Shining Investment: Gold

Every one likes the shine of Gold. We all love to buy gold or like to invest in gold; specially Indians. Our parents always like to accumulate physical gold whenever they have money so they can use it in their children's marriage; but is that the only way to procure gold. Do they know or gave a thought that there are other ways also available for investment in gold.

In this blog I will explain three different ways by which one can invest in gold:

1.) Physical Gold: Many people like to buy physical gold but I would not recommend this. One can buy physical gold in the form of gold coins, gold bars and gold ornaments. But with some considerations:
a.) The cost of keeping it safe is really high as you have to have a locker in bank to keep it there.
b.) One has to be sure of the quality of the gold (Purity).
c.) There are making charges also which people eliminate from the costing of gold very often.
Therefore there is additional cost associated with the physical gold which we should remember. As in my view, from the investment perspective you should look forward to the other two options described below.

2.) Gold Mutual Funds: This is a better way to invest in gold than buying a physical gold. By this way one can invest even a small amount say Rs. 500 per month in gold and can accumulate big sum in long time like 10-20 years for their future purpose. When the gold is required in physical form one can go for the fund's conversion into hard cash and can buy the physical gold (this saves your procurement and safety cost). One can buy Gold Mutual Fund by opening an account with mutual fund companies which offer these schemes in electronic form.

3.) Gold Exchange Traded Funds (ETF): One can buy Gold ETF through his demat account. So, it removes the worry of theft. One can buy an amount of Gold as low as 1 gram and in multiple of 1 gram. These are valued every day on the gold rate of market. Normally people who want to trade in gold would like to go for this option.

I hope you all can clearly understand the other two ways are very simple and much better way of investing in gold. You can set up Systematic Investment Plan (SIP) for Gold Mutual Fund, so you can regularly accumulate gold for future purpose.

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Evil: Credit Card Or Our Habit

Now a days banks put lot of efforts on getting clients for their Credit Card Services. Every time you visit a super market or a mall you may encounter credit card sales man, who keeps telling you about the benefits of credit card. But 90% of the times we keep ourselves distant from them because we hear lot of negative thing about credit card.

In my view, credit card is a great tool to save money. Credit cards come in various types and each type is meant for/suits to a particular set of individuals. A person can go for a type of credit card as per his requirement not just for sake of having one. You can easily find 2-3 credit cards which will be suitable to your need. Many people believe that credit card are curse and no one should go for it but I personally am a great fan of credit cards because it helps me in saving the money; in fact many a times I get Cash-Back on my regular expenses by using it.

Let me explain what points you should remember whence using credit card which makes it using effectively:

1. Wisely select a credit card: Every one should do a comprehensive research and analysis before deciding on the credit card. Before taking the card, you should carefully analyze certain factors such as: credit card fees, interest rates and other incentive features. You can go for 2 credit cards so that in case of emergency you can use the other one too.

2. Stay within 30% of your credit limit: There will be 2 benefits of it:
a.) You will always use credit card in limit and it will save you from over spending on nonsensical things so that you do not go in debt of the bank. By this way you can easily manage your credit cards.
b.) It will help you improve your credit score for future loan services requirement etc.

3. Track credit card expenses: Normally people do not track credit card expenses on per transaction basis and just like to see the bill when it generates. Many a times people get shocked by seeing the bill amount and curse the credit card for the same. But it is basically our mistake of over spending. Credit card is not meant for spending on whatever you wish to have. Its meant for spending cleverly on the things which are urgent and important. By tracking the expenses you can always keep yourself in limit.

4. Be Skeptical: We should always check our bills the moment it is generated. If you find a transaction that is never made by you; you must immediately inform your lender as soon as it comes to your notice. This way you will exceed your credit card limit without even knowing it and will also have to bear the pain of heavy interest and other charges. A lender can remove the fraudulent transactions and can lock the card instantly to prevent further misuse.

5. Pay the entire Bill, Every Month: The motive behind is to pay off the balance every month. There’s really no middle ground here. In case you do not pay the full bill every month then you have to face huge interest charges on the same and then it can probably become your habit of not paying full amount. You have to have the self-discipline to stop spending when you reach your budgeted limit i.e., 30% of your credit card limit.

6. Using Rewards: After paying regularly via credit card you accumulate the points on credit card, probably the points will be very less in compare to the amount spend. But at least you are getting something in place of nothing as in case of cash payment we get nothing in return.
I am a big fan of the other benefit of credit card which is cash back offers. I always look for the cash back offers before buying or purchasing anything so at least i can save something and in many cases I save handsome amount of money.

It is a well known saying that everything can not be everyone's cup of tea. Do not use credit cards if your past history suggests that your spending exceed your limit. And give yourself a pat on the back for accepting it honestly. The people who are the most successful at managing their money are the ones who know their strengths and weaknesses and make decisions accordingly.

Hopefully now you can understand the credit card is not curse if one uses it in fruitful way. Credit card is not evil, its our habit which makes it evil. So, use it in effective way and keep in mind the above points.

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Rich or Wealthy: Your Choice; Your Action!!

Many people normally think that "Being Rich" and "Being Wealthy" are the same things as both involve having a lot of money. But, there is a big difference between the two. We normally hear about ‘Get-Rich-Quick’ schemes but not about ‘Get-Wealthy-Quick’ schemes. 

Knowledge is the key differentiator between being rich and being wealthy. Rich people only have money but wealthy people know how to make money.  Rich people, may get money in an instant via hierarchy or winning a lottery. However, because of lack of proper mindset and poor money management skills, all of it can be lost in a short period of time. Many people make a lot of money, but all their money goes out of their expense column. Every time they make a little more money, they go for shopping. They often buy a bigger house or a new car, which results in long-term debt and more hard work. Nothing is left to go into the asset column. This kind of behavior that separates the rich from the wealthy.  Some of these people are more commonly known as ‘One Day Millionaires’. Now they have it, the next time they don’t.

Rich people are motivated by money but wealthy people are motivated by their dreams, purpose and passion. Most rich people make a lot of money with their paychecks but the moment they stop working, they stop making money also. The wealthy, on the other hand, don’t have these worries.

The Definition of Wealth

'The number of days you can survive without physically working (or anyone in your household physically working) and still maintain your standard of living.'

For example, if your monthly expenses are INR 20,000 and you have INR 1,00,000 in savings, your wealth is approximately five months or 150 days.

'Wealth is measured in time, not rupee.'

Wealthy and rich people both may experience downfalls and failures in their life span. However, because of knowledge the wealthy person can start all over again and build wealth over time. In contrast, rich people may find it hard to attain what they previously had. In essence, wealthy people are financially free while rich people are not. 

Ultimately, it’s not how much money you make that matters but how much money you keep—and how long that money works for you.

Therefore, Wealthy people say - ''I don’t work for my money. It works for me''.

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Types Of Mutual Funds In India

A lot of people invest in Mutual Funds, still some being unaware of it!!
How much do you know about it? Have you ever considered understanding the nuances of the same???

This blog of mine would contour around this topic only.

In India one may find many who are still not aware about Mutual Funds. I have an experience of my friends asking usually about the types of mutual funds in which they can invest. As I understand, it is a big problem with the generation who have just started their carrier or are new to the professional life.

Mutual Fund is a scheme launched by the Mutual Fund Houses which collects money from the investors and invest in various stocks, securities and bonds depending on the investment objective of the scheme. In India various mutual funds exist like ICICI Mutual Fund, HDFC Mutual Fund, Birla Sun Life Mutual Fund, IDFC Mutual Fund etc. Each scheme is managed by fund manager.

There are different kind of mutual fund schemes available in the market depending on the investment objectives, which are discussed below:

a.) Equity Mutual Funds: These types of funds normally invest in the equity and balance in the debt & bonds. They invest in the companies after researching them very well. Normally an investor should invest in such schemes by taking 3-5 years of time frame in mind. If you select a good fund then it can easily provide you a 15% plus annualized return. So, its better to put your money in these types of schemes if you are looking to save for your long term goal. Value Investor can start Systematic Investment Plan (SIP) also in these type of funds so he/she can save on regular basis.

b.) Equity Linked Saving Scheme (ELSS): If you are looking for tax saving scheme u/s 80C then you can opt for this fund. This can give you far better return than any other tax saving scheme. My recommendation for all the investors is to start SIP from the beginning of the financial year so that he can monthly invest in such schemes and reduce his or her burden for last 3 month of financial year. These schemes normally come with 3 year lock in period (refers the time period for which you can not withdraw the money invested).

c.) Liquid Funds: Everyone should keep their emergency fund in place so in case of emergency they dont have to break their investment instead they can use this fund. These fund have more liberty then the Fixed Deposit (FD). You can invest and can withdraw at any time without any charges. They normally give you returns better than the FDs.

d.) Index Funds: These funds blindly invest in the Index (Sensex, Nifty, Banking Nifty etc.) without researching the shares in which they are investing; so normally their return are in line with the Index. These types of funds are for high risk investors. As they are solely based on the index, and normally index move slowly upwards but rapidly downwards.

e.) Balance funds: These funds normally invest up to 65% in equity and rest in debt securities. Depending on the market conditions these scheme can reduce the equity exposure and invest in the debt securities.Investors of medium risk appetite can invest in them and can look forward for 10-15% annualized return.

f.) Debt Funds: These type of funds are of low risk, as they dont carry any kind of risk. These schemes invest in debt related securities like commercial papers, Govt. Securities, Bonds etc. They can give you better returns than the FDs.

To young investors my suggestion is to start SIP in the equity mutual fund so, they can increase their net worth. After getting the confidence they can sift to different kind of investment opportunities available. 

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Investing - Just Do It!!

Are you thinking about starting investing in shares???
Have you tried it but failed???

If your answer to above questions is YES, you must read this article.

A value investor always insists to start investing early in life. It sounds interesting but very tough to follow. Many people have their reasons of not starting the investment. Below are the reasons which normally people state:

a.) I don't make enough money: This is a very common reason which one states for not starting investment. Their belief is if you have to start investment, you need to have a huge amount of  money. Some say if they invest huge then only they can make impact in the market and by this way they always delay the investment.

b.) I don't want to make sacrifice: Today's young generation waste their money in non important physical things for shot term enjoyment. They live their life at fullest without caring about saving and investing or in case they are saving then they dont try to reduce their expenditure so that they can save more and then invest.

c.) I failed once: Many of us leave investing after facing the failure in investment. In spite of learning from that experience we stop our investment.

d.) I don't know enough: Many people have a notion that they 0.dont have enough knowledge about share market, mutual funds and any other investment tools. If you ask them have you tried learning it? have you tried Google-ing it? They dont have any answer for this. They want to get good returns without any hard work.

e.) I don't have enough time: People might have enough time to watch TV serials or movies but its very tough for them to get time for investment. If someone tells you that you can win a prize of millions of rupees if you set aside an hour every Saturday, you would do it but for investment you would not want to.

Instead of citing the above or any other reasons for delaying investment you should apply the below practices in your life:

i.) You get nothing for nothing: To get something in the future, you have to do something now. It is what it is.

ii.) Time is everything: If you can start investment with 1000 bucks (believe me you can), you should. You will give more time to your money to grow. Value investor always believes to start the investment without delay. In fact its better to start from small money so you can learn with time.

iii.) Patience is essential: As Warren Buffett says 'Investing is like planting a tree — nothing happens overnight'. You have to be patient if you want to earn good returns.

iv.) Perfection is not required: Nobody is perfect, even Warren Buffett did mistakes in his track record of investments. Lately, he made big mistake in his one investment named- Tesco and he accepted it on public forums as well that too quite humbly. Like him we must accept our mistakes and learn from them.There is nothing bad with making mistakes but we should learn from them and for making mistake we have to start investing.

v.) You can learn: In today's time we have lot of free stuff available at one click which you can use to learn the basics. Investment is not a rocket science, anyone can learn it. You just need to put in time for the same.

v.) Its never too late: One can start at any age. Age is no barrier in investment.The moment you feel is the right time for investment- DO IT!! There is no right time for investment.


The key to success, though, is the old Nike slogan: “Just do it.”

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Secret of Value Investing

Have you heard about value investing?
Are you a value investor?
Do you know how you can be value investor?

If the answer of the above questions are NO, you must read this blog.

A value investor always looks out for different investment option available and if you are also looking for the same then you must read my previous blog - Investment Opportunities in India. 

Every investor hears about  value investing very often but few of us know how he can become one of the value investor. Below is the definition of value investing:

'It is is the philosophy of investing in a security when its share price undervalues its intrinsic worth.' 

As definition may sound very simple but to be a value investor one will need very high level of discipline, passion and determination. Below are four points which will help you to be a value investor:

1.) Systematic Investment Plan(SIP): The key to value investing is doing regular investment in share market. I am not saying to set up automatic SIP in equity but one should carefully select the share and then he should invest in it on regular interval at right price. It will increase your net worth regularly.

2.) Buying stocks which are out of favor: Value investor always looks for such stocks which are available at very less price in comparison to their intrinsic price. A value investor seeks to buy a company when it is down and out, provided the price is right. One may find many companies whose share prices are depressed, at any point of time. This could happen on behalf of several reasons like quarterly results, unexpected charges, changes in leadership, dull products, etc. A value investor evaluates the drop in price with the news that is supporting the same. If the investor's evaluation depicts that the market has overreacted (as it usually does), he or she would pick up that share and hold it out. By this you increase your chance of good returns and lower you risk.

3.) Business Owner's perspective: One must evaluate the stock from a business owner’s perspective. Imagine you already own the business (you will, if you buy the stock) as a single share of stock also represent the part of the business. So, when you own a business then you don't look for selling it in few days, week, month or even years. Your outlook for the business should be for 5-10 years. In fact you should buy the share of the companies which you never want to sell in your life. It means buy the share which you want to own for your lifetime.

4.) Controlling Emotions:  Prerequisite for performing a value investment covers some strict methods that are based on facts, figures and reasoning not on the market hypes/news. Never forget that the majority of investors lose money because they did not control their emotions. One should not sell on the news or hype basis, this is the work of traders not of value investors. Value Investor normally invest in the financial struggling companies but had enormous brand power and assets. As Warren Buffett say - 'Be greedy when others are fearful and be fearful when others are greedy'.

There are many parameters that you need to check for selecting the company like P/E value, book value, market capitalization, profits & loss statement and many more (which I would be discussing in my forthcoming articles). But to be a value investor you must inherent the above mentioned four qualities. These are very basic qualities which one should remember; though they are very tough to follow as one lives in an environment which is bombarded with lot of information, news, analyst's views etc. One must keep his faith in the companies selected.

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Investment Opportunities In India

Talking about the Investment Scenario, there are lot of investment option by which we can generate another source of income which can make us financially stable and can prepare us for our retirement quite before the actual age of retirement. People have got a tendency of living on a pay cheque basis by spending their hard earned money on unrealistic things rather than saving and then investing for future.

Since this is my first blog i would like to throw some light on the Investment Opportunities in India based on my personal experience.
Below are 8 investment options which you can opt for. We will discuss each one of them in little detail:

1.) Stock Market: Many people around you will terrorize you for not investing in stock market, some will say you need good amount of money to invest in stock market. Some will say right now the market is on high so no one should invest. But the point is, there is no right time to invest in stock market. You have to educate yourself well enough so you can understand the basics of it. You have to make promise of not doing intra-day trading in any condition. If you want to earn good return then you have to select a company at very good price so you can maximize you profit which takes efforts to work proactively on the share. Being a regular investor in share market is the most basic and essential thing. You can even start with 1000 bucks per month in share market and after getting the confidence as per the knowledge of the market; increase this amount.

 2.) Mutual Fund: Many people don't have time to monitor the market. So, the second best option is Mutual Funds. You can do monthly investing in couple of good Equity Mutual Funds. It will save you from volatility and you can earn more than Fixed Deposits. Just select couple of good Equity Mutual Funds and start investing in them.

3.) Tax Saving Options: For getting best use of tax saving scheme u/s 80C, you can invest in Equity Linked Saving Scheme (ELSS) mutual fund. In this kind of fund you have to invest money for minimum 3 years. It is the lowest time for which you can invest in any of the tax saving options available. Even ELSS mutual fund gives you opportunity to earn better return than the other tax saving options.

4.) Secured Non Convertible Debentures (NCD): If one does not want to invest directly or indirectly in the market then he can go for the Secured NCD bonds. Many companies from time to time issue these bonds to generate money from the market. These are a type of loan given to the company for which one buys the NCD Bond; but it has been noted that many companies in the past failed to pay back the interest return to subscribers so the idea is that before getting into any of the NCD bond one must check the company's history.

5.) Bank Fixed Deposit(FD)/Recurring Deposits(RD): If you want to go for the safest bet then you can go for the FD or RD. They will give you lesser return as compared to above mentioned options but the security of your money and interest return is sure.

6.) Initial Public Offerings (IPOs): It sounds very exciting to invest in IPOs but you have to select the IPO carefully as in the bullish market many companies try to get their IPOs in the market and common men get trapped into it.

7.) Real Estate: In India people have a preference for getting their money invested in Real Estate. For investing into this one needs huge amount of money but the return from this option in 5-10 years are very good. In selection of the property you should always check few things i.e. surrounding location, owner of the property, future prospectus of the location etc.

8.) Gold In our country on every occasion we see the charm of gold among the ladies  and we heavily deal in physical gold normally. From the investment perspective one must compare the return from gold with above options available. A jewellery involves hidden costs like making charges, security charges of locker etc. One can opt to go for the gold ETF, which is easy to hold and you can sell it any time in the market which saves you from any fraud involved as well.


The points mentioned above are the ones which I have learnt in my Investment Tenure till now. I believe there is a long and long way to go with these things and to involve more and more number of people in it for making each one a Financially Educated person. Though I am not here to teach anything; I would be sharing my experiences via my blog and would eagerly wait for your response, suggestions, ideas in the comments below.

Happy Investing!!