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Caution 20/80 Home Loan Schemes

September 4, 2013 3 Comments

Real estate companies have been offering schemes called 20:80 and 25:75 where the builder agrees to pay interest on the borrower’s loan for a specific period. The buyer pays 20% upfront and the bank disburses the entire loan to the builder through the individual. The builder finances the construction of the project with the money, and agrees to pay interest on behalf of the borrower to the bank.

Banks such as ICICI Bank ,HDFC Bank and Axis Bank have been lending under these schemes in the hope of increasing the pace of home loan disbursement. Read more of this post

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Investing in NCDs

July 4, 2011 4 Comments

A non-convertible debenture is a fixed income instrument where the issuer agrees to pay a fixed rate of interest to the investor. An NCD cannot be converted into equity of the issuing company unlike convertible debentures.NCDs are good substitutes for fixed deposits,especially company deposits.

Debentures are of two types secured and unsecured. The debentures with a “charge” on the assets of the issuer are called secured debentures. So in case of a default by the issuer, the secured debenture holders are paid by selling the assets against which the charge was created. Secured NCDs offer lower interest than their unsecured counterparts. Read more of this post

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Edward Zajac – 94 year old investor

June 25, 2011 1 Comment

This is a story I came across in the Economic Times.It seems to be a reprint from Bloomberg.I have this story pinned to my notice board just to remind me how Dumb Money can become Smart Money.Here is a person who seems to have made good money without trying to become an expert at investing.He has accepted his lack of expertise and found a way to benefit from the expertise of the “smart money”.His method involves just looking at some basic facts before putting his money in a company.The skills required are really basic.The rest of his magic merely seems to be a result of compounding due to his Time in the Market and the wisdom that comes from experience.To follow him we don’t need to understand financial statements or master technical analysis.

Buy & hold strategy not dead yet for 94-year-old investor

NEW YORK: Stick with stocks, says investor Edward Zajac. He should know. The 94-year-old has been trading for 72 years and said he’s made about $2.5 million.

“I am a live, open-hearted investor,” said Zajac. “I’m willing to hold that stock 5, 10 years, if I have to.” Zajac, who lives with his daughter in Henderson, Nevada, bought his first stock, Petroleum & Resources, in 1937 while attending the University of Illinois. He’s invested full-time since 1968, after retiring from installing computer systems to travel the US in a recreational vehicle with his wife. Read more of this post