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admin@paisashield.comWith an array of expenses to be handled every month, keeping multiple cards is common among urban citizens.While on one hand it increases your hassles to keep track of how much you are spending, on the other it improves the credit utilisation ratio, thereby increasing your credit scores and worthiness for acquiring loans.
Credit Utilisation Ratio is the percentage of the available credit limit you are utilising. If you have a spending limit of Rs 100,000 on your credit card, and say you use Rs 70,000 from that limit in a month, your CUR is 70%. Th...
Technology has changed several things for the lending industry. Online aggregators help customers zero in on the cheapest loan and banks take less than a minute to approve and disburse loans. However, the canons of prudent borrowing remains unchanged. It still does not make sense to borrow if you do not need the money - or to take a long-term loan only to enjoy tax benefits available on the interest you pay.
The golden rule for smart borrowing is what the older generation has been telling us all the time: do not live beyond your means. We list that 5 immutable rules of borrowing th...
It is an internal lending rate of reference for banks, to determine the minimum rates of interests for loans. For this, they take into account the additional or incremental cost of arranging additional rupee for a prospective buyer. Under MCLR, banks are under an obligation to adjust their interest rates as soon as the repo rate changes.
Treasury Bill is a short term (up to 1 year) debt issuance from the Government of India, which is an external benchmark rate, published by an independent ...
Already popular in the corporate world, personal car leasing has become much more popular in India for self-employed individuals and professionals who run their own practice to lease a car; and there are plenty of benefits to it.
A lease gives you the right to use a vehicle for a pre-determined tenor and/or distance against payment of monthly fixed lease rentals. Typically, a lease is for two-five years. There are two kinds of leasing contracts. In operational leasing, all you have to do is buy the fuel; the other details - maintenance, insurance, r...
Your colleague at the office got a life cover of Rs. 75 lakhs, and you are feeling compelled to buy a life cover policy as well? Think before you follow your friend - do you really need a sum insured of Rs. 75 lakhs or more? Or may be do you need an insurance in the first place? If you approach an insurance advisor, to get an answer to your questions, you will be suggested to buy an insurance at the earliest possible, to avail the benefit of your young age. Do not fall into the trap.
Another myth defining the thumb rule for optimal amount of insurance as 10-12 times of the annual i...
The lure of big money has always thrown investors in the lap of stock market. However, making money in equities is not easy. It not only requires a lot of patience and discipline, but also great deal of research and a sound understanding of the market, among others.
Added to this fact that stock market volatility in the last few years has left investors in a state of confusion. They are in a dilemma whether to invest, hold or sell in such a scenario. Although no sure-shot formula exists for success in stock market, here are some of the ideologies if followed prudently, may increase ...
The concept of private wealth management is gaining popularity in India, recently. More and more financial institution, banks and brokerage houses have started offering wealth management services for a nominal fee - normally ranging between two to three percent of the assets under management. On the face of it, the fee structure looks reasonable as the wealth managers do have a reasonable expectation to provide returns exceeding the market return. However, is the fees structure really a fair pricing strategy?
Lets take an example of two friends - Ravi and Sumit. Over his life, Ravi...
Living for today sounds very good in the self-help books you may be reading, but really living it in your money life may not work. Unless you begin to plan for the time you are no longer able to leverage the human capital to earn an income, you are likely to see a drastic drop in living standards in the future.
The more time you have in your hand, the lesser you need to save. And simple math proves it. Sample this: You are a 25 years old and are 35 years away from your retirement. On the other hand, your 40-year-old boss will retire in another 20 years. Suppose, both of you want to...
Choosing the right investment instruments at the right age is very important.
We suggest you take a larger exposure to equity when you are younger and scale it down as you advance in age. A rule of thumb is to invest 1 - your age into equity (i.e. a 30 years old investor would invest 70% of the total wealth into equity) instruments and the balance into debts.
To start with, your Employees' Provident Fund (EPF) would put you on track as it takes away 24% of your cost to the company (CTC) and gives you a return on that money. Curren...
An asset class is basically a group of similar types of investments. These investments can be broken down into sub-classes which is primarily driven by the risk and return potential. Each asset class reflects different risk and returns characteristics, and performs differently in a particular market. Broadly they are classified into:
· Equities or stocks
Start investing as soon as you can and you will enjoy time's magical power of compounding. The greatest advantage in investing is time, so the younger you begin investing, the more time to have for your initial dollars to grow and compound.
A Chinese proverb says: "The best time to plant a tree was 20 years ago. The second best time is now."
That attitude is at the heart of investing. No matter how old you are, the best time to start investing was 20 years ago, and the second-best time is now. It is never...
Fund distributors use various marketing tactics to attract investors. They often present half-truths as facts and create misleading opinions in the minds of the investors, which can be detrimental to the investor's interest. One such myth is when you initiate an investment into a mutual fund through a broker network - whether online or offline, it is marketed as a zero cost investment. This is true, however, only partially. The amount is invested in the fund of your choice, but under the regular plan, whereas if you invest directly via the Mutual Fund Company, you will have the option to invest in the same fund, under the direct plan...
A credit score is a numeric rating creditors use to assess borrower risk in making lending decisions. The most commonly used credit score in India is from CIBIL. This rating is defined by how much debt you have, whether you pay your bills on time, how many credit cards you have and any unpaid bills, among other factors. The value ranges between 300 – 900. Higher credit score increases the chances of your loan application getting approved. Nearly 90% of the loans are granted for individuals with score greater than 750. While score between 300 and 549 is considered poor, anything from 550 to 700 is considered fair. Score belonging to ...
When the going gets tough, the tough go shopping’ is true for many because retail therapy, other than the distractions it brings, also improves the buyer’s mood. And when it comes to retail therapy, the Generation X and baby boomers are equally guilty as the millennial. Even if what each generation generally spends on may be different, the fact remains that they derive some kind of happiness linked to using the plastic.
Retail therapy may bring happiness but depending too much on it may actually do more harm than good. It is important to understand the signs of being overdependent and break free. We bring you some help.
To plan for your retirement, you need to commit to building wealth for your retirement. And if you are mindful and deliberate about saving, investing and spending money, you may be able to build wealth for your retirement faster than you think. Here are the ways by which you could create a retirement wealth faster than you realise.
Employee provident fund (EPF) and public provident fund (PPF) are your greatest allies in setting yourself up for a comfortable retirement. If you can afford to put full Rs. 1,50,000 in your PPF; and a 12% (along with 12% from your employer) of the basic sa...
Most of us are averse to being debt ridden. A loan (of any type) is a debt that one would typically want to repay at the earliest (preferably prepay i.e. pay before it’s due). Prepayment is a facility which allows you to repay your housing loan (in part or full) before the completion of your loan tenure. Usually, customers opt for prepayment when they have surplus funds. Evaluate the following factors before deciding to pre-pay your loan
Before considering prepayment of your housing loan, you need to ensure that you have sufficient funds for your living expenses or for financial goals such as marriage, travel abroa...
Buying a home is a big commitment. For most of us, it will be the biggest purchase we make in our lifetime; and it also usually ties us to one place for a long period of time. Of course, the process is more than finding a home you like. It is about finding a home you can afford and enjoy for years to come. And the price tag you see isn’t the full story. It is important to consider all of the financial factors of home ownership before you sign any dotted lines. Here are five costs to consider before buying a home.
House hunting can be intimidating – even the ones you can afford! In reality, you only have to pay a po...
Are you planning to buy gold this festive season? If yes, then you should know that you can invest in gold in various forms. These include physical gold, exchange-traded funds (ETFs), and Sovereign Gold Bonds (SGBs) in India.
You should choose between these options wisely (and according to your needs) as each has specific features and drawbacks associated with it.
Being a tangible asset, which can be worn or displayed, one always has an emotional attachment to physical gold, and it is easy to buy. You can buy it in the form of jewellery or gold biscuits and coins from jewellers. Other ...
Corporates are increasingly choosing to reward their management teams with equity awards or stock options. Especially for hi-potential employees who have made significant contributions to the business or have the potential to help move the company forward. Equity rewards or stock options can take various forms like equity stock options, stock appreciation rights (SARs) or restricted stock units (RSUs). Each of these are linked to company’s stock prices but could be difference in some form.
Stock options present a right to purchase company stock at a set price for a specific period. These rights are subject to a w...
Financial advisors often prepare complicated investment policy statements (IPS) for their clients, complete with appendixes, footnotes, and legal disclaimers. But yours need not be a complicated one – rather, at its most basic and useful form, your statement would document the parameters of your investment plan – the asset allocation framework, criteria for selecting securities, and the system to maintain those investments on an ongoing basis.
Documenting your goals might seem straightforward, but there's more to it. Your goals needs to be described as must-have and good-to-have. For a middle cla...
Cost of medical treatment has increased significantly over the recent past. People have come to realize the importance of medical insurance to cover for the contingency in cases of unforeseen circumstances. There is also an increase in medical insurance premiums, resulting in people owning multiple medical policies; and that too from multiple insurance companies. However, just paying the premium for the medical insurance is not sufficient to cover yourself for uncertainty. You need to also understand the intricacies of the claim process in order to ensure that you are able to avail the benefits. Holding more than one policy is not bad if you understand how to ...
You probably already know some of the basics—like how making your own coffee or bringing your lunch to work can save you thousands of rupees a year. If you are doing that, definitely keep it up!
But let’s look at a few other ways you can save on everyday expenses, and how some simple decisions that you make every day can help you save money.
The supermarket is a great place to start because there are a lot of easy ways to cut down on your shopping bill. You may already be doing things like: making a list to cut back on impulse buying, clipping coupo...
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