Reality check: Is bloggers money saving tips are practical?

Personal finance and investing blog world filled with 'money saving tips' in each and every article. To be little different, I would like to write the practical side of this tips. Hope you will enjoy this.

Just type 'money saving tips' to Google and see the result pages. You will present with titles like 50 money savings tips, 100 money saving tips, 200 money saving tips etc. Did you ever tired to read these tips to know whether it is practical or not?

If I speak frankly, most of them are useless by impossible to practice. Most of them are just writing to increase the number of tips with articles. I have found people commenting heavily on such articles but, how many of them still remember those tips read from various blogs? How many of them practiced such tips and went back to the article to write their success story? Practically none.

Such pathetic reality happening due to most of the tips writing in the blogs are just bogus. I am not saying all the tips are not practical but, some or the majority of such tips are difficult to practice. Here is the three superb example on a tip I have found in a famous personal finance blog. Read and comment on the practical side of this tips.

“Sign up for every free customer rewards program you can”

How many families regularly using internet? Most of the old age people may be never using net. If using, not regularly. What are the sources to get the information of such reward programs? In my opinion, it is better to provide possible steps once after practicing the same self and informing others to follow. Or, it will be like the analyst reports coming each and every week by recommending any stock to buy and the analyst personally not holding the stock.

Another example I found with this same article:

“Instead of throwing out some damaged clothing, repair it instead”

Nice idea isn’t it? If you have a big hole in the back side of your shirt or pants, get a piece of cloth and repair it. Then go to office or party. If you write a word 'I am saving Money' will do superb to justify and others to follow the same practice.

The very best third tip from this tip guy is,

“Learn how to dress minimally”

Can you consider this as a tip or say some good words from English dictionary, once if you have a daughter aged 15 years or more? If it is a place like Iceland or Greenland, is it possible to use minimal dress? I don’t know how the person, who wrote this, how he dressing. In my thoughts, he may be not coming out because of not wearing any dress.

I have not yet understood the meaning of writing such impossible tips to simply increase the tip numbers in the article. I still feel shame after reading such tips as a personal finance blogger. Such tips turning the tipsters to the level of blind tipsters. Am I right?

Here are some practical tips that is possible. Just read and compare with the above three. Comment here about how do you feel after.

“Combine your cable, internet and telephone service” – Extremely practical isn’t it? The only requirement is to check for an operator providing all these service as a single package. Yes, this will minimize money spending and you can of course, save some money.

“Get your books from the library” – A neat tip for those who have reading habit. If you go to the libraries, get a member by paying cheap fees and get valuable books from there.

“Always go with a list” – This most practical and most recommended tip can be used when you go for shopping especially groceries.

I remember a word from my professor at this time and interested to share to all of you. "When you advice something, think twice about the possibility of practicing the same". Whether to yourself or by others. Never advice anything that is not possible by anyone.

What want to do to get right tips?

Money saving tips are hot cakes with personal finance bloggers. People who visiting to a finance blog or website mostly giving preference to get tips on saving money. As a reader, collect the maximum possible articles of money saving tips and make a list about the tips that you can practice easily. Once after listing such tips, categorize them i.e. tips for shopping, tips for banking, tips for credit card usage etc… later practice these steps to get the most required knowledge with each category.

Comment to know me about your feelings on this article.

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Be a money saving expert by improving your skills

So you want to be a money saving expert. But, you don't know what to do for that. In my experience, It is simple once if you acquire required knowledge with five areas. I have identified these five areas for my blog readers to to get knowledge to be a money saving expert.

1. Budgeting
Through proper budgeting, a person able to explain his money flows perfectly. It helps to identify and the 'Need' category, where a person normally won't be able to save more money but the next, 'Want' category will lead him to save money. Need category generally have the expenses for utility bills, day today food items etc. and the 'Want' category involve anything that help for little posh life. A careful budget planning will enable one to identify what he not really want from the 'Want' category and that lead him to save money.

2. Shopping
There are many possibilities of saving money while shopping. In my personal experience, I never buy any product without identifying the price with multiple store. Of course, if the item falling to my 'Want' category, I even ready to wait for the price to come down. Careful shopping at the time of reduction sales and festival times help people to save good money. I have found most people wasting money unnecessarily while doing shopping and it happening because of not having a shopping plan before starts to shop. Through having a clear shopping plan with little patience, you can save lots of money easily. Developing a bargaining skill will be fantastic to deal better during your shopping.

3. Credit Card
Controlling usage of credit card certainly helps people to save enough money as well as keep away from falling to debt. Never accept any offers from credit card companies that indirectly force you to shop more using your credit cards. You should know the 'do an don'ts' with credit cards and develop your own credit card using plans. Here is my personal experience with credit cards for your reference.

4. Banking
Bank deals should be intact or will cost you. A person not have enough knowledge on the fees and charges applicable for dealings and defaults, automatically authorizing banks to deduct money from his account as fees or charges. There are many fantastic articles available in the net to refer and have knowledge on intelligent banking to save money.

5. Investing
I think, no need to say anything about investments. Investing is an integral part of financial planning but, it if one don't have enough knowledge on what he is doing, will give negative result along with money lose. Never ever start investing on any product till you know each and everything about the same, is the solution to avoid such errors. As a better solution, one can contact a certified, experience financial planner to ask help with low fees.

Above five are the areas a person should acquire knowledge to save money and lead better life. It is easily possible by anyone if give little focus to this goal. Unlike 20 years back, now we have all the resources like good books, dedicated blogs and websites to get good knowledge on these five most important areas. When you are practicing the knowledge receiving from books and blogs, experiences later shape you to be money expert.

Welcome your thoughts to share here.

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My personal biography of investing - Part 2

Here is the second half of my ‘personal investing biography’ for my readers. I have ended the first half by saying I was learning the successful investment practices adapted from three legend investors, to create my own investment valuation principles.

After read the books, ‘The Intelligent Investor’, ‘The Warren Buffett Way’ and ‘Common Stocks and Uncommon Profits’, to have better familiarity on the investment practices used and suggested by Benjamin Graham, Warren Buffett and Philip Fisher, I have finalized the must look areas to valuate a company to invest. This practice leads me to have my own style of investing.

As I have personal enmity to brokers, stock analysts and tipsters, I cautioned myself to not hear, follow or even bother their words. Instead, decided to stick own my investment principles entirely, for all of my present and future investing requirements.

When I strongly felt I am able to valuate any company, I started a personal savings account to transfer some pre-determined amount each month to accumulate money for buying stocks. I never lost any chance to add any money that coming to me as bonuses from my company or from any other ways. Finally, I have identified and subscribed a best online trading platform for my personal investing. With a practice of keeping backups to all my important accounts and data, I have also opened another online trading account from another vendor as a backup to the first. This trading account later helped me to purchase any shares specifically for my child investments plan.

At the end of year 2005, I bought my first set of shares when the price of same totally met my requirements to purchase. Later, I had brought shares of another six fantastic companies to build my core stock portfolio. I am still holding these shares as my ever best investments. As a result of my patience and research, I have not faced any lose, even after the recession lead stock market crashes. A well mix of defensive sectors in my portfolio helped me a lot to protect my portfolio from any major setbacks.

With my seven companies, I have made a profit of 6 times than the money I lost at the time I started investing as a beginner. I also like to point out the only mistake happened from my side was the decision to sell some shares of a classic company, to get my previous lose back. Yes, I got my previous lose back with its interests. It took 12 years for me to recollect my lost money. But, in the same time, I was doing big mistakes of selling a germ for little price. As the cost for this mistake, I have never got another opportunity to buy these stocks again in the price I paid to buy it earlier.

Now, I am a very happy investor by not investing regularly but, taking extra care to not miss any possible investing opportunities. Still am following the practice of transferring some amount to my trading account in each and every month. With my further researches, I have already identified next some companies to invest when it reaching to my pre-determined price band to buy.

It is the time to have a small discussion on my personal investment valuation method. I am not saying this methods developed by me. But, I am able to say, these are the most succeeded methods I have found practiced and followed by legend investors. Here are the five methods I am following to valuate an investment:

1. A company with one or more products or service, that have unbeaten monopolistic position in the market were customers required to buy it again and again. Such eminent position and improving quality eliminate any room for competitors to enter with similar product or service.

2. A company should lead by well efficient management team, capable to introduce innovative ideas time to time, to maintain its leadership position intact in the market, by considering the economy and market cycles, time to time and in advance.

3. A company should have zero debt or very few, manageable debts. The term 'manageable debt' correlating to a company’s total debt, combining both long term and short term debts, should not exceed its yearly net profit. A debt position up to one half of its yearly net profit can be considered if the company meets all other conditions perfectly.

4. A company should have a history of registering consistent per share earning growth year to year for last 10 without any drop in earning at any year.

5. Finally, when buying, the stock price should project a rate of return of 7% or more.

Above are the five golden rules I am following to valuate an investment. I never interested any compromise with any these rules. Any situation that forcing me to compromise, will lead me to not invest on it at present and keep aside till it meets my requirements.

A person with average math skills, I am not in a position to valuate financial statements of any company to identify common ratios and the possibilities exposing by them. Being frank, I don’t believe or not interested to do any numerical calculations to reach to any assumptions based on the result from it. Even though, as an investor, knowing some calculations are the integral part of valuation and should have enough knowledge on that. To identify the price, an investor should know the rate of return from the buying price. If he pays higher price, the rate of return will come to low.

Like this, I have always interested to know the cost to sales part of any company to understand the ability of a company to survive at the time of economic changes like inflation. Making a quality product from minimum cost, automatically convert the company to a cash rich one. As the result, there will not be any debt and enough investor appreciations possible.

As a follower of value investor Benjamin Graham and his Margin of Safety principle, I learned the skills to calculate and compare a stock price with the related returns of a most secured government bond. Calculating the Rate of Return and relative returns helped me to identify the right buying price. If you interested to know these calculations, visit my blog time to time. I will soon post articles on these calculations for readers to understand what Graham intended to teach his students and investors from his Margin of Safety formula.

This is my personal experience and short biography on investing. I intend to share two major points; 1. Do not allow a bad result from any mistakes in our life, to override us and drop the interest to a particular subject. Instead, take it as an experience to learn new lessons. 2. Each investor should develop his or her own investing strategies than just following others. Life experiences and practices followed by legend investors greatly help for this. Read and read more to get the best from it to keep as your personal.

If you are new here, you might have missed the first part of this biography.

I am happy to hear from each of you. A discussion on any points, most welcome. In case you have any doubt or a question, don’t hesitate to comment here to let me know.

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My Personal Biography of Investing - Part 1

Here is the first half of 'my personal biography of investing'. It is totally exempt from any specific country, money or stock market. But, intend to energize people through sharing the important investment moments from my personal experience. I have divided this article into two parts. In the first half, I am sharing my experiences as a beginner investor and in the second half, I will share the investment practices I have followed and kept my own for valuating companies to invest.

My first huge lose and workarounds to get those money back

After signing to my first job on 1993, I thought, I will buy some stocks. As a beginner investor, I was not aware about the stock market and how it is working. I was totally blank on the stock selection criteria. When decided to buy, I was following those who was investing in stocks at that time and blindly believing the words of brokers from my native city. On 1994, I have purchased 20 shares of a well known company in India, it became the most valuable company in India today, and received the paper format certificate.

At the time of 1994, I have even not heard on the demat form and not introduced online trading facilities because, internet was very rare in my city. The only possibility to buy stocks are to contact the brokers and use the off line trading platform. I have even not bother to visit the broker office after he recommended the above stock to buy. I was also not aware about that company or its business and investing possibilities.

I am happy to say that, I am still have the first certificates of 20 shares, I have got as my first purchase, and it merely given a profit of 2000% along with lots of bonus shares of its sister establishments. The value of my first 20 stocks grown to 20 times till today, excluding the value of any bonus shares I have received. Including the value of bonus shares, the profit will rise to a clear 30 to times if I sell the stock with today's price.

Even I have invested without any plan or study, this experience teach me a lesson of doubling profits multiple times when investing on right company with long term focus.

After my first purchase of 20 shares, I have not done any activity for next 2 years. As I was working for overseas, I have not got any chance to contact the broker to put buying order. After back to my native, the time index was booming up, I have again got an advise to invest on a technology company with price was booming fast. As a total beginner, I have purchased 25 stocks of this broker suggested company with the price of 1700 per share.

When the next bear phase started, I had a look at the price of this company and really shocked by seeing the price per share is only 43. I had met a clear lose of 1657 per share and that vanished my major chunk of savings. There was no reason for crying. I had made multiple mistakes. First, I believed a broker word to select a stock to invest. Second, I never studied about the company or the stock market to identify the better stocks and time to invest. Third, I have invested total money to a single stock and finally, I invested on a stock that was from a hot sector.

I am sure, if it had happened to any beginner investor other than me, he could never have a look into the stock market again. Yes, my experience was enough for me to say goodbye to investing for ever. All over this, I have got benefited by learning a classic truth, never enter to any contract without study or research.

Following several years, I was roaming without a job. I was thus not able to invest to get my money back. When I got the first job, the salary was not enough to meet my monthly budget and there was no money to invest. I went back.

At the time of internet facility introduced to the company where I was working, I got an opportunity to access internet from my own desk. While browsing, my eyes stuck with the name of Warren Buffett and his teacher Benjamin Graham. I have got thrilled with the investment principles of Benjamin Graham and Warren Buffet and thus start finding any books written by them. Unfortunately, I was not able to find the first book named "The Intelligent Investor" by Benjamin Graham, anywhere in the local book stores. After next two years, I have started my career as Systems Engineer in Mumbai. I have received a copy of "The Intelligent Investor" from there and start reading the same.

The principle and advices of great value investor Benjamin Graham attracted me a lot. As Mumbai was the place where Bombay Stock Exchange is, I again attracted to stock investing. Even though, my previous investment lose was their in my mind as a black mark. After lots of thinking about a re-entrance, I finally decided to start investing with little money to test the value investing steps described by Benjamin Graham within his book "The Intelligent Investor". To get additional information about value investing, I had referred the national bestseller, "The Warren Buffett Way". Through reading this book, I have got ideas on Buffett investing style and the qualities he was looking on a company, business, management and financial.

I have finally reached to the ever best investment classic from Philip Phisher, "The Common Stock and Uncommon Profits". After reading it several times, I have got very clear picture on the most important areas an investor need to give maximum focus to valuate a company. My next step was to build my own investing principles by following the practices and advices from these three investing legends and which later lead me to creating my own valuation methods, I still following. As I was very weak with numerical calculations, I was not able to interpret financial reports of the companies. But, I studied the necessary formulas to fetch the most required informations like per share earnings, debt ratios, rate of returns etc..

My basic preparation to select and invest on a company started from this point. With increased confidence from enough references on valuating companies and find right investing candidates, I reentered to capital market with an intention to get back my money, that I lost years ago.

Here is the end point for the first half. You can visit the second half to read all the interesting steps I have followed to get back my previous investment lose through investing again.

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My Personal Plan for Creating Investment Portfolio for Kid

Building an investment portfolio for a new born child to secure her future, is the dream of every parents. Child investments required careful selection of proper investment instruments and maintaining the same for long term, without fail. It required enormous efforts and patience to get desired result. If you think a little, you can build a simple investment portfolio for your kid, by not having much complexities. Here is my personal experience of creating a simple investment portfolio for my kid.

When creating a portfolio for kid, it is recommended to add the investment instruments that have high risk. Equities are the best asset class to meet this requirements. High risk instruments have capability to provide high rewards. A child investments always have long term focus and equities have a character of performing well for long term, equity investments are the better option for those planning investments for kids.

For me, it was not simple to select right instruments when I was thinking about presenting a core portfolio to my kid. I never went directly to invest on any instruments blindly. Instead, I collected the possible details about the available instruments to know the possibilities of systematic investments for long term to generate wealth slowly and steadily. Further, I have moved with this clear vision and goal and that took me to the following investments:

1. Mutual funds

When my baby girl was at the age of one, I have selected two well performing large cap focused mutual funds and started systematic investment plan (SIP) on it in her name. Of course, I am the guardian for this investments and kept my wife as the nominee. Through SIP, I have authorized mutual fund to withdraw a fixed amount from my account in each month, for next 12 years. I am getting the statements properly by e-mail and thus getting updated information about the fund, time to time. The major problem I have faced while selecting this funds, to know the fund manager and investment style. I took enough care to not select any fund with a fund manager have trading nature than investing. I have also selected the funds that is top from the beginning till the date.

2. Direct Equity investments

With my nature of transferring a fixed amount in each month to a separate account, enabled with online stock trading functionality, I met the basic requirement of building a portfolio of wonderful stocks for my kid. Transferring an amount to a separate account in each month working for me in two ways; First, it will work as an emergency fund for me, even though I have a separate one, and second, a regular transfer of a fixed amount to this fund already build a great corpus, that is enough to buy good shares when it is coming to the right price. I have a plan of buying considerable number of stocks from at least 10 excellent companies to generate an equity portfolio for my kid to meet all her necessary future expenses.

To those who interested to know my stock selection criteria, please read below:

- I have considered companies who have at least one product with real monopolistic position in the market and providing no room for its competitors to enter to the same segment.

- I have considered the management efficiency of the company and the ability to introduce innovations, time to time, to maintain its leadership position.

- Companies that have continuous earning growth for last 8 to 10 years and without any fail.

- I have bought the stocks that meet the rate of return that I have fixed myself

- Zero or no debt companies only selected.

Through the long day process scanning number of stocks, I have shortlisted 25 stocks and selected 10 stocks to the final list to buy. I am sure, I will buy at least 8 companies from this list before my kid reaching to her age of 10. I have patience to wait until the price of these stocks coming down till my prefixed buying boundary.

3. Savings Account

My third option was a secure saving account with compounding interest. To meet the same, I have opened a PPF - Public Provident Fund - which directly controlled by the government. It providing 8% interest to the investment in a compounding basis. This account helping me to add any excess amount in it and with a future plan of educating money savings to my kid. At the time I can use this account as her parking place for any of her savings. Through such account, I am getting total tax deduction to the amount depositing to that account as well as the interest earning from it. It of course, a double edge sword for me.

What will be my task with these investments?

1. I am sure, above three will perfectly meet required child investments. I have the requirement of monitoring the investments with mutual funds. But, this can be done once or twice in an year due to the present fund status and fund manager capability.

2. Intelligent selection of stocks and long term investment focus eliminating the requirement of monitoring the performance of stocks I have mentioned with step two.

3. As it is controlling by the government, there is no worry on the money depositing to my PPF account.

Above mentioned are my personal child investments plan. Selection of an account mentioned in the step three may be different in your nation. If you plan to select a saving account for your kid, always prefer the one providing compounding interests and lock-in periods of certain years. You can convert this account as a good parking place for all money your baby getting as presents or saving through educating her about the requirement of saving money.

You are welcome to share ideas by commenting on this. Remember, world has full of ideas but getting the same from a simple point, is difficult. If you have a right idea, it will be useful for readers as well as me to update my knowledge.

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My Dream Eco friendly home features

I have a dream of build an eco friendly home. It may take time but, I have planned well on the required features in such home. Below are the reasons why I thought I should go for an eco friendly house and the minimum required features in it.

Due to continuously rising utility bills, increasing diseases from contaminated water and water scarcity, bad health due to air pollution and climate changes, forcing people to the requirement of building an eco friendly house or converting their present home to more eco friendly. If I build an eco friendly house in the future, I would give preference to the below points. I thought sharing the same will give an idea to the readers at least to think about it if they have any plan to build a house in the near future.

Below are the necessary points in the context of an eco friendly home:

- All the required features should be available in a cost effective way by minimize the amount of materials used through careful design. In other word, a design should have maximum durability and flexibility.

- All the materials should be natural or try to use locally available materials.

- An eco friendly house should have capability to manage all resources efficiently in a well managed way. Water, waste, climate, power all will come to the picture.

- Any product that you use, should have required quality standards.

- Use safe, non toxic materials, which are now widely available

- Buy only what you need. In this context, should use the maximum possible materials from your own hand.

The home I am going to build, should have the below features.

1. Water management

An eco friendly house should have the facilities to collect both piped water and rain water. As you have to pay for piped water, collecting the rain water have more importance of saving your money. When thinking about water management with an eco friendly home, you should properly have 3 under water tanks. The first one for piped water, second for rain harvesting or collecting rain water and third for waste water. All the fittings for using the water should be efficient by confirming it not wasting water more than what is required for particular usage. For an example, a 3/6 duel flush water system in toilets will do better for us by not wasting much water.

The rain water harvesting water tank should meet the necessary requirements that providing by various approved agencies. We should take care of the source prior to building such water tanks. There is no wonder but proper rain water harvesting can reduce your water bills to half or more less.

Waste water management tank required to collect used water. For an example, a well conversion of used water from bath rooms to toilets flushes reduce the water wastages and maximizing the usage through efficiently converting water to all possible usages.

Protect ground water, waterways, streams and storm water drains by required control measures in place.

2. Energy management

Electricity is a major culprit of losing a good chunk of or money as utility bills. A parallel and less cost solution available for this is the solar energy. Installing solar energy system helps you to get continuous power with no cost. Depends on your requirements, installation of solar panels possible along with future extension option if required.

Use heat sinks such as brick or concrete to store heating. You can even increase the level of ceiling, wall, and underfloor insulations.

Always purchase appliances that have highest power efficiency.

Install solar water heater instead of electrical water heater to take maximum advantage from solar energy and save electricity.

3. Healthy atmosphere

In an eco friendly home, precautions required to have healthy atmosphere. It is a must to protect children's and old aged people, those who are vulnerable to disease immediately, by planning properly.

To get such, keep the home dust free. Use natural materials to decorate walls and avoid materials like paints and turpentine or polyurethane. Avoiding carpets and dust attracting surfaces will do better to live healthy.

4. Waste Management

Proper waste management in place not only help to have a healthy, clean atmosphere but also help you to get money by creating composts or save money for buying composts for your garden. Composting garden and kitchen wastes produces valuable fertilizer for your plants. To do such, a compost tank as per the required standards should be designed. You can thus intelligently manage the waste to create composts and thus earn or save money efficiently.

5. Gardens and surroundings

My most favorite. A house should have enough open space around the home. Your surrounding should be filled with enough trees for clean air and protect yourself from sun heat and should have a good garden, whether it is vegetable or plants, to have maximum healthy surroundings.

You can use drip irrigation to use watter efficiently. A tank that designed to filter waste water naturally, helps you to convert the same to the use of the garden or small farm. Such way, you will be able to use the water efficiently by utilizing the maximum.

Your garden should have an area where water can naturally flow to avoid flooding and allow natural cleansing and soaking of water into the ground.

Always place plants that suitable to your soil conditions.

You can even use your terrace to create a mini eco system by placing plants and building vegetable gardens. The only requirement is the house and terrace area should be built as per this requirements or having specially built for planting on the top.

6. General safety

Always confirm that your house built by meeting safer house design standards. Provide safe storage for kitchen, bathroom, laundry and garage for dangerous substances, such as medicines or household cleaners. Make sure all such are away from kids.

Always secure ovens and non-attached cupboards with safety chains.

All your stairways and kitchens should design with child barriers. This should also need between the front yard and the footpath/driveway.

Always install smoke alarms, and fire extinguishers

Have good relationship with neighbors

Have electricity power breakers

Always use security lightings, safety locks and catches on doors and windows.

Most of the above already in my mind and I have planned to apply when design my home. I am sure, following the above with the help of a well experienced designer help to have a good neat eco friendly home with maximum efficiency of resources, minimum cost and healthy living standards.

If you have any doubts on the same, please comment here. Also, if you have any idea other than the above mentioned and that you feel, a great help for building my eco friendly home, always welcome and appreciated.

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What is hyperinflation

World are slowly moving to hyperinflation. Stimulus packages offered by most of the countries inviting such economical change to a great extend. Any countries who presently reached the inflation rate to 0% certainly facing hyperinflation issues. Having little knowledge about hyperinflation would seems better at this context.

Here is a best definition for 'hyperinflation' from investorglossary.com to know better about this very rarely used term. Have a look.

Hyperinflation is the extremely rapid escalation of prices (typically more than 50% per month) for goods and services.

The most famous hyperinflation of the modern era occurred in Germany in 1920-1923 when the government began printing money to make up for revenue lost to a general strike. The German hyperinflation resulted in a percentage increase in prices in the millions per month. Other cases of hyperinflation (Greece, Hungary) following World War II were even more extreme.

The root cause of hyperinflation tends to be the excessive printing of currency by the monetary authority. Hyperinflation is extremely disruptive by making savings worthless very quickly, thus encouraging workers to spend money as fast as it is earned. Even moderate inflation is feared because of its potential to lead to hyperinflation, but many countries have experienced moderate inflation without hyperinflation resulting.
Hope this article helps you to get enough knowledge about this economic change. Don't forget to comment if you like this article suitable presented by considering the present economical changes.

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Credit card - Convert an enemy to close friend - A journey through personal experience

Those who prepares budgeting as the preliminary step to personal financial planning, normally giving weightage to monitor the credit card usage to identify and eliminate unnecessary expenses. Even, personal finance advisers recommend this as the first step. Credit cards are the major enemy to a person who doesn't have control on spending. This article sharing my personal experience, how I made a credit card as one of the best friend of mine.

Using credit card is good but bad at the same time. Both depends on our way of thinking and control on spending. I have experienced lots of people suffering from huge credit card debt which taking major chunk of their earning in each month. If you control a little, you can easily convert a credit card as one of your best friend in need.

As a preliminary step of making a credit card as your best friend, always select a credit card carefully. Prior to filling the final application, collect necessary informations on charges and services providing by various credit cards. This would be vary by company to company. Compare the costs, interest rate, services and other areas like customer care clarity etc.. to identify a best card suitable to your needs.

Due to the heavy competition in the credit card segment, most of the credit card companies offering life time free credit cards. Take advantage from it. Such features eliminating the requirement of paying annual fees for the cards. Always remember to ask and identify if there any hidden costs involved behind such offers. Asking to the existing customers of similar card will give you a clear picture about the facilities and drawbacks.

Never accept the credit limit offering by the company. Instead, always set your own spending limit. For my card, I had set a spending limit equal to my one month budget. It helps me to use the card intelligently only for buying any items that is required for the month. Such credit limit preventing me to use the card to buy any items that not included to my monthly budget.

Other benifit a person receiving to do so is, he will think twice before using the card to buy any product or service because its limit. Gradually, it will shape him to identify the 'want' and 'need' to use his card intelligently.

Limiting your credit card amount will put you in a safe side in case of loosing the card (I fear this as most). If such burglary occurs, and you are not able to contact the credit card company immediately, the person who steal your card can use the same for limited amount. I personally knew the saddest story of various people, suffered from huge debt due to misuse of their card heavily after losing the same.

I generally don't have a practice of using credit card. As per my budget, I am transferring fixed amount for each month, to a separate bank account. This enable me to use their debit card to do any purchased. In some situations, I am paying directly by cash.

I never used my card for balance transfer. Yes, balance transfer is a nice facility offering by credit card companies. But remember, it is a hidden debt trap set for credit card users.Don't fall to such trap.

In my life, I never used a credit card to withdraw money from any ATM. I am not able to do such because tearing of the PIN number immediately after receiving the same, without opening. Using credit card to withdraw money from any ATM is, of course, costly. Not having the ATM PIN saving me from any possible temptations to withdraw money from an ATM.

I have another reason to keep a credit card. It is of course, working as an emergency friend for me. Yes the credit is limited to the maximum low level. But, some time, situations compel you to have some immediate amount and final settlement will be later.

I don't know how you are going to treat this article as well as my practice. Its all depends on one's mind. For me, credit card is an assurance and through such, I am confident by fully loaded with enough money required for my next month budget.

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Can you predict the stock market boom?

Time is over. Economies start showing signs of survival. As a beginning, most of the stock markets start recovering by slowly moving upwards. Naturally, as a finance blogger, this is the time for us to get questions from readers and people about the next possible new heights of stock markets. Can any of you able to predict the next height of the stock market in your nation?

Previously at the time of recession in its maximum and when stock markets came to the utter down, I start facing the interesting question, how much the market can come down. Now the scene changed. Those who asked about the down level of stock markets now start asking the possible new heights. I should give an answer to this question but how can I give a exact answer to this question?

It is a truth, no one in the world can predict the movement of stock market. No one can say how much it will come down or go up and what time. If you have excat idea about what is going on with your economy and think a little, you may able to make the people happy by saying a well satisfying answer.

There is a truth that the stock market will go up with the economies that have little impact from the present economic recessions and its economy growth are intact or moving forward. Developing countries like Brazil, Russia, India, and China, known as BRIC countries, informed economic growth have little effected by the economic recessions or these countries can recover from recessions as fast as possible. This is happening due to its growth is intact. Their stock market can go forward and that is certain. But, not able to say a right time frame. A person who is asking such naughty question certainly expect a time frame from our mouth. A simple tactics can save you here. You can easily say the market will grow up but it will take next 10 to 15 years or more. With the present growth of such countries, your said target will be right and there will not be any fault.

Whenever I facing a question about new possible market heights and time, I always replying that the stock market presently moving through the bottom line. It can still go down or go up but volatile at present. It is the time to get good stocks with good prices if you if you really interested to invest for a long term focus. If once the stock market start booming, certainly it will break its previous heights but, it is a time taking process and that is the reason intelligent investors saying to invest with good companies for long term focus.

Certainly the next question we can expect about, how much time it will take to reach the new height. To give the question, I should know the previous heights or out stock market. If you know the same, you can easily say the same number or 1000 points more from its. The truth behind is, the nature of any stock market in its booming time, always beating its previous heights. it may take long time but it will happen.

There could be fluctuations during the journey to beat previous heights but as long as the economy growth is intact, it is certain that the market beat its previous record. The best message here is, an investor should practice patience and never commit the mistake of panic selling.

You can predict something that certainly happen. But, something you cannot predict. For example the time a market take to reach its next height. My mission by giving any answer to such question is, give the person a better understanding on the requirement of perfect stock selection with long term focus and the requirement of patience. Most of the time I have succeeded with this mission with those who have asked similar questions to me.

Can you now predict the next stock market heights? Share your thoughts here.

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Six best articles on money saving

Here is the best five articles I have found on various blogs that help anyone to save money if taking little action. Sharing this to my readers to help them to save money to a great extend.

1. Titled with "Do you Haggle? How to Negotiate A Price", The Digerati Life introducing the best practices for us to learn how to bargain a right price while shopping. This is one of the most attractive post for me to save money through simple actions. Visit and read the article at The Digerati Life to learn better bargaining skills

2. In his article titled 'How To Create A Budget', Pinyo intents to inform us about the must requirement budgeting to plan and save money, through seven simple steps. A must read for you as a personal finance blog visitor and to start fantastic personal financial plan. Visit and read the article at Moolanomy to have a clear and better idea.

3. David rocks again. This time he is presenting a wonderful article titled "50 Ways to Budget Travel and Save Money on Vacations" in his respected personal finance blog named "Money Ning". He took extra care to complete this wonderful article for us, the readers, about the money saving possibilities while planning a trip. He included the points to remember for saving money from airfares, eating, car rentals, transportation, currency, accomodation, shopping, alternatives, He have also mentioned the points to save mony from 'general' with an extreme fantastic bonus tip as the 51st point. You can visit and read the article at Moneyning here to practice this excellent tips to save lost of money.

4. Would like to know more about how to manage money wisely? Visit 'Finetunedfinances' and read the article titled "Ten Wise Moves with Your Money". As the article heading says, Matthew Paulson wrote ten wise steps that certainly help a reader to move wisely with his or her money. This is an article, using simple language with clear idea. If you plan your finance, you should read this article by visiting 'Finetunedfinances' now.

5. If you are a collage going student, you should read the article titled "7 Ways to Save Money on College Transportation". In his guest article Mike from "Cleverdude" presenting seven simple steps that one can follow to save money while going to collage. You can read this article at Cleverdude here.

6. Do you know how one can save lots of money while doing any banking deals? Just have a look at the blog 'Bargaineering.In his title "Five Money Saving Bank Hacks", Jim exposing the possibilities of saving money when dealing with banks. Little care will give you good savings with your day to day banking. Have a look at the article at Bargaineering and practice the saving habit from banking.

That's all for now. I am sure, reading the above article will give you good knowledge about how to deal with money intelligently and how save maximum possible from each simple action.

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Make Money - Why TMM recommend Infolinks

After putting lots of efforts, we are establishing our blog to the internet world. Naturally, our next mission will be to monetize the blog using most effective methods available today. More than 1 year, I was in search for a perfect solution to monetize my blog along with Google AdSense. The journey finally took me to "Infolinks, an excellent in-text service provider. I thought it will be worth adding a personal review to help readers to know more about the company and features to recommend a nice way to monetize there blog or site.

infolinks review



Introduction:
This is my successful second month with Infolinks, a most high CPC provider in-text advertisement company. I have lead to Infolinks by a co-blogger, who having great success with Infolinks for a long time. When I was registering with Infolinks, I was using some other in-text programs. After approving my account, I found the configurations are more simple and user friendly. Soon after configuring Infolinks to my blog, I found an increase in my revenue to 5 times than any previous, similar ads I have integrated with Google AdSense. I am really happy with their service because of its promptness and right effort to help the publisher all the time.

Features:
If you have a legitimate blog or site, whether it is small or big, you can register with Infolinks and the approval process is relatively immediate. The simple yet powerful Infolinks code is very simple to add to your main code. You can easily alter this highly configurable simple Infolinks code as per your requirement. Infolinks providing all the required instructions to add the code and configure the same as you wish. This configuration option helps you to control over Infolinks advertisements appearing only in the places where you exactly required.

If your blog or site has huge number of comments under each article, you are one of the lucky person to generate huge revenue by having a fantastic combination of Infolinks with Google AdSense. You can easily configure Infolinks to appear only in the comments section under each articles than the main post body and configure Google AdSense for other portions wherever you feel good to match. I am sure, this combination will generate enormous revenue for you.

The most beautiful option I have found with Infolinks, compare with any other in-text ads, is its excellent ad style and superior ad loading time. Infolinks has very high CPC rates compare with any of its competitors today. From my personal experience, I have realized the Infolinks CPC rates are very attractive compare with any of its competitors, I had used with my blog earlier. This high CPC rate is one of the major attraction of Infolinks in this space. Infolinks generally distribute 80% revenue to the publisher. This ratio is high with its competitors and helps Infolinks publishers to get maximum reward on their effort.

Publisher can easily track their earned revenue by login to Infolinks at any time. Once after completing each $100, Infolinks will release your payments through PayPal or using Bank wire. You have option to configure your preferred method to receive the payments. Their pay out timing is intact and no need to worry. You can visit the Infolinks FAQ section as well, to know more about this.

Support:
Infolinks have an excellent support team. I have personally realized their dedication by getting prompt answers to all my queries and in time. For example, at the beginning of joining, I was not able to configure the Infolinks as per my requirements. I have contacted the support team and not even wait for an hour to get right reply with right instructions. I am very happy with their support and promptness. That is a major reason to get me more closer with Infolinks.

At the beginning, I had limited Infolinks ads to the comment section in my blog but, later realized that the loading speed of Infolinks ads are superb to not disturb any readers. It lead me to configure the ads to the post section too, to generate more revenue now.

Personal Experience and view:
I have worked with most of the available in-text advertisers but, left all of them after registered with Infolinks. Presently, I am very happy with them and personally like Infolinks because of its capacity to generate high revenue from relatively less traffic. It is still possible because I found there ads have enough quality and take very less loading time. I have also liked the good looking appearance of Infolinks ads, one most required quality to attract the visitors.

Using Infolinks doesn't required any additional changes to your blog or web site. It has a very small but highly configurable code (once if you required) for publishers, which can install and integrate with any site or any blog with one simple and easy step.

Infolinks is relatively a new company in the in-text advertising space. But, within this short time they have established and added their footprints across the internet. Those who using the ads from them are very happy because of the professionalism they are showing in each and every points from the beginning to delivering the money to the publishers. It is a fast growing company and I am sure, soon it will win over any other competitors in the similar space.

A final word to readers:
From my personal experience, I have found the service from Infolinks is excellent and that is the reason I have selected the service to integrate with my blog 'The Money Maniac'. The most required areas, configuration, support, revenue, found excellent and having high quality compare with its competitors. Proper configuration and integration of Infolinks with other providers like Google AdSense, AdBrite or any, will be able to bring you more revenue. Infolinks maintaining a very good help section and a very good FAQ for its publishers as well as advertisers.

You can sign up to Infolinks right away to start earning good revenue. To know more about Infolinks, visit here.

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Steps to be a Great Blogger and Earn Money

In this very special post, I am sharing my experience and the 20 steps I have followed from the beginning of 'The Money Maniac' blog to establish and start generating revenue from it. I thought It would be useful for any visitor who intend to start a blog as his own.

As you aware already, these steps are already available and have been mentioned in number of blogs. However, I rewrite the same here in a structured manner where, I have coordinated it to 20 steps a beginner to start and establish the blog at the end of following these steps.

1. Decide the SUBJECT to blog. This should be one to that you have enough passion and interest. A subject that interested to you will never allow you to run out of posts in the future. Identify a best and easy BLOG NAME and ADDRESS

2. Start a blog with any blog host like blogger, wordpress.org etc. An own domain name will do better for you. Decide a best TEMPLATE for your blog. Try to have a template with maximum features, simple and easy configurations possible.

3. Decide your TITLE, DESCRIPTION, and KEYWORDS for your blog. Tune the HTML for the same. This part required lots of research to get right name, keywords that attract visitors and traffic to your blog.

4. Learn from the masters. To do so, try to visit excellent blogs like problogger.net, labnol.org or Moolanomy.com to identify the features they have in their blogs.

5. Design a good looking and attractive HEADER for the blog.

6. Identify the RIGHT MIX OF COLORS for blog titles, post headings, post body, side bar widgets etc.

7. BURN A FEED with feedburner. Add a subscription window to your blog including an RSS feed subscription button

8. HAVE A GOOD main menu with all required options. An 'About Me', 'Contact Me' etc.. are the examples.

9. Write at least a 10 articles. Have a time table for the same. This will help you to post articles by following the timetable for each day of a week. For example, in Monday, you can write about a new post in your subject, Tuesday you can go for a review, Wednesday you can write about a latest news in your subject area etc...

10. SUBMIT YOUR BLOG SITE MAP to Google, Yahoo and MSN

11. Submit your blog to BLOG DIRECTORIES like blogcatalog, blogarama, blogexplosion, blogflux etc - there are good directory list available in the net.

12. REGISTER AND SUBMIT articles to public article submission sites like Digg, Propeller, Sphinn, reddit etc. Whenever posting a new article, submit the same to these directories to have more visibility and thus to get more traffic.

13. Submit your blog to the free database DMOZ.org - It is very difficult to get listed even though, try and try. You may have to resubmit after each 6 months. continue this practice till listing. Some time this process will go life long.

14. Submit the same to dedicated BLOG SEARCH ENGINES Technorati and Wikio

15. Start Google analytics to ANALYZE the traffic. This will later help you to tune your blog to more better.

16. From point 10 to 14, if any one rejecting your submission, resubmit after some time.

17. Start advertisement focus. Select only two or three advertisers. In my best opinion, select Google ad sense for articles and Kontera for comment section. Add some 2 to 4 affiliate or referral buttons in the side bar.

18. WRITE ARTICLE as much as possible. At least one per day.

19. USE PING SERVICES to ping your blog after posting any articles. I personally use pingates.com immediately after posting each articles. This will help to update all the directories with your latest posts.

20 Final is, visit similar sites and start commenting on it. Always, subscribe their feeds to get mails to your blog whenever they post new articles. This will help you to comment as the first one. Of course, this practice will attract more traffic to your blog.

In my best opinion, visiting the well established blog, as I mentioned in the step 4, will help you to identify the best required features with a blogs front page.

Once the blog established, you can earn handsome money from it. Remember, to establish a blog, lots of effort required along with time. Patience, discipline and hard work should be your best friends at this time.

Wish you all the best.

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How to take our World out of Recession?

In this guest post, Asav Patel, from 'My Journey To Billionaire Club', discusses on 'How to take our World Out of Recession'.

Today I was talking with my old friend on phone. He was very much worry about the current Recession & Global economic slow down. Recently he heard the news that, in USA they are firing Indian doctors also.

He was scared because he knew some Indian doctor over there who has been recently fired. He was asking me that, What is the solution of the Recession? When will Obama take USA & this World out of the Recession?

Well, so many people around this world are thinking the same way. They hope that, one day come when Obama will take the USA out of the Recession. Well, Obama is doing right things right now. But only Obama can’t take USA & World out of the Recession.

It is you (& Me) who can take our world out of the Recession.

So What is the solution of this problem? How can we take this world out of the Recession?

Well, according to me there are 2 basic solutions of this problem. I know that, you may not agree with me but these are the 2 possible solutions that i have thought. So i thought that I should express it with you……..

Solution: 1 Create Jobs in the Economy by Developing New Businesses…. Entrepreneurs come ahead…!!!

Well, all of you know that, because of the recession the businesses are shutting down. In last 1 month only around 34,000 businesses in Europe shut down and thousands in USA. Now No Businesses in the economy means no Jobs or there is a severe job loss at the mass scale.

So What is the Solution of this problem? Well…. We have to create new jobs in the economy. And than and only we can take world Economy out of the recession.

So How can we create New Jobs in the Economy? Well, Simple…………. By Creating Businesses…..

So Who will Create Businesses?…… Again it is very Simple……… Entrepreneurs will create new Businesses.

So Where are the Entrepreneurs? Why don’t entrepreneurs come and save us?

Well, Because unfortunately there is a shortage of Entrepreneurs. So Why there is a Shortage of Entrepreneurs?………..

Well, See the solution No 2 for this………!!!!!!!

Solution: 2 Redesigning of the our current Age-old School System

So by now you understand that one solution of taking our world out of the Recession is Entrepreneurs. Entrepreneurs will create Businesses and thus the new jobs will be created in the Economy and thus we will be out of the Recession.

But again ……… We know that we need Entrepreneurs but there is a shortage of Entrepreneurs in the economy. There is no shortage of Employees & Self-employees in the economy. We have over supply of them but we have a clear shortage of Entrepreneurs.

- So Why we have a shortage of Entrepreneurs & what is the Solution of it?

Well, we have a shortage of Entrepreneurs right now in the world because our School/Education System is not designed in such a manner that it can create entrepreneurs & Capitalists. Our traditional age old school system is designed in such a manner that it will create only employees & Self-employees.

I remember that, The only thing I learned about Businesses & Investments in my whole the school life was, - “It is Risky.”

This age old school altitude kills natural entrepreneurs since school. And ultimately they lose their confidence & convert themselves into Employees & Self-employees. And when right now we need Entrepreneurs, we don’t have enough Entrepreneurs in the Economy.

I have a solution of this problem.

The Solution is - “If Some how we re-design our School System in such a way that it motivates & produces all the 4 essential components of the Economy – Employees, Self-Employees, Entrepreneurs & Capitalists (Investors). Than and only our Economy will have enough Entrepreneurs in the Long run & This is the only Long-term Solution of protection our World from Future Recessions according to Me……….!!!!!

So We can take our World out of the Recession in 2 ways – Short Term & Long term (Future Recessions) Both……… By Motivating Entrepreneurs & Creating New Jobs in the Economy (Short Term) & By Redesigning of School System (Long Term)……….

What do you Think?…….!!!!!!!!!

guest writers blogAbout Guest Writer
This post was written by a guest writer. If you'd like to add a guest post in Money Hacker, please check out Write for Us page for details about how YOU can share your knowledge with our community.

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Benefits of investing in Mutual Fund

There are several a benefits available from investing in a Mutual Fund. This article point out 6 major benefits investors can enjoy by investing in mutual funds.

Small investments: Mutual funds help you to reap the benefit of returns by a portfolio spread across a wide spectrum of companies with small investments.

Professional Fund Management: Professionals having considerable expertise, experience and resources manage the pool of money collected by a mutual fund. They thoroughly analyze the markets and economy to pick good investment opportunities.

Spreading Risk: An investor with limited funds might be able to invest in only one or two stocks/bonds, thus increasing his or her risk. However, a mutual fund will spread its risk by investing a number of sound stocks or bonds. A fund normally invests in companies across a wide range of industries, so the risk is diversified.

Transparency: Mutual Funds regularly provide investors with information on the value of their investments. Mutual Funds also provide complete portfolio disclosure of the investments made by various schemes and also the proportion invested in each asset type.

Choice: The large amount of Mutual Funds offer the investor a wide variety to choose from. An investor can pick up a scheme depending upon his risk/ return profile.

Regulations: All the mutual funds are registered with Exchange Regulators (depends on country) and they function within the provisions of strict regulation designed to protect the interests of the investor.

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Features of debt instruments

This article deals with all the features that debt instrument carried. Each debt instrument has three features: Maturity, coupon and principal.

Maturity: Maturity of a bond refers to the date, on which the bond matures, which is the date on which the borrower has agreed to repay the principal. Term-to-Maturity refers to the number of years remaining for the bond to mature. The Term-to-Maturity changes everyday, from date of issue of the bond until its maturity. The term to maturity of a bond can be calculated on any date, as the distance between such a date and the date of maturity. It is also called the term or the tenure of the bond.

Coupon: Coupon refers to the periodic interest payments that are made by the borrower (who is also the issuer of the bond) to the lender (the subscriber of the bond). Coupon rate is the rate at which interest is paid, and is usually represented as a percentage of the par value of a bond.

Principal: Principal is the amount that has been borrowed, and is also called the par value or face value of the bond. The coupon is the product of the principal and the coupon rate. The name of the bond itself conveys the key features of a bond. For example, a GS CG2008 11.40% bond refers to a Central Government bond maturing in the year 2008 and paying a coupon of 11.40%.

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Major advantages of a diversified portfolio

A good investment portfolio is a mix of a wide range of asset class. Different securities perform differently at any point in time, so with a mix of asset types, your entire portfolio does not suffer the impact of a decline of any one security. When your stocks go down, you may still have the stability of the bonds in your portfolio. There have been all sorts of academic studies and formulas that demonstrate why diversification is important, but it's really just the simple practice of "not putting all your eggs in one basket." If you spread your investments across various types of assets and markets, you'll reduce the risk of your entire portfolio getting affected by the adverse returns of any single asset class.

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Growth Stock and Value Stock

We might have heard the the beautiful term, 'growth stock' and 'value stock'. But, what is growth stocks and value stocks and what all are the differences in both? This article provide you an exact idea to answer to all the above questions.

Growth Stocks:

In the investment world we come across terms such as Growth stocks, Value stocks etc. Companies whose potential for growth in sales and earnings are excellent, are growing faster than other companies in the market or other stocks in the same industry are called the Growth Stocks.

These companies usually pay little or no dividends and instead prefer to reinvest their profits in their business for further expansions.

Value Stocks:

The task here is to look for stocks that have been overlooked by other investors and which may have a ‘hidden value’. These companies may have been beaten down in price because of some bad event (mostly macro economic), or may be in an industry that's not fancied by most investors.

However, even a company that has seen its stock price decline still has assets to its name - buildings, real estate, inventories, subsidiaries, and so on. Many of these assets still have value, yet that value may not be reflected in the stock's price. Value investors look to buy stocks that are undervalued, and then hold those stocks until the rest of the market realizes the real value of the company's assets.

The value investors tend to purchase a company's stock usually based on relationships between the current market price of the company and certain business fundamentals. They like P/E ratio being below a certain absolute limit; dividend yields above a certain absolute limit; Total sales at a certain level relative to the company's market capitalization, or market value

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Secondary Market products

Here is the detailed list for an investor, on the main financial products/instruments dealt in the Secondary market, which may be divided broadly into Shares and Bonds.

Shares:

Equity Shares: An equity share, commonly referred to as ordinary share, represents the form of fractional ownership in a business venture.

Rights Issue/ Rights Shares: The issue of new securities to existing shareholders at a ratio to those already held, at a price. For e.g. a 2:3 rights issue at $125, would entitle a shareholder to receive 2 shares for every 3 shares held at a price of $125 per share.

Bonus Shares: Shares issued by the companies to their shareholders free of cost based on the number of shares the shareholder owns.

Preference shares: Owners of these kind of shares are entitled to a fixed dividend or dividend calculated at a fixed rate to be paid regularly before dividend can be paid in respect of equity share. They also enjoy priority over the equity shareholders in payment of surplus. But in the event of liquidation, their claims rank below the claims of the company’s creditors, bondholders/debenture holders.

Cumulative Preference Shares: A type of preference shares on which dividend accumulates if remained unpaid. All arrears of preference dividend have to be paid out before paying dividend on equity shares.

Cumulative Convertible Preference Shares: A type of preference shares where the dividend payable on the same accumulates, if not paid. After a specified date, these shares will be converted into equity capital of the company.

Bond: is a negotiable certificate evidencing indebtedness. It is normally unsecured. A debt security is generally issued by a company, municipality or government agency. A bond investor lends money to the issuer and in exchange, the issuer promises to repay the loan amount on a specified maturity date. The issuer usually pays the bond holder periodic interest payments over the life of the loan. The various types of Bonds are as follows:

Zero Coupon Bond: Bond issued at a discount and repaid at a face value. No periodic interest is paid. The difference between the issue price and redemption price represents the return to the holder. The buyer of these bonds receives only one payment, at the maturity of the bond.

Convertible Bond: A bond giving the investor the option to convert the bond into equity at a fixed conversion price.

Treasury Bills: Short-term (up to one year) bearer discount security issued by government as a means of financing their cash requirements.

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Do’s and Don’ts an investor bear in mind

Below is a complete list of do's and don'ts an investor should bear in mind when investing in the stock markets.

>> Ensure that the intermediary (broker/sub-broker) has a valid Exchange registration certificate.

>> Enter into an agreement with your broker/sub-broker setting out terms and conditions clearly.

>> Ensure that you give all your details in the ‘Know Your Client (KYC)’ form, if exists.

>> Ensure that you read carefully and understand the contents of the ‘Risk Disclosure Document’ and then acknowledge it.

>> Insist on a contract note issued by your broker only, for trades done each day.

>> Ensure that you receive the contract note from your broker within 24 hours of the transaction.

>> Ensure that the contract note contains details such as the broker’s name, trade time and number, transaction price, brokerage, service tax, securities transaction tax etc. and is signed by the Authorized Signatory of the broker.

>> To cross check genuineness of the transactions, using the trade verification facility available with concerned Stock Exchange website.

>> Issue account payee cheques/demand drafts in the name of your broker only, as it appears on the contract note/ registration certificate of the broker.

>> While delivering shares to your broker to meet your obligations, ensure that the delivery instructions are made only to the designated account of your broker only.

>> Insist on periodical statement of accounts of funds and securities from your broker. Cross check and reconcile your accounts promptly and in case of any discrepancies bring it to the attention of your broker immediately.

>> Please ensure that you receive payments/deliveries from your broker, for the transactions entered by you, within one working day of the payout date.

>> Ensure that you do not undertake deals on behalf of others or trade on your own name and then issue cheques from a family members ’/ friends’ bank accounts.

>> Similarly, the Demat delivery instruction slip should be from your own Demat account, not from any other family members’/friends’ accounts.

>> Do not sign blank delivery instruction slip(s) while meeting security payin obligation.

>> No intermediary in the market can accept deposit assuring fixed returns. Hence do not give your money as deposit against assurances of returns.

>> ‘Portfolio Management Services’ could be offered only by intermediaries having specific approval of concerned authorities for PMS. Hence, do not part your funds to unauthorized persons for Portfolio Management.

>> Delivery Instruction Slip is a very valuable document. Do not leave signed blank delivery instruction slip with anyone. While meeting pay in obligation make sure that correct ID of authorised intermediary is filled in the Delivery Instruction Form.

>> Be cautious while taking funding form authorized intermediaries as these transactions are not covered under Settlement Guarantee mechanisms of the exchange.

>> Insist on execution of all orders under unique client code allotted to you. Do not accept trades executed under some other client code to your account.

>> When you are authorizing someone through ‘Power of Attorney’ for operation of your DP account, make sure that:

>> Your authorization is in favour of registered intermediary only.

>> Authorization is only for limited purpose of debits and credits arising out of valid transactions executed through that intermediary only.

>> You verify DP statement periodically say every month/ fortnight to ensure that no unauthorised transactions have taken place in your account.

>> Authorization given by you has been properly used for the purpose for which authorization has been given.

>> In case you find wrong entries please report in writing to the authorized intermediary.

>> Don’t accept unsigned/duplicate contract note.

>> Don’t accept contract note signed by any unauthorized person.

>> Don’t delay payment/deliveries of securities to broker.

>> In the event of any discrepancies/disputes, please bring them to the notice of the broker immediately in writing (acknowledged by the broker) and ensure their prompt rectification.

>> In case of sub-broker disputes, inform the main broker in writing about the dispute at the earliest and in any case not later than 6 months.

>> If your broker/sub-broker does not resolve your complaints within a reasonable period (say within 15 days), please bring it to the attention of the ‘Investor Grievances Cell’ of the NSE.

>> While lodging a complaint with the ‘Investor Grievances Cell’ , it is very important that you submit copies of all relevant documents like contract notes, proof of payments/delivery of shares etc. alongwith the complaint. Remember, in the absence of sufficient documents, resolution of complaints becomes difficult.

>> Familiarize yourself with the rules, regulations and circulars issued by stock exchanges/regulators before carrying out any transaction.

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Precautions to take before investing in stock markets

If you are an exisiting stock investor or planning to invest in stocks directly, here are 11 useful pointers to bear in mind before you invest in the markets:

>> Make sure your broker is registered with Stock Exchange and not deal with unregistered intermediaries.

>> Ensure that you receive contract notes for all your transactions from your broker within one working day of execution of the trades.

>> All investments carry risk of some kind. Investors should always know the risk that they are taking and invest in a manner that matches their risk tolerance.

>> Do not be misled by market rumours, luring advertisement or ‘hot tips’ of the day.

>> Take informed decisions by studying the fundamentals of the company. Find out the business the company is into, its future prospects, quality of management, past track record etc. Sources of knowing about a company are through annual reports, economic magazines, databases available with vendors or your financial advisor.

>> If your financial advisor or broker advises you to invest in a company you have never heard of, be cautious. Spend some time checking out about the company before investing.

>> Do not be attracted by announcements of fantastic results/news reports, about a company. Do your own research before investing in any stock.

>> Do not be attracted to stocks based on what an internet website promotes, unless you have done adequate study of the company.

>> Investing in very low priced stocks or what are known as penny stocks does not guarantee high returns.

>> Be cautious about stocks which show a sudden spurt in price or trading activity.

>> Any advise or tip that claims that there are huge returns expected, especially for acting quickly, may be risky and may to lead to losing some, most, or all of your money.

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Major details on the contract note issued by stock brokers

Reading the contract note after each stock transaction, is a best practice and a must for an investor to identify and solve any possible errors from self or from broker side. Below is the of major points in a contract note where your attention required mostly.

A broker has to issue a contract note to clients for all transactions in the form specified by the stock exchange. The contract note inter-alia should have following:

>> Name, address and Exchange Registration number of the Member broker.

>> Name of partner/proprietor/Authorized Signatory.

>> Dealing Office Address/Tel. No./Fax no., Code number of the member given by the Exchange.

>> Contract number, date of issue of contract note, settlement number and time period for settlement.

>> Constituent (Client) name/Code Number.

>> Order number and order time corresponding to the trades.

>> Trade number and Trade time.

>> Quantity and kind of Security bought/sold by the client.

>> Brokerage and Purchase/Sale rate.

>> Service tax rates, Securities Transaction Tax and any other charges levied by the broker.

>> Appropriate stamps have to be affixed on the contract note or it is mentioned that the consolidated stamp duty is paid.

>> Signature of the Stock broker/Authorized Signatory.

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TMM starts video posts on finance and investing



Here is a sample video as the beginning of starting video blogging with The Money Maniac. Visitors now can have more detailed and effective information on investing and personal finance through accessing my video articles.

As a beginner, I am planning add video posts not in a regular basis but you can expect at least one video post in a 10 days frequency. Video posts will come to a regular basis once after I am gaining confidence on the same and equip with required technologies.

through starting the video posting with my blog, I am opening a nice option for the readers to ask any questions, doubts or expecting a post or video on any specific subject, it is easy for me to effectively help you on the same.

I hope this will helpful to my readers and anticipating your co-operation for a better future.

Thanks for visiting.

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Understand the risks associated with mutual fund performance

About Sherin; My Twitter; My Facebook Page

risks in mutual fund investingAS an investor, it is the duty of each person to identify all the possible risks associated with investment instruments to that he/she planning to invest. Identifying the risks will be helpful to assess your risk taking capacity as well as the possible gain or lose. Here is an article exposing the major risks associated with any mutual funds, that an investor should know well:

If you go through the key information memorandum, you may receive the below mentioned information on possible risks. An investor must know that, there are various mutual funds available in the market with different investing style and type. Associated risks to each of them are not similar but, it entirely depends the nature of the product.

Market risk

If the overall stock or bond markets fall on account of overall economic factors, the value of stock or bond holdings in the fund's portfolio can drop, thereby impacting the fund performance.

Non-market risk

Bad news about an individual company can pull down its stock price, which can negatively affect fund holdings. This risk can be reduced by having a diversified portfolio that consists of a wide variety of stocks drawn from different industries.

Interest rate risk

Bond prices and interest rates move in opposite directions. When interest rates rise, bond prices fall and this decline in underlying securities affects the fund negatively.

Credit risk

Bonds are debt obligations. So when the funds invest in corporate bonds, they run the risk of the corporate defaulting on their interest and principal payment obligations and when that risk crystallizes, it leads to a fall in the value of the bond causing the NAV of the fund to take a beating.

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Failproof your bank details

You must have seen recent newspaper reports about fraudulent emails going out to customers of various banks asking them to update confidential and sensitive information pertaining to their accounts, Debit Card numbers / PIN numbers, Internet Banking user IDs / PIN numbers etc. This fraudulent method of obtaining account information is called Phishing. Here are some points to remember to protect yourself from such fraudulent activities.

A little about Phishing: The Phishing email may also direct you to a spoofed (copy) website or pop-up window, which looks exactly like the real bank site. The fraudster sends "spoofed" emails that appear to come from a legitimate website or source that you have online dealings with such as a bank, Credit Card Company or an ISP - any site which requires users to have a personal identity or account. The email may ask you to reply with your account details or personal information in order to "update security" or for any other reason.

How to protect yourself from such dangerous activities?

At the very basic, Check the website you are visiting is secure.

Before submitting your bank details or other sensitive information, the following checks will help ensure that the site uses encryption to protect your personal data: If the address bar is visible, the URL should start with ‘https://’ (‘s’ stands for secured) rather that the usual ‘http://’. Please note that the fact that website is using encryption doesn't necessarily mean that the same is legitimate. It only tells you that data is being sent in encrypted form.

Following the above steps would help you transact over the net in the most secure environment. I reiterate the following simple precautionary measures:

>> Never let anyone know your PINs or passwords, do not write them down

>> Do not use the same password for all your online accounts. Use different password for different accounts and activities.

>> Avoid opening and never reply to spam emails, even if purportedly sent by the Bank.

>> In case of suspicion, report the matter immediately to your bank. Always keep the contact number and e-mail addresses of bank officials and customer care wing.


>> Look for the padlock symbol on the bottom bar of the browser to ensure that the site is running in secure mode.



>> Disable the "Auto Complete" function on your browser to prevent your browser from remembering Passwords.

>> Always logout to terminate your session, instead of closing the browser directly.

>> Always type the address of the bank website in the address bar of your browser or access it from your stored list of favorites. Do not access the bank website through a link in an email or through another website.

>> Always have very strong password with a mix of using special characters like # $ @ etc.. along with small and capital letters and numbers.

The above are the best practices to escape from any possible dangerous situations. It is always advisable to use your commonsense along with any such fraudulent mails or information. You can always contact your bank to double check the status of information to proceed with.

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