ThePfblog help you to manage your money efficiently.

This blog has wide variety of articles on savings, financial planning, money management, investing, protection, debt management etc... Happy reading. Find out more...

Following are the some of the Advantages of this blog :-

  • This blog easily accessible and read through FB, LinkedIN, Google+, RSS etc..
  • You can use the subcribe box to get fresh articles to your mailbox directly.
  • You can use the 'Connect with us" button to access the articles at your convenience
  • To choose any article instantly, visit the archives...

December 14, 2016

// // Leave a Comment

The Great Indian Cash Crunch

Demonetization of 500 and 1000 rupees notes by November 8 was a heaviest decision by the ruling party of India. It has a great decision but has shaken India to a great extent. Sufferings from the decision have still not finished and can see people queuing in front of the banks on a daily basis. ATMs are completely dead and people running for money everywhere. What are the problems people facing now? 

Here are some points from the point of view of an ordinary citizen from a middle class family.

  1. They told the idea of demonetization is good in initial days because of it deal with black money in the market, but when faced the heats of no money, they are now turning back to the clear planning failure of the government.
  2. Small shoppers are badly affected with the act as well as the amount of money they can withdraw from banks and ATMs.
  3. People running with 2000 rupees currencies to get change and pain increasing day by day.
  4. Banks are running out of money and clashes happening with customers every day.
  5. Villagers especially farmers affected hugely as digitalization is still a dream for remote villagers.
  6. Those who have saved their everyday earning in cash box or somewhere else as physical, are suffering from the sudden act of government.

Here is some of the spreading news:

  1. People think that the government already informed their followers about this act and they have cleared their back money before November 8th.
  2. Authorities seizing crores of new notes from the market and how they are getting so much notes.
  3. Government has failed to stop the corrupt bank officials providing support to people to convert their black money to white.
  4. Lots of people believes that the planning of this act is improper and a great failure.
  5. Government also failed to convince people in a way about the updates and actions they taking behind the screen. This is giving a feel to people that the government is just sitting and watching the pain of citizens.
  6. Payment gateways such as PayTM, turned to multi billion company due to people using the app frequently.
  7. No one seeing any rich people standing in the queue or bank for getting cash and everywhere filled with ordinary and middle-class people only.
  8. Everyone frequently remembering the parents of leaders behind this plan and can hear such curse everywhere in the street and public places.
 In my opinion, this was a great idea if had implemented with good plan and arrangements. It now turns as a national tragedy and certainly affects the name of government. Forth coming state elections will certainly prove the same without any doubts. This was no doubts, an absolute failure from the government to whom the Indian citizens elected with huge majority for doing betterment to them but they realized the same government later turned them as a pain point.  
Read More

November 29, 2016

// // Leave a Comment

Disadvantages of Stock Trading

dangers behind stock trading
There are no formulas identified in the earth to make people rich in a day or week. General mindset of stock traders is to become rich in a fortnight by buying and selling stocks frequently, bypassing the law of above truth. Certain end of such traders would be a great tragedy by generally getting bankrupted or ran out of trading room with lots of debt burdens and no dress. Stock traders have very little chance to become millionaires, but certainly the broker and tax department to get rich slowly by them.

Understanding the dangers and disadvantages of stock trading would help young people, who are attracting to trade in stocks, to not lose money by blindly entering to the trading platform, where emotions precedence intelligence. Here is a list of disadvantages of stock trading for those who want to know the unknowing depth of this black water where traps have no limitations.

1. Traders are just gambling

Yes! They are just gambling by purchasing daily lotteries. If they are lucky, they will get something or lose the total capital. Stock trading also has similar character. It is all depends on the movements of stock market that no one able to predict. There is no system or formula in the world to predict stock market trends. An average trader would be highly depends on stock movements and speculating to trade. He has not option to confirm his speculations are right until the final result comes. Most of the time trading result turns the trader to a total loser.

2. Traders never move on own decisions 

Most traders speculating in stock market purely based on daily research reports and recommendations in channels and news papers. Active traders hugely depend on the words of their brokers or representatives. As long as we are not able to predict what will happen to us in the very next minute, how these self proclaimed 'guru's can predict the movement of stock markets for next few hours or days? Ultimate victims of these gurus are the traders who blindly believe them and trade as per their recommendations.

3. Trading is the best to become debt trap 

While opening an account, inquire whether the broker provide loans to traders or have any agreement with banks or financial organization to arrange fund for traders in the form of loan. If yes, this is a trap. Most traders have habits of borrowing money from others or organizations to play in stock market and finally it will make them liable to repay entire borrowed money with interest. As an already loser, most of the times it will not be possible by them and soon getting bankrupted. Traders have all the possibilities to land in huge debt trap with the 'fantastic' help of brokers and other similar elements.

4. Traders unknowingly making broker s and tax department super rich

If inquired, we can easily identify the highest percentage of broker revenues coming from trading commissions. Tax department also get an un-compromised fixed tax from each buy and sell. Most traders ignoring these facts and dedicated their life to make the brokers and tax department super rich through putting their neck to the dangerous traps of debt and ignorance!

5. A trader cannot be an investor 

When found any trader uses the word "investor" to describe self, run away from him at the very moment. It shows he even doesn’t know the deference between trading and investing. It is difficult for a trader to become investor. If so happened anytime, the sleeping element, greed to become super rich within a week or month, would be always there in his thoughts and it would wake at any time. Trader turned investor thus have very few chance to become successful with the stock market.

6. Trader and waste of time 

Traders generally start their day traveling to the brokerage house. There they will monitor TV channels and computer screen to know each changes happening to stocks. Someday they never trade due to not getting right options and go back to home in the evening after stock market closed. They are thus wasting whole day without any productive activity.

7. Emotional animal 

Trading happens on emotions. Fear and greed are two major emotions that lead traders to trigger buy or sell button. Use of intelligence doesn't make any sense inside the trading room. Instead, greed and fear based emotions; activities on third party recommendations have prime positions there.

8. Ego and stock traders 

Most of the stock traders become bankrupt because of their ego to collect the money back which had lost in stock market with previous trading activities. To get the lost money back, most traders put more money, even borrowed money, and finally fell to the huge debt trap.

9. Overconfident to lose money fast 

Another back draw of trading is over confidence. These dangerous thoughts would pull traders to put large amounts to bring profits fast. The best word to describe this is, eating like a Sparrow, but defecating like an Elephant. Generally, the receiving profits will be less, but the loss will be huge and unable to recover from it easily.

10. Lose turn trader’s day’s worst 

Lost trader never get peace in mind and cannot able to concentrate anything. This will spoil family, relationship and all the good needs to happen in life.

Want to be a stock trader to after reading the above, proceed and put your head to the big scissor to end your life easily along with family, dependents, kids etc...
Read More
// // Leave a Comment

Disadvantages of Monopoly Business

monopoly business
In a value investor perspective, selection and investing of a real monopoly business is a dream. They never waste any opportunities to invest on monopoly business whenever the prices are down in the stock market. Invest to a monopoly business is the best advice from great value investors like Warren Buffett. Investors worldwide considered it as a classic advice to invest successfully. However, is there are any disadvantages in investing of monopoly business? Yes, there are some. If invest even in a monopoly business for long term without knowing the real drawbacks of the business, the final result will be the erosion of investor’s wealth.

Why do investors love monopoly business to invest?

A monopoly business mean there will be only 'a' product or service available in the market. In a better word "a single seller in a given market". Rest of all known as "Commodity Business". Public generally should go for that and if the product or service not available, public won't have any option for another similar. It is of course, very difficult to find such product in market but yes, there are still some there. Investing in monopoly business stood as a wonderful advice because of company’s capability to adjust prices depends on inflation. As long as there are no competitors in the market, a monopoly business can increase or decrease prices for their service or product as they wish. Profit per unit would be awesome and there will not be any questioning on their price changes in the market.

Here is how even a monopoly business can be trashed and erase investors wealth:

If required, a monopoly business can reduce the quality of product. As long as there is no question on their product or service, it is depends on the company to decide the quality. Generally they wouldn't do such, but any of your invested monopoly company has such practices due to lack of management ethics, as an investor you are in trouble because the company existence would be in a question later.

Unsatisfied employees generally a known problem for monopoly businesses that can leads to lockout of the company unexpectedly. Because of monopoly company can decided decrease in salary of the workers. This is also comes under the lack of management ethics.
And finally, the great danger of any monopoly business, effort required sustaining in the industry. Best example in this kind is, IBM. There processors have monopoly in the market over long time. However, if they stop their continuous research and developments, their competitors like AMD would over take them in the market. For the research and developments, IBM required millions of Dollars per month to sustain monopoly business. If you are an investor to a monopoly company like IBM or Google, you have very limited chance to get wealthy because the profits of such monopoly business generally goes for research and developments than distribute to the investors. Thus the investor can only claim they have a monopoly business investment in their hand but no profits..

In this way, understand your selected monopoly business well then invest. There will be poison in each, even in honey too, if not uses properly. Remember the old proverb, "Precaution is better than cure".

Read More

November 24, 2016

// // Leave a Comment

How to Sell an Illiquid Stock

If you are investor, whether new or experiences, you must know there are certain types stocks that can put you in trouble. These are known as Unlisted stocks and the other is Illiquid stocks.

In my previous article, I have already explained what is an UNLISTED stock and how can you sell a such stocks. Unlisted stocks are such, that should have brought directly from an unlisted company or a stock of listed company kept in hand even after the company unlisted from the stock exchange. There are various options to sell an unlisted stocks as mentioned in my previous article.

Another kind, ILLIQUID stocks, are the stocks of currently listed companies, but considered as a dead stocks due to not having any activity such as buying or selling by anyone. In other words, no transactions would be happened on such stocks. In this scenario, those investors who hold such stocks, would be difficult for them to sell again due to not have any buyers in the market.

Most of the time, new investors found frequently falling to this trap. Micro cap and penny stock investors are the biggest victim of having illiquid stocks. such stock will remain in their hands  without having any buyers in the stock-market. Such stocks never give any returns, but contribute heavily to money lose. When buying illiquid stocks, knowingly or unknowingly, an investor really converting his or her live money to dead money. There are lots of such stocks can be found in stock markets. Even stocks markets regularly list the illiquid stocks in their websites for investor awareness. Is there any option available to sell such illiquid stocks you have? Chances are very limited, but there are some. If you are lucky, any or more of the below mentioned options would work for you.

1. Wait for a chance

Realize that, if you have an illiquid stock in your hand, you are in trap. Instead of proceeding with any urgent step to dispose such shares and meet huge loses, patiently wait and regularly track the company until any positive news comes out from them. If so, this would be a best time to sell your stock as someone would be ready to buy the stock on the positive news on the company. It is not an easy task, but you should regularly track the company. Google alerts are the best options among to deliver right information right time to your hand. So go for that and set necessary alerts.

2. Reduce the asking price

If you have an illiquid stock, your first goal should be avoiding the same anyway. Waiting to get the money spend for buying this scrip is invalid at this point of time. You may need to ask a price less than the current price of the stock in the market. If you are lucky, someone would come and buy your stocks. Holding an illiquid stock until getting the money you have spend to buy the stock is totally a foolish act. You are not only going to get money, but also going to face lose as long as you hold such stocks. Sell at the earliest by using any of the technique in this article and thus reduce the lose.

3. Learn the Reason of Being Illiquid

There are lots of reasons company stocks can reach to illiquid list. Being aware of the exact reason why a stock became illiquid, would help you to target on that particular issue company facing. Once the issue solved, then the stock become liquid easily and you will get a chance to sell the same. One of the reason why stocks are being illiquid is, having higher promoter holding. Identifying such issue and tracking the status of the issue time to time is necessary to sense the right time to sell the stock.

4. Approach Illiquid Stock Buyers

In some countries, there are agencies specifically focused to buy and sell illiquid stocks. You have to search for them and once found, approach them. If it is feasible to you, sell your illiquid stocks through them.

5. Get Advise from your Brokers

You can also approach your brokers to sell your illiquid stock or at least get right advise on what needs to do to sell. Brokers would be able to help you to sell the stock or at least advise some good options to sell those stuff. Brokers are the best to advise on such because they should have faced lots of similar issues from various customers.

A Word of Caution:

Always know what you are buying and selling. Taking enough care and research prior buying any stocks are mandatory to not fall into the trap of having illiquid stocks or huge lose in stock market. Human errors are the major fact of most of the investment loses found today. Don't be a victim of that!

Read More
// // Leave a Comment

Importance of Demat Account in Trading

Previously stock trading was done with the help of physical certificates. In the present times, ademat account has taken its place. Demat is the abbreviation of ‘dematerialization’. A demat account is the electronic form of the physical certificate used in stock markets. It is similar to a bank savings account and is used to keep all the financial assets and instruments like stocks, debentures, bonds and NSC in a dematerialized mode.

In 1996, Depository Act was introduced in India to smoothen the process of buying and selling of shares. A depository is an agency that is responsible for holding dematerialized securities and looking after its transfer. In our country, there are two main depositories: Central Depositaries Services Limited (CDSL) and National Securities Depositories Limited (NSDL). These agencies are responsible for various depository activities like opening and closure of any demat account and many other online trading transactions.

How to Open a Demat Account?

NSDL and CDSL have a list of depository participants (DP) on their websites. DP provides a safe place to hold the shares bought by its clients. Most banks, brokers and other financial institutions are depository participants. One can open a demat account by registering with any DP. The procedure to open a demat accountis to fill up an account form, sign an agreement with the DP and submit the essential documents.

The official documents needed for the procedure are proof of identity, proof of residence, two pass port size photographs and a copy of PAN card.

Once the account is functional, the applicant is given a unique Beneficial Owner Identification (BO ID) to make transactions.

What Does a Demat Account Do?

Overall, a demat account helps in reducing brokerage charges. It makes pledging for shares an easy job and avoids confusion in the ownership title of securities. It provides an easy receipt of public issue allotment.

Advantages of Demat Account:

Unlike its predecessor, the physical certificates, a demat account avoids delays in transaction, and has the following benefits:

- A demat account reduces the risk of forgery and counterfeiting.
- It is an easy and faster way to transfer securities.
- With elimination of paper work there is no need for stamp duty for transactions.
- While comparing it to physical certificates, the transaction cost is very low.
- Change of address, signature, dividend mandate, registration of power of attorney, and transmission becomes easy as it is taken care by a single instruction to the DP.
- Investors will have an access to their complete transaction details through Internet and mails.

In the Indian Stock Market scenario, there is an upward trend with tremendous growth opportunities for short term and long term investments. So first time investors can go ahead and open their demat account to grasp benefits.

This is a guest article by Kotak Securities, one of India’s leading share broking firms.
Read More
// // Leave a Comment

Best 7 Online Shopping Sites for Men

Men and shopping are two words, which never went well together until the advent of online shopping prospect. E-commerce through a seamless navigating mode, spells freedom from the shackles of crowd and traffic for those who have the panache for the latest fashion whereabouts yet lack the time and opportunity. It is the world of fashion and accessories at your fingertips, if you know which door to knock and how. There exist, in the virtual reality, an extensive miscellany of online retail sites that caters characteristically to men whether your style is modern ultra chic, classic with an edge or peppy with a cult status. Here we find more about the seven such popular sites that is keeping the online credit registers jingling quite with a roar.

1. Mr Porter

One of the premier e-commerce destinations in men's fashion world, London based Mr Porter brings under its roof 170 well known and well sought after designers namely Dolce & Gabbana, Burberry, Givenchy, Rick Owens, Alexander McQueen, Gucci, Lanvin, etc,. Being a global phenomenon, it maneuvers the fashion guardianship from their front-line offices in London, Manhattan and has chief retail centers in London, New York and Hong Kong.

The site also comes with lucrative features like that of a free collection of returns and exchanges facility, express delivery, dedicated personal shopping team, same day delivery in London and Manhattan, a very enthusiastic customer care service etc . To extend its free fashion advice that is of great help towards their indecisive male customers the site also brings out a weekly online magazine called The Journal and a lifestyle newspaper called The Mr Porter Post.

2 Oi Polloi

Started as a small store in the North Quarter of Manchester in 2002, the Oi Polloi soon caught on with the e-commerce bug and went online to create ripples in the men’s fashion world. Owned by Steve Sanderson and Nigel Lawson, it represents UK high street fashion in a very updated, yet archetypal and sophisticated format that few can resist. They represent clothing, accessories, footwear of brands like that of Barbour, Birkenstock, Converse, Dockers, Dunlop, Havaianas, Lacoste, Levi’s, New Balance, Polo, Ralph Lauren, etc.

They provide free shipping to all their UK customers whereas worldwide customers, except for Indonesia, receive free shipping if their purchases are over £250. They also give refunds within 28 days of dispatch if the item is in its original condition and with all the tickets and tags still attached.

3 Oki-Ni

Oki Ni is currently a French owned fashionable boulevard providing online the most coveted designer menswear brands including Evisu, Duffer, Levi's, Martin Margiela, Comme Des Garçons, Rick Owens, Alexander McQueen, Kenzo and Raf Simons.

They bring a wide variety of men's fashion products like T-shirts, polos, jackets, trousers, jeans, shoes, and even iPod and cell cases that remain ultra chic yet exclusive. The main market caters to that of fashion conscious men in more than 75 countries leading by that in the United States, Japan and Germany etc,

4 Luisa Via Roma

One of the leading websites dealing with luxury designer clothes, shoes and accessories, LuisaVia Roma is an Italian top-notch boutique that has diversified into e-commerce to cater worldwide demands for authentic designer brands like Alexander McQueen, Balmain, Chloé, Dior, Dsquared, Dolce & Gabbana, Givenchy, Lanvin, Rick Owens, Roberto Cavalli, Saint Laurent etc.

It also markets futuristic designers like Peter Pilotto, Mary Katrantzou, Alexander Wang, Charlotte Olympia, Gareth Pugh, Anthony Vaccarello, etc. Visited by over 4 million readers, the site also encourages fan followership with social networking sites like Twitter, Instagram, Facebook, Pin-interest etc.

5 SSense

Montreal, Canada based SSense is another very well-liked e-commerce zone for men. With large pronounced graphics, it makes navigating around in search for quality designer wear, including all forms of accessories and clothing, an easy task. Huge number of dedicated patrons, good e-presence in social networking and great after sales service makes SSese a popular yet stylish target worldwide.

6 Tres Bien store

Directing men's fashion trends largely, the Sweden based Tres Bien Store is a hugely popular online men's retail option that offers a budget friendly yet stylish array of clothes and accessories for men present globally. With excellent customer care services, easy returns and replacements and express delivery service, the store enjoys a good flow of online traffic on a regular basis.

7 Aphrodite 1994

Online since 2007, this exclusive online shopping destination exclusively for men provides contemporary fashion at wallet friendly options. Based in Sunderland, North East of England, Aphrodite offers free and timely delivery within England with brands like Armani, Barbour, Hugo Boss Orange, Paul Smith, Stone Island, Y3, Ralph Lauren, Belstaff, Hype Means Nothing, etc,.


These online stores provide a definitive style sense without the hassles of travelling across the globe. They promise existence of a lot more resources to choose from men's fashion world be it jackets, denims, tees, shorts, underwear, suits, watches, wallets, jewelry, shoes, etc all but from the comfort of the couch and easy pay options of credit or debit card provided you check their credentials for a safe and pleasant shopping experience.

This Post is written by Brianne.
Read More
// // Leave a Comment

The Art Of Balancing Your Financial Goals With Your Risk Tolerance

We've all heard the expression, "The greater the risk, the greater the reward." There's no more fitting application of this principle than when investing in the stock market. The foundation of a positive investment strategy relies on an understanding of the investor's level of risk tolerance. While investing in the stock market involves an inherent tolerance for at least some risk, the degree to which one is comfortable with risk will change with time. Maintaining a positive dynamic between your financial goals and your risk tolerance can be a balancing act which requires judicious reassessment along the way.

Understanding Risk Tolerance

A comprehensive financial strategy relies on your tolerance for risk as an investor. In most cases, this is heavily influenced by one simple factor: your time horizon. While this figure is indeed important, there are other factors at play, such as when you'll need the money and your spouse's risk tolerance level, if you are married.

Risk Tolerance: Three Types of Investors

Investors can generally be broken down into three levels of risk tolerance.

Conservatives have the lowest tolerance for risk, prioritizing the safeguarding of their principal investments from market fluctuation by choosing the lowest risk investments. That's not to say this method is foolproof as conservative investors take on a different risk: insufficient growth assets. Failure to outpace inflation can result in inability to reach long-term goals, decreased spending power and an eventual reduction in your standard of living.

Moderate investors have a higher tolerance for risk, and are more likely to seek out mid-range investment opportunities, including both fixed income and equity investments, with potential for long-term returns. These investors trade an average amount of risk for average return potential.

Aggressive investors are the least risk-averse of the three profiles, and are willing to overlook short-term losses in order to maximize growth potential. These investors maintain a long-term market perspective which supersedes reacting to immediate market fluctuations. This approach is generally adopted by those willing to take on high risk for high return potential over an extended period of time.

Changing Risk Tolerance

Your tolerance for risk will vary during the different phases of life. The biggest change to risk tolerance typically occurs with the switch in focus from saving money to generating income from savings during the retirement years. At this point, an investor's comfort with risk will typically decline, and assets should be reallocated accordingly.

Still, investors should resist the temptation to avoid risk entirely, as some growth-oriented assets are necessary to remain on financial target. Diversification is critical; by selecting investments across a broad range of asset classes, you can achieve moderate growth potential at tolerable risk levels. In doing so, you help your principle continue to grow while simultaneously generating income.

Risk and reward are two sides to the investment coin, but can be weighted in one direction or the other depending on the amount of acceptable volatility, as influenced by factors such as stage of life. While no investment will come free of risk, by reassessing your assets as you move through different phases of life, you can ensure that the rewards prevail over the risks for a beneficial financial outcome from your early investment years through retirement.


Strengthening your household's financial outlook can depend upon understanding your risk tolerance.

With retirement just around the bend, adjusting your risk tolerance levels can lead to prosperity.

Read More

July 21, 2016

// // Leave a Comment

The Battle of Poor Spending Habits and Limited Income

The precarious balance many of us struggle with between income and spending can sometimes feel like a losing battle, especially when poor spending habits and limited financial resources are part of the mix. It’s become a more common scenario in many households due in part to a stagnant economy. Businesses burdened by increased taxes, rising energy bills and new healthcare mandates have little to offer in the way of raises or promotions to their employees. For American households, the cost of living is increasing with food prices skyrocketing along with other life essentials.

So what’s a person to do?

While there’s no magic wand we can wave to make things better, patience and time will be your best ally. In fact, the most important thing you can do is to get an attitude adjustment by acknowledging the problem. Delaying action is just another form of denial. Fretting and harping over the situation will only serve to add to an already stressful situation. Negativity is fueled by inaction, so get busy fixing the things you have control over and accepting those that you can’t. You’ll find, that as you make progress in changing your ways, your view of things will improve. As the battle begins to dissolve and turn into productive habits, not only will your life be easier but the lives of those around you will be better as well.

Limited Income

Of the two beasts battling it out, limited income may be the more difficult to overcome. It will require perseverance to improve your employment conditions by furthering your education to qualify for a higher position or to pound the pavement to find a new job. In either case, it probably won’t happen overnight, so you’ll need to learn to live within your means until it happens.

Poor Spending Habits

Here’s where you can make the most headway in the battle between limited income and poor spend. There’s nothing holding you back from learning new ways to manage your money and correcting spending habits that put stress on all segments of your life. It cost little to nothing for a person to put in place new rules to live by and may even have some positive residual effects.

There are three main reasons most people overspend. Recognizing which ones apply to you is a major key to replacing old habits with new healthy ones.

• Impulse and Emotional Spending: Knowing why you impulse buy or compulsively overspend will help you see potential triggers. If you are an emotional spender, you shop when you’re experiencing sadness, frustration, boredom or a myriad of feelings that aren’t resolved in more productive ways. While the immediate response to spending may be a rush of adrenaline, it won’t be long before it’s replaced with feelings of anxiety and guilt for not being able to control the urge to spend and is especially harmful if there are limited funds to pay the bill when it comes due.

• Social Spending: Another scenario when spending may get out of control is during a social event. Spend an afternoon with family or friends at the mall or a special event like community art fairs, carnivals, etc. can tempt you to spend more than you’ve budgeted. Learn to enjoy window-shopping. Be proactive by carrying only the cash that you’ve designated for entertainment or discretionary purchases.

• Competitive Spending: Keeping up with the Joneses is a deadly game when it comes to your personal finances. Wanting what your neighbor has isn’t enough, you want bigger and better. The social connection to impulse spending can sometimes be summed up, as ‘misery loves company’.

Gaining control of overspending begins with committing to a new way of life – living within your means. A plan needs to be drawn up that allows for a small amount of discretionary spending without allowing for impulsive purchases. If you’ve used up your monthly allowance, whatever you were hoping to buy will have to wait until next month. For bigger purchases, a plan can be devised to put aside a specific amount until you’ve accumulated enough to make the purchase.

If left unchecked, poor spending habits on a limited budget will devastate your credit score. Never underestimate how a low credit score will impact your ability to be approved for the loans or credit you may need in the future. It is one of the most important reasons to examine how you handle a limited amount of revenue and why you should learn to spend it wisely while looking for ways to increase your income.

Vanessa May is a regular contributor to and a variety of financial blogs and websites.
Read More

November 30, 2015

// // Leave a Comment

Role of Debt Investments

Role of Debt Investment portfolio
Investment instruments that provide fixed income and safety against capital lose can define as a debt instrument. However, is it necessary to have debt instruments in your investment portfolio? This article discusses the advantages and disadvantages of adding debt instruments in a portfolio.

People generally love to invest on instruments that give faster money growth. Financial advisers prefer equity investments to build wealth for long run. But, selling the equities prematurely  would lead to the  capital loses to the investors. What would happen if I have short term goals? Equity meant for long time investment instrument and not a preferable investment option for short term goals. S what is next? Here is the role of debt instruments. Below are the points help you to understand more about the debt instruments and how it would help us to achieve our short term goals.

Money in Debt Instruments are Safe

Most of the debt instruments are backed by governments or have a government appointed regulatory to control the activities. Thus the money invested with debt instruments provides high safety and liquidity. Investors can sell or redeem the instruments whenever they required money. Bank Fixed Deposits and Government Bonds all comes under the umbrella of  debt instruments. Mutual funds such as Liquid funds  also a good debt instrument to park money safely. Through the capability of providing superior capital guarantee and liquidity, having debt funds in a portfolio would help you to meet short term goals with guaranteed money.

Debts Instruments are Good for Low Risk Seeking Individuals

Debt funds have the ability to protect capital in a certain level. This nature makes the debts instruments a best friend to people who seek law risk to their invested capital. Money invested in debt instruments would not grow like invested in equity, gold or real estate but, always provides certain level of guarantee to the capital invested in it.

Help You to Save T

There are several debt investment instruments in our nation offers tax saving capabilities. However, it is mandatory for the investors to hold such investments for a certain duration  to avail such tax benefits. Adding debt funds as the part of your portfolio thus provide your tax saving needs too.

Availability of Systematic Investment Options

Debt instruments such liquid mutual funds have choices to invest as lump sum or systematically.  This ability helps the investors to invest regularly over a period of time until they required to do so. For an example, if you want to re-invest all the money crediting to your bank account periodically as dividends, interests or from any other sources,  can automatically invest to a better mutual fund through selecting  monthly, quarterly, half yearly systematic investment options available with the fund house.

Can Work as a Perfect Emergency Fund

Having an emergency fund is mandatory to live your life without losing the standards. No one can predict the arrival of an emergency and having a decent emergency fund in hand is the only best option to deal with such situations. Through providing high liquidity to the investments, one can choose certain debt instruments to work as an emergency fund for him or her. Debts instruments have triple benefits: It would work as an emergency fund. It would fetch more interests than savings accounts and provide safety against lose of capital.


Debt instruments have an important role to play in your financial plan. It generally provides capital security and high liquidity. Including quality debt investments in a portfolio helpful to save tax as well as protect portfolio against lose of money from other instruments. It also works as an emergency fund and a perfect instrument to meet short term goals etc… Debt instruments are the best friend for people who have low risk taking capacity and near or after the retirement. It also best to receive regular income if invest wisely to the fund which offers that facility like monthly income plans.

Read More

October 28, 2015

// // Leave a Comment

Family Financial Planning Guide and The Role of Family Members to it

family and finance
This article written to understand the "role of family members to the financial planning" process. Through this article, I tend to reveal the core factors of financial planning success through the participation of each members in a family by playing there roles. Various financial planning articles in this blog already discussed about the advantages of participating family members throughout the financial planning activities not only to get better and sharp ideas when work as a team but also have a successful family financial plan at the end.

There are financial advisers who provide financial planning services to their clients. I have no idea, how many of them aware and insist their clients to participate the family members throughout financial planning. A wise financial plan required to work with family members to discuss and get possible ideas and advises, to achieve huge success. Without participating members in a family, I strongly feel the financial planning process would be one sided and not be produced required results. This short article reveals possible roles each members in a family and how they can contribute to your family financial plan.

Before discussing the same, readers should know different areas of a good family financial plan. Here are those points to have a quick scan:

    1. Status assessment and setting of goals
    2. Family budgeting
    3. Debt Management
    4. Emergency Fund creation
    5. Protection of family members from various incidents
    6. Investment planning for various goals
    7. Possible money saving activities
    8. Additional Income generation
    9. Teaching members to learn and have financial freedom
It is up to you to decide how to engage family members to participate and contribute to the above sections. It is not possible by anyone to completely do family financial planning alone by meeting all these criteria’s and without participation from family members. Areas like goal settings, budgeting, money saving, additional income generation and financial education requires active participation from all the members in a family or it would fail to meet required goals. How can you involve your family members to these areas? To get a right answer, you should understand how and where your members able to contribute and to. Here is a short suggestion from my experience to understand this area in a better way.

1. Role of Family Head (It is you or the bread winner of family)

    Remember your spouse would be your immediate contact point. As the head of a family, you would be the one should take initiatives to start the family financial planning. To execute and complete the financial planning, a working blueprint is the first thing one should have in hand. Creating such blueprint requires lots of efforts and time. To give you a better idea, above mentioned 9 core areas should have weightage in a financial planning blueprint.

    Family head have sole responsibility to assess present status. Work with other family members to get right ideas to create a good plan, decide when and where to start and complete each steps successfully, identify the obstacles associated in each step and tackle those obstacles with the help of members and finally bring a blueprint to great success. He should be the active participant and final word to each areas of financial planning and confirm any action that has complete support from other family members.

    Family head requires deciding some of the financial planning factors like debt management, emergency fund creation, insurance protection to self and family members, decide financial planning goals and work for an investment strategy to achieve these goals. He is still required to get ideas from family members on each of these areas, but the final decision should come from him by combining all possible sharp ideas.
2. Spouse of the family head 
    Spouse of family head have a very important role to play during the family financial planning process. A spouse could actively participate to the areas of money saving plan inside and outside the home, creating additional possible income by work part time or through small businesses, to support the main income stream of the family. This would be highly helpful if a family have huge debt and active debt management plan in place. Spouse could take the control over 'budgeting side' as a total regulator to ensure the budget plan is intact and strictly following.
3. Senior citizens in the family
    I strongly feel the existence of senior citizen in our family would give us enormous security feel. They could probably the parents of family head or spouse. They generally have very good knowledge from long years of life experiences and have sharp ideas to support family financial plan. They can easily participate to the family financial planning by provide right direction and support to each of the process and from their own experience and knowledge. As they have lots of time, they can also contribute to financial process steps through assess sharply. If educated, they would be the right people in your family to educate or mentor the kids on various subjects. Their experience can consider as a huge supportive factor to each and every step in a family financial plan.
4. Kids in a family
    Intelligent people never avoid kids at the time of family budgeting. Parents should understand and allocate sufficient amount in each month to meet children’s needs and the priority changes occur frequently. Thus, they should be an active participant at the time of budgeting discussions. Another important factor is, kids should grow with sufficient financial literacy and saving habits. They should aware where and how to save money inside and outside the home. Elders should support them by providing necessary training to bring their kids with sufficient financial knowledge and to make them understand the difference between ‘want’ and ‘need’. Once updated, kids should be wise enough to spend money and save maximum to support their parents.
There are other roles available to members in a family and even best friends at the time of financial planning. As I said earlier, parents should understand first on how and where their involvement really needed.

Read More