Binary option trading - the Russian Binary Market

Binary option trading is undoubtedly a global phenomenon and traders from across the globe have access to the market, regardless of whether they are in front of their computers and trading their favorite assets or they are physically present on the floor where the trading is taking place. Binary trading has seen traders from all quarters and in this article, we will focus on the option trading market in Russia.



Being one of the fastest growing financial markets in the world, over the years, it has evolved as a stronger one with increasing number of trader base. Not only that, you will come across many such websites that will have Russian translation for traders from Russia. In fact, aside from Russian there are several other languages in which this trade is offered to the investors. In fact, if any website or trading platform has the facility of live chat, the customer support executive on the other end will converse in Russian or any other language as per your preference.

Dragon Options

One of the popular and much sought after trading platform that caters mainly to the Russian traders is Dragon Options. If you want to find out the names of few other binary brokers that offer binary trading facilities to traders with different language preferences, you can visit a website that lists the best binary options brokers. Although you may not find too many websites that dedicatedly work for the Russian traders barring a few but most of them are planning to incorporate the facility so that the services can be offered to other traders from across the geographical boundaries.

iOption

Aside from Dragon Options, there is another broker that caters to Russian traders and that is iOption. Equipped with 24 hours round the clock chat system, you can bank upon them for your binary trading needs. This trading platform utilizes major portion of its fund to facilitate trade for Russian traders. They have a Russian customer care executive that will answer all your queries related to binary trading. Regarded as one of the pioneers in binary option trading, the broker has earned a reputation in the financial market of offering excellent services to its clients.

Russian binary trading assets

Although the popularity of the Russian traders is on the rise and so is the Russian binary market, when it comes to trading different assets, you will have to be satisfied with just a few. Assets that can be traded in the Russian binary option trading market are as follows:

• USD/RUB currency pair
• Sberbank
• Lukoil
• Gazprom
• MICEX 10 or Moscow Interbank Exchange

The number of assets mentioned above is few but it is expected that the same will increase over the years.
When you browse through different websites of trading platforms, you will find that aside from English and Russian, there are options to trade in different languages. Since the number of brokers catering solely to Russian traders is less, you will have to apply common sense, logic, and wisdom in selecting the right broker thereby safeguarding your investment.

4 Mistakes you can make in Your Relationship with Banks

Although it is a necessity, working with banks can prove to be extremely exhausting and confusing at the same time. It is true that banks are there to help you when you cannot help yourselves. They give you a hand when you need it, but they also take everything from you when you cannot pay your debt.

There are two ways that your relationship with your bank works. On one hand, things work out smoothly, and your relationship is based on trust and respect. On the other hand, each of you tries to cheat on the other one and misunderstandings occur. Either way, here are the mistakes you should avoid when it comes to bank/client relationship.

Let the Bank Think for You

The health of your personal finance should be in your hand. No matter if you talk about your personal finance, or your businesses’ finance, you are responsible for your earnings and your expenses. Before signing any contract, even an account opening contract, make sure you read and understood all the terms, commissions, and risks involved. Once you signed the contracts, you cannot go back. And you all know how many times people have regretted not having read the contracts carefully before putting their signature on them.

Not Negotiating

It is true that some costs or terms cannot be negotiated under any circumstances. However, if the bank is trying to impose some conditions you do not really agree on, it is time you started negotiating. If you know how to address the problem, and if your character is strong enough, you will be able to negotiate even the simplest details. If your business grows and it works better and better, negotiation with your bank is a must.

Standing in Long Lines and Wasting Time with Cumbersome Bank Procedures

It is amazing how some people like to stay in line. No matter if they want to buy a shake, or if they are waiting at a red light, they just love to stay in line. However, when you have to run a business, time is money, and you cannot waste it standing in lines at your bank.

This is the reason why internet banking was invented. Internet banking allows you do any financial operations you want from paying your utility bills to sending money to your business partners and ordering your employees’ paychecks.

Keep a Destructive Relationship

No matter if you think about personal or professional relationships, people tend to like to be in a destructive one. The relationship with your bank is not an exception. If you do not like how your bank treats you, why do not you change it? It is your money, your time, and your nerves that have to suffer.

You can choose to have a bank to manage your personal accounts and another bank to take care of your businesses’ finances. Each bank focuses on something: profitable loans, low commissions, lower interests, etc. Think about your needs and choose the banks that fulfill them most suitably.
insurance claims.

Discover How to Manage to Buy Your Favorite Car

Buying a car is an investment that should not be taken for granted. This implies a person should be very careful when buying a vehicle for his own use. It is important to learn how to manage to buy your favorite car. The customers need to consider several factors to enable them find quality products for their own use. In this case, they will purchase vehicles that will serve them fully.

These are some of the common tips that may help any customer to make good decision when acquiring cars.

Make a decision on the kind of model that pleases you

Dealers offer various models of cars to customers. Interested customers have the responsibility to select the right model to fit their own needs. There are certain sites that provide information about different cars. They give ratings of each brand that is sold online. The sites may also direct you to reliable auto manufacturers that produce durable cars. Some people prefer second hand products while others will go for new products. If you are planning to drive your car in United Kingdom, then you should look for UK drivers licence. This means that you will not be arrested by the traffic police on such issues.

Buy your favorite vehicle from popular dealers and companies

Asking your colleagues and friends about the best dealers will definitely give you good results. Customers usually have information about the manufacturers and will never fail you in any way. Recommended dealers who have been in the business for a very long time are not likely to disappoint their clients. A number of things will determine the best dealer. The cost of his cars is very essential. A savvy customer will tend to choose affordable cars. No one would want to purchase a car that is not falling within his or her budget.

The prices may be influenced by the quality of products that are offered. When the prices are too low, you have to give this a second thought. Some expensive cars are likely to last longer than the cheaper ones. This means that you must compare and contrast the cost being offered by different companies. This will give you an opportunity to pick the best choice.

In this case, the customer should know the amount of money he or she is willing to spend on buying the car. This depends on the brand of car that you are planning to purchase. Check such details from the internet so that you are sure of what you are planning to buy.

Mode of buying the car

Because of technological advancements, some companies that deal with cars offer their products online. This means that customers have opportunities to buy products of their own choice from anywhere. As long as the supplier is reliable, they will ship the product to your home country. You have to ensure that you choose companies that have served a number of customers. Reading reviews from other clients will help you in making such decisions.

Five benefits of owning a home than renting

If you think that it is worth buying a home, you are not alone. Although the phrase sounds so familiar that this is a great time to buy a home, many people wonder if there are advantages of owning a property. Surely, you have heard that the value of the homes are dropping or it is better to rent than buy, but the truth is that buying a home is still part of the dream for millions of families who long for home.

Here you will see a list of the benefits of buying your home. Sure, this is a purchase that comes with obligations, and before you make be assessing whether the owner is for you or if it fits your current reality.

1. You will feel that you have a safe roof for you and your family:

To call the space you inhabit, as "my house" will make you feel confident. This way you own the rights of the property and have a feeling of being proud. Buying a new house will give you a sense of accomplishment to feel you reach one of your most desired personal and financial goals, and that will contribute to a better quality of life for you and the whole family.

2. It gives you stability:

It is true that on the psychological levels, investing in a home brings in a sense of permanence and stability to the investors. If you have plans to start up your family and buy a home, you can ensure great financial stability for yourself as well as your children. It is indeed a satisfying experience to have your own asset, which can assure you about great returns on investments in future.

3. Home Purchase is a big investment:

It is true that unlike a few years ago, you may not immediately gain the value of your property. However, long-term real estate investment remains safe and there are many experts who think that the worst of the economic crisis is over and they foresee the future with optimism.

4. Tax savings:
Depending on the financial situation and the tax laws that apply to your dwelling place, you could deduct the interest on your home loan from your yearly taxes. In the U.S., depending on where you live and if that is your main housing, you could have a tax exemption, which sometimes is automatic. To learn how you benefit the purchase and your responsibilities regarding taxes, consult an expert!

5. Owning gives you independence:

You can make your own decisions and eliminate problems faced with the with property owners. Many of them tend to inspect the houses on rent, which sometimes create uncomfortable situations for the residents. Owning also means you can paint the interior walls of the color you like, you can have pets, change the carpets, and put that wood floor that you like, or you can even build a deck or an extra room.

Risk analysis

The property rates have grown up remarkably, because in developing countries like India, the capital values can be kept high over a long period. However, rental income grows at more realistic rates as they represent the true demands and functionality. Most rent agreements have a clause for 10% annual hike in the rental values, but property prices generally double every five years if you live in a metropolitan city. Nevertheless, the stock markets can also give you a return of a whopping 20%, hence it is always advised to do a risk analysis before buying the property. So always, consider the pros and cons of investing in properties.

Tax free bonds : A must for any retirement portfolio

Tax free bonds have been coming out in droves over the last year.  The Indian government empowered multiple companies to issue tax free bonds to help generate working capital.  This has given a unique opportunity for retail investors to lock in an almost risk free guaranteed rate of return for long periods of time.  For early retirement enthusiasts like myself, tax free bonds provide a much needed route to invest a part of the portfolio to generate risk free returns.  There are three big concerns for any early retiree, that he or she has to solve to enable a successful exit from the usual salary based working environment.  Tax free bonds solve two of these concerns in the most efficient manner possible.  This makes tax free bonds a no brainer key component of each and every early retirement portfolio.

Lets take the example of Ramesh Arora, who is in his 50s and lives in Mumbai with his wife and younger son Rahul.  His elder son Raghav is married and lives in Pune.  Rahul is ready to retire now, and expects to spend Rs 20000/- per month on expenses for himself and his wife.  He does not want to burden his elder son for living expenses, while he still needs to take care of his younger son for a few more years before he is up on his own.  Ramesh has 3 big concerns that he must address.  The key is to establish a portfolio that gives him CONSISTENT returns every month, in a GUARANTEED manner, and the returns need to keep up with INFLATION.  While Ramesh was actively working, his monthly salary took care of all 3 aspects.  His salary was CONSISTENT, in the sense that he got his paycheck every month.  His salary was GUARANTEED, in the sense that, as long as he kept going to work, he was sure he would get that salary.  And finally the salary would increase every year keeping up with INFLATION.  Now in retirement, with the monthly salary gone, Ramesh needs to ensure the same 3 aspects are covered by some other means.

Fortunately for Ramesh the Indian government has come out with tax free bonds that simplify his retirement portfolio considerably.  Ramesh's first requirement is that he gets monthly Rs20000/- in his bank account for living expenses in a consistent manner.  This amounts to Rs240000/- (Rs 2.4Lakhs) per year.  Since Ramesh is only in his 50s he is still not considered a senior citizen, and cannot avail of the tax breaks given to citizens over the age of 60-65. If he invests approx Rs 27Lakhs in tax free bonds he will get a yearly return of about 9% tax free on this, which amounts to Rs 2.4Lakhs per annum.  This is a a sure fire way to ensure that his income his consistent per month, and also he does not lose any of it to income taxes.  The second aspect of GUARANTEED returns is also met since all of the tax free bonds are from highly rated companies with the risk of default being almost nil.  The only aspect that is not covered is INFLATION.  At the end of the bond term of 10 or 15 or 20 years, his expenses would have gone up considerably due to inflation, and the fixed returns from the bonds would not suffice to cover his increased expenses.  To take care of inflation, he should have a separate component of his portfolio invested in avenues that provide inflation indexed returns.  This could be real estate rental income, or equity mutual funds etc.  However the key here is that he can rely on the tax free bonds to provide his regular monthly income, and leave the rest of his portfolio to generate higher risk inflation indexed returns that he does not have to depend on a monthly basis.  This is the best way to structure his portfolio, divided into steady income generating portion, and inflation indexed portion.

How to Handle Getting Laid Off

If you want to read what I've done to stretch out my funds to keep my family afloat, skip this and scroll down

I and seven other were pulled into the department manager's office. There was some small talk about what we'll be doing for the weekend, and some status updates about various projects; however, the manager was looking as if she was holding back some news. It was at this point that I knew something was amiss, and my instincts were correct. 

We were told that our last day was Friday, and that we are now being transferred to the temp department for the company. Many of the people teared up, along with the manager, but I felt oddly calm. I never been in this situation before. Any job that I had, I left on my own terms. I was never fired or laid off, but this was different. 

Now, after the whole shock of losing my job wore off, I need to make a plan of action. As you may know, I have a toddler and my wife who is now pregnant. We had plans for the next year with our budget and what we wish to accomplish, but now those plans are gone. I no longer have a steady paycheck or benefits. This is the same situation anyone who lost their job is feeling. The "I lost my job and can't pay my bills."

Thankfully, I have enough resources to last me until mid January. I do have a side business doing consulting and selling items online that pulls in a few extra dollars. I can still cut expenses. 

So now you know what my current situation is. My goal, since I now have so much free time, is to blog what and how I will cope with this life changing event. My goal is to either find new employment or move my business from part time hustle to a full time endeavour. I hope you join in for the ride of a life time.

But you are not reading this just for a sob story. Here is what I've done so far to handle with change of losing my job:

Ten Things I did when I got laid off:

1. I looked at my YNAB reports to see any and all spending trends since March 13. I identified areas that we were spending money in that could be cut back.
2. Called up my internet company and reduced our broadband from 40Mbps to 20Mbps saving 30 dollars.
3. We are withdrawing only 100 dollars per month to spend in three very basic categories: Groceries, Household supplies, and blow. We normally spend around 600 dollars in this area, so we are now only spending 400 dollars. We reduced spending by 200 dollars or 33%.
4. Thankfully, I am not upside down in my car loan, so I am researching how to sell a car with a loan. This would save 160 dollars per month (payment and insurance).
5. We are cutting Hulu and I bought an antenna to get free television. 
6. I am looking at doing some freelance work at various freelance websites.
7. I am learning how to cook.
8. I am learning Python programming language.
9. I am offering free training in QuickBooks and QuickBooks Point of Sale
10. I am relying on Stoicism and faith a lot more. (I know, it is an odd combination!) 

This is just a rough list that I've done, everyone is different. If you have any advice or comments feel free to share!

Why Rank Teachers?

In the private sector, employees may earn promotions from evaluations. That is generally not the case in education. Administration is a specialization of education, not necessarily a promotion for educators. Further, do we really want to create a system that incentivizes our "best" teachers to leave the classroom?

In the private sector, employees are often paid bonuses based on their reviews. Despite recent education reform efforts, that is not the case for most educators. Besides, historian Diane Ravitch explains through historical context in her book "Reign of Error" that merit pay has been tried, and has repeatedly failed.

Removing "ineffective" educators does not have to be done by ranking them against their peers. Such a decision can be determined by observation criteria and a process designed to give educators the opportunity to improve first.

Students do not get better because their teacher has a ranking.

Most people, regardless of their profession, do not enjoy being ranked. It leads to counterproductive tension, stress, and justified debate.

So what is the benefit of ranking teachers "Accomplished"; "Skillful"; "Developing"; "Ineffective"?

What if we turned back time. What if every penny and hour that has been poured into ranking teachers was poured into making us better?

What if for every minute teachers had to spend...

• ...proctoring standardized tests; we led project based learning assignments.
• ...discussing standardized tests; we discussed new instructional strategies.
• ...completing performance evaluation paperwork; we explored applicable game-based learning tools.
• ...completing pre and post conference observation paperwork; we observed fellow colleagues and collaborated with one another.
• ...reviewing performance paperwork with our administrators; we discussed new ways to integrate technology into their classroom with our administrators.
• ...reviewing test taking techniques; we created additional opportunities for student led projects. 

Most teachers love to learn. The explosion of Twitter chats and educational Pinterest posts are tangible anecdotes of our passion to improve - - even outside of school hours. We want to get better and we enjoy learning how to be better for our students. 

What I don't understand is how turning teachers into numbers and then sharing our numbers with the rest of the world is making us any better.

So... what is the benefit of ranking teachers, and what is the cost?

P.S. For any readers or legislators who may believe I'm "whining", my past "results" and upcoming "ranking" will be evidence that I'm not, but rather questioning purpose. 

New Game Based Learning Tool to Teach Disability Insurance

DefendYourIncome.org is an excellent game based learning learning tool for teaching disability insurance.

They even have an app!

If you are 30 years old or younger, you have a 1 in 3 chance of needing long-term disability care, with an average coverage length of 32 months. What is particularly relevant for high school students to understand is they are not immediately eligible for full Social Security disability benefits early in their careers; and even if they were the coverage is inadequate.

This previous post is dedicated to exhibiting a broader range of insurance education resources.

3 Reasons to Go Cashless and Start Using Your Credit Card

Do you feel the temptation to go cashless and start swiping your credit cards, but in the back of your mind, you’re also apprehensive that it might backfire? Credit card debt is not an easy problem to resolve, and maybe you don’t want to ever start down that road.

How about making your credit card use a learning experience? There are more advantages to going cashless than just ease and convenience, you know.

Build Your Credit History

One big reason to go cashless is because the proper use of credit cards help build a stellar credit history. Credit cards are basically on-the-go personal loans, you see. When you use a credit card, you’re borrowing from your bank or provider. If you can consistently pay them back without issue – no late payments, never prolonging repayments, etc – then you’ll quickly build your credit history into a gleaming polish.

With better credit history comes improved credit score, and that leads to better interest rates and repayment arrangements for future financial needs.

Learn to Macro and Micro-Manage

When people say they’re afraid to use their credit cards, what they’re really saying is they’re afraid they won’t be able to properly manage their finances when they have that piece of plastic in their hand. It’s a given that when you only swipe cards to pay for your stuff you lose an important facet of spending: you don’t see your money actually leave your pockets.

It’s like losing the speedometer of your car. Sure, you can tell if you’re going too fast, but if you need to keep your car at a certain speed, how can you tell without a speedometer? It isn’t easy to tell how much you’re exactly spending when all it takes is a swipe and a signature or PIN.

That’s exactly why using a credit card can teach you not only to macro-manage your finances, but also micro-manage each expenditure. You’ll have to be on top of every receipt and start counting all the decimals; after all that, it’s not that bad —after all, you end up learning how to really control your financial management.

Take Tactical Advantage of Promos and Special Offers

When I say “tactical” here, I mean in terms of advantageous spending. Let’s take a quick example to be more concrete: Let’s say you were out buying groceries, but you don’t have enough cash budget to complete your shopping. Then, you notice a promo at the store that says if you pay using your credit card, you can get a certain discount, plus you won’t pay interests for a full year. Now, let’s also say that if you avail of the promos, you can pay off the resulting bill within a year.

The obvious choice then would be to use your credit card to extend your cash budget, because:

1. You get a discount

2. You can pay the balance before interest kicks in, making the credit card use effectively free of charge 

That’s what I mean by “tactical.”

All of these reasons bolster one another too. When you get good at leveraging your credit cards for promos and special offers, you become good at micro-managing, and you start to build your credit score through better financial management. 

 So what do you think? Maybe it’s high time to go cashless.

Black Friday and Budgets

Budgets are hard to manage. Cars break down, kids get sick, roofs need replacing. These are life events that never fit neatly into a budget. So here is how I recommend you establish a budget.

Begin with...

• Fully contributing to your retirement programs at work with a direct deposit.
• Contributing to an emergency savings account with a direct deposit.
• Contributing to your children's college education with a direct deposit.
• Review your insurance information semi-annually to make sure you are adequately covered (life, health, disability, property, etc.)
• Predict your tax obligations and pay them along the way to ensure you do not owe at the end of the year.

Obviously, if you are not investing for retirement now, retirement will never come later. Save. Savings covers the "messy" events that blow up monthly budgets. In my opinion, everything else is much less important, and that is a great place to trim costs. So with the remaining money, prioritize and spend. 

A budget should reflect what you value the most. So during the hustle and bustle of Black Friday be sure to prioritize spending on what really matters most to you first, and use Black Friday as an opportunity to trim costs on the plastic products that don't really make us happier. 

Top Five Tips to Save your Business Tax

A company always ensure that it pays the correct but minimum amount of tax possible. Getting a corporate tax return wrong can end in penalties.The entire process of tax return and legislation is complicated. As Benjamin Franklin said “tax is one of the perpetual certainties of life’. None of us are totally unaffected by taxation. How much we earn will be charged to income tax and much of what we buy is subject to VAT. The tax code allows you to subtract costs of doing business from the gross income and whatever is left is the net business profit.

Every business should know as how to maximise their deductible business expenses to reduce their taxable profit. Here are some of the key points to save your tax:

Invest before deduction limits are cut:

Take advantage of the section 179 deduction that allow a business to deduct expenses for several capital equipment purchases such as business software’s, computers, furniture’s, vehicles or manufacturing equipment’s. This means if the company makes any purchase before the end of the year, they may be able to deduct most of their outlays for capital equipment’s. Even if the company do not think that they need to make new purchases, they can review their inventory and equipment and use them at the year end to replace the obsolete assets. Also make sure to talk to your tax advisor or accountant for more specifics.

Defer your income:

If the company wants to be in the lower tax bracket deferring income is a good idea. Billing late somewhere in December will defer your taxable income. If the company cannot defer income or wages of their employees, they can consider delaying the payment of bonus until the New Year. If the company can operate on a build-up accounting basis they can claim a deduction for the bonuses even though the bonuses aren’t paid until next year.However, the bonuses must be rewarded within 2.5 months of year end.

Vehicle and travel expenses:

There are numerous deductions from vehicle as well as travel expenses. Not only can you deduct 48.5% per mile for business trips but also can deduct tolls paid during the trips. Expenses related to business travel including expenses for hotels, airfares, cab fees or rental cars are deductible. Moreover, you can also deduct the expenses of a business associate travelling with you provided he/she is professionally involved with you in the business. However, make sure that all the receipts are kept.

Education deduction:

Work-related education can also be deducted provided such education courses improve job-related skills. Companies can deduct employees’ educational expenses if such courses are applicable in the job. In addition, transportation to and from the classes may also be deducted.

Keep the business records organised:

Knowing what records to keep and for how long can save the billable hours especially when the tax session rolls around. The types of record to keep and how long to keep them depends on the following items involved -

Keep copies of income tax returns for a minimum of three years. However if it is suspected that no return has been filed there is no limit on the number of years the file can go back for examination. So it is better to keep the copies of tax returns for an indefinite period of time

Keep records of the costs of assets purchased such as confirmations of securities purchased or receipts of equipment purchased. The records are needed to figure out the basis of assets used for determining the gain or loss upon a sale

Keep records relating to meal and entertainment for maximum of three years from the filing of the return?

Keep records of employees for at least four years. These records include:

* Date and amount of all payment to the employee
* Time slips of employment
* Copies of employment tax return
* Employee information such as name, address, date of employment or social security number.

If your company is looking for tax advisor you can contact Wisteria chartered accountants in London who will offer you proactive services in terms of high quality and specialist tax advice in all areas of corporate taxation.

4 Reasons Why I don't like Budgeting

I have written several posts in this blog but never did I write a single article about budgeting. It seems like counter-intuitive since this is meant to be a personal finance blog - budgeting, investments, savings articles, should be the topic.

Budgeting is closely synonymous to Saving. It is the process of proper allocation of resources to ensure each liability, expense or savings will be satisfied according to plan.


Although savings is just an aspect of budgeting, it is still the same. To budget is like saving the money for proper allocation - no unplanned spending or excess outlay for expenses.

Here are the four (4) reasons why I don't like Budgeting

1. It limits your creativity

To spend lesser than what you earn closes one's mind to look for a better way of earning more to obtain one's goals and dreams in life. Budgeting constricts the elasticity of our mind to seek for a definitive solution.

What about saving money for capital of future business? Still invalid. Capital is not a problem these days but creativity. There are a lot of ways to raise money: angel investors, venture capitalists, relatives, friends, Kickstarter, IndieGoGo, Quirky, cooperatives or even banks. Note that banks is the last priority of obtaining a capital. It has the highest interest rate of loans!

2. It kills your desire

You will be satisfied with the status quo. If you budget, chances are you will get used with what you practice and no longer aim for other things. If you can survive with what you are currently earning, why struggle to earn more?

This could be the worst justification of all if you keep on budgeting. If your original plan is to become a business magnate, odds are greater that you will just be contented of being a production worker all your life when you are already satisfied with your current job, earnings and properties.

3. Inhibits you to enjoy life

Budgeting is the best test of discipline. You know how hard it is to budget. For me it's a pain in the ass. Instead of spending what you earn for what you want, you tend to set aside some portion of your money for saving, for slow investments.

4. It evokes self-pity

To limit one's spending will likely trigger self-pity. Instead of having things that can make you happy, why limit yourself to something that doesn't give value to you at all? While others are happy, you are self-castigating to the point of being discouraged in the long haul.

Afterword

Budgeting is NOT really bad at all granting all of these conditions are present:

1. It is not a limiting factor to obtain what you need and what you want to have/do;
2. A part of your earnings is spent on fast investments to gain a significant interest and keep up with inflation;
3. There is a continual improvement of one's income.

Bottomline

Rather than budget or limit your spending, why not increase your income?

The Chosen Few

The Chosen One - image from fanpop

I have chosen the apps (android) that I will try out for a month for my budgeting needs;

Toshl Finance, YNAB, MoneyWise, and Pocket Budget

There are two honorable mentions that I eliminated from my testing;
Goodbudget (EEBA) and simplebudget

I will start with the eliminated apps.

Simplebudget have the simplest layout. The app uses an envelope budgeting system. You work your way from determining where you want your money to go. You create envelopes for mortgage, insurance, utilities and so on. You start by making a budget for everything you need. You'll realize at the end of the process, how much income you need to support your spending (cannot be negative number).

Then, track your spending and record it in the assigned virtual envelopes that you've set early on as your budget. One problem is that it doesn't meet my needs due to the fact that I go on business trips and acquire additional income. The amount differs from month to month yet once you've set an envelope, it'll become default as you swipe across months.

Goodbudget (formerly EEBA) is similar to simplebudget, I have problems setting additional income and how it would play to my overall picture of my spending and budgeting. The graphic user interface and flow of the app requires a learning curve much deeper compared to other apps.

So, with that out of the way remains the chosen few where one will rise above all and become the budgeting app to help me reach prosperity. I will update my progress of using the apps.

How to Get Unlimited, Targeted Traffic in The Next 15 Minutes

Sounds like a wild idea, right? Can you really get unlimited targeted traffic in 15 minutes? Not only can you do so, but I am going to tell you how. If you like to get unlimited, targeted traffic in any niche to your website listen up, for I am about to tell you the way to do it.


You may think I am pulling your leg, but the fact is that after you are done reading this blog and put to action what I state here, your traffic ticker will explode. And the best part is the way to do it is by using a system I created. That’s right. The secret is to using my system. 

GET IT HERE ==> http://bit.ly/1i3Bjyb

You may then ask what system I am talking about. I am talking about a powerful and effective technique that is built around a five-step process.

It is a system that when set up, will send a tsunami of traffic to your website so fast that it will make your head spin. All you will need to do is perform all the actions required, and take a look at your hit counter.

Then go do something fun for 15 minutes. Then come back and take another look at your hit counter. You will faint when you see how many hits you got within just 15 minutes.

If you think I am joking here this. I have a friend who owns a website. Before using my amazingly powerful program, his website was getting about 1000 hits a month. After he put my system into action, he saw his hit counter go from 1000 hits a month to a 1000 hits a day. If he can see this kind of result, so can you. 

Photo topreviewbonus.com 

My updated student loan lesson

Multiple reports have been published explaining that when high school students list their preferred colleges on federal financial aid applications, that they could be used against them.

"A university concerned about its "yield" - a closely-watched measure that tracks how many accepted students actually enroll - may not extend an admission offer if the university is near the bottom of an otherwise qualified student's list, for fear the offer will be rejected.

A college at the top of a student's list, on the other hand, may not feel compelled to offer generous financial aid, since the student is seen as likely to accept without it."

The advice our guidance counselors are giving is to have our students list their top ten in alphabetical order.

I incorporate resources from the US Department of Education (FAFSA) and Consumer Financial Protection Bureau such as college search tools and key dates in the lesson.

Here is my full lesson posted online. The "Student Handout" guides the student through the lesson.

Yolanda (Haiyan) victims need no whistle-blower

I really like Wrigley's tagline - "In times like these, you need a juicy". This simply reminds us to be cool and calm in adversities than being stupid enough to be prejudicial and skeptical. Being cool and calm is not being passive and lazy but being strategic and action-oriented. It's the message of this post.


The devastation of typhoon Yolanda was a black swan. That was the strongest storm ever recorded and some considered it to be an outlier.

But the fact that it happened simply pushes us to think and act differently than what we did in the past. This is already an alarming call for us to act and change, far different than the way we lived before. 

Yolanda Lessons and Action Plans

1. Cars and houses were flushed out like ants in the molehill. This might happen again, God forbid. Strengthen buildings and infrastructure projects to anticipate stronger gusts in the future (take note of "stronger"). Perhaps the single mistake was we were unable to anticipate the worst case scenario. Preventive action plans could have done.
2. Create a robust Emergency Response and Preparedness Team to act immediately in Search and Rescue Operations (SRO) and relief goods distribution. The bulk of work here is on PLANNING. We should never take this for granted. Let's not make 'death of hunger' a reason for more casualties and looting as a legal act.
3. The KISS Principle. Most people complain about how the media disseminated the news report. They kept on hearing about "storm surge" but no one seemed to care. "If the people were told of a 'mini-tsunami' instead, many could have evacuated and survived!", one friend told me. Valid but there is always two sides of a coin. Media and government must be proactive enough to convey the news in an easy-to-understand layman's term to the nth time. Keep It Simple Stupid!

Truly, helping is the living word in crisis. It is not about being a whistle-blower. Imperfections and inefficiencies are expected but should not be treated like a billion-dollar-lotto-prize - some overreact that they didn't even verify if the information was really true. And they're making it worse through viral publications. Not good.

Granting the information is true, it wouldn't help either. Hungry victims don't need whistle-blowers but food and water.

I'm not blaming. Not complaining either. And I'm not giving any advice. You know yourself better than I. It is also evident that maggots and parasites flock these times to piggyback the situation.

This is not something new. This happens every time, only that the majority of us only discovered this 'sad truth' just this time. This happens anywhere in the world too but on a lighter scale.

Enough said. Action time. I placed links below for those of you who want to give cash donations. It is not through government. I guess you know why it's better to give to Non-government Organizations (NGO) and private firms. I trust this list. Choose at your convenience. Shoot a comment if we need to blacklist something.

Note: These are direct links to the donate page to save you time searching for the donate button; not in particular order.

PHILIPPINE RED CROSS

UNICEF PHILIPPINES

GMA NETWORK

ABS-CBN

OTHER PHILIPPINE FUNDRAISERS

OXFAM AUSTRALIA

UNICEF USA

AMERICAN RED CROSS

WORLD VISION

AMERICARES

ACTION AGAINST HUNGER

CATHOLIC RELIEF SERVICES

SALVATION ARMY

DOCTORS WITHOUT BORDERS

SAVE THE CHILDREN FEDERATION

OPERATION USA

AMERICAN JEWISH JOINT DISTRIBUTION COMMITTEE 

INTERNATIONAL MEDICAL CORPS

INTERNATIONAL RESCUE COMMITTEE

WORLD FOOD PROGRAM USA

LUTHERAN WORLD RELIEF

TEAM RUBICON

SHELTER BOX

Image courtesy of www.boston.com 

Do you have a classroom micro-economy? Be careful.

A new trend in personal finance classrooms is to create micro-economies. I am a big fan of using a micro-economy when they are managed appropriately, particularly in the elementary grades. A matter of fact, I advised Vanguard on their development of MyClassroomEconomy and serve on the advisory council for BizWorld. To put my concern about micro-economies into context, I need to address the spirit and environment of a personal finance classroom.

One view: Personal Finance should be offered in every school so our children will be empowered with tools and concepts to be rich.

My view: Personal Finance should be offered in every school so our children will be empowered with practical tools and concepts to live a happy life.

Perspective on happiness varies from person to person. For some, happiness does indeed correlate with great wealth. For most, research has found that financial stability is most correlated with happiness, not great wealth.

To begin the year in my classroom we play the Awesome Island Game (which I no longer own the rights). In my game, participants simulate a life over the span of forty years. The financial choices they make impact their net worth. Most students aspire to conclude the game with the greatest net worth, earning them a ticket to "Awesome Island".

Earlier this semester I noticed one of our brightest students was accumulating enough assets to earn a ticket to Awesome Island. However, at the conclusion of the game he only had enough money to purchase a ticket to "It's Okay Island". I quickly reviewed his budget and recognized on the philanthropy line item that he had given most of his wealth away at the end of his life. It was important for him to give back, it is what makes him happy. I was impressed that he understood that feeling awesome has more to do with what lies in your heart, rather than the zip code under your feet.

With that said, I am a big fan of using micro-economies when they are managed appropriately. However, here are my concerns...

• Correlating test grades with a micro-economy can be contrary to the spirit of a personal finance class. We want students to understand how to generate wealth and value the benefits of capitalism. However, if a teacher is strictly correlating the success of a student with wealth, what does that say about us? Let's not send a message to our students that serving as a teacher, fire fighter, police officer, social worker, soldier, etc. makes us a failure because we don't have the same bottom line as an investment banker.
• Including test grades as a part of a micro-economy can be counterproductive to some special education children who cognitively do not have the ability to test as well as some of their peers. Many of these kids go through school frustrated and fully aware of their challenges. Our classrooms should give them hope, not a rank. 
• Including test grades as a part of a micro-economy is not necessarily an accurate reflection of how well a student will do financially in life. As an example, my students have participated in the bill paying simulation Budget Challenge for a number of years. I do not give them time in class to work, it is purely for homework and designed to measure whether they are gritty enough to stay on top of their bills throughout the semester in their own time. In other words, I'm assessing their behavior. I have found...
• there is a correlation between content and behavior, however...
• some students who test well are not gritty enough to pay their bills on time.
• some students who do not test well are gritty enough to pay their bills on time, but struggle to make good choices. However, many of these students still outperform the good test takers who are apathetic. 

Like I said, a micro-economy can be a great experience for students. I am drawn to experiential learning, particularly when it incorporates entrepreneurship opportunities. How to generate great wealth is a lesson every child should learn. Kids also need to experience the value of making enough money and managing it well enough to reach their own goals. Just be careful how you implement the simulation. 

The Various Markets to Engage in with Spread Betting

Spread betting is a popular trading method that has gained a lot of popularity in the last few years due to its flexibility and the various options provided to the traders. When you are spread betting, it's likely that you already have an account set up with a reliable broker. On this account, your broker will provide you with a wide variety of options for the markets you can trade in.

The platform that you will be working with also gives you options of communicating with your broker about how your shares are looking, as well as receiving information that is vital to making your trades. When it comes to the markets, you need to know about the options that you have. The following are just some of the markets that you could find yourself in with spread betting.

Spread Betting With Shares

Shares are one of the most popular markets that traders seem to work with. The reason for this is; they provide some of the best market prices with high returns and very little risk. They are also very convenient for the traders to work with, allowing them to control the exposure that they have. The profits that are made by traders are not subject to any stamp duty or capital gains tax, meaning that the profit you make is what you will keep. The only charge that is going to be coming out of this amount is what you owe to your broker for their services.

Spread Betting With Indices

Indices are another popular trade to work with, as you will be trading the stock market as a whole. The larger trades that you work with will be moving much faster, which is convenient for those that are not very patient with the market. With this type of trade, you can hold your position for as long as you need or want without having an expiry. There are a large number of companies that you will be working with on a single stock market, which makes this ideal for those that don't have time to work with multiple trades at one time.

Spread Betting With Commodities

Commodities are a type of trade that will work with forward and spot contracts. They have also been known to work with soft commodity betting, basically meaning just different types of commodities. With commodities, there are various types that you can choose from including energy commodities, restaurant commodities, retail store commodities and many more. You just need to choose the area that you feel most comfortable with and take a chance.

Spread Betting With Currencies

Currencies are the last type of trade that you can find interest in. Most people choose currencies, as they are working with foreign currencies and the Forex market. This type of market is a hard market to get into, and you can get the help that you need from your broker if you find any trouble. Don't worry about messing up a few times, this gives you the ability to learn from your mistakes and make better choices the next time around.

Tracking Your Spending

Black Bear Tracks

And everything they did is in written records. | And every small and great [thing] is inscribed.

54. Surat Al-Qamar (The Moon); 52-53

I first opened my checking account at 19. I've vague memories of using my checkbook register. Never using it would be more truthful. Which is sad, really, because keeping record of spending plays an important role in being successful financially.

Since my last month's paycheck, I've been trying to get into the habit of jotting all my income and spending. Perfect timing too, because 2 months ago I've finally bought my first smartphone (nothing fancy, an Acer Z2 Duo) to use a budget and spending tracker app. I thought it would be easy and with the convenience of the smartphone, I'll get everything down to the last penny.

I was wrong. I'm off. By a lot.

I've narrowed my mistake to one thing: Procrastination. I kept delaying myself to take out my phone, load the app, and record the transaction. Then whatever is delayed, it never gets recorded.

So, I'm renewing my niyyah. I am committed to take record of all my transactions as they occur.

What's next? I will report on which app works best for me. I apologize that I only have an android phone, so I will try to use apps that are both on iOS and Android.

You are no Warren Buffett, so why pretend?

Turn on any business TV channel, and it is impossible not to be in awe of wise sounding financial analysts giving opinion about the market and stocks. Fundamental analysts will be analyzing economic conditions and their impact on a company’s business, and technical analysts will be analyzing chart formations. I don’t understand any of it because I am no Warren Buffett. And I don’t want to spend all my time figuring all this out. Do you feel the same?

Let me spell out my constraints, see if these are applicable to you:

• I am not a finance wizard, I don’t earn my living by investing
  
• I want my money to work and beat inflation instead of rotting in saving bank account or fixed deposits, but I am not chasing maximum return, I just want returns to meet my financial needs
  
• I want to live my life and not spend it all just watching my investments
  
• Based on my personal experiences and that of people around me, I don’t quite trust financial advisors; only thing guaranteed with them is their fees or commission, and they seem to suggest investments to maximize their income, not mine.

I call myself passive investor. My solution has been to practice passive investment philosophy of asset allocation and rebalancing, in a detached, systematic, methodical way. And I will explain it in this article. It has served me well, but I must caution that it might not be suitable for you, and it is not a financial advice of any kind. You should not blindly follow anything or anybody, not even Warren Buffett. Evaluate it, find out whether it makes sense to you. First and foremost, I advocate financial literacy.

Asset Allocation

First step is to understand your risk appetite, financial goals and timeframe. Evaluating this troika of risk-return-liquidity will help you in picking a suitable mix of asset classes. I keep aside contingency funds and short term needs in low-risk cash-equivalents (fixed deposit, liquid mutual funds), and medium term needs in medium-risk debt/bond mutual funds. Only for long term needs, I use asset allocation and rebalancing.

Asset Allocation at x year age: Medium Risk Assets = x% High Risk Assets = (100-x)%

Figuring out risk appetite is quite hard. How am I supposed to know how I will feel if my portfolio falls by 10%, 20%, 30%, 50%? So I follow a popular rule of thumb for asset allocation: if your age is x, then portfolio asset allocation should be x% in medium-risk assets (bonds, gold) and (100-x)% in high-risk assets (equity, real estate). It is a good rule to start with, and based on learning and experience, one can fine tune it. The basic premise is that risk appetite decreases with age.

Let’s take a concrete example. Say, the age is 30 years, and for sake of simplicity, only investment options are bonds and equity. The suggested asset allocation is: 30% in bonds and 70% in equity.

Rebalancing

Rebalancing is a technique to maintain the desired asset allocation. Let’s say, one year back, you have invested ₹1 Lakh in chosen asset allocation of 30:70, i.e. 30% in bonds and 70% in equity. Suppose in last one year, bonds and equities gave 8% and 15% returns respectively. That will take allocation to 28.70 : 71.30 as shown in following table. To bring it back to 30:70, you will need to sell ₹1,470 worth of equity and invest that amount into bonds.

Asset	Desired Allocation	Investment	Growth	Current Value	Current Allocation	Rebalance	Post Rebalancing
Bonds	30%	₹ 30,000	8%	₹ 32,400	28.70%	₹ +1,470	₹ 33,870
Equity	70%	₹ 70,000	15%	₹ 80,500	71.30%	₹ -1,470	₹ 79,030
Total	100%	₹ 1,00,000		₹ 1,12,900	100%	₹ 0.00	₹ 1,12,900

Let’s see what would have happened if during last equity has fallen by 15% (instead of rising):

Asset	Desired Allocation	Investment	Growth	Current Value	Current Allocation	Rebalance	Post Rebalancing
Bonds	30%	₹ 30,000	8%	₹ 32,400	35.26%	₹ –4,830	₹ 27,570
Equity	70%	₹ 70,000	-15%	₹ 59,500	64.74%	₹ +4,830	₹ 64,330
Total	100%	₹ 1,00,000		₹ 91,900	100%	₹ 0.00	₹ 91,900

Rebalancing would require selling ₹4,830 worth of bonds, and investing that amount in equity. As you probably noticed, the rebalancing strategy forces to book profit in the asset class that has gone up, and invest in the asset class gone down (buy when low, sell when high).

Rebalancing Triggers

There are different tactics for triggering rebalancing. The example above is when rebalancing is done after a year, that works fine since it avoids short term capital gains that are taxed at higher rate. But you can also pick 6 months or 15 months. Whatever period you pick, do it with discipline. Doing it at gap lesser than 3 months is futile, it just increases time overhead and transaction cost.

Another trigger that I use is the imbalance threshold of 5%. When the gap between desired and actual allocation for a asset class is more than 5%, I rebalance. For example, when my equity allocation goes above 75% or below 65%, I rebalance.

Rebalancing along with further investments or withdrawal

If you are in accumulation or withdrawal phase of your investments, i.e. you are putting in or withdrawing some amount every month from your investments, you can incorporate rebalancing into it such that after putting-in or withdrawing, your portfolio is at the desired asset allocation. That reduces transaction costs as well as potential tax outgo.

Let’s take the example above, and suppose you were investing ₹10,000 at the current month, you would need to invest ₹4,470 in bonds and ₹5,530 in equity:

Asset	Desired Allocation	Investment	Growth	Current Value	Current Allocation	Invest	Post Rebalancing
Bonds	30%	₹ 30,000	8%	₹ 32,400	28.70%	₹ +4,470	₹ 36,870
Equity	70%	₹ 70,000	15%	₹ 80,500	71.30%	₹ +5,530	₹ 86,030
Total	100%	₹ 1,00,000		₹ 1,12,900	100%	₹ +10,000	₹ 1,22,900

Similarly if you were withdrawing ₹10,000 the current month, you would need to withdraw ₹1,530 from bonds and ₹8,470 from equity:

Asset	Desired Allocation	Investment	Growth	Current Value	Current Allocation	Withdraw	Post Rebalancing
Bonds	30%	₹ 30,000	8%	₹ 32,400	28.70%	₹ -1,530	₹ 30,870
Equity	70%	₹ 70,000	15%	₹ 80,500	71.30%	₹ -8,470	₹ 72,030
Total	100%	₹ 1,00,000		₹ 1,12,900	100%	₹ –10,000	₹ 1,02,900

You do not need to do these computations every month by hand, instead it can be incorporated into an excel sheet.

Summary

My passive investment strategy for long term investment has two parts: asset allocation and rebalancing. Asset allocation is to decide weight of various asset classes in the portfolio based on risk profile. I use x : (100-x) thumb rule for asset allocation between medium : high risk asset classes. Rebalancing is to keep portfolio at desired asset allocation by selling/buying asset classes that have gone above/below their allocation percentage. Rebalancing can be done periodically or at some imbalance threshold. Further investing or withdrawal can be folded into rebalancing to save transaction cost and taxes.

In the next article, I will share an Excel sheet to automate asset allocation and rebalancing. In future articles, I will discuss investments in various asset classes such as bonds and equity.

Have you used asset allocation and rebalancing? Please share your thoughts and tips in comments.

Investment 101: Investment Types and Asset Classes

Somehow I always thought that I was rich. That was till I got married and decided to buy a house, around a decade back. It quickly dawned on me how poor I was :-) I couldn’t afford a house in Bangalore even if I sold or mortgaged my soul. That was pretty bad.

© Secret Millionaires Club,
Warren Buffett teaching kids investing, with cartoons

However, something good came out of it. I started to think beyond fixed deposits for my saving surplus. Couple of months later, my boss’s boss Dharma gave a talk on retirement planning. I figured that with power of compounding, I could build retirement corpus of ₹1 Crore by investing ₹10k/month at 6% for 30 years, which was reassuring. Later my friend and colleague Piyush Agarwal gave me a personal tutorial on investments. I knew nothing and it was akin to Warren Buffett teaching kids basics of investing. From those seeds, I slowly grew plants. I will share some of the saplings from those seeds in this and the next article.
First step is to learn about investment types, asset classes, and their return, reward and liquidity. It will help you in cutting through a lot of financial jargon and assess whether an investment suits your needs.

Risk, Reward, and Liquidity

Risk is the possibility that actual return on an investment could vastly differ from expectation, including the likelihood of loosing part or full investment amount. Higher that possibility and wider the gap between actual and expected returns, higher the risk. It is typically measured by calculating the standard deviation of the historic average returns of an investment. Higher the standard deviation, higher the risk.
Returns or reward is the gain (or loss), typically in percentage, on the original invested amount in a given period of time.
Liquidity is the ability to convert an investment or asset to cash (and vice versa) quickly without affecting the price of the asset. Both time taken to liquidate an asset, as well as potential price movement during that time determines the degree of liquidity. For example, buying or selling a house or a privately held business can take quite a bit of time, and price can fluctuate due to economic events during that period.
Liquidity is often ignored, but it is a very important factor in making investment decisions. For someone with long time horizon, investing a small slice of portfolio in a illiquid and risky but potentially highly rewarding investment is a worthwhile pursuit. But the same is an absolutely bad idea if it makes your portfolio highly concentrated in that one highly illiquid asset and you need money back in, say, one year timeframe. So you should always consider troika of risk, reward and liquidity while evaluating investment alternatives.

Investment Types

There are three basic kinds of investments: ownership, lending, and cash equivalents.
Ownership: These are investment which you own fully or partially. For examples, share in a company or a business, a house or any other real estate, gold or other precious materials, paintings or other valuable art works. Ownership investments are among riskiest and most profitable types of investments.
Lending: These investments are the kind of loans you have given with an expectation of getting the principal back along with fixed return rate. For example, a government or a company may issue a bond where it pays a fixed amount to bond buyer over certain period of time. Lending carries a risk of default where borrower is not able to pay back the interest and/or the principal. Lending investments tend to have lower risks and reward, and are typically more liquid than ownership investments.
Cash Equivalents: These are investments that as good as cash, i.e. can be quickly and easily converted to cash. For example, you can withdraw your money anytime in a saving bank account in a reputed Indian bank. Similarly mutual funds that invest in liquid or ultra-short term assets pay back the redemption amount in a day or two. The risk as well as returns are very small.

Asset Classes

There are five main asset classes commonly available to investors in India:

Asset classes and their characteristics

Asset Class (other names)	Investment Type	Underlying Security

Risk
Returns
Liquidity
Examples
Cash
Cash Equivalents
Cash
Low
Low
High
Saving/checking/money-market accounts, liquid or ultra-short term mutual funds
Bonds (debt, fixed-income)
Lending
Debt/Loan
Low-Medium
Low-Medium
Low-Medium
Bank fixed deposits, Provident fund (PF), PPF, government bonds, company bonds and deposits, debt/income mutual funds
Gold
Ownership
Physical Gold
Medium
Medium
High
Physical gold, Certificates of gold deposits with banks, Gold Exchange Traded Funds (ETF)
Equity (Stocks)
Ownership
Shares in publically traded companies
High
High
Low-High
Stocks, Equity Mutual Funds, Equity-ETFs
Real Estate
Ownership
Real Estate properties
High
High
Low
Residential properties, office/retail properties, Real Estate Investment Trust (REIT)

Low/medium risk investments are also referred as defensive or asset protection/preservation investments, while high risk investments are known as aggressive or growth investments. You need to devise a combination of these asset classes, that suits your needs and risk profile, into your personal finance plan, and execute that plan methodically.

Mutual Funds

As you probably noticed that mutual funds are mentioned for all asset classes in the table above (ETF and REIT are also a kind of mutual fund). Mutual funds collect and pool money from many investors and invest those in one or more asset classes to achieve investment objective declared in the mutual fund prospectus and offering documents. These are operated by professional fund managers and regulated by competent authorities like SEBI. Main advantage is that it gives a professionally managed diversified portfolio of a particular asset class small investors, which is often difficult to create with small investment capital. It also takes overhead of monitoring, purchasing and selling of assets off from the investor. Of course, it comes with a price as these funds charge management fees, and risk of fund manager making poor choices. Value Research Online is a great resource for analyzing mutual funds in India, and it champions cause of small investors. We will get into mutual funds in much more details in future articles.
In the next article, I will discuss how to put together a low time overhead financial plan through passive investment strategy of asset allocation and rebalancing.
Do you have any questions or suggestions, please share them in comments.