The New Case For FDs

wealthymattersYou can’t run a shop without cash in the till. And in the same way you can’t get through life smoothly without a certain cushion of readily accessible cash that you can dip into as per your need. For quite a while now, readily accessible money meant various types of bank accounts, stocks and mutual funds that you could cash in fast whenever needed even as they continued to grow quietly in the background.

However, this year’s budget has changed the situation a bit on account of the 2 quotes below:

The return on investment in equity is already quite attractive even without tax exemption. There is therefore a strong case for bringing long term capital gains from listed equities in the tax net. However, recognising the fact that vibrant equity market is essential for economic growth, I propose only a modest change in the present regime. I propose to tax such long term capital gains exceeding Rs1 lakh at the rate of 10% without allowing the benefit of any indexation. Read more of this post

Three Stories on Why You Need a Plan #KhudKoKarBuland

Here is the story of 3 wealthymatters readers. Real names are not revealed to respect their privacy.

The first is the case of a young man in IT. His goal was to be “financially free” ASAP. His strategy was to get himself sent over to Europe by his company and leverage his increased salary to book 2 houses in India and pay EMIs on them. Unfortunately his company fell on hard times and his Europe sojourn was cut short. In fact even his old job back in India was in danger. And neither property had appreciated much in the interval.

The second is that of a young man who made a good diving as an engineer working in oil rigs round the world. Money came easily along with a sense of adventure. He believed in living it up while he was still young.He thought retirement was far away. Unfortunately he met with a accident and had to spend much time in hospital. He never fully recovered and is having to try and set himself up in another career. Read more of this post

Believe It Or Not – 8% !!!!

wealthymattersAccording to a joint report by Ficci and the World Gold Council, an Indian household spends 8% of its daily consumption on gold jewellery and coins, only marginally behind medical expenses and education.

Glad To Be Wrong!


Our government might have had its problems with Duvvuri Subbarao refusing to pump money into the system on demand,but I personally felt he didn’t attack the inflation problem in the country vigorously enough.So when I heard of the government’s decision to appoint a new RBI governor to replace him,I was like…….hmmmm,new guy brought in to toe the government’s line,somebody who when told to jump would ask “How High?”…….The rock star like  coverage of his appointment,in even the pink papers,made me even more cynical.”Stage-Managed”,”Command-Performance”were the sort of words that came to mind.And I tuned out whatever Raghuram Rajan had to say.

I am pleasantly surprised about his concern for savers,liquidity and inflation.And I am eagerly awaiting his Inflation Indexed Savings Certificate based on the CPI New Index.

In this case I am glad to be wrong!Here’s hoping Raghuram Rajan remains true to the anti-inflation tradition of the Chicago School of economics


What Americans Consider Rich


wealthymatters.comMany Indians who haven’t been abroad,tend to multiply foreign salaries by the exchange rate, compare them with Indian ones and get suckered into various job offers.However,what is rich and what is wealthy is really relative.It depends on where in the world a person  comes from and exactly how well off or not so well off the person might be in his/her own society.

Here are some figures of what Americans in general consider Rich and Wealthy in America.They are sourced from the results of the Gallup Poll reported here:

The table below shows what percentage of Americans consider how much a year as being rich : Read more of this post

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