Conviction of Mind

Internet not working on laptop - what should you do?

2023-04-15T15:12:00.003-07:00

When the internet is not working, consider looking at the available networks and see if you can switch to any other internet that would work

Further, troubleshoot by restarting the modem and the laptop once to make sure there are no issues with either of them.

If none of those works, consider contacting your interest service provider to help troubleshoot.

Treasury bonds Vs high yield savings

2023-04-15T15:10:00.002-07:00

You have some additional cash and are looking for the best place to park to get more money from it? If you answered yes, couple of options that you might be considering could be

1. Treasury bonds

2. High yield savings with bank fixed deposits

This is especially in United States.

First let’s look at the commonalities:

1. Both are absolutely safe and assured

2. The capital preservation is assured

Now, let’s look at when we should look for which one

1. If you could need this money anytime soon (within the next six months to a year or lesser), great option is to choose high yield savings. One option to consider is PayPal savings (which offer 4%+ APY these days.

2. If you don’t need it immediately and consider ways to get the maximum amount in an assured way, you can consider 15 month fixed deposit in certain banks, which offer over 4.65% APY for 15 months.

3. If you think the inflation is going to remain high and want to save with the government, you can choose the treasury bonds as an option.

Few things to note in case of treasury bonds

1. You can but only directly from them. I would prefer online

2. The rate would be updated every six months according to the inflation. It is going to go lower to around 3.5% starting May 1. So, if you are planning to park for a longer time, investing before May 1 would be a good choice

3. The rates have been historically much lower owing to a reduced inflation. I also think the inflation will go down and the returns on these bonds go lower. BTW, Dane would be the case with the bank fixed deposits too as all debt rates are related to a large extent.

4. If you want to take the money out before 5 years, you have to pay a penalty of last 3 months interest.

5. You can’t take the money out during the first year and this is a deal breaker got some people.

Hope this clarifies and helps you to make the decision on where to park excess cash that you are looking to grow with capital preservation.

Checking your credit report - US

2021-01-25T08:49:00.004-08:00

In US, you can check your credit report for free but to get the credit score you may have to pay. The credit reports are offered for free with almost all credit card companies.

The below infographic available in https://www.usa.gov/credit-reports helps to see why seeing credit card reports is important (to remain vigilant) and how to do it without paying any money.

If you really want identity protection or such value added services, it can come with a cost through multiple partners. Please do share your experience of getting a free credit report and how it worked out.

IRS Submission experience during the Covid time

2020-07-17T20:38:00.001-07:00

With the new reality syncing in, we are forced to stay in home almost all the time. This is absolutely helping to flatten the curve (or so we hope). I had to still submit my tax returns to IRS as I had to apply ITIN for my children.

I fixed the appointment in one of the nearby TAC (tax assistance centre) - San Jose location and it took over thirty minutes to really get an appointment. You are expected to be there on time and at least fifteen minutes early for the all the checking to complete.

I visited ten minutes early and had my kids with me. It was a big checking procedure and finally they let me in. It was as if you are in for catching the flight during the pre covid situation.

They quickly let me see IRS official and she was very frustrated and unhappy to begin with. With the kids around for ITIN application, she was even more concerned and took ten minutes to clean her cabin and area before letting us in again.

Finally, she took some separate time and reviewed the form and the details. It all took over forty minutes and that's it. In fact, only four or five people were there including my kids right there during my time slot that I booked for. She mentioned that it will take close to 11-12 weeks to get the ITIN and then further 6 weeks to process the returns.

If you want to book a face to face appointment during this situation for any specific reason, you should validate and confirm if that can't be done online. I am still thinking why ITIN is not something that we can do online. If it's necessary, book an appointment and visit the office.

Happy filling returns!

Is GDP really measuring the growth?

2020-01-26T14:30:00.001-08:00

I recently listened to a TED talk on why GDP measurement can't be considered as the interpretation of real growth. I couldn't agree more.

GDP just measures the trade that happens irrespective of whether it's good or bad. For example, it doesn't really shows how productive the people in the country are because it doesn't account for those activities that doesn't directly correlate to any trade activity. Think of the last time you cooked your own food in home. Ohh! It's everyday almost, isn't it? As you have prepared your own food, the cooking time and the time you spent on it is not getting counted towards GDP itself. The cow's milk is considered an industry and accounts for GDP but not our own time well spent in taking care of our kids.

On the other side, it may also depict incorrectly that we are growing even though we may not be really. Also, it depends on what you want to measure - is it really the measure of nice products and services that is imported and exported for the greater good? What about natural and man made disaster as war? After such a disaster, you need lot more work and development to get where you were before, isn't it? Is that considered a great growth all of a sudden even though the greater good is not really achieved? What about the time and effort spent on war and illegal activities - sometimes that get counted too in this accounting.

Biggest takeaway - GDP measures the growth in an accounting way that's not appropriate and needs change. Also, it largely depends on what you want to measure, if it's countries contribution and the people's effort towards that and their growth with per capita measure of something, GDP largely misses the point.

So, next time, you see GDP numbers, take it with a pinch of salt. Also, expect people to modify the way it's calculated multiple times in the years to come.

Please do share your comments and thoughts on what you think.

Libby - An app for audio books and eBooks from your US library

2020-01-20T14:24:00.002-08:00

Have you ever wondered about having audio-books from your library. Libby is a nice app (the web version is https://www.overdrive.com) to see all your books

I recently was looking for some ways to hear audiobooks during my commute. Usually, I use Spotify to hear some regional songs. The Libby app works seamlessly with the Android auto app and it was amazing to listen to nice books during commute.

I also downloaded few ebooks and it remembers the location and works perfectly. If you choose to read through Kindle, that option is also allowed. The ebooks can be read through overdrive in the web using a browser or through the Libby app itself.

I use the Alameda County library. Some of the most popular books have a hold period and you can be in the waiting list for the books and it will be borrowed automatically for 21 days.

I would highly recommend giving it a try.

Happy learning!!!

How do I use PayPal offline (with 2% cashback)

2019-11-25T20:57:00.004-08:00

PayPal is one of the safest option for paying online. With more and more omnipresent payment solutions, Mobile has become the primary option to pay across online and offline in stores. Apple Pay, Samsung Pay and Android Pay are some of the widespread payment options using NFC (Near Field Communications) to pay using mobile.

How to use PayPal in Samsung Pay and Android Pay?
Just like adding your credit card in Samsung Pay or Android Pay, you can add your PayPal account and log into it.
Please do note that only the balance and bank would be used for these payments. It would be a preferred choice to use if you are planning to pay directly from your bank account for all the offline payments easily.

Can I use by Bank account to pay through NFC?
Yes. Through PayPal inbetween. You can add bank to your PayPal account and verify it. After that, you can add the PayPal account to Android Pay or Samsung pay and BOOM. You are all set to pay all in-store payments through Bank (using Android Pay or Samsung Pay and PayPal)

PayPal also provides you with a credit card in partnership with Synchrony and it comes fee-free with industry best cashback rate for fee-free cards at 2%. Once you have the PayPal credit card, make sure to pay your bills on time by due date to avoid any late fees/fines. There is absolutely no annual fee and the perk of 2% comes for all the transactions you do online/offline. I would highly recommend this as one of the best in the industry for the fee-free cashback cards.

Link for more information - https://www.paypal.com/us/webapps/mpp/credit-card/2-percent-cash-back-mastercard

PayPal provides hassle free protection for 180 days as well if you end up facing an issue with any transaction. After all, PayPal is built on trust by all its customers.

29th state in India - Telangana

2013-07-30T09:23:00.001-07:00

Andhra Pradesh is a state that was formed on linguistic basis as having people speaking Telugu. Telangana, Royalaseema and Coastal Andhra were part of Andhra Pradesh. Telengana is fighting for its own statehood for a long period of time. Today, Congress Working Committee (CWC) announced the approval for the formation of a new state called Telengana state. Hyderabad would be a common capital for both Telengana and Andhra Pradesh for atleast next 10 years. The new state will be formed after the resolution is formed in the parliament, probably, in the next 4-5 months.

Are Telengana people excited?
Mostly, Yes. But they would be really excited if Hyderabad was made their capital and Andhra Pradesh was made to create its own capital.

Are other Andhra people happy?
No. They still think this should not have happened. They are worried about the future of their people in Hyderabad and the future of Hyderabad as such.

Is this really true? Everyone agreed?
Yes. Its hard to believe. But its indeed true. There has been times when Congress said Telengana cannot be formed and a commission will be put to analyze the Pros and Cons and no steps were taken for a long time. Congress, know to be a silent observer and usually doesn't involve in making bold decisions, has made this bold decision through the CWC. We have to wait and see how the resolution in the parliament goes for the formation of the new state.

Future of Hyderabad:
Hyderabad belongs to the Telengana regions. The development of Hyderabad happened because it was the capital of entire Andhra Pradesh. All the people in all the regions of Andhra has helped in developing Hyderabad and making this as an important capital. Both Telengana and Andhra as different states, would like to own Hyderabad. Hyderabad has stalled in creating new developments in the past few years due to political instability. There were no big developments. This city also has faced numerous threats and few areas are always in red alert. When Hyderabad is owned by both Telengana and Andhra, more problems is likely to be created. It is possible that people from Andhra would move into Telengana as usual and take up positions in Hyderabad. But new developments is most likely to be stalled. Time being the great healer, would help in Hyderabad's cause and brings new developments to happen in future.

Other Views:
Most of the people in Telengana itself also believes that United Andhra Pradesh would do more good than separating it to two states. This will cause more bifurcation in other states, which asks for their new state.

As such, this was never an easy decision to make for Congress. They may have been opportunistic to come up with the announcement just before the election time.

Do comment on your views.

CRISIL Open Offer: Subscribe or Not to subscribe?

2013-07-29T10:51:00.003-07:00

CRISIL is the leading credit rating company in India. It researches other companies and gives rating to IPOs, other financial debt and equity instruments. It is completely debt free and is one of the best mid to large cap company one can invest in. It also has a good management team and reporting profits year after year. It has always enjoyed being the pioneer in the industry and had good valuations.

Now, McGraw Hill Asian Holdings would like to increase the promoter shareholding in the company through an open offer priced at Rs. 1210/-. The open offer period is from July 24 to August 6, 2013. So, the price would be stabilized around Rs. 1210/- till the end of the offer period and then goes back to the real valuation from the market. McGraw Hill Asian Holdings currently hold 52.77% and would like to increase another 22% through this open offer.

What does it really mean when a company is making an open offer?
If a company is making an open offer, it actually believes in the business more and would like to invest in its vision more. If companies are having excess cash, they can buy back the outstanding shares.

How does it work out?
People who have the company's shares can apply for the open offer. Based on the number of shares tendered, company will give the open offer price to the qualified shares. If the total number of shares tendered at the open offer price is exactly 22% , all the shares tendered would be given the offer price. If the number of shares tendered is more than 22%, say 44%, one in two shares alone would be given the offer price.

Can I buy now? Is it an arbitrage opportunity?
The current quoting price of the stock is Rs. 1185.15/-. The open offer price is Rs. 1200/-. The difference is Rs. 24.75/-. This seems to be an arbitrage. Yes. There is an opportunity. But how big? If you buy the stock now, you will end up paying a brokerage of 0.5 to 1% based on the broker. It sums up to Rs. 11.85/- . After this, you need to pay tax on the profit. This profit will be added to your income and would be taxed at your tax rate. So, if you are in no tax bracket, you can get Rs. 13/- per share as arbitrage.

There is a catch though. Not all the shares tendered will be taken by the company. If everyone tenders their shares (worst case), only one in two shares will be given the open offer price. And, think of the higher risk. If the price of the stock moves down after the open offer (which is most likely based on the previous open offers from various other companies), you will end up making a bigger loss.

Current shareholding stays at
Promoters: 52.77%
Foreign Institutional Investors: 10.35%
Domestic Institutional Investors: 16.15%
Others (Public) : 20.73%

If the Institutional investors doesn't tender any of their shares, every retail investor who gave his shares would get the open offer price.

The arbitrage opportunity was huge when the announcement of the open offer was made on July 23, 2013. The shares were promptly rose by 20%.

I already have CRISIL shares. Should I subscribe for the open offer?
It really depends on your scenario. The open offer price is better than the secondary market price and this would mean you can make better money by selling to the open offer price. The profit that you make here will be taxed as per your tax slab. This profit will be added as your income. If you stand in more that 10% tax slab and you have bought the shares about a year back, it always works out better to sell it in the Secondary market. This is because, there will be no tax for long term gains as STT is paid in transactions made through the market. So, the additional profit that you get from open offer price is completely wiped off by your taxes.

If you had bought this in less than an year and you fall in 20% tax bracket or less, you need to see how much will be your taxes in both the cases and identify the best case. Hopefully, tendering the shares would make much sense for you here.

CRISIL, as such, is a good share to own. It always have moved from one strong position to another strong position. They have a niche and is a great share to hold. If you want to make use of this open offer opportunity, you can probably sell this now and buy this at a lower price after the open offer.

Let me know your comments and on your decision. All the best.

How to find the best engineering college

2013-07-09T03:35:00.000-07:00

There are about 520 engineering colleges in Tamil Nadu that are affiliated to Anna University. Most of the parents wants their children to become a doctor or engineer. The counsel ling for all the engineering colleges affiliated to Anna University started from 21-Jun-13 and happening till 26-July-2013 as per the schedule in here.

Because of sheer number of colleges and the number of students coming out every year, the engineering stream has completely lost its sheen for those students coming from average colleges. Most of south Indians invest heavily on education of their children. There should be some amount of analysis that should be put in as college is one of the important phase in everyone's life.

Students should understand their needs and check if the college satisfies everything that they are looking for. Some of the important parameters that can be used for analysis is provided below. This is no particular order and the priority differs for each student based on their background.

- Fees

- Placements

- Discipline

- Course

- Accommodation and Travel

- Infrastructure and Facilities

- Professors and Lecturers

- cut-off marks

The cut-off marks along with the list of colleges that was opted by students last year is made available in the link - http://annauniversitybe.info/TNEA-2012/. Please note that there will certainly be some changes this year and this cut-off marks wouldn't repeat in the same way. This will just act as a guide.

Shortlist few of engineering colleges according to the needs mentioned above. Then, interact with the alumni, students and college officials by visiting them in person before the counsel ling starts. The alumni and students of the college can help in giving the right picture of their college. The expectations will be set clear.

There are some engineering colleges offering management quota seats. According to the needs, if one wants to get into a college that is already filled in counsel ling, one can opt for management quota. Here as well, its advisable to meet up with students and their parents to set the expectations right.

Please provide your comments on your experience in getting into the engineering college.

How should I invest a lump-sum amount

2013-06-12T00:46:00.000-07:00

The "lump-sum" may mean different amounts to different people. Even for the same person, the "lump-sum" can mean different amounts according to his life stage. These kind of lump-sum amounts are parked mostly for shorter term with a particular goal in mind. The goal can be anything from Buying a car, House, Children's education, marriage, retirement etc., The tenure is important to be identified before considering the investment avenues. Also, the importance of reaching the goal on time also should be considered.

Let us assume, Raj is looking for investing 10L in some investment avenue for best returns in 2-years time frame. He expects the best returns possible during this period. What should he do?

The options for him may be.,

(1) Direct Stock investment

(2) Mutual funds

(3) Post Office savings schemes

(4) FD

(5) Purchasing land

(6) Corporate bonds/debts

(7) Insurance linked Annuity-plan

(8) Chit funds

(9) Multi-Level Marketing

(10) Leave it in the SB a/c.

(11) Gold

100% safe investment can only be Post-office Savings schemes, FD and SB a/c.

As Raj is expecting best returns possible for the two-years period, we will see each of the option in detail below.

(1) Direct Stock investment:

He can get returns in anyway from "-100%" to "220%". It really depends on the stocks he has chosen. There are some best Blue-chip stocks (like Infosys, Reliance etc.,) that could have potentially give you bad results for a two-year period. Risk here is 100%, Which means you can potentially lose all the money you put in here. As the better returns lure you, you can choose to invest part of your lump-sum (may be 10%), which can give you great returns if you hit the bull's eye.

(2) Mutual funds:

If Raj is a kind of a guy, who thinks, "I will always leave it to the professionals", they he can consider this option. Mutual funds are less riskier than stocks. It can give returns from -80% to 200%. If the market is down, you won't lose your entire money. This mutual fund will be actively managed by a fund manager, who is supposed to better in the field than a novice. If Raj is comfortable in taking the risk, then he can choose to invest part (say, 20%) of his entire lump-sum.

(3) Post-Office Savings schemes

Most of the Post-office savings schemes like Kisan Vikas Patra (KVP), Public Provident Fund (PPF) etc., are for longer term. Raj can't invest his lump-sum here if he want to get back the money in 2 years time frame.

(4) FD

If you want safety and happy with corresponding less returns, then FD is for you. The Fixed deposit gives around 9% p.a. according to the bank and is extremely safe in India. You should certainly invest some part of your money (say, 30-60%) here if you want good returns with safety of the capital.

(5) Purchasing Land

Land or Plot, as an investment option, is the most illiquid one. If Raj knows what he is doing and sure that he can get someone at the right time, he can choose this one. But, for most people, who buys land 1-5 times in a lifetime, this is best ignored.

(6) Corporate Bonds/Debts:

Corporate Bonds and Debts will stand directly head-to-head with FDs. Raj can invest in FDs than Debt funds, if he can get better post-tax returns in FD than 7%. Corporate Bonds don't come often. It is better to invest in some companies with good track record (remember, Tata) when they supply Corporate Bonds. If Raj can't find any company giving corporate bonds, then he can't apply for this. Also, this usually has more time period than 2 years. Final Verdict is, If Raj is looking for 2-years, then he can best avoid this as well.

(7) Insurance Linked Annuity-plan

Insurance is always for longer term. Also, Keep in mind that Term insurance is better than any other insurance. Insurance should never be combined with Investments is usually the key.

(8) Chit Funds

Chit Funds can be compared with Recurring deposits with loan facility. This product is not for Raj, with his current requirements. There are lot of scams happening here. So, its better to look for legit-ness of the fund before investing in any of the chit funds.

(9) Multi-Level Marketing

To start with, MLM seldom has a good business model and almost always is run with only one motto - "Lure as much people as we can". whatever the tenure and investment you are considering, its best to stay away from these scams. It sometimes looks legit initially, but screw you completely.

(10) Leave it in the SB a/c

This is the most dumb thing that any one can do. Leave only about 30% of your monthly expenses in your SB a/c. The remaining should be either in a FD or a liquid fund, that can give you better returns. The inflation just eats your money, if you leave it in SB a/c

(11) Gold

Investing in Gold is a good option for a long term. The safety that this instrument provides is considered to be great. Some part of your investment (say, 10%) should be in Gold. Remember that, Investing in Gold is usually through the Gold ETFs or Gold Fund of Funds and not through the ornaments. The ornaments have Making charges and Wastage, which eat up your returns. If you are planning to invest in gold, ornaments is not an option. As Raj is looking to invest for 2 years, he can invest about 10% of his money in Gold ETFs.

As a whole, Raj can allocate his lump-sum 10L asset

1-1.5 Laks - Direct Stocks

2-3 Laks - Mutual funds

3-6 Laks - FD

1-1.5 Laks - Gold

Please provide your comments and your thoughts on the best plan for Raj.

U.S. Consulate B1 Visa experience in Chennai

2013-06-07T12:14:00.001-07:00

Most of them would have seen a ever-standing long queue near Gemini Bridge in Chennai. You can see the location of U.S.Consulate through this map http://goo.gl/4t4Z2 . There are different kind of Visa(s) that you can apply to reach U.S.

For quick reference, please refer to the below F.A.Qs

Why do I need Visa?

Most foreign countries require approved Visas for the people from other countries to visit their country. The norms vary from country to country. This U.S. Consulate is responsible for issuing Visas for people visiting "The United States of America" only.

Can I apply for any Visa here?

The Visa interview happens here. For application and other such details refer to http://www.ustraveldocs.com/in/index.html . The visa interview for all the type of Visa for U.S. happens here.

The usual schedule now is to record your finger-prints in OFC and visa interview in the U.S. consulate on the next day. I had the OFC (offsite Facilitation Center) appointment scheduled on 30th May and U.S. Visa appointment on 31st May.

My appointment was at 8 AM for the OFC. I went there by 7.45 am. There was already a big queue in front of the OFC office. I looked for the parking inside the building. I went to the watchman near the gate and asked where to park my vehicle. He told "You can't park the vehicle inside. No Parking inside the campus". I had to park it out. I stood near the line and went into the Centre exactly at 8.00 AM. Only people who had appointment at 8AM were allowed in. I had to keep my bag with important documents outside the center and only plastic bags were allowed inside the gate! This OFC is specifically to get the fingerprints and photo. They don't ask any questions here and this is just a formality. This appointment is one day before the U.S. Visa Consulate's appointment. So, people coming from other states has to be in town for at least two days for the Visa interview.

For the U.S. Visa Consulate, my appointment was at 7.30 am. Again, this was the first available slot for the day. I reached the place by 6 am. I had to park my vehicle about 1 km from the Consulate and walk back. There is no place nearby to park the vehicle. I reached the consulate at 6.20 am. The queue was already long. It seems people were standing from 4.30 am! The place at which you stand hardly matters though. They started to verify the documents by 7 am and sent one-by-one in the queue. I know that the mobile phones and bags are not allowed in the consulate through by previous day's experience. So, I kept my bag and mobile phones inside my vehicle itself. To my surprise, they didn't even allow remote keys. Also, CDs were not allowed in. There was a small petty shop nearby and it did the safe-keeping job for the visa aspirants. They would charge Rs. 10/-. The receipt would also be provided and they give you a token. Then, You will be provided a number and the documents would be screened. After the screening, they check your fingerprints back for matching and ask you to proceed into the adjacent building. The officers arrive only by 8AM. Then each officer will take one-by-one in their queue. Keep an eye on your number and any of the TV screens. Easily you can see the counter number and stand in queue for your turn. The Visa officer will be inside a bullet-proof glass cabin and ask you few questions. This will be mostly related to who are you, Where you want to go, purpose of visit, how much time you will go etc.,

Then, if you want the courier to reach your office/home, you can give Rs.300/- and place the order. I didn't opt for this and I collected the passport directly from the Blue Dart Courier office. When you are collecting the passport, make sure you go with your original document and you have to sign in the copy as well for the proof.

All the best for your interview. Add your experience and questions in the comments below.

Mom is so special

2013-05-23T23:29:00.001-07:00

Motherly love is beyond comparison. There is a saying that - "God cannot be there for all of them. So, he created mom". There is a great truth in that. All the mothers in the world love their children and want to give whatever they want.

My mom is so special. She gave love, provided care and taught good and bad. She was really fun-loving and enjoys comedy a lot. She laughs and make others laugh with her words. She is a role-model in many ways. She gets up even before the sun rises and gets all the required things for us on time. She knows where things are in the house and helps everyone - from my father to my brother in getting their things. She was kind and lived for us. There are no words to explain her love.

My mom is so special. When my father had Jaundice (Manjal Kamalai), my mom helped him to recover faster. During my campus interview days, I told, I am planning to move out of Chennai for my job. My mom immediately said "you need to move places far away as well, if required, to make money" and was helping me to make that decision faster. When my sister gave birth to her son, mom was there as a pillar of support. Even though my mom's uterus was removed during the same time, she was confident. Her great attitude helped her to recover faster. She helped my sister and her son all the day.

My mom is so special. She encouraged everyone to bring the best out of any person. She managed to do this all the day. She believed that her younger son can become a banker and he is now. My father was really caring for my mom. They were really made for each other is an understatement.

I lost my mom due to heart-attack about a year back and I am still missing her. My mom is so special. I miss you, Mom.

Get 3x more money by investing early

2013-05-11T06:00:00.000-07:00

If you can live with 90% of your income, it is possible for you to make a choice of saving or investing for the remaining money. If you can't live with 90% of your income, you need to concentrate more on your career to increase the income. As a rule of thumb, it is better to live with 90% of your income. I mean, it is better to spend less than what you earn and its even more better if you can save at least 10% of your income.

Once you make sure you are living within your means, the next step is to invest as little as you can. Saving just makes the money safe but won't grow the money beyond the inflation numbers. If you are investing, it grows your money and gives you better return. Please read Begin Investing for more information.

Why should one invest early?

Investing early gives more time for you to grow your money.

Lets take a small example. John and Joe are childhood friends and of same age. They earn the same amount of money. John invests Rs. 20000 every year and gets 12% returns from the year 2013 till 2030.

Joe, after seeing his friend investing for ten years, thought he also needs to invest. Joe also invests Rs.20000 every year and gets the same 12% returns from the year 2023 till 2040. So, both of them, invested the same amount of money and got same returns for 17 years. What do you think is their returns on their investments on the year 2050.

At the end of year 2050, assuming that they are going to get the investments out now for their retirement/children's marriage/higher education.

John gets more than Rs. 1 crore (Rs. 1,07,55,561/-) and Joe get only around Rs. 34 lakhs (Rs. 3463003/-).

Please note that John and Joe invested the same amount of money and got the same amount of returns. But the only thing John did is investing early. Also, they invested only for 17 years. Just by investing early, you can get 3 times more than the person investing late.

So, its plain and simple. Invest the maximum that you can as early as possible.

Please share your thoughts.

Why asset allocation is important

2013-04-05T08:27:00.001-07:00

Everyone understands investing the money is really important. If not, understand that investing is expected to give more returns than inflation. On the other hand, saving money would give depreciating returns compared to inflation.

Primarily, investing everything in one asset class (debt, equity, gold, real estate, liquid funds, cash etc.,) is a bad idea. Based on your current age, the asset allocation should be done. Most of them are over-exposed in real estate.

The rule of thumb is to reduce the exposure on risky investments (equity, mutual funds, ULIP etc.,) and increase the exposure on safe investments (PPF, PF, debt, gold etc.,) as your age increases. Also, the amount in each asset class should be less than 70% ideally.

There needs to be some emergency cash always available for unforeseen emergency need. This would be typically around six months of your expenses.

The primary reason for asset allocation is to diversify and thereby reduce the risk of losing the entire investment because of one asset. For example, if one invests only in real estate and for some reason its down, he would lose his entire wealth. On the other hand, consider a person investing in different asset classes. He invests in equity, real estate and debt according to his age. Even if one asset class is down, the others would assist him in getting returns.

What do you think? have you invested in different asset classes. Are you over exposed to any particular asset class?
Share your comments.

Whom does the Rs. 2000/- tax credit help?

2013-03-26T12:12:00.002-07:00

In this year's budget, the tax slabs are unchanged and Rs. 2000/- tax credit has been introduced. The tax slabs as such remain the same

For both Men and Women in India,

Income - Tax slab
upto 2 Lakhs - Nil
2-5 Lakhs - 10%
5-10 Lakhs - 20%
Above 10 Lakhs - 30%

This Rs. 2000/- tax credit is not for all the tax-payers. It benefits 1.8 crore people in the income group of 2-5 lakhs. Essentially people who are getting less than 2 Lakhs (tax would anyway be NIL) and more than 5 Lakhs have their tax rates unchanged without any tax credit. For those who are under 2 Lakhs will not be credited Rs. 2000/-

The individuals less than 60 years of age will be paying Rs.2000/- lesser if their income is between 2.2 and 5 lakhs. If they are earning more than 2 lakhs and less than 2.2 lakhs, there will be no tax for them.
Similarly for the senior citizens, if their income is between 2.7 and 5 lakhs, they can reduce their tax liability by Rs. 2000/- before paying their tax. If their income is between 2.5 and 2.7 lakhs, they don't have to pay any tax.

Please note that, submitting Income tax return is mandatory for everyone. Even if you have completely paid the tax liable, it is necessary to submit your returns separately. Also, if you are not liable to pay any tax and have some income less than the taxable income, then also its necessary to submit the tax return.

Let me know your thoughts.

Top 5 things to look for when buying/renting a house

2013-03-24T07:09:00.001-07:00

There are many things to look for when you are buying/renting a house. While buying a house, you may have some priorities and check-list. Also, while renting the house, you will have an eye on the rent and other agreement details.

In common, there are many things to look for when buying or renting a house and I have listed the top 5 things, I think, here.

(1) Good Locality
      It is important to see whether it is in good locality. It reminds different things for different sort of people. Good locality can mean one or many of the below
     (a) good residential place to live in
   (b) few good schools and hospitals around
   (c) friendly people nearby
     (d) Good roads, have office nearby
     (e) departmental stores and hotels nearby
    The choice of above things depends on the sort of the people and the life-stage they are in.
(2) Ample ground water supply
   Water is a essential commodity and we require water for many things in our life. There should be a bore-well or well with ample ground water supply, which can be enhanced with 'Rain water harvesting' through rain water. If there is a way to get drinking water (Municipality water/ Metro Water) directly to our home, then it is well and good.
(3) Proper sewage disposal
Another very important thing to consider. There should be a proper sewage disposal that can be done. If underground sewage connectivity is made, then it is better. That too, in this world of flats around, it is always to be safe than sorry. If there are more than 500 flats, there should certainly be a way for disposal.
(4) Good Connectivity
      There should be good roads around and good connectivity through nearby bus stand/railway station/airport. Based on your job/other needs, there is a possibility that you will have to travel at least infrequently in the future. Its always better to have good connectivity through all the means possible.
(5) Less Pollution
      It is another important thing to consider. Pollution is increasing day by day. The kind of noise pollution and air pollution that we experience, when we are traveling, itself is harmful. Its nice to have the house in a walkable distance (less than 1 km) to the nearby bus stops/railway station but not very near it.

Please provide your comments on what you think on the important things to consider while buying/renting a home. What are the things that you look for. Happy to hear.

What does customer experience mean?

2013-03-18T11:00:00.001-07:00

Customer experience is the experience of the customer from the period they came to know about the existence of the product until they finish using the product. For a hotel like Saravana Bhavan, the customer experience is from the point they came to know about its existence (the day they started) until they are associated with that particular customer (probably, forever for Saravana Bhavan but it depends on each of the customer).

For a typical brokerage firm, it is all about how easy it is to open the account and the experience until the customer closes the account. For BSNL or Samsung, it is from when the customer gets to know about their products (the point when they want to buy it) until the time they stopped using it. Customer service is also part of it. Its all about the customer service, once the customer has become the owner of the product.

Most of the times, I have seen, the Customer Experience is great until one procure the product or service and after that, because of the customer service, it loses its ground and go nowhere. So, its very important to concentrate on the customer service if you want to give a good customer experience. This customer experience is really of great importance, as they would get more customers by 'word-of-mouth'. Once you provide a great customer experience over-all, you are heading towards that market leadership.

I have been a user of BSNL broadband for a long time. Recently, I surrendered the BSNL broadband connection as I had to move from that place. It was seamless to close the account and I received a call from BSNL folks asking the reason for my surrendering the connection. It was indeed a good customer experience. Usually, BSNL's customer service would be pathetic is what I have heard a lot till now. But, I think, they are trying to correct it. No doubt, they are nowhere near the market leaders yet.

I have an account with Kotak Securities, my brokerage firm for the last 4 years. I, usually, trade online and haven't visited their offices for a long time. Recently, I had to fill out the form for nomination and found that they are strict in finding fault in the forms that the customer built out and usually don't approve it easily. It doesn't really makes sense, at least, to me. As its our nominee, if we give some details wrong, we are the ones, who are finally getting affected.

For opening an account, it takes more that 50+ signatures and the people visiting us says "Don't fill the form and I will fill that completely". This gives us some pleasure as we know few others who have done this already and its a kind of routine. I am worried that they didn't even ask for the nominee details. I found that the nominee details are not entered because of the recent drive from the SEBI that mutual fund investments should have nominee details. I would like to advise Kotak Securities here , to remind of nominee details while opening new accounts to others. Are they market leaders?

How was your customer experience in the services and products? Share your views.

Market Leader Samsung

2013-03-18T10:31:00.001-07:00

Couple of years back, the word "Samsung" always reminded me of the beautiful Home Appliances (read TVs, Air Conditioners and Fridges). But, it has also become one of the market leaders in Mobiles, Accessories and also Laptops. This leadership in other avenues have always come along with their prime home appliances growth as well.

About three months back, I wanted to upgrade my 5 years old desktop. And I was in a shock to find most of the accessories had the option of Samsung in it (except the mother-board and processor, of course). When I tried to find the best option for internal hard disk, Samsung has created a good presence there.

After the Samsung Galaxy series came into existence, it has grown to market leadership in India. The recent S4 as per the release has many good features and is comparable to iPhone. Nokia, once a leader in India, has completely lost the battle against Samsung in recent times.

One of the main reasons on why Samsung is preferred over other brands is because of its customer service. I bought a Micromax phone once about three years back. I used it for 6 months and its battery didn't charge after about 8 months. I struggled to find the service center for Micromax and lost faith in its brand.

Samsung is present in more places that it was seen couple of years back for sure. See the attached screenshot of Flipkart.com for the keyword "Samsung"

On a final note, I am happy to share that, I recently bought the Samsung flagship phone - Samsung Galaxy Grand Duos. I will experience it for say couple of months before pitching in to writing an review for it. Its great at the first looks.

Let me know about your experience with Samsung brands. How was it? Was it great or pathetic. Happy to hear.

Google Reader alternative Feedly

2013-03-16T11:15:00.003-07:00

Google has always been the front runner on creating new and exciting products. Even though they come up with lot of good products, I believe they sometimes close down some of their good products unnecessarily.

When Google search came with a bang and captured most of the search market, it innovated many other new and better products not restricting itself to search engine alone. This gave way to them as a market leader in innovation (probably, Apple and Google fight here for the throne).
Google has a bad habit of forcing the change on customers. Gmail, one of the best mail available in the market today, has always changed itself according to the company's vision. It would have been better if Google had provided the 'customize' option on Gmail to have it configured according to what they like by giving some options. On a funny note, one should be happy that, at least, its alive.

Google announced its going to phase out Google Reader from July 1, 2013. Feedly is the perfect replacement for the Google Reader. It integrates seamlessly and there is complete assurance that it gets all the Google Reader data directly once you give the permission for it access your Google Reader. Also, it has a feature of auto-syncing the changes to you do in Google Reader and Feedly. Also, it has its mobile version, apps, dashboard look and the best of all, the classic look of Google Reader.

I am really disappointed with Google Reader being dumped by Google. As Google User(s), We should always be ready and willing to move away from any of the Google Products. It phased out iGoogle, the dashboard of widgets sometime back and its Reader this time.

Which Google Product(s) you love the most and wouldn't want google to dump it ever. Give it in your comments. Also, Share whether Feedly or any other RSS Feed Reader solved your Google Reader problem. Happy to hear.

Know your PAN

2012-07-22T01:03:00.001-07:00

Some times you have to get your PAN number or get the details of First Name/Father's name as given in PAN.

These services are already present in the income tax government website. You can Know you PAN details by just going through this link - Know your PAN which will open the screen as shown below.

When you just know your surname you can go through this link and give your DOB and surname to get the complete PAN details. This will give you your PAN number if you have forgotten it. Please note that, it is illegal to have two PAN numbers associated with your name.

Know your PAN

After submitting your Surname and Date of Birth, your PAN details will be shown to you similar to the screen below.

Your PAN details

This will really come in handy if you need to reset your password and you want to know the correct name as entered in PAN or want to know your PAN number immediately.

Please add your comments.

How to e-file your income tax returns

2012-07-17T22:27:00.002-07:00

Income tax returns can be easily filed online for free with the help of government's income tax website. This can be done even if you don't have any digital certificate.

Follow these simple steps:
1. Go to the income tax website.

Income tax india e-filing home page.

2. Register using the above link. The username will always be your PAN number. If it says you have already registered and you haven't done so, then you might have to call the income tax department to get it resolved. This can happen only if you have given the details to another person for filing your income tax return.
3. Once you have registered, download the relevant ITR form. Use this link. Fill the excel file by following the instructions downloaded. This would ask you to enable macros. The instructions will be present as a README file when you download.
4. Validate the sheet and create XML using the macro buttons available in the excel sheet. This will create the xml file in the same location of the excel sheet.
5. Click on the Select Assessment year as shown in the below screen to upload the XML you created.

File your returns online

6. If there is no Digital certificate, select No in the above screen and upload the XML file after selecting the corresponding ITR in this screen. If you have a digital certificate, your returns are filed. Otherwise, you have to send to the CPC, Bangalore address mentioned in the screen to complete the filing of returns. You can send the ITR-V generated within 120 days after filing your returns online.

It has become now mandatory for those who earn more than 10 lakhs to file their returns online.

MBS - Mortgage Backed Securities

2012-02-04T10:48:00.000-08:00

Securitisation is a process of liquidizing the assets held with financial institutions. If there are many auto loans given by a bank and instead of raising money through deposits and giving further loans, Banks can also do the following to increase its profits.

- Bundle all the auto loans and form a security.
- Raise the money through prospective clients with the help of other financial institutions.

The risk lies with the bank and this gives more liquidity to the bank and the money generated through this process can be availed in giving further loans.

In India, Securitisation has been there for long. Please visit this site for more details.

Consider the Home loans now. Banks have done the due diligence and have approved home loans for 20 people for 1 crore. The mortgage would be the home for the bank.

Now, If I am a person A thinking having very less money but ready to lend money for a prospective buyer who buys home and wants my part of interest back. Say, I have only Rs. 20000/- and want the interest for that alone to come to me.

Banks think, my whole 20 crores is locked up in the home loans. I also want the liquidity. This way, Investment banks created a security out of the mortgages in the bank and sold in the market and people like Person A bought it. The things that are not bought will remain with bank and investment bank. This gives more returns than FD and Person A is happy in taking the risk. Bank is happy in getting more money and Investment bank is happy on making its commission on forming the product.

Market Zooming to 6000

2012-02-03T13:11:00.000-08:00

Okay. Nice title to keep most of them interested.

Its very hard to time the Stock market and in fact, one can't predict the market move. If you want to know whether the market will zoom to 6000, the answer is YES.
But the real question is when?

One cannot really predict the market and it always gives surprises. There will always be some positive news and negative news around and market will hear the part of it and behave in the bullish trend even when there is a bear around the corner.

Simply, to get good returns,
Put a SIP and invest more during the bearish period in a good equity Mutual fund like DSP Blackrock Top 100.

If you are a good stock picker and want to beat the market, do the fundamental analysis and have patience. Its just the buy and hold strategy. Book profits when your target is hit.

To summarize, one cannot really predict the market at any time. One can wildly guess the way market movement and he can just be lucky in guessing. There is no denying the fact that returns in market is superior than any other means for long periods (>5 years)

By the way, I don't think market would be reaching 6000 by June-2012 for sure.

Leverage - Analysis

2012-01-22T09:06:00.000-08:00

Leveraging in simply increasing your exposure in something with some money that you don't have and thereby inherently increasing the risk.

Typical example for a normal common man would be 'Buying a house' - Where most of the money is given as a loan by the bank and he is thus said to be leveraged.

For a equity investor, few of the other examples would include Stock Futures, Options and Margin Intraday trading.

Without the money in hand, only the risk will be increased in each of the case and typically Leveraging is the concept where you will be get high returns along with high risk.

For example, Reliance is at Rs. 800/- now. you think, it will go Rs. 860/- in next 3 days.

You have Rs. 5000/- in hand, which you can afford to lose. Remember, you shouldn't be taking risk on a capital that is required next day for your need.

Option 1:
Buy 6 shares
- 6 * 800 - Rs.4800 spent.

Profit
- 60 * 6 - Rs. 360/-

Option 2:
Buy 60 shares
- 60 * 800 - Rs. 48000 spent (Rs. 43000 in margin)

Profit
- 60 * 60 - Rs. 3600/-

You can clearly see that Leveraging gives you a greater benefit in rewarding. But it goes without saying that it has higher risk. What if, Reliance goes down?

If you have bought only 6 shares, you can afford to hold it. But if you have bought in margin you are locked. You have to book losses and the losses would be heavy as well.

So, Leveraging would help in having high risk and give high rewards.