Money – Investing.

The most important driving factor of our lives, still no one talks about it, people will talk philosophy, religion, emotions, books etc, Money zilch :)… I know nothing about that beast, except that I need to have it somehow and I need lots :)

I have been recently pursuing Investing, not that I have a lot of money to invest, but in general of how people make money and how money attracts money :) here are the few investing options that are out there:

1. Get out of debt: This is the first evil, All Debt is bad, but some are better than the others, Credit card, personal debt, cars are among the worst. Anything you pay interest on is bad. Loan on your home is not as bad, but it needs to get off soon.
   
   
2. Banks: For all those who just use the interest provided by the bank to grow your money, the days of 6-10% interest rate was for our previous generation not ours, the best we can do as of now is open an ING account whose current interest rate is 3%, which is better than most fixed deposits, If you need a recommendation to this let me know, in that way both of us can make money :)
   
   
3. Real estate: If you are in the US (in most areas) and have a stable job (going to last 2 years or more) and have 5% or so down payment then buy a house and remember the mantra, Location! Location! Location! My personal opinion is not to overextend your self on the house loan, get a loan which you pay off in 10-12 years and own the house. Things like number of earning members of the family are important and things like wife’s future maternity leave should be carefully considered before you set down a price on the house you can afford.
   
   Other real-estate investments can be additional rental property purchase. This way the rental property pays for the loan and the property hopefully will appreciate in a few years :)
   
   
4. Mutual Funds:
   Advantages
   
   
   
   • There are 9 categories of mutual funds, based on the risk level you are willing to take
     
   • There are more mutual funds then stock! I was surprised at this first but it is counter intuitive.
     
   • Since a mutual fund consists of a number of stocks, owning a mutual fund gives instant diversification.
     
   • Mutual funds should be No Load
     
   
   Disadvantages
   
   
   
   • You can loose money, Loss is possible with a mutual fund. It is not like a savings account :)
     
   • All funds have fees, which mean they will take a percent of the profit that is made by the fund. This is usually taken yearly and is in the range of 0.5% to 2%. I don’t like no fees, but they are necessary.
     
   • Profits are not huge (like doubling your money). The average mutual fund will give you like 10-20% in a good year.
     
   • Good mutual funds have a minimum ($2500) that you need to invest. Sometimes I think, I am not ready to risk 10% loss on $2500 of my hard earned money :)
     
   
   Difficulties
   
   
   
   • Finding a good mutual company.
     
   • Understanding Morning star ratings.
     
   • What should be the risk level?
     
   
   
5. Stocks
   This is risky business:).You should own stocks, but do yourself a favor and don’t put all your money into it.
   Advantages
   
   
   
   • Profits can be great if you pick the right stock at the right time.
     
   
   Disadvantages
   
   
   
   • You are responsible for diversifying your own stocks. It is not very helpful if you put all your money into 1 company.
     
   • Fees, Scottrade Interactive Brokers probably offers the lowest fees amongst the online traders. At $7 for Market orders, this is pretty good; I have not found anyone reputed and cheaper then them. Though I don’t have an account here:)
     
   
   Difficulties
   
   
   
   • Needs a constant following of the market.
     
   • What stocks to buy?
     
   • When to buy?
     
   • When to sell?
     
   
   
6. DRIPS
   Dividend Re-investment plans; these plans allow you to buy stocks of a company monthly. E.g. you can say I want to buy Home Depot $250 of home depot stock monthly or fortnightly.
   Advantages
   
   
   
   • Dollar Cost Averaging: Build up your assets slowly in a number of companies.
     
   
   Disadvantages
   
   
   
   • There are fees associated with each purchase, like $2.50 each time to purchase stock of $250, which is 1% of your principal. So the stock has to appreciate at least 1% before you can realize any gains.
     
   
   

Any more Investing Ideas?

Birthday Treasure Hunt + Chakarapongal

If you thought getting gifts on a Birthday was easy, think again.

On my 28th (read 16th) Birthday, I had to go on a treasure hunt to get my gifts. This treasure hunt was prepared by RS and Prad. Also, its not 1 clue per gift, I have to solve 2 clues per gift.

1. I have to solve the first clue to tell me what the gift is. (like baseball/cricket bats, ipods etc ;) )
2. The second clue leads me to the location of the gift (basement, pile of clothes, cupboards etc.)

I have very little time to solve these clues, because the party audience is waiting and all the pressure is on me. I did manage to solve some on my own and others with lots of prompting :)

Here are the clues if you want to take a shot.

I will update this place with answers and pictures in a couple of days.

Questions 1a, I have to guess my first gift using this question.

Answer to 1a - Start Higlighting here => The last line gives it away easily, Its all part of the "game". We've played a lot of board games before so, the clue says "we have done this before and it is loads of fun". So the gift as a board game called "Balderdash". It was awesome :)


Question 1b, This is where my first gift is located.
Answer to 1b - Start Higlighting here => "The Smelly cat" phrase indicates a sock, shoes, pig sty, trash can something nasty. Since I take it on a walk once a week, it most probably is something like a trash can, "the lid", confirms that :). The unscrambled word is "PRADNYA", she finds it amusing that I am @ home with filth :) . So, the board game was behind the "trash can"


Question 2a, I have to guess my second gift using this question.
Answer to 2a - Start Higlighting here => This is a bit complicated :), lets start with the signs first, The exclamation mark is "NOT", the second sign is a directional sign with "SOUTH" highlighted. The third sign is mountains, trees and the base is highlighted for "LAND". Which results in "Not South land Alley", this is a bowling alley that we frequent. The next sign is for "GOLF", !G but R means ROLF :) . The clue "Will your friday question change" means, I usually ask if we can go bowling each friday, so the gift is something that will distract me from asking this question :) ... which means its probably a game of some kind. "all your dreams bundled together" means its a collection of games. The gift was a 15 in 1 game, containing foosball, airhockey, table tennis, basketball, bowling etc.


Question 2b, This is the clue to the location of the second question.
Answer to 2b - Start Higlighting here => This one is a bit complicated too. The first sign is an "ENTER" key, the second is some kind of dots, but "Dont make a mountain out of a mole hill" points to ants living in them. So, ENTER + ANTS = ENTRANCE and cloes to the shoe rack. So the gift was near the entrance :)

Chakarapongal: My Ethiri, made awesome chakarapongal for all of us. I was thinking its a ploy to kill me? I tried it, anyway. I usually dont like chakarapongal its too rich in ghee, gooey etc .., this one was really awesome, I had a lot of it. I am still alive :)

Book Tagging

Since Ethiri tagged me, here is the list.

Total books I own:
Ok, with 10 textbooks a year on an average, I studied for a quarter century of my life so,
10 textbooks/year x 25 years = 250 textbookss (figure out the trailing s, thats the geek)

250 other books so about 500?

Books I hate:
Self healing books, they are the worst, why would someone buy them ? :)

Favorite books:

First 2 books are just amazing

• The Fountainhead, Ayn Rand


• Atlas Shrugged, Ayn Rand
• the Harry Potter Series, Goblet of Fire is the Best !!
• The Mango Season, Amulya Malady - I finished this in one sitting, one of the very good books I have read recently.

Last book(s) I bought:

Life of Pi by Yann Martel, I was patient enough to read 25 pages, I got my money back after that !

Rich Dad, Poor Dad , This is a good book, I am not sure I bought it :)

Last book I read:

The Automatic Millionaire, David Bach,This is a good book

Last Book I was Gifted:
1000 Places to see before you die, and I returned it :) I am not sure why this book is awesome, you can get all that information from the inet,

In my defense, Automatic Millionaire was also gifted.

Book that made 0 sense to me:
Life of Pi?

Now, is the time to tag someone, I tag

RS - This is the Koyal Singing (little bird chirping)

Mohan - Ha Ha, like I expect him to come up with a list.

Pradnya - You can use my comments section, until you get your own blogger id :)

Vasu - This guy is funny so he might have a good list. I am sure there will be a lot of Hindi books and shayri's