The most significant advantage of a joint home loan is the increase in home loan eligibility. Incomes from all joint home applicants are pooled in to enable the applicants to obtain a higher loan amount towards purchasing their dream home.  All the joint home applicants are eligible for tax rebates under Section 80 C for principal repaid and under Section 24 for interest repaid. However, these tax deductions are capped at 1 L for the principal repaid and 1.5 L for the interest repaid.

There are a number of advantages when you combine incomes and apply for a joint home loan. A bunch of these advantages are detailed here for your reference.

a. The most significant advantage of a joint home loan is the increase in home loan eligibility. Incomes from all joint home applicants are pooled in to enable the applicants to obtain a higher loan amount towards purchasing their dream home.

b. All the joint home applicants are eligible for tax rebates under Section 80 C for principal repaid and under Section 24 for interest repaid. However, these tax deductions are capped at 1 L for the principal repaid and 1.5 L for the interest repaid.

c. Another advantage of jointly taking a home loan is that all the borrowers can simultaneously avail these income tax rebates, thus maximizing the tax benefits of the home loan.

d. The number of people who can avail a joint home loan can be anywhere between 4 and 6, depending on their individual credit profiles.

e. The one criteria banks insist on is that all co-owners of the property should also be co-applicants but the reverse need not be true.

Who can take a joint loan?

– A married couple or a parent and child can take a joint loan.

– Some banks allow brothers to take a joint home loan provided they will both be co-owners of the property. Banks insist that all co-owners of the home must be co-borrowers in a joint home loan.

Exceptions: Sisters, friends or unmarried couples living together are, generally, not allowed such loans by banks.

Do both borrowers get tax benefits?

Yes. You as well as the co-borrower can avail tax rebates on the principal and interest repaid on the loan.

This way you can maximize your tax benefits.

Note that knowledge of current personal net worth is essential to make financial decisions. It is important to reevaluate personal net worth while making any important financial decision as the value of assets and liabilities is likely to change. Also, net worth should not be considered in isolation. It is a good idea to consider factors like current and future income levels, future liabilities etc.

An accurate understanding of one’s financial well being is of utmost importance at every stage of life. So, whether you are a student, fresher into the job market or a veteran - assessment of personal financial health is important in order to make good financial decisions. For example, purchasing a car, purchasing a home, taking a student loan, liquidating an investment or making a risky investment  – all these decisions can be made only if you know your financial status well.

An individual’s financial health is computed by means of his personal net worth. In simple terms, personal net worth is the net asset value of an individual. Personal net worth is calculated as follows:

[Total Assets] less [Total Liabilities]

One must assess his / her net personal worth on a regular basis. This is because corrective measures can be taken in time if the net personal worth starts declining. It is much easier to recover at early stages than once you find yourself in deep financial crisis. Your net personal worth will also give you an idea about how financial institutions perceive you as a borrower.  For example, Deepak, an IT consultant with a software company wants to purchase a car. He has set his eyes on the Toyota Corolla. The car dealer informs him that the on road price of the car will come to Rs.11.25 L.  If he takes a car loan, he will have to pay a monthly EMI of Rs. 15,000 towards repayment of the car loan and pay an amount of Rs. 1.0 L as down payment. Deepak’s monthly salary is Rs.0.9L and the EMI as well as the down payment seems easily affordable. However, Deepak should assess whether he can afford to buy this car at present by considering all his liabilities and assets. His personal net worth should give him a fair idea of his current financial status and whether he can afford to buy the car.

Computation of Deepak’s personal net worth

Assuming that Deepak’s monthly outflow towards EMIs of outstanding loans is Rs. 35,000/- and looking at his personal net worth, a corolla is a viable option. This is because he has a positive net worth of Rs.18.73 L. Further he is able to make payments of EMIs with ease considering his current income and should also be able to pay the EMI on the new car loan.

Note that knowledge of current personal net worth is essential to make financial decisions. It is important to reevaluate personal net worth while making any important financial decision as the value of assets and liabilities is likely to change. Also, net worth should not be considered in isolation. It is a good idea to consider factors like current and future income levels, future liabilities etc. For example, if Deepak has to bear the expenses of his sister’s wedding which costs him approximately Rs. 9 L and he has to sell off some of his investment to meet the wedding expenses, his personal net worth will look different. Further, if the market value of assets declines, his personal net worth will also take a hit. Let us take a look:

Deepak’s Personal Net worth is he has to bear his sister’s wedding expenses and the economy takes a down turn:

Clearly, in the above situation, Deepak should not purchase a car at present and should concentrate on improving his personal net worth.

Decide what you really need by making a list before you venture out. And keep looking at that list while you wander around, so that you’re aware of what you really need, and what you like the look of. Make sure to be armed with only a limited amount of cash and ensure that you stay within your budget.

These days, whether you’re at home, or out in the city, you are constantly bombarded by messages to Buy! Buy! Buy! From phones, laptops and other electronic gadgets, to home appliances, branded clothing, and footwear, to airline tickets and dream holidays. Advertising has evolved so that the messaging is subtle, subliminal and extremely effective, so that the line between what you need to have and what is nice to have is often blurred. But let’s face it: consumerism has arrived, and in a big way, and there really is something to what is now labelled ‘retail therapy’. The question now is how to get the best out of all the shopping that’s out there and waiting for you!

A QUICK CHECKLIST

• Decide what you really need by making a list before you venture out. And keep looking at that list while you wander around, so that you’re aware of what you really need, and what you like the look of.
• Take a limited amount of cash.
• Stay within your budget.
• Leave credit cards at home.
• Do not remove the tags. Wait a week to think it over. Remove the tags once you’re sure you’ll enjoy your new item.
• Watch for sales. Try things on prior to a sale.
• Try shopping off the beaten path. You will be surprised at the bargains and finds that jump out at you.
• A heavy discount does not mean that you have to buy it.
• Take time to think things over to avoid impulse shopping.
• Ensure that you reach the shop at the right time. If not in the first week, then try checking out the shop in the first ten days of sale for sure. The first and last days are the worst to visit.

THE ONLINE VERSION

Using the internet to shop gives you access to the best prices and the best deals through a quick search in a matter of minutes. While it’s easy to shop around online yourself, price comparison sites can do it all for you. Simply type in what you want and they scour the market to bring you a list of retailers selling the product, along with the prices they charge. Do pay attention to product reviews because they can tell you if the product actually works. Another way to approach it is to Google the product along with the word ‘complaints’.

Tip: if you don’t check out, and leave the item in your shopping cart, the price might go down.

Make sure to double-check the total cost before you buy, especially if you’ve ordered something from outside the country. Shipping can sometimes work out to more than the price of the product itself.

Contrary to popular belief, never pay by check or money order when buying online. If something goes wrong, the seller has your money and you have to try to get it back. The safest way to pay is with a credit card.

SHOPAHOLICS, FIND A SOLUTION!

If however, you are a shopaholic, then you need to dig a little deeper and begin by examining your spending habits, and identifying your weaknesses.

• Look at your bank statements every six months or so, and evaluate your income and expenditure. Expenditure breaks down into fixed costs, such as mortgage repayments and bills, and whatever is left over and spent throughout the month. Work through the transactions and ask yourself if each one was necessary.
• Figure out where your hard-earned money’s going. It’s the little buys that add up, so if you can’t remember where you spent it, maintain a diary for a few weeks, and you’ll be shocked. You will also see a pattern to your spending, which, if you want to change, is really important to understand.
• Decide what you want and how much you intend to spend, and stick to that limit. When you plan to travel, always book in advance if you can, because long-haul flights and train tickets are significantly cheaper the earlier you book.
• Try not to use shopping as a pastime or entertainment. Ask yourself: Did I want this before I saw it? If the answer is no, walk away.
• Realise that buying something because it’s cheap does not mean you are getting a good deal, especially if you don’t really need it. A good test is to ask yourself if you would buy an item at its full price – this will give you an indication of whether you are getting a good deal on something you actually want.

So, start paying attention to where, how and why you spend and it’s likely that you will start feeling a bit more flush. Understand that price does not always mean quality; an unbranded item could give you the same level of quality as a known brand, if you shop smart. A happy mood spells a happy shopping experience.

The Akshaya Tritiya is supposed to be one of the most auspicious days to buy gold. According to Indian belief, this day is blessed by the goddess of wealth and investment on this day would grow throughout the year.  The jewelers and gold traders wait for this occasion to push up the sales.

In order to attract more buyers, the jewelers and banking institutions have come up with various schemes this year. One of the leading jewelers has come up with an offer of a free silver coin equal to half the weight of gold purchased i.e. if someone buys 100 grams gold, then he will get 50 grams of silver free. Another renowned jeweler is offering up to 50% discount on the making charge of jewelry. Similarly, banks are also offering attractive discounts on the gold coins if booked on or before Akshaya Tritiya.

There are many options available in the market, and it’s natural for the buyers to get confused. The buyers have a wide range of options to buy Gold on this Akshaya Tritiya. Before buying, it is necessary to understand whether one is purchasing for investment or as jewellery. Following are some of the most attractive gold investment options available in the Indian market:

a. Gold Jewelry
b. Gold Bar/coins
c. E-Gold investment
d. Exchange Traded Fund (ETF)

The details of all the four options are shown in the table below:

Finally

Now after analyzing all the data under the four options to invest in gold, it would be a better choice for a buyer to first analyse his/her need. If the buyer wants to invest for long term with less carrying cost and doesn’t want many tax obligations, then Gold ETF is the best choice. Even when the buyer wants to make jewelry in the future with the invested gold, it is best to invest in the electronic form of gold because later on when needed it can be easily liquidated, and proceedings can be used to make gold jewelry at the prevailing market price. If, however, the buyer immediately wants to use gold as jewelry, then obviously there is no point in buying gold in an electronic form. Usually during Akshaya Tritiya people try to invest in gold as a long term asset, so perhaps the best way to do this is to invest in the electronic form of gold.

Empirically, the percentage of investments just before 3-6 months of tax filing climbs up while it becomes a bit subdued post the tax filing season. Why such a scenario? What is the relationship between tax filing and investment?

Many investors confuse investment with a tool to save tax and do not see them as a tool to build wealth! Investment certainly helps you save taxes but by making tax saving as the primary goal of investment, you are mismanaging investments that can help you retire early in style!  Take some pointers from the article that unfolds below to make a fresh start this year!

Tax saving versus investment

Tax saving is an integral part of financial planning no doubt. There are several schemes introduced by the Government to encourage individual savings. It is meant to inspire people to see the larger picture and not just to try to save taxes for a particular year. It is true that tax savings is equivalent to earning a return and is supported by the philosophy that a penny saved is a penny earned! The problem arises when you do not see tax as a piece of the saving puzzle and consider it as the puzzle itself! Most individuals just opt for a random investment instrument to save tax without weighing its pros and cons and without understanding why it deserves to be a part of a healthy financial portfolio.

Every investment needs to have an objective. A person starting out on his first job could start investing with a goal to start his own business; a new parent might want to get started early to invest for his child’s education; a senior executive may invest for his retirement savings corpus; an employee with the highest income bracket might want an additional tax benefit and invest in infra bonds solely for tax saving etc. Investment can also be of short term and long term. Investment to save tax will fall into short term investment as the sole purpose is to save tax.

Why should you think beyond tax?

A host of tax saving instruments might be introduced during the tax season for the masses but you must keep in mind that you need to carefully sift through them to suit an instrument that will suit your individual needs. Here  individual needs refers to aspects that will drive investment keeping the larger objective of  building wealth for the future in mind rather than a  last minute rush to save tax! Investors should decide their investment plan based on two aspects: objective and investment horizon.

Investment Objective: The objective of any investment is to get specific returns or an approximate sum of money at the end of the investment horizon. The objective should be realistic and must take into account the risk appetite of the investor. For example, if you are an investor with a low risk appetite you should not invest in stocks and should not expect 20% returns over the period. At the same time, a risk taking investor can build immense wealth by investing in equity and equity oriented mutual funds over a longer term.

Investment Horizon: As an investor you should consider your investment horizon while choosing investment assets. Risky assets such as equity and equity oriented mutual funds are not a good choice for short term investment. Their returns fluctuate drastically in the short term but tend to provide good returns over a longer time frame to the tune of 10-12 years. Those who are interested in short term investments should look at debt assets such as company deposits, Government bonds, bank fixed deposit etc. Similarly, if you wish to stay invested for a longer term, you should consider investing in equities and equity oriented mutual funds. Investing in debt will incur opportunity cost.

Things to remember

Investment planning should be done in advance and you should not wait for the tax filing season to arrive. Investors often make the wrong choices in the last minute rush to save tax. Remember that you do not save much in taxes anyway. Most of the investments fall under article 80C which provides a maximum tax deduction of 1 lakh. This amount is so small that your PPF alone can cover the entire 1L now, as the investment limit on it has been recently increased from 70,000 to 1 L.  Even otherwise your EPF and insurance will anyway cover most of it. Nevertheless, if you still need to invest, you should do it as the saving itself is equivalent to 30% of returns immediately. Infrastructure bond under 80CCF was re- introduced last year to help increase the tax savings and is useful solely for this purpose for most individuals who are intent on saving tax.

Secondly, if you have not taken up any investment for tax savings, do not panic and buy anything that is recommended. Do your own research and take your time. If you find nothing, don’t buy. It is better to pay taxes than lose out more than your tax liability in a bad investment. Some investors invest in properties just to save taxes. This is fine if you have enough disposable income to pay the EMIs. However, if your disposable income is not enough to afford the EMI, avoid investing in properties. Do remember that properties are not easily converted to cash because it takes time, due diligence, and enormous amount of paperwork to sell the property.

Additionally, investment planning requires expertise. The good news is that this expertise can be learnt provided you spend some effort and time in this direction. Asking simple questions such as what is the past returns over last 10 years; what is the rating assigned to this bond; what is PE ratio etc., can go a long way in building wealth and mapping out a wise investment schedule. A healthy financial portfolio is an ideal mix of short and long term investments or the right ratio of debt and equity instruments.

Finally, investment planning is a necessity to secure the future for yourself and your loved ones. Ensure you do not make it solely the function of tax saving alone!

If you and your spouse earn similar incomes, then its best to opt for an equal co-ownership of the property and split the tax benefits of the home loan equally as well. In case one of you fall under a smaller tax bracket,  it is good to let the partner with the higher pay make a higher contribution towards the home loan resulting in a better tax benefit collectively. This would help you optimize the benefits from the tax exemption on principal and interest repaid.

A home loan often means all the more caution with money management and monthly budgets. It also means some smart thinking on the part of the individual who is taking up the home loan. Apart from things like evaluating fund flow, future job prospects, negotiating a pay hike, understanding loan eligibility, maintaining a good credit score and getting the best interest rate in the market, one also needs to consider the possibility of opting for a joint home loan!

Who can opt for it?

Banks insist that all co-owners of the home must be co-borrowers in a joint home loan.

- One could team up with parents or the spouse to be able to maximize the benefits of a joint home loan.

- Some banks allow brothers to take a joint home loan provided they opt to become co-owners of the property.

The exceptions are sisters, friends or unmarried couples living together as most banks generally don’t allow them to opt for a joint home loan.

Key advantages of a joint home loan
a. Banks do not allow a person to borrow to an extent where their EMI exceeds more than around 40-50% of their monthly income. This ensures that there is no stress on an individual’s monthly budget. Hence, when the incomes of all the joint applicants are combined to decide the loan eligibility, the result is a better loan amount for a better home.
b. All co-applicants are eligible for simultaneous tax rebates under Section 80 C for principal repaid and under Section 24 for interest repaid. However, these tax deductions are capped at 1 L for the principal repaid and 1.5 L for the interest repaid. Do note that this is applied for each individual loan applicant thus maximizing the tax benefits on the home loan.
If you and your spouse earn similar incomes, then its best to opt for an equal co-ownership of the property and split the tax benefits of the home loan equally as well. In case one of you fall under a smaller tax bracket,  it is good to let the partner with the higher pay make a higher contribution towards the home loan resulting in a better tax benefit collectively. This would help you optimize the benefits from the tax exemption on principal and interest repaid.

Eg. Let’s say the principal and interest repayment on your home loan for a given year is Rs 2.4 lakh and Rs 3.5 lakh respectively. Now, under Section 80C, you can get a maximum tax deduction of Rs 1 lakh on principal repaid and under Section 24 you can get a tax break of up to Rs 1.5 lakh on interest repaid. However, if you and your spouse have opted for a joint home loan, you would collectively be able to claim a deduction of Rs 2 lakh and Rs 3 lakh on the principal and interest repaid.

Do note that the tax benefits are according to the proportion of the loan. That is, if the ratio of the loan is 70:30, then a loan of say, Rs 50 lakh will be split as Rs 35 lakh and Rs 15 lakh respectively and this ratio will be applicable while calculating tax benefits on the interest and principal repaid on this loan.

Also keep in mind, that tax slabs might change according to new budget specifications each year and there could be changes in the gross income as well, not to mention changes in the total principal and interest repaid in every new year of the home loan. In this respect, the interest repaid will become considerably lesser and the principal repaid will become higher during the latter years of the loan.

For tax purposes, it is best to procure a home loan sharing agreement, detailing the ownership proportion in a stamp paper, as legal proof for ownership.
So taking a joint home loan has the significant twin benefit of increasing your loan eligibility and maximizing your tax rebate.  Do remember that though the banks insist that all co-owners of the property should also be co-applicants in a joint home loan, the reverse need not be true.

It is a good idea to categorize your payments under different headings like daily living expenses, entertainment and vacation, health etc. This will give you a fair idea of how much you spend on different categories. It is easier to keep track and also control your expenses once you know how much portion of your earnings goes into each expense.

Getting married? Starting a job? Getting further education? Starting your own family? Have you planned for these important phases in your life? Good control over your personal finances will help you achieve the goals you have set for yourself and cope with changes in your life. How can you achieve that? The answer is having your own personalized budget.

How do you draw a budget that suits your need? Say, you are interested in taking an educational course and are thinking of taking a student loan. How will you accommodate this additional expense? To begin with, you need to draw your personal budget.

- The first step is to calculate your monthly income. Consider income from all sources including income from your investments. ——- A

- Next, make a list of your monthly expenses. For example, if you are a salaried employee, list your routine expenses like expenses on commute, food expenses, utilities, clothes, charities etc. Then think of any extraordinary expenses that you may have to incur during the budgeted period, such as home improvement projects or purchasing a car. ——- B

- It is a good idea to categorize your payments under different headings like daily living expenses, entertainment and vacation, health etc. This will give you a fair idea of how much you spend on different categories. It is easier to keep track and also control your expenses once you know how much portion of your earnings goes into each expense.

- Calculate the difference (A – B = C).

- The next step is to redraft your personal budget to include expenses related to the educational course like interest and principal payment, course fees, expenses on tuitions and books, loss of wages etc. If you still have a comfortable surplus of cash (C), you can finalize this budget. If not, consider the expenses that you can avoid and reconsider the amount of loan. Once you reach a bottom line that you are comfortable with, finalize your budget.
- When you decide the cash surplus / short you will be comfortable with, you should also think of the percentage of income you would ideally like to save for your future. Think of short term as well as long term or retirement savings.

You may compile your budget into an excel sheet or use a physical book or diary. Alternatively, there are several free softwares available online for the taking.

Here are a few tips of a working budget:

- Keep your working sheet as simple as possible and keep it clean. Each item and category should be clearly defined.

- It is a good idea to create a flexible spreadsheet or if you have a hand written budget in mind, leave – enough space to add items of income or expenses in the existing budget.

- Maintain budgets on a continuous basis. Ideally, one should have a monthly budget rolling into an annual budget. The annual budget should also be in line with the long-term budget.

- An important part of budgeting is keeping track of actual income and expenses and calculating variances. If variances are beyond acceptable limits, then it is time to revisit your budget and make necessary changes.

- If you have a long list of income or expenses, it is advantageous to use excel or other computer software. For example, by using excel you can add comments, format your sheet, create reports using certain information from the excel sheet.

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In this era of recession, deflation, and job cuts, it is especially important for you to consider where your hard-earned money is going; financial security is the key in today’s unpredictable world. And the first step towards gaining that security is to have a saving plan.

Do you have money put away for a rainy day? How will you manage if there’s a family emergency? What about a down payment for a home, or a fund for higher education, or retirement? Do you have loans to repay?

In this era of recession, deflation, and job cuts, it is especially important for you to consider where your hard-earned money is going; financial security is the key in today’s unpredictable world. And the first step towards gaining that security is to have a Saving Plan.

Still not convinced? Then ask yourself why you need to save. The answer’s really very simple: so that your money can start earning money, and work towards reducing the effort you put in everyday.

START SAVING NOW: HERE’S HOW!

You might wonder how to begin saving if your income is already over-committed. Efficiency and discipline are the answers.

• You need to first find out where your income is going. Maintain a diary for the month, noting down everything you spend on, to the last paisa. You will be surprised at the amount of random purchases you make – from coffee breaks to grocery bills. These are the best places to start trimming.

• Then, make a budget. This isn’t as difficult as you think. All a budget does is create a plan for spending, by stating expenses and goals. Make sure to cover fixed and regular expenses such as mortgage or rent, utility payments, and car or loan/credit card payments. Then set limits on necessities like groceries and clothing, as well as nice-to-haves like entertainment and travel. It’s also important at this stage to factor in a savings amount.

• Now, your first priority is an emergency fund, if you don’t already have one in place. And the easiest way to do this is to have the amount deducted from your salary every month and put into a Fixed or Recurring Deposit. Give yourself a pat on the back if you find yourself adding that little extra to your fund because you managed to save a little more this month. You might find it easier to stay within budget if you use cash or debit cards for the necessities and frills.

• As your emergency fund accumulates, your next task is to find more money for savings and even investment. Begin by paying off your credit cards. If you spend a little time examining your monthly statements, you will be amazed to see how much money you’re losing just by way of interest!

SAVING Vs. INVESTING

At this point, we need to address the differences between saving and investing.

Savings provide for emergencies and fund specific purchases in the near future (within two years). The primary goal is to store funds and keep them safe. However, you invest to increase net worth and work toward long-term goals. Also realise that investing involves risk, where you could lose some of your original investment. Only consider an investment plan when you have in place an emergency fund, insurance, control over credit use, and a retirement plan.

IN THE LONG RUN

Now, consider making a long-range savings and investment plan. When beginning to plan for investments, consider your goals, the amount of time you will be able to spend on nurturing these investments, how much you know about the funds, how much money you have to invest, whether you can tolerate risk, and handle loss. Remember that your ultimate goal is a financially secure future for you and your family.

If you look back over all that we’ve discussed so far, you will realise that we’ve told you how to begin saving money, in small, manageable chunks. The final objective might be to set aside enough for you to retire so that you don’t have to work another day, but your immediate goal is to start the process and become habituated, so that saving becomes a way of life, and a chance to improve how you live.

Investing in art is a good method for diversification. Since art prices do not depend on other possible components of a portfolio, they act as a cushion when other markets are not doing well. The aesthetic pleasure of viewing a great piece of art is a great advantage.

Instability in the financial markets is encouraging investors to look for alternative methods of investment. Some of the most popular alternative investments are Investments in art, stamps, gold, other commodities, wine, toys and books.

Of these, NRI favourites have to be art, fine wine and gold. We discuss these investments in detail:

Investing in Art
Art is being incorporated into the investor’s overall asset allocation decision. There are many ways of investing in art via Auctions, Online auctions, Art gallery and Online portals.  A few things an investor must look into:

• Art buyers should gain as much knowledge as possible of the artist’s work, the quality, provenance, condition and period in which it was painted before investing.
• Have a clear idea about the time horizon and gestation period for a particular work to appreciate in value.
• If an investor is looking for quick returns, he must buy works of well-known artists. If you like a less famous artist’s work and are prepared to wait, your returns might grow majorly over a period of time.
• Buy art only if you like the quality of work and not just the artist. Art requires careful maintenance.

Advantages and risks of investing in Art

Investing in art is a good method for diversification. Since art prices do not depend on other possible components of a portfolio, they act as a cushion when other markets are not doing well. The aesthetic pleasure of viewing a great piece of art is a great advantage.

Art works hardly depreciate in value hence proving to be a less risky investment. On the other hand, art prices are known to appreciate over a period of time and this is very advantageous.

Like all other investments, investing in art also has its downsides. Not anyone can invest in art. It requires a certain level of knowledge and expertise. The fact that they depend largely on public tastes and other factors, make them a fairly speculative investment.

Also art cannot be resold quickly for a profit. It also needs high level of maintenance, storage, security, and it doesn’t give dividends, bonuses or income.

Investing in Fine Wine

Fine Wine is another popular means of investment. Wine purchased as an investment is typically obtained from a reputable wine broker since wine houses do not generally sell directly to the public.
Advantages and Disadvantages of a Wine Investment

Those who favour wine investment offer many reasons why wine investment should be considered. Firstly, being a physical commodity, it is not affected by the stock market, company bankruptcies, fraudulent activities, major market shifts or even poor management. Wine Investment provides legitimate ways of exemption from capital gains tax, VAT and import and export duties. Like other tangible investments, wine provides a good means to diversify a portfolio. Fine Wine increases in quality with time, hence its value continually increases.
There are several disadvantages as well. It is argued that Wine Investment Market is difficult to understand and analyse. Wines are not always priced based on their value, but on the basis of their demand, which in turn is dependent on several unstable factors. In order to store and preserve wines, investors tend to incur sizeable expenses.

Investing in Gold

Gold is regarded as the safest type of investment as its value is not affected by inflation, unlike other assets. Due to the rapid growth of the world economy and the uneven rise of geopolitics, there is a lot of uncertainty involved regarding other modes of investments and hence most businessmen these days believe that gold, or the yellow metal as it is often referred to, is the safest bet when it comes to investing.

Advantages and Risks of investing in Gold
Apart from being the most basic type of saving, gold is also an integral part of religious and social tradition, especially in India. It is the primary metal used for ornaments. Gold is indestructible. It does not smudge or stain and it does not get corroded by acid.  Gold can also come in handy for a gold loan, which is a loan ideal for sudden emergency cash needs and comes with lower interest rates when compared to a personal loan!

Unlike currency, gold is not restrained by governmental obligations and hence transactions between different countries are easy. It is advisable to buy gold in the form of gold bars or coins from approved dealers instead of jewellery. While selling ornaments, value is lost on making charges, waste removal and sales tax. It is not advisable to buy gold during wedding seasons or during festivals like Diwali. Also, when investing in a gold deposit scheme, one loses the making charges.

Can you survive a job loss for six months? Do you have some funds stashed away for such emergencies until you gather your reins and surge ahead confidently with a new job and a new plan for the future in place? What about a medical emergency? Do you have resources that you can tap into for such a scenario. If the answer is No, then it is time to take a serious look at how you manage your money.

Alert #1: You are terrible with bills and payments!

Maybe its forgetfulness or a laid back attitude or a chaotic lifestyle, whatever the reason, if you are laden with unpaid bills, get fined for late payments 70 per cent of the time, bounce a few cheques every 10 months, then it is time to take stock of your organisational skills, at least in your personal finance department.

Keep a monthly tracker, set reminders on your mobile, keep an online calendar that beeps when bill, insurance and other payment deadlines arrive, choose whatever means that you are comfortable with to meet the objective of being methodical with payments.

Sort bills in a folder, keep them accessible at one place.

Alert #2: You use your credit cards excessively and often take loans.

The golden rule is to spend less than you earn. Distinguish between your needs and desires. If you desire something too expensive, which you are tempted to purchase with your credit card, think twice.

Don’t splurge, see if it should be on your priority list. If it is a must have and you need it that badly, save for it. That will help you decide if you feel it is worth the effort.

Remember, too much debt will eat into your monthly spending and put a road block to any kind of saving, as you will be busy paying off your credit card bills and EMIs on personal loans for you to set aside anything for a saving.

Instead, try to reap the power of compounding interest by saving some funds. Once you are sitting pretty on a pile of money, you could then indulge in a well-deserved vacation or that powerful music system, you always wanted as part of your relaxing Sundays.

Alert #3: Obsessive, compulsive, impulsive shopping.

Well, shopping malls, branded stores and supermarkets lined with tempting new entrants were designed with you in mind. These places you should avoid like the plague, if you are not someone who checks the price tags of goods, but instead rely on the ‘I want it right NOW!’ mind frame.

Don’t stack your living room or your kitchen or your fridge, with things that are purchased without any rhyme or reason.

Take the example of Rema. She has to try out new brands, interesting gizmos that she has no use for, antiques that she fancies endlessly and also food stuffs, the packaged, canned, ready to serve, frozen variety.

Her living room is stacked with odd, terribly expensive antique pieces that she does not even have the time to look at, her fridge overflows with canned foods that are well past their expiry dates and she owns three different kinds of mp3 players which she does not use! You are now thinking what a waste of money! Exactly!

It is painful routine, but make it a habit. Keep a tab on your money outflow, make a note of what, where, when, how you spend. At the end of every month, track your bills using an excel tracker or a good old accounting notebook and shred bills that are not required retaining warranty papers and bills, for goods that can be returned.

Rema did that and realized how much more she could save with a little discipline!

Alert #4: You are a debt juggler!

Do you have a priority list of debts that you clear based on how heavy the late fee or charges are going to be or when next you need to repeat the use of that particular service? If this is the kind of lifestyle you lead, you need help!

Find ways to cut back on your monthly expenses and pay off all your dues as quickly as you can. Don’t let yourself into such a pins and needles situation again! Always cut back on spending, conserve on resources until to achieve control over your finances.

Alert #5: Cheques that bounce!

If you think you can write cheques that cannot be encashed and get away with it scot free, think again! Bounced cheques come with hefty fine amounts and establishing such patterns will not bode well for your financial track record.

Alert #6: Late and default payments.

It can be minor expenses like a fine for the video or book that you returned late or consistently incurred late payment charges on your credit cards or EMI payments. The former just piles on miscellaneous expenses that end up adding to a significant percentage, while the latter can lead to big trouble.

Making a habit of this consistently can get you labeled as a defaulter. Your interest rates and lending rates could increase at an accelerated pace on the basis of your track record for late payments. Defaults will be reported to CIBIL.

If a pattern is notice you will find taking a loan or applying for a credit card in future extremely difficult. CIBIL keeps track of all your credit and generates a report that clearly shows your past repayment track record.

Nowadays banks are keeping a close tab on these credit reports and base their loan decisions on the financial health of the loan applicant.

Alert #7: You don’t have back up funds in place!

Can you survive a job loss for six months? Do you have some funds stashed away for such emergencies until you gather your reins and surge ahead confidently with a new job and a new plan for the future in place?

What about a medical emergency? Do you have resources that you can tap into for such a scenario. If the answer is NO, then it is time to take a serious look at how you manage your money.

Small strategies will help go a long way! Here is a sample of a few things to start with, use your judgment and build on it. Give it plenty of thought, time, effort, patience, commitment and enforce a plan of action.

a. Start a savings bank account that is different from your salary account. Determine how much money you would need to comfortably and prudently manage your monthly expenses then transfer the rest automatically to your savings account, every month and keep it inaccessible for routine needs and curb any temptation to eat into these savings.

b. Prepare a budget and stick to it.

c. Keep your credit cards locked away atleast until you take control of your spending habit. One can also use a credit card to wisely keep track of monthly payments, but that is for people who can differentiate between a want and a need. Until you find yourself in that place, lock it away!

It is better to start as early as possible before you find yourself in a financial mess. Before you land yourself in big trouble learn to implement some rescue measures well in advance!

Keep watching this space on more such tips on managing your money.