Whenever there is a statement about anything in this world, regardless of who has said it, do not believe it. But to analyse it and know the truth is wisdom

- (Kural: 423): Thiruvalluvar, a celebrated Tamil poet.

Sankaran, a 28-year old civil engineer working with a multinational company in Chennai had invested all his money in stocks, mutual funds and ULIPs. When the market was at 20,000 levels, his portfolio was showing huge profits. However, he lost heavily during the market crash. Sankaran is just wondering if he had en-cashed all his investments when the market was at 20K, he would have been a happy man today.

While Sankaran was blaming the stock market for his misfortune, he saw an advertisement in a newspaper. It was about a new ULIP scheme that guaranteed the highest NAV for first 7 years of its maturity. The scheme says that even if the stock market crashes subsequently the investor will get the highest NAV. Guaranteed.

Sankaran thought this is what he wanted at a time when all his investments were in the dumps. He could not believe his eyes. He checked the printed brochure and the scheme details on the respective insurance company’s Website. It all confirmed that the highest NAV is guaranteed. He wanted to sign up for one such policy with a huge premium. However, before signing up the policy he wanted to know, ‘how could they guarantee the highest NAV?‘

He was not satisfied with the answers he got from his friends and relatives who he spoke to. So he got in touch with a professional financial planner for better clarity. If you too are looking for more clarification on ‘highest NAV assured schemes‘, do read on…

When they say the highest NAV is assured we assume the highest stock market related return is assured. Is that assumption right? If that assumption is right then there are some points to ponder over:

Who gives this guarantee? Stock markets have crashed by more than 50 per cent during the downfalls in the year 2000 and 2008. If somebody could have given guarantee of highest stock market returns, they could have become bankrupt. Again during the first 7 years of the policy the stock market could meet similar downfalls. Assume someone has got exceptionally extraordinary ability to predict the stock market and moved out from the stock market when it reached its peak. S/he will not work for an insurance company. S/he will be on her/his own and making money without revealing this secret to the entire world. Why didn’t they provide this highest NAV assurance earlier? Why are they not providing this assurance in their other schemes?

So far six insurance companies have launched this kind of ‘highest NAV assured schemes’. They all are assuring the highest NAV. There is no doubt about it. But the fine print is they assure the highest NAV of their schemes, not the highest stock market related returns. If you assume that there is no difference between highest NAV and highest stock market returns and, both are one and the same, then you are wrong. They are different. These funds need not invest all your money or any of your money in the stock market. They may invest everything or most of your money in the debt market. So do we get stock market related returns on these schemes? No.

In order to make good the highest NAV assurance, a major portion of your money will be invested in the debt market securities for most of the time period. A debt fund is expected to deliver around 8 per cent to 10 per cent per annum. Therefore highest NAV assurance is not rocket science. Even a novice can launch a highest NAV fund and keep on investing the money collected only in bank fixed deposits.

Studies reveal that, whenever a product is re-launched with a fancy idea, buyers tend to forget the earlier pitfalls of the product and go after the fancy idea irrespective of the continuing pitfall. The same investors who have realised the entry level charges (to the extent of 20 per cent of first year premium) are high in ULIPs and rejected them, are now again after the ULIPs now because of the fancy idea: highest NAV assured, irrespective of the still continuing high entry level charges.

Here are some simple investment rules

If you are looking for stock market-related returns, you can invest in equity mutual funds and stay invested for 5 years or more. If you invest in tax saving mutual fund you will get tax benefits also. These funds have no entry charges.

If you are looking for an insurance cover, you can go for pure term insurance policies. In fact term insurance and SIP in equity funds would be a good alternate to the high cost ULIPs.

If you are the kind of investor who is looking for assured returns, you can invest in PPF, NSC, or Bank FDs.

But please keep in mind that stock market and guarantees never go together.

Stock Market and Guaranteed NAV Never Go Together is a post from riyaz.net.



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Many investors change their long term investments based on the short term sensational current affairs. They switch from risky investments to safe investments the moment they hear this. They ‘Act first and Think later’. This is very dangerous as far as investment decisions are considered.

Thailand and Europe

In fact today, the investor’s biggest worry is not Indian market ; but the problem in the Eurozone.

Thailand faced a major natural disaster in 2011. Severe flooding occurred during the monsoon season. The World Bank’s estimate for this disaster means it ranks as the world’s fourth costliest disaster as of 2011.

Investors focusing only on the short term crisis advocated for a long term bear phase in their equity market. But Thailand’s equity market rebounded in the Q1 of 2012. This was possible because of the right kind of steps taken by the government such as simulative policy measures and reconstruction efforts. IMF now projects Thailand’s GDP to grow 5.5% in 2012 and 7.5% in 2013.

Similarly the European debt crisis has created a negative sensation among many investors. They started advocating for a long term bear phase in the European markets and other related markets. The fact is these markets have already factored this debt crisis. The possibility of further unexpected negative news seems to be very less.

In due course, this European crisis will settle down. The European leaders are determined to solve the fiscal deficit problem. They have enforced discipline on countries which have not fulfilled the obligations.

Of course the austerity recommendations will not happen in some countries. This is because of the bureaucracy or the lack of will by the locals. But the leaders are determined and resolute and have taken the bold and prudent decisions so far and moving in the right direction. They have taken steps which are painful for many in the short run but it has got the potential to produce a more positive long term result for each and everyone.

Investor’s expectation

Investors are looking for a kind of assurance. Though they all know it is impossible, they expect positive outcomes and favorable news every day.

Even today investors remember the market crash of 2008. Sensex has fallen down from 20873 to 8160. It is a loss of 61% from the peak. But how many of us recollect the much faster recovery of 2009 and 2010 in which sensex recovered from 8160 to 21004. It is a gain of 157%. Investors remember the sudden market crash irrespective of they have experienced a loss or not. But they don’t recollect the much faster recovery if they have not gained out of it.

We all know the fate of investors who moved out because of the bad news about the market at the end of 2008 and beginning of 2009. They all have missed the faster recovery of 157%.

So whenever we hear a sensational current affair, we need to take a step back and look at the big picture to understand the REAL problem. This would be the holistic approach towards your investment decisions.

Do the basics right

So as to get better long term results as an investor you need to STOP reacting to short term sensational current affairs. You should do the basics right. You need to invest your long term money in long term investments and your short term money in short term investments. Make an in-depth fundamental analysis on the investment scheme before investing.

Do periodic review and check if the scheme in which you have invested is not performing, because of the non-performance in the market or poor performance of the scheme itself. If the scheme itself is poor performing, then we need to cut our losses and move in to better performing scheme in the same asset class. If the market is underperforming, then we need not move out.

Timing Vs Asset allocation

Timing is difficult and almost impossible. So instead of investing in a single asset class, diversify across various asset classes by creating an asset allocation ratio based on the risk taking appetite and required rate of return. Then rebalance these assets periodically.

In spite of the short term sensational current affairs, these time tested investment strategies will give you much better positive outcome to your long term investments.

The Role of Short Term Sensations in Long Term Investments is a post from riyaz.net.



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What does a Professional Financial Advice mean in portfolio management?

Making a habit of rebalancing financial portfolios

Most of us make smart financial plans that are based on the number of earning years, financial commitments and the level of risk we can take up at the time of planning. But it is found that our financial commitments and the level of risk we could take up with age changes. Our financial commitments may increase with increase in family commitments, increase in standard of living and disability or otherwise of a family member. Age could also make us in a position to take lesser risk as also the level of inflation could dictate a rebalancing of our portfolios.

Believe me, life is a process of change and this applies to our asset allocation of our investments too and we need to change them to meet our changed needs. Taking a professional financial advice makes for reduced risk and helps to improve our returns and makes for alignment of our investment to meet our financial goals. Truly it makes for good financial health.

Professional financial advice is important to take care of early loss of earning

We all set our financial plans based on what we pursue when we set up these plans. It could be when we are young, however we need to understand that life is not predictable and it is quite possible that we may fail to earn much before our retirement due to unforeseen causes like disability and death. This demands that we foresee and cover the financial risk it could impose on us and/our families. Probably a professional financial advice would convince us of the need to take up some life or disability insurance.

A good financial proof retirement makes a professional financial advice necessary

Youth never allows us to think of the additional expenses that old age involves and getting a professional financial advice or doing a financial review periodically would tell us about the additional expenses related to health in old age would involve. We may need expenses for long term care, critical illness and other costly medicines. In addition we may need more money to get help as we would not be able to be active physically. Most of us have failed to look into this need.

Assuring ourselves that we have right amount of liquidity

We all need some amount of liquidity to be able to meet our immediate financial commitments; however we cannot afford to have too much liquidity in our investment portfolios because we would lose on profitability. This would mean missing on our long term financial goals in life. Creation of wealth with a financially sound retirement and old age involves making sure that the right amount of liquidity is maintained. Maintenance of right liquidity means setting aside some money for emergencies and immediate expenses. This would help us to not lose on profitability either with having more liquid assets or losing on selling good portfolios in an emergency.

Professional financial advice helps for transfer of wealth to beneficiaries effectively:

It is right to say that the most appropriate estate planning can be done with a professional financial advice. Estate planning is not easy and most of us may be wrong in assuming that the preparation of a will is all that is got to be done. Proper estate planning would mean making for transfer of maximum wealth to our beneficiaries. It would involve reducing on taxes and probate duty on death too. In case of insurance policies it would involve keeping the family informed of all the formalities to get the money on time. We would surely agree that we would like our family to be taken care of in the most appropriate way even on death.

Second opinion ensures investments for the right purpose

When we take a professional financial advice we would be able to find out investments that we have not made for the right purpose. These investments could be those that we have bought because someone just told us for their own financial gains or we were a part of the organization that sold these products. On analysis we may find that the investment does not meet our financial goals.

A professional financial advice is definitely better than the ones given by investment agents because this opinion is not based on just getting commission or brokerage on investments. Those offering professional financial advice are only offered a fee for their services and are impartial in their opinion. They are in a position to best determine if our investment portfolio is efficient enough to help us achieve our financial goals.

Why should you get Professional Financial Advice On your Investments is a post from riyaz.net.



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During my TV interviews, in each and every show, either the anchor or one of the callers will ask this question. Which is the Best Performing Mutual Fund now? There is not a single show in which the question about Best Performing Mutual Fund is not asked.

Also, as a guest speaker, whenever I deliver a speech in Rotary, Lions, Jaycees or Round Table, during the Q&A Session after the speech, definitely there will be a question on Best Performing Mutual Fund.

Everyone is interested in knowing which is the Best Performing Mutual Fund now. The reason behind this is they would like to check whether the scheme in which they have already invested is part of the best performing mutual fund schemes or not. If it is not part of best performing mutual fund, they would like to switch their investments to the current best performing mutual fund.

There are so many websites which rate the mutual fund schemes, list down the best performing mutual fund schemes in each and every category.

Relevance of Best Performing Mutual Fund

Can a best performing mutual fund now continue to be a best performing mutual fund even after a week, after a month, after a quarter, after a year…?

Then in that case, do we intend to switch our investments every week or quarter to stick only with the best performing mutual fund of the time.

Is it possible for a cricketer to score a century in each and every match?

Don’t chase after the best performing mutual fund. Regardless of the mutual fund scheme, the performance shown is history. Past performance is just a guide to check how well the fund manager did in the past. The longer the period in which the best performing mutual fund is shortlisted the better. But looking at the past performance is just like having a look at the resume of a job applicant. The applicant may be a topper in college or in his previous employment. However, that only provides the probability, and not the assurance, that he will be one in the future.

I am not saying, one should not look at the performance of the mutual fund schemes. Considering the performance of mutual fund is really an important step in the selection criteria. But don’t give over weightage to the performance. Don’t look only at the Best performing Mutual Fund now. You need to consider the other factors also.

Best performing Mutual Fund and Some Points to ponder over

Do you walk into a hospital or a pharmacy and ask them, “which the best curing medicine now?” Even if you ask, will they be able to give you the right medicine?

Can a best playing cricketer, fit into T20 match as well as a Test match? Both the matches have got different formats. So a best player in one format will not be a best player in the other format. Similarly a readymade list of best performing mutual fund will not fit for you, you neighbor, your brother as well as your colleague.

As we all have different financial needs and goals, we need different schemes to suit our needs and goals. A best performing mutual fund scheme suitable to my brother need not be suitable to me.

Beyond Best performing Mutual Fund

Now, it must be very clear to you, that there are some other important parameters to be looked at beyond performance.

Requirement Study

You should select a mutual fund, which is really suitable to your requirement. To do this, you should know what your requirement is exactly. Then you need to select the fund which is really suitable to meet your requirement.

Consistency

Instead of focusing on which is the best performing mutual fund now, you need to focus on the consistent performing fund over a longer period of time. Instead of choosing a fund which is a recent best performing mutual fund, you may choose a fund which is not in the list of best performing mutual fund of this quarter, but a consistent long term performer for a period of over 7 years. So consistency scores over the recent performance.

Existing Portfolio

Also you need to select a fund which is not very similar in nature when compared to your existing mutual fund investments. Irrespective of the fact that, you own a similar fund already, if you invest in a fund just because it entered into the list of best performing mutual fund, it is like taking one more paracetamol tablet along with your regular paracetamol tablet of a different brand. This will lead to duplication and over exposure.

Considering all these factors along with the list of best performing mutual fund schemes will help you choose the right fund for you instead of looking at just the list of best performing mutual fund schemes.

Final Thoughts

Investments are just tools like a hammer. If you are in the process of building your dream house, you need to concentrate on the home that you would like to live in with your family members for the rest of your life and not on the type of hammer to buy.

You need to keep in mind that investments are not ends in themselves. They only hand round to facilitate realize the superior goals in our life.

Which is the Best Performing Mutual Fund now? is a post from riyaz.net.



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When a person should be health conscious? After becoming sick or before becoming sick or always…

There are some questions like this, though at the sub-conscious level we know the answer, our conscious mind somehow acts as if it is ignorant of the obvious answer.

When to start planning for our retirement is one such question, though we know the answer at the much deeper level, somehow on the surface, we act as if we are unaware of the answer.

The problem of ignoring the obvious answer

As we ignore the answer and behave as if we are unaware of the answer, actually the problem magnifies. A recent research study reveals this truth in black and white.

Though the retirees and pre-retirees who have been surveyed were well aware the fact that they may live longer, and also recognized that they did not want to run out of money, only a very few of them were REALLY planning financially to live longer. For example, only one-third of the pre-retirees “tried to match their savings for retirement with the expected income during retired life till their life expectancy.

That means two-third of the pre-retirees are not really planning for their retirement and they are financially not capable of facing their retirement. They have a huge gap in their retirement savings.

The Ideal and Obvious answer

The ideal and obvious answer to the question “When to plan of our retirement?” is

“as soon as you get your first job.” What…? Really…?

Yes. Your first job is the starting point of your journey towards the destination of retirement. Can you travel without a clear route map and directions? If you travel without a route map and directions, you may get yourself off-tracked and deviated?

Similarly if you don’t create a clear financial plan for your retirement at the beginning of your career, then you may not be able to go where you are actually supposed to go or you may need to take a lot of corrective measures to get yourself on the right track to achieve your retirement goals.

Logical Answer to our Conscious mind

Why our conscious mind is not accepting this obvious answer? There is a lot of pain in planning for our retirement very early. Our conscious mind wants to avoid this pain. Also many of us are in the middle of our career and we have not planned for our retirement so far. If our conscious mind accepts the obvious answer, then it needs to feel guilty of not doing it early. This is an added reason for our mind to ignore this.

Let us try to convince our mind more logically

Planning for retired life is planning to lead a life without regular income. Can we plan for 20 years of retirement in just one year? It is difficult and not possible. It is easier for anyone to plan for 1 year of retirement life in 1 year of working life.

So in order to plan for 5 years of retired life you need to plan 5 years in advance. To plan for 10 years of retired life, you need to plan 10 years in advance.

Suppose if you want to retire at the age of 60 and you have a life expectancy upto 80. Then your retired life span is 20 years. To plan and provide for these 20 years of retired life you need to plan at least 20 years in advance. That is you need to plan at least at the age of 40.

I think now your conscious mind would be able to accept this fact of life.

Recent Trends in Retirement

Because of the increased stress levels at work and change in work culture made today’s generation to think of retiring early. Today no one is willing to work till 60 years. Everyone would like to retire much earlier in life.

Because of medical advancements and positive results in field of research on stopping aging, our life expectancy is not just 75 or 80, it will also go to 85 or 90. Everyone will live longer than they anticipate.

One side, we want to retire early. On the other side, our life expectancy has increased and also will increase considerably. This increases the span of our retired life from just 20 years to 30 years or even more.

So you need to plan for your retirement 30 years before you actually retire. If you do the math, you will come to a conclusion that planning at the beginning of the career for retirement is not only ideal but also logical.

When to start planning for retirement? is a post from riyaz.net.



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Simply put, Social SEO means making it easy for various social networks to understand the content on your site and help them display your content in a way that generates the right social activity.

If SEO helps you rank better on Google, Bing and other search engines, Social SEO will help your site stand out on Facebook, Twitter, Google+ and other social media networks.

I don’t have to tell you the benefits of increased social media activity on your site. Do I? Different social networks have different ways and formats for interpreting your website content. Facebook for example looks for Open Graph tags, Twitter looks for Twitter cards while Google+ uses the Google Authorship markup.

By including relevant information in prescribed formats in our webpages, we can make our sites attract the right social media audience, eyeballs and the right traffic. All this can be accomplished with Social SEO.

Is Your Site Social SEO Ready?

Gearing up your site with Social SEO simply means adding relevant meta tags to the pages of your website. However, it is very cumbersome to add these tags manually to all pages. If you are using themes like SomoThemes on your WordPress sites, you are already a step ahead as you already have out-of-the-box support for Facebook Open Graph and Google Authorship markup.

Let me tell you about the new SEOPressor plugin. Chances are you are already using this plugin. SEOPressor has now come up with an all powerful new version V5 that includes an out-of-the-box support for Social SEO and many more feature additions.

If you are already using SEOPressor, this will be a free upgrade. I highly recommend that you grab a copy of SEOPressor for your site right away. I am sure you will thank me for this. Few main features of the version V5 are – Over Optimization Check, Structured Data Support, Multiple LSI Keywords Analysis, Social SEO Integration, Automatic Smart Linking. In my opinion, this simply beats all other on-page SEO plugins out there. Period.

Social SEO is here. Are You Ready? is a post from riyaz.net.



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AppMakr

This online tool allows you to make a mobile app without any knowledge of code. Moreover, it has a great reputation among thousands of app creators who have successively created an iPhone app to meet their business needs. AppMakr is a user-friendly tool that allows you to track your app with analytics features and to support your business with ads. If you are looking for a site that facilitates app matters, this is a great tool for you.

SwebApps

Easy to use and inexpensive, SwebApps allows users to build and track a mobile app for their business or organization. With competitive pricing and discounted pricing for nonprofits, SwebApps also allows you to update your app, a great feature that is ideal for new app creators that want to tweak their initial app. Like many other great tools listed here, SwebApps helps you upload your app to iTunes; from there, you can promote your brand and grow your business.

MobBase

If you are a musician, artist, or a company that wants to generate a fan (and customer) base and sell merchandise, MobBase is a great tool to check out. By visiting their website and setting up a free account, you can begin the process of creating the mobile app right for you. Fees are upfront and competitive and allow you to pay for the features you need. If you choose the free route, you still get a lot of features and it’s ideal for new app creators who just want to get their feet wet in the app scene.

Buzztouch

With its web-based software, Buzztouch allows you to create and manage your app without any previous app-developing experience. Their creation process is streamlined and user-friendly. They have verbally mapped out the entire process of app creation, so you know exactly what to expect before you dive in. There are many great app builders out there, but Buzztouch really holds your hand (albeit virtually) through the whole process.

AppsBuilder

AppsBuilder promotes its app-building capabilities as 100% customizable without knowing any bit of code. You can create the app of your dreams for iPhone users with the help of AppsBuilder’s 24/7 support team. Guidebooks and video tutorials are also available through the site and allow you to tailor your app to meet all your needs. Their safe hosting environment and reputable background makes them a solid choice among the best of the best app-developing resources.

Buildanapp

This website is perfect in its simplicity. It tells clients right up front—they can create their app in six easy steps. If you want to create an app for your iPhone without hassle or headaches, this is a great resource to consider. Buildanapp facilitates an easy creation process with its various templates that are all customizable. Instead of fussing with code, you simply make choices based on Buildanapp’s suggested options. It’s easy to upload your own logo as well as choose visual elements from their inventory. If you’re looking for a quality app that is simple to make—this site delivers.

Cabana

If the idea of creating with visual prompts appeals to you, Cabana is an all-star among app-development websites. Their apps are visually appealing and can give your creation the wow factor it needs to be a hit. Their visual approach to app creation is unique in the industry and definitely worth checking out. Their staff comes from a few companies you might have heard of—Pixar, LucasArts, and Adobe. Consequently, their take on mobile apps is creative and cutting edge.

These great sites are among the best of the best tools available for helping you develop and customize an iPhone app that meets all your expectations. You can grow your business, expand your fan or client base, and create an app that truly performs without any technical background at all—such is the beauty of all this technology available to you!

7 Excellent Tools to Develop iPhone Apps is a post from riyaz.net.



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With a struggling economy and tightening household budgets, Americans may not be able to meet their minimum monthly payments, or may do so with significant hardship. Meanwhile, individuals’ credit card debts continue to rack up interest and late fees, adding to the financial burden.

It’s now more important than ever for you to take control of your debt rather than letting it take control of your life.

If you can’t keep up with your current bills, you have a few options to help you restructure, reduce or completely eliminate your credit card debt. These options are consolidation, settlement and, in dire cases, bankruptcy.

Debt Consolidation

Debt consolidation is a straightforward process that you can do on your own or with the help of credit counselor. Consolidate your debts by taking out a single large loan. This loan ideally will be the same amount as all your credit card debts combined.

Use the money from your new loan to pay off all your credit cards. When the process is complete, you’ll be left with just the one loan to repay rather than many smaller debts.

The new loan will be much simpler to handle. Rather than making several payments to different creditors each month, you’ll be responsible for a single monthly payment. And personal loans typically come with significantly lower interest rates than credit cards, so you’re likely to save money in interest as you repay the loan.

Additional benefits may include reduced late fees and other charges, lower monthly payments and a longer repayment schedule.

Debt Settlement

Debt settlement requires more work and dedication that consolidation, but it has the potential to save you thousands more than consolidation would. It is best done with the aid of a professional credit counselor and a debt settlement firm.

During the debt settlement process, your credit counselor will contact your creditors directly. He or she will work to negotiate a reduced principle. In a successful settlement, you could end up responsible for repaying only half of your total debt amount. For many Americans, that equates to saving thousands of dollars.

Bankruptcy

Bankruptcy should only be used if no other option will work for you. It is designed to give you a fresh financial start and can erase all or most of your debts.

While your credit score does take a blow after bankruptcy, your score and report are probably already significantly damaged if you’re considering bankruptcy. Because of this, many people find that filing for bankruptcy does not harm their scores as much as they thought it would.

Additionally, this option’s historical stigma is slowly fading. If you declared bankruptcy several decades ago, it might have felt impossible to receive new loans or lines of credit afterwards. But as the option becomes more commonplace, lenders are forced to adapt their views of such individuals. Many lenders and creditors now are happy to help you rebuild your credit and your life.

Consult a credit counselor to learn more about consolidation, settlement and bankruptcy, as well as to find out if one of these options is right for you.

Stop Letting Your Credit Cards Run Your Life is a post from riyaz.net.



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In every SAP SRM developer’s life there comes a day when he/she needs to modify the standard Web UI and this blog is intended for that day. Let’s get into the details now.

The things you need to know/have before reading this blog are

• Work experience in SAP SRM7
• Good knowledge of SAP ABAP Web Dynpro
• Patience :-)

I am going to divide the general requirements into few categories and discuss how we can achieve each of those requirements

1. Hide certain field/ tab/container etc.,
2. Replace the standard search help with a custom search help
3. Make field non-editable/mandatory
4. Add new fields/tabs

Category 1

SAP has provided a beautiful BADI WD_BADI_DOMODIFYVIEW for achieving most of the requirements under this category. This is a filter dependent BADI, so you can create multiple implementations based on webdynpro component and the VIEW name. It has an import parameter called VIEW, which gets the reference to the view controller at runtime. So, if you want to hide any of the UI element on a particular view, just proceed as below

• Right click on the field and go to technical help to identify the WD comp and VIEW that field belongs to
• Create an implementation of the BADI using WD component and VIEW as BADI filter
• Inside the implementation, get the reference of the UI element and remove/hide it from the UI

Sounds like a piece of cake. Isn’t it?. Well not always. Let’s look at an example to understand it better. For instance, if you want to hide PO number field on overview tab of the PO screen.

The technical help of PO number field gives us the information about WD component, VIEW name and component configuration

Create an implementation for the badi with the following filter combination

In the implementation of BADI use the following code:

DATA : lo_trans_cont TYPE REF TO cl_wd_transparent_container.
*every UI element in webdynpro has a corresponding class. Find the class for the UI element that you want to hide
CONSTANTS lc_main_cont_id TYPE string VALUE 'MAIN_CONTAINER'.
CONSTANTS lc_left_cont_id TYPE string VALUE 'LEFT_CONTAINER'.
*In this case the field is embedded in a transparentUIcontainer with name 'LEFT_CONTAINER', which in turn embedded
*in another container with name 'MAIN_CONTAINER'
lo_trans_cont ?= view->get_element( lc_main_cont_id ).
lo_trans_cont ?= lo_trans_cont->get_child( id = lc_left_cont_id ).
IF lo_trans_cont IS NOT INITIAL.
*Remove input field
lo_trans_cont->remove_child( id = 'PO_NUMBER').
*Remove label
lo_trans_cont->remove_child( id = 'PO_NUMBER_LABEL' ).
ENDIF.

PO number field is removed from the VIEW now

Same goes for hiding any container present in the view. For hiding subviews, please refer to Floorplan Manager for WebDynpro ABAP: Dynamically Modifying Purchase Order FPM in SRM7 Using Custom AppCC

Other way of doing this is creating a Z component configuration by copying the std one and making the changes to it

/SAPSRM/WDCC_PO_DOFC_OV_HD. click on ‘other functions’ and select ‘Enhance’

you can change the ‘visible’ property of the UI element

This method can be used , if the changes to the web UI applies to all the users.

Category 2

For this case, we will use the same BADI, but now we use the import parameter WD_CONTEXT, which holds the reference to the VIEW context.

Value helps are assigned at context attribute level. Every contest attribute has two properties related to search help

• input help mode

SAP use below code for different types of the search help

Deactivated 101
Automatic 111
DDIC 121
OVS 131

Application defined 141

• input help name – this field holds the actual search help name

Get the name of the view context attribute that holds the search help and use the below sample code to attach/overwrite new/existing search help

Below is the sample code to attach/overwrite search help to a context attribute:

DATA lo_nd_attrib TYPE REF TO if_wd_context_node.
DATA lo_nd_attrib_info TYPE REF TO if_wd_context_node_info.
*get the reference to context node info
lo_nd_attrib_info = lo_nd_attrib->get_node_info( ).
*attach the search help to the relevant attribute
lo_nd_attrib_info->set_attribute_value_help( name = ‘here enter the ID of the context attribute’
value_help_mode = '121' (if it is DDIC shlp)
value_help = ‘here enter the custom search help name that you have created')

Category 3

Use the below SPRO configuration to make the fields non-editable/mandatory

Add the field to the above configuration and select ‘Field enabled’ and ‘Field required’ check boxes as required. Same thing goes for fields at item level. You can define customer class and method to enable/disable fields based on custom logic. For more information on customer class, please refer to the SPRO documentation.

Category 4

There is an excellent blog written by Ricardo Romero on how to add custom fields to SC and POWL. You can find the blog here Add custom field to SC and POWL.

For adding new main views/Tabs, please refer to Floorplan Manager for WebDynpro ABAP: Dynamically Modifying Purchase Order FPM in SRM7 Using Custom AppCC.

If you cannot achieve the requirement by any of the above said methods, the last option would be to enhance the standard webdynpro component/view.

There might be other better ways of doing whatever I said above, so please post your thoughts and comments. I hope you enjoyed reading it as much as I did writing.

View Video Tutorials on Web Dynpro for ABAP by Sankar Bhatta

Web UI Modifications in SAP SRM 7 is a post from riyaz.net.



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This is in continuation of the FPM tutorial I had written about customizing standard PO screen (Adding custom MAIN / SUBVIEWS and changing standard MAIN / SUBVIEWs) in SRM7. In this article I will talk about how we access PO details in Custom subview that we had added in the previous article.

Here is the screenshot of how the screen looks after making changes according to the previous article:

I have added an input field to the view of component YTEST. Now I would like to access the PO description and display it in the input field. To achieve this we need to access the FPM instance inside the WDDOINIT method of YTEST component controller and access the attribute MO_APP_PARAMETER of interface IF_FPM. Once we have the reference to this attribute ( which is of type IF_FPM_PARAMETER) we can use GET_VALUE( ) method to read different parameter values. Below is the sample code on how to read the PO GUID

* Instantiate the FPM Manager
DATA: lo_fpm TYPE REF TO if_fpm,
lo_appdata type ref to IF_FPM_PARAMETER,
lv_value type string,
lv_guid type CRMD_ORDERADM_H-GUID,
ls_header type BBP_PDS_PO_HEADER_D.
*access the attribute containing different parameters
lo_fpm = cl_fpm_factory=>get_instance( ).
lo_appdata = lo_fpm->MO_APP_PARAMETER.
*get the po guid
CALL METHOD lo_appdata->get_value
EXPORTING
iv_key = 'SAPSRM_BOID'
IMPORTING
ev_value = lv_value.
lv_guid = lv_value.
*once we have the GUID we can access all the details of the PO
CALL FUNCTION 'BBP_PD_PO_GETDETAIL'
EXPORTING
I_GUID = lv_guid
IMPORTING
E_HEADER = ls_header.

After getting the PO header details in ls_header, set the context attribute which is binded to the input field to ls_header-description. See the code below ( this code can be generated by code wizard)

DATA lo_nd_node TYPE REF TO if_wd_context_node.
DATA lo_el_node TYPE REF TO if_wd_context_element.
DATA ls_node TYPE wd_this->element_node.
DATA lv_ponumber TYPE wd_this->element_node-ponumber.
* navigate from <CONTEXT> to <NODE> via lead selection
lo_nd_node = wd_context->get_child_node( name = wd_this->wdctx_node ).
* get element via lead selection
lo_el_node = lo_nd_node->get_element( ).
* set single attribute
lo_el_node->set_attribute(
name =  `PODESCR`
value = ls_header-description).

I have listed down below different application parameters that are available for us to access. Unfortunately there is no description available for each of the parameters. If you want to know the value that each parameter holds at runtime, you have to debug and see it. To do that put an external breakpoint at statement

‘lt_app_params = LO_APPLICATION_INFO->GET_APPLICATION_PARAMETERS( ). ‘

inside the method INITIALIZE_APP_PARAMETERS of class CL_FPM_FLOORPLAN_ASSIST

Here is the list of parameter names

If you are wondering how we are able to access FPM instance inside our custom component methods, here is a brief explanation.

*access the attribute containing different parameters

lo_fpm = cl_fpm_factory=>get_instance( ).

The above static method call enables us to get a reference to the FPM instance, even though we did not explicitly create an instance of class CL_FPM. So where did it get instantiated in the first place? To understand it we need to go inside componentcontroller WDDOINIT method of component FPM_OIF_COMPONENT ( This is the core component underlying all the FPM applications) . In this method, below code creates an object for CL_FPM

CREATE OBJECT wd_this->mr_fpm

EXPORTING

io_floorplan  = wd_this->mr_oif_api

io_controller = wd_this.

Initialization of IDR component and AppCC component is also done inside the WDDOINIT method.

The constructor method of the class CL_FPM stores the instance in global private static attribute GO_INSTANCE. FPM message manager is also instantiated inside the constructor method. The static method GET_INSTANCE   reads this attribute and returns it as returning parameter. So in short, the FPM instance is available to all the UIBB components.

I hope this tutorial brings in in-depth understanding of how to access business object details inside custom UIBBs. Thanks for taking time and reading my blog.

View Video Tutorials on Web Dynpro for ABAP by Sankar Bhatta

How to Access PO Details from Custom Component Embedded in Standard FPM in SRM7 is a post from riyaz.net.



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This tutorial is intended for ABAP webdynpro developers working in SRM7 with good knowledge on FPM.  Most of the requirements we encounter in projects involves modifying web ui components. Almost all of the applications in SRM are built based on ABAP webdynpro FPM. Modifying FPM based applications is bit different than modifying normal ABAP webdynpro applications. In the coming sections we will see different methods of achieving this.

If you are not familiar with webdynpro go through the below links first to get a hang of ABAP webdynpro

1. Web Dynpro ABAP Part 1
2. Web Dynpro ABAP Part 2
3. Web Dynpro ABAP Part 3

If you are familiar with ABAP webdynpro but not with FPM go through the below docs and elearning material first.

• Getting started with Floor Plan Manager (Web Dynpro for ABAP)
• Building a Simple RoadMap Application using Floor Plan Manager GAF (Guided Activity Floorplan)

Go through the below excellent e learning material on SDN.

• eLearning Tutorials – Floorplan Manager for Web Dynpro ABAP

After the above tutorial download the developer guide from the link below

• FPM Application Developers’ Cookbook

Ok… enough of material.. let’s get into some action now »

Basically there are three ways of modifying the PO FPM elements depending on the requirement.

1. If you want to hide/remove  MAIN/SUBVIEWS or indivudual UIBBs contained in them and you want to make these changes visible across all roles then enhance the standard component configuration and make the necessary changes.

2. If you want hide/remove fields with in specific UIBB ( for example you want to hide PO number  field in ‘Overview* tab ) based on some logic.  you can use WD_BADI_DOMODIFYVIEW BADI, create an implementation with filters  component  ‘/SAPSRM/WDC_PO_DOFC_OV_HD ‘ and view  ‘V_PO_DOFC_OV_GN_HD ‘  and write the below code (to get the component and view name , right click on the field in web ui and go to ‘more field help’)

DATA : lo_ref TYPE REF TO cl_wd_transparent_container.
lo_ref ?= view->get_element( 'LEFT_CONTAINER' ).
IF lo_ref IS NOT INITIAL.
lo_ref->remove_child( id = 'PO_NUMBER_LABEL' ).
lo_ref->remove_child( id = 'PO_NUMBER' ).
ENDIF.

3. If you want to hide/remove/add  MAIN / SUBVIEWS based on some logic, then you have to follow the method I mentioned below.

First let’s look at the standard purchase order display screen and understand the difference components and configurations that it uses.

Login with the employee role and go to shopping area->My Pos POWL query where you will see bunch of POs. Open any of the PO by clicking on it. Right click on any of the tabs ( Overview, Header, Approval etc., ) and go the ‘More field help’ of the UI element. You will see below information

Now go to component FPM_OIF_COMPONENT from SE80 and locate the application /SAPSRM/WDA_L_FPM_OIF. This application will have different application configurations associated with it.  We need to figure out which application configuration is getting called at run time. To know this we need to go to PFCG and see the Employee role, go to ‘display purchase order’ webdynpro application and click on details button.

Now double click on application configuration /SAPSRM/WDAC_I_FPM_OIF_PO_PURCH and select ‘Start Configurator’, which will take you to application configuration browser window. Click on ‘Other funcitons’ dropdown button and select create enhancement. This will open up a pop up window asking for the name of new configuration, description and package. Enter a configuration name starting with Z or Y and click OK

Click on ‘Create’ button to go to the individual component configuration view. The component configuration that is currently used by application is displayed there.

We need to create an enhancement for this component configuration as well and use it in the apllication configuration enhancement. To create enhancement for component configuration /SAPSRM/WDCC_FPM_OIF_PO_PURCH, expand the component configuraiton section of FPM_OIF_COMPONENT and locate the configuration /SAPSRM/WDCC_FPM_OIF_PO_PURCH. start the configurator and select ‘create enhancemnet’ from the ‘other functions’ button dropdown. Enter any name starting with Z or Y and select OK. save the configuration. Now replace /SAPSRM/WDCC_FPM_OIF_PO_PURCH with the Z component configuration that we just created.

After this is done click on ‘go to compoent configuration’ and select ‘change’ -> ‘global settings’. you will see under ‘application specific parameters’ , webdynpro component and confguration used for AppCC.

we need to create our own custom AppCC component by copying the standard WD component /SAPSRM/WDC_FPM_OIF_CONF and component configuration /SAPSRM/WDCC_FPM_APPCC_PO_PURCH. Go to se80 and create both ( configuration can not be copied. so just look at the standard configration /SAPSRM/WDCC_FPM_APPCC_PO_PURCH and creata Z  configuration similar to it ).

Once we have created the custom AppCC component and configuration, replace the standard AppCC component and configuration with custom ones.

Ok… we are done with the enhancement part . As we have created a custom AppCC component, we can now add/remove main/subviews as we want. let’s look at a simple scenario.

The requirement is to change the name of the ‘Header’ mainview to ‘Header after change’ and remove the subview ‘Budget’ from the mainview ‘Header’ and also add a new subview with name ‘ FPM is Cool’ which holds a custom component ( YTEST ) as an UIBB.

The above requirement can be achived by just changing the custom component configurationZENH_SAPSRM_WDCC_PO_PURCH that we had created earlier. But what if we need to do that based on some logic, we need a place to write the code. This is where the interface method OVERRIDE_EVENT_OIF of AppCC component comes into picture. Go to the component controller of component  ‘ ZWDC_FPM_OIF_COMP ‘ and open the method OVERRIDE_EVENT_OIF’ and write the below code at the end.

TYPES:
BEGIN OF ty_s_uibb,
component            TYPE string,
interface_view       TYPE string,
config_id            TYPE wdy_config_id,
config_type          TYPE wdy_config_type,
config_var           TYPE wdy_config_var,
needs_stretching     TYPE fpm_needs_stretching,
location             TYPE fpm_location,
index                TYPE fpm_index,
END OF ty_s_uibb .
DATA: ls_uibb TYPE ty_s_uibb,
lt_uibb TYPE STANDARD TABLE OF ty_s_uibb .
ls_uibb-component = 'YTEST'.
ls_uibb-interface_view = 'YTEST'.
APPEND ls_uibb TO lt_uibb.
CASE io_oif->mo_event->mv_event_id.
WHEN 'FPM_START'.
TRY.
*rename the main view Header to Header after change
CALL METHOD io_oif->rename_mainview
EXPORTING
iv_variant_id  =  'PO_PUR'
iv_mainview_id =  'PO_HDR'
iv_new_name    =  'Header After Change'
*remove subview 'Budget' under main view Header            .
CALL METHOD io_oif->remove_subview
EXPORTING
iv_variant_id  = 'PO_PUR'
iv_mainview_id = 'PO_HDR'
iv_subview_id  = 'Budget'.
add subview FPM is coll in Header mainview
CALL METHOD io_oif->add_subview
EXPORTING
iv_variant_id   = 'PO_PUR'
iv_mainview_id  = 'PO_HDR'
iv_subview_id   = 'mysubview'
iv_subview_name = 'FPM is Cool'
it_uibb         = lt_uibb.
CATCH cx_fpm_floorplan .
ENDTRY.
ENDCASE.

This is how PO screen looks after the code change. Header description is changed, ‘Budget’ subview is removed and there is a new subview with name ‘ FPM is Cool’ added.

If you now click on subview ‘FPM is Cool’, you can see the custom component YTEST ( I had created a simple component YTEST with single button and some text)

I hope this tutorial will be of some help to ABAP webdynpro developers working in SRM 7.

Next in the series: How to Access PO Details from Custom Component Embedded in Standard FPM in SRM7

View Video Tutorials on Web Dynpro for ABAP by Sankar Bhatta

Floorplan Manager for WebDynpro ABAP: Dynamically Modifying Purchase Order FPM in SRM7 Using Custom AppCC is a post from riyaz.net.



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1. Aakash: $60

Aakash, the new, super-cheap (what else, at just a little over $50?!!) tablet from Datawind, India is touted as the world’s cheapest tablet. This tablet has a 7 inch display, with Android 2.2 OS and a 366 MHz processor. Originally released in 2011, the 2012 version contains a faster processor, the Ubislate 7, a 700 Mhz processor and battery life of 1.5 hours.

2. The Coby Kyros MID7012: $ 87.72

This is a 7 inch touchscreen Android 2.3 tablet with 4GB storage. It’s available on Amazon for $87.72. You can access thousands of games and applications from this tablet’s marketplace, along with productivity tools for social media. Video display is at 1080p, which is good if you want to do image editing or watch movies on this tablet. The Coby Kyros connects wirelessly to the internet.

3. Velocity Micro Cruz T301: $ 94.99

This tablet has Android 2.2 OS, a full 7-inch display and 1 GB storage. There’s no camera or other savvy features, but if you’re looking for an e-reader, video and music player, you’re all set. The battery comes 75% charged, so you’re ready to go on day one. You can buy this tablet on Amazon for the great price of $94.99. For this price, you don’t have to think too hard to buy this one.

4. CherryPad: $99

CherryPad is a 7 inch Android tablet, that comes with a 256 MB RAM, 2GB inbuilt flash storage, 800MHz processor, and a 800 by 480 pixel display. Though the display resolution doesn’t sound like much, you can play 1080p HD video comfortably on this tablet. It also comes with an SD card slot – you can expand up to 16GB on this tablet. That’s a great option to have in a tablet, if you’re the kind that accumulates a lot of stuff over time.

5. Lenovo IdeaPad A1: $189

This 7-inch tablet comes with inbuilt GPS that doesn’t require a data connection! The OS is Android 2.3 Gingerbread, not Honeycomb, which might come as a disappointment if you like customizing the stock Android apps and interface. There’s 2GB of internal storage, and a microSD card slot which allows expansion up to 32GB. Plus, you get a micro-USB port to connect to your PC. The processor is single-core 1GHz Cortex A8, which explains why Android Honeycomb OS hasn’t been used on this device.

6. Amazon Kindle Fire: $199

The 7 inch Kindle lacks savvier features such as 3G, camera and so on, but you have free access Amazon’s library of videos, books and other media content. The storage is only 8GB, with no expansion slot. However, the browser is great, Amazon’s own; plus, you get access to Amazon’s curated Android app store, which includes such gems as Netflix, Hulu and Pandora. The price, of course, is unbeatable.

7. Samsung Galaxy Tab: $199.99

This 7 inch tablet runs Android 2.2, has great scrolling functions and a fast processor. The homescreen doesn’t rotate quickly but you’ll get used to it. The device comes with HDMI support, but it works only with the higher-priced WI-FI version for now. The Wi-Fi connectivity is fast, even if the signal is distant, which is great for a tablet at this price range.

8. Barnes & Noble Nook Tablet (8GB): $199

If you compare the Amazon Kindle and the Barnes & Noble Nook Tablet, you’ll find there’s not much difference in the features. You do get a microSD slot for memory expansion in the Nook, unlike the Kindle. The storage is 8GB, the design is stylish, and the 7-inch screen has wide viewing angles with good reading features. It doesn’t support app side-loading, the speaker is not great and the selection of apps is small.

9. HP TouchPad: $239

This is a 10 inch tablet, priced excellently at $239. It has WebOS, which allows for card-based multitasking. The tablet itself is a little thick, when compared to the Samsung’s Galaxy Tab 10.1. However, for a 10 inch tablet, the price is absolutely fabulous.

10. Archos 70 Internet Tablet: $199.7

This tablet is a 7-incher, with a front-facing camera, Android 2.2 and 8 GB internal storage. No microSD expansion slot, of course, but the display is decent and you can play HD videos. For just 100 dollars more, you can get a 250 GB drive! Best option if you want to copy a bunch of movies to the hard disk, take the Archos 70 and head off to a picnic.

World’s 10 Cheapest Tablets is a post from riyaz.net.



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Favicon is the tiny little icon left on your web browser’s address bar, and therefore, is an element of your overall website branding. They show up in your browser, but additionally in feed, so it’s essential that you include one with your websites.

Step 1

To get going, simply open Photoshop and set your picture size right into the best square out of any even number, for example, 60×60 pixels, as working with a 16×16-pixel picture would be challenging.

Now, in order to begin creating your personal favicon, set your background color along with width, height and resolution. Make certain shades of color you use on your favicon are similar pair of colors you employ in your website.

Step 2

When it comes to information on your design, you can either build a straightforward image or use your typography talent in planning your preferred favicon. I personally advise you to design a customized square shape image. Don’t forget that the dimension of this favicon is just too small to contain all of the information you intend to the role in the image.

Wait a bit and just keep on it simple yet fascinating. You can also make use of graphic along with text or your logo. Since Favicon is very tiny, it is necessary to maintain the graphic as simple as possible.

Step 3

After you have created the ideal image, change the sizes of your graphic to firmly 16 pixels by 16 pixels. This is due to the standard size of the favicon is at 16×16 pixels. If you would like lower your existing image dimension to use the image as a favicon, go to the Image -> Image Size.

Thus, in Photoshop, this can be achieved using the ‘image size’ selection under ‘Image’ menu at the very top. Insert 16 pixels in height and width then press OK button. This will likely resize the reputation to the adjusted size. Now you should save your data with the name ‘favicon’. Therefore, it should be saved and protected as .ICO layout. This can be done by making a selection of ‘windows (.ICO)’ within the file type option inside the ‘Save As’ window.

Step 4

Lastly, make sure you upload your customized ‘favicon.ico’ icon you have just generated to the website server is hosted. To add your Favicon on your server, simply open your FTP and check out the root directory of your website and search for favicon.ico. In case your Favicon icon is available on the server, overwrite this along with your custom photo. That’s all. Whenever you view your website, you’ll definitely notice your customized icon presented next to the TITLE in the address-bar. At last, don’t forget to update the page to get the change.

Create a Favicon in Photoshop – A Step by Step Guide is a post from riyaz.net.



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“Life is full of uncertainties. Future investment earnings and interest and inflation rates are not known to anybody. However, I can guarantee you one thing.. those who put an investment program in place will have a lot more money when they come to retire than those who never get around to it”.

This meaningful quotation made me realize that we need to do regular financial check-up to ensure that we have enough to meet our financial goals in life. Planning for financial goals require taking into consideration the present rates of earnings on investments, future earnings and rate of inflation that would affect our lifestyle and financial goals. It is vital that we all realize that regular reviewing our finances according to our changing dreams, needs and aspirations and making necessary changes would help meet our financial goals.

Marriage and a Merger of Personal Finance

Marriage could be the first circumstance that calls for reviewing financial needs. Getting married means not just end of bachelorhood or spinsterhood, but additional expenses of managing household and financial needs of one’s spouse. Likewise two pay-packets call for necessity to review the fruitful investment of excess income. I would say that marriage brings along with it future goals like buying a house, planning for children and so on and additional expenses involved in this planning.

Kids and Their Future

The innocent face of kids brings joys to the couple’s life, with the added responsibility to plan for additional finances required for their upbringing, education, medical expenses and marriage. In addition, don’t we as parents feel that we have to leave behind an inheritance that our children would love to treasure?

Health is Wealth

Regular financial check-up is required not just after marriage and kids, but God forbid, death, long term sickness and accidents are eventualities that can change everything for a family; these unforeseen contingencies can lead to major turmoil and depletion in finances.

Switching Your Job or Transition to a Business

Regular financial check-up is also required considering the change of employment or business activity. Regular jobs bring regular income and regular investments, while increases would mean more of investments. Also irregular and cyclical income means saving and investing more in times of high income; as in surgeons, artists, consultants investment and insurance advisors for times of income crisis.

In addition, can anyone of us afford to miss on the effects that inflation plays on our financial planning? Periodic financial check-ups ensure we are self-sufficient in old age. Other factors like windfall gains could also make differences in our finances. So it is very true to say that regular financial check-ups or reviews would help make adjustments in financial plans in the most optimum way.

What Does Regular Financial Check-up Give Me?

Expecting the Unexpected

Deepak Chopra aptly said,

“Even when you think you have your life all mapped out, things happen that shape your destiny in ways you might never have imagined”

It is right that budgeting regularly would help all of us to pin-point where we are overspending and need to economize to fulfill goals. It is true that this would help increase savings for investments. It would be right to say here that regular financial check-ups help to review financial needs and also set up sufficient contingent or emergency fund that come in handy in emergencies; sickness, accident and unemployment. Ideally it should be 3 to 6 months of your family expenses. This would come in handy in case of emergency.

How very true it is that insurance forms an important part of financial planning as it provides for not just financial protection on death, but also for illness and future needs. Constant and regular financial check-ups is necessary here also to provide for increased insurance needs, with planning early in life helping reduce premium costs and refusal for insurance.

Net Worth Tracking

It has been well said by Noel Whittaker,

“Becoming wealthy is not a matter of how much you earn, who your parents are, or what you do, it is a matter of managing your money properly”

We would be smart in preparing a balance sheet of our family finances. Like a business balance sheet, this could enlist assets like contingency fund, various investments, interest earnings, pension, provident fund, insurance and other immovable assets we have and also enlist the liabilities like expenditure on children’s education, marriage, medical expenses, retirement expenses and cost of inflation on financial reserves. Constant updating would not only give an idea of your exact financial standing, but would also help to make appropriate financial planning changes.

Financial Check-up Review Triggers

• A special mention needs to be made regarding regular financial check-up with regard to mutual funds; the change of fund manager and other changes in investment portfolio need to be considered.
• How very true it is that regular financial check-ups help in maintaining excellent financial health. Budgets need to be reviewed every month, with financial consultants advising their clients to review their investments every 3 months and make the necessary changes.
• There may however not be a need to make changes if the portfolio is as planned, though in certain cases like big change in financial goals or with new guidelines of investment necessary changes may have to be made in the investment plans.

To conclude how very true it is that uncertainty is an important ingredient of life, but managing your money properly with regular financial check-up could give you the stability and peace of mind to face your financial goals confidently.

Do You Do Your Regular Financial Check-up? is a post from riyaz.net.



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The existing pension plans/ retirement plans in India are from the insurance companies. They are available in the form of traditional products or in the form of ULIP schemes.

Indian Traditional Retirement Plan

The traditional pension plan/retirement plan schemes from Indian insurance companies are expected to deliver only 6% to 7% CAGR as they are allowed to invest only in conservative avenues. This 6% or 7% is not sufficient to beat inflation.

Indian ULIP Retirement Plan

The ULIP pension/retirement plans have huge front loaded charges. They also have higher regular running expenses and fund management expenses which pulls down the net return. That’s why market has rejected these products and they have become failures.

Customized Retirement Planner for India

As a prudent investor, you should not rely on a single product or scheme for your retirement planning. A comprehensive and customized Indian retirement plan should consist of a bundle of schemes and not a single scheme.

Also you need to avoid schemes which deliver lesser return and schemes with huge charges. You need to select a combination of schemes which as a combination can deliver a decent inflation adjusted returns with low charges.

Schemes for Pre-Retirement Planner in India

A combination of Term Insurance, Mutual Funds, and PPF will help you in creating a better pre-retirement planner in India.

Term Insurance

In case of any mishappening to you, your spouse’s retired life needs to be secured. This can be protected with adequate term insurance. Online term insurance policies are cheaper by 50% to 60%. So opt for online term insurance instead of an offline term insurance.

Mutual Funds

Equity mutual funds play a vital role in delivering positive inflation adjusted returns. Short term and Medium term debt funds are better alternatives to fixed deposits as they can deliver better post tax return.

PPF

PPF delivers 8.6% tax free return. It has got a lock in of 15 years. One can save upto Rs.1 lac p.a. Safety and its tax free status makes this product a compelling option for an Indian pre-retirement planner.

Schemes for Post-Retirement Planner in India

A combination of schemes like POMIS, Senior Citizen’s Savings Scheme, Bank FD, Mutual Fund MIPs and Debt funds could be considered for creating a post-retirement planner in India.

Creating an Indian Retirement Planner

We have discussed enough about why should we have a Customised Indian Retirement Planner in the place of a readymade pension/retirement plan. Let us think about how to create a comprehensive and customized retirement planner for India.

1. Lifestage

In this step, as an Indian retirement planner, you need to answer two questions. One is “How many years from now you are planning to retire?” and the other one is “ Your Estimation of Post-retirement years”. Studies reveal that the average life expectancy of an Indian is 75 years. But it is advisable to assume 85 years as your life expectancy so as to make sure that you will be covered enough during your post retirement.

2. Expected Retirement Expenses

Again in this step you need to have an answer or 2 questions. The first one is “what will be retirement expenses in today’s cost of living”. Research reports show that approximately 70% of your current expenses will be your retirement expenses. The second question is “what would be the expected rate of inflation on these expenses”.

3. Expected Retirement Income

The first question to be answered is “What is the expected amount to be received at the time of retirement from schemes like EPF, superannuation, pension commutation, gratuity?”. The second question to be answered would be is “What is the annual income you expect from the sources like pension schemes, rent, royalty?”.

4. Existing Investments

“What is the current value of the investments made towards retirement?” and “What is the expected return from these investments?” are the questions to be answered in this step.

5. Working out the Retirement Planner:

We are going to work out the retirement planner in this step with the answers from the earlier steps.

• a) You need to find out the future value of the retirement expenses with the present value of retirement expenses, number of years to retire, and the inflation assumed.
• b) The expected retirement income by way of rent, pension, royalty need to be deducted from the retirement expenses (calculated in the point (a)) to arrive at the net retirement income to be generated from the retirement corpus.
• c) Then the retirement corpus needs to be calculated by taking into account the net retirement income (calculated in the point above point), number of retirement years, inflation assumed post-retirement.
• d) The retirement benefits like pension commutation, gratuity, superannuation, EPF needs to be deducted from the retirement corpus (calculated in the point (c)) to arrive the net retirement corpus required.
• e) The monthly investment required to accumulate this net retirement corpus needs to be calculated taking into account the existing investments, and the rate of return from the investments.

The detailed approach for creating a comprehensive and customized Indian Retirement Planner is well explained in the above five steps.

Role of a Financial Planner in Creating an Indian Retirement Planner

• A professional financial planner will be able to take into account ‘the rate at which your income grows’ to decide the monthly investment towards the retirement corpus.
• Also the financial planner will be able to decide the asset allocation for your portfolio based on the required rate of income to accumulate the net retirement corpus.
• The financial planner will be suggesting you the right mix of schemes for your pre-retirement planner and post retirement planner.
• Also the professional financial planner will be able to tell you the required life insurance coverage and the health insurance coverage and when you need to opt for health insurance coverage.
• Periodical review on the retirement planner has been conducted by the financial planner so as to accommodate the changes and deviation from the original retirement planner.

You can be a “do it yourself” Indian retirement planner or “seeking professional assistance” Indian retirement planner, the above points will help you in having a happy and peaceful retired life.

Customized Retirement Planner for India is a post from riyaz.net.



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Many have a tendency to complain about inflation, taxes and EMI’s as deterrents to saving and investments. But the question is are we making a conscious effort to save and control spending? Do we have any financial leak and are we ignoring them?

My intention is not to confuse, but to emphasize that you need to fix these leaks. So that you can create and build wealth that can last for a lifetime.

Arun, a marketing professional earning Rs. 24lacs per annum post tax was surprised how his friend Girish who earned just Rs. 18lakh per annum and having similar family conditions could save and invest. Taking Girish into confidence he explained his problems. Girish gave him a patient and empathic hearing. Girish explained where Arun spent unnecessarily or created financial leaks and how these leaks could be plumbed. This could make Arun feel financiallt fulfilled in his life.

The Financial Leaks

In addition to his necessary expenses, Arun spent a lot on things that were unnecessary and unhealthy. Some of the financial leaks or avoidable expenses included his smoking and drinking expenses. Since he belonged to the upper status of society Arun believed that drinking and entertaining his friends and colleagues with foreign liquor at least once a month was essential. This even took up about Rs.1.5laks to 2lakhs of his annual income.

In addition Arun dined in star hotels at least once a month, with dining out in other restaurants at least twice a week. This took up about Rs.1.5laks annually. The family believed in shopping in expensive malls and watching movies in multiplex that cost him about Rs.300000 per annum. In addition there was the yearly recreation and other lifestyle expenses.

Method of Financial Plumbing

Girish emphasized to Arun to cut down on his cigarettes and alcohol to not only save money and invest, but also to care for his health. In addition Girish suggested that he find other healthy ways to relax like doing deep breathing, meditation and relaxation exercises daily. Next he suggested that he entertained his friends in more healthy ways and minimized his visits to star hotels and restaurants for a meal.

He told Arun that dining at home, experimenting on their new favorite recipes. Cooking together as a family provided the togetherness and helped to get the family’s cooperation in meeting the savings goals. Shopping just for essential needs, with entertainment in theaters or watching videos at home instead of visiting multiplex theaters saved money on tickets and in travelling to these theaters that were on the outskirts of the city.

I am sure we all could relate and find some that could identify with our spending habit patterns.

Your Excellent Life Balance Sheet

Just have a look at how fixing financial leaks could help:

• Your monthly unhealthy expenditure of Rs10000 on alcohol, if invested at 12% would give you a corpus of Rs. 23, 00, 386 in 10 years and Rs. 98,92,553, in 20 years.
• Next your unhealthy monthly expenditure of Rs.2000 on cigarettes will grow to Rs. 4, 60, 077 in 10years and Rs. 19, 78, 511 in 20 years at the same rate of growth!
• Similarly, your extra unwarranted expenditure of watching movies at multiplex and shopping in malls of Rs.5000 each month would grow to Rs. 11,50,193, in 10 years and to get Rs. 49,46,277 in 20 years at the same growth rate!
• Cutting on extra dining out expenses of just Rs.5000 per month could accumulate Rs. 11, 50,193 and Rs. 49, 46, 277 in 10 years and 20 years at the same interest rate!
• Aren’t you surprised this amounts to 50 lakhs in 10 years and 2.17 crores in 20 years with a mere cutting Rs. 22,000 a month? You are more healthy and financially sufficient all your life!
• Plumbing some other financial leaks switching off fans, heaters, air-conditioners and other electric and electronic appliances when not in use would help make savings and the energy crisis!
• Avoiding financial leaks with avoiding the use of credit card unless very necessary would help avoid payment of high interest. Detesting the idea of just making payment of minimum amount on credit card outstanding balances is one of the worst financial leaks. This applies also to giving priority to paying off low interest loans in favor of high interest loans.
• Next avoiding the financial leak of paying high interests paid on loans, with earning lower interests in savings accounts and fixed deposits is important.

Conclusion

Hope you are set ready to fix your financial leaks and to channellise the extra savings in a fruitful investment option. Here’s the road map to riches. Fix your financial leaks; get extra savings; invest the extra savings properly; become wealthier.

Leak Proofing Your Personal Finance to Build Wealth is a post from riyaz.net.



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A study revealed that only 47% of Indian households had bank account. In addition every 3 out of 4 households had a quarterly bank balance of only Rs. 5,000. With the recent savings bank account de-regulation many banks have raised their interest rate by 1%. But households would not benefit much, as banks could charge increased transaction fees to offset increased cost, and also the additional interest income from savings account is negligible.

A further study has revealed many other interesting facts. Most Indians prefer to be lenders and not owners that have enterprise.

We tend to play safe and prefer to be lenders by investing in fixed deposits and debentures of banks and companies. Investing in fixed deposit or debentures gives us a fixed interest. The bank in turn lends money to others for interest and makes a profit on the difference between the borrowing rate and lending rate.

Do you want to be an owner?

You can be a lender by investing in fixed deposits of SBI. Also you can be a part owner of SBI by investing in its shares.

As a part owner you would not get a fixed return in the form of interest. Since you own the company partly, you would share in profits or losses. You would get a part of the profits in proportion of the shares owned by you. Owning means risk-taking with the chance to get higher returns than lending to the bank or companies by making fixed deposit with them.

Suppose, Tomorrow Tata motors comes out with 12%interest paying debenture, what will be the response? There will be a huge response. It will definitely be oversubscribed. All investors will not get the allotment.

For a moment, just think. If TATA motors was to pay 12% interest to debenture holders, then it need make more than 12% with the borrowed money. Will you benefit more by being a lender (debentureholder) or part owner (Shareholder) of TATA Motors?

Lending or owning?

We as Indians should be proud to be a part of a developing country. Owning would give us an opportunity for long term capital appreciation and growth. However it is best to understand that the Sensex may fluctuate, but an increase is definite over a period of time.

In the last 10 years, sensex gas grown at 17.79% CAGR. That means, if someone could have invested Rs. 1 lac 10 years back, it could have grown to 5.14 lacs. In the last 10 years one third of diversified equity mutual funds have delivered a CAGR of more than 25%. That means if someone could have invested 10 years back in these mutual funds Rs. 1 Lac, it could have grown to Rs. 9.31 Lacs.

So the coming decade post 2011 is the golden period for owning. This period would help the so called middle-class people to build wealth. With the middleclass aspiring for quality education for children, quality healthcare for their family and a decent lifestyle after retirement, owning equity is the only time-tested means to get a decent inflation adjusted returns. So we need to get our long term perspective right and start owning equities.

Asset Allocation

Owning and investing in shares means creating wealth with a long term perspective. But balancing the way we invest matters.

First, we need to allocate some amount of money for risk coverage. This could include money set aside for insurance, medical insurance and critical illness coverage. Next we all need to set aside money in liquid sources as savings accounts / bank deposit / liquid funds that would come handy in contingencies like loss of job and sudden illness. Then money required for short and medium term needs has to be set aside in debt investments.

Once this is done you are free to buy equities and build wealth. Equities can beat out all other investment categories in the long run. Equity is one of the few investments which can give you a positive return after adjusting for inflation.

Last but most important, feeling motivated that you are an owner would make a significant impact on the way you multiply your wealth. It would also give you the positive spirit and affirmation to stand by your decisions during the downs of the economic market.

To Be or Not to Be In Equity is a post from riyaz.net.



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Who does not wish to live in a house of their own? Buying a new flat will take a long time, so some of us may wish to settle for buying a resale property. However buying a resale property could involve many legal and other procedural requirements. It is prudent to first understand the various procedures and safety measures for buying resale property to avoid hassles in future.

Buying Resale Property – A Guide

Consult Experts

It may be ideal to engage a good real estate agent to locate a resale property. He would be in a position to locate sellers as well as guide you regarding the price of such properties in different localities. They would also be in a position to tell you about the seller of the property. Most real estate agents charge a fee and also help with registration, payment of stamp duty and other paper work involved in the purchase of resale property. In addition, taking the help of a good lawyer would also help to make sure that things are clear legally also.

Title of the Property

It will help engaging experts like real estate agents and lawyers to help you, but it is always better to be well-informed yourself when entering into deals for buying resale property. The first step in this regard would be to establish the title of the seller; whether he is the real owner of the property or has been given the power of attorney to transact the deal. All the documents with regard to the property need to be clear. In addition you need to make sure that all the original documents with regard to the property that were given by the builder or original developer are in order.

Documents

Buying resale property seems great, but it could become a big problem if the documents regarding the original purchase and subsequent transfer of title are not properly stamped. Firstly it could pose great problems especially if you want to apply for a loan for purchase of the resale property. Subsequently it could prove to be unacceptable in case you wish to transact further on the property.

Existing Loan

It is also necessary to make sure that the property documents are not lying mortgaged in the bank’s custody against a loan taken by the seller. The bank will consider a loan only once the loan taken by the seller is repaid and the documents released.

Loan Eligibility

Buying a resale property would definitely provide you with a bigger space in case of older properties. However it is best to note that some banks may not lend money on buildings older than 10 years. This may be due to the reason that they may not want to take the risk of the price of the property going down. Banks also make sure to ensure that the bank’s outstanding loan should always be lower than the value of the property in the market.

Property Valuation

Next it is imperative to note that the loan amount is highly dependent on the cost of the property. Technical experts would evaluate the property. However it would be useful to yourself avail the services of a property valuator at a small fee before approaching the banks. The bank’s property valuator may valuate the property at a much lower rate. They would also like to safeguard their interests against the fall in the price of the property in future.

More Down Payment

Most banks wish to make sure that you be responsible for the maintenance and good upkeep of the resale property. So banks would expect you as the purchaser of the resale property to pay a certain percentage of the price as down payment. You may have to pay about 20% of the price as down payment; property of 50 lakhs requires 10 lakh as down payment.

Age of the Property

This down payment could be more in case of older properties. In addition, banks usually lend only on properties that are unto 50 years old. The tenure of the loan also decreases with the age of the property.

Flat Society

The bank may grant the loan and you may make the down payment, but there could be another problem. It arises out of the need for some Flat societies that require the payment of a heavy price for change of ownership. It is best to consider this cost also when coming to a conclusion while purchasing resale property in cooperative and other societies.

Conclusion

Buying resale property would give you a chance to settle in your own house fast and save you of high rents paid and the need to frequently shift your place of living. Taking a loan from the bank could give you tax deductions on the interest paid soon. You would not have to wait till the possession as in the case of new flats. It is always prudent to be well informed about the various details of the resale property.

A Step by Step Guide to Buying Resale Property is a post from riyaz.net.



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Today here prevails a similar confusion with who is an investment advisor and who is the financial planner. It is quite common to find these terms used interchangeably, but it is necessary to understand that an investment advisor and a financial planner have the similarities as well as differences as with sales and marketing.

Why is this confusion?

There is a real confusion among the investors regarding who a financial planner is and who is an investment advisor. These terms are used very loosely, so it is necessary that one understands the function of each of these professionals and approach the right people.

The main confusion in these terminologies arises out of a person’s own perception. This arises due to most professionals offering financial services like insurance advisors, mutual fund distributors and stock brokers calling themselves financial planners. This term has been used very loosely by many to suit their own convenience and image. This is more like a compounder professing to be a doctor, when he/she knows purely only about the medicine that one has to dispense. A compounder will not have the expertise to diagnose the disease that needs to be treated.

Who is the Financial Planner?

Financial planner is involved in planning all the finances of a person. His job includes drawing up an appropriate plan that covers all financial needs and goals in the short, medium and long run. Such a planner is like an architect of a building and helps to analyze and draw a complete map of how his or her client’s finances need to be planned. It includes considering the need for liquidity, cash management for various needs, goals planning and feasibility, long term cash flow, estate planning and risk management.

Who is an Investment Advisor?

In contrast an investment advisory/advisor is a person or group that helps his client to decide on the financial products that he or she should invest in. Such an advisor understands what his or her client actually wants after communicating with him or her and understanding the need. An investment advisor makes a thorough analysis of the various securities before doing so.

Hence investment advisory is just one of the ingredients of financial planning.

Goal Achievability

A financial planner will be able to tell you, is it possible to achieve all your financial dreams with your current and projected earning capacity. If it is not possible, then the financial planner will be able to tell you what could be achieved with your earning capacity and to achieve all your dreams what kind of earning capacity you should have.

Risk Management Plan

A financial Plan also covers creating a risk management plan. A risk management plan includes creating an emergency reserve, assessing the human life value and suggesting a term insurance; identifying medical insurance cover required and suggesting a health insurance plan; and also suggesting a general insurance policy to cover the natural perils like fire, flood, earthquake … against your properties.

Investment Plan

A financial plan that suggests investments comes only after all the aspects have been analyzed fully. The best investment advice can only flow out after a deep analysis of a client’s need and after the preparation of a financial plan. Financial Planning should precede the investment planning.

Existing Portfolio Revamp

It is also necessary to understand that a financial planner also looks at past investments. He then makes necessary changes to make them amicable to achieve a client’s financial goals over a period of time. Also he will assist you in restructuring your existing outstanding loans. If necessary he will create a debt pay-off plan also.

Tax Planning

A financial planner should assist you in creating a tax plan also. This tax plan will be in sync with your overall financial plan.

Review

A financial planner will do a periodic review on your financial plan and investment plan. If you are preponing or postponing one of your goal or if you have got a job promotion, then you may need a financial plan review. If direct tax code has got implemented or one of your investment schemes underperforming, then you may need an investment review.

In a nutshell a financial planner will not only give you an investment advice he assists you in managing your personal finance in a complete, comprehensive and a holistic way.

Investment Advisor Vs Financial Planner is a post from riyaz.net.



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Here’s the list of financial resolutions for 2012. You may pick and choose a few among these and implement to improvise your personal finance management system.

1. Would you like to prepare a workable budget for the year 2012?

You may choose to create a workable budget for 2012 by projecting your income and expenses. Also consider investments committed earlier like insurance premiums, SIPs and other commitments like EMIs. Is there any other financial goal you are going to meet this year like buying a car or buying a property? Have you made the provision for down payments?

2. Would you like to do a Portfolio Rebalance?

2010 ended with a sensex of 20509. This year it is trading around 16000 levels. So definitely there will be a requirement to balance your portfolio to restore your predetermined debt equity ratio. Probably you may need to increase your equity exposure. You can make this market fall as an opportunity.

3. Would you like to resist the temptation to make quick profits?

Temptation to make quick profits is the biggest enemy of wealth creation. This temptation leads to speculation and gambling which in turn will lead to a huge loss. If you could take a resolution to resist this temptation you will not fall prey for bogus schemes that seem to offer huge returns.

4. Would you like to repay your high cost loans?

Do you have credit card debt, personal loan, or car loan? These are all definitely high cost loans. Why don’t you chalk out a plan to repay these debts well in advance? This will reduce your debt burden. You can become debt free earlier. You will have more investible surplus if you are debt free.

5. Would you like to review your insurance?

You may decide to check the life insurance and health insurance already taken is sufficient or any additional coverage is required. If you have taken a term insurance policy through an agent, now compare the premium with an online term insurance plan. By changing to an online term insurance plan you will definitely save up to 60% of your offline premium.

6. Would you like to do an early tax plan?

If you have not done your tax saving investments for the current financial year, you may decide to do it now without any further delay. As soon as the budget session is over create a tax plan for the next financial year. Doing tax saving investments in the last minute may force you to think only on saving tax and not on your financial goals and choosing a best scheme in sync with your goals.

7. Would you like to prepare a retirement plan?

Don’t put off today what you can’t afford to do tomorrow. In spite of the world wide pension crisis and a growing acceptance that we must plan and save for our retirement, the harsh reality is we are actually not saving enough. Research reports reveal that only 15% of the individuals are saving sufficiently for their retired life.

Have you started planning for your retirement? You may be saying ‘who me? I am too young to be thinking about retirement”. It is not so! Rethink. You should have started thinking about it yesterday. Because time flies quickly. If you were smart, and planned for retirement when you are young, your retirement years will be really those “Golden years”. If not you need to compromise and you need to work longer and retire later than others.

8. Would you like to avoid resolution pollution?

You need to be very cautious about setting too many financial resolutions and also need to avoid setting unrealistic financial goals. You need to set resolution which is workable. You need to keep realistic expectation on the outcome of the resolution. Over expectation may demotivate you. New Year resolution is not a magic. You will be able to progress it only over a period of time with constant practice.

Now you have all the information needed to create the New Year financial resolution. So go ahead and create one for you and your family.

Financial Resolutions for 2012 is a post from riyaz.net.



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It was just another day that a new client came to us for financial planning. He wanted to know if he had planned well for his family financial goals. As a general procedure, I suggested that a study would help me come out with a comprehensive financial planning to meet his goals.

Explaining the Financial Planning Concept

I told him that financial planning lies in addressing 4 important areas namely, risk management, wealth creation, wealth preservation and wealth transfer. It is an ongoing process throughout life. Financial spring cleaning done regularly helped to stay focused and keep track of your finances.

It is best to understand that financial spring cleaning involves collecting and assimilating data. This included various investments, present financial situation of the client. Then an appropriate plan was prepared and reviewed regularly considering changes. It is best to get a financial plan prepared by a certified financial planner or advisor who has the expertise, education and ethics and believes the plan would work for you.

Analyzing Life Insurance

My collection of data told me that my client had more insurance coverage on his wife and dependent children than on him. In addition he had been sold certain unit linked plans by his investment consultant. These ULIP’s were disguised like profitable part of his overall portfolio.

So the first thing that I emphasized to him was to increase the term insurance coverage on him, so that his family was secure in his absence caused by sudden death. This was essential considering that he was the sole earning member of his family and still had various financial commitments before his children settled down.

Online term policies with nominal premium rates would be best for the purpose. I then told him that buying ULIPs are not good investments because of its heavy front loaded charges and under performance. As a part of portfolio revamp, i suggested to the client that he surrender certain policies and take up more of online term coverage on him.

Evaluating Health Insurance Requirements

Client already had a general health insurance policy for him and his family. I also suggested that he should take additional health insurance coverage in the form of critical insurance. An additional critical insurance coverage would provide for income in case of critical illness eventualities.

Examining Other Investments

Stocks and MFs

A closer review of his investments in stocks, mutual funds and other portfolios convinced me that my client had gone wrong in many of his investments. I was surprised to find that he had been misguided to invest in penny stock and closed ended NFOs of mutual funds. These stocks and mutual funds were not just risky but also lacked adequate liquidity and profitability to cater to long term inflation.

PMS

His portfolio management that was done by 2 portfolio managers lacked consistency that was vital for growth. They had repeatedly bought and sold stocks of big stocks like Larsen & Toubro, Tech Mahindra and Siemens just to book minimal profit and paid high costs on entry, taxes, brokerage and exit.

It was also seen that my client had an unwieldy portfolio that consisted of certain stocks that were bought on momentary emotions. In addition both his portfolio managers were buying similar stocks and mutual funds that made for laying all eggs in a basket. In addition to lack of diversity in stocks, they had sold off more profitable funds to invest in least known. I suggested that he invest more in diversified large cap and mid cap funds.

Fixed Income Investments

We suggested moving of fixed deposits that earned just 6.5% post tax to fixed maturity plans that yielded 8.75% post tax. We also suggested that he increase his contribution to Public Provident Fund and in the senior citizen account of his parents.

Client Reaction

My client understood very well that his broker had not suggested investments taking into consideration his financial goals, risk tolerance and return expectations. We also rendered the service was to help our client create a cash flow management strategy. This would help him ensure surplus funds were appropriately invested in a diversified way.

To conclude once the first step was taken to embark on his new journey to a strong financial backing, we advised him to keep himself well informed about financial planning with knowledge from various sources. Finally he understood that it was worth taking help in financial spring cleaning due to the rich long term gains that would accrue to him.

Have You Done Your Financial Spring Cleaning? is a post from riyaz.net.



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Potential Problems Related to Your Spending Habits

You are finding it difficult to repay your debts

Potential Problem: You decided to splurge in on your salary and went ahead purchasing everything you ever wanted on monthly installments and did rest of the shopping on your credit card. A few months later, you come to terms with reality not being able to service all your debts.

Possible Solution: You must take into consideration the fact that all your loans combined should not go beyond 30-40% of your salary. It is imperative that you bore this fact in your mind before taking any new debt.

You find yourself in a tight financial corner every next month

Potential Problem: You spent a little too much on your vacation and are now feeling the pinch for not being able to pay up for the insurance premiums that you are required to pay the next month.

Possible Solution: In order to deal with such a situation, you need to monitor your accounting constantly on a monthly as well as annual basis to see how the cash flow is. This will help you to manage your cash flow in an effective manner.

You are unable to determine what you really need and whether you can afford it

Potential Problem: You probably got a little too excited when received your bonus amount and made up your mind to purchase a big and brand new refrigerator or an advanced split air-conditioner to tackle the summer heat or a car to swing along the countryside. But, what you failed to assess initially was whether you would be able to meet up with the increased electricity or petrol bills generated in your monthly budget.

Possible Solution: You can deal with such problems by planning well-ahead and deciding firmly on entities you regard as relevant to your needs. You need to assess before you buy whether the recurring expenses of the equipment you’re going to buy in fits into your monthly budget.

Potential Problems Related to Your Investment Habits

You are unable to contemplate or relate to the product you’re in possession with

Potential Problem: You have decided to invest in the real estate sector after seeing your peers make good returns, especially when the prices were rising. However, nobody explained to you the fact that your money could get bottled-up in there in the absence of a good deal. In the same way, you may have five insurance policies but not enough life insurance coverage.

Possible Solution: It is important that you know the purpose of buying a financial product is it will help you solve your financial problem. Not all products in the market will solve your required needs. By setting yourself goals, you will be able to zero in on the perfect asset choice.

When you need money, your portfolio is in negative

Potential Problem: You worked hard and even managed to save up regularly cutting away all your unwarranted costs. Yet, when you come close to meet your goal (say buying a property), you realize that your portfolio doesn’t support your need.

Possible Solution: Before deciding to go in for the kill, you need to choose your assets wisely keeping your goals in mind. For example, it is quite risky to keep all you money in equity in case you are aiming for a short-term goal. As a result, your capital may get exposed in the event of the market falling.

You focus your investments in only one asset category

Potential Problem: You made huge returns from the stock market last year. So you decide to concentrate your investments only in stock market. You have suffered in the 2008 crisis or 2000 technology bubble burst and incurred major losses and are quite suspicious if things would work out; and decide to stick just to debt investments. It must be noted that neither of the strategies will pay off.

Possible Solution: You may decide to go by your insticnt, but it is not always advisable to blindly invest everything you’ve got in a single asset class. In order to reduce the risk factor and still be on the charts, you are required to broaden your time horizon of investment. Also you need to diversify across various asset classes to reduce risk.

You have understood how to be proactive on your financial problems. Unimplemented knowledge is a burden. Our problem is not ignorance but inaction. You can be different from others by being alert to your financial problems well in advance.

How to Be Proactive on Your Potential Financial Problems? is a post from riyaz.net.



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Misselling

These kinds of investment decision making will make you fall prey for misselling. As you are not interested in doing the homework and if someone comes with a long chart and calculations for 20 years, then you may find it interesting and end up buying products like ULIPs. When you realize that you have invested in a mediocre product, you will blame the agent or broker and not yourself and your wrong decision making approach.

Market Moods

When you just want to act, your investment decisions will swing based on the market moods. If the stock markets are highly volatile and it is comes down day by day then you may think that instead of investing in stock market investing in debt funds are fixed deposits are safe and wise. If the stock market goes up and everyone is investing in the market including your driver, then you may think it is opt to invest in shares or equity funds. So in this case you will never buy low and sell high. In fact you end up buying at peak and avoiding the market when the share prices are low.

Aggressive Trading

Blindly, some investors believe that by doing aggressive trades in shares and derivatives are the quick way to make money in the stock market. They enjoy their higher degree of involvement with the stock market. They feel very happy about the few successes in the stock market which give them comfort in accepting many losses. They don’t go back and calculate how much they have made or lost in a trade; what is the total profit or loss they have made in a particular year. These investors will learn very old lessons of investment after losing a huge amount of their hard earned money.

Wealth Creation Secret

The mistake investors do is they don’t understand the basic investment principles. They simply try to make some investment decisions. How can these investment decisions be right? Very difficult. As an investor, you need to understand the investment principles. Then based on the investment principles, you need to take the investment decisions. These investment decisions will be right for sure. Without right investment principles, right investment decisions become impossible. Without right investment decisions, long term wealth creation is just a day dream.

Sound Investment Principles

Asset Allocation

Depending upon your financial goals, you need to arrive at the required rate of return from your investments. You need to decide what kind of allocation needs to be given to different kind of investment avenues (like Fd, Debt funds, Equity Funds, Gold ETF..) in order to achieve the required rate of return. Once decided, don’t change this asset allocation ratio depending upon the market movement.

Risk Vs Safety

Whatever the long term savings you have got you can invest in risky assets like equity funds. You will be adequately rewarded for taking risk in the long run. Whatever the short term savings you have got you can park it in FDs or debt funds.

Investing your long term money in safe avenues will be a destruction to create long term wealth. You will not be able to beat inflation. Similarly investing your short term money in risky investments is also dangerous.

Fundamental Factors

The returns an investment generates will be based on its fundamental factors. Analysing fundamental factors only will lead to a long term success. There is a lot of difference between taking one right investment decision by fluke and taking right investment decisions regularly by analyzing the fundamental factors.

These investment principles are very simple and straight forward. At the same time these principles are very authentic and profound. The magic formula for creating long term wealth is “Sound Investment Principles + Right Investment Decisions = Long Term Wealth”.

Principles of Wealth Creation is a post from riyaz.net.



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Mahesh believed that Lekha was no good at finances and was just home bound. He also believed that he had to support her, but had no moral obligation to reveal anything else to her. Lekha was shocked to know that Mahesh was deep in debt. She was sensible and thrifty and thought they would soon lead a comfortable life, but her dreams were shattered and she was forced to sell all the jewelry and some of the household things that her parents had given her in marriage. They found that affording the rent of their flat was also too much, so they had to move to a smaller flat.

Lekha was happy for she knew at least now and could keep a track of Mahesh’s finances, but she lost faith in Mahesh as he hid vital financial information from her and decided that she had to start earning also to feel financially secure in their relationship. Mahesh’s financial infidelity has broken the very foundation of their marital life that is based in trust, confidence and open discussion of all vital issues.

Financial infidelity could go further in various other respects like the case of Ankit that hid vital information about the salary he earned and the increments he got, the loans he took, and the number of credit cards he used. He died of a severe cardiac arrest at the tender age of 32, and this was a shock not only to his wife and children, but also to his parents and in-laws.

Ankit’s wife Anila believed that he had taken sufficient insurance to protect the family in case of his death. She also believed that he had enough savings. But Ankit a poor money manger had huge credit card dues, as he had borrowed for family expenses. Also he had a sizable amount of car loan and home loan. He had the habit of paying only the minimum due on credit cards. Besides he had defaulted payment of premium on some policies.

Anila was shocked and disposed off their flat and car to close the loans. She was left with very little from the insurance Ankit had. She only wished that Ankit had told her everything so that she could have set aside enough for the family and not had to send their son Amit to a government school and have no finances for his future education.

Recognize When There is Financial Infidelity

Mutual Trust

As the couple ties the knot and takes the marriage oath, it seems so pleasant, but I would say trust and respect for each other need to be for life. The break of trust and respect in major financial matters amounts to financial infidelity. I would say that transparency in marital relationships is very important and could help save situations that are irrevocable.

Financial Openness

This applies to revealing the number of bank accounts a partner has and the nature of transactions made. You need to have an open discussion with your spouse on the financial matter like the number of credit cards you have, loans you borrow, investments you make, tax you pay…

Family Support

You need to inform all your family members and dependents about your financial and debt status. Then you will be able to take decisions with much more clarity. Moreover, if your family members know about your debt, they will also change their spending habits and support you in getting out of debt faster

Equal Weight

You could definitely be not guilty of financial infidelity if both your partner and you consider that equal weight should be given to both views in financial affairs. This is also necessary for the strong foundation of your relationship and family.

Spirit of Compromise

It is true that mutual trust and respect coupled with compromise can do a lot to remove financial infidelity and save the extreme situation that we have seen in the case of Mahesh’s and Ankit’s family. A spirit of compromise could definitely save financial infidelities that have their roots in selfishness on the part of one of the partners. This also apples to relationships that is emotionally vulnerable with one partner feeling inferior or being terrorized emotionally.

Lastly I am sure you would all refrain from the guilt of financial infidelity that could not just ruin the financial position of families and their overall peace, but could also cause certain devastating relationship issues that could not heal even in a lifetime.

Are You Guilty Of Financial Infidelity With Your Partner? is a post from riyaz.net.



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Increased life expectancy has lead to the increase in the costs of living and medical expenses. This makes it difficult for many senior citizens that lack a regular income to live a life of dignity. Reverse mortgage is the solution introduced by the Union Government of India in 2007 helps senior citizens.

Understanding the Concept of Reverse Mortgage Better

Reverse mortgage is the opposite of a conventional housing loan that needs to be paid back with interest over a period of time. Reverse mortgage helps senior citizens having a residential property to receive a regular income against its mortgage. The borrower and his/her spouse are allowed to stay in the place of residence until both die, aiding the living of a dignified life by senior citizens.

Workings of Reverse Mortgage

A senior citizen couple should necessarily own a flat or house. Then they can pledge the property for a monetary value agreed upon by the bank. The value is generally fixed considering the present property values, demand and also the condition of the property. The bank starts periodic payment as a loan that is decided after consideration of margin of interest costs and price fluctuations in the property. It is an ideal solution for senior citizens that have residential property, but no finances for regular day to day expenses and medical aid. The borrower’s interest in the property decreases once the reverse mortgage EMI begin.

Guidelines for Reverse Mortgage

The guidelines set by the Reserve Bank of India state:

• The maximum amount of the loan given generally as EMIs cannot exceed 60% of the property value. In addition the minimum period of the mortgage is 10 years, and maximum 15 years. However some banks have been recently offering tenure of about 20 years.
• The borrower can avail of the loan in parts every month, every quarter, every year or in a lump sum.
• The lender/bank would revaluate the property once in 5 years. If the value of the property has increased, the borrower has the option to ask for an increase in the amount of loan. He can also ask for the additional amount to be given in a lump sum.
• The installments or lump sum received in a reverse mortgage is a loan and not an income. Hence no tax is payable on it. However he has to pay capital gains tax when the property is taken for the borrower for the repayment of the loan on the mortgage.
• The interest paid on the reverse mortgage could be floating (fluctuating) or fixed, with this rate depending largely on the interest rates prevailing in the market.

Eligibility for Reverse Mortgage

A senior citizen can avail of reverse mortgage on his/her house or property when:

• He/she is above the age of 60 and his spouse that is a co-applicant is above 58 years of age.
• The property is the permanent residence of the individuals and is self-occupied. The property should be self-acquired and located in India. The title should be clear of the borrower’s ownership.
• It is mandatory for the property to be free of encumbrances and it should have a minimum life of about 20 years.

Settlement of Reverse Mortgage

• The reverse mortgage loan is payable on the death of the last surviving life partner. It could also become payable when the borrower sells off his/her property. In such cases the bank gives the choice to the heirs to settle the loan with accumulated interest. Otherwise the bank arranges to recover the same with the sale of the residential property.
• Any extra amount that remains after the loan with interest and expenses has been settled is passed on to the legal heirs. If the sales proceeds are much less than the loan, the bank. In case of losses that could occur due to wrong estimation by the bank is borne by them.
• The loan could be foreclosed when the borrower has not continuously stayed in the house for a year or has failed to pay property taxes or insure the house. The loan is also foreclosed when the borrower turning bankrupt, donates or abandons his property. In addition renting a part of the house, adding an extra name to the ownership could all affect the lender’s interests and lead to foreclosure of the mortgage. Government statutory provisions could also require it.

Some other highlights of reverse mortgage include the borrower’s option to prepay the loan with interest. Also one or both spouses could outlive the period of the tenure. Then the bank will stop payment of monthly installment. They will however wait for the both the borrowers to die before settlement. Reverse mortgage involve long, tedious, difficult and complicated procedures. In addition they have no provisions for increase in monthly payouts.

Lastly reverse mortgage has failed to gain much popularity in India, with marketing strategies being inadequate. The reason is also that many banks are fixing the maximum limit of loan. The resentment among the heirs and family sentiments are also some of the other reasons. It is true however that reverse mortgage is the solution for financial sufficiency in lives of most senior citizens.

A Layman’s Guide to Reverse Mortgage is a post from riyaz.net.



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