First Step towards your dream

In my earlier blogs, you would have understood the need of investments or saving, so that your finance is streamlined based on the type of spenders you are.

Today, I will give you a guideline that will help you to decide the type of investment; you can plan, so that your investment /savings grows with your age & career expands, as you near your dream / target that are achievable and becomes more realistic.

My understanding, further to this recommendation is that, you know the difference between debt & equities. If not, just get the basics on this by earlier blog on Equities & Debt investment type, before you read further down.

If you ask any financial expert, the best age to start your investments or savings is as early as possible.

Especially, in India, during the early 90's and 00's the average age to have a proper / regular job was at 31 and 28 years respectively, if you have completed your graduation in first class. Now, because of economic conditions and to improve profitability by global companies, they started outsourcing to large extend. Due to this job opportunities have increased especially in India and the average employable age has come down to 26 years [without depending parents for monthly expenses], where in the governments contributing majorly by policy changes and awareness creation, making us more educative & employable.

Saying this, I am just giving an idea, what will your time to start your investment and not starting a debate on the age or economic values. The labour force in India is still way behind China, however in one way, we are far ahead as per Deutsche Bank Research report. This report clearly suggests that, the potential is there in India and not elsewhere to be the workforce for the World, intellectually.

If we need to make India super power of tomorrow, then you as an Investor or Indian should start growing with your economic conditions. This means, when you participate in investing in Indian ideas that will guide or groom the World ex: Hotmail, Infosys, Reliance, Tata, United Breweries, Bharti and ICICI, then only these are achievable. I have listed the versatility in Indian industry, which have gone globally and succeeded.

A single tree can't become forest, however seeds from the tree, can become a forest in the later stage. If everybody starts investing in good ideas and good management companies, then we can do more than what others have done till date.

Typical Indian investment mindset is either Safe Investment or High Profit. When you want to succeed or your investment has to grow, you need to think of average safety and average profit, which makes you more reliable and avoids you from falling to traps or economic downsides, literally.

Income you earn by your work or employment is as active investment of yourself, which gives you a passive component called money. However if the same is idle or spend on unwanted things, then the purpose of your ability vanishes.

Make your passive component, work for you actively, without much hassle.

Any age to start investment is right. Don't get worried, since the other person has started early or he is earning higher at less age. All these are economic changes, so everyone is bound to rely on that and you need to understand it.

Typically diversify the investment into [recommending for an average Indian mindset]

Your Monthly Savings = [(Your Age + 20) % = Debt funds] + [Equities]

Scenario 1  Age: 25. Savings is Rs 30000 per month = [(25+20) %= Rs 13500] + 16500
Scenario 2  Age: 30 Savings is Rs 15000 per month = [(30+20) %= Rs 7500] + 7500
Scenario 3  Age: 35 Savings is 45000 per month = [(35+20) %= Rs 25000] + 20000

Debt returns varies from 3 % to 8 %.
Equity returns varies from -30% to +25%.

Sometimes the returns might be higher or lower due to various factors like type of investment, investment horizon, economic conditions etc...However I am trying to ensure that you keep only this average in mind, and follow the investment guidelines properly.

I have kept the average return of 15 to 20% achievable, keeping my basic investment formula and following this on regular basis.

• Saving & investing on MONTHLY basis ONLY
  
• NEVER investing in assets that have HIGH DEPRECIATION value at ONE GO.
  
  • Flat [not house], Car, Electronic items [TV, Mobile phones, Computers, Branded & Luxury items]
    
  • Equity Investment [might give good return, if the economy goes upside, however there is 'if' condition]
    
• ONE GO investments due to cultural barriers & personal needs, which cleans your savings or makes your to achieve your target
  
  • Gold, House, Flat for additional income [ investing due to rental factors]
    
• Investment Timeline – 1 to 5 years.
  
  • Every 1 year, you need to re-check your investment performance and change, if it does not work as expected.
    
• REDUCING YOUR EMI TENURE, where ever possible.
  
  • Typically, for Housing loan, an average person take 20 to 25 years. Instead take 10 or 15 years. Less Interest, your savings or earnings are converted into values or targets.
    
  • Typically for Personal loan, an average person takes 4 or 5 years. Instead take 2 or 3 years.
    
• Credit card purchases – Many try to convert to EMI. NEVER DO THAT.
  
• NEVER compare EQUITY returns Vs DEBT returns. Always sum both the returns, and calculate based on your principal invested.

Prepare Rice using Microwave

Now based on my earlier blog on Microwave Cooking, you would have felt that, this is something new or probably we can buy or make use of Microwave in a better way!

Usually there are two ways of preparing rice...

Traditional way of putting the rice in boiling water and filtering the starch.
Conventional way : putting the rice + water in the pressure cooker and waiting for two to three whistles.

Traditional way of preparing rice :
+ Starch is removed, so the rice is not smoggy
+ - the rice stays good for 4 to 6 hours [shelf life], depending upon the climate
- you need to very careful in this preparation. If the rice is over boiled, then it becomes sticky.
- risk involved, to filter the starch from the rice

Conventional way of preparing rice by pressure cooker:
+ You get the benefit of essentials from the starch, so that food taste improves
+ rice stays good for long hours
+ no risk [as water & rice mix together]
- rice turns brittle after 3 to 4 hours
- eating pressure cooker rice, you will get belly as the gas in the rice are still there and this increases the size of our stomach. This is long term effect, it will take 3 to 5 years to see the person having belly who is eating pressure cooker rice on a daily basis.

Preparing rice using Microwave, mixes both these factors, and you get a product that are good for health with ease.

How to prepare rice using microwave?

1. Take the quantity required. say 1 cup of rice.
2. Put it in bowl and wash it 2 to 3 times, until the dust or the rice mill extracts come out.
3. Now soak the rice by pouring water in the bowl that has rice. Ensure that water level is higher that the rice level.
4. Wait for 5 to 10 minutes [max]
5. Drain the water and pour fresh water [2 x Cup] in the rice or the water level should be 1 inch above the rice level.
6. Close the Lid
7. Keep it in Microwave Oven for 17 to 18 minutes [max].

When you open the oven, you find little amount of starch is spread in the microwave glass. Don't worry. Remove the bowl and open the lid. You will find the rice, that is very nicely prepared.

Remove the microwave glass and clean it, so that your Microwave is ready for next cooking.

NOTE: In case you have poured less water, and find that the rice is still not boiled properly, pour some amount of water again and keep it for 5 minutes. Rice is ready.

Some doubts will come like this?
Will the little amount of starch spread in the microwave glass, will come every time we prepare rice or rice items?
My answer is Yes & No.

It will come only, if you prepare only plain rice.
It will NOT come, if you mix some items or ingredients with rice like Tomoto Rice, Pongal, Veg Briyani or Non-Veg Briyani, as the ingredients consume those, so you get a clean outcome.

Follow the tips & prepare your rice and let me know the feedback.

Financial Goals

When we talk about financial goals, most of them are not sure or it is decided on circumstance.

To have a better understanding for the need of this, you need to understand what you target for. It has to be done through planned manner.

Remember 'ROME was not BUILT in a day'.

To achieve your financial goals, it might take 5 to 20 years, unless we have spare or free money due to some wealth left by our forefathers, which is not going to happen.

In Simple terms, get your finance streamlined.

• Calculate the current total debts or liabilities, if you have any.
  
• Plan, what you need to buy so that you have a target for your finance.
  

The Basic step of achieving financial goal is by setting up the foundation even before the plan in started.

1. Get one Insurance Policy
   

• Preferably a Term Insurance for [ YourDream x 2 ] ex: If you are planning to buy a house for 25L or your liabilities is 25L, then your term insurance value should be 50L
  
• Other than Term Insurance, I will NOT recommend any other Insurance policy as their value or factors are nil and you get a mere 4 to 5% or less return at the end of its tenure.
  
• Personally I will NOT recommend ULIP based Insurance, as the basic idea of cover during crisis is lost here.
  

1. Get an Health care or Medical Policy
   

• Since most of them are covered under corporate level schemes, it might not be necessary however
  
• Have one additional in hand, it will be useful when we retire to take care of ourselves as that time, the policy cost will be very high or most of them don't allow subscribing / opening new policy after certain age limit.
  

Once you are covered financially & health wise, you need to plan your finance systematically. I have divided that into certain parts, so that you can understand them.

PART A

The first & foremost is close all your existing loans or debts like credit card, personal loan etc..

• If you unable to close them. Convert them in low-interest loans.
  
• If you have a credit card loan
  • By taking a loan from a friend or relative
    
  • Or by opting for Balance Transfers
    
  • Or by taking a Personal Loan
    
• Stop using credit cards, if you are unable to control using it or if you have urge of shopping always.
  

PART B

Once you are out of debts, now it is time to build wealth. Before building wealth, you need plan for the target or what you need to have. It can be anything but remember be realistic or that can be achievable.

Some of the wealth options are

1. Real Estate [House/Flat/Land/Property/Bungalow/Designer houses]
   
2. Jewels / Diamonds
   
3. Four Wheeler / Two Wheelers
   
4. Foreign Holiday Trip
   
5. Child's Education
   
6. Child's Marriage
   
7. To start a business of your own
   
8. Medical Emergencies, if any.
   

PART C

Now you have the target in your mind, so you need to work towards it. Money or wealth can be built in…

In Debt market

In Equity market

What is debt market?

In layman approach: Any investment or savings, which does not change or erode the principle, is called debt market. The outcome is static.

Ex: Government bonds, Savings Account, Fixed Deposits, Real Estate*, Gold*, Jewels*, Diamonds

What is equity market?

In layman approach: Any investment or savings, which increases or decreases the principle drastically, is called Equity market. The outcome is dynamic.

Ex: Real Estate*, Chit funds, Mutual Funds, Share market, Gold* etc...

To understand why you should invest or start saving money…read my earlier blog 'Investment in nutshell'

NOTE: * - Some investment like Real Estate & Gold are both in Debt & Equity. I will tell you...why I have mentioned like that.


For detailed type of recommended investment, I will do inform you in my next blog.


Until then, happy reading.

Microwave Cooking

The one thing, I hated most was Microwave Oven. I know people using it and most of them say that, they use it for re-heat or make coffee ...basically for simple chores. I used to think, why someone should invest Rs 10K for this purpose.

Time came for me to experiment with it, due the handle that broke in my pressure cooker, which I got it & surviving during my initial days of my onsite trip.

With my initial experiments, its outcome was pretty bad with Microwave Oven.

However with the days going by and understands how it works, I can say that I have perfected the approach and can cook some of the daily need or variety of Indian recipe with ease which uses less oil.

Remember Microware Oven is used for less oil or no oil. But still you can use a max of 4 to 5 table spoons. Most of the dish recipe use this much only.

If you need to fry something like onion, chicken or potato …you need to still use the pan with required amount of oil. Never try those in Microwave Oven.

This way of cooking is healthier as it contains less oil but still the taste remains the same.

What are the things that I have tried till now?

1. Normal Rice
   
2. Roti / Chapathi
   
3. All types of Pongal
   
4. All types of Briyani
   

Why I recommend Microwave Oven…

1. Same taste as you get it in Pressure Cooker
   
2. Fewer vessels mean less work & less cleaning.
   
3. No need to wait & watch. Set the time and based on the signal, you know what needs to be done next, if needed.
   
4. Healthier, as it uses less oil or ghee.
   
5. Hygienic & Less space
   
6. Running cost compared to Gas is less or same. Microwave Ovens usually come with 1000 watts to 1500 watts. 1000 w will consume 1 unit per hour if used, translates to Rs 6 per day / Rs 180 a month.
   

What are the vessels that are required?

Typically when you buy a microwave oven, manufacturers bundle free offer of microwave cookware in India. Usually they will be fiber make. My recommendation is glassware for preparing rice items.

Why Glassware?

It handles the pressures due to its weight and cooks evenly similar to pressure cooker.

What type of Glassware?

Get any glassware that has a proper fitting lid. Sample picture below,

Next time, I will write down on how to prepare rice, so that you can give it a try and give its feedback.

Sending Money to India

There are multiple ways to send your money to India from UK. I have listed some of the available options..

To find the current bank exchange rate ...Oanda or XE

On-line methods: 

1. AxisRemit by AXIS Bank
2. Money2India by ICICI Bank
3. Money2anywhere by UAE Exchange
4. QuickRemit by HDFC Bank
5. OnlineRemit by SBI Bank

or through International Payments via your UK Banks called as SWIFT payments

Off-line methods:

1. Western Union 
2. UAE Exchange 
3. SWIFT transfers via any UK Banks

For Offline or online mode, you need to pay Service Transaction Taxes [STT]. For Charges, click here.

The Off-line methods are

- tiresome, need to go the counter or bank physically
- we need to pay HIGH brokerage for every transaction
- higher brokerage payout [usually £20 for SWIFT transfers or 1% of the value we send] , means less money received
+ next day deposit
+ exchange rate is good normally 0.30 to 0.50 paisa more than online-bank rates
+ good when you send huge amounts more than £ 2000

 On-line methods are

- effective bank rate
+ easy & simple
+ less charges [Rs 25 to Rs 75]
+ next day deposit
+ good when you send less than £ 2000

Best for On-line Transfer

My personal recommendation is Money2India by ICICI Bank. Why?

+ charge Rs 25/- per transaction + better exchange rate compared to Remit2India & Money2anywhere or other Online modes
NOTE: Check the rate of XE site and it will be 60 to 80 paisa less than the rate mentioned in it. Which is the best among all the existing/reviewed vendors in this post.
+ You can transfer to any bank
+ You can send Demand Draft, for whom they don't have account
+ You can opt for Remittance Card to whom you are going to send money, which is similar to Account Opening but one time process. They will get an ATM card, to withdraw cash.
+ Pay directly to your Credit Cards based in India




NOTE:1: Don't transfer on Friday rates, as FOREX don't work on weekend, any changes on Monday, will severely impact the exchange rate.

NOTE:2: Usually on-line method takes only 1 day however in some cases it takes 4 to 5 days. They reason that is delayed is not because of the Remittance Bank but because of the UK Bank to the Remittance Account Bank.

Ex:

You have UK Bank account from Lloyds TSB

You have remittance account in ICICI Bank via Money2India

You are transferring to SBI Bank in India


You initiate a transfer of xxx GBP from Lloyds TSB via a Reference Number obtained from Money2India for the same xxx GBP. Lloyds TSB bank takes 4 days to debit to ICICI UK account, even though the amount xxx GBP has been debited from your account on 2nd day.

This will be bad, if the exchanged GBP vs. INR is depleting.

In order to ensure that your money reaches on time, ensure that your UK bank transfers immediately, meaning you need to use or check bank uses Fast Processing Option. Most of the modern banks have these. This will translate to NEXT day debited in your SBI Bank.

What rates you will get?


ICICI Bank follows XE exchange rate. It will be 60 to 80 paise less than what it displays in exchange rate, which will be better compared to other vendors.


For remittance rates..


ICICI
SBI
Axis
HDFC
TimesofIndia


Best for Off-line Transfer

UAE Exchange

+ Brokerage varies based on amount send. The higher, the optimum brokerage
+ next day