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Designing Your Retirement


wealthymattersI think it a pity that so many Indians are so worried about retirement Link. For a few years now, I could have simply decided to quit all work and live off the income from my assets . It’s a different matter that I choose to work . I find personally meaningful work, one of the biggest sources of pleasure in my life.

Perhaps my approach of planning and providing for retirement will help many more people quit worrying about  it. So here it is :

1.First ask yourself if you wish to ever fully retire. When ?

2.Then ask yourself where you wish to live upon retirement ? Or would you really prefer to live a gypsy’s existence, going wherever your fancy takes you.

3.What are the plans, wishes and expectations of the rest of your family ,even as you retire ?What do you think of these claims ?How would accommodating their needs modify your plans? Read more of this post

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Recurring Deposits


wealthymatters.comA Recurring Deposit(RD) is a type of term deposit account opened by a person/persons with a bank or a post office wherein the investor or investors deposit a fixed amount of money every month for a fixed tenure . This scheme is meant for investors who want to deposit a fixed amount every month, in order to get a lump sum at the end of the tenure. The interest on RDs normally offered by banks is one percent below Fixed  Deposit(FD) rates compounded quarterly.Often there is nothing extra by way of  interest offered for senior citizens.Otherwise the rules for operating a RD account are the same as that for a FD account.The PO offers a fixed 7.5% interest compounded quarterly for a 5 year term.

RDs are great for people to develop the savings habit.It is especially useful to teach kids to save especially the Post Office Recurring Deposit (PORD) which has a minimum deposit of 10 rupees per month.Often banks package RDs as schemes to become or to make your child a lakhpati,millionaire etc or as schemes to build the down-payment on a house or vehicle.  Read more of this post

Economic Life,Sinking Funds,Amortization and RDs


wealthymatters.comHaving an abundance of material resources and never having to hustle round in the last-minute to find the funds to do what we want to do is a good indicator of wealth.

I first came across the concepts of economic life,sinking fund and amortization as an engineering student.Adapted to our personal finances and business these concepts help us to always have enough money at the right time.

Economic life , a.k.a useful life is the period of actual usefulness of an asset.Beyond this period it is cheaper to replace or scrap the asset than to continue maintaining it.

A sinking fund is a reserve created by periodically setting aside certain sums in an account to replace  an asset in future or to repay a liability.

Amortization refers to spreading an asset’s replacement cost over it’s economic/useful life. Read more of this post

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