wealthymatters

Inflation Targeting

February 14, 2014 Leave a comment

wealthymatters When printing presses started making currency notes, there was trouble. It was too easy to be irresponsible, and print too much “fiat money”.Every currency needs a “nominal anchor”: something that pins fiat money down to reality. There are exactly three choices for this nominal anchor: gold, a foreign currency like the dollar, or the consumer price index (CPI) basket of goods.

The gold standard — where the US dollar was pegged to 35 ounces of gold — fell apart in 1973. Since then, the world has been looking for a new nominal anchor. Pegging to a foreign currency works well in some places, e.g., for Hong Kong. But pegging the Indian rupee to the US dollar is not a viable option, as this is tantamount to handing over the Indian monetary policy to the US Federal Reserve. This is inappropriate as the Indian business cycle is quite different from the US’. Read more of this post

Filed under Theory Tagged with consumer price index (CPI), external sector crises, fiat currency, forward guidance, Inflation Targeting, macroeconomic stability, nominal anchor, Paul Volcker, Pegging to a foreign currency, postaday, quantitative easing, quantitative easing (QE), The gold standard, US Federal Reserve

Thumb Rules For Cement Stocks

February 14, 2014 Leave a comment

wealthymatters

The growth in cement demand is usually 1.28 times the GDP growth rate in India.

ACCs average EBIDTA/tonne is Rs 727

Filed under Paper Assets Tagged with cement stocks, postaday

Looking For A Jobby Job

February 14, 2014 Leave a comment

wealthymatters This link takes you to available jobs in India.

If you have been reading my blog for a while you have probably come across the term the Cash Flow Quadrant,else just use the search box at the top of the blog to catch up.If you wish to become wealthy,it helps to have multiple incomes,especially business incomes,to fund investments that put out passive incomes.

The general idea is that our time,energy and attention spans are limited.So instead of working at a job to earn money,it is better to build little money making machines,ie sources of largely passive income,so that we can manage to make money and accumulate wealth without much daily effort.Hence my focus on entrepreneurship and investing in this blog.Even if you are employed full-time,do acquire a part-time business to increase your income and as insurance against the perils of job loss.

So if we are all to be entrepreneurs,ie self-employed or better still employers of other employees why this post on looking for a job? Read more of this post

Filed under Tool Kit Tagged with available jobs in India, business income, Cash Flow Quadrant, employed full-time, job loss, jobby job, money making machine, multiple income, passive income, postaday, self employed, why get a job

Excellence Is A Habit

February 12, 2014 Leave a comment

wealthymatters

Filed under Tidbits Tagged with Aristotle quote, postaday

Donating To A Political Party – Section 80GGC

February 11, 2014 Leave a comment

wealthymatters The entire amount donated by an individual to a recognized political party is allowed as deduction under Section 80GGC of the Income-Tax Act while computing gross total income.

The donation should be made to a political party registered under Section 29A of the Representation of the People Act to avail of this deduction.

With effect from FY14, cash donations to political parties don’t qualify for tax reliefs. So take care to make the payment through banking channels — cheques, demand drafts, credit or debit cards and internet banking — if you are planning to claim tax deductions.

This exemption is part of Chapter VI-A deductions. And under the law, the total deductions under Chapter VI-A cannot exceed the gross income. Other benefits under Chapter VI-A deductions include tax-saving investments under Section 80C, health insurance premium under Section 80D and interest on education loan under Section 80E, among others. These can be claimed against your income from salary and house, but not all sources of income. The Chapter VI-A deductions cannot be claimed against incomes taxed at special rates, such as long-term capital gains, short-term capital gains which are taxed at 15% under Section 111A and winning lotteries or games, which are taxed at a flat rate of 30%.

Also, most employers usually don’t factor in such donations in employees’ investment declarations and Form 16. So, while your tax-saving investments under Section 80C are taken into account to calculate your tax , exemptions related to donations don’t receive a similar treatment.Employees have to claim a refund at the time of filing their income tax returns.