For Whom Wealth Matters
January 28, 2012 Leave a comment
Considering buying gold?Not beyond indulging in a bit of superstition?
The following are some of the days considered auspicious for gold purchases in 2012 according to the Hindu calendar. Read more of this post
January 25, 2012 5 Comments
Following is an excerpt from yesterday’s TOI.
A question that is frequently asked by the parents of young children is: How do we teach a child about the value of money and which is the right age to discuss the subject. The standard answer is that irrespective of their age, children today are already exposed to money-all the time, through media, through daily transactions with goods and services. Money is not just a currency of exchange, but an important factor underlying people’s lives, decisions, conversations and choices. Therefore, the child understands the power of money, says financial planner Gaurav Mashruwala. She or he starts believing that money can buy most things, especially given the onslaught of advertising. Most parents believe that exposure to money means discussing banking, investment, stocks, etc. However, money is about so much more-discipline, gratification, patience and value. In reality, there are four aspects of money-income, expenses, assets (investments) and liabilities (borrowing), says Mashruwala. A child needs to be exposed to all these aspects in a systematic manner. The right age to expose a child to money management is the day the child learns to spend money. Read more of this post
January 24, 2012 15 Comments
Philanthropy is of interest to me.But I have my own preferences when it comes to giving viz.:
1.When it comes to giving money I prefer to do it anonymously.When it comes to giving of skills I prefer to do it personally.
2.It is very important to me to in no way demean or belittle the recipient.
3.I want to empower people by my assistance,not cause dependency.
4.I dislike cold charity.
5.I dislike competitive giving.
6.I abhor hard selling by charities .
7.I dislike super exclusive philanthropic cliques.
8.I hate profiteering off the poor and self-serving , hypocritical philanthropy.
9.I would love to have the option to give as little or as much as I can or want without being judged.
Milaap and Rang De are my 2 new discoveries.I haven’t test driven them yet,But I promise I will blog about my experiences with them later.In the meanwhile you can find out more about these microfinance organizations from their respective websites here:http://www.milaap.org/ and http://www.rangde.org/ .In case you have wished for an Indian version of Kiva here is your chance to be a social investor.Rang De has been around for a while but Milaap is newer.So be warned and start with just what you won’t mind writing off as a mistake.I repeat I have not personally tested either site as yet.
January 22, 2012 Leave a comment
ELSS =Equity Linked Savings Scheme ,is a special category of mutual funds that invest predominantly in stocks. They are very comparable to diversified equity funds. The only differences between regular diversified equity funds and ELSSs are the 80C tax benefits on investments upto 1 lakh and the lock-in period of 3 years,incidentally the least among all 80C tax-saving avenues. It means that once you invest in an ELSS , you cannot withdraw your investment for a period of 3 yearsHowever,the DTC proposes to phase out the tax breaks on ELSS , so this avenue may be closed in the coming years.But, you can still invest in it this year and get tax breaks.
The best ELSSs have not done too badly during downturns and have given excellent returns in boom times.The reason has been the lock-in period. These funds have not suffered due to large scale redemptions when the market sentiments have tanked.Moreover, fund managers keep a portion of the mutual fund corpus, around 7-10%, as cash,even in good times, so that they can meet all redemption requests. This cash is invested in very short term debt investments, generating meager returns. This impacts the overall returns of the mutual.Since the fund manager of an ELSS knows that funds cannot be withdrawn for 3 years, he can invest all the funds in equities and keep less money as cash and provide good returns in the long term. Read more of this post
January 18, 2012 Leave a comment
For any drop in interest rates by 100 basis points, or 1%, very broadly you can see a capital appreciation of 5% on a 5-year bond, 7% on a 10-year bond and 10% on a 15-year bond.The higher the duration of the bond, the greater the capital appreciation.
Since bonds like NHAI and SBI come from the government, they track benchmark 10-year Gsec rates.The 10-year yield now stands at 8.25%. Suppose this were to drop by 100 basis points over the next one year, then it is possible that the NHAI 10-year bonds with a face value of Rs 10,000 could gain Rs 700 per bond and trade at Rs 10,700 and the 15-year bonds will trade at Rs 11,000. Thus for a 15-year bond, an investor could make a capital gain of Rs 1,000, or 10%.
However it is better to buy these bonds with an objective of holding till their maturity, and not merely for capital gains. This is because bond markets are not well developed in India and show very little activity. So, exiting many bonds could be a problem. Also there are very few products with a maturity of 10 to 15 years, hence the market prices may not reflect the true price.
wealthymatters 