Saturday, April 20, 2013

An appeal to give for education- Someone needs your financial help

A request to GIVE. I do not know this charity, but somewhere a feeling that the person is doing a good thing. All of us wish to do something, but do not have the time. Many of us can give some money but not time. Here is a person who is taking the effort to do something and so I think we could help him with money. Not too much. His current project for a primary school in a village seems to be 250K. If I send a thousand rupees, it is perhaps not too much. A dinner with friends sets me back more. So an appeal. I have no clue about the bonafides. But I am going ahead in my small way. I hope the mission succeeds. Nothing like supporting the cause of basic education. Here is the mail I got: Contribute to set up a Primary School in village Mahabadia Ahambhumika is aiming to set up a Primary School in village Mahabadia,distt.Bhopal.We have been wrking in this village since last 3 years.The people of the village work as daily wage labourer in brick kilns,construction sites and stone quarries.This village don’t have any school therefore,the children don’t go to school except few ones.We have an informal literacy centre namely Mehak ( Fragrance) in this village where we impart basic edcution of Hindi,Mathematics and English ( recently started ) to 52 girl children daily ( except on Monday) for 2 hours.We have realised that 2 hours duration is enough time to educate the children properly.Besides that there are many more children in the village who needs to be edcuated.In view of above we have decided to start a Primary school for the children of this village. The school we are aiming at will provide education to all the children of the village.There are more than 150 children in this village. Our plan is to start the Primary School from the month of July 2013 and we need to raise Rs.2.50 lacs for this purpose by the end of May 2013. In past you have supported us whole heartedly therefore, I am requesting you without any hesitation to contribute for setting up a primary school.Please feel free to contribue any amount as per your convenience.Please drop a mail once you decide the amount you will be contributing, mentioning the time by when you will be contributing.( Please try to contribute before the month of June 2013).Drop a mail to us once you transfer the amount with transcation number. You may further help us by spreading words to the people you know who may help us for this cause. Below is the banking profile of Ahambhumika. *Online Bank Transfer: AHAM BHUMIKA SWAYAM SEVI SANSTHA, SAVINGS ACCOUNT NO. 2073101015874, IFSC Code- CNRB0002073, CANARA BANK, Branch - MAHARANA PRATAP NAGAR, BHOPAL Important: If you're doing a online transfer to our account, please send us an email with your name, address and donation amount, so that we can send you the receipt. **Account payable Cheques/ DDs in favor of – AHAM BHUMIKA SWAYAM SEVI SANSTHA, Payable at BHOPAL (M.P.) and send it by post to *Postal address to which you may send cheque for the project : Subrat Goswami Ahambhumika C/o Archaeology 3rd Floor,B-Block, G.T.B.Complex,T.T.Nagar, Bhopal-462003 (M.P.) -- With regards (Subrat ) Founder Ahambhumika (M) 98264 72718

Tuesday, April 16, 2013


(FOR the first part go to : Having started off on our ‘savings’ plan, let us understand what kind of savings instruments one can use and for what purpose, duration etc. i) Savings accounts in banks- Keep enough to tackle a month’s outgo and some emergency needs depending on your situation. You can always keep a ‘sweep’ account that ensures highest return: ii) Liquid funds are good if you need money in two to three years time; iii) Fixed deposits and bonds are good if you need the money after three to five years; iv) FMPs of mutual funds are a better option than fixed deposits from safety as well as tax impact is concerned; v) Savings instruments will never be subject to market risks. Yes the can have risk of default, so better not to chase high returns and sacrifice on risk. vi) Savings has to be in a form that you completely understand. Cannot be an insurance policy or ULIP. I have a different take on financial planning. I ask each of you to write down what you earn now and what can be spared for savings and investments. From there, one can take a call on what is achievable and what is not. There is no point first saying that this is what I need and then go about finding the money. It may click once in a way, but more often, you will end up taking risks that you can ill afford to. For example, if I can spare, say, five thousand rupees a month for two years, it could accumulate to around Rs.1.40 lakh at approximately eight percent per annum. So, I can plan to spend around 1.40 lakh at that point in time. However, if I decide first that I want to spend around Rs.2 lakh at the end of two years and cannot spare more than 5K each month it would need a return of more than 15% p.a.! So I would have to search for something with that kind of potential. Alas, there will be only uncertain avenues that risk losing principal also. In short, first decide what you can spare and fix your aspirations in the realm of possible. Do not get carried away by the crazy advertisements that drive you to aspire for the moon and then choose a road that will destroy your wealth and health. All other schemes are ‘investments’. Returns would be unpredictable and will have risks attached to them, with the potential of higher returns. It is common to say that equities deliver fifteen percent compound returns. However, in the last five years, it has delivered zero. You cannot plan to meet a certain financial outlay with any ‘investment’- whether it be equities, land or gold or anything else. They are subject to factors beyond your control. After the savings plan, I would surely look at ‘spending’ money on some medical insurance. Life insurance is something that you need so long as you have commitments or financial dependents. Once you cross that hurdle, stop the policy. Today, a term policy with payout only on death, costs less than medical insurance. Do not fall in to the trap of thinking that there has to be a ‘return’ from a life insurance payout. There are better investment options available. Investments are financial outlays, where the final result is not predictable in terms of value. It is subject to market forces and business cycles. The outlays could be on equities, real estate, precious metals or commodities or currencies. These do not trade at predictable prices and there is no guaranteed return. Once these are covered, you might like to start ‘investing’. For equities, mutual funds (go for either large cap diversified or an index fund) are a good option. To get the best out of equities, it is important to keep investing regularly and not just in one go. Of course, that strategy can work, if you are capable of picking stocks at their lows or are able to time the markets. If you cannot, then the SIP route is the best. One more thing to invest could be a second house or a plot of land, depending on each one’s appetite. I have covered this in one of my earlier pieces. Investments are financial outlays that over time can give you a chance to change your lifestyle or leave behind an inheritance. Investments over time can give you a new goal or a desire to be fulfilled. Investments go to build wealth. A second home, a plot of land, stocks, gold etc. are not things you buy to meet some future goals, but to create your portfolio of wealth. Once you get here, your concerns are more towards preservation of wealth than rapid appreciation. Do not be in a hurry to acquire assets for wealth creation. Savings simply takes care of your normal needs over your lifespan. So, savings are the first step. Savings will take you to a goal with reasonable degree of certainty. Investments will change your state of well being.

Thursday, April 4, 2013

Picking stocks- of sectors I like and dislike

In Moneylife