Investment is always risky. But risk factor may vary from investment to investment. In the market you will find a vast variety of investment schemes. Some of which may include high risk factor but some may include low risk. It is the fact that if you invest in a scheme having high risk, return will be higher as compared to those investments having low risk related to them. The most significant way to save your investment is to invest on those investments which yield low returns.

Another way to reduce the risk factor is the diversification of your investment.  This is the easiest and the best route. You can save your investment, minimize the risk factor, and get the maximum benefit from your investment. Diversification is a technical term. It means that the investor spreads investment across different assets who offer returns which are not correlated. Diversification has become very necessary in this modern market scenario. You cannot trust any particular asset because it may go against your expectations at any time. Therefore, it is highly advisable to invest in more than one asset because your investment in other assets will be saved if any particular asset goes wrong.

In diversification of investment, the term “correlation” is widely used.  You must have a relevant technical knowledge to analyze the correlation between two or more than two specific assets.  The exposure of the investor should be sound about all related terms and conditions and the financial aspect of each and every aspect of even a small thing. You can reduce risk significantly if investment is made on a variety of assets and their return does not correlate with each other. For example, you invest on two assets. One of the assets relates to pharmaceutical and the other asset is related to a software company.

Market consultants advise the investor to spread his or her investment across fifteen to twenty individual and different assets. Never invest huge amounts on any particular asset because no one in the world can give full surety about the safety and protection of investment. If you get a fast conclusion of the market, you will come to the point that there are large numbers of companies offering investors to invest their money. They attract them by giving high returns and these companies try to suck maximum money in the shape of investment from the investor. They use so many tactics and they easily trap the investor. On the other hand, the investors get confused because it is not possible sometimes to select the most appropriate investment plan. In such circumstances, it is highly advisable to take in consideration two important points:

A – Never go for high returns
B -  Diversify your investment maximum

It should be kept in mind that the investor should not go for the quantity. Investing in a large number of assets doesn’t make it diversify. Diversification comes in when the investment is made on different variety of assets. Ideally, the investor should spread his or her investment of the following assets:

• Stocks
• Bonds
• Real estate
• International investments
• Cash

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Conclusion:
To reduce risk factors while investing, the investor should consider two points strictly. Firstly, he or she should never go for high returns and secondly the investment should spread across a variety of assets. Never invest in any one asset or those assets which are correlated with each other. In the world of finance this phenomena is known of diversification of investment.

One of the not so good things with banking business and investment is the roller coaster ride it brings about in view of the income process. Term deposits of banks may earn higher returns for the first time since the past few years with surplus liquidity drying up on one hand and investments picking up, thereby creating more demand for bank funds.

Moody’s Analytics reported lately: “the research arm of rating firm Moody’s, deposits rates will go up as surging investment and monetary tightening have soaked up excess liquidity in the banking system. This development signals a change in the way banks respond to policy rates.” It further goes on to say excess liquidity had been a major factor holding down commercial bank rates. Lately, liquidity in the banking system rose sharply as monetary easing and weak private borrowing left banks awash with funds.

As an answer to this, commercial banks deposited surplus funds at the RBI. Since the beginning of this year, however, the volume of surplus funds deposited at RBI has trended down, and since May 31, banks have moved from net lenders to net borrowers of funds from the RBI.

In must be noted here in this news that the report says the move will be welcomed by savers, who have seen rising prices and falling deposit rates erode the value of their savings over the past year. The report has also indicated that the rise in bank rates will help slow economic activity and reduce inflationary pressures. Moreover, a section of the market feels that the pace of rate hike may be gradual as the crisis in Europe may trigger further capital outflows and hence impact liquidity, there are others who feel that the strong inflationary pressures in the economy will force the central bank to hike policy rates.

In addition to this, as far as banks are concerned, RBI data notes that while the annual YoY growth in loans has been picking up for over two months now, the year-on-year growth in deposits has been secularly falling since early January. While YoY loan growth has gone up from 13.9% in early January to 14.9% by May 21, the YoY deposit growth in the same period has dipped from 16.8% to 14.3%. Even on an incremental basis, it has grown by only 0.7% so far compared with a growth of 3.4% in the year-ago period. Data also indicates that banks are already seeing a flight of funds to small savings schemes. As results, banks may have to hike deposit rate to woo back depositors.

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As a conclusion, it cannot be denied that there is indeed truth and proven impact that the term deposits of banks may fetch you more and high as liquidity woes rise.  This is the usual flow, the rise and fall of money matters in banking and investment.  Liquidity woes as they rise and fall, certainly triggers a lot in view of the capital that you have invested on in your respective banks and other monetary business matters.  You then must be very careful and keen observant when it comes to the many possibilities of making your money work for the best for you.

Money is the blood that makes economy alive.  If you are not in need of money these days, you are either filthy rich or crazy inside a mental hospital.  Even rich people desire for more and more money, how much for us ordinary struggling citizens.  Now how can we really earn big bucks these hard-up days?  Making the moolah but got nothing in the bank to show for it? Finance expert Sumeet Vaid tells you how to save.  You just have to be more careful and smarter in applying these tips below:

1) Collegian: You’re in college and just got a part-time. With your canteen diet and hectic social life, you can’t help but approach your parents for a few bucks at the end of the month. You don’t have to let your gadget updates be restricted to your birthday either. Hence, if you are smart and cool enough you can use your connections and common sense for your pocket to have those extra needed and urgent money.

• Income: Rs 9,000 a month
• Expenditure: Conveyance, food, entertainment (once a week)
• Goal: Upgrading gadgets every 6-8 months. A weekend trip every 3 months.

Try this one: set a monthly budget for Rs 5000 a month and save the rest. Stay your gadget update at Rs 10,000 on a horizon of eight months. Ideally, you should invest your money in short term debt funds.

Make a monthly Systematic Investment Plan (SIP) of Rs 1,225 to achieve this goal. To make sure you can afford weekends away, put away Rs 1,660 in Liquid Plus funds for three months to accumulate Rs 5,000 every three months.  This may be easy to read but hard to do unless you will exercise the golden rule called “DISCIPLINE”!

2) Career starter: You got first job and finally have a chunk of disposable income. Of course there are salacious shoes and gadgets that need your attention, and you want to proudly “purchase” entry into clubs instead of relying on hand-outs from connected friends. Follow this plan and you can holiday in style and have savings for the future.  Apply the golden rule here, once and for all, and I bet you things will be smooth sailing than expected.

• Income: Rs 25,000
• Expenditure: Conveyance, entertainment (once a week), shopping (weekly/monthly)
• Goal: New car, famous perfumes and updated gadgets,  signatured clothes, new bachelor’s pad, big bucks savings, a holiday once a year.

Pin down monthly expenses at Rs 15,000, and you’ll have a whole 10 grand left over. For an annual holiday, make a monthly SIP of Rs 1,600 in a Short term debt fund for a year to accumulate Rs 20,000 at the end of the year.

Of the left-over Rs 6,400, make a monthly SIP of Rs 5,000, of which 50 per cent shall be invested in equity and 50 per cent in Debt. The Debt component is for emergencies and Rs 1400 is a buffer monthly expense. You’ve moved in together or just got married. The honeymoon period will come to a crashing halt if you don’t keep money on a tight rein. The good part is, you have twice the money and half the outgoing now! Saving should be your top priority if you are planning a future.

3) Nest builders: After the dating and courtship stage, this is now the time to settle down. Assuming then, that you have finally stayed together with your fiancée in one roof after courtship, this will then be the time to build your new “nest” or home. If then, just moved in together as “live in” or just got married, one basic thing to do and set aside budget is your honeymoon as a newly-wed couple.  It is something extraordinary special an event for a newly married thus there is a need for a good amount of budget.  If the savings is low, then, honeymoon will surely be dependent upon it.

But one thing to note is the fact that you can still decide on what type of honeymoon you as a couple wish to have. The good part is, you have twice the money and half the outgoing now! Saving should be your top priority if you are planning a future.

• Joint income: Rs 60,000
• Expenditure: Rent, house-keeping, entertainment, personal upkeep
• Goal: Holiday, savings and nest egg.

Finally, it must be remembered that curtail household expenses to Rs 40,000 (considering Rs 15,000 as rent and the rest towards utilities) and personal expenses. This leaves you a monthly surplus of Rs 20,000. For your holiday goal, put away a monthly SIP of Rs 3200 needs in Short Term Debt Funds to have Rs 40,000 for the annual holiday. Invest Rs 15,000 through a monthly SIP accordingly, 70 per cent in Equities; 20 per cent in Debt and 10 per cent in gold. This will accumulate into Rs 1,90,000 annually, all going towards your nest egg savings for long term goals.

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In Conclusion, Be more streetwise as they call it with your approach in earning savings from whatever you have and in whatever status you are in. It is truly DISCIPLINE that matters and will surely make a difference in every monetary endeavor when it comes to savings.  If you can only be more disciplined with whatever money that may come your way, then the rainy days once they come will never be that difficult to handle.  Why simply because of the fact that you have labored while it is still shining.  Meaning to say, you were able to save for your unforeseen needs.  Once again let us be more disciplined in every possible way, great and small.

What is money for you?  Is it really important for you to save money? Money is a very important reality.  It is likened to blood that makes the economic life of society get going.  Without money life will be paralyzed because it seems to be the be all and end all of economic life in general and in particular. I also want to share nice word of Catherine Pulsifer, “Can implementing the three Rs- reduce, recycle, reuse, save you money? If you only implemented the three Rs in your kitchen, you would save money.”

Let’s now talk about the importance of saving money?
Basically, before marriage 80% of people spend so much money in clothes, fashion, DVD, movie, parties, mobile and on their girlfriend or boyfriend. After marriage we start thinking about saving money because as it has been said humans as we are, we learn about the essence of responsibility after marriage.

We must by all means, be responsible in saving money because we can’t say when emergency occurs and we need money. There are varieties of reasons to begin saving money. Different people save for different needs. We need money from time to time, in our life, so money saving is necessary.

These are the essential reasons why we need to save money.
1.  Emergency Funds: This is something very urgent and necessary.  It is important to have an emergency fund set aside to cover unexpected expenses. This could cover an unexpected car repair, your emergency appendectomy or a sudden job loss. Ideally your emergency fund should be about three to six months of your expenses. If you are just starting out you should put aside at least 20k for this.

2. Retirement: This is a factor that you should take a close look and a serious consideration.  Another important reason to save money is your retirement. The sooner you start saving for retirement, the less you will have to save in the future. You can put your money to work for you. As you continue to contribute overtime you will be earning more interest on the money you have, then you put in each month. You should at least be contributing up to your employer’s match and eventually you will want to contribute ten to fifteen percent of your gross income.

3. Dream House: It is not possible that everyone has their own house, and everyone wants to have a dream house in a good location. We can also say same thing for flat because not everyone can buy land. This is one of the big reasons for saving money.

4. Vacations: The fourth reason to save money is to have fun. You can save up for your world tour. World tour obviously include so much money in order to fulfill this dream you need a lot of money so what you need to do is to save again and again.

5. Dream Car: The fifth and exciting reason is to purchase a car with cash. You will be amazed at how much money you can free up in your budget if you do not always have a car payment. You can also negotiate the price of the car much lower if you are willing to pay cash at the dealership.

6. Marriage: Now, the biggest thing in life is when you have already children after marriage.  These fund help you in your time after time family and other cultural events. This is also a good reason for saving money. In fact it is one of the milestones of your life.

7. Wife’s Jewelry: With marriage, wife’s jewelry and gifts that include anniversary, birthday,and parties could be among the most needed by couples.  These are some of the many reasons why we need to really work hard and save a lot. Hence, for this we need savings funds.

8. Children Education: A seventh reason to begin saving money is for your child’s education. You may also consider saving for your child’s education when the time comes that they will enter schooling. Their various school expenses such as tuition fee and other expenses included in it.

9.  For gadgets and other appliances: You need enough budget most especially when you need to upgrade your gadgets such as your computer and other needed appliances.  As a man of business and needs you must always be updated with the needs and call of time in order for you to do business more effectively.

10.  Security and safety: Money will always be a means for security and safety.  No matter how we may deny it, money will always be considered one of the most essential needs of man for all his important transactions.  If you will not have enough money, chances are you will not feel safe and secure.

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As a conclusion, saving money will really make your life easier and more comfortable.  You can become the ruler and the person who is in control of all your wants and needs once you learn and master this difficult and not so easy practice of saving most especially for important moments in your life such as emergencies or rainy days.  Be mindful and practical in whatever decision you make with your hard earned money, after all earning is not a bed of roses nor as easy as ABC.  Be smart and intelligent.  Save while the iron is hot and the drive is still there while you’re still young.

Saving money is sometimes jeopardized with being selfish or self-centered, not to mention the fact that if you save money you are considered too traditional and antiquated, meaning to say, you do not know how to enjoy life.  On the contrary, to save money is one of the wisest lessons that any person should do in view of whatever money he has for future urgent and necessary needs, more so for the rainy days.

Here are some valuable tips that you must take into account before you go on enjoying with your hard-earned money.  Not reading this article may one day make or break your life.  Thus, take time to spend a few minutes reading and understanding this article for your own financial welfare and other benefits.

Let us begin by reading W. Somerset Maugham’s classic short story regarding “The Ant and the Grasshopper”.

Once upon a time, there is this story, in a field one summer day, a Grasshopper was hopping about, chirping and singing to its heart’s content. An Ant walked by, grunting as he carried a plump kernel of corn. “Where are you off to with that heavy thing?” asked the Grasshopper. Without stopping, the Ant replied, “To our ant hill. This is the third kernel I’ve delivered today.”
“Why not come and sing with me,” said the Grasshopper, “instead of working so hard?”
“I am helping to store food for the winter,” said the Ant, “and think you should do the same.”
“Why bother about winter?” said the Grasshopper; “we have plenty of food right now.”
But the Ant went on its way and continued its work.
The weather soon turned cold. All the food lying in the field was covered with a thick white blanket of snow that even the grasshopper could not dig through. Soon the Grasshopper found itself dying of hunger.
He staggered to the ants’ hill and saw them handing out corn from the stores they had collected in the summer.

Then the Grasshopper knew:
Moral: It is best to prepare for the days of necessity.
So we cannot say about the future, we must prepare for future happiness or tragedy that come in our life without information for this money saving and god grace is necessary. lets talk about money saving.

How much should you save?
Whether you save regularly or irregularly, a question often comes visiting: “Am I saving enough?” Saving the right amount is crucial for at least two major reasons.

• It is only when you save money that you can invest in options such as fixed deposits, public provident fund, stocks, mutual funds, real estate and gold to create a future income for meeting small and large requirements, such as the education and marriage of your children and your retirement, holiday enjoyment, future parties.
• It is necessary to prepare for the future, current needs also have to be taken care of. Equally important, we would like to have a life and enjoy it with our families.
• But the problem is that beyond a point, the more you live it up, lesser are the chances of accumulating enough savings for a minimum decent standard of living in the future. Clearly, drawing a balance between the present and future holds the key. The good news for you is that the balance is achievable if you follow certain rules that we present here.

Thumb rules for equity investing
1. (100 minus your age). If equity is the best bet for brisk growth of our savings, then the logical question is how much should we invest in them either directly or via mutual funds?

The standard rule of thumb to determine your ideal equity exposure is a simple formula that suggests you subtract your age from 100. For example, if you are 35, then 100-35 or 65 per cent of your portfolio should be exposed to equity.

While this can be taken as an indicative formula, it would not, of course, be applicable to everybody at every point in their lives. For example, if you are a 30-year-old and part of a double income family with one young child, you could put in 70 per cent of your investments into the market.

However, if due to a sudden turn of events, you also have to provide for dependent parents and siblings, you should change your allocation and tweak down your equity exposure.

2. Keep debt-equity proportion constant. If the age-based thumb rule does not apply to you, use a tactical allocation thumb rule. Here, you start off by investing, say, 60 per cent in equities and 40 per cent in debt, and continue keeping the ratio constant at all times.

If you find at the end of the year that equities have done well, you should trim your equity exposure in the next year, the assumption being that there is likelihood of a market downturn. However, in times of a long-running bull market, like the one we have been witnessing, this strategy may not be ideal.

3. Factor in the trend. This thumb rule on trend-based asset allocation is the opposite of the previous one. The assumption in this one is that if the stock markets are going up, then that is the trend of the cycle, and you should enhance your equity exposure for the next year. Of course, trends could change and you might be trapped with a high equity exposure in a falling market.

How to follow the thumb rules.
Since the thumb rules tend to contradict each other, you can adopt the following approach. Use the ’100 minus age’ formula if there is nothing exceptionally different in your profile and the assumptions fit you.

Keep that as the guiding number, and tweak it upwards or downwards depending on your specific circumstances. If you are in your mid-30s and single, you could invest more than 70 per cent in equities. If you are 60 and do not see yourself retiring for another eight years, you could invest more than 40 per cent.

How many mutual funds are enough?
Once you decide how much money you should place in equity, you need to figure out how much to keep in equity mutual funds and how much in stocks, if at all. Then, you will also have to figure out how many equity funds and stocks to buy.

The truth is that there is no magic number, though the number of funds in your portfolio should give you adequate diversification without making your returns suffer. Let’s first examine mutual funds and then stocks.

How many mutual funds?
You can target up to about 10 equity mutual funds. Apart from 10 being an easy number to track, academicians like J.L. Evans and S.H. Archer have shown in their research that most of the risk reduction due to diversification takes place in an aggregation of 8-10 securities.

Which categories of mutual funds?
Typically, if you’re venturing into equities for the first time, you can start with an exchange-traded fund (ETF). ETFs are low-cost cousins of index funds and invest in all the securities that lie in their benchmark index in the same proportion in which the index has them.

ETFs don’t have risks associated with fund managers. They aim to give you returns in line with the market, so you don’t lose or gain more than what the market does. Says Mumbai-based financial planner JayantPai: “It’s not possible for active funds to outperform the market on a continuous basis. ETFs ensure that your returns are at least in line with the market.” One ETF tracking a large-cap index like Nifty or Sensex should do fine.

Diversified equity funds.
One ETF in your equity portfolio can be supplemented by a couple of diversified mutual funds, including equity-linked savings schemes. This will form the core of your portfolio and provide a baseline of expected growth.

As diversified equity funds invest in around 30-50 or in an even higher number of scrips, chances are the same scrip will feature in more than one fund if you have too many funds in your portfolio. Also, ensure that these schemes are different in styles.

Mid-cap funds and thematic funds.
You can supplement your core funds with higher growth investment options. One of them is mid-cap funds. Though there are 26 mid-cap funds in the market, almost all of them target the same universe of stocks and there are negligible differences among them.

Then, there are thematic funds that invest according to a theme, such as infrastructure. You can invest in one mid-cap and one thematic fund.

How many stocks are enough?
After gaining equity experience through equity mutual funds, you can invest directly in stocks. Financial planners believe there isn’t much merit in holding top-line equities as they would be anyway present in your mutual funds.

“Target some good, small companies that your funds may not have,” says Pai. Although Nifty has 50 scrips and Sensex has 30 scrips, you don’t need to hold as many, as tracking would be a problem then. Here, too, 10 sounds like a decent number. “Ensure that these 10 scrips are from different sectors,” adds Pai.

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As a conclusion, you can be the best and only person to decide in view of whatever way or you’re your life would go.  As Prof. Dumbledore once said in the phenomenal movie “Harry Potter and the Sorcerer Stone”, it is definitely your choices, and your choices alone which will bring you to your desired destination…nothing more nothing less…Therefore, winning the savings game is about succeeding in providing for the future without losing out on your present. It is here that thumb rules serve as great guideposts. They show a happy middle path that lies between the ways of the ant and the grasshopper. In the end, you still win.  Win-win situation is hence the best ending in view of this quest towards success.  Happy investing folks!

Have you checked your bank account lately?  How much balance do you have?  Are you aware of your bank’s maintaining balance?  Before we discuss what is the importance of having a maintaining balance in your bank account it is essential and obvious to ask first if you have in fact a bank account…

Do you have a bank account?  This is a basic question that you must answer either yes or no.   If you do then you are one of the billions of individuals that do. If you do not have a bank account, well sorry to say, but you are missing out on the many benefits and advantages of banking.

What then are the benefits of banking, there are many who wonder exactly what they are. If you are interested in opening up a bank account with a financial institution, but you have yet to do so, you may be wondering what the benefits of banking are. In fact, there are an unlimited number of banking benefits. To know and determine how you can benefit from having a bank account, it is important to examine your needs.

Bank accounts are often given to you or obtained because they allow you to have money. If you are employed, it is likely that you will receive a salary or paycheck. There are many financial institutions that will charge you a fee each time you go to cash in your paycheck. This fee is usually assessed to those individuals who do not have a bank account at all. While the fee may not seem like a large amount of money at the time, the fees can easily add up. By opening up a savings account or a checking account, you will not be subject to these fees.

Having a bank account simply means having a safe place to store your money. If you do not have a bank account, it is likely that you are carrying around large amounts of cash. It is advised, no matter where you live, that you do not carry large amounts of cash with you or keep large amounts of cash in your home. In the event that your money becomes lost or stolen, you will be unable to have that money replaced. A bank account provides you with a safe place to store your money. It also provides you with easy access to your money, either with checks or a debit card.

The elimination of check chasing fees and the security of a bank account are just a few of the many advantages or benefits of banking. You may also find that having a bank account will improve your chances of being able to obtain a loan. If you are in need of a personal loan, automobile loan, student loan, or mortgage, you have a higher chance of being approved if you are already the customer a bank. This is because many banks are more likely to do business with their existing customers.

If do not already have an account with a bank, it is advised that you at least consider opening one. You should be able to obtain free information from a number of local financial institutions. This information may provide insight into all of the ways that you can benefit from opening up a bank account.

Now assuming that you have already a bank account, one important consideration is to know how much is the maintaining balance of your bank.  In this way you will always be conscious not to break away from the said amount otherwise you will be penalized.

There are a lot of benefits once you maintain a particular amount from your bank account.  Let us say for example you maintained even just $1000.  Once any of your family members got an accident or a natural calamity takes place, this said maintaining balance will surely help you remedy the accident and the disaster that happened to you.  Your bank will be very much willing to help you financially through a loan due to your good standing in view of your maintaining balance.

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In conclusion, you must not set aside this important factor of banking.  By all means you must always reserve at least $1000 in your bank account as your maintaining balance for emergency and calamity purposes.  In this way, you can live worry free as you move on with your life and those of your family and loved ones.

Our economy has been challenging these days.  If we need to survive, we need to tighten our belts now.  How?  Well, by saving for the rainy days and season.  We need to save for emergencies and unforeseen events. You can save money starting today. What would you do with an extra $100 every month? Spend it on some new shoes or save it so you had a cool $1k at the end of the year for the holidays? Whatever your needs are, you can definitely get that extra money by showing a little financial discipline. Always remember “All days are not same. Save for a rainy day. When you don’t work, savings will work for you.”
Follow these simple four steps to start saving money today.

Step 1: The best ways to save money include brown bag lunches.
Brown Bag Lunches: Many people eat out for lunch regularly to the tune of $7-$10 a day. If this is you, then by brown bagging your lunch every time you go to work, instead of hitting the fast food joint could save you up to $150! Not everyone spend this much on a regular basis, but most people eat out 1-2 times a week in a fast food or a restaurant. Conservatively everyone can save $50 a month by avoiding work lunches/takeout.  Be conscious of your savings.

Step 2: Stick only to your grocery list.  No more no less.
Groceries: I’m sure, there is one area of your life that is ripe with opportunities for savings: your grocery bill. The best thing about saving money on groceries is that, a little saved each week will add up. One simple step is to start living by a grocery list. Meaning to say, focus only on the list.  Impulse shopping is the number one killer of grocery budgets. Make out your list the day before and then stick to it no matter what. Saving $5 a week, $20 a month should be easy with just coupons alone. For more great tips on saving money on your groceries, you must be truly a disciplined person.

Step 3: Budgets are the best way to save money
Budget Your Money: Create a monthly budget including bills, loans, utilities, groceries, clothing allowance, entertainment, savings. In short,  everything. Don’t forget to include some kind of emergency account so that when your brakes go, or you need a spare tire, or you need a plumber the money is coming from somewhere. When you are done there shouldn’t be any money left over; it should all have a designated job. If you can commit to living by a budget you are sure to save an additional $20 a month.

Step 4
Delayed Gratification: This last part on money saving tip can average out to an additional $10-$20 a month if done regularly. The next time you want to make a significant purchase, something over $50, please delay or wait 48 hours. If you still want/need it after thinking about it for a couple of days then go ahead. If the item was more of an impulse buy the 48 hours should help you realize that.

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In conclusion, you must therefore know on how to manage your financial life smartly and conscientiously, otherwise you will definitely become a victim of money problems.  Be more frugal in spending and always be creative in view of all your expenditure habits.  This way you can therefore save the money that you badly need in times of crisis.

Do you wish to get rich the legal way and the most practical, smart way possible?   Well, here are very essential realities not just simple words that will solve and answer your most desired dream of getting rich!  These are: asset allocation, long term and compounding from a financial expert vocabulary.

Indeed, these are the very exact three words that can help you retire with Rs 40 a day. Let me show you exactly how do this work. Say for example, you can set aside Rs 40 every day for your retirement. Where do you get Rs 40 a day? Well, in many ways.  Why not cut down on those cigarettes? Then, let’s see what could possibly happen with your mere 1 dollar!  Hold your breath then.

Let’s also make some assumptions (do allow for the fact that all may not be valid). Let’s also suppose that these are valid for the next 30 years.

Instrument Yield (%pa)

Retirement Chart

Money earned if invested over the next 30 years

Now you see what can happen to your $1!  Nice chunk of change?! Now, isn’t it attractive dear readers? Doesn’t that make your retirement look so comfortable?

Of course, if you spend Rs 120 per day on cigarettes, you probably won’t live for 30 years!
Ah, now you are saying you don’t smoke? Maybe you’re a frequent restaurant-hopper or a frequent drinker, shopper, and many other? That would easily mean Rs 2,000 per week. Keep at it for 30 years and you would have said goodbye to Rs 15 crore. Think of the holidays you could have afforded with that kind of moolah!  What a great retirement life indeed!

Let’s say for example you will save and cut your restaurant escapade or shopping galore:  this will then be the computation:

Gastronome’s chart

Money earned if invested over the next 30 years

Don’t fit into the smoker or the gastronome’s category? But you have one weakness — you love shopping or outing maybe?. Say, you spend about Rs 10,000 per month on retail therapy.

Hmm. Over 30 years, a Rs 10,000 investment in an equity fund could fetch you Rs 17 crore. I won’t even go into what you can do with that kind of money!  Here’s your computation then:  Hold your breath!

Money earned if invested over the next 30 years:

Why do you think the otherwise smart, educated people fail to understand this? Allow me to tell you what I think.
Your life is a function of your habits, not simply common sense. It’s tough to change your habits. Consider this. Most smokers know the damage that 54,750 cigarettes can do to their health. But that ‘one’ cigarette never seems to matter. Ditto for that ‘just one’ cold drink of Coke or chocolate.

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In conclusion, most people don’t care about small numbers and wait for that big amount to come by for them to save. Funny thing is, if I tell you saving money are very simple and needs very simple methods to make large amounts of money, most people, including you would laugh at me. But it’s just so easy. Start small. Start simple. Save big! They need complicated tools such as day trading, brokerage accounts, futures and options, and the like.When you tell them that they can make a lot of money by just being disciplined they will just not believe it!  Try it now or never!

Money is one of the best blessings we have to take good care, or else it will become a curse to our lives.  Teaching our children while they are still young about the proper way of handling their finances, that is on spending and savings will ensure them of a financially stable future.  Thus a happy and contented life can start from simple lessons that we can teach our children.

Obviously, teaching kids with money entails a lot of patience and fragility.  As parents it’s your primary job to raise responsible and smart kids when it comes to budgeting.  They will have a better future depending on how you teach them with the practicalities of life, most especially on money matters.  In general, these are some of the most effective and fundamental principles you can consider in teaching your kids about money matter most especially on saving and spending.

Here then are simple yet effective tips on how to awaken in our children the proper and responsible way of managing their money even if they are still kids.

• Educate yourself– You can only give whatever you have.  This is a timeless principle.  If you yourself do not know the ways and manners of savings and spending, you will never become an effective teacher or mentor to your kid in terms of money matters.  Learn the ways on how to save well, budgeting, savings, investing, decreasing debt, buying only the necessary things and tightening your belt, meaning to say saving for emergency.
• Set them a good example yourself– Kids learn more by way of examples or witnessing.  If you teach them one thing and do another, then they will certainly be confused and would never learn what you wish them to learn.  Basically, our kids look up to us in everything we say and do.  If our words match our actions then that would become a very effective means to teach them great lessons in life most especially when it comes to money matter.
• Teach your kids one habit at a time–Our kids are not robots.  They pass from one stage to the next.  We should be patient and gentle with them, meaning to say let us teach them only the things which their mind and maturity can afford or fathom.  Money matter is a lifetime process.  We need to be efficient and practical in teaching only what is asked by our kids’ stage in life.  Let’s not put more than enough pressure on them.
• Introduce your kids to money—while they are still young and started to know how to count, take this great chance and opportunity in teaching them about the different currency and denominations.  Teach them the use of money in terms of getting what we need in order to live a better and comfortable life.  Teach them too how to add and subtract in order for them to know the value of buying and saving.
• Give your kids an allowance—Let your kids handle their own money no matter how small it may be.  In this way they will learn the actual experience in managing their financial affairs.  If they need advice regarding the money they are handling be always ready to help and explain to them the lessons that they need in view of the situation.Letting them hold money will eventually make them responsible in view of saving and spending.
• Give and allow them to have the chance to earn money—whenever your children do something beyond you expecting them to do for instance you ask them to wash your car and yet he watered the garden after doing what you ask him to do, then by all means give him that opportunity to have money as “earning” for doing something extraordinary.  This will encourage him to find ways and means on how to earn and likewise learn the value of hard work and patience.
• Teach them about savings and spending—if your kid asks you to buy him something he badly wants, don’t just buy it away for nothing or to please him.  Instead take this opportunity to teach him the important value of savings in order for him to get whatever he wants.  Impress upon him that money is not an easy thing to earn or have.  Hence, he will realize the importance of saving for whatever he needs and for his future as well. Likewise tell him that though he has the capacity to buy anything he wants, remind him that he must only buy what is urgent, important and necessary.  Otherwise, he has to save his money for the rainy days.

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In conclusion, teaching our kids to manage or handle money is a very serious task that we must pay attention too. Otherwise they will one day suffer from various money problems and put the blame on us.

Have you ever dream of retiring early, at the prime of your life, living by the beach all the rest of your retirement age?  Also, did you come to imagine to have everything at your fingertips because of financial freedom?  Then if your answer is yes, read on folks! This one piece of advice is for you!

There is this famous quotation that says:“the early bird gets the worm,” This very much applies to investing in general and savings in particular whether small or huge.  This is indeed something worth pondering if you want to enjoy your old age.

The simplest definition of investment available is that, investment is putting your money to a particular company whose business is to let you earn income or profit.  This profit is easier to get and will be huge if you start your investment endeavor at an early and reasonable age.  When you’re young, alive and kicking, to invest is truly difficult due to various distractions and expenditures.  But if you are aware of the many advantages and benefits it may give to you and your future, then you might think of investing early otherwise.

Here is the list of the five of the best things that you can benefit from investing early on in life:

1. Time will be at your side –If you begin investing early on in life chances are, you will have a longer period of time in earning your profit.  There are more than enough chances and opportunities for you to put more and more money to your investment as you find more ways of earning income.  This eventually will lead you to a more financially-free and successful way of living later on in life together with your loved ones.
2. Compounding returns – It is a proven reality that compounding returns are definitely powerful as time goes by.  The earlier you invest and put your resources into this business the more you’ll benefit from the consequences that will surely earn you with a lot of money later on in life and when you need it most.  Usually putting premium on regular investments or a retirement account for that matter will surely bring you a large compounding result and benefits.
3. Improves spending practices and habits – If you will start investing early on in life, your focus and attention would be to tighten up your belt and budget.  Instead of buying unnecessary things or going to trivial places to relax perhaps, your priority then would be to save that budget for your future and the future of your loved ones.  In so doing you will be saving more and eventually earning more as well.  Indeed investing can teach you essential lessons that will improve your spending habit and entire life as well.
4. Ahead of the personal monetary game – Early investments equals to greater chances of doing good and playing it big in the financial arena.  People in your category will look up to you and that would be an advantage in earning more because of their trust and confidence which is a result of investing early.  Meaning to see, they consider you a wise and smart businessman because you risked a lot in investing your money early on in life. If problems emerged in the long run of your investments, you will surely overcome them because of your long experiences in the business.
5. Quality of life –Obviously, this is the best benefit that every investor should take into account.  If you want to live your old age graciously, then there is an only way to make it happen that is to save and invest your savings early on in life.  If you have plenty of money, then you won’t be a burden to your family, thus life would be easy for you and the passing of years truly bearable and enjoyable.

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In conclusion, you must take courage and brave the risk of investing early despite of the inconveniences that it may give you.  After all, if there is one very essential and significant decision that you can make maturely while young, that is investing by all means.  The time is now, or never!