Saturday, December 31, 2011

Happy New Year 2012

Wish you all a very happy new year 2012.

Have a good health and may all your wishes come true.

Always have a goal and work towards it. It should be specific and also measurable. Otherwise, it becomes a wish.

Goals for 2012:
(1) Maintain personal health.
(2) Learn new things in varied topics through khanacademy, wikipedia and investopedia.
(3) Spend enough time with the family.
(4) Manage time more effectively.

What are your goals for the year 2012?

Friday, December 23, 2011

De-regulation of Savings Bank interest rate

RBI has de-regulated the savings bank interest rates. It really means that now any bank can give any interest rate in the savings bank account.

Because of this, banks are reacting in different ways. Using this in positive manner and giving more interest for the customers to attract more depositors and others increasing the rates to avoid people moving away from them and few others doing nothing.

Yes Bank - Raised the interest rate from 4% to 6% and recently to 7% now.
For those having amount less than 1 Lakh, it is 6% and more than that it is 7%.

Kotak Bank - Raised the interest rate from 4% to 6%
For those having amount less than 1 Lakh it is 5.5% and more than that it is 6%. They also have the sweep in account, which is nothing to do with this RBI step.

HDFC Bank - Introduced many charges. Particularly Rs. 500/- for closing down your account.

Most other banks (ICICI, Axis, SBI) - Hasn't done anything. Remains with the 4%.

First, It is not recommended to just move your savings bank account for few higher basis points interest. It just doesn't make any sense. Also, I don't find any reason for people having large amount of money sitting idle in the savings bank, except if its absolute need in the short term and you don't think of the interest rates at that time.

Already, the FD rates are de-regulated and almost all banks are having close rates. The scenario here will be no different soon. Also, you don't have any clue on when the raised interest rates on the banks will be reduced again. They have the right!

Given almost all banks also have the sweep-in account (automatically moves part of the savings bank account above a threshold automatically into a FD), it is of little importance that these interest rates are de-regulated.

Tuesday, December 6, 2011

New Pension Scheme - More details

To know what is NPS and basic introductory details on the same, go to the previous post using the link given here.

Okay. I will be getting more than (at least risk-free?) 8% always right?
Simply, What are the benefits and returns in NPS?
Short Answer. No. There are many Pension Fund Management companies which will be managing your money on your behalf to get you returns for your Pension. It is again your choice to select the Pension Fund Management Companies. Based on the choice of the fund (Auto-Choice/Active Choice),
                    the returns has historically varied from 4% -26%.

But this cannot guarantee this will always give positive returns, as it have some equity exposure (for Active Choice, Asset Class E). But in the long run certainly, equities tend to outperform the debt and is always better.

Remember this rule: If you invest more in NPS, you will end up having less charges as the charges are more or less static per year and the Fund Management charge is very less.

Charges - NPS

Compare the Fund Management charge with the index fund's Fund Management charge of 1.35%.
The Maintenance cost is similar to the demat account maintenance cost. In addition to above, demat charges will be applicable.

You can choose to have the 80% of the complete amount as the annuity and 20% in the fund as the lump-sum amount at the end of 60 or 70 as per your choice. The last year can be extended after due consideration and it is 70 years as of writing this article.

If you are not able to pay the minimum in any of the year, you have to pay an additional Rs.100/- as penalty to renew the account and the account becomes dormant otherwise.

The above details are completely for the Tier-I NPS account. This is the primary pension account introduced by NPS. This is of course illiquid. 

If one has Active Tier-I NPS account and want to use the NPS account for the short term as well, he can use the Tier-II NPS account.

For opening Tier-II NPS account, there should be Tier-I active NPS account.
Minimum while opening: Rs. 1000/-
Minimum per instance: Rs. 250/-
Minimum Account Balance at the end of FY: Rs. 2000/-
At-least one contributions in a year.

This Tier-II is a voluntary savings attached with Tier-I and not mandatory.

Saturday, December 3, 2011

New Pension Scheme

New Pension Scheme is introduced by the Govt. of India to provide pension for all the salaried and self-employed citizens of India. This has several useful features and benefits backed by the Government of India.

How to open an NPS Account? What is the procedure?
There are many POPs (Point of Presence). Almost all the public banks and some of the private banks are involved in here. You can ask the procedure through the toll free number before going there. All the State Banks, Muthoot and private banks like Axis bank, ICICI bank are some of the famous POPs available.

Go to the nearest POP.
Get your address proof and Id proof along with you. (PAN card and Ration card works best)
If ration card is not available, get your telephone bill.
Minimum Investment: Rs.6000 in a year. In installments, at least Rs. 500/- in a month.

What are the advantages of NPS?
* Primarily to have the planning for your retirement pension, if you are salaried/self-employed.
* Good lock-in period. You will be able to touch it only at 60 years. (Is it an advantage? sometimes, it might work against you. After all, you are saving for your future and you need this!)
* Very less charges and good tax benefits.

How is my money allocated in NPS?
Okay. All is fine. I am going to get it only after 20-30 years. Where will my money get invested...
NPS provides two approaches to the amount invested in it. They are .,

  1. Active Choice 
  2. Auto Choice - Lifecycle Fund
If you are not choosing anything, automatically your investment will fall under the Auto Choice. Auto Choice will have reduce the equity exposure as the age increases and at the age of 60, there will be almost zero equity exposure.

The returns for the past two years are in the range from 4% - 26% according to the fund selected. Following funds are available for selection. It also depends on what choice you make (How much equity exposure and how is the market at that time)

Max. equity exposure allowed is only 50% at any point of time and it would also track only the index fund of BSE or NSE according to the fund selected.

Next post will have some more details of NPS.

One Minute Manager - Sharing and Review

One Minute Manager is all about finding the manager with perfect managing and leading skills and the 'secrets' behind his managing style in his own words.

The first and important secret:
- Setting Goals - One Minute Goals
It is important to know what the person really is behind to know whether he is performing well. In the marketing world, it is targets set. In the programming world, it is the success of the project or the component that the client want within the deadline. It is important to set the goals upfront in all the means in a broad way to understand what are the requirements of him/her in this role as a responsibility.

The Second and Third Secret go hand in hand.
- One Minute Praising (Second Secret)
This involves catching people doing something RIGHT towards their assigned task. Once they find, praise them honestly and give your opinion as how important he is to your organization. This praising re-assure him to do well in future. Make sure not to praise him for the same achievement again. This will make him do more to get the praising from the manager he is trying to emulate.

- One Minute Reprimand (Third Secret)
So, what would you do when you find something going wrong. Analyse the situation and identify the root cause of the problem. After solving the hot problem in front, Reprimand the person who caused the situation. Being honest with people around you accept this behavior and wouldn't want to be a person to be reprimanded next time. Reprimanding is a skill and it is best understood only if you practice well. It should be done immediately after the issue and the person involved in it  (instead of waiting for the review, which happens once/twice a year) and assure him about his importance in the company and what you think of him in the end. The final assurance is to make sure that you are against his behavior (which caused this issue) and not him as a person. The final assurance should also be in a such a way that he should trust his skills and make sure that kind of issue shouldn't happen again.

A review of the same book can be seen here as well.

This is one of the best management books available and is well worth the read.

Tuesday, August 30, 2011

Action Month and more..

Jagoinvestor has come up with 'Action Month', for making real difference in your financial life. This will be really beneficial if you are procrastinating something for long. Just do it and clear the financial mess around you and be happy.

You can do either one or all of the following:
- Start an SIP with one or more Mutual funds (according to your requirement) (I did it, I already had one)
- Create a new Term life insurance. - I already have one and plan to increase it next year.
- Create a new health insurance - I have it already
- Surrender useless policies - I checked the policies that I have but none of them have to be surrendered.
- Organize your financial life - I have all of the financial documents in digital format.

This will certainly help your financial life and don't forget to register for Action month in Jagoinvestor website.

There is very nice article on Stop loss in Understanding the Stop loss. Its a very good read and this explains how to give stop loss and when to exit a position by keeping trailing stop losses. This will make sure that you will come out when the market don't like a particular stock even if you really don't track the share with the complete news flow.

Tuesday, August 9, 2011

Why is Health Insurance important?

we saw the importance and benefits of Health insurance here.

Now, we will see practical examples and for whom it will save their life.

Scenario 1:
Person A depends on his daily income for his living. He saves around 2 lakhs in 3 years and goes in a two-wheeler to his office daily. He is a acting driver and his aim to become a owner of his vehicle and run it under a call taxi company for the next few years before starting a company like that (probably). But, all of a sudden, he met with a road accident, when he was driving his two wheeler and his hospital bill came to 1.8 Lakhs.

The worst part he didn't have any health insurance but had bike insurance which covered his bike and his bike was covered in his insurance and he had lot of ENDOWMENT policies from LIC.

If he had term insurance policies, he would have used the some part of money towards health insurance and remaining money towards mutual funds.

Scenario 2:
Person B is working in a private concern. He is a consultant there and doesn't usually get any coverage. Person C is a student and their parents are ill all of a sudden. Person B's mother had to undergo a costly operation immediately, which costed her more than Rs.1 lakh, which costed him not only pain in the heart but also the financial pain.

If he was financially aware of these things, he could have easily averted the above case.

The above scenarios are really true scenarios happening around the world in our day-to-day lives.
Have you met similar scenarios in your life. Did you find Health insurance important at any point of time? Have you advised anyone to take it?

Let me know your comments.

Sunday, May 29, 2011

Why investing in Mutual funds is better?

Investing is the best way to tackle inflation and get good returns with passive investment style is Mutual funds. Mutual funds gives you instant diversification with ZERO entry load. There are numerous types of mutual funds according to each and everyone's requirements and one can choose which one choose their investment style best.

Best site to choose the Mutual funds is:

one can choose a good rated fund from value research online and invest according to their asset allocation style. As Mutual funds gives instant diversification, risk is diversified and one needn't have to worry about putting all eggs in single basket. Also, it will be maintained by a financial professional, a fund manager and he would involve himself in getting good returns to the fund.

This would mean certainly, Mutual funds are less riskier than direct investment in Stocks. SIP (Systematic Investment Planning), Keeping yourself invested in every month in the fund with small amounts of money, thereby present in the market all the times, is one of the best strategy one can follow along with investment in Mutual fund to get good returns.

Example 1:
You can put Rs.50,000/- as one shot in HDFC Top 200 Mutual fund. (When the market is high, at this point, you may well lose your opportunity to get units at lesser price)

So, its always better to be always present in the market all the time with the help of SIP as mentioned in Example 2.

Example 2:
You can put Rs.5000/- every month in HDFC Top 200 Mutual fund. (This way, you remain invested at all times of the market, irrespective of the market conditions)

Its hard to time the market. And I would prefer Example 2 for starters in the Stock marketing world. If you can time the market, well go ahead with Example 1.
What do you prefer?

Chennai are Champions again

Its yellow everywhere. And its Dhoni magic working so well these days!

This year's IPL was not so encouraging for many people around India. Reasons being,
(1) Players shifting from one team to another team
(2) Too much cricket
(3) Cricket Fans Fatigue (Yeah!! We too are tired)

Probably, Because of the amount of turnout for watching Sachin and Dhoni in all the matches they are playing, they are asked to play even if they are tired. Now, they are expected to take rest in the upcoming WI series, giving way to the youngsters.

Yes! Dhoni has the golden charm to do it again and has repeated it for Chennai. Good to see them win all their 8 matches this time and coming good this convincingly this year.

Happy for Chennai :)

Sunday, April 10, 2011

Top 5 ELSS Funds in India

ELSS is Equity Linked Savings Scheme and is tax-saving mutual fund that invests in equity and equity-related products. These schemes directly involve in investing in stock markets and carry a inherent amount of risk and can give handsome returns as well.

Top 5 ELSS funds

The above is the screenshot from the for analysing all type of mutual funds. I took up a look on the currently available ELSS funds in the market and did some analysis to get this list. This is based on their past performance and this can be well be a probable indication of their future but not their future.

To quote the top 5 ELSS funds for this FY 2011-2012,

1. Fidelity Tax Advantage
2. Canara Robeco Equity Tax Saver
3. Tauras Tax Shield
4. HDFC Tax Saver
5. Sahara Tax Gain

In the case of ELSS, you get up to 30% returns (because of saving tax) before hand and even if you get 2-3% less after 3 years, it would have beaten any well managed fund by leaps and bounds. So, its always better to put your remaining amount after your PF into ELSS if you want better returns.

Be aware that ELSS doesn't give any assured returns. If anyone says that you will get 16% assured returns every year, they are fooling you around, and its better you walk two steps ahead them, so them you don't hear them. There won't be any assured returns if you see any market, stock, unit-linked kind of words in front of you. Have fun.

Disclose the investments for this FY

And its April and yet another start of the new financial year. If you are a salaried employee of a company, you all would have come across this every year and this is nothing very new. Even if you are not salaried, it is better to have your investments planned before hand for this Financial year before hand and plan accordingly.

Why is disclosing the investments important in the month of April?
Its nothing to do with the month of April. But its better to disclose in the month of April itself to get the full advantage. For the salaried class of people, who worry about the tax, this marks an important event. This is because TDS (Tax deduction at Source) is based on the investments disclosed and better to disclose the right figure to get the proper cash flow right from the beginning.

How I can make this disclosure to my benefit?
Understand each and every section that has to be disclosed and the advantages and dis-advantages in detail.

Section 80C:
Identify how much is already covered by your PF. Your contribution towards your PF, comes under this section.

12% of your basic. - Already accounted in.
Max. that you can account in is Rs. 1,00,000.
If you want good returns, invest in ELSS and for secure returns, I would recommend PPF. Don't ever invest solely for the purpose of saving tax.

Infrastructure Bonds(Section 80CCF)
Max. of Rs.20,000/- applicable for FY2011-2012.

Medical Re-imbursement - Rs.15,000/-
Section 80D - Medical Insurance Premium -
Rs. 35,000/- (only if, one of your parent is above 60years.) or
Rs.30,000/-(should cover your parents as well)

Leave Travel Allowance
Within India, two times in the block of 2011-2014.

And perks and loans according to the company's terms and conditions.
Pick the best that suits you and feel free to leave the other things behind.
Most of the companies don't support 80G bills (Donations to charity). The best that can be done here is to increase the disclosure in some of the other investments to match the 80G investment, so that the cash flow for each month will remain constant.

Monday, April 4, 2011

Should I continue my SIP now?

This is a universal question that can be answered with a simple answer: YES and a detailed answer below.

SIP is Systematic Investment Planning and it is designed for people who want to be involved in market during all the time, thereby minimizing the risk involved in the volatility of the market. There are many mutual funds currently providing with SIP for the investors and almost all the funds have either the online agents or the agents directly collecting the cheques from your doorstep for investing in your favored fund. Check out Are agents your friends? before deciding and investing on their suggestions. There are no entry load for most of the mutual funds now but still all the agents would still get the Trial commissions which would differ from each fund house to fund house. So, its better to be aware rather to cry later.

Coming back to the SIP fundas, You invest a constant sum of amount irrespective of the market condition. It works best for the equity mutual fund and I am going to take an example of the equity diversified mutual fund.

Say, If you put Rs.10000/- every month on to a mutual fund and this mutual fund's NAV differs according to the market conditions, you get the number of units according to the current NAV.
NAV No. of Units
April 2011 55.66 179.66
May 2011 61.21 163.21
June 2011 58.27 171.61
July 2011 65.66 152.3

From the four months data itself, it can be clearly seen than, As the NAV increases, the no. of units you buy decreases and when the market is down (NAV decreases) and you buy a lot more for the same money and the no. of units increases. So, you already know, when the market goes down, you want to buy more and when it goes up, you want to buy less and you are doing exactly that with SIP.

This works best when you are invested for extremely long time and you might say, I can invest the whole Rs. 20000/- during the month of June 2011 after April 2011 instead of May 2011. Its extremely hard to time the market and what would you do if the market turns its head and ran towards 63 NAV. And if you are a long term investor, its best to remain invested in the market and continue your SIP for a long time to come.

And never forget to get out of your equity exposure at the right time (just before the requirement for your goal, say 13 years from now, if you are planning for your retirement at 55 and your current age is 40) and move all your funds to safety to the debt level so that you are in never a position to sell all your holdings at a loss.

Why are Indians primarily savers?

Indians are primarily more on the saving side because of the environment surrounding it. They see everyone around them are saving and are doing the same! There is a big difference between Saving and investing and it will be a hard fought truth.

Setting a goal and standing by it is pretty hard. The commitment is easy to come by if you are working and set by your peers and your managers (some of them don't get it even under the supervision of strong managers.. :-) ) and its also the inherent nature of the entrepreneur and he has it in his veins. But, to see through a goal that is set as a part of retirement or getting a house is very hard to come by and its hard to come even for an entrepreneur.

Let us see a simple example. You need a house. First house. Absolute need. Alteration for rent. Everything. Fine. It should be understood that how much you are currently having in hand and how much you need as a loan and it should be a neatly laid out plan. How many of them who have bought the first/second house recently has plan and bought the house recently after this plan. This really hurts the whole economy. Because, without absolute need and plan, some people are ready to buy the real estate at whatever prices the agent is quoting and are happy at the price they bought just because they were saving this long and they are going to INVEST in a property for the long term! This again beats my thinking. You are investing in a highly illiquid asset class, which has a good scope of growth but not excellent but given the nature of the leveraged investment made in the real estate, the returns will be below par to that of the savings account at least till that of 20 years. And, if it was your absolute need, just forget about what we are talking about here and think you have bought something for your child or nice thing for something in your wardrobe for your absolute need and don't even think of getting any return out of this instrument.

So, you ask is SAVING bad?
No.. Not at all.. Saving is the first step towards Investing. As I was describing here, you need to spend less than what you earn and get your saving right on track before you think on your investment track.

After you start saving, make sure to invest in towards your financial goals that are well set and are tracked. If you can't track it properly, its time you hire a financial planner and there are many available in market to do that.

Sunday, April 3, 2011

Dhoni and the golden urn

It seems Dhoni has a special feeling towards the golden urn. Suddenly, all is well when it ends well.
Dhoni had a dream run in World T20 to secure that he has world renowned leadership and the nerve within him to secure the gold. And then, much fame came to him as a captain of CSK (Chennai Super Kings) in IPL 3 and it moved leaps and bounds within India and won the cup for CSK against Sachin. People even accepted it with a smile.

Then, even in Champions League gold followed him. Now, he was in with much renowned batting line-up as the favorites for the world cup 2011 and everyone chipped in bits and parts at some part of the game to MAKE IT HAPPEN. In the league games, there were some hiccups and they proved themselves champions after they beat all the much famed teams in Quarters to Finals.

Some of the decisions were breath-taking and has to be taken at that level. Dhoni knows what he is doing when he took three seamers against Pakistan and Sri Lanka in Semi Finals and Finals of such a big tournament, which can really back fire, given that your strength is spin. Dhoni would say the opposition strength also lies in playing spin and I wouldn't feed them with getting my spinner. Dhoni proved how he is right against Sri Lanka, by playing out Muralidharan and Randiv without giving a wicket to them. But it was a different case against Pakistan, Afridi was given many a chance with Sachin, but their fielders were never up to mark to catch it and Dhoni felt bad for not reading the pitch correctly. Having this kind of side and getting that kind of fielding performance would be because of the coach and certainly captain would have a role to play.

And, last but not the least, he came and performed in the finals of the world cup tournament, when it really mattered and was there till the very end. Not to forget the poor start by the famed opening pair and things were really going good for sri lanka. Coming in at the right time and playing a captain's innings you got to have IT in you and Dhoni has IT. Its official now. Dhoni is now the successful captain of Team India and its not the luck factor alone that has favoured him. He was not like Kamran dropping catches like anything and giving some facial expressions.

Sri Lanka were having few odds favouring them. Side playing first won 9 out of 11 games in a world cup final and its really hard to chase down a total. The highest total that was chased down in a world cup final match previously was never this high. Also, Sri Lanka and India have faced 6 times before in World cup matches and only 2 times India have been able to beat them. Dhoni was always playing completely different for the past one year and completely out of form. Even during this tournament before the final, his highest score in the tournament was only 30 or so. May be, it was because he didn't get a chance to play in some of the matches and in some, he was not good enough. Also, he has created a new kind of shots other than helicopter shot like dancing down the track and defending shot - A peculiar shot played really well by dhoni. Only the spectator will be kept gazing whether he will be IN the very next ball.

But will all the above odds favoring Sri Lanka and with those two quick wickets of those great gems, it would have been a cake walk for Sri Lanka except for this man in the middle. DHONI getting his form back right in the slot. He has the urge for the golden urn for the team, specially for Sachin. Sachin, what a man he has been this long for the country and he really deserves this cup for sure. Dhoni and his boys were a pleasure to watch all along.

Cheers India. Congratulations Team India and Dhoni. Continue your journey.

Tendulkar and India

Not very long back, It was Tendulkar who took India on his shoulders right through for more than 20 years. There was some days when Opposition team will get control over team India completely once Sachin Tendulkar gets out. But its never the case anymore. It doesn't mean we don't need the master anymore in our team. We do need him for his strokes and occasional mastery words. But our batting order has reached more resilient with him and looks good even without him as well. Its good for the future of the Indian cricket.

Is it the time for Sachin to retire?
Its never the time to retire for the master unless he himself calls it for. Its not for the media or Greg Chappell to predict but leave it to the great man. Let him play until he enjoys playing and he will call it a day when he think its right!

Tendulkar has been part of 33 winnning matches in his 48 centuries. Even though, one would say, 13 on 48 centuries were on the losing cause, it was for establishing pride for the country against some good teams and conditions, that are never easy for batting. Never to forget those nervous 90's that has sailed India home about few years back.

For those stats savvy people, there was a post I recently came across from a blog that I follow and I couldn't do more justice than the one given below,

Let me know your comments.

The cup that counts...

As predicted in my last post, India came out good and performed well in all its final three stages of the World Cup tournament. It was great to watch all of them chipping in at the right time and contributing for the success of the team.

Even though the stats was against you when you were playing against Australia and Sri Lanka, it was really very important to be calm and composed and hit the right chords at the right time. Everyone came good and the best team exhibiting good command over all the other teams won the WORLD CUP that really counts...

Happy for TEAM INDIA and proud to be an Indian.

Friday, March 18, 2011

WC2011 and India - Predictor

In WC 2011, Just finished watching Sri Lanka Vs NewZealand and Srilanka was all over Newzealand and they were never in the game. Even though, Most of them expect Pakistan and Australia to be a close contest, I don't think it would be one. Lets wait and watch. By the way, I want to predict the results of WC 2011 Quarters-
Group A
Sri Lanka

England had all their nail-biting close matches and managed to pull off a draw against the mighty (:)) ) Indians and win against WI and SA and lost against two minnows they faced.

Group B
South Africa
West Indies

Results - India would win against West Indies. South Africa would win against Bangladesh.

So, Now into the Quarter results to identify the Semi-Finalists.

Australia vs WestIndies - Australia
India Vs Newzealand - India

England Vs Sri Lanka - Sri Lanka
South Africa Vs Pakistan - South Africa

Now the Semi-Finals to identify the Finalists.

Australia Vs India - India (Of course, I am an Indian :) )
Sri Lanka vs South Africa - South Africa.

And the finals,

South Africa vs India - India (The revenge game :-))

India gets the cup this time anyway!! :)

Ohh!! There will be no India vs Pakistan match this World cup!!

The above prediction just got missed and still we have only few teams left. This all started with Australia losing to Pakistan and ended up at the third place in Group B waiting to face the mighty Indians.

1st Semi-finals: India Vs Pakistan (India will win this one)
2nd Semi-Finals: Sri Lanka Vs NewZealand (Sri Lanka would win this game)

WC2011 Grand final: India vs Sri Lanka (India would win and get the cup that really counts!!!)

I have 2 Lakhs. How to get it doubled in a year?

Its a catchy title to click on the contents of the post. If you have 2 Laks, Great! Already you have double of 1 Lak :)

Okay, coming to the point, you are expecting 100% returns in a year. I have few important questions to ask you!?

(1) How much risk averse are you? Do you know risk and returns join hand in hand?
(2) If you are willing to take risk, Are you sure "You will not feel anything if you completely lose this 2 Laks"

In the order of High returns, if you are great at trading and making returns.
(1) Derivatives (Options and Futures) - Highest risk - You can lose all your money in one day as well. Gain the same in one day as well.
(2) Intraday - High risk - you will lose comparably less money. But trading will lead to lose all your 5 days profit in the 6th day. Do you really want that. If you know what you do and confident doing that, and have the stomach for doing that, please carry on with it.
(3) Equity - High risk - you will lose comparably less money. Again depends on whether you are an investor or trader. Many people have a doubt whether they are really a investor or trader themselves. If you have a doubt, then its highly likely that you are a short term investor cum trader. This is a new role that I have given people who are not actively trading, but when they do trade they do it only in short, they don't have proper goals.
(4) Equity Mutual Funds - Medium to High risk - This is comparably the best option to park the money if you are risk averse and if you want only around 15% returns in the long term.
(5) Debt Mutual Funds - Low to Medium risk - This depends on your risk profile - Around 8% return
(6) Fixed Deposit - No Risk - Now-a-days you get 10% returns in here (Before tax)
(7) PPF, NSC, POMIS - NO Risk - 6-8% - Debt Government bonds and PFs

If you are knowledgeable, you can go with direct equity and opt for the high risk equity and park some remaining money in Equity mutual funds. If you have some more stomach and great knowledge, move one or two steps ahead and do intraday trading and derivatives to achieve your goal faster. But remember, in the meantime, it is highly likely that you may lose your money as well.

Also, Equity markets give returns over 200% in a year and negative returns in another whole year. So, it is where you are and whom you believe.

Real estate regulation - Need for the day

Real Estate - General Perception:
An asset that always appreciates in value.
Demand will always be there as land is of limited availability.
Rental Income is like interest to your principal and Land appreciation is capital appreciation.

Real Estate - My thoughts:
An asset that can appreciate in value, but not always. People are not selling in loss. Remember, if it stands at the same price for over an year, you are at loss.
The demand and supply nature of real estate is for those who are usually dealing with it and who are well versed with it.
Its a very big investment and your first house is not your asset as it doesn't give you income and you don't see it in the investment perspective
Its a very illiquid instrument and its very hard to find the client to sell the asset at the desired price at the required time.
When you are investing in real estate, most of the people are highly leveraged, and boosting their returns. You know that its a risky investment and if you are ready to invest with high leverage, you are going to get high returns. In the year 2010, Real estate was at the boom and land prices increased @165% and please don't expect it to happen year after year.

There is a saying in Tamil which can be translated to English as "Built a House and see; Do a marriage and see." Literal meaning is "Doing a marriage and building a house is really hard"
But now-a-days, people easily fall prey to many builders (reliable and unreliable by their name) to their cheesy words and give their hard-earned money to them and delve into their work caring less about their home.

And builder makes a great fuss out of it and people who buy it may be forced to face either
(i) wait for few more months for possession
(ii) Agree on what was already built
(iii) Pay extra for unnecessary things that might not be used/non-agreeable terms
And many more... and gets frustrated about this later.

So you say all the above will be applicable only when you buy a flat and not when you buy a plot and you built it. Yes, thats when all the problems lie right on your head. You will hire a contractor and you will be at the mercy of the contractor. If you don't know him already and if he is handling many projects at the same time, you are screwed. Forget about the money, you will always end up paying more, you will not be finishing the project on time if you are not following up.

This following up is really a big key in real estate, when ever you building a flat or building in plot. Even when you are getting a loan for your house, you need to follow up.

Wouldn't it all be better if we had some rules and regulations in here. Complaints and solutions in common place. I don't think it would give solution to all the problems. At least it will give some regulation in the real estate market , what SEBI did to capital markets, and investors can freely get the assistance of them after SALES.

Remember, if you are sold the flats, and after a year you are facing a problem and you find the flat promoter in other name sitting pretty well in another place. What can you do today. File a case. It will run for years. He would have changed his name the very next year several times :)
And still the case will be running and such is our judiciary. This is where Regulation of Real estate would help us all.

TATA HOUSING has recently proposed the real estate regulation and I don't think it will come anytime soon though.