Wealth Creation

[amitrandive]

10 Reasons You’re Not Rich Yet

http://time.com/money/3944987/not-rich-yet/?xid=frommoney_soc_socialflow_facebook_money

Being “rich” can mean different things to different people, but I believe it means having the financial freedom to achieve your goals and live the life you want.

Regardless of our upbringing, education, profession or lifestyle, most of us are not where we want to be financially and our reasons are probably more similar than different. The good news is that it is never too late to become rich if you, like me, are ready to own up to the reasons you’re not and do something about it.

Want to know why you aren’t rich yet? Keep reading.

#1: You spend money like you’re already rich.

Sure, it feels good to buy expensive things, whether it’s a luxury car, designer clothes, a big house in the burbs, or a tropical vacation. Even if you don’t necessarily buy pricey items, if you consistently buy stuff you really don’t need, it still adds up fast ($300 trip to Target for toothpaste? AHEM). But the shopping high only lasts until the guilt and regret set in or the credit card bill arrives. Most of us are guilty of living beyond our means and using credit cards more than we should. The problem is that as long as we continue to spend more than we have, we can’t start building wealth. Chronic overspending and high-interest, revolving credit card debt are your worst enemies when it comes to financial success. Spend like you’re poor and you are much more likely to become rich.

#2: You don’t have a plan.

Without clearly defined short, mid and long-term goals, becoming rich will just seem like an unattainable fantasy. And that turns into your go-to excuse for why you shouldn’t bother saving or stop overspending. As we say in the financial industry: those who fail to plan, plan to fail. Creating a financial plan may seem overwhelming or intimidating, but it doesn’t have to be. Whether you do-it-yourself or decide to work with a financial professional, the process simply starts with prioritizing your goals and writing them down. Put that list where you can see it on a regular basis. Visual reminders go a long way in helping us stay on track.

#3: You don’t have an emergency fund.

I know, you’ve heard it a hundred times: you need to have at least six months of income saved in an emergency fund. And yes, it’s much easier said than done. However, I’ve seen too many people (including myself) get hit with a major unplanned expense, whether it’s a car or home repair or a medical bill, or an unexpected job loss, accident or illness that’s led to a drastic reduction in income. When these things happen–and they do, more often than you might think–not having a financial safety cushion can make the situation much, much worse. If you’re forced to rely on credit cards, you’ll end up sinking deeper into debt instead of, yes, saving to become rich.

#4: You started late.

With every year or month that goes by without saving, your chances of becoming rich decrease. Time and compounding interest are your two best friends when it comes to growing money, so wasting them really hurts. Just like exercising, the hardest part of saving is starting. Even if you’re in debt, making little money or have a lot of expenses, you can still always save something — even if it is a small amount. The sooner you get yourself into the habit of saving — regardless of how much — the easier it will be for you to continue and eventually increase those savings. I like to think of saving as a muscle you have to work out and build with practice. Even if you start saving late, you can still become rich if you’re committed enough. But you need to start. Now.

#5: You’d rather complain than commit.

“Life is too expensive.” “I’ll never get out of debt.” “I don’t make enough money.” “Investing is too risky.” I’ve probably heard every excuse for why someone isn’t saving, investing or planning in general, and I’ll admit I’ve used a few of them myself from time to time. It’s easier to be lazy and let bad habits fester than to commit to –and follow through on — changing them. It’s no wonder obesity and debt are epidemics in our country, and that millions of Americans have had to push off retirement. As long as the complaining, excuses and finger-pointing persist, so too will not becoming rich. Instead, take responsibility for your bad habits and focus on what you can do to change them. Then do it.

#6: You live for today in spite of tomorrow.

I get it. It is really hard to think about retirement and other distant fantasies when we have needs and plenty of wants now. The bills have to get paid, the family must be fed, momma needs a vacation — and a new wardrobe to go along with it. The problem is that impulsive and overly-indulgent behavior commonly lead to credit card debt, spending money you might have otherwise saved and, yes, not becoming rich. Do yourself a favor: Ditch the “buy now, worry later” mindset and instead, adopt a “save now, get rich later” mindset.

#7: You’re a one-trick investor.

You might be lucky enough to become rich by betting all your money on one type of investment. Just like you might be lucky enough to win the lottery. But that’s not a strategy for getting rich (at least, not one I’d ever recommend).

One of the worst financial mistakes you can make is putting all your money eggs in one basket. Doing so puts you at too much risk, whether it is being too conservative or too aggressive. Sure, the stock market is on a run and real estate is on an upswing again, but are you prepared for when the tides turn? Because they will. And if you are invested in all fixed-income securities like CDs, bonds and annuities and think you’re safe, inflation should make you think again. Your investment portfolio needs to include a good mix of investments with varied levels of risk and return potential and liquidity (so you can get your money when you need it).

#8: You don’t automate.

Here’s the secret to saving: Automation. Saving is seamless when it’s automatic. Unfortunately, we are not born to be savers. We are impulsive and greedy by nature. Being responsible requires much more discipline. However, automation forces us to be responsible without too much effort. And all it requires is setting up regular transfers from a paycheck or bank account to a savings or investment account. Without it, we are much more likely to spend money we could be saving. Even if it is a seemingly small amount that you automate, those steady investments can make a big difference over time. Automate whatever you can whenever you can; just be careful to avoid overdrafting your account and try to increase your savings amount periodically.
Sign up for ASK THE EXPERT and more view example

#9: You have no sense of urgency.

You might think you don’t need to worry about getting out of debt or saving because someone, or something else will save you. Maybe it’s a pay raise, a new job, an inheritance, a rich spouse, or the lottery you’re counting on. Whatever “it” is, you use it as an excuse to put off taking steps on your own to become rich. The problem is that very little in life is certain. Who knows what will actually happen, or not happen, so why not focus on what you can control now? Save now and save yourself — just in case something, or someone, else won’t.

#10: You’re easily influenced.

Maybe you live with a chronic over spender or a typical day out with your girlfriends involves shopping. Or maybe it’s your inner “Real Housewife” that you sometimes can’t control. We all have negative influences in our lives that threaten our chances of becoming rich. The superficial, materialistic, sensational culture in which we live is probably the biggest one. The suffocating swirl of media that goes along with it makes it ten times worse. The trick is not giving in to temptation. How? Some of it is making conscious choices to avoid putting yourself in vulnerable positions. But most of it is having the willpower to keep the goal of becoming rich in the front of your mind, especially when you are tempted to sabotage yourself.

 

[amitrandive]

Daily habits of self-made billionaires anyone can adopt

http://www.businessinsider.in/11-da...an-adopt/They-meditate/slideshow/51932897.cms

1)They meditate

Science says that meditation has a number of mental and physical health benefits, from improving memory to boosting the immune system.

Ray Dalio, founder of Bridgewater Associates, told The Huffington Post, "Meditation, more than anything in my life, was the biggest ingredient of whatever success I've had."

Media mogul Oprah Winfrey say that they practice meditation daily.

2)They're charitable

"The world class set their sights on impacting the world with their wealth," Siebold writes. "Some do it through philanthropy, others through business or various financial vehicles."

A handful of billionaires have taken to philanthropy, including founder and CEO of Bloomberg Media Michael Bloomberg, who has donated $3 billion over his lifetime.

Some have even pledged to give away more than 99% of their fortunes.

3)They wake up early

There may be some truth behind the age-old adage, the early bird get the worm.

The wealthiest people tend to be early risers. Take Jack Dorsey, who wakes up at 5:00 a.m. to meditate and work out. Or Richard Branson, founder of the Virgin Group, who wakes up at 5:45 a.m. to exercise before starting his work day.

In his five-year study of rich people, author Thomas C. Corley found that nearly 50% of them woke up at least three hours before their workday actually began.

4)They stick to routines

A hallmark of highly successful people is their dedication to ritual.

Take John Paul DeJoria, cofounder of Patron tequila and Paul Mitchell hair products, who starts every day with five minutes of quiet reflection.

"Doesn't matter where I'm at, which home I'm in, or what hotel room I'm visiting," he says. "The very second I wake up, I stay in bed for about five minutes and just be."

5)They live below their means

Just because they have billions in the bank doesn't mean they have to indulge in overspending — in fact, some of the world's wealthiest people choose to live frugally.

As Murray Newlands wrote at Entrepreneur, "Sam Walton, the founder of Wal-Mart, famously drove around in a 1979 Ford F150 pickup truck ... Mark Zuckerberg owns a modest $30,000 Acura TSX entry-level sedan ... Bill Gates was known to fly commercial for years."

Then there's legendary investor Warren Buffett, who is notably down to earth — he still lives in the same $31,500 home, and chooses a flip phone over a smart phone.

6)They pursue their passion

"You've got to find what you love," Apple cofounder Steve Jobs said during his 2005 commencement address to the graduates of Stanford University. "The only way to do great work is to love what you do. If you haven't found it yet, keep looking. Don't settle. As with all matters of the heart, you'll know when you find it."

Jobs isn't the first to emphasize the importance of pursuing your passion. Author Napoleon Hill, who studied over 500 incredibly rich people in the early 20th century, wrote in his bestseller, "Think and Grow Rich": "No man can succeed in a line of endeavor which he does not like."

7)They read

Many of the world's most successful people are avid readers.

As Business Insider's Shana Lebowitz wrote:

Investing legend Warren Buffett reportedly spends about 80% of his day reading, and continues to include book recommendations in his annual shareholder letters.

In 2015, Facebook's Mark Zuckerberg resolved to read a book every two weeks ... Media mogul Oprah Winfrey selects a book every month for readers to discuss online as part of "Oprah's Book Club 2.0," and when tech billionaire Elon Musk is asked how he learned to build rockets, he reportedly answers, "I read books."

8)They develop multiple streams of income

The richest people focus on earning — so it comes as no surprise that they develop additional streams of income.

Richard Branson, the billionaire chair of the Virgin Group, epitomizes this habit, Corley explains in "Change Your Habits, Change Your Life." Branson has overseen about 500 companies and his brand is on somewhere between 200 and 300 of them.

Branson "puts the rich habit of having multiple streams of income on steroids," Corley writes. "His desire to expand the Virgin brand is really a desire to expand his streams of income. Branson learned very early on that this rich habit creates the most wealth."

9)They're self-employed

Along the same lines, billionaires tend to be their own bosses. They're typically self-employed and determine the size of their own paycheck.

Mark Zuckerberg has been working for himself since age 19, when he first launched Facebook as a Harvard sophomore in 2004. Snapchat CEO Evan Spiegel, who is the youngest billionaire in the world, had a similar path — he created the popular photo-sharing app with two of his former Stanford classmates and has been his own boss ever since.

"It's not that there aren't world-class performers who punch a time clock for a paycheck, but for most this is the slowest path to prosperity, promoted as the safest," says self-made millionaire Steve Siebold, who has also studied over 1,200 wealthy individuals. "The great ones know self-employment is the fastest road to wealth."

10)They exercise

Highly successful people don't just push themselves in the office — they push themselves physically, outside of the office.

Mark Cuban, "Shark Tank" investor and owner of the Dallas Mavericks, does cardio for at least an hour, six to seven days a week, he told The Dallas Morning News.

Branson credits exercise for giving him at least four additional hours of productivity each day. Science concurs:Working out can boost your memory, concentration, and mental sharpness.

11)They hang out with other successful people

The wealthiest people like to stand next to the smartest person in the room, notes author and podcast host James Altucher: "Harold Ramis did it (Bill Murray). Steve Jobs did it (Steve Wozniak). Craig Silverstein did it (Who? Larry Page). Kanye West did it (Jay-Z)."

After all, "In most cases, your net worth mirrors the level of your closest friends," Siebold explains.

 

[amitrandive]

 

[ravi2126]

Income Tax Rebate-

❓Do you have an income of less than INR 5 Lakhs a year ?

1.You are eligible for a tax rebate of INR 5000. *

2.The tax rebate was increased from INR 2000 to INR 5000 in the Union Budget 2016 if you earn an income less than INR 5 Lakhs.

❓What is the main condition to be followed if you want to avail a rebate under Section 87A ?

3.This is simple. You should have an income less than INR 5 Lakhs per year.

4. You earn an income of INR 3 Lakhs a year and you can claim basic tax exemption of INR 2.5 Lakhs.

5. You have to pay tax on the remaining INR 50,000, as you fall in the 10% income tax bracket.

6. You would have to pay tax of INR 5000.

7. You are eligible for an income tax rebate under Section 87 A, as you earn an income less than INR 5 Lakhs a year.

8. You do not need to pay any tax as you earn an income of INR 3 Lakhs a year and are eligible for* a tax rebate.

 

[ravi2126]

Good News-
You can close PPF account before maturity

Yes, you can close your PPF account before it has completed the 15 year lock in period, under certain circumstances.

Your PPF account should you completed at least 5 years.

This new rule has come into effect from April 1st 2016.

Before this new rule was passed, you could withdraw your entire PPF, only after the completion of the lock in period of 15 years. Only on death of the investor, could the PPF amount be withdrawn before 15 years.

You can close your PPF account before 15 years, if you need money for the treatment of a serious ailment.

You need money for the higher education of your children, you can close your PPF account prematurely.

However there is a penalty for pre mature withdrawal.

You would lose about 1% of the interest earned on the PPF account as a penalty.

 

[ravi2126]

⚖Loan Against Mutual Funds⚖

1. You are an investor in mutual funds. This is something really great for you.

2.You can avail a loan against your investment in mutual funds.

3.All you have to do is approach a bank , Broker or an NBFC, and request for a loan against your mutual fund investments.

4.The bank would consider your request only after seeking a lien (This is the legal right of the bank to sell the units of your mutual fund, in case you default on your loan).

5.The lien gives the bank the right to sell your mutual fund units which you have pledged, if you default on your loan.

6.The bank holds the right over the units of your mutual fund investments, till the time you have repaid your loan.

7.The bank will sanction your loan, depending on the value of mutual fund units, which are held in the folio of your mutual fund scheme.

What quantity of loan is sanctioned against your mutual fund investments?

1. The quantity of loan sanctioned, depends on the type of mutual fund.

2.If you pledge equity mutual funds, you will be able to avail a loan which is as high as 50% of the NAV (Net Asset Value) of the fund, you pledge.

3.Equity funds are volatile and their value could fall in a stock market crash.

4.You would have to pledge more number of equity mutual fund units to make up for a shortfall, in case their value falls in a stock market crash.

5.If you pledge debt mutual funds, you will be able to avail a loan which is higher than 50% of the NAV (Net Asset Value) of the fund you pledge.

6.Many banks decide what is the minimum and maximum amount they would lend against mutual fund investments.

 

[rip07]

Bro! very nice articles and quotes on this thread. Congratulations!!

All such things are very nice to read but very hard to implement. All such information I am sure, many people read but still they are not rich or have a decent lifestyle. These reading can trigger the initial push but most of the time we fail to carry on or to say the least make them habits.

Same I believe in trading, so many methods and good explanation but still 95% people as a trader... . Might be emotional training is missing on this part. Our cultural habits and family upbringing also matter to have a right mindset.

Trading in the Zone-Mark Douglas, this book changed a lot my trading style. Hope someone can through better light on this.

Thanks
Rip07

 

[amitrandive]

Investments Learning

http://www.subramoney.com/2016/05/investments-learning/

Learning how to invest and how not to invest is a continuous process…so here are some more learning:

1. There is nothing like a continuous out performance: over 4-5 years you may have one or two brilliant years, 2 reasonable years, and one bad year. Over all if the fund manager has beaten the benchmark and stayed true to label during this period, you should hold on to that fund manager
2. Investing early in ANY instrument is better than late investing: the cost of delay in investing is huge. So in the early days if you did not know about Index funds, etc. even if you did invest in PPF – it is better than not investing at all.
3. Anyway you invest, there is risk: Investing in equities, investing in debt, keeping in savings account, keeping in market fixed deposit – whatever you do there is risk. So do not wait to learn everything about everything. Till you do not know what to do invest in an index fund..and once you know and understand you can re-allocate your investments. My Granpa kept money stuffed in the pockets of the clothes in his closet. He believed that the maid servant did not know that – because he thought that was risk free, but he missed out on any potential profits and, obviously, returns lagged inflation. What if the house burned down? There are no risk-free investments. Period.
4. Some friends who live far beyond your means should not be your friends at all: It just does not match. You need to mix with people your spending levels only. Do not over stretch. The small indulgences – a CCD or Barista or Starbucks – may seem trivial, but all that add up to a big amount at the end of the month.
5. When you sign up for a SIP sign up for a TOP UP SIP. This constantly raises the amount on a regular basis..and Icici Prudential had shown me how it works…
6. An investment professional who wants to rip you off will find a way to do it. So finding a good IFA to help you is step #1
7. Most of the scams in investing could not have happened without trust. Most of the time those closest to the bad actor are the first victims. Bernie Madoff bilked members of his religious community and other friends and family!! Obviously, you need to trust your investment professionals by all means – but remember what Ronald Reagan said : “Trust but verify” .
8. All frauds are not big hairy and audacious. Leaving a blank signed cheque, leaving the Transfer Instruction slips with the broker and tempting him is an amazingly stupid way how people have been wiped out. ….

 

[amitrandive]

Long Term Investing principles

http://www.subramoney.com/2016/05/long-term-investing-principles/

Successful investing is about controlling the controllable. You can’t control what the market does, but you can control what you do in response. In the long run, your returns depend less on whether you pick good investments than on whether you are a good investor. Investing for the long run includes believing in compounding, not interrupting the compounding, having enough money for other emergencies etc. – only when those things are in place can you stop worrying about needing emergency money.

The first step to reaching your financial goals is to make sure you set goals that are reachable. Your expectations must be realistic. The stock market is not going to provide a high return just because you need it to.

The second step is to recognize what you are up against. Despite what all the daily market reports make it sound like, investing is not a game, a sport, a battle, or a war; it is not an endurance contest in a hostile wilderness. Investing is simply the struggle for self-control – the unrelenting effort to keep yourself from becoming your own worst enemy.

The market is not perfectly efficient, but it is mostly efficient most of the time. Attempting to beat the market may often be entertaining, but it is seldom rewarding. There’s nothing wrong with gambling on poor odds, as long as you admit honestly that what you’re doing is gambling and as long as you put only a tiny proportion of your wealth at risk.

The brokers on the floor of the Stock Exchange clap and cheer when the closing bell clangs every afternoon because they know that no matter what the market did that day, they will make money-because you tried to. Whenever you buy a stock, someone is selling it; whenever you sell a stock, someone is buying it. Most of the time, the person on the other side of the trade knows more about the stock than you do.

However, you don’t have to lose just because other people win, and you don’t have to win just because somebody else loses. You win when you stick to your own long-term plan, and you lose only when you let greed or fear goad you into changing that plan.

The right time to buy is whenever you have cash to spare. The right time to sell is when you have a need for cash. If you buy because the market has gone up, or sell because it has gone down, you are letting a few million strangers rule your life with their greed and fear.

Once you lose money by taking too much risk, the only way you can earn it back is by taking still more risk. If you lose 50%, you have to earn 100% just to get back to where you started. And if you lose 95%, you need to earn 1,900% before you break even. You may be able to do that once or twice through sheer luck alone, but the more often you have to try it, the more likely you are to end up broke. All too many people live their investing lives like running on a treadmill, running faster and faster and getting absolutely nowhere.

If you want to have more money, save more money. Investing more money for a longer time is the only sure way of having a bigger corpus.

Investments that outperform in a bull market are certain to under perform in a bear market. There is no such thing as an investment for all seasons. That’s what diversification is for: to protect you against the risk of putting too many eggs in the wrong basket. And buying something that has just doubled, in the belief that it will keep on doubling, is an extremely stupid idea.

Your goals are a function of all your life circumstances: your age, marital status, income, current and future career, housing situation, and how long your children (or parents) will be dependent on you. Risk is a function of probabilities and consequences – not just how likely you are to be right but how badly you will suffer if you turn out to be wrong. Investors tend to be overconfident about the accuracy of their own analysis-and to underestimate how keenly they will kick themselves if that analysis is mistaken. Understanding your own shortcomings as an investor is far more important to your long-term success than analyzing the pros and cons of individual investments.

In the short run, hares have more fun; but in the long run, it’s always the tortoises who win the race.

 

[amitrandive]

What keeps YOU poor?

http://www.subramoney.com/2016/05/what-keeps-you-poor-impediments-to-riches/

Here are my observations as to why people do not get rich. Almost all of them will justify their being not well off – I had to pay for my parents expenses, my children’s schooling is expensive, my own medicines,…..blah blah. I find these as rationalisation and the deeper answer lies in the following….

1. Procrastination learning about money: Most of us love money, but are not willing to learn how to earn well, invest well, etc. The more you postpone the lesser the chances of accumulating a decent corpus for any goal.
2. Spending more than your income: the number of people who do not understand the difference between the CTC and the take home pay live beyond their cash flows. This means that they live off their parents or their credit cards.
3. Procrastination of financial learning means that they do not know the cost of postponing investments. So we keep postponing to a virtuous tomorrow and do not save, invest, or organize our finances today. Tomorrow, as we know, never comes.
4. Going into debt without a thought: Many individuals will just walk into a shop and buy a Rs. 55,000 item without worrying where the money is going to come from. So it is a want that is charged to the credit card not just the needs. Then the credit card company offers a usurious rate for an EMI which they HAVE to accept..so if your luxuries are funded at 43% p.a. interest costs, you cannot get rich. Just perish the thought.
5. Not knowing what is investing; An occasional equity share bought when the market goes down, averaging a falling share, investing in some sundry mutual fund,..then selling because you have held it for 4 years, – a series of disjointed, stupid, and most times irrational actions is NOT INVESTING. It is called time pass. When they show me that portfolio I know what they are doing, but believe me IRR is like a bad word for them. After all, they are qualified and they know everything do they not?
6. Not saving / investing in an organised manner: need I say more?
7. Being too aggressive: buying some bunch of **** cap and fooling themselves that they are in ‘mid cap’ direct investing.
8. Being too conservative: some of these people could tell you a million stories of how their friends lost money in the equity market. I tell them stories of plane crashes and road accidents. Why even tiger mauling, dog bites – after all risk has to be managed, NOT IGNORED.
9. Amazing to see people accumulate credit card bills, utility bills, etc. and making some extra penal payments OUT OF SHEER LAZINESS.
10. Letting cheques bounce because they had no clue how much money they have / had in their savings bank accounts.
11. Giving ‘loans’ to friends, relatives, neighbors, ….some of these people go around wearing a “I am a sucker” label. There are others who give loans to show off how rich they are. Neither the friends nor the loan come back.
12. Bad financial habits: drinking, gambling, playing on the stock market, …can rip you apart…