Money Matters

So in a month or so I will be 28 years old and will have nothing to show in terms of assets. In fact if I leave out sentimental value all I have is a laptop and an ipod to show for a year of work. Even if I discount the fact that I am underpaid, and sometimes “not-paid” it still does not justify my pay check to pay check existence. Hence I decided to attempt unraveling the strange and mysterious universe of finance.

To say the task is daunting is like saying Mt Everest is actually a molehill. Shares, bonds, money market, IRA’s, dividends, index funds, non load vs load, CD’s, treasury bills…what? How? When? HELP!!!!!
Ok breath…relax, baby steps take baby steps. Actually once you realize there is a method to this madness you do start to feel better. I know still confused but it will get better so don’t get overwhelmed and remember one step at a time.



The Step-by-Step Program


#1- Value & Priorities
Money needs to have a purpose; in itself it is just a useless piece of paper. So list out what value money will add to your life. Here is my list:
· Security
· Relationships
· Comfort
· Luxury
Identifying these values is a good start to understanding what you will do with your money.
Once your values are identified next is setting priorities. Make sure that the priorities you set match at least one or more of your values or else you will end up spending money that does not add anything to your life.
Here is an easy tool for prioritizing

#2- Budgeting
The very first thing that you have to do to is calculate your expenditure. It’s about as painful as getting a tooth extracted but no getting away from it.
Earnings- Expenditures = will give you the money you can play er invest or save
Use a tool, it will make the task sooooooo much easier. Preferably Quicken or Microsoft Money however you can get free online tools here or here…see we are saving already!

#3- Credit Card Debts
If you have credit cards with high APR before saving or investing pay it off pronto. Stupid credit cards!!!

#4- Rules
Every finance guru has his own mantra but here are my favorites

David Bach:

Pay yourself first

Warren Buffett

First rule "Never lose money."
Second rule "Don't forget Rule Number 1”

Don’t remember the dude’s name:

Invest in companies that you love
Buy when on sale (stocks)

#5- Savings and Investing
So enough with all the psychobabble lets get to the nitty gritty of the $$Mulah$$.

SAVINGS
Remember, “Pay yourself first”
· Savings should be of three types
Long term- 30-40 years
Mid term- 3 to 5 years
Emergency fund- Liquid cash which can remove anytime

· Why do you want the government to take 25 to 33 percent of money every month? If you are employed start maximizing you 401k. It’s tax-free and can make you an automatic millionaire!!! Beginning at age 30, if you save $671 each month at an 8% return, you'll have $1 million by age 60. Island retreat anybody?? No 401k who cares we have IRA no don’t fund the Irish Republican Army but set up your own Individual Retirement Fund. There are of two types of IRAs traditional and Roth.

· How much interest is your bank paying you…umm Zero! Move your savings immediately to a high yield savings account and get 5 to 7 percent interest. Find out the saving rates of different banks and costs and select one as per your needs.

· Will you be staying in one place for at least for the next 3 to 5 years then why pay somebody else’s mortgage pay yourself first. However make sure you take all the costs in factor. Real estate will always appreciate so buy it during a slump and sell it when it gets high. What if you have to move…just rent it out and it will cover your mortgage.

· Set up atleast 3 to 6 month of emergency funds.

· Automate your savings by linking your savings to your checking accounts

More information available at the Resources section.

INVESTING
Money does not grow by sitting in one place or on tress not even in money plants ( I checked); it needs to circulate so invest. Besides the general guidelines, I have outlined only what I find the most appropriate investing options for myself. Your option will change as per your values and priorities.

General guidelines
· Remember the old all your eggs in one basket adage? It’s the key to wise investment Diversify!! Your portfolio should be as diverse as all the united colors of Benetton or a rainbow. That means don’t just buy bonds or don’t just buy stocks mix and match.

· Unless you are ready to spend a lot of time researching stocks don’t speculate that is don’t keep buying and selling stocks.

· Make sure you understand the risks and the actual costs…fees, taxes etc.

· Start investing only after your 401k, Roth IRA account, credit card debt elimination, emergency fund set up (3 to 6 months). Remember the money in your 401k and IRA account can be invested.

How to invest:
Build an investment portfolio by:
· Doing it yourself (individual stocks)

· Using a broker or brokerage firm

· Mutual fund options

· Combination of any of the above

After a lot of research and contemplation for at the moment, Mutual fund option suits me the best. My criteria were as follows
- I do not have any upfront investment money but will put in monthly amounts

- I don’t want my investing choices take too time and energy taking (hey I already admitted in my previous post I am a lazy ass)

- I want to have a diversified portfolio

- I don’t want to pay brokerage/broker fees or go through the process of selecting a good brokerage firm.

- I want a secure investment option

After sorting through all criteria and investing options I found Mutual Fund particularly Indexed Mutual funds makes the most sense to me. To understand more about this check out resources section.

Resources:
To be updated

The Harry Potter Post

Wanted to do a Harry Potter post but did not know what to write thats not already been written. So enough said here is a pre-release video posted on you tube that recently got featured....

Accio Deathly Hallows

FYI Loved the book, hated the last chapter, My favorite HP book still remains Harry Potter and the Goblet of Fire

A TOAST....

Tonight I had planned to watch a movie that I have already seen, LOVE ACTUALLY. I knew that I would enjoy it nearly as much as I did the first time around. A British film, it boasts of a heavy duty star cast- Hugh Grant, Emma Thompson, Keira Knightly, Colin Firth and Alan Rickman to name just a few. As the title suggests its central theme is a love story actually multiple love stories deftly interwoven to create a wonderful film that stands far apart from the normal run of the mill romantic movies that we often get to watch these days. The brilliant casting albeit plays a major role in the films success.

But today I am not going discuss this movie. As I mentioned above I had planned to watch it again but the movie that I finally did end up watching was SHADOWS IN THE SUN. The story outline read “an editor who is also an aspiring writer tracks down a reclusive literary legend living in rural Italy so as to convince him to write again”. It did not sound very interesting but the only other option I had was Legally Blond and am I glad that good sense prevailed. Shadows in the Sun (also known as Shadow Dancer) was a fantastic film. It was unexpectedly hilarious, whimsical and at same time poignant. The characters are funny, outrageous, vulnerable yet utterly believable and leave you behind with a burning desire to join them on their regular Monday night jaunts of wine drinking and karaoke. But however good the movie was, it is almost overshadowed by its brilliant location. Set in a tiny village bathed in golden sunlight, tucked away in the Tuscan hills in rural Italy, it will make even an ardent city lover pack their bags and baggage and head off to the countryside. Stunning architecture, golden sunsets, lush verdant hills and crystal clear streams nearly succeed in seducing you to ignore the story that is unfolding.

However I really wanted to talk about in this post was not the movies (although I guess I may have fooled you in believing I did) but a dialogue from the movie Shadows in the Sun. The talented, eccentric, writer, Weldon Parish played by Harvey Keitel, tells the persistent editor incidentally also an aspiring writer who is suffering from self doubt the following statement:

"You don’t choose art but art chooses you."

The point he was trying to make was that being creative or ability to produce art was a gift, an inherent talent and despite all the hardship an artist may have to suffer, ultimately a privilege. For some reason I was disturbed by that statement. Are creativity and artistic temperament and ability really for the fortuitous few, with the rest of the populace filling the role of silent spectators, watching from the sidelines, able only to appreciate but not create?

While some may argue that a lot of people may just not be interested in being creative or producing a piece of art, I would beg to differ. The doting aunt knitting beautiful, warm sweaters for their favorite nephew or niece, the bashful bathroom singer belting out songs under the pouring water, moms baking divine chocolate cakes and artfully decorating them for their child, the women in rural India creating magnificent rangolis during festivals, the backbencher copiously filling his textbook with caricatures, the jovial uncle who is the life of the party cracking jokes and keeping everyone in splits, kids coming up with fantastic storylines and having the time of their life role playing, the thousands of bloggers posting their writing regularly at a public domain; they all belie the statement above. Art is not for just a chosen few, there resides a performer hiding inside all of us and knowingly or unknowingly it surfaces during different facets of our lives. The only difference is that for some people it just comes easier than for the others.

This post is a toast to celebrate the artist that exists inside all of us.

SALUD!!!

I Know what I am doing this Summer...

Movies Watched:
-D
-Parineeta (2)
-Batman Begins
-Mr. and Mrs. Smith
*Movies I will watch in the very near future- War of the Worlds, Sarkar.

Books Read:
- India Unbound
- Being Indian
- The Glass Palace
- Ground Zero
- Feluda Stories
- Assorted mix of news magazines, Reader digest and Archie comics.

Restaurants Visited:
- THE chola bhatura stand
- Nirulas
- Azzuro
- Haldirams
- Peppercorn
- Nagaland momo stand
- Naivaidyam
- Handi Biriyani
- Buzz
- MK52
- Barista
- Nescafe
- Various chat stands, corn corners, Mc Donald’s, roadside Chinese, a dhaba and miscellaneous other places.
* Have to go and eat there - Karims, Rodeo, Lotus Pond…amongst others. :)

Markets Visited:
- Lajpat nagar (umpteen times)
- G.K. I (again umpteen times)
- G.K. II (4)
- Ansal Plaza
- Kalkaji Market
- Green Park Market
- Delhi Haat

Family Gatherings (happy):
On three occasions.

Meeting Friends:
At least 3 times a week

Besides these fun activities, I watch T.V, spend time with my parents, surf the net, drink endless cups of Chai, do yoga, take on household projects and oh yes…. work on my thesis :0)

Book Review

India Unbound By Gurcharan Das At midnight on 15 August,1947 when india gained its independence, Pandit Nehru delivered his famous speech called Tryst with Destiny. Every Indian soul stirred with the resonance of his fine words "At the stroke of midnight when the world was asleep, we awoke to freedom and liberty". Everyone believed in the dream, made possible by the blood and sweat they had spilled. However 50 years after liberation I think all Indians have asked this question at least once - what went wrong??? It seemed after 100 years of oppression that our time had finally come. We were on the road to success and no force could stop us. Yet we are conquered once again by high poverty rates, illiteracy, inequality and bureaucratic red tape. An unabashed capitalist, Gurcharan das elevates this coffee table discussion through historical evidences, personal anecdotes and critical analysis of policies and strategies pursued by the government of India. He succeeds in giving the reader a greater depth of understanding of the shackles that has tied the great nation down. More than just a litany of woes this book captures the winds of change blowing through and the revival of the great Indian dream. His views however revolve strongly on his personal opinion and belief in the success of the capitalist module, but it has to be mentioned that they certainly seem to hold true in the Indian context.

The Idiot Box

The weather, certain unfortunate circumstances and my inherent laziness have left me housebound since the past week. Now not that I am complaining mind you, I took this opportunity to drink an inordinate amount of tea and watch a lot of television. Here is a listing of shows not arranged in any particular order that either I liked, hated, was forced to watch or just plain tweaked my interest!

Koffe with Karan: Trust my luck to discover the show right before its last episode of the season! The lone episode I watched was a recap of memorable clips from previous shows and probably doubly entertaining for that. Abhishek Bacchan, has a brilliant sense of humor and I have completely fallen for the man. Everybody and I do mean everybody hates Kareena Kapoor! And Mallika Sherawat has a fetish for older men running in slow motion especially if that older man is Mr. Amitabh Bachan!!!

Jassi: Its a show my father watches religiously, a drastic turnaround from his WWF (World Wrestling Federation) days! More proof than it is not only the womenfolk who have been seduced by the nonsensical soaps. I have a suspicion that Ekta Kapoor inserts subliminal messages into her programs thus hypnotizing poor unwary viewers into watching her silly soaps.

News Channels: Finally news programs I can relate to, thank you NDTV, Aaj Tak, Star News, Zee News and the gazillion other local channels. Watching news programs appears to be a national obsession

Bengali music show: I saw an antakshari program with some amazing singers belonging to different local Bengali bands competing with each other. Two thumbs up to the immensely talented people of my Sonar (golden) Bangla.

Get Gorgeous-2: Indianized version of America’s Next Top Model. We have Milind Soman, our very own super model screaming, hey guys! lets remove the girl with the big hips (all the participants were reed thin!). Need I say more?

Alley McBeal : After watching an episode on Star World, I rediscovered my love for Alley.

Cricket: The recent selection of Greg Chapel as the coach for the Indian cricket team, rivaled any political appointment, actually the media hype would make us believe it was an even bigger event! I suppose this is understandable since cricket is not just a game but also a religion in India hence the coach would actually be filling in the role of the high priest. Albeit a high priest with a huge salary.

Advertisements: No more used cars, furniture sales, junk food and dancing geckos!