Retirement Planning - Invest Now

It is very important for every individual to plan for his/her retirement. But unfortunately, most of the persons do not plan for their retirement at the right age. They start thinking for retirement when they are near to 40 or 40+. At this age, you will left with around 15 years to build your retirement fund. So if you will start your investments at that time, you may not be able to have sufficient funds to cover your remaining life.

It is always better for you to start planning for your retirement at the right age to have sufficient time to build up your retirement fund to easily live your retirement life.

Click on the link to see more benefits to plan your retirement at the right age. Also check the various investment options you have to invest your money.

http://hubpages.com/hub/Plan-your-Investments-now-to-enjoy-your-retirement-life
http://www.moneymanagementideas.com/investment-options.html

NHPC IPO allotment

NHPC IPO allotment is out. NHPC, India's biggest hydroelectric power generator IPO closed on 12th August 2009. It was priced in the range of Rs. 30-36 and was subscribed by 23.74 times.

Now its allotment status is out on the registrar site, Karvy. You can directly go to http://www.karvy.com/ipoStatus to check the status of NHPC shares allotment by giving your Application ID. You will get the status of allotment of shares.
If you do not know the Application ID, login to your demat account and check in your order book of IPO section to know your Application ID.

Good Luck.

New Proposed Tax Code for Winter 2009 by Pranab Mukherjee

Government on Wednesday, 12th August 2009 proposed a new tax code for Winter session of Parliament 2009. As per the new tax code which is believed to be effective from financial year 2011, Government has indicated radical tax reforms by moderating income tax rates, abolishing STT (Security Transaction Tax) and increasing deduction amount for savings to Rs. 3 lakh.

If the proposal gets passed, then it will be a sign of joy for many income tax payers. Government has proposed different tax slabs and increased the slabs significantly high. Now there would be only 10% tax till Rs. 10 lac of income. So you would have to pay tax on Rs. 8,40,000 (10,00,000 - 1,60,000), i.e. only Rs. 84,000/-.

And if your income crosses Rs. 10 lac, then it would be 20% on the income above Rs. 10 lakh upto Rs. 25 lakh. Above 25 lacs, it would be charged at 30% rate.

As per Finance Minister, Mr. Pranab Mukherjee, Government is abolishing STT but 'long term capital gain tax' may again get introduced on the securities trading. This draft also proposed a exempt-exempt-tax versus an exempt-exempt-exempt (EEE) for savings.

The new code seeks to consolidate and amend the law relating to all direct taxes, that is, income-tax, dividend distribution tax, fringe benefit tax and wealth-tax so as to establish an economically efficient, effective and equitable direct tax system which will facilitate voluntary compliance and help increase the tax-GDP ratio.

As an update, this draft was open for public suggestions and now a second draft is expected to come in the month of June 2010 after considering suggestions. Now, it is expected that Government  may drop the exempt-exempt-tax (EET) proposal for taxation of savings as this was one of the most controversial clauses in the first draft of the DTC.

Major Updates on Direct Tax Code

Click here for New tax code for the year 2010 - 2011.

Investment Ideas

When it comes to money management, everyone tries to figure out the income, monthly expenses, and then try to save more money. But most people forget to invest money, or they just put money into the savings account. If all your money is in savings account or sitting idle, you can never grow your money. And you will make the age-old statement False - "Money makes Money". So you need to invest your money into proper instruments to grow your money as per your needs. Read more about different investment ideas at the following link.

http://www.moneymanagementideas.com/investment-ideas.html

Money Management Tips

Whether you are salaried, business person or having other source of income, it is very important to manage your money effectively. If you will not manage your money properly, you may end up with lots of liabilities and a life full of debt. To manage your money, you need to save more money than you currently do and invest some part of your money for you and your future needs.

These are some of the basics of money management, click here to get some effective tips to save money. From the link provided, you can know more about money management and savings tips. You can also download some books and softwares to help you manage your money more effectively and in an organized manner.

Managing personal expenses during recession

Managing your own expenses sound very simple or you may have got several advices and most of the persons thinks he/she is good in managing their expenses but what happens is they do not consider what is going in the market, how are the conditions in the country or globally. These scenarios can also affect you, like in the current case of recession or when oil prices fluctuates from $70 to $150 and then again to less than $40. So if you will plan your expenses by considering the ongoing trends, it will help you in case some unexpected happens.

Someone may lose his/her job, may be you were planning to sell some of your property or investment in equity market to have some extra cash or to meet some unavoidable expenses but suddenly you found property prices started falling steeply and the market is behaving quite badly. So it is always better to check the current market trend, and control and manage your personal expenses to have some extra cash in your bank account. Also make a habit to invest some part of your savings in some plans/instruments which offers guaranteed returns.

Now what happens is most of us thinks that we do not spend on un-necessary things, so how we can reduce our expenses. But there are various ways in which we can save some significant amount of money. Do not spend much on outings, reduce your dinner outings, and prepare food at home. You can reduce your long drives that are meant for fun only. Reduce time of outgoing calls to your friends, talk to the point. You can also change your mobile postpaid plans as per your current needs.

Shop less and buy only what you really need, do not buy un-necessary items. Buy limited clothes and jewellery. Always search on internet before shopping to know what all offers are there in the market and from where you can get that product/service with better prices.

Suppose if you go to office in your car, and if you have some of your colleagues from the same or near-by area, you can go with option of car-pooling. It will save your fuel cost to some extent and also the maintenance cost of your car will be reduced. Switch on less number of lights in the day time, better to open windows, you will get fresh air and light and also will save on electricity bill cost and this habit should be used in general also, as it saves the environment too from getting polluted.

If you are living in a rented flat or apartment, then do not rent a lavish apartment, get a smaller one as per your needs and not as per your guests needs. After all it is your money that will be saved and can be used during hard times. So if you will peep inside your expenses, you may get some more loop-holes and extra ways to reduce the expenses and live a happy and consistent life forever.

Savings and Investments

Today in this global economic crisis, everyone is worried about future money, where to put hard-earned (or how so ever you may have got) money as to get better and secure returns. And as per current situations, it is really a tough job to give good advice and many people have again started looking for our traditional savings instruments like PPF, NSC and other stuffs. And there is no doubt, that these instruments will ever fail or may not give you returns. These are really guaranteed instruments where one is always sure how much money he/she will be receiving at the day of maturity.

But always do a good amount of research before putting all your money even in these instruments. There are large numbers of schemes present where you will get guaranteed returns, and all have some different rate of interest or some have taxable interest, some are tax-free. And if somebody is not interested in saving tax while depositing money, you may find other schemes with some higher returns. So always analyze yourself, your requirements, do some research and then invest your money.

Now the question arises, should we stop putting our money into equity market?
The answer for this question is with you only. You have to analyze how much risk appetite you have. But as per some rules or equations defined by experts, one should have equity exposure depending on your age, and the formula is 100 - (your present age). Suppose you are 30 years old, then 70% (100 – 30) equity exposure you can have. But if you have faced this present heat, then you will certainly doubt this and I too start having doubts on these equations. So answer is with us only, how much we can expose ourselves to this market segment.

What I’ll suggest someone is always first do your investment of Rs. 1 lac under section 80c, if you come under tax bracket. And if you can afford home-loan, it is best to utilize that for 80c. But if you cannot afford home-loan and as per current property rates in metros, it is really difficult to take one. In this case, you have to make proper planning, do a thorough research, which options are best and again how much equity exposure you can afford. For section 80c, the best options that I like is to put some money around 15-30% in PPF (Public Provident Fund), do not confuse with PF or EPF. Some percentage of money (around 20-25%) you can put in Tax-Saving Fixed deposits, now I’ll prefer PSU banks like SBI, PNB or any other such bank instead of private banks irrespective of better services offered by private banks, and you may have got the reason for that…

Now you have done almost 55% of your savings, now time comes for equity exposure. For me it is a must to put some money in this segment also, just to move ahead than inflation but yeah with a risk involved. But ELSS as per overall records, have always given 10-20% returns if you invest for a period of minimum 5 years, may be there would be some exceptions that I may have missed-out. So I’ll suggest exposure for around 20-30% in this market. You may also consider going for ULIPs if you are really a fan of it, but for me it is a kind of No-No, you may find some of the reasons in my earlier post. It is always better to have term insurance plan than to go for ULIP. You can put 5-10% in LIC term plans.

Now your savings for section 80c have almost finished, and you can analyze your needs and make some calculations and change the above figures as per your needs and risks. And you will not end up in losses, I bet.

Now the big question comes for those reading this article, if I do not want to save tax, then what?

Then again I will repeat, analyze your needs and risk appetite, sorry for repetitions…
Again I’ll suggest you to go for PPF just to get secure returns but yeah with 15 years lock-in period, but your money is secure with Tax-Free returns. Go for some Fixed-deposits as per your need, check the interest rates, duration, and put your money in small chunks in order to have some liquidity.
Go for good Mutual Funds, ‘good’ you will find by doing some research. And if you have good risk appetite, you may expose to direct equity, but it needs some time to regularly check your portfolio, and if you are some what new to this, read my earlier article, you may find some good tips.
You can also go for commodities, like you may invest in Gold, I do not mean go and buy some jewellery or a bar, but go for Gold ETFs, again you may refer to my earlier post for the benefits of that.

And one thing more, do not invest all your money, always have some good amount of money into your savings account, you never know when you may need some urgently.

Well I think this is enough in this article, if I’ll get some other better options I’ll let you know. And if you have some better options or any other comments, please post a comment so that everyone will come to know about that. Always share your knowledge, it will only grow…