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Gold & Real Estate Losers of 2014

gold

Gold and Real Estate is believed as safe asset class for investment. People invest in Gold and real estate considering fact they are not likely to lose their money. However year 2014 was bad year for Gold and Real estate investors. Gold and real estate are coming out to be big losers of 2014.

Gold & Real Estate

Gold

Gold investors were quite happy as gold was giving magnificent return since 2008, but from 2013 onwards gold is giving negative returns. As per goldprice.org Gold gave negative return 18.7% in 2013 and 3.7% in 2014.

Gold was sold at 34,000 Rs/- per 10 gm in Aug, 2013 and today Gold is sold at 23,000 Rs/- per 10 gm.  Overall investor has lost 25% in gold over a period of 15 months.

gold price

Gold price was highly volatile in last 21 months. Many gold analysts were predicting that gold will soon cross level of 35,000 Rs/- per 10 gm but that prediction was never turn out to be reality.

Major reason behind downfall in gold price is given below –

  • Political stability and improvement in economic conditions.
  • Fall in gold demand in the two biggest global markets of China and India.
  • Investors are inclined towards equity and not investing in gold.

As per current feedback from various gold analyst fall in gold price will likely to continue further.

Real Estate

Real Estate Investor was quite unhappy this year as returns from real estate was very negligible this year.  In some cities correction in range of 2-6% is observed, while in other price is becoming stagnant.

None of real estate destination are performing well except Delhi, Banglore, Hydrabad.

Major reason behind downfall in real estate price is given below –

  • Due to increase in land cost and raw material cost overall cost in real estate has gone up.
  • Excessive Real Estate supply in market compare to demand.
  • People are preferring to live in rented house rather than purchasing new house.
  • Home loan rates are same and no indication of reduction in interest rates.

 As per current research real estate price is likely to remain stable for six month or so.

Do share your views on above!

Tax Saving Instrument Flowchart

tax saving

Financial year is about to over and it is time to do tax saving exercise. It is possible to achieve major tax saving by doing proper planning. If you are confused in terms of where to invest your money for tax saving here is simple yet logical method of Tax saving by following simple flowchart.

Tax Saving Instrument Flowchart

Got Adequate Insurance Cover?

If your answer is No. Recommended Tax saving options are given below.

Life Insurance –

You can plan to purchase life insurance cover. Life insurance can bring saving up to 1.5 Lac on premium under section 80C.

Health Insurance –

Additional to above you can think of purchasing health insurance and get saving up to 15,000 Rs/- under section 80D.

If you are covered adequately with life insurance & health insurance you can skip to next section.

Open to Risk? Invest in Equities

If your answer is YES.Recommended Tax saving options are given below.

ELSS (Equity Linked Saving Scheme) –

You can plan to invest in equity based ELSS. ELSS are equity based mutual funds with lock in period of 3 years. ELSS can provide to tax saving of 1.5 lac under section 80 C.

ULIP (Unit Linked Insurance Plan)

Another way to save tax using equity investment is ULIP. ULIP  gives advantage of life insurance and investment. Investment made under ULIP are subject to market risk.

If you are not Opened Risk you can skip to next section.

Need Safe Investment for Retirement?

If your answer is YES.Recommended Tax saving options are given below.

NSC,PPF –

You can plan to purchase NSC or can invest in PPF. NSC or PPF provides you return in range of 8-8.5%.  Investment under NSC or PPF also falls under section 80C.

SCSS –

Another way to invest for retirement is SCSS- Senior citizen saving scheme, but Investment under SCSS is permissible only after age of 60 years.

If you are not looking for any safe Investment for Retirement you can skip to next section.

Want Tax Saving without Investing?

Yes you can achieve tax saving without investment also. Under 80TTA you are entitle for tax saving up to 10,000 Rs/- on saving bank interest.

Home Loan Interest –

If you have taken home loan, Interest amount up to 2 Lac is allowed as tax exemption under section 24.

Education Loan Interest –

Education loan brings you additional tax benefit. Entire interest amount is tax exempted under section 80E.

Tuition Fees –

If you are paying tuition fees for your children you can claim tax exemption under 80 C for the amount paid as fees.

Disability –

If you are disabled person, based on severity you can claim tax deduction  50,000 Rs/- to 1,00,000 Rs/- under section 80U.

Diseases –

Amount spend up to 60,000 Rs/- on certain diseases can be claimed as tax exemption under section 80DDB.

Donation –

Donation amount up to 10% can be claimed as tax exemption under section 80G.

Tax saving Flow Chart (Click on Image to enlarge)

tax saving

Also read:-  Tax saving Instrument Infographic

How much money is enough for retirement in India?

retirement

Retirement is point where you stop employment or business and rely on accumulated wealth for future. So, how much money is enough for retirement in India?  Everyone wants to get answer of this question. Let’s try to get logical answer of this question.

You need to answer few basic questions to calculate your retirement fund. I am sure if you are able to answer these questions you will get answer about how much money is enough for your retirement. So, Let’s Start.

How much money is enough for retirement in India?

What is your current Household expense?

How much money you spend every month for household expense, utility bill, food bill, home management maintenance etc?  I have calculated my household expense and it is approximately 26,000 Rs/- per month. So yearly I spend about 3.2 Lac on Household expense.

How much money you spend on Vacation?

This is the amount which you spend on your vacation every year. I spend nearly 0.5 Lac every year on vacation with my family.

What amount you spend on Entertainment and Transportation?

We usually spend a certain amount for entertainment and transportation. I spend nearly 0.5 Lac for entertainment and transportation.

What are your current Medical Expenses?

Medical expenses are actually unplanned expenses but if you monitor it closely you can take out rough estimate that how much money you are spending on it. I spend nearly 0.5 Lac per year on medical.

What are your Tax liabilities?

How much money you pay as tax and how much you are expected to pay after retirement? I have estimated that amount and approximately 1 Lac is required for tax.

How much money is required as Emergency Expense?

 It is always advisable to keep good amount of money handy as emergency fund. I usually keep six month of my household expense 2.1 Lac for emergency.

What will be inflation adjustment?

Inflation means reduction in your buying power. Inflation cause increase in value of goods, so that you have to pay more money for same goods. Let me give you example before 10-20 years we use to purchase milk at 5 Rs/- per liter but today milk is sold at 30 Rs/- per liter. So while calculating retirement fund you must consider inflation adjustment. I am considering 1 Lac per annum as inflation adjustment.

At what age you would like to retire and what is your expected survival age?

Let’s consider that I will still work for 20 more years and then take retirement. Let’s also assume that my survival age will be 80 years.

Hope you have answer all question given above. Let’s do sum of your all current requirement.

money required

So, if I retire today I need 8.8 Lac rupees every year to live comfortable life. To generate yearly income of 8.8 Lac I need retirement fund of 1.1 Cr.

1.1 Cr retirement fund Invested in instrument giving 8% return will lead to 8.8 Lac yearly Income. With income of 8.8 Lac, I can run the show for few years but down the line inflation effect may cause increase in my monthly requirement. So what to do?

Best is to calculate retirement fund based on years remaining for retirement. So, If I take 20 years is remaining for my retirement than I need to figure out what will be value of 1.1 Cr after 20 years. If I consider inflation rate of 6%, I need 3.52 Cr for retirement after 20 years.

Conclusion:-

For middle class people like me 3.5 Cr is enough as retirement. Remember Inflation and interest rates plays major role in deciding retirement fund for you.

I request reader to follow procedure given above to know how much money is required for their retirement.

If you find any difficulties in calculating your retirement fund, you can get in touch with me.

 Do share your views on above!

5 Innovative online business ideas

online business

Want to start a part time business for earning more money? Online Business could be for you. Online business is very easy to start, require less time and money. You just need little technical expertise and inclination towards starting an online business.

So let’s take a look at 5 Innovative online business ideas.

5 Innovative Online Business Ideas

Online Food Business:-

Starting online food business is a good business idea. The business model of this idea is pretty simple and same like pizza hut model – Order food online and get it delivered at your door step.  This business idea requires a minimum investment.

The example of online food delivery business is Delfoo.com. Delfoo.com is running restaurant network. Hungry people can click or call and get food delivery at home. Payment can be made online or offline. This service is available in Vadodra and Surat.

Earning is commission or fix margin base. This business idea is for earning money by making hungry people happy.

Also Read – 10 Best Social Enterprise Business Ideas

Online Taxi Booking Business:-

Another innovative online business idea is to run cab booking service online. The business model of online taxi booking business is to send taxi/car at required place well in time. Time management and a good network of car/ travel agencies play very important role in this business.

The example of online taxi booking business is Taxiforsure.com. At taxiforsure.com you just need to give pickup location drop location and time taxi will be available at your service. They also serve for some specific requirement like airport transfer, late night car hire, road trip or special car on a special occasion like an anniversary, birthday or even your marriage. This service is available at Majority of location in India.

Online Book Library:-

If you are found of books this idea is for you. You can start online book library business. The business model is quite simple you need to purchase number of books & display it online on a website. Make subscription plan and invoke people to become a member of your library. You can also think of delivering books at door step as per need.

Also Read5 Best Legitimate ways to get rich fast

Online Toy Renting:-  

Another innovative online business is toy renting. If you love to play with toys this idea is for you. You can start Online Toy renting portal. The business model of toy renting is very simple you need to purchase large number of toy and market it online on your website for renting. For that you can derive a plan for monthly, quarterly or yearly subscription. Deliver toy on rent as per age group and earn money.

Online Bus Ticket Booking:-

Last but not least very successful online business idea is online bus ticket booking. The business model of online bus ticket booking is quite simple, you need to tie up with travel agencies and start booking of bus ticket online.

The example of online bus ticket booking is Redbus.in. Redbus.in provide online bus ticket booking service. You can pick and choose bus seat online on the map. This service is available in a major city of India. Recently they have launch app for ticket booking.

So what are you waiting for? Think of some innovative idea like above and start making money.

Also Read – 40 Small Town Business Ideas with low Investments

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