does investing in equity really work??. Even a fixed deposit would have helped increase your base amount by 80% before tax. Was it a mistake not to sell off in 2010 rally??. Doesn't it defeat the purpose of long term??

Even a good stock bought in a wrong time may chicken out for a long time and not yield good results. So. how to know whether it is a right timer to buy. Again, a question that cannot be answered so easily.

What's the way out?

1. SIP in Equity mutual fund spread over a greater span ( 36 to 60 months) can diminish the risk.

2. Buying a stock after solid analysis ( this is not fail proof , but helps avoid major glitches) and buying at a time when everyone is panicking .

Any day no.1 is the best option for a retail investor. Simple looking things at times can do wonders.