We’ll make the future happen

(Source: Times of India, Mumbai, 31st Aug, Page 2)

February 29, 1992 marked the beginning of India’s economic liberalisation. Here, then finance minister Manmohan Singh lays out the roadmap in that year’s Budget speech.
To realise our development potential, we have to unshackle the human spirit of creativity, idealism, adventure and enterprise that our people possess in abundant measure. We have to harness all our latent resources for a second industrial revolution and a second agriculture revolution. Our economy, polity and society have to be extraordinarily resilient and alert if we are to take full advantage of the opportunities and to minimise the risks associated with the increasing globalisation of economic processes. We have to accept the need for restructuring and reform if we are to avoid an increasing marginalisation of India in the evolving world economy. The economic policy changes brought about by our government under the inspiring leadership of prime minister Narasimha Rao in the last eight months are inspired by this vision. Our party is an inheritor of great traditions of national service. True to this heritage, we commit ourselves to providing a firm and purposeful sense of direction to the reform process so that this ancient land of India regains its glory and rightful place in the comity of nations. This budget represents a contribution to the successful implementation of this great national enterprise, of building an India free of war, want and exploitation, an India worthy of the dreams of the founding fathers of our republic. We shall pay any price, bear any burden, make any sacrifice to realise those dreams. India is on the move again. We shall make the future happen.

The 9Cs which make a leader stand out from the crowd

(Source: Times of India,Mumbai,31st Aug, Page 2)


by LEE IACOCCA FORMER CEO, CHRYSLER

I’ve never been commander-in-chief, but I’ve been a CEO. I understand a few things about leadership at the top. I’ve figured out nine points — not 10 (I don’t want people accusing me of thinking I’m Moses). I call them the Nine Cs of Leadership. They’re not fancy or complicated. Just clear, obvious qualities that a true leader should have.
So, here’s my C list:
A leader has to show Curiosity. He has to listen to people outside the ‘Yes, sir’ crowd. He has to read voraciously, because the world is a complicated place. George W Bush brags about never reading a newspaper. ‘‘I just scan the headlines,” he says. Am I hearing this right? He’s the President of the US and he never reads a newspaper? Thomas Jefferson once said, ‘‘Were it left to me to decide whether we should have a government without newspapers, or newspapers without a government, I should not hesitate for a moment to prefer the latter.’’
A leader has to be Creative, go out on a limb, be willing to try something different. You know, think outside the box. George Bush prides himself on never changing, even as the world around him is spinning out of control. God forbid someone should accuse him of flip-flopping. There’s a disturbingly messianic fervour to his certainty. Leadership is all about managing change — whether you’re leading a company or leading a country. Things change, and you get creative. You adapt.
A leader has to Communicate. I’m not talking about running off at the mouth or spouting sound bites. I’m talking about facing reality and telling the truth. Communication has to start with telling the truth, even when it may be painful.
A leader has to be a person of Character — knowing the difference between right and wrong and having the guts to do the right thing. Abraham Lincoln once said, ‘‘If you want to test a man’s character, give him power.”
A leader must have Courage. Swagger isn’t courage. Tough talk isn’t courage. Courage in the twenty-first century doesn’t mean posturing and bravado. Courage is a commitment to sit down at the negotiating table and talk. If you’re a politician, courage means taking a position even when you know it will cost you votes.
To be a leader you’ve got to have Conviction — a fire in your belly. You’ve got to have passion. You’ve got to really want to get something done.
A leader should have Charisma. Charisma is the quality that makes people want to follow you. It’s the ability to inspire. People follow a leader because they trust him. That’s my definition of charisma.
A leader has to be Competent. You’ve got to know what you’re doing. More importantly, you’ve got to surround yourself with people who know what
they’re doing.
You can’t be a leader if you don’t have Common Sense. I call this Charlie Beacham’s rule. When I was a young guy just starting out in the car business, one of my first jobs was as Ford’s zone manager in Wilkes-Barre, Pennsylvania. My boss was a guy named Charlie Beacham, who was the East Coast regional manager. Charlie used to tell me, “Remember, Lee, the only thing you’ve got going for you as a human being is your ability to reason and your common sense. If you don’t know a dip of horseshit from a dip of vanilla ice cream, you’ll never make it.”

Mobile Mail for Free!!!

(Source: Times of India, Mumbai, 30^th August, Page 23)

Check Gmail, Hotmail, Yahoo! And Other Web Mail On Your Handset Free Of Cost

Nimish Dubey

Email on the mobile has been around for a few years now and generally associated with the highly mobile professional with deep pockets. But it seems push mail—the revolutionary mobile mail service pioneered by BlackBerry—could finally be going mainstream. And the reason for this is simple: some companies are offering the service free of cost.

Push mail magic…

For the uninitiated push mail is a service that allows users to get mail delivered directly (‘pushed’) to their mobile devices. In simple English, one gets a mail on one’s mobile device the moment it arrives in the inbox—just as one would using an e-mail client (such as Outlook Express) on a desktop.
The moment a new mail comes, one gets an indication—whether in the form of a chime or a vibration—on one’s PDA or cellphone. Needless to say, this service was immensely popular among executives on the move, as they could keep in touch with their email without having to bother about lugging about a notebook with a wireless internet connection.
The catch (there always is one!) was that this service inevitably came with a price tag. Whether you used BlackBerry’s push mail service or the ones provided by other cellular service providers (such as Hutch and Airtel), you ended up paying for the facility.
What’s more, push mail was limited to a few devices—generally high-end smartphones. It was therefore hardly surprising that for most people, it remained an ‘enterprise app’ rather than one meant for the common mobile user.

…goes mainstream!

But that seems set to change. Thanks to initiatives from some developers, such as Consilient (www.consilient.com), users can now get push mail on their handsets free of cost—all one needs is a handset that can access the internet. And unlike other push mail services, this one works with almost all mid-segment phones.
One just needs to do is register and give one’s email ID and phone number at the developer’s website, and then download the application. That’s it—the application keeps checking your mail server for any new mails and notifies you the moment any new mail comes in.
You can not only check your office mail on it but also use it to keep track of your webmail such as Yahoo! Mail and Google.
Most of the free push mail applications are pretty powerful.
They allow you to compose, reply and delete mails and even view attachments (provided your handset supports the attachment format—you will not, for example, be able to view an MS Office file on a phone that does not support MS Office formats!).
In the case of Consilient, one can even use the application as a plain email client. Instead of keeping it running all the time, one can just use it to check or compose mails. And as far as efficiency is concerned, the free solutions give the likes of BlackBerry a run for its money—we got a mail the moment it arrived using Consilient just a fraction after a colleague got it on her BlackBerry.

Not perfect, but hey, it’s free!

Of course, there are still a few niggles to be sorted out. Free push mail servers sometimes seem to take forever to retrieve new mail.
And there are also whispers about just how secure they are, although nothing concrete has come to light as yet and the likes of Consilient and Emoze insist that they take every conceivable care to protect their users.
And while the service itself is free, users might end up having to shell out a fair bit for the data transferred over their GPRS connections, unless they have an unlimited internet access plan.
Finally, keeping a free push mail application running in the background can drain a cellphone’s battery—not only does the phone’s processor have to work to keep the application running but battery is also expended when the phone remains connected to the internet!
But all these are minor niggles if one considers the benefit these applications offer—the ability to access and respond to email on the move without any extra expenditure.
Push mail’s days of being a niche service seem all set to end.

Free push mail services Consilient: www.consilient.com Emoze: www.emoze.com Morange: www.morange.com Cortado: www.cortado.com

Erase CVV number from your credit card to check misuse

(Source: Economic Times, Mumbai, 30^th August 2007, Page 19)

The best way to protect your debit or credit card from fraudulent use is to memorise the credit verification value & then put a small opaque sticker on it, says SP Ketkar

 

   MR A, young call centre executive had just obtained his first credit card, when another bank’s DSA (Direct Sales Agent) approached him and explained the benefits of carrying two cards. The new card was for ‘free’ and the only document required was a photocopy of the first credit card. Mr A felt proud for the power of his first card and in his enthusiasm to quickly get another one in his wallet, he photocopied both sides of his card and handed over to the DSA executive. At around same time, Mr B, who teaches history at the city college, was impressed by the tele brand advertisements on TV and recently obtained an ATM-cum-debit card to be used for mail and telephonic orders. A few successful transactions later, he found one of his orders was not getting accepted even after repeatedly punching of the numbers as guided by the voice prompt. After making few attempts, he nearly gave up, before he realised that it was the last day to avail of the ‘best offer’. He, therefore, decided to take the help of a tele agent and read out to her the card number, validity date and the last three digits on the signature panel of the card for urgent processing of his order.
   Prima facie, both the above stories sound mundane, which none of our friends above found anything disturbing either. However, Mr A and B were all shocked to see what they found in account statements of their cards the following month. They found their card had been misused and found items of online shopping transactions, which they never did.
   As on date, transactions in CNP (Card-Not-Present with the merchant) environment such as online ticket booking, utility bill payments, purchase of books or any Internet, telephone or mail orders, merely require the users to enter their card number, card validity month/year and a code called CVV (Credit Verification Value) or CVC (Card Validation Code) that is available on the card itself.
   CVV is a three-digit code typically imprinted at the end of signature panel on the reverse of the card (or a four-digit code little above the end of card number on front side) and is meant to serve as authorising code for CNP transactions. In short, CVV number in CNP transactions is a key to your card account, just the way the ATM PIN is for accessing your bank account. However, unlike the PIN for ATM use, CVV code is printed on the card itself and is rarely protected by the users. This exposes all credit and debit card users to the risk of their cards being misused for online shopping.
   Banks, when contacted, remind you of the standard terms and conditions for issue of cards and say you are advised to protect your cards all the time. You must ensure that your card is swiped strictly in your presence and no one is making a note of your CVV for fraudulent online usage. They further tell you, in case you suspect that your card details are exposed, you must get a fresh card issued with new CVV and then protect that card well. Under these circumstances, the only way to protect your debit or credit card from fraudulent CNP transactions is to memorise the CVV and then put a small opaque sticker on it or simply erase it from the card.
   (The author is an alumnus of IIMB. Views expressed in the article are personal)

 

GAMES financial advisors PLAY

Source:Your Money, Times of India, Mumbai,28^th August, Page 37.

Learn the rules thoroughly to ensure that charlatans don’t play roulette with your hard-earned money

 

Shilpa Nayak

 

   BACK in the good old days, you had investment advice thrust upon you only if you were born great or achieved greatness. But that is no longer true; the financial services industry has cottoned on to the great Indian middle class, and is going all out to woo the customer—any customer. Banks, brokerage houses, investment advisors, and insurance agents are all making a beeline to your house or office. What do they want to sell, you ask? Good heavens, nothing! Of course they wouldn’t dream of trying to peddle something you don’t need. They’re Relationship Managers, or Investment Consultants, or Portfolio Advisors. They go by many names these days. And they all profess to have your best interest at heart. They promise to help you manage your wealth, allocate your assets, and invest wisely.
   There’s no denying that investors can always use good advice. Despite having an excellent savings record, Indians are at the bottom of the heap when it comes to financial planning. Left to ourselves, many of us would let our money languish in the solitary confinement of a dingy savings account.
   But today, it’s also true that banks and broking firms offer advisory services. These give the Indian investor a good shot at planning for the future. They can help you evaluate your capacity for risk and identify your investment goals, and then advise you on the investment that best suits your needs. You can get help to properly plan asset allocation based on where you are in your life cycle, as well as get suggestions on regular rebalancing.
   Banks have long offered such services to clients who are high networth individuals (HNIs). Now they offer them to a much larger client base. Over the past few years, Indian brokerages, too, have started offering all kinds of products under their banner as they scaled up distribution. This has introduced many Indian investors to the concept of financial planning, asset allocation and regular investments. So far, so good. Well, then, why the alarmist headline, you’re probably wondering.

Simon says...

The problem is that, as banks and brokerages expand their branches and sales force, they are adding fixed overheads. To break even, they need to increase turnover and generate higher commissions. Financial services is a target-driven industry. And while it’s understandably an imperative for a company’s survival, it also puts its interests at odds with those of its clients. What’s good for the investor may be bad for the advisor, who has targets to meet, and maybe quarterly results to announce. It can lead to unhealthy practices, usually at the cost of the investor.
   Let’s look at the experience of a typical client who’s looking to invest in equities. The relationship manager recommends mutual funds as per the client’s requirements. A few months later, the relationship manager has a new monthly target. This may impel him to get the client to switch to a new mutual fund. He may justify the switch to his client even if it hurts the client’s interests. Many industry insiders admit that this practice is widespread. Some of the biggest banks generate sizeable commissions by churning their clients’ portfolio, often unnecessarily.

Musical chairs    

Long-term evidence shows that an investor is well advised to stay invested for a long period in a good mutual fund. Constant switching is expensive due to the entry/exit loads and the impossibility of chasing returns. But sticking to a mutual fund goes against the advisor’s interests, as a long-term investor yields low commissions of 0.5% per year, as against a new investment, which fetches the advisor 2%. And two switches a year means the advisor makes 4%. Tempting, isn’t it?
   Add to this the fact that new fund offers (NFOs) pay more than 4% as commission. Some go as high as 6%. Little wonder, then, that so-called advisors regularly incorporate a few NFOs into their advice. Investors are to blame, too, due to their infatuation with an NAV (net asset value) of Rs 10. An industry that feeds off this infatuation is hardly likely to educate the investor, or hold his hand and guide him down the path of judicious investing.
   It’s not just equity investors who get the short end of the stick. Debt investors, too, see their interests sacrificed in the race to meet targets. Mutual funds are a tax-efficient route to investing in debt, due to a significantly lower dividend distribution tax, as compared to, say, fixed deposits. But relationship managers at banks have their targets for fixed deposits (FDs), and will try to push investors towards their own bank’s FDs, even though these yield relatively low post-tax returns. Only corporates and HNIs take advantage of debt mutual funds. Many investors don’t even know they exist.

Blind man’s buff    

Another lucrative area for socalled advisors is insurance. For historical reasons, insurance is popularly viewed in India as investment and not as, well, insurance. Indians are over-invested in insurance, but, oddly enough, heavily underinsured. Despite the appearance of new private players on the scene, insurance continues to be sold as an investment product. Hardly surprising, given that commissions are ten times those in the mutual fund industry. For the seller, it’s even sweeter because every policy sold brings an assured recurring income—the investor pays yearly premiums, and cannot withdraw.
   Unfortunately, all the above are standard practices. Industry leaders and regulators should curb these malpractices. But with the large-scale expansions in the industry, and the consequent jump in fixed costs, the pressure to meet targets isn’t about to abate.

Be the referee, not a spectator    

The best way to protect yourself is to educate yourself. You could also get fee-based advice, meaning that your advisor charges a fixed fee to help you structure your portfolio. To be even more cautious, you could actually do business through a different route, so there is no conflict of interest on the part of your advisor.
   Some investors will find it difficult to pay a fee for financial advice, and may have to settle for one of the relationship managers discussed above. Consider that this is likely to prove more expensive in the long run. The best plan of action is to talk with your relationship manager and take his broad advice on structuring your portfolio—and then stop taking his calls. Now, that’s cricket.

IF YOUR ADVISOR...

suggests switching from current mutual fund investments to other schemes
hypes new fund offers as big investment opportunities
insists on building insurance products into your investment plan ...then you may need to look for another consultant!

 

Why buy a HOME when you can RENT ONE?

Source: Your Money,Times of India, Mumbai, 28^th August 2007, Page 40.

Renting can actually leave you with a bigger corpus twenty years down the line

 

Suresh Sadagopan

 

   IT’S OBVIOUS, isn’t it—if you pay rent for years, you’ll have nothing to show for it in the end, but if you used that money to pay home loan instalments instead, you would be creating an asset. This was the question Tarun Banerjee was pondering. But he couldn’t shake off the suspicion that the truth may be more complicated. Tarun, aged 37, is a senior-level financial services professional, married with two kids. He’s had his eye on a threebedroom flat in Kandivli, costing Rs 60 lakh. He would need to pay Rs 10 lakh up front, and borrow the remaining Rs 50 lakh. The 20-year equated monthly instalment (EMI) for the loan worked out to Rs 51,610 per month. Tarun wasn’t worried about the EMI, though—he could afford it. But he wanted to do a spot of number crunching. So we did a comparison of how Tarun would fare if he bought the flat, and if he rented it.

The buying scenario    

Most people consider buying a house because of the tax breaks: the interest component of the EMI, up to Rs 1.5 lakh, is exempt from income tax. The maximum you can save in the highest income tax bracket (33.99%) is Rs 51,000. As for the principal, the tax benefit under Section 80C of the Income Tax Act is lost if, like Tarun, you pay the principal from your Provident Fund and insurance. Also, since Tarun would take a loan of Rs 50 lakh, he would need life insurance, to protect his family from liability in case anything happened to him. We suggest two term insurance plans of Rs 25 lakh each, for which he would pay an annual premium of Rs 9,000 for each. Why two policies? Because 15 years into the loan period, the amount pending repayment would be Rs 25 lakh. If he bought a policy each of 14 and 20 years’ duration, he would need only one policy from the 15th year.
   The net cash flow (tax savings on the Rs 1.5 lakh deduction, minus insurance charges) would be invested in diversified equity mutual funds, and would grow to Rs 26.78 lakh in 20 years, assuming the mutual funds give a tax-free return at a compounded annual growth rate (CAGR) of 12% (a reasonable assumption, as equity has given 16% returns over a 26-year period, and the future looks even better).
   I assumed a year-on-year growth of about eight per cent in the property value. Tarun was shocked: “Doesn’t it grow by 30-40% year on year?” I explained my reasoning. If property grew at that rate, this property would be worth Rs 2.23 crore in just five years! Now, if you want to sell, there should be buyers, right? If someone was going to rely on loans to buy property, they may have to borrow Rs 2 crore, and fork out an EMI of Rs 2 lakh. Not many people can afford that. Salaries are growing on an average at the rate of 10-15% a year, so rising incomes cannot take care of that. Sure, there are people who can afford EMIs of Rs 2 lakh, but they are not the class of people that shops in Kandivli for a 1,150 square-foot flat with a carpet area of 782 square feet. The explosive growth of the past three or four years is unlikely to occur again in the future. Some exceptional mutual funds have given returns of 800-1000% over a five-year period, but that, too, is going to be difficult to replicate (this is why I reckon a 12% CAGR for mutual funds). Historically, too, property has grown at a sedate, single-digit rate. An 8% return thus seems realistic over a 20-year period. In fact, after deducting 0.5% for society charges, property tax, and so on, net growth would be around 7.5%. The property is likely to be worth Rs 2.55 crore after 20 years. The total corpus then would be Rs 2.82 crore. Tarun was underwhelmed.

The rent scenario    

What if he were to rent the same flat? The rental norm for prime residential property is 6% per year of the property value, so let’s assume that figure throughout the 20-year period, although it’s more likely to be less than 6%. Anyhow, we reckon Tarun would pay Rs 3.6 lakh as rent in the first year, with 5% annual increases in subsequent years. Since he could afford an EMI of Rs 51,640, he can easily afford this rent. The amount available after rent is invested in a mutual fund. At 12% CAGR, this would yield Rs 97 lakh in 20 years. Plus, we would put the Rs 10 lakh that Tarun would have paid up front to buy the flat in a mutual fund. This would grow to Rs 96.46 lakh after 20 years. Add to this the tax saving that Tarun would claim on rent. The tax-exempt amount would follow the one-inthree formula: either 50% of the basic rent declared by Tarun’s employer, or 10% of rent above the basic, or the actual house rent allowance. It is reasonable to assume Tarun would claim a deduction of 75% of total rent paid. The tax saved would also be invested in a mutual fund, and would amount to Rs.1.03 crore in 20 years. So the total cash flow is Rs 2.96 crore.

The comparison

The final corpus in both cases is not too different, right? Renting would leave Tarun with Rs 14 lakh more than buying his own place. Now, some might argue that comparing a cash flow with real estate is like comparing apples and oranges. So let’s see what happens if the whole corpus is converted to cash. If he bought the flat, Tarun would pay Rs 10 lakh as long-term capital gains tax. If he rented, he would pay not tax. So renting actually leaves him with Rs 24 lakh more. If we tweaked some numbers, the situation would still not be vastly different.
The last I heard from Tarun’s wife, he was still looking at properties—to rent!
Suresh Sadagopan is Chief Financial
Planner, Ladder 7 Financial Advisories

 

Tackling a rising home loan EMI with ease

(Source: Economic Times, Mumbai,28^th August, Page 17)

 

Rising interest rates have caught many home loan takers on the wrong foot. Some intelligent financial tweaking could help you cope with higher EMIs, says Vidyalaxmi

Managing rising EMIs

THERE are two ways to cope with increasing
home loan EMIs. One way could be to lower your consumption needs. Then you could cough up some funds to prepay the home loan. Explains certified financial planner and wealth advisor Gaurav Mashruwala, “You have two variants in the expenses category, mandatory and voluntary. You have to spend on food but you can cut down on eating in restaurants and entertainment. The idea is to cut down on your lifestyle. Start buying a Cambridge shirt instead of a Tommy Hilfiger. There is always scope to tone down your lifestyle and expenses to accommodate the increase in EMIs. Another way to partly prepay your loan could be to liquidate your low-yielding assets.
   All you need to evaluate is how much net return does your investment fetch you. If it’s lower than the interest outgo on your home loan, it makes financial sense for you to liquidate that investment to repay a part of your housing loan. “You can look to break your bank fixed deposits or liquidate some debtbased products. Touch your equity investments only if you are in dire need,” advises Mr Mashruwala. Typically, equity earns more than 16% annually (more than home loan rates of 12% pa) and historically, has been the best performing asset. You need not liquidate all your investments. You can liquidate around 30-50% of your low-yielding investments, which will also take care that you have a balanced portfolio of investments. However, you have to evaluate this option very carefully. You cannot liquidate those investments which have the ability to beat inflation in the long run.

Higher EMI or tenure?

WHENEVER a bank/HFC hikes lending rate, you either see a rise in your EMI or an extension in the tenure. Industry experts recommend increasing the EMI than tweaking the tenure of the loan. Approximately, when a bank/HFC hikes the lending rate by 0.5%, the tenure of your loan is increased by almost 25 months. If you take a housing loan at the age of 30, you would have planned to repay by the time you complete 50 years of
age. The idea would have been to spend a debt-free retired life. Now, if you postpone the termination of loan at 52 years of age, that would impact your personal finances even more, especially if you retire, says Akhilesh Tilotia, financial advisor and director of PARK Financial Advisors. Secondly, a series of rate hikes could further postpone the closure of your home loan. So it’s better to take the EMI hit right now than postpone the impact of rate hike. The idea is you are able to realise the hike in interest rates upfront.
   Even the compounding effect has huge impact on long-tenure loans. For example, if you take a Rs 30-lakh loan for a period of 15 years at 12%, then your EMI works to a tad above Rs 36,000. Essentially, you will be paying close to Rs 65 lakhs on your house, including your interest outgo. The longer you extend the tenure of the loan, this number will increase. In other words, your interest outgo is another party’s income. Why do you
   want to earn for a third party? Settle the loan repayment at the committed tenure.
   
Facts you must know

Watch your EMI
BANKS say they can lend up to 48 times your monthly salary. But you should see how much can you afford by looking at the EMI as percentage of your salary. EMIs should not increase beyond 35-40% of you take home salary for a housing loan. Any other loan EMI should not go beyond 25%. Banks may recommend an EMI up to 60% of your disposable income. But you have to provide for contingencies such as a job slow down, change of job or mere liquidity needs, Mr Tilotia adds.
Don’t read too much into penalty
IT’S not wise to save on the 2% prepayment penalty on your housing loan. You are actually spending 12-14% on the same loan as interest cost. Even if you take into account the tax benefit, you cannot discount the forthcoming rate hikes in the years to come. Always get out of your debt as soon as possible.
Your first house is a consumption asset
YOU will never sell that for money. If you look at your salary as a pie, your ideal break should be 30% EMIs, 30% to the government in terms of taxes, 20% for consumption needs and the balance 20% should be savings.
   vidyalaxmi.v@timesgroup.com

 

How to speed up shutdown on Win XP

A little fiddling with the process itself can help you get the task done faster than usual


A reason for delay in system shutdown is XP cleaning the paging file (pagefile.sys). To shut down XP without clearing your paging file, run the Registry Editor (click Start > Run, then type regedit in Run box) and go to: HKEY_LOCAL_MACHINE \SYSTEM\Current- ControlSet\Control\Session Manager\Memory Management. Change value of ClearPageFileAt-Shutdown to 0. Close Registry and restart your computer.

 

Tune your gadget to save power

Times of India Mumbai,23^rd Aug Page 21

 

Right Purchase of Electronic Items, Minor Adjustment Can Minimise Monthly Bills

 

Kavita Kukday | TNN

 

   Can’t live with, can’t live without is probably true for two types of relationships for most of us. The first one of course is your spouse and the second these days’ rings true for electricity—more so if you have lots of gadgets. But the huge monthly bills probably make you wish you could live without electricity. Well, here are some simple measures that could help you shave off at least 20% from your bill.

Don’t keep gadgets in sleep mode:

That gadgets hardly consume any electricity when in sleep mode, is a myth. A DVD player or audio system can use up to 50-odd watts per hour, when in sleep mode. Even power adapters and chargers draw 1-2 watts when you leave them plugged in. So the first thing to do is, unplug all unused external power supplies because they can draw energy even when they’re not connected to a device.
   Apart from adding to your bill, leaving devices in sleep mode also pumps CO2 into the atmosphere. For instance, a single ‘sleeping’ PC contributes about 907 kg of CO2 annually, say analysts.
   So remember to turn off any device when not in use.
   But what about occasions when you must leave your PC on? In those cases make sure it goes into a lowpower sleep, suspend or hibernate mode—the last uses the least amount of energy.
   On a Windows XP computer, click on ‘Power Options’ in the Control Panel to set the number of minutes before Windows will turn off the monitor and hard disk or put the system into standby or hibernate mode.
   On a PC running Vista, type ‘Power Options’ in the search box at the bottom of the ‘Start’ menu and click on ‘Change when the computer sleeps’. Whatever the operating system, it’s a good idea having it go into sleep, standby or hibernate after about 20 minutes of inactivity. The shorter the period, the more energy you save.

Install power monitoring software:

All the above will help given that your system is in perfect shape, which is not the case most often. Which is why it’s a good idea to install monitoring software such as CO2 Saver (co2saver.snap.com).This is a free program for Windows XP and Vista that gives you a simple control panel to specify when to turn off monitors and disk drives and put the machine to sleep. If you have a small business or work from home, you could buy a program such as NightWatchman (www.1e.com) or Verdiem (www.verdiem.com)—these offer remote control over all the hardware in your company.

Shop green:

The best idea of course is to shop green to begin with. Many hardware providers these days are coming out with devices that comply with EU guidelines for green computing. So when buying a new PC, ensure that it meets these guidelines. Consider getting a laptop instead of a desktop computer.
   Laptops are designed to run on batteries, so they’re equipped with chips and drives that draw less power to begin with. Besides, since the screen is integrated, a laptop has only one power supply in use.
   If you must get a desktop then use an LCD screen instead of a CRT monitor—LCDs consume about 66% less power.
   Similarly certain hard drives are optimised for efficient power consumption. Seagate’s 160 GB 2.5-inch drive, for instance, uses one-fourth the energy of an equivalent 3.5-inch drive, claims the company. Then there are new Green Power drives from Western Digital that claim to consume 40% less power compared to others.
   Another good idea is to get a machine with a low-voltage processor like the Intel Core 2 Duo or one with AMD’s ‘Cool and Quiet’ technology.

 

INSURE FOR THE SAKE OF INSURING

(Source: Times of India, Mumbai, 21st August- Your Money)

By keeping your insurance and investments separate, you will not only better protect your family, but also earn higher returns

Madhu T

INSURANCE companies and agents never miss an opportunity to repeat the old chestnut that insurance is always sold, not bought. No wonder, then, that many still consider insurance a tax planning tool or a forced saving programme. For some people, it is even an investment. Oddly, few people consider buying insurance just for the sake of insuring their life. That probably explains why so many people end up with the insurance policies that least suit them.
“In the old days, we sold insurance as a tax planning tool and a compulsory saving. But things have changed after the privatisation of the insurance industry,” says a veteran agent of the Life Insurance Corporation of India. “However, even though plentiful information is available today about insurance, people still cling on to old ideas.”
An insurance advisor with a private life insurance company says, “It’s still easier to sell a child plan or a unit-linked insurance plan than a pure term plan. People seem to set a lower priority on figuring out how the insurance plan would actually work for their family in case of an eventuality.”
Why are these insurance advisors griping? Should they be held accountable for their customers’ disinterest in a pure insurance cover? Says the insurance advisor: “People often say we’re not interested in selling pure i n s u r a n c e cover because we don’t a get good commission. That’s not true. Even after you present a slideshow about pure term life cover, most of the questions you get are still about the child plans and ULIPs (unit-linked insurance plans, or insurance plans with various investment options). People are always impressed by the performance records of ULIP schemes and the of cute children on the advertising hoardings and brochures. The thing is, people don’t want to listen to plans about death and stuff like that.”
Why? It can’t be that people don’t care about their families. Surely they understand that if they go for expensive insurance policies with a savings or investment portion in the premium, they may remain underinsured? For example, a Rs 1 lakh endowment plan with for a 20-year term would cost you around Rs 5,000 a year. That means forking over about Rs 50,000 as the annual premium for a cover of Rs 10 lakh. Compare this with paying about Rs 3,000 for a pure term insurance cover of Rs 10 lakh.
Software engineer Sreekumar K is one of those people who asked his insurance agent about a child plan for his daughter. He admists a bit sheepishly that he does know what pure
term insurance is. “I have read about it. Still, I wanted a child plan for my daughter for mostly sentimental reasons.” And what about the adverse consequences of his decision? “Yes, I do think my family would be in trouble if something happens to me right now. But I’m working on it; I’m planning to buy a life insurance policy next year,” he says.
Would he consider buying a pure term cover? “I have my reservations about buying a pure term policy. I’m not too thrilled with the idea that I’ll get no money when the policy matures,” he replies. But what about the huge difference in the premiums for a pure term cover and an endowment plan? He can buy a pure term cover by paying a little over Rs 3,000, as opposed to Rs 50,000 for an endowment plan. “But I’m told the endowment plan will give me returns of more than Rs 10 lakh at the end of 20 years,” he says. Sure, but at the end of that period, he would have paid a total premium of around Rs 10 lakh, while a pure term plan would cost him around Rs 60,000 over the same period.
Says a financial advisor, “Most people don’t realise that traditional endowment plans return only around 6-7%. If you keep your insurance and investments separate, you can earn much higher returns.” According to him, if Sreekumar were to opt for a pure term plan, he would save a lot on the premium, which he could then invest in a diversified equity scheme of a mutual fund. “Equity has returned around 17% returns in the last 15 years. Also, if you feel such schemes are not keeping up their performance, you can always walk out. That would not be such a good idea in an insurance plan,” he adds.
That brings us to ULIPs, a hot favourite of insurance customers. Though ULIPs offer various investment options, most investment experts are not too keen on the idea. One reason for their hesitation is the huge deductions from premiums, on account of administrative costs and the agent’s commission, for the first three years. The result of these deductions is that they leave the customer with a smaller investment corpus. The second reason they cite is that ULIPs are not very transparent about hidden costs, which insurance companies deny hotly. Says the financial advisor, “If, for some reason, the market fares poorly in the first three years of your plan, you could be in a lot of trouble.”

Budget for SAVINGS, not SPENDING

(Source: Times of India Mumbai, 14^th August, Your Money- Page 42)

Becoming and staying wealthy is not a matter of earning more, but of keeping what you earn

 

Amar Pandit

 

   AMERICAN sprinter Marion Jones is down to her last $2,000, according to The Los Angeles Times. Yes, the same athlete who won five medals, including three gold, at the 2000 Sydney Olympics, shone on magazine covers, and signed multi-million dollar endorsement deals. Fast forward to 2007, and she has been declared bankrupt.
   We saw something similar in the movie Tara Rum Pum, where actor Saif Ali Khan plays a car racer who travels a similar path from wealth to insolvency. Well, the film had an important message: one should save for a rainy day and plan well for the future. The reason is clear: history shows that any income can be spent.
   There are plenty of richesto-rags stories of business tycoons, builders, brokers, media celebrities, and sports stars going bankrupt, due to several reasons, including:
   Faulty business plans
   Excessive concentration of assets in one asset class
   No written plan for managing money for the future
   Inadequate savings to maintain one’s current lifestyle in the future
   Purchase of unproductive assets
   We live in an era of unprecedented opportunities and income levels. At the same time, we also have more ways than ever before to consume and spend. No matter where you live in India, chances are that you have your favourite brands of coffee and pizza, and that you have (or would like) a cool phone and the latest car. Which makes that one basic financial rule all the more important: plan your finances, not just to create wealth, but also to leave some of it behind for the next generation and for society. With this rule always in sight, it is easier to keep the money you earn, without sacrificing the good life.
   Those who appear rich are not necessarily rich. What ultimately matters is now how posh you look, but that you have a high net worth. And the point is never how much you earn, but how much you keep—and more importantly, how much you put to productive use by investing. People who earn in thousands can become crorepatis by diligently following the path of savings and investments. There are several examples of them in our current economy. At the
same time, people who have earned in crores have later faced bankruptcy, including some of our noted film stars.
   There is a tendency today among many people to live a page three lifestyle on a working-class income. Current lifestyle has become more important than saving for a rainy day or for one’s future. “I enjoy each day to the fullest” or “I never plan ahead” may sound fashionable, but it’s certainly not prudent. People often give into impulse buying without considering what such purchases are doing to their financial lives. If that sounds sententious, I should confess that I, too, have been guilty of such practices. It’s marketer’s job to strike an emotional chord and get you to buy things that you can’t afford, don’t need, and perhaps don’t even want. I once met a gentleman in Dubai who thought nothing of shelling out Rs 20,000 for a day’s drive in a Hummer, and then complained that saving was a tough thing to do. He drew up many spending budgets, but yet somehow the savings never piled up.
   So what’s the magic financial mantra? Don’t keep an expenses budget; keep a savings budget. Implementing and following an expense budget is tough. You might keep it up for a month, several months, or even a year. But most such budgets are doomed to failure; a time will come when you
just can’t resist the temptation of some new gadget, a new car, or a nice vacation. Better to just set yourself a savings target of 15-25% of your gross annual income, and move this amount to a mental account called “My Road to Riches”. The money should be deployed productively in investments, whether cash, debt, equity, or real estate. If you follow this plan consistently, you will surely end up wealthier and safer than even people who earn more than you but who set a great store by “looking” rich. This is the principle of “Pay Yourself First”.
   A gentleman I know adopted the “Pay Yourself First” principle with very modest amounts of Rs. 50 and Rs. 100, starting in the 1970s. He kept this up for 16 years, until about 1995, after which he saved relatively less. In 2003, his portfolio was worth Rs. 5 crore, and in 2007, around Rs.12 crore.
   Keeping money is as important as making money. What you do with your income today determines what you can do with it tomorrow, whether it goes up or down. It’s just not productive to think, “I’ll definitely start saving when I make more money” or “I don’t make enough to save, so I should first concentrate on increasing my income”. Start saving today by setting aside at least 15-25% of your income. It will make a big difference to your future. Unlike Saif Ali Khan’s character, we real-life people are usually not lucky enough to get a racing opportunity at the right time, and to win the race. So it’s best to start now—it’s never the wrong time to do the right thing.
Amar Pandit is a Certified Financial Planner and Director, My Financial Advisor

 

Sentiments sometimes change even when the fundamentals are the same -Behavioural Finance

(Source: Times of India, Mumbai, Date:13^th August 2007,Page 23)

Sentiments sometimes change even when the fundamentals are the same

 

PARAG PARIKH

 

   THE MARKETS were shocked when the BSE index fell by more than 600 points on August 1. There was fear all round, and analysts and the media said the markets were overvalued. They were trying to find reasons after the event. A few weeks earlier, when the index touched 15,000: everyone said the economy was growing over 9%, the corporate profits were great, and the markets were attractive. Some even predicted when the index would touch 18,000.
   Market PE seemed cheap. Now, with a fall of over 500 points, isn’t the market even cheaper? And shouldn’t investors come and buy at these attractive rates, sending the markets back up? The same people who found the market attractive when it was going up found it unattractive when it started going down. Yet, the fundamentals hadn’t changed: the economy was still cruising, and corporate profits were still strong.
   What had changed, though, were sentiments. Greed was replaced by fear. The reason for such of behaviour is that most people do not have a firm grasp of investment concepts and fundamentals. They imitate others in a bid to make easy money. The conventional economic wisdom is that markets are efficient and people make rational decisions. But new research supports Behavioural Economic Theory, which says that markets are inefficient in the short run and people do not make rational decisions to maximise profits. The reason is simple: we human beings have a mind and a heart, and our decisions are guided by both. A lavish birthday or wedding celebration is certainly not a profit-maximising act by a rational human being; it’s an emotional decision influenced by one’s emotions. Emotions are why even intelligent people make financial blunders.
   In the stock markets, there are no geniuses. Could anyone have predicted August 1? The fall had less to do with Indian fundamentals than with fear that global markets were sinking. Investors are irrational: last year, when oil rose to $65 a barrel, the markets plunged. Today, it hardly seems to bother anyone that oil is $75 a barrel.
   Finance as we understand it is: 1+1=2. If it were that easy, markets would be boring. What excites people about markets is their inability to understand it. Markets consist of the actions of millions who behave in unique irrational ways because of greed and fear. And so we have Behavioural Finance, where anthropology meets economics, and psychology intersects with finance.
   In stock markets, Behavioral Finance explains why we hold on to stocks that are crashing, foolishly sell stocks that are rising, pay for ridiculously overvalued stocks, jump in late and buy stocks at the peak of a rally just before the price declines, take desperate risks and gamble when our stocks descend, avoid the reasonable risk of buying promising stocks unless profit is guaranteed.
(Parag Parikh, chairman, Parag Parikh Financial Advisory Services, specialises in behavioural finance.)

 

wAnnA BReAK aDmIN'S pAssWoRd???

 (Source: http://www.orkut.com/CommMsgs.aspx?cmm=21743894&tid=2548052727062426547)

try dis out!!
1. Restart you computer

2.When booting, press F8 and select "Safe Mode"

3.After getting to the user menu. Click on a user and this time it will not ask you for a password

4.Go to Start>Run and type "CMD" (without the quotes).

5.At command prompt type in "cd C:WindowsSystem32" (without the quotes), I am assuming C is your System/Windows Drive

6.For safety purposes first make a backup of your Logon.Scr file.. You can do this by typing in "Copy to Logon.scr to Logon.bak" (without the quotes)

7.Then type "copy CMD.EXE Logon.scr"(without the quotes)

8.Then type this command, I will assume that you want to set Administrator's password to "MyNewPass" (without the quotes)

9.Now, type this in (I am assuming that you are still in the directory C:WindowsSystem32) , "net user administrator MyNewPass" without the quotes

10. You will get a message saying that it was successful, this means Administrator's new password is "MyNewPass" (without the quotes)

11. Restart the PC and you will login as Administrator (or whatever you chose to reset) with your chosen password.

Digital Signature-How it works?

Some frequently asked questions about digital signatures

What is a digital signature?
First, it is not the scanned form of your paper signature as some might think. It is an electronically generated stamp of authentication. It is a set of encrypted data used with the same validity of a paper signature, but on emails, electronic documents and online transactions. Your digital signature is unique to you. A receiver can verify if the message came only from you and that it had not been tampered with.

Do I need one?
For now, it is quite a helpful tool but before long, it may become absolutely essential. With a digital signature, you can file tax returns online, make investments, do your banking transactions and even send quotations to your business partners. India is moving into a system where an increasing number of electronic transactions will go under the mandatory e-filing system requiring a digital signature. The private sector, too, is embracing this. One day, you may be required to digitally sign your job application.

How do I get it?
You must apply to one of the country’s seven certifying authorites (CA) licensed by the government. A CA not only issues the digital certificate to you, but also certifies all your online transactions to establish an unbroken path of virtual trust.

Is it widely accepted?
Indian laws recognise digital signatures at par with paper signatures. A growing community of large and small companies, financial service providers and government agencies are not just accepting them, but insisting that their customers use digital signatures.

Is it reliable?
It is practically safe and certainly more so than paper records. The certifying authority verifies your identity for each transaction and the software used at the receiver’s end eliminates chances of tampering en route. An elaborate system of checks and balances also ensures that a sender is not able to disown his or her message later.

Is it affordable?
At Rs 2,000 or more per signature, it often isn’t, especially for young professionals. But with increasing volumes, prices are coming down and the government also plans to encourage more competition in the sector.

I am not tech-savvy. Isn’t paper and phone the better way?
You don’t have to be a rocket scientist to use digital signature. You won’t see or feel most of the processes that happen in the back-end. If you have the basic comfort level with a personal computer and can click on the button shown on the screen, you're OK. This system also does away with many shortcomings of the paper and phone world.

Source:Economic Times Mumbai, 11th August Page 13

Mis-Selling of ULIPS by AGENTS

Source: Economic Times, Mumbai, 11^th August, Page 12

 

Regulator Says It Has Discovered Cases Of Misrepresentation Of Returns

 

Our Bureau MUMBAI

 

   INSURANCE Regulatory and Development Authority (IRDA) will soon take measures to counter mis-selling of unitlinked insurance plans (Ulips) by insurance agents. The regulator has come across numerous cases, where agents have lured prospects by misrepresenting the nature of returns that can be earned from unit-linked policies, which has caused concern.
   Among the measures planned are a revision of the commission structure, a declaration from the agent of the list of items that have disclosed to the prospect, and an attestment from the prospect that he has fully understood the implications of his investment decisions. In a rising market, agents find it easy to mis-sell unit-linked plans, as they draw up illustrations based on past performance. For instance, an agent may claim that the policy has generated a 50% return in one year on the back of the stock market boom and project future earnings assuming a high annual return of around 25%. In reality, agents cannot give indicative returns of more than 10% a year, which is a reasonable return expected from equity investments over a long-term period.
   “In spite of these guidelines, there are complaints that there is a mis-selling of products, and agents promise returns far in excess of what is permitted to be stated and non-disclosure relating to risks that policyholders have to bear,” said IRDA chairman CS Rao. Mr Rao was delivering the AD Shroff Memorial Lecture in Mumbai on Friday on the progress of the insurance industry since liberalisation in 2000. Post-liberalisation, Ulips have been driving the growth in the life insurance business which has recorded a compounded growth of 45%. At present, most of the premium income for the industry, including market leader Life Insurance Corporation, comes from sale of Ulips.
   Although most companies have brought down commissions on Ulips, there are still some insurers who provide a higher incentive of around 35% in the first year to push Ulips. Earlier this year, IRDA, for the first time, took major action on mis-selling after an insurance advisor attempted to sell a unit-linked policy to IRDA officials with unrealistic projections. In other markets, every illustration made by an agent has to be authorised and signed by the insurance company. There is a possibility that similar practice could be introduced in India
   Regulators across the world feel the customer discretion is warranted in the case of Ulips since the customer chooses the investment and consequently bears the risk of his investment. In traditional policies, the risk was very low since the regulator made sure that investment went into safe instruments. To ensure that policyholders take informed decisions on Ulips, the regulator had introduced guidelines for Ulips that required insurance companies to be more transparent of the risks and impact of charges.

 

Change windows login screen

Source: http://huntme007.blogspot.com/2007/04/change-your-login-screen.html

Are you bored of seeing the same blue welcome screen??
then here is a way to change the login screen
first down load a login screen of your choice from the following url
htp://themes.belchfire.net/index.php?dlcategory=12
then extract the .exe file n save it to a directory say login_screen

*now open the registry editor
start>run>regedit>hkey_local_machine>software>microsoft>windowsnt>current version>winlogon

now on the right hand side locate uihost
right click that and select modify
and paste the address of the location where u stored your " .exe file"
for example: If u stored the > exe file on the desktop in the directory login_screen n the name of the exe file is 123
then your address would be
C:\Documents and Settings\Administrator\Desktop\login_screen\123.exe
and your done
check this by pressing winkey+l

 

Excellent choice-BANKING FUNDS

Excellent choice-BANKING FUNDS

Source: Economic Times Mumbai, 7^th August 2007,Your Money, Page2 (www.timesyourmoney.com)

WITH the Sensex returning a whopping 43% in the past year, investors with equity exposure have made handsome gains in the broad-based rally in the stock market. However, the fund category that stood above the rest has been banking sector funds,which delivered returns of over 75%. These funds outperformed even the category benchmark, the BSE Bankex, which jumped 71% in the same period.

The past few years have been a golden period for domestic banks, as strong economic growth has led to a huge surge in credit offtake. Banks have seen an almost vertical rise on nearly every front, from direct lending to treasury operations to retail loans.

Despite the tough business environment created by the cycle ofrising interest rates since 2003, they have done remarkably well. Even amidst intense competition, the net interest margins (NIM, an important indicator of a bank’s profitability) of most banks has remained stable between 2.5% and 3.5%. This also indicates the ability of banks to pass off higher deposit costs on borrowers.

The operating efficiency of public sector banks has improved significantly in recent years. The ROE (return on equity) gap between the public and private banks has narrowed considerably. However, the new and private sector banks are faring better than old and public sector banks in attracting higher valuation in the market. Banking funds fall under the category of sectoral funds.

Sectoral funds, as the name suggests, focus on a particular sector, like banks, pharmaceuticals, technology, and fast-moving consumer goods (FMCGs). Unlike a diversified equity fund, which has limited exposure to any sector, sectoral funds invest predominantly in one sector. Due to their strong focus, sector funds are inherently more and hence carry higher risk-reward for investors.

Even with such a robust performance by banks, it is surprising that there are only three banking-focused funds in the country. The Bank BeES run by the Benchmark Mutual Fund is an exchange-traded fund. The other two—Reliance Banking Fund (RBF) and the UTI Thematic Banking Sector Fund (UTIBF)—are both open-ended equity mutual funds. Incidentally, the Benchmark Bank BeES is the largest fund in the country, with assets under management (AUM) of Rs. 6,531 crores on 30th June 2007. But compared to the other two open-ended counterparts, the performance of Bank BeEs has been fairly mediocre of late. The performance of RBF has been exemplary, as one can observe from the table.

If you invested Rs.10 in RBF in May 2003, it would have almost multiplied five times in only four short years. By contrast, Rs. 10 invested in the UTIBF is worth only two and half times as much in the past three years. If you compare the portfolios of RBF and UTIBF, you will find huge variance in the investing style and scrips invested. True, State Bank of India and ICICI Bank are in the top five holdings of both funds, but the similarities end there.

RBF has a greater focus on mid-cap or smaller emerging banks, while UTIBF has a higher level of large-cap or big public-sector banks. Remarkably, both portfolios have a liberal sprinkling of non-banking stocks, as the offer documents of both allow for the same.

If you want to build a long-term growth portfolio, you should definitely consider adding banking funds to your investment stable, since banks are a good proxy for the economic growth in the country. As the Indian economy expands further, banks will be a direct beneficiary of the GDP explosion is likely in the future.

With Basel II banking norms being implemented from March 2008, and with RBI’s roadmap to allow banking mergers and acquisitions from 2009, the valuations of most banks will be certainly driven upwards. It’s an old cliche, but it just may turn out that, in the future, investors in banking funds will be laughing all the way to the bank. Sameer Kamdar is country head, mutual funds, Mata Securities

The truth about LIFE insurance

Source: Economic Times Mumbai, 7^th August 2007,Your Money, Page2 (www.timesyourmoney.com)

The truth about LIFE insurance

The fact is, term plans are still not sold by insurance agents.That leaves it up to each one of us to seek protection

THERE are several commonly held misconceptions and myths about life insurance. Unfortunately, some get mistaken for facts. Let’s see which is which. Most people believe life insurance is good savings vehicle.

That is true only if your idea of good returns is 4% to 7%. If you, like most people, expect higher returns, then why choose insurance? A better option would be the Public Provident Fund (PPF), which gives 8% returns, tax free.

And that rate is fixed (unless, of course, the government decides to change it). If your priority is safety, consider alternatives like RBI bonds,National Savings Certificates (NSC), Kisan Vikas Patra, bank fixed deposits, all of which guarantee returns. Even post-tax (depending on the tax slab you fall into), they will still yield higher returns. Yet, for many people, insurance is the main saving. What makes this choice even more baffling is the myth of safety.

There is nothing safe or guaranteed about returns on an insurance plan—it depends on the performance of the funds invested. The bonus declared varies from year to year, and the post-tax return is less than the other options mentioned above.

That brings us to another reason why people buy life insurance—to save tax. For tax savings, insurance is a very good option. But what a reason for buying insurance! There are several other ways to save tax. You could invest in PPF, NSC and ELSS (equity-linked savings scheme) mutual funds too. ELSS mutual funds have shown a mindboggling 44.88% compounded annual growth rate (CAGR) over five-year period.

The best performing fund, the Magnum Taxgain scheme, has fared even better: 63% CAGR over five years. PPF gives a clear 8% returns yearon- year, compounded. So why put your money into insurance, then? That brings us to yet another argument for buying insurance. Insurance gives you tax-free returns in the end. True—but how little, and after how long! You can also get tax-free returns from PPF, ELSS mutual funds and equities.

The rebuttal would be that the insurance corpus goes into debt and that cannot be compared with mutual fund or equity returns. The insurance doyens would probably point to Unit-linked insurance plans for realistic comparison. Let’s see. To be sure, there’s some truth in the claim that unitlinked insurance products ULIPs) can give good returns, like mutual funds. But insurance companies eat the premium in the first year and the following few years, like a silkworm that furiously nibbles at the mulberry leaves, leaving a moth-eaten corpus for the kitty.

Upshot: the policy holder starts life with a disadvantage! To be fair, ULIPs can make up in one situation. The mortality charges in a ULIP plan tend to be low. Hence, if you take a high insurance cover (like, say, Rs 50 lakh), the ULIP plan becomes comparable to a combination of mutual funds and term insurance, after about 12 years. This comparison is for some plans with low-charges, not the whales that have 70% up-front charges!

That is, assuming that MFs and ULIPs are going to perform at the same return-levels. But— There is a concentration risk in ULIPs, as all the money goes to the fund of the insurance company, whereas a mutual fund corpus can be diversified across funds and schemes. We are assuming that mutual funds and ULIPs will give the same returns. To date, mutual funds have been winning hands down. As of last week, six large-cap funds have given a five-year CAGR return of more than 50%, while the Sensex has returned 38.15%. The average five-year CAGR for the large-cap category is 44.6%.

ULIP returns are reported on the invested amount, after deducting all the charges, which are substantial. The actual returns are thus far less. The last reason for buying insurance is that it provides protection. At last, the real reason! Unfortunately, agents don’t talk about it. No client wants to talk about it, either, since it involves their death (“eventuality”, in insurance lingo). Suddenly, we invoke God: “It is all in God’s hands, you know? If he brought us this far, he will see us through in the future too, won’t he?” Where is the need for insurance? When insurance agents seldom talk about protection and family security, but keep harping on tax breaks, taxfree returns, and safety, it’s no wonder that they don’t help customers see the real need for life insurance.

The fact is that term plans are still not sold by insurance agents. The reasons? Firstly, premiums and commissions are low. Secondly, many medical tests are required, which is a lot of work. And thirdly, policies may be declined, or may be issued at an extra premium. Extra work, lost commissions… no wonder agents don’t talk about term insurance. That leaves it up to each one of us to seek protection,which is really the main purpose of insurance, after all. As the adage goes, have faith in God, but keep the powder dry. Suresh Sadagopan is chief financial planner, Ladder 7 Financial Advisories. The truth about LIFE insurance Insurance Suresh Sadagopan are still not sold by insurance agents. That leaves it up to each one of us to seek protection Bhagvan Das

 

What sort of a mutual fund investor are you?

(Source: The Economic Times, Mumbai 7^th August, Page 21)

 

What sort of a mutual fund investor are you?

 

Bakul Chugan has a well-researched questionnaire that can help you choose the right scheme

 

   AN office colleague recommends fund X to you over a coffee machine. Your uncle next door suggests fund Y. The opinions as to which mutual fund to go for are increasing day by day. And with 500 odd schemes in the market, you know how difficult it is to choose the fund of your choice.
   There are several schemes to choose from — liquid, monthly income plans (MIPs), balanced, equity funds and so on. Each has its own risk-return given, making the choice all the more important for an investor. We have attempted to make this process simpler by devising a self-analysing questionnaire. After you are through with answering the following questions, we will suggest the right mix of MF products. So, cross your heart and answer these questions:
1. How would your best friend describe your risk-taking capacity?
(A) A risk-avoider (B) A gambler (C) Willing to take risk after adequate research
2. You are in the final lap of KBC and you’ve won Rs 1 crore. You aren’t fully confident of the answer. Which of the following choices will you go in for?
(A) Go home with the winning amount (B) Play on for 50% chance of winning Rs 2 crore, risking the amount already won
3. What is your comfort level while investing in stocks or mutual funds?
(A) Somewhat comfortable (B) Very comfortable (C) Not my cup of tea
4. When you think of the word risk in investment parlance, what comes to your mind first?
(A) Uncertainty (B) Thrill (C) An opportunity
5. You receive a bonus of Rs 50,000 that you wish to invest. You would:
(A) Invest in stocks, despite the turbulent market (B) Go in for balanced mutual funds (C) Deposit it in a bank FD, earning over 9% interest per annum.
6. You have just finished saving for a once-in-a-lifetime vacation. A month before you plan to leave, you lose your job. You would:
(A) Cancel the vacation (B) Extend your vacation because this may be your last chance to go in first-class (C) Go as scheduled, reasoning that you may need the time to prepare for a job search
7. Which of the following job opportunities are you most likely to opt for?
(A) Extremely high salary, but does not guarantee job security (B) Job security is the first priority (C) Fairly good salary with somewhat assured job security
8. You hold stocks of a highly-reputed company. The stock falls sharply due to a market correction. You would:
(A) Sell it immediately before the worst happens (B) Buy more, it’s a jackpot
So, what type are you?

• Aggressive: You are pretty bold with your investment strategies and believe in the ‘High Risk, High Return’ theory. In fact, you aim for capital appreciation in all your investments. So, think of investing around 60% or more of your portfolio in equities. Actively-managed equity funds , large or mid-cap, can suit the bill. Sector funds such as technology, banking, automobile and pharmaceutical will suit those who have a view on sectors.

• Moderate: You don’t get carried away by huge returns generated by rather risky ventures. You are happy with mediocre returns. You can invest 30-60% in equity funds, and the rest in short-term, debt-oriented funds. Stay away from long-term debt funds as they face interest-rate risk. Index funds are also a good option to start exposure in equities. Among equity funds, index funds or active equity funds can be some options to consider.

• Conservative: You are averse to risk and must, therefore, opt for debt-oriented hybrid funds. MIP funds and short-term debt funds will suit the bill. Equity funds are best avoided.

 

SCORE CARD:

============

21-26: Aggressive Investor

15-20: Moderate Investor

10-14: Conservative Investor

 

Scores:

=======

1. a=1,b=3,c=2
2. a=2, b=4
3. a=2,b=3,c=1
4. a=1,b=3,c=2
5. a=3,b=2,c=1
6. a=1,b=3,c=2
7. a=3,b=1,c=2
8. a=2,b=4

 

 

 

 

Speed up firefox....

Speed up firefox....
This tricks will improve the speed & load time of firefox. And you will be able to surf faster..

Type about:config in the address bar, Then look for the following
entries, and make the corresponding changes.

1. network.http.max-connections-per-server =32
2. network.http.max-persistent-connections-per-proxy =16
3. network.http.max-connections = 64
4. network.http.max-persistent-connections-per-server = 10
5. network.http.pipelining = true
6. network.http.pipelining.maxrequests = 200
7. network.http.request.max-start-delay = 0
8. network.http.proxy.pipelining = true
9. network.http.proxy.version = 1.0



Lastly right-click anywhere and select New- Integer. Name it
nglayout.initialpaint.delay and set its value to 0. This value is
the amount of time the browser waits before it acts on information it recieves.

Enjoy!!

 

Source: http://www.orkut.com/CommMsgs.aspx?cmm=28323012&tid=2547093667330161704