Tool Kit | wealthymatters

CIBIL and your CIR

April 3, 2011 8 Comments

Before a bank/other financial institute extends a loan to you,a potential borrower, it needs to take a decision on whether you would be able to repay the interest and principal or default and how much risk is involved in lending money to you.Banks rely on many factors to take this decision on your credit-worthiness – including your income and household income , your other loans and EMIs, your previous repayment history and defaults if any, etc.In the past, the banks had to collect all this information from you before analyzing it. But now, they have a readily available tool to make this decision simpler for them – your credit history in the form of your Credit Information Report (CIR).

In India, the Credit Information Report is created and maintained by a company called Credit Information Bureau (India) Limited, or CIBIL.The Credit Information Report is a compilation of your repayment history.CIBIL was promoted primarily by State bank of India (SBI) and HDFC. Now, most banks, financial institutions, non-banking financial companies, housing finance companies and credit card companies are its members, and regularly provide it with data about borrowers. Read more of this post

Filed under Paper Assets, Tool Kit Tagged with banks, CIBIL, CIBIL Report, CIR, credit history, Credit Information Bureau India Limited, Credit Information Report, credit-card companies, credit-worthiness, default risk, financial institutions, HDFC, Housing Development Finance Company, identity theft, loans, NBFCs, non-banking financial companies, postaday2011, RandomBlog2011, repayment history, SBI, State Bank Of India

Buffett’s 7 Filters

March 30, 2011 1 Comment

Anybody who has read anything about Warren Buffett knows he is superbly wealthy and has made all his money through his investment in stocks,that he is a value investor,that his favourite holding period is forever and that he loves his companies to have ‘big moats’.Following are a list of parameters that Buffett uses to evaluate companies.They are from the book ‘The Guru Investor’ by John P. Reese.Why not use these parameters to check out a company before buying its shares?

STABILITY OF EARNINGS:This can be checked by considering the earnings per share (EPS) for the past 10 years. EPS is derived from the residual profit left after payment of all expenses, taxes, depreciation, interest, preference dividends and belongs entirely to equity shareholders. A company should not have a negative EPS in the past 10 years. If the EPS is lower than that in the previous year, the dip should not be more than 45%.

DEBT TO EARNINGS RATIO: The second variable is the level of long-term debt to earnings ratio. Buffett likes conservatively financed companies. He prefers the long-term debt of a company to have been paid off from its net earnings in less than five years. This implies that the long-term debt to earnings ratio should be less than or equal to five.

RETURN ON EQUITY (ROE): The third variable measures how much money a company earns on its equity. The ratio is generally expressed as a percentage. For a company to figure on Buffett’s radar, its 10-year average ROE should be greater than or equal to 15%. Read more of this post

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Human Life Value Calculator

March 23, 2011 1 Comment

Wealthymatters.com In case of our demise we would all love to have provided well for our near and dear ones. A Human Life Value Calculator is a nice place to begin planning how to do so.A very enthusiastic insurance agent might tell you that various insurance products are the best way to provide for all these needs.This is strictly not so.Think if you want to provide for a child’s college education you do not need to buy an expensive children’s education plan but can for example use a plain term deposits.Here is a link to a fairly comprehensive Human Life Value Calculator: http://www.personalfn.com/tools-and-resources/financial-calculators/hlv-calculator.aspx .Remember to put in future values of the goals of your dependents.

Filed under Paper Assets, Theory, Tool Kit Tagged with Calculator, Children's education plan, future values, Goals, Human Life Value Calculator, Insurance, postaday2011, RandomBlog2011, term deposits

5 E-mail Tips for Newbie Entrepreneurs

March 11, 2011 6 Comments

Many entrepreneurs, especially first-timers take e-mail communication casually and in the process, hurt their own interests. Here are a few simple tips that will help show your business in a better light.

1.Stop using free e-mail for your business: If you want to be taken seriously, do yourself a favor :quit using free e-mail like yahoomail,g-mail,hotmail etc.for business.

Get your firm a domain name and use Google Apps or the services provided by your domain host to get a business-like e-mail ID.

Don’t be cheap here.Don’t go for free e-mail hosting.The inappropriate ads and security issues are bound to put- off a saint.

2.Make the subject line clear: Busy people want to allocate their time well. A clear title allows people to decide quickly on the importance and urgency of your e-mail.Avoid wasting other people’s time and they will think better of you.So take the time to write a good subject line.

3.Write actionable e-mails:There are two kind of emails. One that converts into actionable point , and the other that goes nowhere. Read more of this post

Filed under Entrepreneurship, Theory, Tool Kit Tagged with allocate time, domain name, e-mail communication, e-mail ID, e-mail tips, Entrepreneurship, free e-mail, free e-mail hosting, g-mail, Google Apps, hotmail, important urgent, newbie entrepreneurs, postaday2011, RandomBlog2011, read receipt, yahoomail

Life of a Solopreneur

March 10, 2011 Leave a comment

This post was originally posted here :http://www.pluggd.in/ekla-chalo-re-story-of-a-single-founder-solopreneur-297/.It gives a good idea of what it is like to be a solopreneur and do an Ekla Chalo Re.I like the idea of starting off immediately by onself without waiting for a perfect launch.After all, a lot of ventures fail but if you never start you can never fail much less succeed.Just contain the downside risk and maximize the upside potential and begin!But do read the story of Sumeet of Kreeo before you begin.

As an entrepreneur one must be focused on being successful whether as a team or single! What is most important is starting up and getting into execution mode rather than waiting for a perfect situation (team, funds, prototype, and customers). None of your dreams will come true if you just keep dreaming and planning. You can’t learn swimming without getting into water.

Coming to the dilemma of starting up as a team (one of the most important factor for getting funding also) or a single entrepreneur. I think it has no impact on the success of your venture. You will need a leadership team for sure but it’s not important to have it in place right from the start (VCs will tell you otherwise), a team can be formed as you move on (only if you don’t need VC money). Read more of this post