10 Ways to Boost your Self-Confidence

 In my corporate experience I have seen many people with very High IQ not being able to perform and I have also seen several people with mediocre IQ do fantastically well in their lives. 

The biggest determinant for this inconsistency is Self- Confidence.  This is one of the key characteristic of a Leader.  And yes, Self Confidence can be developed. 

The following are 10 ways you can enhance your Self Confidence :  

1. Recognize your fears and insecurities.Bring to the foreground emotions and thoughts that are always present at the back of your mind.
2. Never be ashamed of yourself or to ask for help
3. Talk to your friends and loved ones about your problems. Focus on the things that are creating problems for you and then try to find a way to solve these problems.
4. Know that  nobody is perfect. Even that famous film star  or supermodel have insecurities.
5. Enjoy and celebrate your success. 
6. Discover your talents and then focus on them. We should build on our strengths. 
7. When you feel low, look around you and at the problems that others are undergoing and thank God that he has blessed you with so much more. Believe me, a visit to the hospital or an orphanage can be therapeutic. 
8. Never fall victim to self-pity. It can be very damaging to your self esteem and self confidence. Self-pity promotes us to give excuses to ourselves. Also don't let others pity you; this will only lower your self-esteem and self-confidence.
9. Try to smile as much as possible. A smile will add to your confidence. People are always appreciative of a smile.
10.  Fake it !  Sometimes just pretending to be confident makes you really confident ! You will never know when you will make a transition from pretension to reality.

The Best Motivator

I remember once I was walking around the office (Read : MBWA) , I saw a person sitting on her desk with a clearly despondent face. She was a very good and efficient worker and had a cheerful countenance. I asked her "Hey ! What's wrong ?".  My simple prodding seemed to open a floodgate of tears.

She said  "I have worked so hard for the last one year, I think I have made some difference to my department and my organization... but today, during the appraisal,  I was told that whatever I had done was anyways expected from me.... but was was reminded several times about the one slip which I had made .... " 

An autocratic boss always criticises, never forgets negative performance and takes good performance for granted. It might have worked some decades earlier, but nowadays, leaders have to re- inforce the good things instead of harping on their  inefficiency. 

Human beings crave recognition. 

Money is a great motivator, but middle managers usually do not have much say in changing company policies and monetary aspects, but they do have the power for the real BIG and the BEST motivator - Recognition .

So, how can the people be motivated ? Yes, it certainly is a tough job, as each individual is different and their  keys to motivation also differ.  I am sharing some of the things that have worked for me  : 

• Put it in writing :  Just like you should always criticize in private, you should always praise in public. Verbal appreciation is great , but writing it is even more effective. And always write immediately. Appreciation loses its sheen if it is given late. Appreciation emails work wonders.  And emails can be copied to relevant and appropriate persons. Emails do not need money neither consumes too much time.  

• Awarding an object : In one of my organization,  I had started a ritual of awarding a small figurine - a karate kid in a karate pose.  Whenever a team member did something extraordinary in terms of performance, quality, teamwork or taking initiative, I awarded this figurine to them in my weekly team meeting. And how they loved it !  They proudly displayed it on their desks.  Everybody craved to have it .  I was moved when I met one person a few years back who told me "Ananya, I still have the Karate kid on my desk... It inspires me to keep on doing well ...!" 

• Thank You Notes :  Designate a day in a year where "Thank you " notes will be exchanged. I did it every year on the Thanksgiving week.  Create a small  template for writing the note and specially the reason why they were thanking and let the team exchange it with each other.  It is important tom write the reason for the praise in the praise itself. This concept worked very well in global and virtual teams.  The team in India were thrilled to receive handwritten Thank-You notes from the UK and the US office and the same reaction was there in the US and the UK office when they received the notes from India. This helped not only in recognition but also in team bonding.

• Immortalize their names :  If you have a big office with several conference and meeting rooms,  it is a good idea to name the rooms by the Best Performer of the Year. For Example,  there was a "Ananya Meeting Room" and a "Kevin Conference room" in one of my organization.  This is a really big motivator and the employees remember it forever.  Whenever I visit that organization , I always find some plea to go to the Ananya Conference Room and believe me , it still fills my heart with joy and pride.  And even if the person leaves the organization, they become theirpermanent ambassador !

There are several others .... but more in some later blog ... 

Have you noticed,  none of the above costs money but they really motivate the employee.... 

" A person's name is to that person , the sweetest and the most important sound in any language "- Dale Carnegie. 

Posted by Ananya Das

Taking term plan can be a smart Insurance choice

Term Insurance policies are becoming increasingly popular in India, and for a very good reason. Yet a large number of people still go for traditional plans like endowment plans or money back plans. The appeal of the traditional plans lies in the maturity amounts, if the policy holder outlives the term of the insurance policy. In a traditional plan the policy holder gets a guaranteed amount (also known as sum assured) and a bonus amount. In the event of an untimely death, at any point of time during the term of the policy, the family of the policy holder gets the sum assured. The sum assured is almost equal to the total premium amounts paid over the entire term of the policy. On the other hand in a term insurance plan, while the family of the policy holder gets the sum assured in the event of an untimely death, if the policy holder outlives the term of the insurance policy, then the policy holder does not get a maturity amount (i.e. zero maturity amount)

So the insurance premiums in traditional plans, not only enables the policy holders to get a life insurancecover in the event of an untimely death, but also is an investment for the policy holder on maturity. So it makes perfect sense for investors, or does it? The answer lies in the cover (or sum assured) to premium ratio. But before we examine that, there are several things we should note about insurance.

• The most important objective of life insurance is to provide life cover to the policy holder’s family in the event of an untimely death, not to generate the best investment return


• There are plenty of better investment options that give much better return on investments than life insurance policies


• While insurance premiums qualify for tax savings under Section 80C, there are other investment options, like mutual funds, PPF etc, that also qualify for tax savings under Section 80C


• The more insurance companies add features an insurance policy, higher is the cost and the premium for the policy holder. Plain vanilla insurance policies have the lowest cost and premium

Premiums: Term Plans versus Traditional Plans

The premiums of traditional plans like endowment plans or money back plans are several times higher than term plans, because the traditional plans provide additional features like giving the policy holders sum assured and bonus on maturity of the policies. While actual premiums vary from plan to plan and the age of the policy holder, the table below shows approximate premiums for a certain sum assured for term insurance, endowment and money back plans offered by Life Insurance Corporation of India. The age of policy holder is assumed to be30 years and the term of the life insurance policy is assumed to be 20 years.

The table above clearly shows the huge difference in premiums between the three plans, for the same sum assured. While apparently it seems that based on returns, Endowment plan is the best and Term plan is the worst, the key here is the premium for different plans. The Term Plan charges the premium only for protection purpose and not for investment purpose, while Endowment Plan and Money Back Plan charges premium for both protection and investment purpose. From a return point of view, however there are much better options than insurance plans. Let us examine, with the help of a small case study.

Case Study

Let us assume there are three policy holders, Suresh, Rajesh and Ramesh. All three of them are 30 years old and have the same income and risk profile. All of them want a life cover of Rs 20 lakhs. All three want to maximize tax savings under Section 80C of Income Tax Act. However, each of them takes a different approach:-

• Suresh opts for an endowment plan from an insurance company with a sum assured of Rs 20 lakhs. For this policy, he pays a premium of Rs 1 lakh every year and maximises tax savings


• Rajesh opts for a term plan with a sum assured of Rs 20 lakhs. For his term policy, he pays a premium of Rs 6500. To maximize his tax savings, Rajesh invests Rs 93,500 in Public Provident Fund on an annual basis


• Ramesh opts for a term plan with a sum assured of Rs 20 lakhs. For his term policy, he pays a premium of Rs 6,500. To maximize his tax savings, Ramesh invests Rs 93,500 in Equity Linked Savings Scheme through a monthly systematic investment plan

In the event of an untimely death, each of their families will get Rs 20 Lakhs as life cover. However, if they survive the term of the insurance (20 years), the returns look very different. See the chart below for amounts invested by Suresh, Rajesh and Ramesh, and the maturity amounts in Rupees Lakhs.

• Suresh will get a post tax maturity amount of Rs 35 - 39 Lakhs, assuming a 5 – 6% investment return (based on historical returns)


• Rajesh will get a post tax maturity amount of Rs 50 Lakhs, assuming a 8.7% compounded annual interest rate on PPF (based on PPF interest rate in 2013 – 2014)


• Ramesh will get a post tax maturity amount of Rs 1.25 crores, assuming a 15% annualized return fromELSS (based on 15 years performance from top performing ELSS)

The reason why Rajesh and Ramesh’s maturity corpus is bigger than Suresh’s is due to the fact that only a small fraction (only about 6%) of their investment goes to buying life cover, the balance in invested in instruments like PPF and ELSS, that give much higher returns than endowment plans.

If Suresh opted for a money back plan, his maturity amount would depend on how he re-invested Rs 4 Lakhs that he received from the insurance company. He may have used the money for his expenses, like a lot of investors, in which case his total maturity amount would be even lower. Even i he re-invested the money back in PPF or ELSS, his returns would be lower than Rajesh or Ramesh, due to compounding effect.

Conclusion

A term plan is the purest form of insurance and is a straightforward protection policy. Endowments and money back policies will offer a return of between 5 to 6% per annum. Considering the term of these policies (20 or 25 years), this return is very low relative to other investment options available, like PPF or ELSS. Also due to the higher premiums of the traditional plans, policy holders in these plans tend to be under-insured. Investors should consider buying a term plan purely for insurance purpose and invest in long term investment products for their financial planning objectives.

Advisorkhoj

How to identify pre-2005 currency notes?!

This note has the year of printing clearly printed in the middle of the bottom row on the backside.

The Reserve Bank of India (RBI) has announced its plans to withdraw all currency noted issued before 2005. Financial experts believe that the move is largely aimed at removing fake or counterfeit currency embedded into the financial system as well help uncover the big black market currency in the country. While the motives of RBI are unquestionably good, there has been some quantum of confusion amongst the general public as to whether the notes they have would need replacement or not. Read on to find out if the currency notes in your pocket or ones stashed in your locker needs to be changed.

Identifying Pre 2005 Currency Notes: Currently the Reserve Bank of India prints currency notes in the denomination of Rs. 5, Rs. 10, Rs. 20, Rs. 50, Rs. 100, Rs. 500 and Rs. 1,000. All the notes printed before the year 2005 do not have the year of printing marked on it. All currency notes printed post 2005 have is year of printing clearly printed in the middle of the bottom row on the backside of the note. If your bank note has no year of printing on the back, it means the note is printed before 2005 and needs to be exchanged with the bank as per the RBI deadline. All notes with the year of printing indicated on the currency note would stay in operation as all of them are posted after 2005.

This note has the year of printing clearly printed in the middle of the bottom row on the backside.

Possible Reasons for Withdrawal: The possible reasons for the withdrawal of old currency is more to do with streamlining the number of currency variants than anything else. Of course the government is worried about the inflow of fake currency and hopes to tackle it by using all notes printed post 2015 which are far more technically superior and difficult to print for fake currency mongers.

How to Exchange Old Currency Notes: So now that you have identified your currency notes and shortlisted the ones that need to be changed, a simple exchange procedure is revealed by the press release of the Reserve Bank of India. First things first, there should be no reason to panic whatsoever as the RBI has clearly stated that all old notes would continue to be completely legal and can be exchanged at any bank after April 1, 2014.

An old (pre-2005) note without the year of printing. (RBI website)

All public sector as well as private banks have been asked to create a dedicated exchange counter where both account owners as well as non account owners of that bank or branch can exchange their old currency notes for new ones. These exchange counters will become operation from 1st April 2014.If you have a large amount of old currency notes with you, you may want to exchange them, before 30th June 2014. So why is this date important? All exchanges done before 30th June would be unconditional. For any exchange of more than ten pieces of old Rs 500 or Rs 1000 notes after that date would require identity proof and address to be shared with the bank if you are a non customer of that bank.

In Indian so far there has been no official declaration regarding the lifespan of a currency note.

yahoo.com

Opening a Savings account - procedure

itsallaboutmoney

Fixed Deposit - Interest calculation procedure

A Fixed Deposit can be defined as an investment in which you deposit your money in a Bank for a fixed lock-in period. In return, the Bank gives you an interest at a specified rate and that interest is added to the original deposit while paying the accumulated amount to customer at the time of maturity.  Banks also give you the option of periodic pay-outs in the form of monthly and quarterly interest payments if you intend to use that interest as a source of regular income.

You can save any amount in a Fixed Deposit starting from Rs.10,000/- without any upper cap for a lock-in period of 7 days to 10 years. Some banks may also offer fixed deposits where the minimum amount may be lower.

 Interest on Fixed Deposits and its calculation

Banks offer both fixed and floating rate of interest. Fixed rate of interest is unaffected by any change in market rates and stays constant during the deposit term. On the other hand, floating interest rates vary as per the market rates and keeps changing throughout the deposit term.

For any fixed deposits below 6 months, Banks use simple interest while paying the sum at maturity. While for any deposits above 6 months in tenure, the interest is calculated using compound interest and it is compounded quarterly.

For the sake of understanding how Compound Interest which is compounded annually works, let us a simple example -

Assume you invest Rs 1000 for three years at 10%, compounded annually. Here is how the interest is calculated –

Year 1: Interest is 10% of Rs 1000 – Rs 100

Year 2: Your investment amount now is Rs 1100 ( Rs 1000 + Year 1 interest)

Interest is10% of Rs 1100 – Rs 110

Year 3: Investment amount is now Rs 1210 (Rs 1000 + Year 1 interest + year 2 interest)

Interest for year 3 is 10% of Rs 1210 – Rs 121

Total Interest for 3 years: Rs 100 + Rs 110 + Rs 121 = Rs 331

Amount – Rs 1000 + Rs 331

That gives you a fair idea how Compound Interest works. Now, when it comes to compound interest on Bank Fixed Deposits, the compounding is done quarterly.

Here is a simple formula to illustrate how it is calculated –

Let us consider the following values –

P (Principal) = 50000

R (Rate of Interest) = 9% or 9/100 or 0.09

n (compounding period) = 4

Since most Banks compound interest on a quarterly basis, we use n as 4 within the above equation to calculate annual interest and maturity amount. Similarly, if the interest compounding takes place semi-annually or monthly, the value of the compounding period becomes 2 and 12 respectively.

t (number of years or lock-in term) = 2

Inputting the values, the equation becomes

A (Amount on Maturity) =   50000 (1+0.09/4)4*2 = 59500/-

So interest is Amount – Principal = 59500-50000 = 9500/-

For better gains, it is recommended that you opt for reinvestment of interest within the fixed deposit.

Types of Fixed Deposits

The two types of fixed deposits are:

1)      Bank Fixed Deposits

2)      Corporate fixed deposits

While Bank Fixed Deposits are made with Banks, Corporate Fixed Deposits are made with companies who are looking for people to invest and fund their business.

Corporate deposits do offer a slightly higher interest rate but the level of risk is also higher. In addition, corporate deposits do not have the liquidity that Banks deposits offer and the lock-in periods will not have the same level of flexibility as available in Banks.

Tax Benefits on Fixed Deposits

Banks also offer Tax Saving Fixed Deposits as per the provision under section 80 C where the lock-in period is 5 years. Say, you have invested 1,00,000/- in a tax saving fixed deposit for 5 years. As per the provision released by the Government, you get tax benefit as per your income slab.

If you fall in the 30% income slab, you get a benefit of 30,900 bringing the effective investment down to 69,100/-. Similarly for 20% and 10% income slabs, the benefits will be 20,600/- and 10,300/- respectively.

However, the interest earned on the Fixed Deposit during a financial year is taxable and there is also ‘tax deducted at source’ when the interest is reinvested for the next year.You should also note that as an individual, you can invest the maximum amount of 1 lakh in a year.

Advantages of investing in Fixed Deposits

• Negligible risk
• Assured Returns
• Capital Appreciation
• Flexibility of parking additional capital for small terms
• Tax benefits for 5-year deposits

itsallaboutmoney

Steps to protect from fraud

Sometimes criminals will create fraudulent cheques or change the name or amount of a legitimate cheque. This is known as Cheque fraud. Though a Cheque is a useful instrument for banking, if it falls into the wrong hands, it could cause you inconvenience and loss. 

There are a number of simple steps that you can take to protect yourself from cheque fraud:

• Keep your cheques in a secure location.
• Review your monthly bank statement or regularly check your transactions through online or telephone banking. Keep your contact details registered with the Bank regularly updated. If you see transactions you didn’t do or get alerts about unusual activity, notify your bank immediately and they will investigate.
• You should never sign a cheque leaf until you are about to hand it over to the person who is being paid.
• If you have to mail a cheque out or have it sent out, make sure that you cross the cheque or make it an account payee only cheque by drawing two lines at the top left corner of the check and writing ‘Account Payee’.
• If you cancel a cheque, you should dispose it off properly after crossing out the cheque number andMICR code.
• If you close your account, destroy any unused cheques.
• Consider using electronic payments such as online payments, wire transfers or direct deposit of payments.
• If you receive a cheque that doesn’t look legitimate, ask for a different form of payment.
• If you believe that you have lost a cheque, you should inform your bank as soon as possible. They could stop payment on the lost cheque by tracking down the cheque number.

It is smart to be alert about your cheque book and its contents and any cheques you may receive from someone else.

You should report to your bank immediately if you lose a cheque book or if it is stolen. Your Bank will initiate a Stop Cheque procedure on all the cheques that has been reported as lost. Your bank will then issue you a new one at a small fee or free as the case may be.

There are a number of security features already built into cheques to help prevent fraud. Banks also have the means and will try to detect fraudulent cheques, but it takes time. And it may not always be possible to do so until it goes through the cheque clearing system.

By alerting your Bank, you help your Bank take steps for damage control and to safeguard your accountfrom losses as a result of a lost cheque or stolen cheque. This will also prevent you from being held as negligent or being responsible for any loss as a result,by the Bank.


itsallaboutmoney

How to fill a Cheque

A cheque is an important bank document which is used to make payments and exchange funds between people and two different accounts. A cheque book is issued by a bank to a valid account holder along with the welcome kit, when a new account is opened.

A cheque is a popular mode of banking transaction. A cheque book usually contains 5, 10 or 20 leaves. Cheque books these days already have the important details, such as the name of the Bank, branch address, IFSC code, Account holder’s name and Account Number printed on each leaf. This has made filling out a cheque, even more convenient.

Follow these steps to correctly fill up a cheque.

1. Fill in the date. This is called the date of issue.

• Mention the correct date in the top right column. It is day, month and year in figures.
• A cheque once issued is valid for the next 3 months.
• Sometimes, a cheque may require a future date to be written on it. Such a cheque is called a postdated cheque (PDC). This means that the cheque cannot be cashed until that day. People tend to write a postdated cheque because when they do not want it to be encashed or deposited before a particular date.  This is often used when one has to pay out a loan or a Monthly Instalment which will be paid out at a future date.

2. Write the name of the person/ company (Payee) you want to address the cheque to.

• Make sure you spell the name in the same way as it appears on the beneficiary’s account.
• If the name does not match, the cheque will not be valid for payment.

3.  It is advisable to strike out ‘or bearer’ at the end of the ‘payee’ line.

• This will ensure that the cheque is encashed only to the person it is addressed to and not to just anyone who holds it.

4. Write the amount to be paid in words along the ‘Rupees’ column. Strike a line after you fill in the amount in order to prevent any alteration.

5. Rewrite the exact same amount in figures within the adjacent box.

• Say to pay a sum of 1000 Rupees, write One Thousand only (in words); 1000/- (in figures) in the box.

6. Put your signature above your name to authorize the transaction. This should be the same or closest likeness of the signature specimen you have submitted to your bank while opening your account.

• The name and account number of the holder is usually already printed on the cheque leaf. If it is not, carefully write your name in BLOCK letters and enter your Account Number in the designated box.

7. Sometimes, in order to secure a cheque, you may mark out two parallel lines with ‘Account Payee only’ written in the middle, on the top left corner of the cheque. This is called ‘Crossing out a Cheque’. This means your cheque will be paid into the account of the person being paid and not to the person holding the cheque for payment at the counter.

• Follow this carefully to direct the amount transfer into the account of the right Payee. It is an important step to safeguard your money.

8. To cancel a cheque mark ‘CANCEL’ in bold across the face of the cheque and if possible, inform the bank officials or make a note of the cheque number and record it as cancelled. You should also mutilate the MICR code of your cancelled cheque or shred the whole cheque. You should additionally scratch out your signature on the cheque.

A correctly filled out cheque would look like the image below.

Do remember that you cannot make any changes / corrections to a cheque that you have filled in. Any overwriting will render the cheque invalid.

Every chequebook has a record sheet where you can note down the details of each cheque you have issued. It is a good practice to keep a record by duly noting down the transaction details such as the payee name and his/her contact number, cheque number, date and amount. Such information are crucial should you require to stop a payment or to check if there is an unauthorized withdrawal.

A cheque is valid only when filled in with correct details including the date, name of the payee, amount specified in words and figures and duly signed by the account holder. A cheque is a sensitive and an important document for your banking purposes, hence should be kept safe. You should sign a cheque only when you are ready to issue it. This is to prevent the unauthorized use of your cheques in the unfortunate event of losing your chequebook in which case, pre-signing your cheques would ease unauthorized usage of your cheques and would amount to carelessness on your part as a customer.

itsallaboutmoney