Monday, December 3, 2012

Investing in mutual funds? Know key features before choosing them

In recent times, the complaint that mutual funds have underperformed and that they should at least do better than bank deposits, has grown louder. In a year when the second mutual fund in the country, after UTI, celebrates its 25th birthday, perceptions about what mutual funds are, and what they can do, continue to be erroneous. Investors should be aware of the key features of mutual funds before choosing this vehicle to build wealth.

Mutual funds are vehicles to invest in the securities markets. Every saver knows that there is a demand for his money from companies, government and banks. There are two primary ways to channel savings into productive investments. The first is a transactional arrangement, primarily structured as a loan transaction, and banks dominate this segment. A depositor gives a loan to a bank, which in turn lends to other borrowers.

The second is a market arrangement, where the entity that needs money issues a marketable security, such as an equity share or a bond, and the investor buys these securities in the market place at the market price.

A transactional arrangement, such as a bank deposit, is pre-defined, but is rigid. The investment has to be for a specific period, earns a predetermined return, and is not transferable. An investment in the market is more flexible, but is subject to fluctuations in value, based on the market factors. This is why mutual fund investments are subject to market risks. Choosing mutual funds requires the conscious choice and comfort in dealing with the opportunities and risks in the securities markets. Investing in the securities market offers two unique propositions to the investor.

First, the upside potential of the investment is not limited to a pre-specified rate. If an investment is made in the equity shares of a company, whose performance exceeds expectations since the shares were first issued, the appreciation in value is available to the investor. The returns from securities are not amenable to pre-definition or accurate forecast, and include both upside and downside.

Second, the downside risk in an investment is not managed on manifestation through the accounting system of provisioning, but through a transfer in the market place. A non-performing loan on a bank balance sheet is classified as such after the default, and is written off from the profits. This is the classical method of risk management. If a bond's price falls from Rs 100 to Rs 90 due to the possibility of a downgrade in its credit quality, a mutual fund may book the losses and get out of the investment.

However, a buyer, at Rs 90, might believe that the bond is cheap given his view on whether the downgrade may actually happen. The security market cares about expectations for the future and dynamically builds information in the price. Investing in a mutual fund, therefore, requires a modification in expectations about risk and return. This is also the reason that the NAV of a mutual fund fluctuates, reflecting the current market price of the securities it holds.

If we define mutual funds as vehicles to access the securities market, what is the value addition for an investor who can access the market directly? What if he buys a few shares and bonds directly through the broker? It is true that investors can trade in the stock market using electronic platforms, buy equity shares in an IPO, or purchase bonds when they are offered by issuers. Mutual funds are useful only if the investor believes that building long-term wealth through investing requires a formal process.



Uma Shashikant

Understanding Portfolio Management Service

Portfolio management service (PMS) is a method of investing used by wealthy investors and companies who want exposure to a variety of products such as equities, fixed income, gold and structured products. There are several advantage and disadvantages of a PMS over mutual funds. 

WHAT IS A PMS? 

Portfolio management service providers advise clients on buying or selling shares, derivatives or other type of securities. Depending on the type of PMS, the manager can also buy or sell securities on behalf of the clients. An entity needs to be registered with the Securities and Exchange Board of India as a portfolio manager. An investor individually owns the securities in a PMS portfolio, unlike a mutual fund where investors only own units of the fund and not the actual securities. 

WHAT ARE THE TYPES OF PMS? 

In a discretionary PMS, the decision to select, buy or sell stocks is taken by the portfolio manager. The trades are also executed by him. But in a non-discretionary PMS, an investor can take the trading decisions advised by the portfolio manager, which are then executed by the manager. In an advisory PMS, a manager gives only investment ideas, and the trades can be executed by the investor. 

WHAT ARE THE FEES IN A PMS? 

Portfolio management services either have a fixed, profit-sharing or hybrid fee structure. In a fixed-fee structure, the manager charges a set fee every quarter or on the corpus. It is levied irrespective of the returns generated by a portfolio. Then, there is the profit-sharing model, where the fee paid by an investor is a percentage of profits. This is usually a large chunk, around 20-25% of profits. A hybrid model combines both, although charges are less. 

WHAT ARE THE ADVANTAGES OF PMS? 

PMS trade in a wide range of securities, including structured products, which is not available to a mutual fund. PMS regulations are less strict than MF regulations. A PMS is a more personalised investment solution; some investors may ask their portfolio managers to allocate a large part of corpus to non-equity products like fixed income, gold, etc. 

WHAT ARE THE DISADVANTAGES OF PMS? 

PMS do not disclose the portfolio as much as MFs. There have also been cases where PMS managers have misused the money.


ET

Use mutual funds to address financial needs


Most financial experts will tell you that it is important to plan your investments according to your financial goals and personal needs. These vary from one individual to the other, with some looking to build a nest egg for their retirement, and others wanting to fund the down payment of their dream house. Funding children'seducation and marriage are also prominent goals for most people. One can plan for these goals with the help of different mutual funds which are suited to various requirements. The choice of mutual funds depends on the time horizon as defined by the proximity of goals and one's tolerance towards risk. Here's how one can plan for specific goals in life by using mutual funds.

Retirement

Creating a sizeable corpus for one's twilight years is a key financial goal. Ideally, one should begin saving for it as soon as one begins earning. A systematic investment plan ( SIP) in mutual funds is the best route to help you achieve this goal. If you are in your 20s or 30s, start investing aggressively in diversified equity funds, which carry the potential to create long-term wealth. A mix of large-cap and mid-cap oriented funds with healthy track records should be a part of your portfolio. Remember, however, that you will need to gradually shift your money to safer debt funds as you get closer to retirement.

Children's education or marriage

Providing for these goals requires careful planning. Since you cannot compromise on your child's future, your investment should not be subjected to high risk, but should still leave scope for good returns. Balanced funds, which invest in a mix of debt and equity, are the ideal choice for these. Index funds can also be used in a smaller proportion. For your daughter's marriage, the need for gold jewellery can be met by buying gold ETFs at regular intervals. Since you cannot predict the price of gold at a given time, the least you can do is keep pace by accumulating gold ETF units.

Down payment for house / car

If you are saving to buy a car or make the down payment for a house a year or two down the line, steer clear of equity investments. Such short-term goals can be met through debt funds, which invest purely in fixed income instruments. Income funds or short-term bond funds should be used to ensure that your money grows at a steady pace. These work best when interest rates are heading southwards.

Meeting recurring expenses

If you want to earn a regular income to meet certain recurring expenses, monthly income plans could be the right option. These are suitable for investors who don't want to take too much risk as these invest up to 20% inequities and the rest in debt instruments. These are fairly stable and can provide a steady stream of income by way of regular dividends.

Tax planning

If you want to reduce your taxable income and also build long-term wealth, you can invest in equity-linked saving schemes or ELSS funds. This investment is eligible for tax deduction, with the income from dividends and capital gains being tax-free even though these plans come with a lock-in period of three years. These can be used to supplement other equity fund investments meant for your retirement goal.


Economic Times

Check your cheque status, only those in new format will be honoured from January 1

Add one more item — get a new cheque book — to your list of 'things to do' before the New Year. You may not be able to use your old cheques from next year with the implementation of the new Cheque Truncation System (CTS-2010), which will eliminate physical movement of cheques for clearing. Instead, only their electronic images, along with key information, will be captured and transmitted. It will make the clearing process more efficient, secure and quicker; but for that, you must switch to new cheques with prescribed standard features before December 31.

"Customers need not worry about the impending CTS implementation. I am sure they will not be inconvenienced due to the migration process. Some transitory period, from January 1 to March 31, could be given during which both types of cheques will be accepted. Banks are sending messages to customers now so that they comprehend the urgency and act upon it," says AC Mahajan, chairman, Banking Codes and Standards Board of India (BCSBI).
CHECK YOUR CHEQUE'S STATUS

If you have ordered your cheque books recently, say, a month ago, you may already have the new cheque leaves with you. Since most banks have already migrated to the new system, chances are that your bank would have sent you CTS-compliant cheque leaves.

However, if you have received the cheque book more than two or three months ago, you need to run a status check. For instance, the compliant ones will have the new rupee symbol (.`) inscribed near the numerical 'amount' field.

"Visibly, there will only be the following difference: "Please sign above" is mentioned on the cheque leaf on right had side bottom; and, void pantograph (wavelike design) is embossed on left hand side of the CTS cheque leaf," explains Anindya Mitra, senior vice-president, retail liabilities group, HDFC BankBSE -0.17 %.
Check your cheque status, only those in new format will be honoured from January 1Check your cheque status, only those in new format will be honoured from January 1


GET YOUR OLD CHEQUE BOOKS REPLACED

If you haven't received the new form of cheque books already, speak to your bank as early as you can. "Banks could adopt two methods to replace the old cheques. One is to send new cheque books by registered post and ask users to cancel the old ones. Customers may be asked to show proof of the same to the bank. They may also ask customers to surrender the older ones. Or, the customers can visit the bank branch themselves to surrender the old cheques and receive the CTS-compliant ones," says Mahajan. Banks will not charge any fee for replacing the old cheque leaves.

ISSUE NEW POST-DATED CHEQUES FOR EMIS

If you have issued post-dated cheques (PDCs) for your home or auto loan EMIs, you will have to issue fresh cheques. "RBI's guidelines to NBFCs state that if they have accepted post-dated cheques from their customers for future EMI payments, they should get them replaced with CTS-2010 standard compliant cheques before December 31, 2012. This will be applicable to banks as well," explains VN Kulkarni, chief credit counsellor with the Bank of Indiabacked Abhay Credit Counselling Centre.

"Most of our customers have opted for the ECS (electronic clearing system) mode for their EMI payments. So, the new sys-tem will not impact them. Only a small percentage of borrowers pay their EMIs through post-dated cheques. We are asking them to give us new cheques and accept their older cheques back," says Abhijeet Bose, head, retail assets and strategic alliances, Development Credit BankBSE 0.52 %.

Not all banks will return your older cheques, though. You needn't be concerned about it as these cheques will be non-compliant with CTS standards and hence not be valid.

To avoid these hassles, you can simply switch to the ECS mode, where the EMI amount is debited from your account every month. It will also save you the trouble of altering the amount on PDCs in case of any change in EMIs.


Economic Times

Monday, November 26, 2012

MANAGEMENT LESSON


-       Once upon a time, a very strong woodcutter asked for a job with a timber merchant, and he got it.
-       The pay was really good and so were the work conditions.
-       For that reason, the woodcutter was determined to do his best.
-       His boss gave him an axe and showed him the area where he was supposed to work.
-       The first day, the woodcutter brought 21 trees.

-       “Congratulations,” the boss said. “Go on that way!”
-       Very motivated by the boss’ words, the woodcutter tried harder the next day but he only could bring 17 trees.
-       The third day he tried even harder, but he only could bring 10 trees.
-       Day after day he was bringing less and less trees.

-       “I must be losing my strength”, the woodcutter thought.
-       He went to the boss and apologized, saying that he could not understand what was going on.
-       “When was the last time you sharpened your axe?” the boss asked.
-       The woodcutter replied : “Sharpen? I had no time to sharpen my axe.
-       I have been very busy trying to cut trees.

"JUST HARD WORK IS NOT ENOUGH TO ACHIEVE SUCCESS,
WORK SMART AND WITH THE RIGHT ATTITUDE TO ACHIEVE SUCCESS IN LIFE".

L&T Mutual Fund to now manage Rs. 12,800 crore for 9.5 lakh investors.



L & T Mutual Fund’s AUM jumps from Rs 3,842 crore in September 2012 to Rs12,800 crore. The AMC will be catering to around 9.5 lakh investors from 200 cities and towns.
“The decision to acquire Fidelity’s mutual fund business in India was made with an aim to become the best value provider of investment solutions across asset classes. With this acquisition, our fund suite spans the whole range of investment opportunities – equity, fixed income, hybrid, domestic and international funds – and moves us closer to becoming one of the country’s leading and admired asset management companies.We now have a high quality business that combines best-in-class practices, a strong domestic brand, market knowledge and a proven performance track record,” said Y.M.Deosthalee, Chairman & Managing Director, L&T Finance Holdings.
The fund house will now be offering 25 funds, amongst which few popular funds are L&T Tax Advantage Fund, L&T Equity Fund, L&T India Large Cap Fund, L&T Triple Ace Bond Fund, L&T India Special Situations Fund and the L&T Global Real Assets Fund, which feeds into Fidelity’s Luxembourg-based SICAV – Fidelity Funds Global Real Asset Securities Fund.  
“The comprehensive fund range, proven track record, geographical reach, our commitment to distributor training and investor education, and the support of our investors provides an opportunity to take the All New L&T Mutual Fund to the next level. We have significantly enhanced our capabilities in all areas including equity and debt fund management, operations and customer service,” said Ashu Suyash, CEO, L&T Mutual Fund.

Saturday, November 24, 2012

What is CRR, SLR, Repo Rate and Reverse Repo Rate?


Reserve Bank of India plays an important role in controlling the interest rates in the banking system, by adjusting the liquidity in the system.
How RBI control the interest rates in India? If you want to understand the above, we should understand certain commonly used terms by RBI.
These are CRR, SLR, Repo Rate and Reverse Repo Rate.

What is Cash Reserve Ratio (CRR)

Each bank has to keep a certain percentage of its total deposits with RBI as cash reserves. It is called Cash Reserve Ratio (CRR). On 30th October.2012, RBI reduced the CRR by 25 basis points to 4.25%. If the bank is having a deposit of 100/-, it has to keep Rs.4.25 as cash reserve with RBI and it can use only the balance 95.75 for lending or investments.

What is the role of CRR in the banking system

RBI uses CRR as a means to control the money supply in the system. When the money supply is on the higher side, RBI will increase the CRR to reduce the supply and vice versa.

What is Statutory Liquidity Ratio (SLR)

Every bank has to maintain at the close of every day a certain percentage of its total liabilities (Deposits) in cash, gold or government approved securities. This is called SLR. At present, the SLR is 23%.

What is the role of SLR in the banking system

Its role is more or less similar to CRR and controls the money circulation the banking system. If RBI wants to suck, excess liquidity from the system, it will increase the SLR. Banks will be forced to keep the higher percentage as liquid assets and its power to lend will come down.

What is Repo Rate

When banks require short term money, RBI will lend member banks against securities held by them. RBI will charge interest on these loans and this rate of interest is called Repo Rate. At present, Repo Rate is 8%.

What is the importance of Repo Rate in the economy

When RBI wants to decrease the lending activities in the country, it will increase the Repo Rate. Once the Repo Rate is increased, the cost of funds to banks from RBI will increase and it will in turn increase the lending rates to customers. This will reduce the lending transactions. But if the RBI feels the need of more lending activities, it will decrease the Repo Rate and reduce the cost of funding. This will translate into lower rates on loans and lending will pick up.

What is Reverse Repo Rate

If banks have excess amount with them, they can park the surplus money with RBI and earn interest on this. The interest on such amount is called Reverse Repo Rate. At present the Reverse Repo Rate is 7%.
RBI will increase the reverse Repo rate, if it wants to reduce liquidity in the system. Banks will be tempted to park money with RBI rather than lending, if this rate is high. At present Reverse Repo Rate is kept 100 basis points below Repo Rate.
By adjusting CRR, SLR, Repo Rate and Reverse Repo Rate, RBI will ensure that the banking system is working fine.  It will adjust these factors to promote an orderly growth of the economy by controlling interest rates and liquidity in the system.

Wednesday, October 31, 2012

Top 20 banking terms you should know


1. National Electronic Funds Transfer (NEFT)
Transfer of funds initiated by electronic means such as an electronic terminal, telephone, computer, or ATM. The NEFT facilitates the process of fund transfer within the same bank or inter-bank transfers. The minimum amount that can be transferred is as low as Rs 100.
2. Linked Account
Any account linked to another account in the same bank where funds can be transferred electronically between accounts and carry out other specified services as well.
3. Travellers' Cheque
Cheques issued by a bank and function as cash but are protected against loss or theft when travelling.
4. Base Rate
It is the minimum rate a bank charges its most credit worthy customer. The bank cannot lend below this rate (with an exception to banks employees, loans to bank's depositors against their own deposits, albeit with the subvention of the central bank).
For a retail customer, the Base Rate will cover all loans from auto, personal to home loans effective from July 1, 2010.
5. Balance Transfer
Balance transfer is an option included under credit card payments and is useful for persons holding more than one card. On availing this facility, the cardholder can transfer the balance amount outstanding on card one to card two and vice versa, if he/she is not able to make full payment that is due on a particular card.
In any case, the payment due date is only delayed but the payment has to be made at the scheduled time as stated in card two. Balance transfer facility is useful in reducing the interest outgo (on card one) and extending the payment due date on the original card.
6. Banking Ombudsman
Banking Ombudsman is an unbiased forum formed to resolve complaints registered by bank customers with respect to the services provided by banks. The RBI introduced this scheme under Section 35A of Banking Regulation Act, 1949. In case one has not been satisfactorily serviced by their bank, they should first register a complaint with the bank customer service department.
If they are not happy with the bank's response, then they can approach the banking ombudsman for an unbiased resolution.
7. Cashback
The term 'cashback' is used with reference to credit cards. Cashback means giving back some portion of money (spent by the cardholder through the credit card) to the cardholder himself. The cashback is made in terms of points earned; for example, the bank may say one point will be earned for every Rs 100 spent by the cardholder and at the end of the year, the money worth of the points earned (say Rs 1 for 1 point) will be credited back into the cardholder's account.
8. Credit History
Credit history is an account of an individual's past borrowings by way of loans, credit cards and all other debt that needs to be repaid/has been repaid. Credit history in India is currently being provided by CIBIL (Credit Information Bureau of India Limited) and contains records of an individual's open and past accounts of loans and credit cards.
Through the CIBIL report, the bank (lender) can know if the individual (borrower) had made any late payments or defaults. You can get your own credit history report from CIBIL for a nominal fee.
9. Collateral
A borrower needs to provide some kind of security to the bank in case of high ticket loans (except home loans where the property is the security). Such security is called 'collateral'.
In case the borrower fails to repay the loan, the bank has the authority to attach the collateral to the loan and claim its dues.
10. Documentation/Processing Fee
Bank requires certain documents from the borrower to look into his creditworthiness and charges a fee for the same. These charges are known as documentation charges.
Processing Fee is charged by the bank upon sanctioning of loan to the borrower.
11. Dormant/Inactive Account
If an individual has not made any transactions in his/her account (except for interest payments credited by the bank) for more than two years, the savings/current account is declared as dormant/inactive.
12. Fixed Rate
Fixed rate is the interest rate that remains constant for the full term of the loan.
13. Floating Rate
An interest rate that is referenced to a market rate and is revised as per the change in the interest rates in the economy. When interest rates in the economy rise, floating rates rise and vice versa.
14. MICR Code
MICR stands for Magnetic Ink Character Recognition. MICR Code comprises 9 digits given at the bottom (right side) of the cheque number. It is a unique code and varies between each bank branch.
MICR Code is required for cheque clearance. MICR Code is different from the IFSC code, which is also mentioned on a cheque.
15. No-frills Account
This account is a basic savings account provided by banks to make banking simpler and more accessible for all customers. In a no-frills account, you do not have to maintain minimum balance and enjoy basic banking facilities such as electronic funds transfer (EFT), netbanking, free cheque book issuance.
16. Electronic Clearing Service (ECS)
It is a service provided by the banks to facilitate direct debit from your bank account towards an investment account (such as a mutual fund SIP) and/or paying regular loan EMIs.
One can give a standing instruction (SI) to the bank to transfer the specified amount every month for a specified period. Alternatively, you can direct a one-time transfer of funds through NEFT/RTGS (explained next).
17. Processing Fee
Bank levies processing fee in order to process the loan application of the borrower. This fee is a small percentage (example: 2.5 per cent) of the loan amount sanctioned and is usually waived off during festival time to attract more borrowers.
18. RTGS
The RTGS or Real Time Gross Settlement System facilitates fund transfer within same bank or inter-bank transfers, but unlike NEFT, RTGS ensures the fund transfer fast and smooth in 'real-time' for a nominal fee.
The minimum transfer amount is higher than NEFT (usually Rs 2 lakh and above).
19. IFSC
IFSC code is useful in bank fund transfers and cheque clearance. It is an 11 character code assigned by RBI to identify every bank branch uniquely. The first part is the first 4 alphabet characters representing the bank. Next character is 0 (zero) and is reserved for future use. The last 6 characters is the branch code.
20. KYC
KYC or Know Your Customer norms are imposed by RBI on banks and other financial institutions to ensure that the correct identity of the banks' customers is established and to ensure that banks deal only in legitimate banking operations and not in money laundering or frauds.







Rule of 72


31st October is celebrated as World Savings Day but what a coincidence Halloween is also celebrated on the same day. (tragedy is we know about Halloween but….) Let’s learn some basic rules that you can practically apply in your day-to-day life.
The ‘Rule of 72′ is a simple way to determine how long an investment will take to double, given a fixed annual rate of interest. By dividing 72 by the annual rate of return, investors can get a rough estimate of how many years it will take for the initial investment to double itself.

For example, the rule of 72 states that Rs 1 invested at 10% would take 7.2 years (72/10 = 7.2) to turn into Rs 2. In reality, a 10% investment will take 7.3 years to double (1.10^7.3 = 2). When dealing with low rates of return, the Rule of 72 is fairly accurate. Albert Einstein said compounding is eighth wonder of this world & “rule of 72″ eight wonder. Below chart compares the number of years it takes an investment to double at certain rate.
72a Rule of 72 & Super Mario Personal Finance Lessons

Every Penny Counts

Let’s try to practically apply this rule. Let’s assume that as today is World Savings Day – you added Rs 1000 to your retirement kitty. (assuming you are 29)
72b Rule of 72 & Super Mario Personal Finance Lessons

WOW! So if someone save Rs 1000 today for his retirement – it will become Rs 32000 in 30 years or Rs 64000 in 36 years.(@ 12%) Just imagine if this amount is Rs 10000 this month (if you don’t splurge in the festive season) or Rs 1 Lakh this year (bought a small car or vacation or may be combination of many small things).
There is also a reverse usage of rule of 72 – where you divide 72 by number of years & you will get the rate at which money will double in this period. Similarly there are 114 (triple) or 144 (quadruple).
Hemant Beniwal

Tuesday, October 9, 2012

How is interest on saving bank account is calculated ?





A lot of people do not know interest is calculated on their savings bank account.In this article I will explain all the aspects of interest on a savings bank account. Earlier all the banks had the same interest on their saving bank accounts, which was 4% , so a person had no choice in terms of interest rate, you would have got the same return with any bank. But, RBI has recently de-regulated interest on saving bank account and now banks can decide the interest they want to pay on saving bank. This has had a positive impact for customers, because now due to competition, banks like Kotak Bank and Yes Bank have started offering higher interest rates like 6% or 7% and using that parameter to attract lot of customers.

How is interest on saving bank is Calculated ?

Coming to the main question, the procedure to calculate saving bank interest, we will first see how it was done earlier and then we will see how its done now.
Old Method
Earlier, Banks used to pay 3.5% interest on the minimum balance between 10th and last day of the month. This was not a very customer friendly method because if you kept Rs 5,00,000 in your saving account for the whole month and on 26th, & let’s say you take out 4,90,000. You would have got interest only on Rs 10,000 @3.5% , which is just Rs 28.
New Method
Now a new method is used to calculate the interest on saving bank account which is very fair.  From April 1, 2010 , as per the RBI circular on new guidelines on saving bank interest calculation; this is the rule for interest calculation.
“The interest has to be calculated on daily basis for the closing day balance” – It’s that simple. So let’s say the interest rate is 4% , then you will get interest @4% on daily basis for your closing balance and it will get accumulated , but it will be paid back to your account only after 3 or 6 months. While RBI wants all the banks to pay the interest every quarter, each bank has its own criteria , like ICICI Bank pays it twice a year right now in Sept and March.
So now, if you see the same example we discussed above, with the new method of interest calculation, the interest will be 4% on 5 lacs (Rs 1,369) for 25 days (from start of month to 25th) and on 10,000 for next 5 days (Rs 5) (26th – 30th) . So the interest would be total Rs 1,374 . In the old method it was just Rs 28 . Can you see the gigantic difference?
Saving Bank Interest Calculation

High Interest on Saving bank from some banks

You must have seen some banks are now offering 6-7% of interest rate and they have dual interest rates, like 5.5% below 1 lac and 6% above 6% (in case of Kotak Bank) , which means that you will be getting 5.5% on the amount below 1 lac and only on the difference amount above 1 lac, you will get 6% interest . So if you have a balance of Rs 1,50,000 in your bank (lets say kotak bank) , you will get 5.5% on 1,00,000 and 6% on 50,000 .

You should be more interested in interest below 1 lac

If you see the average amount kept in saving bank account , it should not cross 1 lac for most of the people . While there are people who park their money in saving bank account for some time, but it does not happening with most people. So if some bank is giving higher interest for amounts above 1 lac, that’s a secondary benefit for you, not the basis of selection of bank. Because if you are anyways ready to keep a balance of more than 1 lac, why not just create a short term deposit online,which can be broken anyways or just activate your sweep in account option, so that an amount above a target amount automatically gets converted to FD and earn more money.
Do you now understand how interest on saving bank account is calculated? Will it help you manage your bank money in a better way?

Jagoinvestor

Wednesday, September 26, 2012

Ganesha, Remover Of Obstacles


Ganesha offers lessons in how to be successful for devotees familiar with his incarnations as it’s faith in the elephant-headed god that propels them. The neighbourhood temple to Ganesha is where they light a lamp, break a coconut and hope fervently that the deity also known as ‘Remover of Obstacles’ will pitch in to help. This belief comes with ancient stories of his prowess, even of his mount, the rat, which can reach any corner of the world and burrow through a mountain, even.

Ganesha took many forms as visualised in the Mudgala Purana to show the path to success. Of them, eight are particularly significant. First, in his incarnation as Vakratunda or the one with a curved trunk when he vanquished the demon Matsarasura. Matsara means jealousy and the anger born thereof. His very birth is ascribed to a remiss by Indra and true to his nature the demon desired to rule all the three worlds. His boon of fearlessness from Shiva helped him and soon he was tormenting everyone, heady with power. Vakratunda cut him down to size. He comes riding a lion. He says, however well endowed you are, wisdom lies in  knowing and understanding your limits.

Second, his avatar as Ekdanta or the one-tusked one was taken in order to subdue Madasura or the demon of vanity. In this avatar Ganesha stresses the need to not let illusions enter your head and intoxicate you with pride. This is possible only when you understand that you are but a part of the divine and that the divine energy is acting through you. So give up pride in the self.

Third, Ganesha as Mohadara teaches us to get rid of moha or attachment by killing the demon Moha. Fourth, as Gajanana he kills the demon Lobha or greed. Fifth, as Lambodara he overcomes krodha or the demon of anger. Lust is another demon of undoing and so sixth is Ganesha’s incarnation as a deformed Vikata who destroys the demon Kama. Seventh, as Vignaraja, he destroys the ogre of self-indulgence.

In his eigth incarnation as Dhumravarna he cuts at the root of it all, ahankara or arrogance. Brahma felt the sun, the sustainer of life, deserved the post of the minister of life actions and so appointed him as such. With this, the sun became  so arrogant, that when he suddenly sneezed, the personification of arrogance, Ahantasura, was born. The terror he was wreaking and the misery he was bringing by his sheer arrogance was unimaginable. Eventually the gods prayed to Ganesha, asking him to end their suffering at the hands of Ahantasura.

Ganesha appeared as a smoke-coloured deity riding a rat. Ahantasura was overcome. Arrogance is the root of self-destruction, says Dhumravarna. Even though the sun is so powerful, his arrogance created havoc in the world.

Ganesha is elephant-faced, pot bellied and with short legs because he has no ego. And that is why the attributes which would otherwise be seen as disproportionate and strange now become endearing. We all have eight negative energies in some measure in us and we need to overcome them in order to control the ego. The ills that derive from these negative emotions manifest in a similar manner. It is divine power that makes you powerful, beautiful, desired… so do not ascribe it all to yourself, says Ganesha and that remains the most valuable lesson to success. Let the excitement of achievement be the celebration of your Muse.

Sudhamahi Regunathan

Sunday, September 9, 2012

6 Ways to Make It in Your Life, Career


'Do anything as long as it feels like an adventure...
...The problems of failure are hard. The problems of success are harder...
...If you're making mistakes, it means you're out there doing something...
...The one thing you have that nobody else has is you...
...Make interesting mistakes, make amazing mistakes, make glorious and fantastic mistakes...'
...Valuable advice from a best-selling writer.

I never really expected to find myself giving advice to people graduating from an establishment of higher education. I never graduated from any such establishment. I never even started at one. I escaped from school as soon as I could, when the prospect of four more years of enforced learning before I'd become the writer I wanted to be was stifling.
I got out into the world, I wrote, and I became a better writer the more I wrote, and I wrote some more, and nobody ever seemed to mind that I was making it up as I went along, they just read what I wrote and they paid for it, or they didn't, and often they commissioned me to write something else for them. Which has left me with a healthy respect and fondness for higher education that those of my friends and family, who attended Universities, were cured of long ago.
Looking back, I've had a remarkable ride. I'm not sure I can call it a career, because a career implies that I had some kind of career plan, and I never did. The nearest thing I had was a list I made when I was 15 of everything I wanted to do: To write an adult novel, a children's book, a comic, a movie, record an audio book, write an episode of Doctor Who... and so on. I didn't have a career. I just did the next thing on the list. So I thought I'd tell you everything I wish I'd known starting out, and a few things that, looking back on it, I suppose that I did know. And that I would also give you the best piece of advice I'd ever got, which I completely failed to follow.
First of all: When you start out on a career in the arts you have no idea what you are doing.
This is great. People who know what they are doing know the rules, and know what is possible and impossible. You do not. And you should not. The rules on what is possible and impossible in the arts were made by people who had not tested the bounds of the possible by going beyond them. And you can.
If you don't know it's impossible it's easier to do. And because nobody's done it before, they haven't made up rules to stop anyone doing that again, yet.
Secondly, If you have an idea of what you want to make, what you were put here to do, then just go and do that.
And that's much harder than it sounds and, sometimes in the end, so much easier than you might imagine. Because normally, there are things you have to do before you can get to the place you want to be.
I wanted to write comics and novels and stories and films, so I became a journalist, because journalists are allowed to ask questions, and to simply go and find out how the world works, and besides, to do those things I needed to write and to write well, and I was being paid to learn how to write economically, crisply, sometimes under adverse conditions, and on time.Sometimes the way to do what you hope to do will be clear cut, and sometimes it will be almost impossible to decide whether or not you are doing the correct thing, because you'll have to balance your goals and hopes with feeding yourself, paying debts, finding work, settling for what you can get.
Something that worked for me was imagining that where I wanted to be -- an author, primarily of fiction, making good books, making good comics and supporting myself through my words -- was a mountain.
A distant mountain. My goal.
And I knew that as long as I kept walking towards the mountain I would be all right. And when I truly was not sure what to do, I could stop, and think about whether it was taking me towards or away from the mountain.
I said no to editorial jobs on magazines, proper jobs that would have paid proper money because I knew that, attractive though they were, for me they would have been walking away from the mountain.
And if those job offers had come along earlier I might have taken them, because they still would have been closer to the mountain than I was at the time.
I learned to write by writing. I tended to do anything as long as it felt like an adventure, and to stop when it felt like work, which meant that life did not feel like work.
Thirdly, when you start off, you have to deal with the problems of failure. You need to be thick-skinned, to learn that not every project will survive.
A freelance life, a life in the arts, is sometimes like putting messages in bottles, on a desert island, and hoping that someone will find one of your bottles and open it and read it, and put something in a bottle that will wash its way back to you: Appreciation, or a commission, or money, or love.
And you have to accept that you may put out a hundred things for every bottle that winds up coming back.
The problems of failure are problems of discouragement, of hopelessness, of hunger. You want everything to happen and you want it now, and things go wrong.
My first book -- a piece of journalism I had done for the money, and which had already bought me an electric typewriter from the advance -- should have been a bestseller. It should have paid me a lot of money.
If the publisher hadn't gone into involuntary liquidation between the first print run selling out and the second printing, and before any royalties could be paid, it would have done.
And I shrugged, and I still had my electric typewriter and enough money to pay the rent for a couple of months, and I decided that I would do my best in future not to write books just for the money.
If you didn't get the money, then you didn't have anything. If I did work I was proud of, and I didn't get the money, at least I'd have the work.
Every now and again, I forget that rule, and whenever I do, the universe kicks me hard and reminds me. I don't know that it's an issue for anybody but me, but it's true that nothing I did where the only reason for doing it was the money was ever worth it, except as bitter experience. Usually I didn't wind up getting the money, either.
The things I did because I was excited, and wanted to see them exist in reality have never let me down, and I've never regretted the time I spent on any of them.
The problems of failure are hard.
The problems of success can be harder, because nobody warns you about them.
The first problem of any kind of even limited success is the unshakable conviction that you are getting away with something, and that any moment now they will discover you. It's Imposter Syndrome, something my wife Amanda christened the Fraud Police.
In my case, I was convinced that there would be a knock on the door, and a man with a clipboard (I don't know why he carried a clipboard, in my head, but he did) would be there, to tell me it was all over, and they had caught up with me, and now I would have to go and get a real job, one that didn't consist of making things up and writing them down, and reading books I wanted to read.
And then I would go away quietly and get the kind of job where you don't have to make things up any more.
The problems of success. They're real, and with luck you'll experience them. The point where you stop saying yes to everything, because now the bottles you threw in the ocean are all coming back, and have to learn to say no.
I watched my peers, and my friends, and the ones who were older than me and watch how miserable some of them were: I'd listen to them telling me that they couldn't envisage a world where they did what they had always wanted to do any more, because now they had to earn a certain amount every month just to keep where they were.
They couldn't go and do the things that mattered, and that they had really wanted to do; and that seemed as big a tragedy as any problem of failure.
And after that, the biggest problem of success is that the world conspires to stop you doing the thing that you do, because you are successful. There was a day when I looked up and realised that I had become someone who professionally replied to e-mail, and who wrote as a hobby.
I started answering fewer e-mails, and was relieved to find I was writing much more.
Fourthly, I hope you'll make mistakes. If you're making mistakes, it means you're out there doing something. 
And the mistakes in themselves can be useful. I once misspelled Caroline, in a letter, transposing the A and the O, and I thought, "Coraline looks like a real name..."
And remember that whatever discipline you are in, whether you are a musician or a photographer, a fine artist or a cartoonist, a writer, a dancer, a designer, whatever you do you have one thing that's unique. You have the ability to make art.
And for me, and for so many of the people I have known, that's been a lifesaver. The ultimate lifesaver. It gets you through good times and it gets you through the other ones.
Life is sometimes hard. Things go wrong, in life and in love and in business and in friendship and in health and in all the other ways that life can go wrong. And when things get tough, this is what you should do.
Make good art.
I'm serious. Husband runs off with a politician? Make good art.
Leg crushed and then eaten by mutated boa constrictor? Make good art.
IRS on your trail? Make good art.
Cat exploded? Make good art.
Somebody on the Internet thinks what you do is stupid or evil or it's all been done before? Make good art.
Probably things will work out somehow, and eventually time will take the sting away, but that doesn't matter.
Do what only you do best. Make good art.
Make it on the good days too.
And fifthly, while you are at it, make your art. Do the stuff that only you can do.
The urge, starting out, is to copy. And that's not a bad thing. Most of us only find our own voices after we've sounded like a lot of other people. But the one thing that you have that nobody else has is you.
Your voice, your mind, your story, your vision.
So write and draw and build and play and dance and live as only you can.
The moment that you feel that, just possibly, you're walking down the street naked, exposing too much of your heart and your mind and what exists on the inside, showing too much of yourself.
That's the moment you may be starting to get it right.
The things I've done that worked the best were the things I was the least certain about, the stories where I was sure they would either work, or more likely be the kinds of embarrassing failures people would gather together and talk about until the end of time.
They always had that in common: Looking back at them, people explain why they were inevitable successes. While I was doing them, I had no idea.
I still don't. And where would be the fun in making something you knew was going to work?
And sometimes the things I did really didn't work. There are stories of mine that have never been reprinted. Some of them never even left the house. But I learned as much from them as I did from the things that worked.
Sixthly, I will pass on some secret freelancer knowledge. 
Secret knowledge is always good. And it is useful for anyone who ever plans to create art for other people, to enter a freelance world of any kind. I learned it in comics, but it applies to other fields too. And it's this:
People get hired because, somehow, they get hired. In my case I did something which these days would be easy to check, and would get me into trouble, and when I started out, in those pre-Internet days, seemed like a sensible career strategy: When I was asked by editors who I'd worked for, I lied. I listed a handful of magazines that sounded likely, and I sounded confident, and I got jobs.
I then made it a point of honour to have written something for each of the magazines I'd listed to get that first job, so that I hadn't actually lied, I'd just been chronologically challenged...
You get work however you get work.
People keep working, in a freelance world, and more and more of today's world is freelance, because their work is good, and because they are easy to get along with, and because they deliver the work on time. And you don't even need all three. Two out of three is fine.
People will tolerate how unpleasant you are if your work is good and you deliver it on time. They'll forgive the lateness of the work if it's good, and if they like you.
And you don't have to be as good as the others if you're on time and it's always a pleasure to hear from you.
When I agreed to give this address, I started trying to think what the best advice I'd been given over the years was.
And it came from Stephen King twenty years ago, at the height of the success of Sandman. I was writing a comic that people loved and were taking seriously. King had liked Sandman and my novel with Terry Pratchett, Good Omens, and he saw the madness, the long signing lines, all that, and his advice was this:
"This is really great. You should enjoy it." And I didn't. Best advice I got that I ignored. Instead I worried about it. I worried about the next deadline, the next idea, the next story.
There wasn't a moment for the next fourteen or fifteen years that I wasn't writing something in my head, or wondering about it. And I didn't stop and look around and go, this is really fun.
I wish I'd enjoyed it more. It's been an amazing ride. But there were parts of the ride I missed, because I was too worried about things going wrong, about what came next, to enjoy the bit I was on. That was the hardest lesson for me, I think: To let go and enjoy the ride, because the ride takes you to some remarkable and unexpected places.
And here, on this platform, today, is one of those places. (I am enjoying myself immensely.)
To all today's graduates: I wish you luck. Luck is useful. Often you will discover that the harder you work, and the more wisely you work, the luckier you get. But there is luck, and it helps.
We're in a transitional world right now, if you're in any kind of artistic field, because the nature of distribution is changing, the models by which creators got their work out into the world, and got to keep a roof over their heads and buy sandwiches while they did that, are all changing.
I've talked to people at the top of the food chain in publishing, in bookselling, in all those areas, and nobody knows what the landscape will look like two years from now, let alone a decade away.
The distribution channels that people had built over the last century or so are in flux for print, for visual artists, for musicians, for creative people of all kinds.
Which is, on the one hand, intimidating, and on the other, immensely liberating. The rules, the assumptions, the now-we're-supposed-to's of how you get your work seen, and what you do then, are breaking down.
The gatekeepers are leaving their gates. You can be as creative as you need to be to get your work seen. YouTube and the Web (and whatever comes after YouTube and the Web) can give you more people watching than television ever did.
The old rules are crumbling and nobody knows what the new rules are.
So make up your own rules.
Someone asked me recently how to do something she thought was going to be difficult, in this case recording an audio book, and I suggested she pretend that she was someone who could do it. Not pretend to do it, but pretend she was someone who could. She put up a notice to this effect on the studio wall, and she said it helped.
So be wise, because the world needs more wisdom, and if you cannot be wise, pretend to be someone who is wise, and then just behave like they would.
And now go, and make interesting mistakes, make amazing mistakes, make glorious and fantastic mistakes.
Break rules. Leave the world more interesting for your being here. Make good art.

Neil Gaiman, award-winning, best-selling, writer, delivered this speech for the graduating class at Philadelphia's University of the Arts.