Assets Allocation-Finanicial planning

You have many options for where to invest your money, and every option has a different risk/reward ratio. You can put all your money in the high risk/reward basket, such as aggressive growth stocks, and you may enjoy great gains, but you’ll also suffer huge losses when things go badly. On the other hand, you can put all your money in the low risk/reward basket and keep your assets secure, but then your gains will be very modest.

If your gains are taxable, you need to make about 7% just to stay even, since you have to cover inflation + taxes (based on typical USA figures).

The point of intelligent asset allocation is to enjoy strong gains without taking on too much risk of losing your entire principal and having to start over from scratch.

So you want to have some money in the aggressive growth bucket, so you have the potential to enjoy some big wins when things go well. But you also want to keep some money in your secure bucket, so you have backup funds to get back in the game if your aggressive investments go bust. Asset allocation involves determining how much to put in each bucket.

I’ve made mistakes on both sides. As a young adult, I kept all my money in a regular savings account, earning minimal interest while the market was soaring. Then in my late 20s, I put most of my money in stocks that lost 70-80% of their value during the dotcom bust, and it took me a while to rebuild those cash reserves. Both of these were good lessons for me.
A financial investment example
As an interesting illustration from the course, consider this hypothetical example. Suppose Erin and I are each going to invest $100,000 for 25 years, and we want to maximize our returns.

I decide to play it safe and stick the whole $100K in a fairly secure investment that yields 7% per year.

Erin decides to split her money into $20K chunks and invests in five different vehicles, which perform as follows:
$20K is lost completely
$20K returns 0%, so you only get the original $20K back
$20K is invested at 5%
$20K is invested at 10%
$20K is invested at 12%

Who gets the better total return? Let’s see how the numbers add up:
My 7% investment turns that $100K into $572,542 after 25 years.
Erin’s returns are as follows:
$20K lost = $0
$20K @ 0% = $20K
$20K @ 5% = $69,626
$20K @ 10% = $241,139
$20K @ 12% = $395,769
So Erin’s grand total is $726,534. That’s $153,992 more than what my 7% investment earned. It’s interesting that 40% of her initial investment returned zero or negative returns, and another 20% underperformed my 7% return. But those higher returns of 10% and 12% really pay off. Even though most of Erin’s picks were poor performers, being right just 40% of the time was all she needed.

By diversifying her investments, Erin was able to participate in the big winners while not being wiped out by the losers. Of course it would have been great if she could have invested the whole amount at 12% or more, but this example assumes she did her best to pick five potential winners.

To optimize your long-term investment gains, you need to optimize your asset allocation. Maybe you start with 1/3 of your money in safe investments like municipal bonds, another 1/3 in growth funds, and the last 1/3 in aggressive growth stocks. Over time these percentages will drift as each bucket grows at a different rate, so you need to rebalance them.

When your riskier investments lose money, rebalancing means transferring money out of your secure bucket to get back in the game and try again. And when your riskier investments pay off big, rebalancing means transferring money back to your secure bucket to lock in your gains. This strategy allows you to continue enjoying some big investment payoffs without taking on too much risk.

Beyond financial planning
After the financial planning course I realized that the strategy of asset allocation can be applied to other areas of life, such as work, relationships, and health.
Consider how you allocate your time. You can think of your time as consisting of several buckets, each having a different risk/reward ratio. If you have a full-time job that pays a flat salary, then most of your time is allocated to the security bucket, so you might want to shift some of that time to the entrepreneurial bucket to participate in the game for much greater gains. Maybe your job pays $20/hour, and you have the option of trying to make $50/hour doing consulting on the side, but your consulting efforts don’t always pay off. Some hours you make $50, but others you make $0. And as you slide the risk/reward ratio further, you may put yourself in the game for some of those delightful

$10,000 hours.
You can also use non-monetary criteria for each bucket. With physical exercise you could have different buckets for allocating your time to aerobic conditioning, endurance training, strength training, stretching, sports, and fitness education. Each of these buckets will have a particular impact on your physical health. You would then allocate a certain percentage of your available exercise time to each of these buckets in accordance with your fitness goals. I remember when I started exercising regularly, all I did was running (aerobics). Then I got into distance running (endurance). Today I do about 40% aerobics, 45% strength training, and 15% disc golf (sports). I had the most balanced allocation when I trained in Tae Kwon Do, which was a great blend of everything.
It’s up to you to decide what particular allocation works best for you, whether you’re trying to get better returns on your money, your time, your energy, your goals, or something else. Working like a monomaniac on any one thing for too long will unbalance you, as will neglecting a key area for too long. Intelligent asset allocation can help you consciously determine the right mix that keeps you in the sweet spot of balancing risk vs. reward, work vs. leisure, strength vs. flexibility, solo time vs. social time, and so on.

source-http://www.stevepavlina.com/blog/2006/10/asset-allocation/

Taxes in India-Joke

A little boy wanted Rs.50 very badly and prayed for weeks, but nothing happened. Finally he decided to write God a letter requesting the Rs.50.

When the postal authorities received the letter addressed to God, INDIA, they decided to forward it to the Prime Minister of the India as a joke.

The Prime Minister was so amused, that he instructed his secretary to send the little boy Rs.20.The Prime Minister thought this would appear to be a lot of money ( Rs.50) to a little boy, and he did notwant to spoil the kid.

The little boy was delighted with Rs.20, and decided to write a thank you note to God, which read: "Dear God: Thank you very much for sending the money.

However, I noticed that you sent it through the PrimeMinister Office (North Block) in New Delhi, and those Donkeys deducted Rs.30 in taxes ... "

How to Win Friends and Influence People-WLB

Fundamental Techniques for Handling People:

• Don't criticize, condemn or complain.
• Give people a feeling of importance; praise the good parts of them.
• Get the other person to want to do what you want them to by arousing their desires.
  

Six Ways to Make People Like You:

1. Be genuinely interested in other people.
2. Smile.
3. Remember and use people's names.
4. Encourage others to talk about themselves and listen to them.
5. Discuss what the other person is interested in.
6. Make the other person feel important.
   
   

Twelve Ways to Win People to Your Way of Thinking:

1. Avoid arguments.
2. Show respect for the other person's opinions. Never tell someone they are wrong.
3. If you're wrong, admit it quickly and emphatically.
4. Begin in a friendly way.
5. Start with questions the other person will answer yes to.
6. Let the other person do the talking.
7. Let the other person feel the idea is his/hers.
8. Try honestly to see things from the other person's point of view.
9. Sympathize with the other person.
10. Appeal to noble motives.
11. Dramatize your ideas.
12. Throw down a challenge.

Nine Ways to Change People Without Giving Offense or Arousing Resentment:

1. Begin with praise and honest appreciation.
2. Call attention to other people's mistakes indirectly.
3. Talk about your own mistakes first.
4. Ask questions instead of giving direct orders.
5. Let the other person save face.
6. Praise every improvement.
7. Give them a fine reputation to live up to.
8. Encourage them by making their faults seem easy to correct.
9. Make the other person happy about doing what you suggest.

source-How to Win Friends and Influence people-by-Dale carnegie

SELF GROWTH

You Can Always Be Better Than You Are Now


"There is little difference in people, but that little difference makes a big difference. The little difference is attitude. The big difference is whether it is positive or negative."
- Clement Stone



"Never react emotionally to criticism. Analyze yourself to determine whether it is justified. If it is, correct yourself. Otherwise, go on about your business."
- Norman Vincent Peale

You Can Always Be Better Than You Are Now
by © Arthur, The Motivation Home


Everyone are born with two natures. As we grow up through life, one wants us to advance forward and the other one want us to step backward. The one which you cultivate the most as you grow up in life become the kind of person you shall be. Your own inner will power is going to decide which one shall remain permanent with you for the rest of your life.

If you were to read the thoughts of successful people, they have something in common. Many succeed by their own supreme effort of their own will power. That enough proof that human have the will power to find ways to succeed if they really want to. A human is therefore a director of their own life. Good success habits can be acquired and so does bad failure habits that will hinder your success.

History have shown that a good for nothing person who break his/her old habit can amount to something big if they really want to. The real purpose of reading good books are to simulate and awaken your inner will power so that you can take action on the possibilities.

Never let fate alone determine whether you are rich or poor. Never let the words of another person determine whether you should be angry, happy or sad. They can say what they want but you have the power to ignore them if their sole purpose is bring you down.

Don't let the precious years go by without setting a definite goal. If you want to be rich, then take the action and learn how to be rich. With today knowledge economy, how rich a person can grow is determine by their ideas, not how big their pocket are.

If you want to be a top gun in your career, then start planning how you can become one. Go to the library and start reading books and learn from the career expert. Next, put the knowledge into action. If you need additional qualification, then plan out a time to sign up for the course. There are always ways for you to better yourself.

When you start asking yourself "what can you do to better yourself", then the answer is "taking action to do something is still better than those who do nothing to improve themselves". Many people achieve very little in their life not because they can't achieve something big. Most who under achieve simply live their life without a definite goal and slept through their days caught in the same routine of work, lunch, dinner and watching too much TV programs when they reach home.

Life can only furnish you with the opportunity to improve yourself. Whether you do it or not depends on what your goal is. Therefore, at beginning of every month, you should sit down and spend time to examine the progress that you have made.

Find out why you have not achieve the result you want and plan out ways on what you can do to get closer to what you want. Remember, time pass are forever gone. You can always be better than what you are now if you are willing to put in the effort to "Just Do It".
Copyright © Arthur A motivation a day will make your day a GREAT DAY.
Today is the first day of your life to live the rest days..Have a Optimistic day..Wish you all best

Hair-Care Tips

1.Comb your hair regularly. Combing helps spread the natural oils through hair, making it look shinier and healthier.

2.Massage scalp regularly to increase oil secretion.

3.Always wash your brush and comb when you shampoo your hair. Avoid lending your brushes and combs to others.

4.Don't wash you hair in soaps or harsh shampoos. They are highly alkaline and will upset your hair's natural pH balance.

5.Avoid sratching scalp with finger nails or fine combs, because damage to scalp causes damage to hair.

6.Leave your hair untied for atlease four hours a day. This eases the pressure on your scalp and gets blood circulation back.

7.Finally, follow a healthy and balanced diet. Nothing promotes hair growth better.

Basic Hair Care
We recommend that you follow the suggestions listed below to help you to get your hair into a good condition.
Cleansing
Your should wet your hair with warmish water and using only a little amount of shampoo get it into a lather in your hands and then apply it onto your hair.
The choice of shampoo should reflect you own type of hair and how you wish to present yourself.
Conditioning
1.After you shampoo your hair it is important to use a conditioner on every occasion as a conditioner will help the hair cuticle cells and help to get them to lay flat. it will also allow the hair when dry to be more easily looked after.

2.The conditioner that you use is very important and there are different formulas for dry hair and for hair that is more greasy.

3.It is essential that you make regular trips to a hairdresser every six to eight weeks otherwise there is a danger of getting split ends in your hair.However, by keeping your hair clean and conditioned following the plan above you will be able to ensure that your hairdresser is able to really get the best look and shape to your hair.

Healthy Hair
1.Healthy hair responds to what you eat in the same way as your skin and the whole of the rest of your body.

2.Iron deficiency is the biggest problem for non genetic hair loss amongst women in Britain.

3.For iron to be absorbed in the body Vitamin C and Lysine acid needs to be taken.

4.If you do not eat alot of red meat then it could be difficult to absorb enough iron, so it is advisable to consider using a supplement. It is very important to look after your digestion by eating vegetables and fruit on a daily basis. It is also important to eat the following foods on a regular basis.

5.Salads, Figs, Almonds, Dates, Peas, Beans, Lentils, Sesame seeds, Salmon, Tuna, Sardines.

5.It is also important to drink alot of water and keep your caffeine content down to a minimum by drinking very little tea or coffee, chocolate or any cola drinks.
Unlike your skin your hair cannot repair itself. That's why you need to care for it and protect it - for the state of your hair reflects your internal health.

• To revive your hair's natural health and shine, follow this:
  Keep your scalp clean and cool.
  Nutrients are the key to healthy hair, but to be effective, they must reach the roots. So, whatever you use, you must learn to massage it in well, using the pads of your fingers.
  


• Tension in the scalp or fatty deposits block blood circulation, drying the sebum and thus starving the hair roots. So, message scalp with a god oil to improve circulation and free the hair roots of dry sebum.
  


• Make a pre-shampoo conditioner with natural herbs like henna, 'shikakai', neem, sandalwood, 'amla' and 'brahmi' and add curd and eggs to it. Apply to scalp to beat dryness and lend bounce to otherwise limp and dull hair.
  Follow a balanced diet rich in minerals, proteins and vitamins, the essentials for healthy hair. Especially good are iron, sulphur, zinc-B complex and vitamin C.

Mutual Funds in India

Mutual Fund is an instrument of investing money. Nowadays, bank rates have fallen down and are generally below the inflation rate. Therefore, keeping large amounts of money in bank is not a wise option, as in real terms the value of money decreases over a period of time.
One of the options is to invest the money in stock market. But a common investor is not informed and competent enough to understand the intricacies of stock market. This is where mutual funds come to the rescue.A mutual fund is a group of investors operating through a fund manager to purchase a diverse portfolio of stocks or bonds. Mutual funds are highly cost efficient and very easy to invest in. By pooling money together in a mutual fund, investors can purchase stocks or bonds with much lower trading costs than if they tried to do it on their own. Also, one doesn't have to figure out which stocks or bonds to buy. But the biggest advantage of mutual funds is diversification.Diversification means spreading out money across many different types of investments. When one investment is down another might be up. Diversification of investment holdings reduces the risk tremendously.On the basis of their structure and objective, mutual funds can be classified into following major types:
Closed-end funds
Open-end funds
Large cap funds
Mid-cap funds
Equity funds
Balanced funds
Growth funds
No load funds
Exchange traded funds
Value funds
Money market funds
International mutual funds
Regional mutual funds
Sector funds
Index funds
Fund of funds

source-http://www.iloveindia.com/finance/mutual-funds/closed-end-mutual-fund.html

Personality

Personality

As we are all aware 'personality' is referred to one's traits,both negative and Positive.You are made of liabilities and assests;You have within you the desire to Succeed,the desire for self fulfilment and desire to be happy.

When you look into the mirroe sometimes you could see a smiling face and yet sometimes a frowning face.You find within yourself quite opposing traits.Your negative side is a liability,which is needed to be corrected;Your positive traits are constructive and they are your assets.No one else can change your personality,unless you desire it.

To cultivate a better personality:

1. Do one thing at a time,aim at one goal at a time.


2. Live in the present.


3. Donot forget to learn valuable lessons from yesterday's mistakes.


4. Stop criticising yourself and others.


5. Aim at self-improvement.


6. Subject yourself to an honest self-appraisal.


7. Donot be prejudiced about others;Learn to listen and listen to learn.


8. Donot give up any task until you finish it.If you make a mistake,try again.


9. Excerise your imagination and creative power to achieve success.


10. Donot forget the saying personality is to a man what perfume is to a flower.

11 STEPS TO FINANCIAL INDEPENDENCE

The ultimate financial dream is to have enough money and investments to pay for your desired lifestyle without ever having to work another day for the rest of your life. Many people reach financial security, but few reach financial independence. Many people live the good life while they are working, but in retirement are forced into a less expensive life style because they failed to plan for the golden years. Many people spend like they are wealthy, but few accumulate enough assets to become financially independent. The following are definitions to help you understand the points of this article.
Financial Independence - The ability to maintain and pay for the life style of your choosing without having to work for the rest of your life.
Financial Security - The ability to maintain the lifestyle of your choosing, but having to work to earn the money to pay for this lifestyle.
This article focuses on financial principals that will help you achieve financial independence.
Money is not a root of all evil.But love of Money is a root of all evil
1. Live Below Your Means - You cannot accumulate wealth if you live a life style more expensive than your earnings. You should set your spending below your earnings so that you can save from 10% to 20% of your pre-tax earnings. Without obeying this first principle, you need not be concerned with those that follow.
2. Budget Your Spending - Almost everyone without a budget spends more than they think they spend. You need to have a personal budget and stick to it.
3. Watch The Big Ticket Items - Real estate agents may typically tell you that you can afford a house equal to 3 times your family gross income, after considering the deduction of home mortgage interest on your taxes. But if you limit your purchase to, say, twice your annual gross income, you can cut your monthly mortgage payments by 35% freeing up cash that you can invest in growth stocks or mutual funds. The same is true for cars, boats, etc. Buy what you need but stay within your means.
4. Launch a Disciplined Saving and Investing Plan - Get in the habit of saving and investing. Pay yourself first. Each month when you pay your monthly bills, make your first payment to your savings account, mutual fund or investment account. Force yourself to develop a discipline. The earlier in your life you begin an investment program , the longer you have for your investments to grow and accumulate. If you understand the time value of money, you know that the longer you have your money invested, the larger the growth.
5. Do Not Buy a Vacation Home or Condo - Unless you plan to live in a home more that 6 months out of the year, don't buy it. Almost anything that you can buy, you can also rent, and you only pay for the time that you use the property. Even if you plan to retire and move to a particular place in 10 or 15 years, do not buy until you are ready to make the move. More exciting developments may appear before your move, and the wealth you create by having the money invested will probably far outweigh the savings you realize by buying today.
6. Don't Take on Financial Responsibility for Anything that Eats - Recognize that the more you have, the greater the cost and the longer it will take you to reach financial independence.
7. Protect Yourself From Disaster - Make sure that you have adequately insured your family for the loss of income if a bread winner dies or becomes disabled. Make sure that you have adequate life insurance, particularly during the child rearing years, and realize that you are far more likely to become disabled than you are to die. Also make sure that you have adequate health insurance for every member of your family.
8. Avoid Credit Card Debt - Use credit cards as a matter of convenience only. If you cannot pay off the entire balance when the bill arrives, you cannot afford the purchase you are contemplating.
9. Pay as Little as Legally Possible in Income Taxes - You should plan your tax situation every year and attempt to pay the lowest amount possible. One way is by keeping much of your net worth invested in growth stocks whose gains come largely from price appreciation, rather than dividends. If your employer sponsors a 401-K plan, income deferral or retirement program, max out your contributions in order to defer the taxes. Contribute to an IRA account, even if you cannot deduct the contribution. The growth is tax deferred until retirement.
10. Invest, Don't Trade - Buy investments that you are willing to hold for many years. Buy into companies that you believe will grow and prosper for many years. This appreciation in price is not taxable until you sell and you pay no taxes until that time. Very few individual investors are able to trade in the stock market on a short term basis and make money. Keep a long term focus and forget the day to day fluctuations.
11. Hire an Astute, Independent Financial Advisor - Your most trusted source of independent financial advise may not be your stock broker or financial planner, but your CPA. An astute CPA can offer you advice on everything from clever tax strategies to investment planning. Be sure to hire an advisor that is focused on increasing your wealth. Make sure that you carefully evaluate any investment where the person selling you the investment is earning a commission from the sale.

Footprints in the Sand!

Last night I had a dream. I dreamed I was walking along the beach with the Lord. Across the sky flashed scenes from my life. For each scene, I noticed two sets of footprints in the sand: one belonged to me, the other to the Lord.
After the last scene of my life flashed before me, I looked back at the footprints in the sand. I noticed that at many times along the path of my life, especially at the very lowest and saddest times, there was only one set of footprints.
This really troubled me, so I asked the Lord about it. “Lord, you said once I decided to follow you, You’d walk with me all the way. But I noticed that during the saddest and most troublesome times of my life, there was only one set of footprints. I don’t understand why, when I needed You the most, You would leave me.”
The Lord replied, “My son, my precious child, I love you and I would never leave you. During your times of suffering, when you could see only one set of footprints, it was then that I carried you.”
Author Unknown