Rail Budget impact: 15 stocks to profit on Prabhu's plans

Rail Budget impact: 15 stocks to profit on Prabhu's plans

The minister added that east ticketing services with smart vending & e-ticketing will be made available for all. Taking Prime Minister’s Swach Bharat campaign forward, Prabhu proposed to have toilets in 650 stations and repair 17000 toilets.

Shares of rail related stocks are mixed as minister Suresh Prabhu reads out his maiden Rail Budget speech. He has envisaged Rs 8.5 lakh crore investment over 5 years. He also proposed to focus on signalling system and track laying system. Prabhu said more and lighter wagons will be procured while the government is looking to revamp railway stations redeveopment policy completely. The minister added that east ticketing services with smart vending & e-ticketing will be made available for all. Taking Prime Minister’s Swach Bharat campaign forward, Prabhu proposed to have toilets in 650 stations and repair 17000 toilets.

Here are 15 stocks to profit or get hurt post Prabhu’s proposals

Freight boost:

Container Corporation Will hike annual freight capacity to 1.5 bn tn

Track expansion:

L&T Will hike track capacity by 14 percent to 1,38,000 kms

Investment commitment:
Texmaco , Titagarh Will invest Rs 8.5 lakh crore over next 5 years

Capacity boost:

Kalindee Rail Will partner with PSUs to ensure sufficient capacity

Cleanliness Drive:

A2Z New department to focus on Swacch Rail Cleanliness drive:

HSIL Will build new toilets at over 600 stations

Ticketing Convenience:

CMC , Kernex To create multilingual e-ticketing system

On the menu:

Jubilant Food E-Catering introduced on 108 trains via IRCTC

Eye in the sky: Bartronics , Zicom Surveillance camera for better security of women

Adding more coaches:

Titagarh Wagons , Responsive Industries More general class coaches in select trains

The infra push:

L&T , Simplex Infra To revamp station re-development policy

Siemens India Rs 120 cr for escalators lifts at major stations

CONCOR, Allcargo Multimodal logistics & freight terminals

Going hi-tech:

Kernex Micro , Siemens To improve signalling & electrification work

More wagons:

Titagarh Wagons More & lighter wagons will be procured

Focus on safety:

Siemens, Kernex Micro To install train collision avoiding systems

Easier freight norms:

Allcargo, Gateway Dist Freight determination to be made customer friendly

Based on progress and implementation one can look forward to investing in these companies for medium to long term to make sizeable gains.

Happy Investing
Source: Moneycontrol.com

S&P raises India GDP forecasts, says it's a bright spot

S&P raises India GDP forecasts, says it's a bright spot

Standard & Poor's sharply raised India's growth forecasts for the next several years to reflect a recent change in how gross domestic product is calculated by the government, and said the economy should be a "bright spot" in Asia. The ratings agency S&P raised its India GDP growth forecast to 7.9 percent from 6.2 percent for the year ending March 2016, citing as well rising investment and low oil prices. The agency also raised its growth forecast for 2016/17 to 8.2 percent from 6.6 percent previously. The revisions come after India this month changed the way it measures Asia's third-largest economy. "India should be the Asia-Pacific region's bright spot," S&P said in a statement. At the same time, the ratings agency lowered growth forecasts for a slew of Asian countries, including China and Japan. S&P currently rates India at "BBB" with a "stable" outlook. The agency earlier this week said India must boost growth, cut its fiscal deficit and fulfil promises of financial and fiscal reforms to justify an upgrade in a credit rating.

Happy Investing

Don't be distracted by Budget, keep buying market

Don't be distracted by Budget, keep buying market

The investor mood is very positive at the moment and investors are looking for more buy ideas than sell. However, investors may hold off for a bit as the market has already run up quite a bit and may remain in a consolidation phase from now to the Budget. The investors should not get distracted by the Budget and continue buying the market. Do not see a major correction in the market. One can expect announcements pertaining to increase in spending in physical and social infrastructure in the Budget. This increase is likely to be partly funded through increase in taxes – primarily indirect taxes. The government should target subsidies successfully and chalk a clear roadmap of subsidies and social spending. Also the government should do something to recapitalize public sector banks. If finance minister Arun Jaitley manages to deliver on these fronts, the market will be very happy. The government can look to achieve 3.6 percent fiscal deficit target in FY16, but even if it does miss the mark by a little, it won’t be much of a problem for either the credit ratings agencies or the Reserve Bank.


Happy Investing

Midcap Bets which are cheap and poised for re-rating

Midcap Bets which are cheap and poised for re-rating


Oberoi Realty:
After a gap of four years, the company has started launching new projects. New launches have met with incredible response with pre-sales in FY15/16 likely to be 3 times of what it achieved in FY14. As the company moves from being a single project play to a 4-project player over the next 1 year, earnings should likely follow as well.

Dish TV:
Subscriber addition growth for the company has picked up. Industry fundamentals have also improved as MSOs are looking to pass through rate hikes to end consumers. DITV also has strong embedded operating leverage given content cost negotiations are locked till 2H16 and likely reduction of license fee by 200bps. The company is also now nearing a profit breakeven finally.

Sintex : 
Revenue growth for the 9-month ended December (+30 percent) has started to accelerate for the company. Prefab, custom molding and textile businesses are showing positive traction and outlook on monolithic construction is stable at the margin. The company will likely benefit from government initiatives on "Clean India" and CSR activities by corporates.

Cox & Kings: 
The company has cut its net debt by half by divesting its camping asset and equity raising. India and Education businesses remain on a strong footing wherein revenue growth will likely see acceleration going into FY16E.

Happy Investing
Source : Moneycontrol.com

Market Update Feb 2015

MARKET UPDATE Feb 2015
News 

The headline CPI inflation rose to 5.0% in December, lower than expected. The downward surprise in December was due to a sharp sequential contraction in vegetable prices (-7.9% mom). WPI inflation for December came in at 0.11% versus 0.0% in previous month.

The sustained disinflation momentum prompted the RBI to start the easing cycle earlier than expected. Surprising the markets, the RBI cut the policy repo rate by 25 bps to 7.75% before the scheduled policy meeting in February.

IIP growth picked up in November to 3.8% y-o-y from a sharp contraction of 4.2% in October.

The Government has released a new series of national accounts, revising the base year from FY05 to FY12. The key highlight and surprise is the economic recovery in FY14 to 6.9% from 5.1% in FY13 when the old data was showing a flat trend.

India’s trade deficit narrowed to US$9.4bn in December'14, from an 18 month high level of US$16.9bn in November’14.

Government kick-started its US$10bn divestment drive in earnest with just two months left in the fiscal and 100% of fiscal deficit already utilised. It met with early success though as the Coal India’s US$3.6bn divestment was fully subscribed.

The ECB announced monthly purchases of EUR60 bn QE that will include asset-backed securities and covered bonds extending till September 2016.

Equity Market Update

Indian equity markets were up during the month of January with large cap indices rising by ~6% and mid cap and small cap index by 3.5% and 2.2% respectively. During the month, performance of global equity indices was mixed with DAX and CAC 40 showing maximum gains of 9.1% and 7.8% respectively while Dow Jones and S&P 500 posted decline of 3.7% and 3.1% respectively.

The Sensex and Nifty are up 42.3% and 44.7% on a y-o-y basis. The BSE mid cap and BSE small cap indices are up 70.2% and 80.9% y-o-y as of January 30, 2015, thus outperforming the large caps by a large margin.

FII’s inflow was strong at US$2bn in the cash market. Moreover, they also bought debt worth US$3.4bn. DII’s were net sellers to the tune of US$ 1.3bn while MF’s bought stocks worth US$39mn implying selling by Insurance firms.

Market Outlook

Post the spectacular rally in the month, the market is reaching a zone of uncertainty with key events in coming month which could lead to higher volatility. Key events include (a) Q3FY15 results season (b) RBI’s monetary policy (c) Government divestment program and its impact on liquidity (d) Delhi election outcome, (e) Economic survey and Union budget 2015 -16 and (f) lingering global issues like the Greece debt standoff.

The Q3FY15 earnings season till date has been mixed with more disappointments than positive surprises. The results so far are reminder that improvement in economic activity and earnings is still some time away. However, improved macroeconomic environment through ongoing reforms, initiation of rate cut cycle by RBI and strong global liquidity are likely to support the markets.

We continue to maintain a positive bias on the market from medium to long term perspective. The markets are trading at about 17.1xFY15 & 15.7x FY16 estimated earnings for SENSEX. We believe that multiple expansion driven gains are largely over and the next leg of market gains will be driven largely by corporate earnings growth. We expect the earnings growth to pick up in next 6 to 9 months.

Happy Investing

Will Budget Be Make-or-Break moment for Indian markets

Will Budget Be Make-or-Break moment for Indian markets

Investors' unflinching faith in Indian Prime Minister Narendra Modi will be put to the test later this month when the government presents its annual Budget, which strategists say could be an inflection point for the country's roaring stock market. The Budget, to be delivered by Finance Minister Arun Jaitley on February 28, is the Modi government's first full-year Budget since coming into power last May. With investors keenly focused on the Budget as a gauge to measure the government's reform resolve, "the upcoming Budget could be the most important one for the stock market after the early 1990s, when India launched economic liberalization," Ridham Desai, India strategist at Morgan Stanley wrote in a note. India's benchmark Sensex was among the world's best performers last year, advancing around 30 percent, on hopes of a turnaround in India's economic fortunes under Modi's leadership.The gains have extended into 2015, with the index up 4 percent year to date.

The market will be tracking three key areas in the Budget: a credible fiscal consolidation path, a shift from subsidies to capital spending and specifics on the government's structural reform agenda, says Andrew Tilton, chief Asia economist at Goldman Sachs. "The macro backdrop to the Budget is very favorable. Unlike recent years, both inflation and the current account deficit are no longer major concerns. Further, the sharp fall in global commodity prices, especially oil, are providing a big helping hand to the government's finances," Tilton said. Economists expect the government to set a fiscal deficit target of 3.6 percent of gross domestic product (GDP) for fiscal year 2015/2016, down from 4.1 percent in the current fiscal year ending March 31.

The lower target will likely be based on a reduction in subsidies as a result of lower commodity prices, said Tilton. The Reserve Bank of India has stressed fiscal consolidation as a necessary prerequisite for further easing. The accompanying statement to the RBI's surprise rate cut last month left the door open for further monetary loosening, but this was contingent on "sustained high quality fiscal consolidation as well as steps to overcome supply constraints and assure availability of key inputs such as power, land, minerals and infrastructure."

From subsidies to capital spending Investors will be looking for the government to shift capital spending towards public projects, using the savings from a reduction in subsidies. "At first glance, this seems at odds with the RBI's hopes of fiscal consolidation. But given that the RBI is hoping for 'high quality' consolidation, a shift from current expenditure to greater public investment mean these factors aren't mutually exclusive," Shilan Shah, economist at Capital Economics. "In particular, greater spending on education, health and infrastructure, which can help to boost long-run growth, will come as welcome news," he said. Reform watch Last but not least, markets will be looking for signs of wide-ranging reforms. "The Budget provides an opportunity for the government to push its reform agenda forward," said Tilton of Goldman Sachs. A roadmap for the Goods and Services Tax (GST), which would help to broaden the tax base and ensure a more stable flow of government revenues, is top on investors' wish list. Incentives to boost manufacturing and infrastructure investments, including measures to reduce the cost of doing business and amendments to labor laws, also rank high. Supplementing this, investors are looking for reforms to boost urbanization, including Budget support for urban infrastructure. The government's privatization targets will also be closely watched. "Due to a combination of strike action and bureaucratic constraints, previous privatization plans have a history of missing targets," said Shah of Capital Economics. "Looking ahead, the Finance Ministry may actually gain credibility if it were to set more realistic, lower, targets for asset sales next year."


Happy Investing
Source : Moneycontrol.com

India good investment option

India good investment option

Foreign institutional investors continue to pump money in the Indian equity market despite poor Q3 earnings because it is the only good investing opportunity currently. There are too many geo-political risks across the world and the only bright spot right now is the US apart from India that due to its demographics and growth stands out in the emerging market basket. Pradhan says the Union Budget to be announced by Finance Minister Arun Jaitley will be very closely watched by FIIs who are hoping to see some significant change in Indian business environment.

See 15-16% earnings growth in 2 yrs; remain overweight on India

Global investors, will be focusing on fiscal deficit of India and whether it can be reigned within 3.5-4 percent of GDP, structural reforms once again focusing on the fiscal side and significant increases in infrastructure spending. "What's important is the trajectory of fiscal deficit and whether it is coming down… As long as it is lower than 4 percent of GDP, the market will not be too worried," and Investors will remains overweight on India. The valuations should be high as the expected earnings growth to be 15-16 percent in dollar terms in two years. Earnings growth continues to remain a challenge for many emerging markets, further justifying the high valuations in India. The Reserve Bank will likely lower rates by 100 basis points this year. Economic growth and interest rates cut will ensure that the balance sheet of banks doesn’t decline.

Bullish on Banks, Metals, Auto and Infra going forward.

Happy Investing
Source : Moneycontrol.com

How to play the market ... in this pre-budget rally

How to play the market ... in this pre-budget rally

The current high in the market is definitely a pre budget rally as all the effects of the previous triggers like 3rd QE earnings and Delhi elections have been left behind.

The euphoria in the market is in expectations of the first full budget by the Modi govt which is ecpected to highlight it's vision for next 5-10 years.

In the current upmove till budget it's a buyers market and it is recommended to buy on every dips you get as opprtunity.

Though we are seeing the banks both private and public languishing , but the pre budget rally will be lead by these banks .... in coming days. And private banks should remain the hot favourite. So it is recmmended to accumulate Axis, Yes, Kotak and Indusind on every dips.

Renewable energy is also become the latest favourite in the market and shares of Suzlon has soared almost 20% plus since last week. This stock can also be accumulated at current levels for a target price of 36-40 in near term.

Happy Investing

Financial tips for students: Guide to financial freedom

Financial tips for students: Guide to financial freedom

Impulse purchase can be classified as an unplanned expenditure. Research states that feelings and emotions play a very important role in case of an impulse purchase, which gets triggered on seeing a promotional ad, offer etc.

College days are the beginning of Financial Freedom yet with limitations, as most of us rely on our parents for pocket money. Every student faces a situation of cash crunch and a desire for luxurious spending. In such scenario one has two options either to limit the expenses to the available funds in terms of pocket money or generate additional sources of income which can support additional luxurious expenses. Smart management of finances plays a very crucial role in one’s life irrespective whether a person is a student, working professional or a self employed.

Here are a few financial tips/dos and don’ts:-
1. Weekly & Monthly Budget The first step in financial planning is budgeting. One can start with weekly or monthly budget. There are two components of a cash flow (Income and Expenses). Income is limited to pocket money hence one needs to figure out how to spend the same. Prioritising will play a crucial role, as it will help to focus on those expenses which are required and need to be fulfilled on urgent basis. However this exercise can be done in a simple way, have a track of your expenses in either an excel sheet or one can also have the same on a mobile app. Thanks to the technology many apps are available freely which will help to maintain ones finances.

2. Avoid impulse purchases Impulse purchase can be classified as an unplanned expenditure. Research states that feelings and emotions play a very important role in case of an impulse purchase, which gets triggered on seeing a promotional ad, offer etc. however the point is such unplanned expenditure always have a burden on ones finances; thus an individual should be careful. It is always advisable to carry a list of items to be purchased which will be helpful in buying unwanted products and thus save on expenses.

3. Develop savings habit It is said Every Penny Saved is a Penny Earned; it is advisable to inculcate savings habit every week/month. The savings shall be invested in a savings account. This will help to build the discipline of savings and investments right from the early age. Investments work on compounding principle i.e. interest earned from such investments will help to earn income – thus in long run your money will work for you instead you working for money.

4. Part time earnings With the expansion of the internet era, one can easily look out for part time jobs online. One of the most prominent ways is to find out online freelancing jobs which will provide opportunities to work from home.

5. Scholarship in colleges Usually colleges provide opportunities to student in form of scholarships based on previous academic records, or if one scores above the benchmark level set in the current academic year. Such scholarship not only helps to reduce the cost of education but in certain cases provide an easy finance which will help to reduce the other expenses, especially in case where a student has gone to other city/state to pursue his education.

6. Education Loan – Borrow as much required With the easy availability of finances, it has become quite common for students to take loan in order to pursue higher education. However the pinch of the loan is felt at the time of repayment of the loan as the same has to be paid along with the interest in form of EMI. An EMI is an expense and outflow every month which will reduce net savings/surplus. Thus it is advisable to borrow to the extent required in order to reduce the impact on month savings.

7. Students discount Many companies, travelers provide additional discount to students. For example Indian railways and many airline companies in India provide such discounts to students on travelling. Students should utilize such benefits as it will help to reduce the expenses and every savings can be channelized as investments

Key Takeaways
• Have a monthly budget for both income and expenses
• Take up a part time job which will enhance your savings and investments
• Open an SB A/c and develop savings habit
• Take benefit of students scholarship


Happy Investing

Suzlon ..... touching upper circuit

Suzlon ..... touching upper circuit

The Suzlon share has been the hot favourite among te punters recently.

The stock was languishing in the range of 12 to 18 in recnt months and was a favourite play of the traders and punters.

However last 2 weeks have seen a major buildup in the stock with high profile bulk trades.

The stock has also been in news recently for all the right reasons from sale of it's subsidiary to offset loan to purchase of equity by the famous Singhavi the management wizard. And it augurs well for the stock and it's future outlook.

When te stock hit the upper circuit on monday there were no sellers in the market and the traded volume was more than 150 crores.

One can buy this stock between 18 to 23 or even at the current market rate and play it for Rs 30 - 35 level in short term near future.

Also considering the major thrust by the govt towards renewable enrgy for power generation with 9000 MW planned to be generated in next 4-5 years one can also buy this stock for long term to see te levels of 100-150 in 1-2 years from now.

Happy Investing

This is an Investor's Market

This is an Investor's Market

The market have again moved ahead of the Delhi elections.

The rise of AAP in Delhi did jitter the market but in it's own stride it welcomed the populist AAP and moved ahead with India in focus.

The problems in Europe is being looked by the market from a distance .... with caution.

The rise in prices of crude oil is comforting to some as it has an indirect bearing on the economy and inflation. We can expect the crude prices to remain range bound between 60 - 80 $ per brl. And this range will be comfortable for the Indian economy.

The 3rd QE nos have been dissapointing but the market is taking ques from the Govt's quest to bring major reforms and positive moves in that direction. After the initial euphoria, the market has stabilized to the fact that the outcome of the efforts of the MODI govt will take 6 months to 1 year to show any results on the ground.

The NPAs of both public and pvt sector banks have been worrying but the steps taken by the largest public sector bank SBI show's there determination in resolving the issue in near future.

The next trigger for the market is the upcoming budget by the present Modi govt. Though not many big bang announcements are being expected by the industry however this being the first comprehensive budget by this govt we do expect some form of vision statement to come out of it.

One thing is for sure that unlike the previous govt's working in getting stuck up with have's and have's not and trying to distribute between the lower strata with freebies, the prsent govt is encouraging everyone to come forward and work to achieve things, and slowly moving towards merit oriented system while still taking care of the extreme poor who genuinely need help, by providing them opportunity and trying to connect them to the mainstream.

The make in India push by the current govt to make India a manufacturing hub in near future will also start showing results in 1 to 1.5 years. Many industrialist have come forward to participate in this govts effort. The opening up of skill development school and institutions will grewatly help in this direction.

Thus we can say India is indeed sitting on the cusp of a great economic boom. And the present market can go up only. Either in measured steps or in leaps depending on the sentiments. Today's market though near it's recent peak is still an investor's market with a long term view of 2 to 5 years or more. Many of the largecap and midcap stocks are near it's 52 week highs but the PE multiples still do not reflect the potential story of growth inherent in these companies. One must slowly and steadly builup his or her portfolio with these largecap and midcap stocks and participate to make multifold returns in near future.

If one is not so market savy then don't sweat just stick to the Sensex and Nifty companies. They are part of the index for their longterm performance reflected in their market capatilisation and future growth potential.

Another way to participate in tgis market is through mutual funds a proven best friend of not so market savy investors.

You may choose any path but stay there for the long term and keep investing slowly to buidup up sizeable portfolio. This market will fulfill many of your dreams in time to come and may even provide a good retirement corpus.... provided you stick for a medium to long term with your investments.

Happy Investing

Where are the Indian Markets Heading ?

Where are the Indian Markets Heading ?

The markets have been volatile but almost flat for last 15 days now due to poor earnings. The euphoria of Delhi elections a keenly watched event has also finished now with an astounding victory by AAP.

So where are the markets heading?

The consolidation in the market post 3rd QE results is almost complete. The Greece story has also been priced in by now by the market.

The next event is the Annual Budget.

The market is very hopefull for a big bang budget by the Modi govt being the first full budget. As it will set the tone for the growth of INDIA that MODI has envisioned.

There may not be too many SOPs but it will underline the intent of the govt to move towards the growth and modern futuristic India.

The markets are likely to build up in the pre budget momentum and touch 30,000 by FEB end, the rally will be in Infra, Banking, Auto, Pharma and good Reality stocks.

One can enter the market in the above sectors with a 15-20 days view for short term and 3-6 months view with a near term view.

Happy Investing

AAP win: Brokers decode likely impact on BJP's reforms plan

AAP win: Brokers decode likely impact on BJP's reforms plan
Reforms such as FDI in insurance, coal auctions, and the sale of stakes in in public sector banks, which are more national-level issues, are unlikely to be affected by the outcome of the Delhi state elections, feels
Nomura

The Aam Aadmi Party’s emphatic victory in the Delhi assembly elections is unlikely to distract the government from its path of fiscal discipline and reforms, key brokerages feel. A snapshot of what brokerages have to say on the impact of the verdict in Delhi:

Nomura
The BJP's loss in Delhi could be an exception rather than a trend. There are fears in some sectors that this might push BJP to also renege on fiscal reforms that will require spending cuts on mis-directed subsides and welfare schemes. However, in our view, the union budget (to be presented on 28 February) is likely to reveal whether BJP will turn populist or stick to the fiscal discipline; our bias is the latter. Reforms such as FDI in insurance, coal auctions, and the sale of stakes in in public sector banks, which are more national-level issues, are unlikely to be affected by the outcome of the Delhi state elections.

Macquarie:
Delhi election could serve as a wake-up call for the central government. The largesse due to the sharp fall in crude oil prices needs to be diverted to building infrastructure to kick-start the economy We expect the upcoming union budget to give a fillip to these important areas of infrastructure. The ongoing correction has provided a good opportunity to buy before the growth stimulating budget is presented on 28 Feb. Industrial stocks are under-owned and will be big beneficiaries of a government-led infrastructure build.

CLSA
AAP’s big victory comes as a welcome reality check. We continue to expect the upcoming budget will set the right tone for infrastructure spending but any move away from this path will be a negative. The next big political event will be the elections in the state of Bihar.


Happy Investing


Source: Moneycontrol.com

WEALTH BUILDING FOR STARTERS

WEALTH BUILDING FOR STARTERS

Most parents want to teach their children responsibility - how to become self sufficient and succeed in life (after all, no one plans on raising a dead beat). However, very few actually accomplish this task. Why? Because, as parents, we are limited to the experiences our parents passed on to us; the antiquated notion that "responsibility" is simply getting a job, saving a little money, and maybe purchasing a car or some equally important item. Hopefully these seven rules will open your eyes and help you teach your children to avoid the traps that have stolen financial success from so many people.

Wealth Building Rule 1: Find a Financially Compatible Spouse

Your biggest obstacle to attaining wealth is often found right at home: It's yourself and your spouse. Too often, people live their lives in a manner that is not conducive to creating real wealth and then get frustrated at "the system" when they only really have themselves to blame.

One of the most important financial decisions you will ever make is marriage (more specifically the person you marry and the timing of your marriage). True, love is not rational, but you're going to have an enormously difficult go in life if the person you expect to be there holding your hand is constantly frustrating your dreams, ambitions, and goals. You want someone in the same boat you are, working towards the same agenda. If you are seeking an early retirement, he or she is there helping bring in extra income or clipping coupons to put more money away to compound. If you want to stay out of debt, he or she isn't shopping behind your back or secretly charging on a credit card you don't even know exists.

This isn't a new lesson. It's been around since antiquity: A house divided against itself cannot stand. A good marriage can radically accelerate your wealth building prospects (in fact, according to the research of bestselling author and academic Dr. Thomas J. Stanley, self-made millionaires are far more likely than the general population to be, and stay, married to the same spouse for life).

Wealth Building Rule 2: Recognize That Debt Is a Habit That Must Be Broken

With a few notable exceptions, debt is a form of bondage; a disease that enslaves the borrower. A few years ago, there was a high profile story in the news of a young lady attending college who shot herself because she couldn't pay back $2,300 in credit card debt. Although an extreme example, it is a testament to the power money has over peoples' lives. Imagine your life without owing anyone anything; your car, your house, your education, all paid for in full. Like what you see? When you want it badly enough, you will make extinguishing your debt your number one priority.

Does that seem impossible? It shouldn't be. In the United States, most people don't have any significant credit card debt. Likewise, nearly 1 out of every 3 homeowners has no mortgage against their property; they own it lock, stock, and barrel, without a payment in sight. Why does this seem surprising? It's a phenomenon called stealth wealth. Psychologically, when people are handling their affairs responsibly, they don't want friends or family to approach them asking for money or to treat them differently so they are unlikely to discuss their finances in public. For those of us who work in finance, it's shocking to see how surprised most people are when they learn that 1 out of every 25 households in the United States is a millionaire. That's the cold, hard, data-supported fact. Yet, people don't believe it because they have no idea that their great-Aunt Bertha has silently been buying up shares of Procter & Gamble for decades, or their cousin Bob has 40+ years of municipal bonds shoved in a bank safe deposit box.

Wealth Building Rule 3: If You Don't Like Where your Parents Were at Your Age - Do Things Differently
The old cliché that "insanity is doing the same thing over and over expecting different results," holds just as true today as it did when it was originally written. If you don't like where your parents were at your age, stop what you are doing. During your childhood, they taught you all they knew about money. For many people, these early years established how they feel about their finances today. In order to become financially successful, you must do something different than they did. Otherwise, you will end up exactly as they are.

Wealth Building Rule 4: When you Begin a Job, Look at the Pay of the Highest Employee
Whether you are looking for employment now or are thinking about it sometime in the near future, one of the most important things for you to do is to look at what the top-dog gets at any company for which you are considering working. This will give you an idea of how high you can expect to climb in terms of earnings and promotion. If the CEO is making $30,000 a year, you have no chance to make six figures. Select a job accordingly.

Wealth Building Rule 5: Do Something You Love and Get Paid for It

I remember going into college and being surrounded with people who wanted to be artists, scientists, and businessmen, but instead did what their parents or grandparents told them to do. There is no honor in being a doctor or a lawyer if you wake up every morning and hate your job. Pick a profession you love and you'll never have to work a day in your life.

Wealth Building Rule 6: Understand the Money Myth

Money is nothing more than a piece of paper with the image of a long-dead person on it. When you understand that any power it has over you is derived from your relationship with it, you suddenly become free from the constant pressures and stress of thinking about it. Especially at times such as these, if you are putting money away for ten, fifteen, or twenty years down the road, stop checking your portfolio every day! There is nothing you can gain from it except stress.

Wealth Building Rule 7: Your New Commodity is Not Your Labor, It's Your Ideas

With the advent of the Internet and other technological advances, you are no longer limited to supporting yourself or making a living by your physical labor. The only limit you have on yourself now is your own imagination - your ideas are the most valuable thing you possess. Every man, woman, and child is a salesman for a living; if you don't own a business or investments, then you sell your manual labor to a company in exchange for a paycheck. Change your product. The gap between the rich and poor does indeed grow larger with each passing year, but not because of inequalities or any other such injustices. Instead, it is because the rich understand money and how to use it. Capital is literally a seed; learn how to plant it to produce the best harvest. When you do this, you will rule your finances, not the other way around.


Happy Investing

By Joshua Kennon

Eliminate Debt & Create Wealth

Eliminate Debt & Create Wealth
The only way not to incur debt is not to spend. The strategy might sound simple enough, but it isn’t quite so easy to put into practice. Eliminating debt and acquiring wealth is a multistep process that requires planning, persistence and a lot of effort. Improving your financial situation may require patience and making some lifestyle changes in order to get positive results.

Here are eight steps to help you change this situation

Step 1

Take a close look at your current financial situation. Ignorance about your finances can cause you a lot of trouble when it comes to debt. Michael McAuliffe, president of Family Credit Counseling Service, points out that a good number of people who seek debt management services really have no idea how much debt they actually owe. Begin by requesting a free copy of your credit report. Carefully examine all the credit accounts you have, paying special attention to any that are charged off or past due.

Step 2

Develop a plan to begin paying off your debts. Set up a budget so that you can determine how much money you can pay on a debt in addition to what is due each month. Decide whether you want to begin working to pay off debts with the highest balances or those that carry the highest interest rate percentages. Paying off higher balance cards will get you faster results, although paying off the card with the highest interest rate first could save you some money. Set specific goals for how soon you want to pay off each debt when creating your plan.

Step 3

Pay more than the minimum amount due each month. Personal finance expert Lynnette Khalfani points out that you will never get out of debt if you only make the minimum payments due, especially when it comes to credit card accounts. When paying credit card debt and other debts with high interest, make an effort to pay two or three times the minimum amount due if your budget allows.

Step 4

Negotiate any bad debt you have so that you can rid yourself of it once and for all. Creditors will often accept payoff amounts for significantly less than the amount due as long as you attempt to make reasonable payoff arrangements. Even after an account enters into collections, work with the agency to come up with a fair payoff arrangement.

Step 5

Save up enough money to cover at least three months of all your household and family expenses. You can easily fall into debt if you find yourself out of work and without an income, even for just a short while. Plan ahead by setting money aside that you can use if you have no regular income for a few months.

Step 6

Take some risks if you want to build your wealth. Make investments or start a new business venture that seems risky. It’s the higher risks that can pay off well in the end. Most people don’t become rich by consistently taking the "sure thing" route. Sometimes you have to risk losing money to gain higher returns on your investment. Just do your homework first.

Step 7

Invest in the real estate market. You don’t have to wait until the market is good to invest in something that can have big payoffs. If you aren’t looking for a payout on your investment for several years or more, it isn’t necessary to wait until the market is good to begin investing.

Step 8

Talk to other people who have eliminated their debt and become financially successful. These individuals are a valuable resource if you want to do the same. Asking for help shows that you are no dummy. You can learn a lot by seeking advice from others who have reached their financial and investment goals.


Happy Investing

Budget 2015: Expectations of retail sector?

Budget 2015: Expectations of retail sector?

The moment of truth is here. It’s time for the new government to present its first full budget – and is perhaps the most anticipated budget in recent years. There is a lot riding on this budget as it will reveal the government’s attitude towards development and growth. The government’s pro-business approach has raised the hopes of corporate India - with all industry sectors anchoring a lot of expectations on it. Retailers, on their part, are looking forward to a pro-growth budget as promised by the government. A budget that promotes ‘Make in India,’ facilitates skills development and actively encourages getting the dividend out of demand in India. There are over 12 million retail outlets in the country, employing 33 million + people. Yet, retail is not anchored under any ministry. As a significant contributor to the GDP, employment and the economy of the country; a significant expectation from this budget for retailers is to get recognised as an industry that needs nurturing. Prime Minister Narendra Modi has been talking about the 3Ds of India: Democracy, Demography and Demand. The ‘Demand’ can be successfully milked only if retail is given an industry status and if a national retail policy is formed. The government has given due importance to Goods and Services Tax (GST). Now, the retailers expect an announcement for the starting date for its implementation which will be an important step in removing the various artificial trade barriers and in return will be a huge boost to trade in the country. GST can help retailers reduce the cascading impact of taxes and also help them in creating supply chain methods based on transportation models rather than taxation models. Retailers pay hefty amount of service tax on various expense items including rent and maintenance charges. Since the money is not adjustable with sales tax charged on the sale of goods, the input credit is lost. Only GST can solve this issue. The industry expects the government to recognise this and give abatement on service tax on rental until GST comes into force. It will also eliminate the unnecessary issues that various states face with regard to inter-state billings by e-commerce companies. Foreign Direct Investment (FDI) in retail has been another highly debated point. India is the only country that distinguishes retail by brands (multi-brand and single-brand). Another thing that requires attention is the rules related to e-commerce. Currently, there are no well-defined, clear rules pertaining to e-commerce. As a result, the industry is being split by channels of trade. Retail can at most be segregated by categories of products and services traded rather than by channels or brands. There is an urgent need to create a retail policy that addresses FDI in such a way = that it creates a level playing field. Hopefully, this year’s budget will give directions for a more healthy internal trade policy. More clarity about retailers getting money through ECB European Central Bank) and FII (Foreign Institutional Investor) route will allow retailers to get international funds without losing management control. The entire retail fraternity has set its eyes on this one, hoping that it marks the beginning of ‘Achchhe Din’ for retail in India.

Source : Moneycontrol.com

ACHIEVING FINANCIAL FREEDOM

ACHIEVING FINANCIAL FREEDOM
Financial freedom is directly linked to wealth creation, and cannot be achieved without elaborate planning, first to reach the goal of being financially independent, and second to maintain that level.

For majority of us, our primary source of income is from our personal efforts (job, business or profession). More often than not, our entire lives and consequently those of our families, revolve around our careers - long hours of work, ruthless competition, insecurity about the future, lack of personal time, and so on.

To keep up with our own demands, as well as so as not to be left behind in society, we immerse deeper into our work, resulting in even more stress, failures in personal relationships and lower self esteem. Ironically, all this is done with the desired objective of providing our families with a better quality of life.

Wouldn’t it be great if one doesn’t have to entirely depend upon personal efforts to take care of one’s needs? This would entail creating additional streams of regular income, to supplement or even replace the primary source. If this was possible, most of us would no longer be working without choice, but would work for joy and self fulfillment.

We would have the flexibility to work at our own pace and devote our time to other pursuits we are interested in. Our objective of a better quality of life would be fulfilled. This is what is known as financial freedom when one is no longer dependent upon personal efforts to maintain a desired level of living standard.

Financial freedom is directly linked to wealth creation, and cannot be achieved without elaborate planning, first to reach the goal of being financially independent, and second to maintain that level. The goal is to achieve an amount of capital which not only provides enough regular returns to meet ongoing lifestyle expenses, but also that the composition of capital is such that it is likely to increase in value over time, so that future returns are generated on the increased capital base and are able to take care of the future increase in expenses due to inflation.

While for the majority of families it would seem very difficult to reach such a level, it is certainly not impossible, and can be achieved with some discipline and sacrifices.

Below are some of the rules which from my experience are paramount in wealth creation and consequently, in achieving financial freedom:

Decide upon your level of wealth required for financial freedom – This will be directly proportional to the lifestyle you wish to follow after becoming financially independent. If one is used to living and dining in Five Star comfort regularly and expects it to continue after becoming financially independent, obviously a much higher level of wealth has to be targeted than for someone who is happy eating out once or twice a month. Hence scaling down one’s lifestyle can lower the threshold required for financial freedom.

Know where you are before you start – It is essential to make a complete list of one’s Assets and Liabilities, Incomes and expenses (both current and expected in future) and cash flows before one starts. One cannot reach a destination without knowing where he or she is starting at.

Give priority to protection of what you have – Insure all your assets as well as payment of liabilities against unforeseen circumstances which have the potential to destroy your wealth.

Know your attitude to risk - This depends upon one’s personality, age, commitments, current level of assets/liabilities/income, etc. Attitude to risk is not fixed, and may change over time or due to changing personal or external circumstances. Generally, higher the capacity and willingness to bear risk, higher is the return, but this is not always true.

Get your finances under control – This implies stopping money leakages, however small or insignificant they may seem. Most money leakages are through unnecessary tax and interest expenses, wrong spending and wrong investments. Money leakages are the most common reason for inability to create wealth.

Pay off debts on priority - Unless the debt is incurred for creating an asset which is expected to increase in value or for business purposes, it is not advisable to incur debt. Any other debt, if incurred, should be paid off on priority.

Keep the taxman at bay – Apart from interest, tax expense is the highest expense item which prevents long term wealth creation. Be prepared to pay for expert tax and financial advice. It may seem expensive at first, but the benefits will far outweigh the costs in the long run.

Understand that there is no such thing as free advice – Advice given by many financial product sellers may seem to be free (as they do not charge you fees but earn from product commissions), but in the long run it must align with your financial goals. If not, it can be very costly indeed. There are only two mantras that ultimately work – spend less than you earn, and buy low and sell high.

Understand that gaining wealth is a slow process – Earning it too quickly (say a lottery or inheritance) may make you rich, but it does not give you experience in acquiring wealth, which is vital for keeping and growing that wealth.

Understand and implement the power of compound interest - Albert Einstein called it the Eighth wonder of the world. Interest compounded over a long period of time has a tremendous capacity to create unimaginable amounts of wealth.

Lastly, understand and accept that money is not the solution to all problem - It makes life easier, but does not solve all problems. It is the oil that smoothens the engine. It is not the engine. So take it easy and do not be consumed by the exclusive desire to earn more and more, as it will destroy peace of mind and defeat the objective of being financially independent.

Happy Investing

By Investment Yogi