FINANCIAL GUIDE TO IMPLEMENT AT EARLY TWENTIES

FINANCIAL GUIDE TO IMPLEMENT AT EARLY TWENTIES

For all people groups who are in their mid twenties, the beneath specified advances are must to take after. 

1. Discover your profession way.  Clearly, having a wellspring of salary beat this agenda. In any case, when you hit 30, you require something other than an occupation that pays the bills; you should have a profession, or possibly be on track to get one. 

In case you're still in school, recollect that, as much fun as school might be, your essential explanation behind being there is to set yourself up for beneficial business. Ensure you take in some attractive abilities previously graduation day and home those aptitudes all through your twenties. This doesn't mean everybody needs to contemplate bookkeeping, business organization or software engineering, which are among the majors destined to get you work appropriate out of school, as indicated by the National Association of Colleges and Employers. 

In case you're now working, would you say you are in a field you can imagine yourself proceeding in for the following three, five, ten and 20 years? If not, you have to begin searching for a profession that works for you. . Basically don't leave your place of employment with no arrangement in your psyche, Quit Your Job the Smart Way. 

Likewise its imperative to have an objective based contributing procedure. 

When you begin in your decision profession, make sense of the track you need to take after. What's the subsequent stage up from your present position? To what extent has it regularly taken others to arrive? What pay and advantages accompany that part? Obviously, as this ongoing subsidence showed huge numbers of us, regardless of how well you plot your profession way, you might be compelled to take a few temporary routes. All things considered, knowing your coveted goal will unquestionably enable you to explore through those troublesome circumstances. 

2. Make an arrangement to reimburse your obligation. I won't weight you to pay off all that you owe before you turn 30. All things considered, as per Sallie Mae, school graduates left school in 2008 with a normal Visa obligation of $4,100, up from about $2,900 in 2004. What's more, 10% of that same graduating class additionally conveyed $40,000 or more in understudy obligation, as per the Project on Student Debt, a support gathering. 

Yet, in the event that you're covered under understudy advances or disabled with Mastercard obligation, you have to in any event make sense of how to handle it before you turn 30. "With tidying up obligation issues, the most critical thing is to have an arrangement and not simply expect it'll leave," says an ensured money related organizer. Regularly, they experiences individuals who depend on a major future reward or knock in pay to pay off vast obligations. "All things considered, that may never happen," he says. A superior procedure: Set up a calendar and make sense of the amount you'll have to pay every month to clear the obligation by your deadline. For more data on paying off school advances, see Digging Out of Student Debt. 

you can also learn about wealth creation for all irrespective of age, experience etc.

3. Construct a secret stash. As a mindful grown-up, you ought to comply with an indistinguishable adage from any great Girl or Boy Scout: Be readied. On the off chance that the surprising happens, you ought to dependably have enough money on save to cover no less than three to a half year of costs. Keep it in a general bank account, where you'll have simple access to your assets. You can scan in various banks for the records presently offering the best rates. For instance, American Express Bank's high return investment account as of now yields 1.3% every year and has no base adjust or month to month charges. Perceive How Much Cash You Really Need for additional about crisis stores. 

4. Begin subsidizing a retirement account. The vast majority don't begin getting ready for such long haul objectives until they've achieved their forties, says a certified financial planner, "and after that they freeze spare later on." 

Be the tortoise: Choose the chill way to investment funds and exploit this 20-year head begin. Regardless of whether you can bear to secure just a little sum every month, gradual can win enormous. 

You have to start investing based on your goals

For instance, in the event that you begin sparing just $150 a month at age 25, expecting a 8% return, you'll end up with $527,142 when you turn 65. Holding up an additional five years to begin sparing will cost you $180,766. Regardless of whether you wrench your investment funds up to $200 a month beginning on your 30th birthday celebration, you'll just net $346,376 by 65. Also, on the off chance that you hold up until you're 40 to begin sparing $200 a month, you'll have simply $191,473 when you're 65. 

In a perfect world, you'll need to spare substantially more for retirement - around 10% to 15% of your pay would be ideal. However, precisely the amount you'll require relies upon what sort of way of life you're making arrangements for your brilliant years. For enable making sense of to a dollar sum, attempt our Retirement Savings Calculator.

Reason behind fall of real estate

We all know that the real estate is not performing well but what are the reasons for this collapse?

 As per my opinion the reason behind fall of real estate is its high price, that means the cost of flats are marginally higher than the budget of a middle class family.
 As we know that the population of middle class family is very high in India and thus the majority of people cannot afford his own house.
The real estate can again be on track or even perform better if they reduce its prices, by doing this they can reach or attract the middle class family and thus their sales will grow.

Over and above the high prices, real estate companies have really worked hard to break whatever little trust the prospective buyers had in them, by not delivering homes on time.

Must read: The fall of jaypee group

Further, investors are no longer the driving force in the market, given the sluggish returns in the sector. For a real estate investment to be a viable proposition, after taking in the costs and the risk involved, it should be generating a return of at least 10 per cent per year. And this hasn't happened for a while.

The fear of job losses in the IT industry has also had an impact. The state of the IT industry has a major impact on real estate sales in cities like Pune, Hyderabad and Bengaluru.

In this scenario, the real estate builders have been offering discounts in order to get prospective buyers interested. While several developers offered upfront per square feet discounts, a few large developers bundled financing schemes and reduced interest schemes to offer 'all inclusive house prices'.
Home buyers, in many cases, were also offered indirect benefits such as reduced floor charges or premium location charges. Taking into account these aspects, the effective price correction was 5-10%."

But even this 5-10 per cent correction isn't enough to pull buyers in. This basically means that home prices continue to remain expensive. As I have said earlier, home sales will revive as and when home prices become affordable, which is currently not the case.
 For home prices to become affordable builders need to cut prices from current levels. Given that a majority of them are in no mood to do so, it basically means that home sales will remain sluggish in the years to come.

Crisil Research expects that "in the next 12-18 months, prices are likely to remain stable at current levels on account of weak demand and moderation in new supply additions." This basically means that instead of a price correction, the real estate sector in India is seeing a time correction.

Must read: The fall of jaypee group

Real Condition of Real Estate in India - The fall of Jaypee Group

Real Condition of Real Estate in India - The fall of Jaypee Group-

The Real Bankruptcy…

It isn’t Jaypee Group as a whole that has declared bankruptcy but the real estate group of Jaiprakash Associates, Jaypee Infra tech Ltd which was responsible for a number of construction activities and major infrastructure development under the banner of Jaypee Group got bankrupt.

Promises it Made and Delivered…

The group is commonly known by the title Jaypee Builders and has done an outstanding job on projects like the Yamuna Expressway and the F1 Circuit in Greater Noida. The company also took a leap forward when it introduced the projects Jaypee Wish Town (commonly known as Jaypee Greens) and Jaypee Sports City and showed a gradual yet promising start by building India’s largest golf course (18+9 hole), Jaypee Medical Centre, IT Sector opposite Jaypee Hospital, Adobe Building and some minor yet crucial accomplishments such as Rental Shops and thousands of Ready-to-Move -in Apartments in walking vicinity.

Fall of Jaypee Infratech…

Almost a decade ago, the company had proposed to build 32000 flats and some plots under the revolutionary Integrated Wish Town project located in Sectors 128, 129, 131, 133 & 134 along the Noida - Greater Noida Expressway. But due to piling losses from its other projects such as the unused Formula One Circuit, ban on ground water extraction for construction by National Green Tribunal, fund crunch and issues related to environmental clearance.
The integrated housing project showed no signs of residencies close to delivery for a majority of buyers even after 90 percent of cost payment to the builders.

Also with the delay in possession of flats, the buyers conducted protests and filed a case of cheating at Police Station.
Then the executive chairman and CEO of Jaypee Group, Manoj Gaur, stepped in to assure the agitated home buyers of delivery of all housing units in the next three years, but the announcement came in too late and the poor buyer response had already driven out a majority of potential buyers while hundreds requested refund, leaving constructors with depleted budgets and insufficient money to complete their projects.

Declaration of Bankruptcy…

In today’s date, Jaypee Infrastructure is saddled with a total debt of Rs 8,000 crore. It owes IDBI alone Rs 526 crore. In response to a decision taken by RBI and the government to clean up the Indian Banking System of its massive NPAs (Non-performing Assets) problem, IDBI Bank filed a petition under Section 7 of Insolvency and Bankruptcy Code 2016 which was admitted by the Allahabad bench of NCLT (National Company Law Tribunal) followed by appointment of Anuj Jain as the interim CEO to revive the company in a period of six months plus three months extension if needed.

Current Condition…

Jaypee has sold several assets, including its cement plants to Ultra tech Cement and power plants to JWS Energy to reduce its massive pile of loans and raise funds to complete the long held-up real estate projects.
 In worst case scenario, if at the end of the nine months resolution period, nothing materializes, the company goes into liquidation automatically and interest of the banks will be prioritized over the interest of flat buyers.

Jaypee group has offered 2,000 equity shares of Jaypee Infra tech for free to each home buyer as part of its Rs 10,000 crore proposal to revive the bankruptcy-hit real estate firm.

Apart from that group proposed to bear 50 per cent of stamp duty on behalf of the home buyers on first registration, they said adding the company plans to deliver all apartments in the next 42 months.

Jaypee Infra tech will also pay penalty to home buyers as per the agreement and new law RERA.

Jaiprakash Associates has already deposited Rs 750 crore with the Registry of the Supreme Court and the amount would be utilized for refund to home buyers.

Recently, lender of Jaypee Infra tech rejected a Rs 7,350 crore bid by Lakshadweep, the highest bidder for the company, as they found it inadequate.

This is not the only jaypee groups condition, but its same for nearly all other real estate companies. Previously the real estate business or investment was  profitable but since 5 to 6 years, everything is changed.

WEALTH CREATION FOR ALL

HOW TO DO WEALTH  CREATION ?

Wealth creation happens over a long  period of time only. The secret ingredient to wealth creation is Power of compounding. As we know Einstein told that- Compounding is the 8th wonder of the world.

But the power of compounding does not work efficiently for goals less than 5 years of time horizon. Hence the approach to achieving the goals that will mature in less than 5 years will be different from the ones that are more than 5 years away. Investing in equity funds for short term goals can be fatal if the market turns unfavorable.

For goals beyond 5 years the focus should be to maximize returns; whereas for goals that will mature in less than 5 years, the focus should be to preserve capital and to ensure to generate better post-tax returns when compared with fixed deposits.

It is better not to change the investment plans too often, just keep a watch on your goals. If you have long term goals, as you get nearer to your goals, shift into lesser riskier product. Keep your investments simple, which can happen with slight knowledge about investing. Stick to the plan, monitor it regularly, invest keeping the goal in mind, and do not get affected by short term volatility.

Don't get distracted by marginal performance difference between schemes, as long as you are invested in good funds, the returns tend to average out in the long run.

Now, how to create wealth?

The planning process for wealth creation involves determining how much money you will need to fund your goals?  how much would you need to invest either monthly or one-time to achieve that goal and choosing an appropriate product that best suits the time horizon of investment, providing optimum returns and minimum risk.

How much returns in wealth creation is required?

It is quite obvious that higher the return over your investment, more is the wealth that you are going to create for yourself. Your investments have to earn a return which is enough to meet your financial commitments. But at a very basic level, your post tax investment return should at least match the inflation levels just to stay afloat.

If the return falls below the prevailing inflation level, your wealth would be eroded or destroyed. The purchasing power of your wealth weakens gradually over time if it under-performs the inflation level. So, inflation would be the floor level that your wealth would have to earn post-tax over time.

With the coming of social media and YouTube,  we can learn about investing, ways of investing, where to invest & most importantly how to invest etc. Thus the hassle is reduced, as we can invest in good funds with basic market knowledge and hence ensures that you can create your wealth very confidently.

To read about wealth creation using goal based investment  visit here

GOAL BASED INVESTING

GOAL BASED INVESTING

Goal based investment

We all have dreams and desires but we do not plan our investments according to our goals, most people just invest in an unplanned manner. Goal based investing adds direction to an investment.

A structured, imagined & well thought out process for investing, where you know the purpose behind each rupee that is being invested is known as goal based investing.

It comprises of two parts - planning & investing.

Goal planning notifies the amount that is required to fund the goal and the how much is needed to invest regularly or one-time to get to the desired amount. Investing that amount in the most suitable product helps to achieve the goal without any difficulty.

Firstly you have to determine and analyze your current financial situation and then set goals. This activity involves in understanding what you want to do with your money and how you want your financial future to look like. Goal based planning is set in three time frames; short-term, mid-term and long-term.

1. Short-term: Has a time frame of few months to one year. It covers immediate goals such as buying a car or going for foreign vacation in the near future.
2. Mid-term: Involves a time frame from one to five years. Midterm goals include buying a house or starting a business in 3-5 years down the line.
3. Long-term: Involves plans that are more than five years off. It includes goals such as retirement or child education.

Long- term goals can be achieved with a large part of the investment being placed in funds that invest in equities and high- rated corporate debt with a small portion in secure investments. In addition to growth funds, there are others like the National Pension system (NPS) that cater to the long- term financial goals of retail investors.

Goal based investing ensures that the product selected is appropriate for investment and would help you achieve your goals. Investing in equity to fund short term goals can be fatal if the market turns unfavorable. Knowing your goals, knowing the best suited product will deliver the best possible return and happy investing experience.

Financial planning should comprise of all sources of income minus debt and expenses to arrive at the estimated savings figure.

As income rises, so should the savings towards achieving the goals. Financial plans need to be revisited every once in a while to review the progress and carry out changes in the investment structure if required.

FLIPKART'S & WALMART'S BIG BILLION DAY (an inside story)

Walmart has acquired a whopping 77% stake in India's largest online retail ecommerce company flipkart for 16 billion dollars.

Some of the big questions hanging over the proposed deal include why Walmart wouldn’t instead use some of these funds to try to narrow its massive gap behind Amazon in the U.S., and whether Walmart really gives Flipkart an advantage in India to help it win long-term.

But there is a whole bunch of data in Walmart’s corner that supports the risk it is taking. At a very high level, it starts with the size of India — it’s the second-most-populous country in the world, just behind China. Of course, that size alone doesn’t matter — rather, it’s the shifting behavior of Indian consumers.

India is home to a growing middle class, fueling household spending growth on par with that of China — and at a faster pace than the more mature U.S. market.

What’s more important to Walmart than the current size of the market, though, is its anticipated growth. From 2017 to 2021, online retail in India is expected to grow 141 percent to more than $50 billion.

World bank data

SMART INVESTING

Everyone is talking of doing smart work, but why not smart investing?
Today's need is to smartly invest our hard earned money.  

But for an investor it is important to understand the risk involved as the higher returns are always accompanied by the higher risk. 

So depending upon risk taking capacity of different peoples, some of the best investment options are-

1. Bank fixed deposits

2. Public provident tune (PPF)

3. Gold ETF

4. Post office saving scheme

5. Mutual funds

6. Corporate bonds

7. Corporate companies fixed deposits

8. Equity shares/  Stocks market

9. Real estate investing 

10. Initial public offerings(IPO)

For no risk taking investors, options from 1 to 4 is suitable. For mild or medium risk taking investors options from 5 to 7 is preferable. But for higher risk taking investors rest of the options are preferable.