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July 21, 2016

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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.
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November 30, 2015

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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
ax 

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.

Conclusion

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.


Thoughts? 
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October 28, 2015

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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.







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October 13, 2015

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Dell Buys EMC For $67B

In a biggest deal in the tech history, Dell and partners MSD Partners and Silver Lake agreed to buy EMC today for $67 billion or $33.15 a share.

The biggest part of EMC by far is VMware, which was included in the deal and will continue to be a separately publicly traded company, but EMC will go private and become part of Dell ending the company’s long history as a publicly traded company.

Michael Dell, founder of what once was the leading PC maker, in announcing the cash-and-stock deal to buy EMC, vowed to play a more central role in technology used by corporations. EMC would add the broadest line of data-storage hardware as well as data-center software from VMware Inc. and other high-profile businesses to Dell’s offerings.

Dell has been looking to move away from the server business, which has grown commoditized in recent years and get deeper into enterprise with private cloud computing and storage where it could compete with IBM, HP and other traditional vendors, as well as Pure Storage and newer vendors.

A spokesman for HP, which is breaking into two smaller companies, wasted no time in taking a shot at its now-larger competitor. “This is a real opportunity for HP,” wrote a representative in an un-bylined statement. “Two of our largest competitors are attempting a highly distracting, multi-year merger, just as we are launching two new, focused companies. The massive debt burden Dell and EMC are taking on undoubtedly means that they will have to radically reduce R&D, and integration inevitably will create disruption as they rationalize product portfolios, channel programs, and leadership.”

The deal is expected to close in mid-2016 and is of course subject to regulatory approval. It also remains to be seen once this deal closes whether Dell will sell off some of the pieces of EMC, particularly VMware, to help pay for it.

To help finance the transaction, Dell and Silver Lake lined up a big group of banks to arrange the enormous bank loan package. Such a move would come ahead of a long-awaited move by the Federal Reserve to raise interest rates, which could add tens of millions of dollars in higher debt payments.

“This creates a world-leading company,” Mr. Dell said. “The private structure gives us a tremendous amount of flexibility.”
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September 29, 2015

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Planning to Invest in Stocks and Shares? Here is a Stock Investing Readiness Checklist

A best place to start your reading is to first my previous article titled, "How they lost their Rolls Royce in Wall Street? A Counsel on 20 Deadly Investment Mistakes", wit this article, I have listed with 20 deadly investment mistakes that each investor should aware about. These are so deadly mistakes that most frequently commits by investors around the world. I am so happy, my study and research finally ends up with such perfect list of common, people frequently committing, but deadly mistakes.

In this article, you will find a set of areas investors required to have knowledge and better understanding before they start investing directly to the stocks and shares.  Once after, reading both articles, your mindset would start getting such maturity level through having all necessary  do's and don'ts to succeed as a stock investor.

1. Asses self to know your direct stock investment readiness

    Prior to any plan to invest on directly to the stocks, assess yourself to understand your readiness to invest. Note down your thoughts about stock market gains and losses. Identify why you think it is suitable for you to invest directly to the stock markets instead of taking many other possible routes such as mutual funds and other risk less investment methods. stock investments and what are your fears related to stock markets. Have a deep dive into your patience level and capacity to control panic driven activities. Once concluded, you will come with a final result to understand whether you are a right person to invest to the stock directly or not.

2. Set proper investment goals

    Ask self, what leads you to the decision of making direct stock investments. Define your goals. Get answer to each question on why do you want to invest in stock market than other investment instruments that have better capital protection. Understand the time frame of your goals. Remember, stock market investments are suitable to achieve mid and long term goals, an investor thus required to stay invested for more than 10 to 15 years with right mix of stocks. Identify whether you are able to stay invested for long or not.

3. Understand asset allocation

    An investor should have good understanding on asset allocation. Definition of asset allocation is "An investment strategy that involves committing specific percentages of a portfolio to different asset types such as stocks, bonds, or money market instruments. The portfolio should be re-balanced periodically to maintain the target percentages." Identify whether your stock investment is a part of your own asset allocation model or are you taking risk of not having a proper asset allocation model but investing entirely in the stocks.

4. Learn the basics of stocks and stock markets

    Acquire sufficient knowledge in stocks and stock markets. What is a piece of stock meant to an investor, how stock markets works, who all connected to stock markets directly and indirectly, what are the risks and returns associated to stock investing etc. should be learned well. Without knowing the basics nothing goes to succeed.

5. Direct influencing factors to stock market

    There are various factors plays major roles to the up and down nature of stock markets. Understand what are the major factors influences the stock market to make the investor rich or poor. Such knowledge highly helps to prepare early to take critical investment decisions and not lose any right opportunities. Understand the difference of macro and micro economic factors and how both influence companies.

6. Create an investment intellectual framework

    Successful investor should acquire knowledge on how to select a good stock, when to buy it an when to sell. Use all possible, available sources for acquire knowledge. Read maximum about great investors, basic character and investment styles and finally create your own investment intellectual framework. An intellectual framework is nothing but a set of well defined investment rules for self to stick and follow. These are basically the well defined rules to select the type of businesses to invest, checklist to analyze the candidate, supported factors and time to invest, how much to buy and when to sell. Once have a fantastic intellectual framework, an investor should stick with it using extreme discipline.

7. Know the deadliest investment mistakes

    When comes to the section of selecting a stock to invest, have a practice of collecting biggest investment mistakes happened around you and in the world. Learn about those mistakes and ensure any of such mistakes not happened to you as an investor. Here is a list of 20 deadly investment mistakes again and that would enlighten your skills as an intelligent investor by avoiding each of it when make investments.

8. Learn Diversification

    A good investor should have a portfolio without over diversification and less diversification. Proper diversification requires knowing and studying more about it. Understand different sectors, different types of businesses, stocks like large cap, mid cap, small/micro cap, how much to invest on each sectors, companies with different sizes, all should come under consideration to get proper portfolio diversification.

9. Understand when to sell

    As mentioned already, investment knowledge should not shrink to the section of only buying stocks of good companies, but should include better skills on when to sell. Unlike selection of any stock or stocks, it is very, very difficult to understand when to sell a stock. My better advice is to read Philip Fisher's classic investment guide " Common Stocks and Uncommon Profits" to know when to sell a stock without lose.

10. Have a better self control

    Read more about great investors and adapt the best qualities that helped them to become greatest investors. More over skills, an investor should gain personal qualities that highly required by good investors. Patience, prudence, common sense, passion, discipline are some of the most required skills that any investor should build. If take the story of any successful investor, we can find such skills are top in their personal qualities.
Best wishes...

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September 22, 2015

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Financial Planning for All Ages

Here are three financial planning templates, useful for people at various ages. Each of these templates explain the most important points on age based investing that one should remember during starting his personal financial planning, given here. This is a best fit for using as a template to your finance in a better and efficient way. 

This article does not intended to discuss  about the financial planning terms or actions. But, discusses about the must have considerations during planning your finance considering your ages. By providing some very useful and most important hints and ideas, it certainly help you to plan your finance in a better way.

For people at age group of 20 – 35

Between the age group of 20 to 35 considers as the wealth accumulation phase. This is your golden time to make and save maximum money through proportionally investing on various investment vehicles. consider short, medium and long term goals to do right investments and investment mixes. It is the best age to have maximum equity exposure considering high risk taking capacity at this age. I prefer and advise to have an 80% exposure to equities as it is the best time to create wealth supported by the young age. It is also a right time to makes things happening in your own way by having and practicing budgeting in your life and family.

Budgeting provides with lots of advantages. Read this article carefully to know more about budgeting.


another must have at this age is adequate protection from various troubles. Insurances are the best friends that would help you to get this done. Here is a well written insurance article to provide you necessary knowledge on various insurances and select the right insurances for you and family.

This age group also required to take care to not fall in debt. Responsible use of credit cards and utilizing right loans are required more attention. If you have debts, you should consider paying off the same before starting your financial plan. To allocate your funds, a portfolio proportion of 80% in equity and 20% in the debt instruments will be excellent for those who are in this age group.

You can consider the below investment instruments to build an equity portfolio:

1. Direct stock investments – Aggressive style with mix of large cap, mid cap, small caps
2. Diversified / Sector / Thematic mutual funds
3. Index funds and Exchange Traded Funds (ETF)
4. Unit Linked Insurance plan - Investments
5. Real estate investments (here are two simple investment ideas)
6. You can even add high risk commodity options and futures to your portfolio at this time by considering your risk profile.

7. If you are in India, opening and regularly parking money to the PPF account would be a good option.

For 20% debts side, one can consider fixed deposits that giving compounding interest and secured government bonds. Well performing debt funds and money market funds also can be added to the portfolio.

This is the right time for you to start investments for your kid’s future. You can start and account for your kid at this time. Consider to have one with compounding interest and add little amount in each month to it for your kid.

If you have any long term plan like buy a home, kid’s education or marriage etc, this is the right time to plan your investment portfolio to achieve these goals.

Financial Planning Template 2 – Age group of 36 – 45

If you are in the age group of 36 to 45, you now have to take care of family, children and other dependents. As a person who is the bread winner, you should consider to protect your life with maximum coverage. Identifying and subscribing a cheap and best term policy with enough coverage would be the best option at this point. Your entire family should be under the coverage of a good mediclaim policy and you should cover your assets and vehicles with third party liability policy. This is the time you desperately need an emergency fund to build with sufficient money that would work as a buffer for you to protect from financial issues and risks. As a recommended practice, hold an amount equal to your 6 months salary and to a separate savings account to work as an emergency fund for you whenever required.

It is the right time to teach your kids about the best money practices that they will never forget to do so to their kids later.

A person within this age group should consider a balanced portfolio than previously said aggressive one. A portfolio proportion of 60% in equities and rest in pure debt instruments will work better for you.

Below are the possible investment instruments one can prefer to meet the 60% equity portfolio.

1. Direct stock investments – Balanced style. Large cap companies from defensive sector like Pharma and FMCG would work better.
2. Balanced Mutual funds
3. Index funds
4. Gold ETF
5. Unit Linked Insurance Plan – Pension Plan

You can select the following to your debt portion :

1. Liquid Funds - Best over bank FDs

2. Fixed Deposits with Banks
3. Savings Bonds
4. Maximize contribution to employer pension plan, Provident Fund or 401k
5. Well secured bonds from government or public companies

You should be well aware that this is the time to plan for your pension too. Above investments should focus as per this requirement along with the needs of your kids future.

Financial Planning Template 3 – Age group of 46 – 55

If you are in this age, you are near to your pension. So must be careful when dealing with money and investments. A considerable portfolio at this time would be be 20% to the equity and equity related investments such as mutual funds and rest 80%  in secured debt instruments.

Medical insurance is a must at this age.

You can have the following to your 20% equity portfolio

1. Stocks – Highly defensive, heavy weight blue chips
2. Balanced mutual funds
3. Exchange Traded Funds that tracking major indexes

As we are giving preference to the debt instruments to your portfolio, consider to park your money to the following instruments.

1. Secured bank fixed deposits
2. Capital secured liquid funds
3. Fixed Maturity Plan (FMP) mutual funds.

Never, ever invest with ULIP insurance plans or equity at this time. Especially, you should deal with your pension fund and never touch the same for investing plan. A person near to the pension age  always prefer to park his money on secured vehicles and that should allow easy access such as liquid funds and bank FDs.

Always prefer to invest on any instrument that you have good knowledge with. I never encourage a person to directly invest to the stocks because of the knowledge and time required to identify good companies.

While planning your finance, it is better to have a well qualified and experienced financial planner than any investment trusts or companies that offering investments behalf of you. If you getting a good financial planner, that is enough for you and he can bring you up by providing all the necessary knowledge and updates time to time.

Retired? What is now?
Once retirement life started, be careful with your money and select only instruments that provide 100% security and government support. There are several government supported monthly income plans available from banks and other sources. This is your golden time and enjoy with all the benefit from the savings and investment happened during your various ages as said above.

Remember, this article nor limited to any boundary or type of money. This is in general and applicable to anybody from anywhere in this world. The only drawback is, I am not aware about the type of bank deposits from different countries and how the interest of the same is adding or calculating. You have to hunt and select the better one available at your place..

Best wishes to all the readers to have a most successful and fail proof financial plan. Have a golden time..



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September 17, 2015

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Top 7 Ways to Make Money Online

For once if you had made the claim that it was possible to make money online a decade ago, people would have simply laughed at the idea. However, given the increasing reach of internet and a range of options that it offers to a person, earning money the online way is a reality. You can give your creativity a boost and can work out making money online, the creative way.

Below are listed top seven innovative and creative ways of making money online. Try these and realize the benefits.

1.) Sell photographs online

If you are a photography enthusiast, a range of options exist in form of stock photography websites that pay for sharing photographs. The online world is live with examples of people who have made selling photographs online a career. All you need is a quality camera and enrollment with any of these websites. Adhere to their guidelines and submit your clicks. These websites pay a flat amount if the pictures meet the standards set by the website. You will not only be able to make good money but will help establish yourself as a recognized photographer whose images will be downloaded, the world over.

2.) Tweeting for sponsors


The increasing popularity of social media websites has created a buzzword in the online world. You can use this to your benefit.  The sponsors will pay you for communicating their message effectively to the customers. What better, you can choose the money, you would charge for tweeting for a client. A word of caution though, set the amount within accepted limits and chances are bright that you will have sponsors clambering to you for writing Tweets on their behalf.

3.) Sell Affiliate Products

For those who have a flair for selling, and wish to earn some extra money in spare time, affiliate marketing is the best course of action to pursue. Amazon and eBay are some of the websites that are into affiliate marketing. Register with them and sell products on their behalf. Imagine, the top affiliates on eBay end up earning up to $1.3 million a month. It is high time that you try your hand at affiliate marketing and start making money.

4.) e-Books

Writing books till recent years was considered the preview of niche writers. However, with a range of websites available that publish e books and share about 70 percent revenue with the writers, it is high time that one tries hand at writing e books. Barnes, Amazon, Kobo and Noble are some of the websites that publish e books. Get in touch with any of these and initiate your writing career. Besides giving you wide publicity, e books will help you generate significant money that can substantiate your regular income.

5.) Virtual Assistant


The concept of virtual assistant is rather new in the online world but is gaining increased acceptance, off late. Small business owners and those who cannot afford to have regular office space go in for the concept of virtual assistants. You might be expected to do tasks as booking online tickets or answering the queries of customers that your boss assigns to you. The payments are pretty good and you can expect up to 20 dollars per hour for the service provided by you.

6.) Freelance writing

Freelance writing is another creative way of making money online. Not only will you writing skills get sharpened but you will be able to make a substantial amount of money through this mode. Most of the websites that accept freelance writers pay upfront while some others pay residual income. A viable way of making money online through freelance writing is to write for upfront paying and residual mode websites simultaneously. Register with 2-3 websites at a given point of time and you will be able to make a comfortable amount of money, enough to take care of your daily needs. A host of websites including Freelancer, eHow, Instastudio and Ayushveda are available and you can lease out your writing skills to any and all of these.

7.) Mobile App Testing

Using iPhone apps can be a profitable venture. Companies pay one for testing their mobile apps, if the person is comfortable with technology. UTest is one such application that pays the users to test mobile apps. As you create a name for yourself in the niche area, new avenues will open up for you and you will end up becoming a certified mobile app tester.

Try the above listed means and you will end up earning a fortune, all in your free time.



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Formula to Calculate Compound Interest

All of we are aware about the magic of compound interest calculations. Compound interesting can grow your money like anything. But, how you calculate the compound interest with a given percentage of yearly returns? Here is a simple formula that will help you to do the task easily.

This formula is helpful to identify the final value. Also it is helpful to find out the total amount you are paying as the principal amount and interest for a loan. This is an excellent formula to calculate the maturity value of lump sum investments, like bank fixed deposits, which has a fixed interest rate and fixed period.

Suppose you are investing $200,000 for 6 years in a compounding interest rate of 10% per year the calculation will be like this:

=$200,000(1+10%)^6
The original formula is =Amount investing(1+Interest%)^years
The total amount you are going to receive at the end of 6th year will be $354,312.20/-

This is very helpful to calculate the investment for a period of time with fixed interest rate on compounding basis. You can use an MS Excel sheet to do this calculation.

Comment if you feel this is useful to you.

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September 9, 2015

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What is macro and micro economic factors and how it influence investing

various economic factors
An investor should have well awareness on the macro and micro economic factors that affecting an economy or stock market. Both of these factors can make changes to the investments made by investors. But, to which factor you should give importance as an investor and which one need to avoid? Here is the best answer and why.

To make the answer clear, I would like to give a short definition on both macro and micro economic factors. Here it adapted from investopedia for your reference:
Macroeconomics, on the other hand, is the field of economics that studies the behavior of the economy as a whole and not just on specific companies, but entire industries and economies. This looks at economy-wide phenomena, such as Gross National Product (GDP) and how it is affected by changes in unemployment, national income, rate of growth, and price levels. For example, macroeconomics would look at how an increase/decrease in net exports would affect a nation's capital account or how GDP would be affected by unemployment rate.

Microeconomics is the study of decisions that people and businesses make regarding the allocation of resources and prices of goods and services. This means also taking into account taxes and regulations created by governments. Microeconomics focuses on supply and demand and other forces that determine the price levels seen in the economy. For example, microeconomics would look at how a specific company could maximize it's production and capacity so it could lower prices and better compete in its industry.
Excellent definition. I hope you have got the idea what I am going to tell you. We will hear the same from legend investor Warren Buffett and will ask to him the sense of considering both.

As per him, never give any importance to macro economic factors. That is the common process with any economy and totally temporary. Instances like presidential changes, quarterly or yearly company results, general elections, all are falling to macro economic factors. These will certainly shake the stock market up or down but it would be temporary. As an investor, it is your time to get good stocks in a cheap price due to panic of public that bring the stocks price down.

Micro economic factors, closely integrated to the company performance and thus it have importance. An investor should have well awareness about the performance of a company and sustaining the same for long term. Micro economics tightly connect with the product, cost and demand in the market, that should affect the company and profit to a great extend. Company sales growth, cost of sales, capital allocation, debt increase or decrease, market monopoly all covering under micro economic.

As a value investor, keep avoiding the macro economic factors because it does have nothing to do for us. Keep an eye on such events to get best business in a best price. It is clearly a temporary behavior and would change back to normal. For your information, 98% of stock analysts and stock traders entirely depending on macro economic factors. They are generally making the report or buying shares on the recent possible changes that going to happen with nation or industry. You can experience the same by reading analyst reports or talking to any trader in your place. Mutual fund managers also, generally trust on macro economic factors than micro and that leading them to churn their portfolio time to time.

Any changes in micro economic factors affect to the root of a company and its performance. As a value investor, it is advisable to keep track on a company on the basis of influential micro economic factors like what legend investor Warren Buffett does.


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August 31, 2015

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How to Bring Your Child Financially Responsible


Teaching your children about financial responsibility is one of the greatest things  you can doing as a parent to prepare them for their lives as adults. Nurturing a child emotionally is also vitally important, but to turn a child out into the world with little or no knowledge of basic finances has the potential to be a true disaster. Read on to find some basic tips on raising a financially responsible child.

When teaching a child about financial responsibility, parents should have extreme self-discipline. At the very first and as the start-up, examine your own attitudes and habits about money. As most experts say "Kids are great imitators" so the best and most effective way to teach kids about anything is by becoming the role model. If you want your kids to learn how to save money, you should show him how you do it. As another saying goes "action speaks louder than words". If you are a parent with no discipline on spending money or repeatedly waste money, that's what your kids are going to learn.


This article intends to the kids with an age between 3 and 12 years.


- Start speaking to your kid about money and its worth. Start it at the earliest from an age of 3 which is highly ideal for this. Begin teaching the first principal of wise money management by counting coins. Let the kids start learns about money by holding coins, counting coins and recognizing the differences between each one. Present them a piggy bank and give coins regularly to put into that. Later, they can have a great time counting coins and dropping each one in their very own piggy bank.


- Teach your kid how money is being used. Discuss the expenses you have for your household to your kid and show your kid the bills you need to pay with money. This is the best time to explain to your kid why you can't always buy the toys he/she wanted.


- Present opportunities to earn. All kids need a little jingle in their pocket. That's the purpose of allowance. Allowances can be tied to chores or as some parents prefer, allowances are considered to be a base salary. Whatever allowance system you subscribe to, it's a good idea to include opportunities to earn additional money as well. For example, a surprise bonus rewarding a good attitude, a job well done or special effort being made is a powerful motivator.


- When you choose to give pocket money as a reward, remember that the rules must be understood by everyone involved. Kids must understand how much you give and for what. If your child can read, make a list of the chores with their matching reward amount. If your child is younger, draw pictures or cut them from a magazine and draw circles to represent the coins they will get for each task. Having an understanding will prevent bargaining and allow both parents to handle the situation in the same way.


- Teach the art of spending. Deciding how much and how to spend the money and on what is definitely an art worth practicing. Teach the good practice of convince themselves that buying something they don't need on sale is saving. The art of spending is defining what you need, recognizing the pleasure of buying something very special and then looking for the exact item that fits the bill.


- The first time your young kids ask you for a loan, be happy, because now you can teach them about savings. Only when kids want something beyond their financial means can you explain why saving money is a good idea. Teach them to always put 10% of their money aside. At a young age, they will not understand what 10% is but tell them it is a tiny piggy bank in the piggy bank of money you keep there for emergency. This is the money you keep for something big or special that you want later. Tell them to put 1 out of every 10 coins in the tiny piggy bank. Saving is a good lesson in waiting, something that is hard for young kids, because their perception of time is not fully formed.


As the child's earnings grow, he will learn not only math skills, but life skills as well. He will learn the value of money; that money is earned through hard work and daily effort. Some parents may opt to exchange the play money earned for actual money later down the road. For our children, they often asked us to buy something each time we went to the store. The "job duty" project has minimized their requests because the responsibility now falls upon their shoulders. The money they earn is used to purchase something they want. On some occasions, our children will get to the store only to see something different than what we went to the store to purchase. Usually this new found item costs more money than what has been saved. At this point, our children need to decide if they will buy what they planned or if they will return home empty handed so they can save more money to purchase the more expensive item. What a great life lesson to be learned!


As I mentioned at the beginning, this article suitable to kids between the age of 3 years and 12 years. Next article would discuss how to bring your teenagers with financial responsibility. Keep visit.


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