Complication and Implication of Virtual Water- II

Fresh Water – Concern on Global Food Security

For several parts of the world, fresh water has become a scarcity and over exploited natural resource has now given rise to concern on global food security as well as damage to fresh water ecosystems. Situation seems to increase with the FAO making its estimate that the food production should be double by 2050 and hence food chains should be more efficient with regards to the usage of consumptive water. For geographically and small well defined Australian mango industry, with an average annual production of 44,692 ton of marketable fresh fruit, was 2298.1 kg−1 of average virtual water content, which is a sum of green, blue as well as grey water, at the orchard gate.

Due to wastage however, in the distribution as well as the consumption level of product life cycle, the virtual water average content of 1 kg of Australian grown fresh mango used by Australian household was 52181. This figure compared to an Australian equivalent water footprint of 2171 k−1is the volume of the usage of water in Australia with equivalent capabilities in contributing to water scarcity. Nationally, the distribution and consumption waste in food chain of Australian grown fresh mango to the consumers, indicate an annual waste of 26.7 Gl of green water with 16.6. Gl of blue water

Intervention in Reducing Food Chain Waste – Great Impact on Fresh Water 

These discoveries indicate that the intervention in reducing food chain waste would probably have a great or even a greater impact on freshwater resource available like other water use efficiency measures in food production and agriculture. Analyses of evolution and the structure of trade in virtual water had shown that a number of trade connections together with volume of virtual water trade had doubled for the past few decades. Developed countries have been drawing on the rest of the world to ease the pressure on domestic water resources.

Three studies have been done though it fills three important gaps in the research on global virtual water trade, the first being that in previous studies, virtual water volumes were put together from countries which were envisaging various degrees of water scarcity which was incorporated into assessments of virtual water flows. Secondly some previous studies assessing virtual water networks in terms of immediate water was used for food production though refrained from indirect virtual water used in the supply chains underlying all traded goods.

Global Virtual Water Network Structure

In the analysis, the use of input-output analysis included indirect virtual water, noting the existing conflicting views on whether trade in virtual water could lead to overall savings in global water resources. A re-visit to the Hechscher-Ohlin Theorem was done in the context of direct and indirect virtual water, to determine if international trade could be seen as feasible demand management tool in reducing the water scarcity. It was found that the global virtual water network structure changes significantly on adjusting for the purpose of scarcity.

Besides, the Heckscher-Ohlin Theorem can be validated when indirect virtual water is appraised. Water once seen as an infinite resource is in fact, a finite resource. Moreover, fresh water is an important resource to plants, animals, human and all living things on the planet Earth. Geographic zone of abundance and scarcity is due to unequal global distribution of fresh water and global climatic changes tend to redistribute precipitation away from geographic locations which has sufficient or excess supply to cope up with the population.

Complication and Implication of Virtual Water- I

Water – Huge Number of Characteristics – Important Economic Good

Image credit:ourworld.unu.edu

Water, though not a normal economic good has a huge number of characteristics which distinguishes it from the other goods and these characteristic individually may not be important but its combination makes water an important economic good.`Virtual water’ term was first used in the context of water scarce in Middle Eastern and Northern African countries that imported huge quantity of their food and thereby reduced substantially the demand of water in domestic food production as well as compensated for lack of water.

Importing food was virtually equal to trading water for these countries. Allan (1966) termed water - embodied in food import as virtual water. The terminology as well as the scope of virtual water over the years is extended beyond the original purpose. Presently the definition accepted on virtual water is the water requirement for production of commodities and since food production in several countries is by the largest water user, topics on virtual water problems have been targeted primarily on food commodities.

Virtual water is politically silent and economically invisible (Allan 2003a) and in the past, this has made it possible for water scarce countries to manage with water deficit through food import without a policy discourse of national water scarcity.

Debates – Usefulness of Concept/Feasibility to Import Virtual Water

The term virtual water came into focus in mid 1990s and since then has drawn growing awareness among policy makers, general public and scientific communities. It has become a topic which is discussed recurrently at several international conferences as well as meetings, especially the World Water Forum organized by the World Water Council as well as the Stockholm World Water Week which is an annual event and convened by the Stockholm International Water Institute.

Relevant issues publications have been rapidly on the rise in the international journals. There have been intense debates on the usefulness of the concept as well as the feasibility to import virtual water to reduce local scarcity of water. More than a decade of efforts have been made in virtual water studies and it is time now for a critical review to be done on relevance of virtual water concept in heightening our understanding of real water resources management.

Water – Limiting Factor/Significant Impact

Water is now becoming an increasing limiting factor for sustainable growth and development of economy in many countries, its allocation having a significant impact on the whole economic efficiency especially the mounting physical scarcity in some regions. Need for huge water supply tends to increase the vulnerability in the affected areas.

Moreover, water has also become a strategic resource which involves disputes among those who tend to be affected differently by various policies. Some papers tend to analyse various policy interventions focused at improving water allocation decisions with a novel approach which could incorporate macro as well as micro level options in a unified analytical guidelines which could facilitate assessment of different linkages with other policies as well as their impacts in individual sectors and the wide economy.

Policy impacts comparison indicates the usefulness of the guidelines in information, which the policy makers could use to rank policy intervention as per the emphasis given on various policy objectives.

Virtual Water

Virtual Water Trade – Embedded/Embodied Water 

Virtual water is defined as the total volume water which is needed in order to produce and process. Virtual water trade also known as trade in embodied or embedded water is related to hidden flow of water in case other commodities or food tend to get traded in different places.

On an average it takes around1,600 cubic meters of water to produce ` metric tonne of wheat and the accurate volume could depend on more or less on the climate as well as agricultural conditions. According to Hoekstra and Chapagain they have defined virtual content of product – a commodity, service or good, as `volume of freshwater which is utilised to create a product, measured at the place it was actually produced’ and relates to the sum on the utilisation of the water in the various stages of the production chain.

According to John Anthony Allan, Professor from King’s College London and the School of Oriental and African Studies had introduced the concept of virtual water in order to support his views that countries in the Middle East could save their scarce supply of water by relying on import of food.

He received an award of the 2008 Stockholm Water Prize, for his contribution. He states that `the water is considered to be virtual due to the fact that once the wheat is grown, the real water used to grow it is no longer actually contained in the wheat and the concept of virtual water helps in realizing how much water could be needed to produce different goods and services’.

Some Deficiencies in Concept of Virtual Water

He further states that in `arid and semi-arid locations, the value of the virtual water of good or service could be useful in determining the best use of the available scarce water.’ However there are some deficiencies in the concept of virtual water which means that there is a significant danger on depending on these measures in order to guide policy conclusions.

As per Australia’s National Water Commission it is considered that the measurement of virtual water has less practical value in the making of decision with regards to the best allocation of scarce water resources.

Recently the concept of virtual water trade has been gaining weightage in the scientific and the political arguments with the notion of its concept being ambiguous and changes have been moving between a descriptive, analytical concept and a political induced strategy.

From the point of view of an analytical concept, virtual water trade relates to an instrument which enables the identification as well as the assessment of policy choice not only in the scientific but also in the political discourse.

Concept Analytically helps Global/Local/Regional Level

From the point of politically induced strategy, the query is whether virtual water trade could be used in a sustainable way, or whether implementation could be managed in an economic, social or in an ecological manner and which countries would have a meaningful option of the concept offered.

In the framework of latest developments from supply oriented to demand oriented management of water resources, new field of governance has opened up which facilitates a differentiation as well as balancing of different perspective, interest and basic condition.

The concept analytically helps in distinguishing between global, local and regional level, together with their linkages. Which means that water resource problem needs to be solved.

Be your own advisor when it comes to personal investment plans

Image via gettyimages

Growing personal wealth always has to begin with a plan, and also the simpler the strategy is, the better your chances is going to be of following through and which makes it happen. Too many people begin motivated to create a change in their own financial life, and also have a super driven and overly complex plan. The problem with this particular approach is that after things start to obtain a little hectic, a complicated plan is simply too hard to stay with. So here is an easy plan for gaining control of the financial life as well as increasing wealth.

Increasing Wealth starts with managing that which you have

The most essential step to wealth building investment advice is the initial step. That step is actually gaining control of the existing cash flow by managing that which you already have. Should you aren't managing that which you already have nicely, increasing personal wealth or cash flow won't assist you to. You'll find a way to eliminate the money you have, no matter just how much of it you've coming in.

Follow a Simple Investing Intend to Increase your Wealth

Many people do not succeed (or actually get started) with investing simply because they over-complicate it. Nevertheless, the most efficient investing strategies are always the easiest. Choose a trading strategy: real property, shares or mutual funds, and stick by using it until you get proficient at it. There's no cause to dabble in most three (or more), till you've achieved skills with one. Nevertheless, if you get great at one kind of investment, you'll build the confidence and also the momentum you'll want to adopt another.

Lastly, reward yourself to be consistent in sticking with your own personal wealth building strategy. Too many people are good from being hard on ourselves whenever we mess up, however we stink from awarding ourselves. Arranged some landmarks (one 30 days into your strategy, six months, and one year) and allow it to be a habit in order to reward yourself for sticking with your own personal wealth building strategy. Have fun!

Give Paying Yourself First

Even if you do not think you are able to start having to pay yourself, you never know before you actually take it for any test drive. Agree to put aside 10% of your earnings into an emergency fund to start with. Do these before you decide to pay all of your expenses and place the 10% right into a saving account where one can get it out without having enough to spend your expenses? What you will find is that the 10% is going to be left after you have paid your expenses which no harm is performed. This will construct your confidence that you could pay yourself very first, and then you can begin moving the 10% towards investments that are harder that you should "take back.” Just do that for a month and make sure to change your physiology by concentrating on all the reasons why you ought to pay yourself very first. Before you understand it, you'll have lots of momentum towards your individual wealth building strategy.

Author Bio: Sam is a freelance writer who is currently working for a number of websites that deals with business, finance, marketing, technology, travel and more. He has been working in the web industry for the last 7 years. Currently he writes for an expert SEO Consultant London.

Smart Investor choose Real Estate property: A view from Nuvo City

I have an excellent guest blogger and this post was written by Euru Hojilla  from NUVO CITY. He is one of the best Real Property consultant and passionate when it comes to educating everyone in regards to investing your hard earned money in the world of real property. 

Being a young professional on this generation, having an investment is such a big thing. Nowadays, you won't be able to sustain a family or even start having a family if only depending on your monthly salary. Having a business, investment or a little side kick would be much helpful.

As a young professional, we need to be fully educated of all the options that is best for us. At this point in time, there's a lot to consider like stock market, a traditional business maybe for example a canteen, convenient store, coffee shop etc. Others even consider doing multilevel marketing, others do online marketing, some do selling at work or even at home but little that they know, they could do more bigger like investing in a real estate. Most people easily ignore this idea because they always assume that there's a need for a big capital so instead of learning more about the process, they just say no and let go of this wonderful opportunity.

Real estate investment is worth more than a million, even millions but that doesn't mean that you need to produce millions instantly. There are a lot of amazing offers real estate developers do. One of those are our chances of investing to our first property for NO DOWNPAYMENT payment schemes. Property Consultants will usually ask for your requirements regarding preferences of location, size of space, number of bedrooms, which floor or even orientation of views and most importantly, the budget. Property consultants will assess our capabilities and will surely tailor fit what's best for us. A good sales man will not push a product on his advantage but rather what's best for his/her client.

The next question is: WHY REAL ESTATE? WHY A CONDO?

First, real estate is at its boom and has been predicted by our socioeconomic professionals that it will continue grow bigger and bigger for the years to come. Why real estate, its because of its potential of having a multiple growth or appreciation of the value of your investment. And why condo, because most developers are now creating or building high rise towers in prime locations provided that they are given full equipments to enjoy and maintain a high value of life.

A condo is best to buy during its pre-selling. You will be able to get it or start paying for it in a cheaper or most affordable price. Then through the time, the value of your property is increasing and will keep on increasing. Quarterly, most developers release new prices of their developments and noticeably increased about 2-5%.

What condo offers are accessibility to schools, churches, hospitals, malls, business districts, main roads, restaurants, convenience stores and a peaceful environment.

What we usually pay is the location. The price of the property differs to its location. For example here in Libis, Quezon City. The usual price per sqm to nearby developments are at 120-130,000 per sqm while on this particular project, it only cost 102-110,000 per sqm but the quality of the materials, the finishings and all the deliverables are incomparable. Here, you will be able to save more and gain more. Not only that, you will be more than satisfied with your property and a confirmation of your wisest decision.

What to consider in investing to a condo?

Number one of course is the location, second is the reputation or the credibility of the developers and lastly and most importantly, is the benefit you'll get once you decided to buy a property on this development. A wise investment is choosing a property which not only offers residencies but with spaces for commercials, offices, businesses, malls and even hotels. In that, you are sure to yourself that the value of your property will greatly increase in 50% or even more.

Some young professionals and even the pro's do condo investment for rental purposes (either residential or office purpose) or for resale. Rental - unit owner will look for tenants to rent their spaces from 15-50,000 pesos. That depends on how you furnish and how big your unit is. Most tenants are from BPO offices or if not, families. Resale - for example, an investor was able to buy his unit at 2.3M pesos during pre-selling and after few years once the tower is fully turned over, the buyer will now find another investor to buy it on its current price like for example, the property bought from 2.3M is now at 3.8M. The buyer turned seller is able to earn a net of approximately 1.5M pesos and again will venture to another pre-selling properties.

What's good when you invest to condo is that, this is a property and a tangible form of ownership, an asset and its money generating. You just have to be keen in scouting to condo properties and find the best investment for you.

Step to do: Find a  property consultant, relay the requirements you're looking and provide him/her the opportunity to offer you the project appropriate to your needs and wants. Requirements are basically, 2 valid government issued id's, tin number, signed forms from the developer and a reservation fee which can be paid thru cash, cheque or thru credit card. Then next thing to do, get your payment schedule and never missed paying your monthly amortizations. If you maintain having a good payment history then you'll have a better chance to be approved for bank loans.

I think, I need not to say more because your fortune will always depend on your options. Just stop saying No's and start saying Yes for yourself.

For more info about Nuvo City and amazing deals. Follow Euru Hojilla in Facebook

Negative Inflation

Image credit: Sofia news agency

Inflation – Deflation 

Inflation is a term which tends to reduce the real value of money over time and deflation increases the real value of money, the currency of a regional or national economy, enabling an individual to purchase more products with the same amount of money overtime. In other words deflation is a situation when the price level decreases and the inflation rate tends to get negative.

Economist are of the opinion that deflation could be a problem in a modern economy since it increases the real value of debt and affects recessions, leading to a deflationary spiral. All episodes of deflations do not correspond with phases of poor economic growth. During the 19th century, deflation took place periodically in the U.S. and this deflation was the result of technological progress creating significant economic growth while at other times was due to financial crises particularly the Panic of 1837 that caused deflation during1844 as well as the Panic of 1873 triggering the Long Depression which lasted till 1879.

These periods of deflation were prior to the establishment of the U.S. Federal Reserve System and the active management of monetary issues. Deflation episodes were rare and brief with the development of Federal Reserve while American economic progress has been unprecedented

Negative Inflation 

Negative inflation is said to be an economic phenomenon wherein the economy tends to move out of an inflationary phase and enters into a phase where there is less money in circulation. Negative inflation tends to occur when the prices fall due to the supply of goods which is higher than the demand for those products.

It is often due to reduction in money, consumer or credit spending and could be the result of a combination of various factors which may include, having excess money in circulation that may decrease the value of money which in turn would reduce prices, with more products manufactured than the demand for the same.

 This could lead to businesses decreasing their prices in order to urge consumers to purchase those products and not having sufficient money in circulation causes those with money to hold on to it instead of spending it and decreased demand for goods decreases spending.

Though it would seem that lower prices are good, deflation could ripple through the economy for instance when it creates high level of unemployment, turning into a bad situation and this type of a recession could turn into a worse situation like a depression.

Leads to Unemployment => Decrease in Spending => Less Demand

Deflation could lead to unemployment since the companies tend to make less money and react on cutting costs to survive which may include in closing of the stores, plants and warehouses and laying-off their workers.

This results in the worker having to decrease on their spending leading to less demand with more deflation causing a deflation spiral which may be difficult to break. Deflation tends to work without affecting the rest of the economy when businesses are capable of cutting the costs of production for the purpose of lowering prices like in the case of technology, since the cost of technology products has reduced over the years though it was due to the cost of producing technology that had decreased and not due to decreased demand.

How to Save Hundreds of Dollars with Tax Credits

Awareness of Tax Credit

Being unaware of tax credit is like losing on a pay check and sad to say, several individuals are not aware of it. Each dollar of credit is equal to a dollar in tax savings, for instance in a federal income tax bracket of 28% and getting a buck’s worth of additional write-off could save one with 28 cents. Individuals tend to miss out on tax credits mainly due to the fact that they seem to be in a hurry when the dreaded tax filing deadline is near. Credits tend to fall through these cracks since they panic resulting in making complicated calculation or filling out additional forms. Setting aside more time on your return could help you to net several hundred dollars or could be more. For example –

Foreign Tax Credit - If a person has worked in a foreign country or would be having substantial income outside U.S, they must be well aware about the foreign tax credit which is intended to save you from being taxed by the two different countries on the same income. If the person tends to invest in some international mutual funds they could collect credit due to the fact that it is likely you paid foreign taxes the previous year – knowingly or not. A closer look at the statement on the fund summary of the previous year will provide you with some calculations in order to know the exact amount of foreign taxes which should show up on Forms 1099-DIV and 1099-INT. Presuming that the foreign taxes are from these sources totalling to or less than $300, one can claim the credit on Form 1040, Line 48 and have around $600 of foreign taxes and continue to follow the easy procedure if filed jointly. In other cases, one could file Form 1116 to claim your credit, though it could be a bit nasty.

Dependent Care Credit - When a person is paid to take care of an under-age child of 13 while the parents are out at work, one could be eligible for the dependent care credit where the credit percentage could range from 20% to 35% based on qualifying expenses and depending on adjusted gross income – AGI. Maximum credit possible for a child could range from $600 to $1,050 and for two or more the range would be $1,200 to $2,100. One should also be eligible if expenses were incurred in taking care of any other dependent that could be physically or mentally incapable of taking care of themselves, a disabled person. For high income taxpayers, the credits have not been phased out though lower dollar limits mentioned could be applicable. Form 2441 – Child and Dependent Care Expenses could be filled and credits claimed on Form 1040, Line 49 on furnishing the name as well as the Social Security number of the care provider failing which the IRS would disallow the credit with recomputed tax and would either reduce the claimed refund or sent a bill for the difference.

Moreover the Form 2441 also informs the IRS if one owes the Nanny Tax if they have an in-home care provider. One needs to be careful in taking credit if they have also contributed to a pre-tax dependent care flexible spending account – FSA the previous year through their employer. The pre-tax FSA is usually a process since it could reduce the taxable salary cutting federal as well as state income taxes together with Social Security and Medicare taxes as well. The tax saving rate could exceed the 20% effective tax savings rate which could apply to several people claiming the dependent care credit.

Elderly/disabled Credit – is applicable to individuals who have reached the age of 65 at the end of a particular year or one who has retired on permanent and total disability. Strict income limits are applicable and the credit is not available to most of them. Credits could be claimed on Form 1040, Line 54.

Adoption Credit - is when an underage of 18 years in adopted, you could qualify for a 2014 tax credit up to $13,190 for the adoption expenses and if married, a joint return to qualify could be filed. Phase-out rule, for 2014 could cause the credit to vaporize between AGI of $197,880 and $237,880. On qualifying for the same, credit could be claimed by furnishing details on Form 8839 – Qualified Adoption Expenses, with one’s 1040 with the credit amount on Line 54.

Credit for Overpaid Social Security Taxes – is where there has been more than one employer in 2014 and the earnings have crossed over $117,000 with combined salary, one has withheld too much Social Security tax. Recovery of the excess can be done by reporting the overpaid amount on Form 1040 Line 72 which is treated as a tax repayment and the effect on the tax bill is that of a credit.

Money Lessons for Children

It's been around a year since I've given my children an allowance of $10/month and they've saved up a lot. But, they wouldn't have been able to save as much if I had not given them simple rules of spending. Spend $20 after they've saved up $100. I'm planning to increase their income to give/contribute and grow/invest to enrich their experience with money.

I've had many conversations with them, and they have learnt to cherish their savings. So much that every time I joke if they should contribute for purchase of theme park tickets, they would choose to save for purchases they would like to buy. Toys. 

They are learning about opportunity costs from their monthly allowances. But the problem is, I want to take them to the theme park! Well... maybe I want it more than they do, but I'd like them to spend on experiences rather than toys that only give temporary satisfaction rather than memories. (memories they might forget at their age of 8 and 5)

I'd like them to contribute to the family. Eating out and entertainment costs money. Maybe they didn't ask for it, but they should chip in. The outcomes I hope to have through their lessons in contribution is a feeling of responsibility. I hope when my kids grow up, and they borrow money from me or whomever, I want them to have the integrity to return the money owed. It's a 20 years lesson that I need to keep building on.

Lastly, besides saving and spending, I'd like them to consistently give and grow their wealth.

And establish prayer and give zakah, and whatever good you put forward for yourselves - you will find it with Allah. Indeed, Allah of what you do, is Seeing.

2.Surat Al-Baqarah (the cow; 110)

The example of those who spend their wealth in the way of Allah is like a seed [of grain] which grows seven spikes; in each spike is a hundred grains. And Allah multiplies [His reward] for whom He wills. And Allah is all-Encompassing and Knowing.

2.Surat Al-Baqarah (the cow; 261) 

What is Early Retirement? How many years before I retire?

I routinely get asked by readers of my blog, about my age, how many years I have been saving, and when do I plan to retire.  There are others who write me asking about my definition of early retirement.  Would retiring at the age of 50 be called "early retirement"?  How about if you took a Voluntary Retirement option from your company, and then took up another less demanding job?  Does that meet the definition of early retirement? And so on and on.  Here is how I look at it, and it has nothing to do with your or my age, if you can believe it!!

In my mind the concept of retirement, whether early or just your regular retirement, is simply a matter of three different phases in your life.  In your first phase, you are dependent on your parents, you do not have any earned income, and you are just learning about life through school and college.  Most of us do not focus on any savings or investments at this time, and outside of a part time job or internship, we are not bothered about money or finances in general.  We are completely dependent on our parents to provide for us.  

Once we get a real job, and start earning, and become financially independent adults, we embark on the second phase of our careers.  In this phase, we should be focused on earning, saving, and investing in that order.  Depending on your financial literacy, you may start saving and investing early in this phase, or late in this phase, but no matter what, this is the only time that you have to build your retirement corpus.  Typically in India people spend upto 40 years in this phase of their lives.  For example if you started working at the age of 24, and retired at the age of 64, you'd have worked for a total of 40 years.  It is not uncommon to have people working into their early 60s, and depending on when you started working, you could have easily spent 30-35 years in the work force earning an active income.  I call this the active earning phase.

The third and final phase is after you retire, when you no longer are part of the active work force.  You may choose to take on some part time work in this phase to supplement your income, but you fundamentally do not have a regular source of active income at this time, and are highly if not completely dependent on your retirement corpus for your financial existence.  With growing life expectancy in India, you need to factor in upto 30 years of living in this phase.  For example if you retire at the age of 62, in my opinion you should be prepared for your retirement corpus to last you for 30 years into your early 90s.  You will need to do this to ensure that you or your spouse do not run out of money in the golden years of your life.  I call this the passive earning phase.

With this understanding in place, I simply think of retirement as the point, when you transition from the active earning phase to the passive earning phase.  In my book if you spend more than 35 years in the active earning phase of your life, you have been on the path of regular retirement.  You are no different than the millions of people who work through every hour and every year of their healthy lives striving to earn, and hopefully put together a large enough retirement corpus to last them through their passive earning phase.

However, if you have been proactive in your active earning phase, you will likely do better than having to work for 35+ years.  Below is a table with my thoughts on the number of years you spend in your active earning phase.

So where do I think I am headed for?  Well I have been targeting working for 10-15 years, and then calling it quits.  I have been focused on a high savings rate, prudent and steady investments, and hoping for some small measure of luck!  Currently I seem to be trending to be in the 15-20 years category, which would still be a pretty good achievement if I make it there in one piece. 

I am certain, this will be a rather controversial post, particularly the retirement ratings table.  But hey, somebody had to put it out there!  Write me up and let me know how much and what you agree or disagree to

  

Best Online Company Formation Agent

An online company formation agent by the name of Wisteria Formations in UK is an authorised Companies House presenter for Company registrations. Their online company formation application enables a UK limited company with simple and efficient procedure. The provider offers basic services to incorporate a company instantly at a reasonable cost of £24.99 and can provide support to the business with several optional professional services such as business plan, tax advice, company secretary, accountancy and business advice, registered office and mail forwarding and VAT registration/PAYE registration.

With a dedicated support team on board they have the capabilities of reaching out to their customers with regards to completion of company incorporation, which is equipped by Wisteria Chartered Accountants who beside the completion of company formation also provide services which may be needed thereafter like accountancy or tax issues. The company does not offer a package service and should the customer need extra products or services, all they need to do is to opt for the extra products and services that are required on top of the basic company formation service.

Provision of Video Guidance 

Range of some of the extra products and services for the online application procedure comprises of official copies of the incorporation certificate, memorandum and articles of association, company register and share certificates, Company secretarial service, registered office service, VAT registration, tailor-made business plan, registration as an employer, free business planning meeting with Wisteria Chartered Accountants and assistance in opening a business bank account.

 The company is well aware that all company formation agents should adhere with the Money Laundering Regulations 2007 and hence strive to complete anti-money laundering checks prior to sending any application to the Companies House. Forming a limited company with the services of Wisteria Formation is easy and reliable wherein one needs to follow the ten step company formation process which eliminates the red tape from the process of incorporating a company.

 Besides this, the company formation service also enables the customer to check if the name is available with the Companies House. The provider has also made provision with a video guided process explaining each step of their ten step methods, in details for a quick and easy process in Company Formation.

How much should I save before I retire?

The critical question for all retirees is "Have I saved up enough money to last the remainder of my lifetime?"

I had written earlier, about how to calculate the corpus you need to be able to retire financially independent.  The amount you need depends on only 2 factors, your estimated annual expenses, and the number of years you need to live in retirement.  

Here is how I have calculated the corpus I will need, before I can retire.  The first thing I did was to calculate my estimated annual expenses.  I am now estimating that I will need to live in retirement for 50 years.  I know this sounds like a very large number of years, but then the whole idea is to be a little conservative, to ensure that I don't run out of money in my golden years! Then I refer to the table I had worked on earlier, to check how much my retirement corpus should be.  I have reproduced the table here below for reference.

I will assume that during retirement my investments will continue to give me a return that beats inflation by 2%.  I think this is a reasonable rate of return and can be achieved by a prudent mix of equity and debt investments.  So for 50 retirement years at 2% real rate of return, from the table I see that I need to have saved my ~32 times annual expenses.  

I would also like to provide for my kids when they grow up.  We have decided to leave 2 years worth of annual expenses for each kid.  Finally over 50 years it is likely that we will have to spend atleast twice on extensive home repairs.  So we have allocated another 2 years worth of annual expenses to big ticket home maintenance.  So overall this leads to 38 times annual expenses (32 + 2+ 2+ 2) as the magic number that I need to save up, to be ready for a peaceful retirement.

Next week I will write about my journey and current status to reaching this lofty goal of 32 times annual expenses as savings!

A Step Into The World of Investing

I've decided to start investing this year. Small amounts, monthly, put away early. I'll be placing my investments in an Islamic index fund (Indonesia). To my knowledge, there aren't any Islamic index fund in the U.S. but Islamicity.com lists Islamic mutual funds available for Muslims in the U.S. and also the IMAN Fund.

When I compare other funds to the index fund, it doesn't look attractive enough since other's are performing above the index. But, my intention is to start something bigger. I have two kids, one on the way. They're 8 and 5 years old. My hope is to implant habits for them to invest throughout their lifetime as I did not have parents that encourage me to invest early on. InshaAllah, they have many years ahead of them. Who knows what fruits it may bear in 30 years...