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Knowledge Doesn’t Mean Skill

wealthymattersDo you remember the story of Grace Groner?If you don’t or are coming in late,here’s the story:Link.

Now compare her story with that of Richard Fuscone. He attended Dartmouth and earned an MBA from the University of Chicago. Rising through the ranks of high finance, Fuscone became Executive Chairman of the Americas at Merrill Lynch. Crain’s once included Fuscone in a “40 under 40″ list of successful businesspeople. He retired in 2000 to “pursue personal, charitable interests.” Former Merrill CEO David Komansky praised Fuscone’s “business savvy, leadership skills, sound judgment and personal integrity.”But Fuscone filed for bankruptcy in 2010 — the same year Groner’s fortune was revealed — fighting to prevent foreclosure of his 18,471-square-foot, 11-bathroom, two-pool, two-elevator, seven-car-garage New York mansion. This was after selling another home in Palm Beach following a separate foreclosure. “My background is in the financial-services industry and I have been personally devastated by the financial crisis,” Fuscone’s bankruptcy filing allegedly stated. “I currently have no income.” Read more of this post

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Ultimate Secret Of Stock Trading

What Is The Ultimate Secret Of Stock Trading?

Bhav Bhagwan Hai

Real Estate Investment Trusts = REIT

wealthymattersA REIT can be set up by a real estate developer or a private equity fund by pooling together rental real estate assets -office buildings, malls, warehouses -into a trust.

A REIT issues units that are traded like a mutual fund unit on any exchange that it is listed on.Like shares represented ownership in a company, a unit of REIT represents ownership of a pool of rent producing real estate assets, or of a company owning a real estate project.
Capital market regulator Sebi will shortly announce final guidelines for REITs.

So what does this mean to retail investors?Investments in REITs will be backed by assets, so they will be ideal for retail investors who want to get a piece of Indian real estate but without the hassles of property titles and other regulatory risks.

And how will REITS help real estate companies?
REITs will provide an exit option to real estate developers and to funds that own a stake in income-producing assets across India. It will provide builders a cheaper source of capital and the muchneeded liquidity to those who are highly leveraged. It will also reduce the exposure and risk assumed by the Indian banking system in the real estate sector.

Market regulator Sebi had notified the regulations for REITs last year, but there was lack of clarity on tax benefits for the new product from the govt’s side.There was a concern over double taxation of REITs.The finance minister,Arun Jaitley, announced in this budget that REITs will have pass through in relation to income from the project, which will eliminate multiple taxation.So.now REITs are likely to take off.

Shopping With Zoutons

wealthymattersThe first rule of being a smart shopper is to buy only what you really need and not let others convince you that you need something more.This basically boils down to avoiding impulse shopping.

The second rule is to wait for sale season and/or look for discounts or bargain for one.Smart shoppers  instinctively work in the value of their time,the inconvenience of waiting for sales,the extra effort  and the costs involved in chasing down bargains, to know when to stop.

Another way to get better value you your money is to negotiate payment terms and modes of payment.Both you and the seller value money now rather than later.And the seller is bound to be interested in receiving payment in a way that involves least transaction costs. Read more of this post

Risks Of Dealing With Co-operative Banks

wealthymattersCo-operative banks sometimes offer higher interests on FDs than PSU banks.This makes their deposits interesting when inflation remains high and investors are trying to grab the last paisa in returns.Moreover,when these banks are scheduled(Link),they offer the comfort of RBI supervision and deposit insurance.

However,parking your money in these banks,still carries a measure of risk,as can be seen in the Kapol bank case.Link.The money in your FDs might not be available as and when you need it.

Often the RBI merges weak cooperative banks with stronger ones.In such cases restrictions are imposed on transactions by the customers of the weak bank,to ensure that this weak bank doesn’t collapse.This can be a source of hardship,if you need to access your money urgently.

So always park only a part pf your corpus in any one co-operative bank.Also remember that the RBI makes allowances in case of real distress,but you will have to make your case before top management and wait for them to exercise their discretion.


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