Ultimate Guide to Budgeting Secrets

This article is a result of my long time research to identify the secrets behind creating perfect personal budget. In my study, I found 5 points to follow to make a budget perfect. Here are those points I am sharing for you. There are lots of other factors involved to the creation of successful personal budgeting, but I have collected these 5 points among them, from the real world and personal experiences.

Personal budgeting is not a single hour or day process. Time is the major element helps people to identify all necessary requirements. I will explain these are in detail.

Initial Preparation for Identifying Income and Expenses

Personal budgeting means, getting an idea and control over the inflow and out flow of our money. For a person, it is necessary to identify his monthly inflow's and outflow's to support personal budget creation to a great extend. You can do it but, remember, inflow's and outflow's always vary in each month. For example, if a person following my previous featured active-active-passive income generation methods, his present month net income may be 1000 bucks and next month it may 950 bucks and third month it will go up to 1100 bucks. If a person planning his budget, as per the information from present month, his budget fails certainly in the next month because of changes in the income. To solve this issues and identify right income and expenses, an individual required to track his income and expenses for at least 4 months to get a real average about his monthly income and expenses. With the help of writing down each and every income and expenses for few months, he can easily analyze the result to identify possible variations to reach with an exact average total from both income and expenses.

Requirement of Written Plan

If you search a little, you will be able to find lots of personal budgeting tricks and tips and step by step guides in the net. Most of them deals on how to create and manage personal budgets, but rarely on the pre-planning side. If you read any article, may noted the requirement of recording each expenses and income by writing down. The idea behind such advice is nothing but, to ensure a person not missing any monthly regular and rare expenses/income. If do such, it will help you to not miss any factor that supporting income or expense finally.

Pre-Implementation Planning

Once an individual comfort with above two parts, it is the time to plan an implementation. If you are in the scenario, will you implement it at the next moment? You can say 'yes' but I say 'no'. The reason behind this answer is simple. Anything should be tested before implementing them as permanently. So, it is better to test the plan against yourself first, prior to applying the same to your entire family. If a person not identify his own income and expenses, how could he able to plan budgeting for entire family? So test it first against you and confirm it is a working fine.

Identification of Implementation Difficulties

Finally, we are in the total implementation stage. Only point to remember at this stage is, a budget should not kill the happiness of any family members or it should not prevent a facility that any one from your family enjoying for long term as a part of their life. You can put controls on any activities but, preventing the long going facilities will be dangerous to your budgeting in some another way. Apply the budgeting for a period of one month and rectify any possible issues. Continue this practice for at least next 4 to 5 months, until able to clear all the burdens and difficulties and come it as a practice for you and family members. Your budget is in place now!

Monitoring Success and Failure Measurements

Of course, you need to monitor your budgeting on time to time to know the level of success you are achieving and to know whether it is meeting all your pre-set financial goals. Monitoring will help you to identify any bottlenecks that preventing from achieving your goals or understand any difficulties, as I have mentioned with previous points. Resolution should be done immediately upon identifying any errors, bottlenecks, planning mistakes to prevent such from affecting to your personal budget.

You are welcome with suggestions and comments.

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How to Prevent a Professional Killer Being Your Fund Manager

'Fund Manager' is a fantastic title! Fund managers are the group who always walking with incomparable burden on their shoulder which coming from investors hope. A fund manager can easily make any investor king or convert as beggars. Mutual fund houses generally have a pool of well qualified and experienced fund managers. They are responsible to manage investor’s money by investing them intelligently on various instruments to generate maximum returns. If any fund manager fails to do such, or fail to meet the hope of investors, he is not only losing investor’s trust, but also ruining the reputation of fund house.


Building a reputation as a great fund manager is not as easy as we think. It required extra ordinary skills. A fund manager should have some must qualities and able to work under enormous pressure. Those who have invested or showing interest on mutual fund products, must know the major risks associated to their investments. If she ever went through the document associated with a mutual fund, may saw the section ‘Risks’. In this section, investors get informed with all possible risks associated with that particular mutual fund product. If you read little, you may see a term called 'Fund Manager Risk' in the line. Generally, most of us never pay much attention to it and ignore this term as a usual one in all mutual fund documents. But dear investor, this is the only term in that mutual fund document, can decide whether you are going to get returns from your investments or be a beggar later!!

In this contest, here are some most important points for investors to identify and avoid possible money losing risks by knowing the fund manager capability and disadvantages maximum as possible. Remember, analyzing a fund manager capability and capacity is not so easy. But same time, you can have access to all the information if you really work for it.

Lots of factors influencing to decide the risk associated to a Fund manager. Personal qualities and organizational policies are the most important two factors among it. Below are some most important factors which can decide ‘the level of risk’ associated with your fund manager:

1. Qualification

To introduce himself to the market as a right fund manager, one must obtain the qualifications required to be a fund manager as per the rule in the country. Obtaining such qualification ensures he/she is well aware about the job and the seriousness. Any fund manager who doesn’t have such required, recognized qualification, is not the right one to manage investors money.

Investor Home work: Identify the qualification criteria for mutual fund managers or investment managers as per the law of the country and confirm your manager have such qualifications.

2. Lack of Experience

Any person directly being a fund manager holds risk than an experienced fund manager. Experience is the best master for all. Having sufficient experience will shape a person to identify and avoid maximum possible errors that may lose investor’s money.

Investor Home Work: Identify the background of your fund manager. Get information on the companies he had worked earlier and duration in each company.

3. Trading Focused

Trading focused Fund Manager is a curse for investors. Trading is nothing than gambling and any one can do it. There is no need to have a fund manager to do trading. This is the most dangerous factor associated with a very bad Fund Manager and investors should avoid investing on funds he manages.

Investor Home Work: Monitor the investment portfolio and identify the frequency of changes happening to it. It may help investors how frequently a fund manager churning out his portfolio.

4. Over Confidence

Over confidence always leads to trouble. A person with over confidence generally not gives his ears to any one even if he is doing mistakes.

Investor Home Work: No perfect sources are there at present to identify how confident your fund manager is. Get information on previous funds he had managed and its performance.

5. Over Diversification

Any fund manager interested to manage large number of stocks in his portfolio adding extra risks to investor’s money. Including large qualtity of scrips make any portfolio as unmanageable.

Investors Home Work: Get the information of stock portfolio associated with the fund you are planning to invest. Identify the number of stocks in it. Generally a number between 30 to 40 comprising large, mid, small cap stocks and each from various sectors would do good.

6. Less Diversification

Less diversification also dangerous like over diversification. Less diversified portfolio is easy to manage but, sectorial risks always exist.

Investors Home Work: Can do the home work done for identifying portfolio allocation with point 5 above.

7. Respect on Investors

Those fund managers who not respecting investors as well, is an another curse for investors. If he not respects investors feelings generally don’t have any ethics and manage money as his mind says.

Investors Home Work: There is no option to identify this risk associated to the fund manager other than meet him directly and learn from his mouth itself.


8. Internal Competitions

Excess than controlable Internal competitions between fund managers inside a company cause lose of investors money. The good news is, it is not always happening but still exisits in some place. Performanance based competitions can some time convert a good fund manager to trading based activities.

Investors presently have no option to find this error.

9. Fund Manager Benefits

Company provided benefits to Fund Managers may some time influenced to the performance of a manager.

Investor Home Work: Sudden drop in the performance of multiple funds that a fund manager managing.

10. Number of portfolio

In my experience, I have found most of the fund managers handling multiple investment portfolios for the fund house. Also I have found, most of the time a single portfolio will perform well and all others seems laggards. This is highly dangerous by not getting right attention to all the portfolios.

Investor Home Work: Remember ti understand how many portfolios a fund manager presently managing. If you contact the fund house, you will get access to such data easily. Never invest on mutual funds managing by any fund manager who are responsible for more than 2 portfolios.

Above are the 10 possible factors one can analyze to identify a fund manager risk. Through background analysis of any fund manager greatly help you to get details information on his performance and style.

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Case Study: Mutual Fund Investing Mistakes I Made as a Beginner

As title says, here is a case study on my personal mutual fund investing activities and the experiences. In this case study, I reveal the mistakes and errors happened to me as a beginner and steps I have taken to overcome these in the future. Those who have already read my Investment Biography, I have posted some time back, might know when and how I started direct stock investing on 1993. Even though, 10 years later, I have started investing on mutual funds and later realized the mistakes I have made. Like any other investor, I was investing to mutual fund and continuously committing errors until I have found the same and rectified it.

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Let me take some time to recall my investing experience. When recalling my direct stock investing experience, I feel totally happy on all action I have made because of the effort I had put to create my own stock selection criterion to research, buy and even, sell the stocks. These self made criterion still playing major roles for me as an investor. When coming to my mutual fund investing experience, I still wonder, how could I still commit some big investing mistakes that should never happen to me because I am an experienced investor! . Also I again feel sad while thinking, how I forgot to make a perfect mutual fund selection and investing criterion prior to start investing!

Below are the list of major mutual fund investing mistakes happened to me as a beginner:

I have identified my first mistake from my strong feeling on the decision I have made to invest on mutual funds was totally wrong. With this feeling, I slowly put myself to the requirements of identifying a satisfied answer to a major question, "Why an experienced stock market investor gave his money to a third person, to whom he don't know whether is an idiot or a right investment manager, to manage? I still don't have a right answer to this but I agree this as one of my mistake. This question always irritated me and I felt very bad whenever thinking why I invested on mutual funds. This committed error lead me to stop investing on mutual funds unnecessarily and study on the most important risk factor associated to any Mutual Fund; "Fund Manager Risk" (Tomorrow I will post a detailed article on Fund Manager risk and what are the factors supporting this risks)

Second, when I start investing, I have used to invest small amounts to number of mutual fund that gave tax benefits. Through this wrong action, I got a portfolio of large number of mutual funds with little units from each. It gave me tax benefit but late I have identified that some of this funds are real laggards and the money I have invested on most of this mutual funds, have been lost to great extend. Like the first experience, I have not felt so bad because I have invested very low amount to each of this funds. The point I have learn from this experience was not only one but multiple as follows:

- Tax focused mutual fund investing is really a foolishness. All tax funds will give tax benefit but most of them are real laggards and an investor loose his money to a great extend. If you give that money as tax would be more better than managing documents.

- Don't give your ear to a New Fund Offers. I was a fan of NFO's at the time I have start investing on mutual funds. Most of the NFO's I have invested no have just less than half price per units, compare with what I have paid at that time to subscribe the same.

- Remember, all the fund managers are perfect. Most of them are even worst than any fools. If you invest on 10 funds, I am sure only 3 or maximum 4 will give you returns and others will give you lose.

- Don't believe reports on NFO from any source. They are nothing other than pure nonsenses.

As third, my portfolio had lots of funds but small investing amount. If you have stocks, you can manage it from single location like your trading account. But managing a mutual fund, if you have purchased manually, is an irony and it would be difficult to monitor the stocks. I learn to select right mutual funds using Systematic Investment Plan for long term than selecting huge number of funds, including total laggards, to manage and give worth to the money I have invested.

Finally, when I have identified my mistakes, I sold all the mutual funds when the market was peak. I lost some money for tax but from the influence of market, I have controlled my lose to a 20% of total money I have invested to all these mutual funds. I have learn a great lesson of starting SIP in mutual funds when the market is down and always sell the fund when market is in the top. Remember, it doesn't mean all the fund value come down when market is down or all the funds value will increase when market is in the top.

The best lesson I have learned is, if you have confidence and knowledge to invest stock market directly, then take that path. Never go to invest with mutual funds because it required time to identify best funds, best manager and all other factors supporting to force one to invest on the mutual funds. At present, I have identified and invested on 2 large cap mutual funds in a Systematic Basis and continuing with it. Both fund has good reputation and large cap based. This is as the part of financial planning for my kid and I personally doesn't hold any funds in my portfolio because I don't believe most of the fund managers. Why should I believe when I have capacity to research, identify best stocks to purchase!!

Lessons Learned: If you are able to do a work, never allow others to do it for you. You will never get the required result you required or satisfy with the produced results.

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Highly Effective Interview Guide Part3

We have reached to the third and final part of "Highly Effective Interview Guide". In this part, I would like to explain some of the effective tips I have practiced to do at the time of interview and assist to research and develop fail proof answers to some most famous, but difficult to crack questions. Remember most of this tricks applicable to direct interview but not for telephonic.
In front of an Interviewer or board - Things to Remember

1. Arrive early to the interview site at least 1 hour before the time of interview schedule.

2. Realize, interviewers are there to select you. Not to fire. Be always comfort with this feeling. It would reduce unnecessary tensions and help you to be confident to perform maximum.

3. Have a final reference to the prepared company information and questions you have prepared. Prepare a cram type answer table for final minute reference. Having all important points in this cram sheet highly help you to refresh your knowledge on before the moment of starting interview.

4. Upon reaching in front of interviewer(s), give a smile and provide your CV to each interviewer there, separately. Remember to keep a CV with you. This will help self reference of dates if required.

5. Keep smiling. Do not show nervousness. Be serious to technical questions and be friendly to personal questions.

6. It's the time to learn first trick. Upon sitting in the chair, take a plain paper and place on the table along with a pen. This action is for nothing but, it will indirectly pass a message to the interviewers that you have prepared well for the interview and serious.) I have used this trick number of times and have not rejected from any interview I had appeared with this fantastic trick!

7. Use the paper effect to answer questions. Explaining any of your answers with the help of a piece of paper and pen by drawing the charts, numbers or whatever, will immediately attract interviewer’s attention and impression. It also have another advantage, the interviewer never try to ask you more questions about the subject by thinking you have good knowledge on the subject.

8. Impress them from your ignorance: Avoid the most dangerous three word "I don't Know" at any point of your interview. Admitting mistakes and ignorance is not a lose but it will add credit to your honesty. You can even use the word " I have to refer this ”, if you are not aware the answer of any questions. To impress them, immediately point the question to the paper which you kept in front of you. This action give you an impression as a good learner. The word ‘No’ is always considered as negative and employer may think that you are not a good learner or lazy.

9. Do not give any personal information at the time of technical interview unless you have particularly asked to provide such.

10. Be precise and provide sweet answer to the most famous first question, “Tell me about yourself”. When answering to this question, interviewer should get a photocopy of you from your answer. So, one should prepare like that by researching and developing most attractive answer for this. This part should include your qualifications, certifications, years of experience as what position, why you are looking for a job with this company, at a minimum. Be precise and don't be more elaborate. There are time in front of you to explain each of them at the time of getting further questions. Never talk any personal details here. This section intend only professional answer.

11. Next Expected General Question at any time can be, “Why do you want to leave present company? ” – Look on this example I have developed and used number of times. When I was facing this question, my reply was, “I am willing to expand my skills and knowledge by applying them into more and more advanced environment than where I am at present.” Never talk about more salary or better job.. that is hell wrong. Instead, pass a clever idea, this company is far better to work than the one where you presently working.

12. Remember to not say anything negative about your previous employer(s) or company(s). This will lead you to the main door to out.

13. When a there is a question on expected salary, if possible do not say a fixed figure. If you say such, you may either lose more possible salary or lose the job. If you are able to build a situation to force an interviewer to say your salary, that is a fantastic skill. Or, you can even ask them to say their Salary Band for the position to start negotiations. If the interviewer still compelling you to come with a figure, your knowledge about the industry salary standard for your job will do better here. You can do a comparative study of your present salary with industry standard to come with a right figure to interviewers. Collecting information about company's pay scale from any existing employee or source will also help you in such situations.

14. An another question you can expect from HR idiots that “Where do you want to see yourself after 5 years” Don’t say between legs.. say “You will continue your nature of hard work and always keep your name in the list of possible promotion within the company”

15. Whenever you face the question "Do you have questions for me?", you are free to ask questions about their companies expansion plans, your work profile and the way how company measures their staff performance etc.. In my opinion this are the best 3 questions you can always ask when getting a chance. Answers for these questions generally will give you better idea about the place and job where you are going to join as new. Never ask more questions but limit your questions to maximum three.

16. Learn to clever questions like "What is your weakness and strengths?". Remember, this question not intend to get a reply about your personal weakness. Instead, it seeks your weak areas in profession. Don't explain any personal weakness. Instead, give a reply that mean; you are always keen to learn anything that you feel you are weak. Strengths, you can say anything but have to prove if specifically if ask for such. You can introduce your technical and soft skills here. Specifically exposing some qualities like taking ownership, eagerness to learn, humility, problem solving, being practical, problem analyzing capacity etc., will attract good impression on you.

17. An another question you can exact is "Why do we need to hire you". Here, you can emphasize your skills that employer looking for. Give him a reply that mean your skills and qualifications will be an asset for them.

18. Another tricky question can be expected is "What is your short term and long term goals?", you can easily say your short term goal is, getting this job. When dealing with long term goals, or answering an another similar question, "Where do you want to be five years from now?", inform you will always work hard to always maintain your name in the top line of the promotions list intact.

19. Any question related to your colleagues or supervisors should answer cleverly. Tell them you are not interested to work with people those who not ready to take their burdens. Any question related to 'stress' should be tackled by explaining your years of experience teach you how to tackle such. At the last, any question related to "split priority jobs" could be answered to expose your decision making power and ability to take decisions. Always give answer that supports any job that will give best to company than others.

20. When meet a question "How long you stay with the company" should deal with a clear answer mean, as long as both, you and company, getting mutual benefits.

Post-Interview Actions - Things to Remember

1. Remember to say thanks to each of them before moving out from the interview room.

2. Ask for a visiting card from each personal in the interview board.

3. Immediately draft a thanks mail to each of them interviewed and send them personally. Do not make any request in this mail. Send just a plain thanks letter for the time they spent with you. That’s enough.

4. Ask them the possibilities to follow up the progress or when they can hear from them.

5. Give a follow up call after 4 or 5 days to the exact person who was in the interview board. Remember to not irritate them by calling like Credit Card Representatives. One call would be enough at the right time, to get all the details.

For further reference on sector by sector interview skills, visit this link.

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Highly Effective Interview Guide Part2

This is the second part of 'Highly Effective Interview Guide' as the continuation of previous. Here, we are dealing with the technical approach to an interview to grab enormous success with each interview that you attend. This article specially focused to the required resume features and hacks.

Photo By: KrishnanD

Rule #5 Technical Approach to Interview and its success – Things to remember

1. Curriculum Vitae
2. Source of Job Openings/Interview Call
3. Technical Interview Preparation
4. Pre Research about company
5. Your portfolio
6. In front of the interview Board
7. Post interview
8. Most Beautiful and Easy working Solution

I am starting a very precise tool to succeed each and every interview. Follow this, practice then apply to real world… enjoy the wonderful result…

1. Curriculum Vitae

If your CV is an eye candy, you are in half way of the success. Make it well managed. A perfect CV should provide all the required information to a person looking on it. Upon going through your CV, If any employer raises a doubt at any point that he really want and is not there in your CV, mean your CV is not perfect!. Include all the information that any employer required.

A good CV should have the content arrangements as follows in most time:

a. Name and Present, Permanent addresses, Telephone Numbers, Email, Mobile Number

b. Your objective

c. Employment History (Sorting Order: most recent job first….):
1. Company Name
2. Company Profile in very brief (i.e. Multinational IT Services company and global leader in Airline software Industry etc.. etc… )
3. Your Designation
4. Job Period from
5. Job Period to
6. Company web site
7. Work Description
8. Major Achievements, if any,

d. Skill sets ( Remember to write only the 'skills' that you have. Any person who fill this section with various skills that he exactly not aware about, unnecessarily, giving interviewer a chance to ask questions from the area where you don't have knowledge and thus drop you from being selected. Remember the word “ A drop of poison can contaminate a full bucket of water”)

e. Education and certifications

f. Personal Particulars:
1. Date of Birth
2. Gender
3. Nationality
4. Name of Father
5. Marital Status
6. Religion
7. Languages Known
8. Hobbies (I am always write the word “Depends” for bobbies. When asking by the interviewer about this, I was trying to convince them because of my duty and job timing I do not have time to manage any hobbies. This is a Trick.

g. Passport Details

h. References (If possible, do not give reference directly to CV unless asked specifically. You can write “Available upon request”. A reference generally mean the name of any previous managers or supervisors to search about you. Reference always expected to give professional contacts. Do not give any personal reference here because the one who asking references is not going to marry you. Always try to give two references and inform the referenced person about it.)

That’s it. Make CV impressive with required, correct details and without typos. This is the first set...

2. Sources of openings and interview calls

A. Of course look in all the newspapers (That you are aware. Give ref of post when sending application. Details of paper, date also will do.)

B. As a tip, send your resume to the vacancy that's requirements closely match to your qualification and experience, if you have.

C. Jobsites and social networking sites

3. Technical Interview Preparation

Master trick for technical interview success

1. Be familier with Rule #2 above. Before attending interviews with well reputed companies, as I said with Rule #1, attend interviews with at minimum 10 to 15 small, local companies. (Small, local company means, some companies in yoiur location where sometime your dog even not interested to join with).

2. Clearly point down the questions they are asking. You can make a database of these questions. Find and study answers of these questions. Remember to study all the possible sub questions that can derive from your answers.

For example:

Interviewer : Who is the present US president? (This is the Major Question)
Yourself: Obama
Interviewer: What is the full name Obama? (This is a Sub question deriving from your careless answer). You should expect lots of such sub questions. When preparing to answer for a possible question, an intelligent candidate analyze the possible sub questions can expect based on his answer and prepare to face such situations too.

Upon completion of the 15th interview, you will have a very good data base of questions. Learn for your next interview with these questions. Find answer for each questions in your data base and identify and learn answers for any possible sub questions from your answers. Upon completing this, you will certainly feel comfort and confidence to attend any interview with any company.

This is your starting point for original job search with Big, Excellent companies.

4. Pre-research about the company

As I said with rule #3, before reaching for an interview, a candidate must know all the required about the company. Get the details about their Founder, Year and base country, Business/product type, geographical presence, staff strength, number of offices in the world, last year revenue, stock details, major customers etc. are some of the details, easily available from the web pages of any company.

If you learn all this, you will get a big success with the 100% interview question “ What you know about us? “ (Remember the hidden fact that is, interviewers always like and willing to select a person who are well aware about their company)

5. Your portfolio

a. Enough set of CV’s - Should give one CV to each of the personal in the interview board.
b. Copies of certificates should arrange well - most recent first
c. Experience certificate should arrange well - recent is in first
d. Enough Photographs
e. Passport Copies
f. Reference Addresses (if required)
g. Plain Papers 5 nos.
h. Two pen

A proper portfolio certainly invites very good impression on you. Details and copies should be accessible immediately upon asking by the interviewer. No need to carry any originals to any interview. Instead of that, you can present attested certificates if asked by interviewers.

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Highly Effective Interview Guide Part1

To plan your finance and start investing, you first required a right job. Those who have tried a lot for a job and still not succeeded, should read this article. These are some highly succeeded tips I had practiced to secure best jobs in my career, all the time. Whether you are a beginner or experienced, I am sure, following these tips will bring you high success. I can proudly say, I have authenticity for these tips, which I have developed as my own. I have stories of huge successes through practicing these tips. I have successfully completed dozens of interviews by practicing these tips, without any single point of failure. Some time I had received multiple offers from excellent companies to put me in trouble by confusion to select a company.


Attending interviews to grab the offers is an art. To be like, a person required to develop fail proof ideas and practice them continuously. Below are some workouts I have done and thought I would share these tips with readers for their betterment in career.

This article cut down as 3 parts where I am covering some important rules in this first part. Technical interview preparation, one of the core of this article will be covered in the second part. Ideas to be a successful candidate in front of employers or interview boards, will be covered as last part. Confirm you are reading all three parts and it is worth taking printouts of these parts to refer at any point.

Rule #1 - Never apply to a good company

Yes. My success originally started from this rule. At the beginning of my job search, I took extra care to not apply to any best companies. Instead, I had sharpen my core and supportive skills along with soft skills to get full confidence to crack interviews with best companies. If you really would like to grab success by following this document, my first and best advice is, avoid applying to best companies until you are fully able and confident to do so. Applying to a good company required you to grab the job. Or you may lose the chance for life. Once lost, you generally never get an another chance to attend the interview with same company again. So, don't take a try. Stop applying to good companies immediately and continue reading all three parts of this article. At the end, you will be able to understand why I said to not apply to good companies now.

Rule #2 - Know and build your core skills

Each candidates generally have set of skills. Core and secondary. Secondary skill even known as supportive skill. Always be clear about what are your core skills and put your maximum time to be a master with your core skills. Build your secondary skill(s) or supportive skill(s) as parallel. For example, if you are an engineer, your supportive skills may be better writing abilities, presentation abilities etc. Once after reaching to high comfort level with core and any supportive skills, you are in a position to meet interviewers.

Rule #3 - Get the help of job sites

Today, as a regular practice, candidates just posting the resumes to all available websites. Some time, people may post resumes to job sites that even not relevant for their skills and market. Be practical. You shouldn’t post your CVs to more than 2 or three best job sites that is popular in the place, where you are trying to get a job. Once after posting CVs to job sites, most of them feels they have done and starts waiting for getting interview calls. This is totally a wrong approach. When posting CVs to job sites, your effort really get starts. Here are some points one should always remember on job sites:

- Check and confirm your posted CV status is 100%.

- Never duplicate contents when registering with job sites.

- To verify CV's perfection, preview to know how your resume is appearing for an employer when he searches for such. Most job sites providing an employer perspective preview facility for candidate to know how it appears to employers or consultants. This is a good tool to make your CV error proof and perfect.

- Verify contact details. Always verify to error proof your contact details. Confirm you have provided with backup contact details.

- Most important point is to remember, always keep your CV updated. You should login to the job site regularly to update your CV. Do you know the reason which require regular login? Job sites generally have live or rotating databases. When you log to do any update, your resume automatically come to the first row. When someone else log and update their CV after you, his details will come to the first row and yours will go to second raw. So, keep login to the job site at least once in a day and do any minor update there to ensure your resume is always on top and reachable to the searching employers easily. To keep my resume active, I had a practice of login to the site daily to remove a comma or full stop there and re-add the same next day. This practice continued till got my job. This 30 second job always kept my resume in a right position with the database for the easy access of employers!

- Remember to plant core key words in the eminent places. Preview your CV to easily identify the sentences used by job site engines to identify a candidate or right CV when searches happening. These are the eminent places where you should plant highly searchable contends. Employers generally search resumes by the name of jobs opening with them or the skills they are looking for. You must identify the popular name of your job and employer’s favorite skill requirements for that job. Then place it to the eminent place that used by the search engine to produce CVs to the searchers. To identify what basis the results appear, do some bogus search with the site. This will help you to identify the area in your CV using by search engines to produce search results.

- Remember to hide your CV from the HR of your present company by using possible facilities providing by the sites. I have several experiences, several times the HR departments had received my CV from various consultants at the time I was working with them.

- Upload your CV with a site like Google pages or else to refer the link to employers or consultants immediately. Some time if you don't have net access and required to send the CV to a consultant or employer, you are in trouble. If you have updated your CV with a free space in net, you can simply inform the web address for them to download it easily.

Rule #4 - Know about the company

Whenever you hear from a company to attend an interview, remember to know maximum about the company before reaching to their office for an interview. Use websites to get all the necessary information about the company with latest news articles. This will help you to get impressed by the interviewers. When I was practicing these steps and reaching for an interview, I was able to say all about the company from its starting time. I have faced some interviewers, who were hearing some points about their company as their first time from me. Several time, this tactics helped me to move for the next round of interview.

As I said above, this is a three part article and next 2 parts will be posted regularly by following days. Keep visiting and convey your comments and suggestion on this article.

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Portfolio Balance Model - A Case Study

“Balance is beautiful.” ~Miyoko Ohno

Those who all maintaining an investment portfolio naturally have two question to get answers. First, “how do it balance upon age?” and next, “what are the investment instruments to balance the portfolio?” This article originally wrote to give a perfect answer to the first question, How do one balance portfolio based on age?

However, before starting this article, I would like to give a simple, understandable answer to the possible second question “What are the investment instruments to balance the portfolio?”. Answer to this question is really simple. A portfolio balancing is an act of including high risk investment instruments like stocks, mutual funds, commodities and low risk instruments like fixed deposits, mutual fund fixed maturity plans in a correct proportion depends on the age and risk taking capacity of the person who builds the investments portfolio. It clearly tells, a portfolio should have a right proportion of two candidates, high risk investment instruments and guaranteed investment products.

Portfolio Balance Model - A Case Study

Portfolio balancing is an action to balance the instruments from both, high risk and guaranteed, by adding or removing upon the age and risk profile of the person time to time. Other than age and risk profile, there are various factors influencing the balancing act but these two are important than any.

I have already posted an article with Money Hacker earlier but, though I will clarify little more to give better understanding to readers than the original article. Let us move to the core of this article. We are starting with the financial experts Golden Portfolio Balancing Rule: “Reduce your age from 100. Resulted percentage of your total money should go to the high risk, high growth investments and rest should invest to guaranteed instruments”.

I know you have not understood anything. So I will clarify this with a simple example. Suppose you are in the age of 25 and planning to create a portfolio with mix of high risk investments and guaranteed investments. To identify how much percentage you need to invest on both instruments, you are reducing your age of 25 from 100 and getting a result of 75. With this result, you are investing 75% of your money to high risk investments like equities and equity mutual funds or commodities or whatever it is. Rest 25%, i.e. the percentage similar to your age, of money you are investing to the guaranteed instruments like fixed deposits, traditional insurance policies government secured papers etc., and you are now very happy because you have got a well balanced portfolio upon your age and what expert financial planners recommending.

I know you have not understood anything. So I will clarify this with a simple example. Suppose you are in the age of 25 and planning to create a portfolio with mix of high risk investments and guaranteed investments. To identify how much percentage you need to invest on both instruments, you are reducing your age of 25 from 100 and getting a result of 75. With this result, you are investing 75% of your money to high risk investments like equities and equity mutual funds or commodities or whatever it is. Rest 25%, i.e. the percentage similar to your age, of money you are investing to the guaranteed instruments like fixed deposits, traditional insurance policies government secured papers etc., and you are now very happy because you have got a well balanced portfolio upon your age and what expert financial planners recommending.

Wait a minute…. There is a really confusing, hidden problem with this calculation:

From the mouth of experts, people should build and balance their portfolio when younger. But, when he reaches to the age of retirement, his portfolio should have maximum debt and minimum equity exposure. i.e. 90% debt and only 10% equity.

Suppose, now your age is 25. Subtracting 25 from 100 will result 75. In that case, your portfolio should have 75% of equity exposure and 25% in debt instruments. I agree.

As per the balancing advice, you have invested 75% of your amount to the equity/other high risk investments and rest 25% to the guaranteed instruments. To ensure your portfolio is well balanced upon age, you required balancing portfolio each year by decreasing or increasing equity and guaranteed instruments depends on your age. If you are in the age of 25, your equity exposure would be 75% and debt exposure is 25%. When you reach to the age of 45, your equity exposure should be 55% and debt exposure is 45%.

OK. You are reducing your age from 100 in each year to identify the equity and debt proportion to your portfolio. Now you are planning to retire at the age of 55. With your present plan, when you are reaching to the age of 55, your equity exposure would be naturally 45% and debt exposure is only 55%. Then how this rule will work for you? As per this golden rule, a person at the age of 25 requires an equity exposure of 75% and debt exposure of 25%. Also saying when he reaches to the age of your retirement, here it is 55, his equity exposure should be only 10% and debt will be 90%. In reality, it is showing 45% equity exposure and 55% debt instruments instead of 10% and 90%!!!!

Confused? !!! Below is your best answer to clear this confusion but with the help of little mathematics…

Can you identify the mistake you have made here?

Yes, the mistake you have made is, you have just obeyed the Golden Rule without trying to understand the reality or intention behind this rule. You have ruled with simple calculation each time, by reducing your age from 100, to understand the equity and debt proportion required by portfolio to balance. But you have forgot a truth, by following this rule blindly, you are required to reach at the age of 90 to retire with a portfolio of 10% equity and 90% debt!!!!

Of course, the next question or doubt will be, what is the above said ‘reality’ or ‘intention’ with this rule?

Here is a case study with full clarification on how a model portfolio balancing done exactly to get a perfect result. You must read the scenario below to have better understanding on this:

Scenario: Your age is 25 and your initial investment is 1 lac. We will first balance this 1 lac investments between equity and debt in the correct proportion from the age of 25, till the age of 55, you are planning to retire. The ultimate result at the age of 55 is 10% in equity and 90%. See how the portfolio balancing works:

I know, you are curious to know about this calculation. Below is the calculation details. You can use MS Excel to do your own calculations to realize how I have done it!!

An individual aged 25, carrying a total amount of 1 Lac investment portfolio till the age of 55. He should invest 409090.91 in debt and 590909.09 in equity at his age of 25.

Debt investment amount calculation formula is: Total Amount*Age/55 and reducing 10% from the result. This 10% ultimately come as your 10% equity exposure at the retirement age of 55.

Equity investment calculation made by the formula: Total Amount - Debt (received as per above calculation)

Example:

Debt investment: 100,000*25/55 = 45454.45 and deducting the 10% from this amount will give the Debt investment value of 40909.09/-

Equity investment: 100,000 – 40,909.09 = 59,090.91/-

This example applicable to 1 lac worth investment portfolio that a person carrying from the age of 25 to 55, until his retirement. If you make slight alteration to this portfolio, you will be able to calculate any amount, at any time adding to your portfolio at any age.

Appreciate your own view on this article. I welcome and happy one your suggestions, queries or even doubts to clarify, as the form of comments under this article.

Those who are interested, can download a portfolio balancing excel sheet created by Mr. Nikhil Shah, with more features.

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Financial Planning Process Chart

Here is a simple financial planning process chart to follow and structure your personal financial plan for life in a better way. I have confirmed no points have been missed in this chart, but I have not given any detailed information with this chart. It is a basic chart to plan your finance by identifying all those involved to the process. You can click on the chart to enlarge it.

Financial Planning Process Chart


I am sure, following this chart help you to understand the basics of financial planning process in a better way. There are lots of efforts involved to shape the financial planning in a better, structured and stable way. You can access the step by step financial planning guide, adding as my next post soon, to support this flowchart.

Time being, you will be able to find some of the beautiful articles on financial planning with Money Hacker. Keep visiting and reading. Add your suggestions and ideas to the comment form here to make this project as a perfect one.

If interested, you can visit my another project, learn financial planning through football. It is a very interesting eight part series, comparing the financial planning process to a soccer game to teach the basics in a better way. This series can be accessed here:

Another article describing necessary areas a person required build skill set to make a perfect financial plan for life. It is a must read article and can be found here:

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Top Listed Financial Planning Articles on Money Hacker

For all our late comers, there are chances to miss out some of the best articles posted in previous years. In this context, Money Hacker listing some of the useful articles that posted previously. Each of this article are special in its kind to provide wisdom on personal financial planning, financial adviser selection and understand how money grows. I hope, you will enjoy this links and comment to let me know what do you think about my effort and your valuable suggestions.


1. Points To Remember When Managing Financial Resources - Is an article from the section of personal financial planning, originally posted on 2nd February, 2008, explaining some of the important points to your attention when planning personal finance. Points mentioned in this article generally not getting full attention from individuals as well as financial planners, at the beginning of planning. This is a true article exposing all those points to remember when planning finance. Have a look.

2. Personal Financial Planning thoughts and strategies - Posted on 24th October, 2008, this article explaining some of the important points an individual needs to keep in mind when preparing a personal financial plan to work. Points in this article intend to lead the personal financial plan to a more structured way. It is certainly an interesting read to get all awareness to plan and create good financial planning structure.

3. Independent Financial Adviser Selection - Posted on 27th November, 2008, it has all the clear cut information on selecting a financial adviser. It described the qualifications and qualities a person look and analyze on a financial planned to identify the suitability to select him as your adviser. I am sure, this article is the best in its kind, highly useful to people. Read to get excellent idea on financial adviser selection.

4. Rule of 72 for Compounding - Posted on 27th December, 2007 explaining what is 72 rule and how it works. 72 rule applies to identify the time required to double your money with given interest rate. This article have nice examples to know how it works. This is an article specially good for fixed deposit interested people through having low risk taking capacity to invest money on high risk instruments like stocks etc.

5. 15 Financial planning mistakes - Posted on 15th March 2009, this article listing the most common, 15 financial planning mistakes. It is a comprehensive list included all possible errors to help individual to get aware and avoid this errors when planning finance. This article also helps to assess your present financial plan against each points to know whether you have committed any listed big mistake(s) or not.

6. 5 Financial Life Categories - Posted on 30th June, 2009 explaining the categories of a financial planning cycle. This article can consider as a mini step by step personal financial planning article.

Hope you will enjoy reading these articles. I expect your suggestions as well as your opinions frequently.

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Top 5 Inspirational Books on Value Investing

“A book is a gift you can open again and again.” Garrison Keillor

Books are the best companion to knowledge savvy investors. Value investing is not a knowledge but it is an art inspiring by passion and knowledge. There are several books available on investments, but very few motivational books available on value investing. Such books have a history of decades and still favorites of value investors across the world. In my findings, I have found Top 5 Inspiring Books on Value Investing, most of them are still classic and some of them are fantastic but still no most of the value investors even not heard the title about. It is a right collection to acquire to your library as a classic collection.

Each of the investing books in this lists have its own specialty. None of them duplicates any points in this guides. Each of this guides are special with the subject covering in it. A combination of this guides can provide enormous knowledge to any investor to be a perfect value investor. Have a look on the list below:

Top 5 Inspirational Books on Value Investing

1. The Intelligent Investor

The Intelligent investor written by Benjamin Graham, 'Father of Value Investing', published in 1949 considers an an investment classics that remain bestsellers to this day. I don't remember how many times I have read this book. I still reading this precious value investing bible. It can consider as the king of all value investing books ever published in the world. Benjamin Grahams 2 most famous allegories, 'Mr. Market' and 'Margin of Safety' originally introduced to the investing world through this guide only. The Intelligent Investor considered as a must read for any person serious about investing in the stock market. While this book is not meant for a beginner, reading it does give plenty of structure to help you organize your approach to value investing. Buy this guide

2. Common Stocks and uncommon Profits

"Common Stocks and uncommon Profits" written by American investment genius Philip Arthur Fisher, well known as Philip Fisher, originally published in 1958. Philip Fisher considered as a pioneer in the field of Growth Investing. When I have completed reading the book about 5 times, I have equipped with must have qualities for selecting a business to invest and upon completion of my reading to 10 times, it made me difficult to find a company to invest. Quality of his advise in this guide on the selection of a business is something unexplainable, thrilling and deep penetrating with wonderful knowledge. As the only author highly admired by legend investor Warren Buffett for his classic writing and knowledge, Philip Fisher provided eight cutting edge investing principles to the investors for successful investing. Any true follower of the investment advice and style of Philip Fisher, will be able to make investments 'for ever'. Buy this guide

3. Security Analysis

"Security Analysis" is a trough but ever best qualitative and quantitative business analysis guide from Benjamin Graham. First edition of 'Security Analysis' published in 1934, no investment book in history had either the immediate impact, or the long-term relevance and value, of its first edition in 1934. It was among few guide continuously in print for more than sixty years from its original publication and one of the most admired and most discussed analysis guide in this world. When it come to the original focus of this book, it is a timeless guidance and advice to analyze business quality through careful analysis of balance sheets. The one who have read and familiar about Security Analysis will be able to understand any trap or errors in the balance sheet immediately. When I have read the guide as first, it was difficult for me to understand the intelligent methods Graham explaining to stimulate our analyzing power. When I have went through multiple times, it put me to the most comfortable side to analyze and understand the balance sheet to a great degree. While the guide covering bond investing, Graham explained the difference of valuation points on each bond and equity to analyze the business using right factors. It is a must read as well as a pearl in investment library. Buy this guide

4. Common Stocks as Long Term Investments

I am certain that most of the readers might haven't heard about this valuable investment guide. “Common Stocks as Long Term Investments" is a masterpiece of Edgar Lawrence Smith originally published in 1928. The studies found in this book are the record of a failure, the failure of facts to sustain a preconceived theory. Bonds have certain attributes. A diversification of common stocks has its own attributes, which differs from bonds. Each class of investment has its useful purpose and its proper place in any investment plan. A clearer understanding of their differing attributes may help to determine the relative proportion of each of these two classes of securities which will best serve the investment requirements and purposes of each investor. This book not being famous with investors because of its age as an old investing guide. Reading this guide provide you enormous knowledge on each and every factors need to be pointed when analyzing bonds or stocks.

In this investing guide, smith concluded three reasons why stocks beat bonds as long term investments:

First: inflation is more likely than deflation and bonds don't have any protection against inflation. In inflationary times bonds lose purchasing power even as the face value remains the same. Stocks, to the contrary, grow in value often beyond inflation as I will explain below. Second: for a bond to qualify as high grade, the issuing company has to have earnings above and beyond what is required to pay off the interest and the principal of the bond and this extra income accrues to the stockholders, not to the bond holders. Third: population growth requires growth of products and services and the companies that provide them grow accordingly. Improving standard of living has the same effect, people demand more and better products and services and the companies supplying them grow accordingly. This growth is above and beyond inflation as otherwise there would be no improvement in the standard of living, quite the contrary.

5. The Theory of Investment Value

Finally, “The Theory of Investment Value” is a work from John Burr Williams first printed in 1938 famous on ‘Dividend Discount Model’. More than a book “The Theory of Investment Value” was a Ph.D. thesis at Harvard in 1937. In his 1992 published Capital Ideas, Peter Bernstein says “Williams combined original theoretical concepts with enlightening and entertaining commentary based on his own experiences in the rough-and-tumble world of investment.” Williams' discovery was to project an estimate that offers intrinsic value and it is called the 'Dividend Discount Model' which is still used today by professional investors on the institutional side of markets. "The Theory of Investment Value" is still in print almost seven decades after it was first published, as a serious academic works on valuation, shows you how to calculate intrinsic value and is full of math. Any math savvy investor must go for this guide.

As a value investor, to get exact knowledge, above mentioned books are worth having and reading. Most of them are not a kind of book to read once to keep somewhere. Each of this guide teaching knowledge on various subjects and as the sole authority on what it is teaching. Buy, read and add to your investment collection for referring time to time, provide you enormous knowledge and wisdom.

Comment if you liked this article, to know me your opinion.

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Motivate Self to Generate 3 Way Income

Article written by Sherin Dev; Follow me in Twitter or Facebook . To get latest news and articles Subscribe for free!

"Good management is better than good income." Portuguese Proverb

Did you ever heard 'failure' as a result of continuous efforts? No chance. Result of any effort with positive mind, whatever it is, ultimately come to success! Time may decide the result sometime, but the ultimate result will be a 'success'. When I am writing this article, have kept this truth in mind through out the process. Motivating self to identify 3 way income stream is possible by each of us. In this article, I am introducing '3 way income generating ideas' to understand better and work around.

When follow experts for getting ideas on generating additional income, most of them recommend to have a full time job for steady income and do some sort of part time job or business to generate additional income to support the main stream. Of course, this will do better for most of us to support our family. But, whenever there are some possibility in front of us to generate a 'Passive' income as a third stream, we will not lose anything for dig little to have a try. The word 'passive' I have used throughout in this article with a sense 'an activity that doesn't required active interference from a person'. I suggest you to generate income from three ways than above said, two traditional methods.

This system could work as active-active-passive model. As I said earlier, any person have full time job with some sort of side business following an 'active-active' model to generate income because, he personally required to spend time and effort for each activity. When adding a third stream as per this article, a person starts generating income using active-active-passive model because, new comer doesn't required any kind of active participation from an individual. It is an automatic process happening from highly planned, single time activity for long lasting result.

This article, 'Motivate Self to Generate 3 Way Income', simplifying 3 way income generating idea with an example, how I have successfully used to generate three way income in my life.

As I said earlier, active-active-passive model, we will first look what the first 'active' mean? This is nothing but, your full time job or business. Of course it is active because your full time presence and activities required in this area. It is quite natural for everyone working in an office or doing some sort of full time business to win their bread. An example from my life for this is, my full time job as a systems engineer is my major source of 'active' income.

When we move to the second 'active' in this model, we would borrow the recommendation from most money management experts on generating additional income. An individual can do any sort of part time job, free lance activity, supporting activity, part time service, holiday work whatever it is, as long as it is not effecting to your full time income stream, comes under the umbrella of second 'active' income stream.. There are lots of possibilities to generate second income. But all of these required your active presence or time to time effort and activities to produce additional income as you expected. For an example, blogging is a serious, part time activity for me and I am generating additional income from it by working regularly to write articles and tune blog at my free time. As long as my presence required to generate income from my blog, it is of course an 'active' method for generating income. For those, who are more curious about knowing the possible methods of creating additional income, read this article. It is fantastic and more practical.

We have now reached to the core of this article, adding "a third stream of income" or a 'passive' income. Unlike active-active model, it is a 'passive' stream where our activity no longer required. It is common sense, when a person having full time job with any part time business or job run out of time for a third activity. So I thought to find a passive way that work automatically for me when I am sleeping after my full time job and thereafter part time activities. I have identified my passive stream, investing. To execute, I have selected a set of guaranteed instruments able to generate monthly interests, dividends or other sort of regular income for me time to time. By the quality of selection, I never required to spend time to monitor these investments.

A major advantage from my passive income stream is, I never required to put any effort at any time once after putting little efforts at the beginning to identify and execute. Once identified and executed, you are totally free to sit and receive money time to time. Of course, PASSIVELY.

It is an example from my life on passive income generation, where I have passion and interest on investing. If you are interested to read my biography of investing, you are welcome. There might be another options depends on individual, that work for them overnight when they sleep and generate regular income. As I said above, an effort required to generate passive income limited to once. Identifying and executing plan. If you try sincerely, there would be something for you to work as a passive income source for you.

Comment if you like this article. I like criticisms as well as opinions to improve the quality of my thinking and writing. Write me anything and I will be very happy and accept it with an open mind.

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Top 7 Skill set to Financial Prominence

"If money is your hope for independence you will never have it. The only real security that a man will have in this world is a reserve of knowledge, experience, and ability" - Henry Ford

Article written by Sherin Dev; Follow me in Twitter or Facebook . To get latest news and articles Subscribe for free!

Life is so complicated to manage. Sometime it may appears as rock solid and some time like a melting cream. Money also have similar nature. We may sometime surprise by see how easily some people managing their money and might think how would they got such skills to manage money such a systematic way without much difficulties? You can find the answer for this question right here in this article, 'Top 7 Skill set to Financial Prominence', to build extraordinary skills to manage your money in a better, structured way!

When some situation approaches that force you independent management of money i.e. got your first job, marriage, moved with family to an Independent home etc., you will be in deep trouble by lack of financial planning knowledge and experience. It is better to assess yourself early to identify the skills you have and build most required skill sets. To do such, measure your present knowledge against Top 7 Most Required Financial Skill set below, to get a right picture:

Top 7 Skill set to Financial Prominence

1. Knowledge of Budgeting
2. Knowledge of Debt Management
3. Knowledge of Personal Financial Planning
4. Knowledge of Money Saving
5. Knowledge of Insurance
6. Knowledge of Investing
7. Knowledge of Child Investments

Each of the mentioned skill set have equal importance in financial life of an individual. Reading, assessing self and building required skills on each of these areas help you to be a financial planning prominent person.

1. Knowledge of Budgeting

Budgeting is the heart of financial planning. Through budgeting, an individual able to define his assets and liabilities. He will be in a safe side by getting control over in/outflow of money. When having knowledge on budgeting, a person has several advantages. He will get a clutch on his income against expenses, able to identify and control unnecessary spending, proper allocation of money for rotating expenses, allocating money in a right percentage to control his debts, have well idea on his possible savings and workout to increase savings through controlling his expenses and unnecessary costs etc. All over the above advantages, his financial life become more structured and controlled.

2. Knowledge of Debt Management

Debt Management is not a profession, but it is an art. Debt is so easy to manage and the same time very difficult too, depends on individual and his skills. Acquiring knowledge on debt management gives an advantage of taking full control over debts. Through taking control, one will be able to identify and prioritize bad debts, drawing plan to eliminate debts, identifying proper allocation of money to each debt by considering its priority, total control over the money allocated to pay-off debts, monitor the status and being debt free as ultimate.

3. Knowledge of Personal Financial Planning

All other 6 sections are coming under the Umbrella of Personal Financial Planning. In plain English, personal financial planning is the root of all financial knowledge. The best part, you don't need to waste extra time for acquiring knowledge on personal financial planning. Whenever acquiring knowledge on other 6 areas, you will be a master in personal financial planning automatically. Branches of personal financial planning are: planning and execution of budget for life, controlling and managing debts, taking necessary steps to get protected from consequences happening to self and family members, identifying all available possibilities to save money, able to face emergencies boldly, secure future of self, family and children by saving and investing.

4. Knowledge of Money Saving

Knowledge on money saving have multiple advantages. Some of these are, a person will be able to differentiate the 'need' and the 'want' to spend money for right purposes, become structured on spending, identify loopholes that causing loose of money unnecessarily, increase monthly savings through add controls on spending, increase utilization power of any items to its maximum, become knowledgeable on necessary stuff to prevent lose of money from renting labors, pour his money saving skills to his kids and family members etc.

5. Knowledge of Insurance

Through acquiring necessary skills on insurance, an individual getting equipped with must have knowledge on protecting self and family for now and future. Major advantages from attaining insurance skills are, define exact protection required for self and family, protect the life and financial future of family in case of the untimely death of bread winner, getting full control over huge possible expenses can happen at any time from situations like hospitalization, natural calamities, theft, accidents etc., all over the above, can lead a secure and free life with total protection.

6. Knowledge of Investing

Acquiring knowledge on investing have huge advantages to the financial life of any individual. It is not only a must skill required section, but it is a necessity to plan your future well. Investing known as the heart of actions to attain future goals. Through having excellent investing skills, a person able to assess and understand his risk taking capacity, set right future goals to achieve, identify right instruments to park money, understand the advantages and disadvantages of various investing instruments, having better idea on the return side and lose probabilities of each investment instruments that he select, build a portfolio with right mix of investment products, identify the best product and time to invest, monitor portfolio time to time and do required churning activities to control investment proportion suitable to age and risk etc..

7. Knowledge of Child Investments

Knowledge on Child Investments is the final area with 'Top 7 Skill set to Financial Prominence'. Parents working to provide maximum betterment to their family, especially for kids. To secure the life of kids, a person should acquire required skills on child investments. Through equipping with this skills, he will be an expert to, early identification of the future financial needs of his kids and set plan to achieve these goals for example: higher education, marriage of kids etc., able to build structured saving habits, analyze and identify best product bundles to invest for child, monitoring activities for time to time to ensure the capacity of investments to achieve the goals etc... More over these, an individual will be able to execute a right plan to provide maximum betterment to the kids whether he is with them or not, at the time when they need the results of his efforts.

Except Point 3, an individual required to work hard by referring guides, articles to acquire required knowledge on each area. Reading great books, referring case studies all will help to understand the basic of each section to lay an important stone to financial freedom. If you dig further in this blog and refer other most famous personal finance blogs like 'The Digerati Life', my most admired financial planning blog, you will be able to find number of useful articles to kick start yourself to the financial freedom.

If you like this article, feel free to comment on it. I value your comments as most. Feel free to subscribe TMM to receive further such articles directly to your mailbox.

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Graham's Mr. Market Allegory

Any investor who want to be a right value investor must read and understand what meant by two most famous value investing allegories from the 'Father of Value Investing' Benjamin Graham. His most admired allegories "Mr. Market" and "Margin of Safety", attracted huge number of investors world wide and now it is your turn to understand both. I have already posted an article on the allegory ""Margin of Safety"", some times back, and here is the simplified idea on the second one "Mr. Market".

Both these allegories found in Graham's great investing book "The Intelligent Investor", the only one and most admired value investing classic, which strengthen value investing skills to countless number of people. So we will start with the second allegory "Mr. Market". What is "Mr. Market"? Before moving to further explanation, we will have a look on the allegory presented by Benjamin Graham with his investment classic "The Intelligent Investor".(You can even read my review on Intelligent Investor here)

Let us close this section with something in the nature of a parable. Imagine that in some private business you own a small share that cost you $1,000. One of your partners, named Mr. Market, is very obliging indeed. Every day he tells you what he thinks your interest is worth and furthermore offers either to buy you out or to sell you an additional interest on that basis. Sometimes his idea of value appears plausible and justified by business developments and prospects as you know them.

Often, on the other hand, Mr. Market lets his enthusiasm or his fears run away with him, and the value he proposes seems to you a little short of silly. If you are a prudent investor or a sensible businessman, will you let Mr. Market’s daily communication determine your view of the value of a $1,000 interest in the enterprise? Only in case you agree with him, or in case you want to trade with him. You may be happy to sell out to him when he quotes you a ridiculously high price, and equally happy to buy from him when his price is low. But the rest of the time you will be wiser to form your own ideas of the value of your holdings, based on full reports from the company about its operations and financial position.

Did you understood what he meant from the above parable? Yes it is little difficult but very easy at the same time. Read below the explanation from Graham itself:

The true investor is in that very position when he owns a listed common stock. He can take advantage of the daily market price or leave it alone, as dictated by his own judgment and inclination. He must take cognizance of important price movements, for otherwise his judgment will have nothing to work on. Conceivably they may give him a warning signal which he will do well to heed—this in plain English means that he is to sell his shares because the price has gone down, foreboding worse things to come.

In our view such signals are misleading at least as often as they are helpful. Basically, price fluctuations have only one significant meaning for the true investor. They provide him with an opportunity to buy wisely when prices fall sharply and to sell wisely when they advance a great deal. At other times he will do better if he forgets about the stock market and pays attention to his dividend returns and to the operating results of his companies.

If you still have not understood the meaning, I will explain the same in one sentence "Never consider market up and down to take buying or selling decisions. Instead, focus on value than price"

There are some important points a value investor keep in mind when reading above:

1. "The speculator’s primary interest lies in anticipating and profiting from market fluctuations. The investor’s primary interest lies in acquiring and holding suitable securities at suitable prices.

2. “Never buy a stock immediately after a substantial rise or sell one immediately after a substantial drop.”

3. "The same criteria should logically be applied in testing the effectiveness of a company’s management and the soundness of its attitude toward the owners of the business."

How do you feel after reading this? To get more better idea, read this article too, a bonus. Did you understood the internal meaning fully or required further clarification?

I love to hear from your mouth as a comment here.

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