Many investors fail to worry about return of capital instead of return on capital. When Maruti Suzuki came out with its campaign – ‘Kitna Deti Hai?’ it tapped the nerve of an Indian mind-set. Return on capital is the buzzword that rules the world of investments. Many end up chasing returns at the cost of capital. Here are five factors that would help you to reduce the chance of loss of capital.Temporary loss of capital and permanent loss of capitalBefore we get into the details of how to ensure return of capital, let us understand risk. Warren Buffett has captured the essence of investments with two rules: First, do not lose money and second do not forget the first rule.In traded markets, the prices of stocks, bonds and mutual funds fluctuate almost every second. You buy a stock say at Rs 100 and the next moment the tick shows a value less than that. Volatility-led losses or marked to market losses in the short-term should … [Read more...] about Why return of capital is more important than return on capital
The home loan is the biggest liability one takes in his/her lifetime. Getting it right is a must as it helps you in achieving your dream of owning your house with minimal trouble. Borrowing money is a big task and the first exposure to credit for many comes through the use of credit cards. Here are three mistakes associated with credit card usage that you must avoid if you intend to apply for a home loan.Defaulting on your credit card billThis could be the worst possible thing that can happen to you. If you default paying the credit card bill, it will show that you do not have money to even service your short-term liabilities. When you are going to apply for a large loan such as home loan even a ‘I simply forgot to pay’ can cost you dear. The credit officer may simply choose to play safe and deny you home loan.Close “Do pay your entire bill outstanding before the due date,” says Sukanya Kumar, founder and CEO of RetailLending.com. Timely payment of your … [Read more...] about Three credit card mistakes you must avoid before applying for home loan
Tax saving mutual fund schemes or equity linked saving scheme (ELSS) are one of the most preferred options to save tax for most individuals. It comes with a three-year lock-in period. Although there is no restriction on the amount one can invest in it, investments up to Rs 1.5 lakh in a financial year is exempt under section 80C of the Income Tax Act. The recent budget kept the section 80C limit of Rs 1.5 lakh intact.Although no rule bans investments in excess of Rs 1.5 lakh per year, one should not invest money in excess of what is required in ELSS. Primary reason behind this is the three-year in lock in period. Financial planners advise investing in equity mutual funds with long-time frame – typically in excess of five years and in that case three-year lock-in is not a hindrance. It makes sense to invest in a product for long-term by choice and not out of force.ELSS portfolios comprise stocks of companies of all sizes – large, mid and small. This is akin to a … [Read more...] about Explainer | Should you invest more than Rs 1.5 lakh in tax-saving funds?
State Bank of India (SBI) has pegged its credit growth for the current financial year at 10-12 percent, to be mostly driven by retail loans. The bank has decided to go risk-averse on the corporate front to salvage capital.“There will be growth but it will focus on quality as far as corporate credit is concerned. But we will not miss the opportunity to grow because we are capable of growing and managing the risk,” said Rajnish Kumar, Chairman, SBI.The bank’s advances grew 11.96 percent in 2018-19. Of this, the retail segment that makes up for 58 percent of the outstanding loans grew at 18.52 percent, while the corporate book grew at 14.83 percent as on March 2019.“Lot of attention is being paid to managing the balance sheet in such a manner that any asset which guzzles the capital, we are not going for those assets. There is more focus on risk-weighted assets,” Kumar said after announcing the fourth quarter results on May 10.The bank’s capital … [Read more...] about SBI looks to avoid riskier loans for capital conservation
This place is so lovely. advertisement advertisement Cross the Hale County line driving north on the rolling two-lane Alabama State Route 61 and you can’t deny it: the kudzu, the catfish ponds, a picturesque old store called Newbern Mercantile Co. It’s as visually seductive as any rural patch of the so-called Black Belt (a name derived from properties of soil) that stretches across several southern states. And yet this place is so tough. The 15,388 people who inhabit Hale County’s 644 square miles face all the same challenges as residents of similar counties across the rural South, as America becomes ever more urbanized. Jobs are scarce; per-capita income is low; the poverty rate is high; affordable housing is a problem. Most of these places have been largely forgotten. Hale County has not. This is, you could say, by design. Over a period of two decades, 600 or so students have participated in Auburn University’s Rural Studio program, which is … [Read more...] about The Heart of Hale County