Monday, May 31, 2010

Festival of Generators? - Khaleej Times

After its successful launch last year, the ‘Sharjah generator festival’ is back. The industry is booming, thanks to SEWA.
Jokes apart, as a resident of the UAE since the past 15 years, I have never heard of electricity cuts here. But it has happened and there seems to be no respite.
Electricity cuts have become the norm in the emirate. The disruption goes on for hours together, day and night, without warning.
The UAE is considered a developed country and is often compared to countries like UK, USA and France. The country helps other countries in need. Top sports clubs and buildings the world over are being bought by people from the UAE.
Can somebody be generous enough to sponsor/buy SEWA? -      Mohamad, Sharjah

Sunday, May 30, 2010

Financial Goals

It is perhaps more important to ignore the stock market experts of today than what Aristotle did several thousand years ago refuting the 'world is flat' experts.

I don't think it matters whether the earth is flat or round but what matters individually for most of us is the ability to go to work every morning, meet deadlines, educate our kids, grow in our careers and contribute our bit to the society. 

And somewhere in our busy schedule and life is the task of making smart and informed choices about one's money. 

And it does seem tough to make informed choices with a plethora of options, products, tax laws, market volatility and no time to study or understand the personal finance space. 

And on top of that there is the information overload from product companies, newspapers, magazines and the internet. 

The information overload can be extremely overwhelming at times. It can take away your focus from the critical but important decisions about your financial goals.

That's why it's important to focus a little on key principles of financial planning. 

The success of any activity including investment strategy depends on how you focus on the right things and ignore things that do not matter.

The fact of the matter is no one has seen the future and analysts and experts can at best give you educated opinion or pure guesses. The media presenting these answers like facts further compounds the confusion of investors.

Why don't these technical analysts or market gurus don't eat their own pudding? 

When they give their mandatory disclosures at the end of the show they say, "Well, I have no exposure in the stock". 

(Any analyst expressing her/his views on any stock/s on television or writing for newspapers has to inform the viewers/readers if s/he or her/his company owns the stock or has advised their clients to buy or sell the stock/s discussed; this is called as a disclosure and has been made mandatory by the market regulator the Securities and Exchange Board of India, SEBI).

If the stocks were so lucrative, why are people busy giving stock tips rather than buying it. If you knew for sure that the share of company A is going to double in the next few months, what would you do? 

I am sure majority would beg, borrow or steal to get a piece of it. But what does the person in question do here "goes on television and tells everyone how to do it but himself stays out of it". 

What should one then focus on? One should focus on trying to find answers to the questions mentioned below. It is only these answers that will help you achieve your financial goals.

Here are the 8 Key Questions you must ask yourself

*How much should I save to achieve my financial goals? 
*What returns do I need to earn on my investments? 
*How much should I allocate to equity, debt, real estate, cash, gold and art? 
*How often should I change my allocation to stocks, bonds and cash?
*How much insurance should I have?
*What are the risks that my family and me are exposed to?
*How should I maximise my post tax returns rather than investing for the sake of minimizing taxes?
*How would my wealth be transferred to my wife, children, parents or any of my nominee should something happen to me? 

Getting the answers to the above is the key solution to your financial needs. I am sure each one of you will have a different answer to the questions posed above.

The decision of identifying the vehicles (stocks, insurance, mutual fund, real estate, gold etc) comes next. 

F. Scott Fitzgerald once said "Genius is the ability to put into effect what is in your mind" and this principle is as true today as it was ages ago.


A young man asked Socrates the secret of Success. Socrates told the young man to meet him near the river the next morning. They met.

Socrates asked the young man to walk with him towards the river.

When the water got up to their neck, Socrates took the young man by surprise and ducked him into the water. The man struggled to get out but Socrates was strong and kept him there until he started turning blue.

The young man struggled hard and finally managed to get out and the first thing he did was to gasp and take deep breath. Socrates asked 'What you wanted the most when you were there?' The man replied 'Air'.

Socrates said 'that's the secret to success. When you want success as badly as you wanted air, you will get it. There is no other secret.

Friday, May 28, 2010

Money, Money and Money

Money is just a commodity for some and for some it is oxygen. People all over the world crave for what only a very minute percentage of the entire world population owns.
Who says money cannot buy happiness. It can, if you know where to shop for it. Should we then start for desiring money, I guess not. We should desire the purchasing power that money has, that's what we should look for. At times the purchasing power is also bestowed in other neglected things. So look for the power that comes with money.

Tuesday, May 18, 2010

How to identify and deal with backstabbers at work

Backstabbing at workplace certainly devastates individuals, especially when a person doesn't know ho to deal with it. Now, career guru Kepcher has offered some advice on how to identify and cope with backstabbers at workplace.
Credit Stealer
Seemingly helpful team player who will enthusiastically support your suggestions and work to make the project a big success - particularly because she intends to take credit.
This will include magnifying her own role, using personal pronouns such as 'I' and 'me' as substitutes for "we" whenever possible.
The Chameleon
He, too, will appear to be a helpful team player, offering encouragement and support in private.
However, the chameleon will launch into his command performance whenever bosses are present and criticize ideas he supported some time back, including subtly accusing his peers of failing to notice the problems.
His every move is an effort to make himself look good - by making others look bad.
Backstabber In Chief
Occasionally, the Backstabber will also be the boss. Sigourney Weaver nailed this role in the movie "Working Girl."
The most encouraging boss imaginable will steal the assistant's potentially career-making idea.
How to handle all kinds of backstabbers at your office, by Kepcher, reports the New York Daily News:
Stay calm. Do not let them make you emotional and defensive.
Don't wander through the jungle alone. Beware of private conversations that can be misquoted later. Use e-mail and group meetings to document your contributions.
Be polite, but persistent. Learn to say no.
Use direct phrases such as, "I'm perplexed you have so many negative comments about our idea since you were so supportive when we spoke privately yesterday. Is there a reason you didn't bring up your concerns until now?"
By being direct and careful, you can help push the Backstabber species in your workplace to extinction as quickly as possible.

Thursday, May 13, 2010

The Common Sense Appoach To Debt Management

The first thoughts of most people who find themselves deep in debt, include those of how to begin getting out of it. 

What may be a natural urge, is stopped short by the failure on the part of many to go into deeper detail on their plans. When this sort of plan is used you could end up making this same mistake again and again. When it is not your intent to make this a life pattern for you, your plans for debt consolidation have to encompass a great number of items. 

Any way to pay the bills they can come up with, that will help keep the collectors away is what many people gravitate toward. This is what is necessary, but you have to wonder if these people took the time to find out which course of action would work out the best for them. 

In too many cases, there is fast run to the bank or to an online lending website to obtain a loan which may only be a quick fix for a bigger problem. The lender tells them exactly how much they can borrow and they take that amount without question, whether the loan is a payday loan, a home equity loan or a personal loan. 

Many people have learned by misfortunate circumstances that loans do come with a price tag attached and the lender's advice on borrowing more to get a bigger house is backfiring on them. Not anyone could have been able to foresee how things would turn out to be now, but it is always best to apply common sense. It is more risky for the borrower than the lender when you borrow more than you can afford in the hope of being able to afford it later. 

Education should always be a part of a solid debt consolidation program. Time must be spent in finding what really works best for you, not just anything that works. It also must involve correction of bad spending habits, or that individual will be establishing for himself or herself a bad pattern for life. 

You must make some changes in the way you are spending your money each month, when you continue to purchase on credit . It becomes all too easy to look at how much more money can be charged, rather than asking yourself if you have spent your budgeted amount for the month yet. 

A life pattern can be a good pattern, however these good patterns also must have a beginning step. It may be a good idea to get educated on wiser money management and ways to help you save more money, as you are preparing to consolidate your debt. 

We most likely can take the same amount of time and energy to establish good spending habits and patterns for life as it takes to establish those bad ones. Your future can begin to look a little brighter for you and those you love after you have done this.

15 Common Financial Problems

When it comes to psychology and financial behaviour, India does not have too much of research papers. Hence we are forced to turn to the US or UK for such research work. 

US studies have summarised financial problems and have found the following to be the most common of financial problems:

~ Not planning: The single biggest problem for most people is that they just do not plan their finances. It just keeps coming and going. Even if they are not happy about the results of what they have done so far, they do not change the way things are done. 

~ Overspending: Many people with not very high incomes have very high ambitions. This is likely to get them to grief. Most of this problem is because the salesmen in most shops do not tell you the price of a product, they only tell you the EMI -- so anything from a plasma TV to a luxury home on the outskirts of the city are made to look cheap! After all at Rs 2,899 a month does a plasma TV not look cheap? 

~ Not talking finance at home: Children are kept away from the finance topics at the dining table. Finance is perhaps the second most taboo topic at home! So many children grow up without knowing how much of sacrifice their parents have gone through to educate them. 

~ Parents spending on education and marriage: There are just too many kids out there who believe that they need to worry about savings, investment and life insurance only at the age of 32 plus. This means your father, father in-law or a loan has funded your education and marriage. Kids should take on financial responsibility at a much younger age than what is happening currently.

~ Marriage between financially incompatible people: Most marriages under stress are actually under financial stress. Either the husband or the wife is from a rich background and the other partner cannot understand or cope with the spending pattern. It is necessary to match people financially before marriage. 

~ Delaying saving for retirement: "I am only 27 years old why should I think of retirement" seems to be a very valid refrain for many 32 year olds! Every year that you delay in investing the greater the amount that you will have to save later in your life. Till the age of 32 it might be feasible for you to catch up, but after some time the amount that you need to save for retirement just flies away.

~ Not prepared for medical emergencies: Normally big emergencies -- financially speaking -- are medical emergencies. Being unprepared for them -- by not having an emergency fund is quite common. Emergency fund has now come to mean the credit card -- which is good news for the bank, not for the borrower. 

~ Lack of asset allocation: Risk is not a new concept. However, it is a difficult concept to understand. For example when the Sensex was 3k there was much less risk in the equity markets than there is today. However at 3k index people were afraid of the market. Now everybody and his aunt wants to be in the equity market -- and there are enough advisors who keep saying, "Equity returns are superior to debt returns." This is true with a rider -- in the long run. It is convenient for the relationship manager to forget the rider. So there could be a much larger allocation to equity at higher prices -- to make for the time missed out earlier. 

~ Falling prey to financial pitches: The quality of pitches has improved! Aggressive young kids are recruited by brokerage houses, banks, mutual funds, life insurance companies, etc. and all these kids are selling mutual funds, life insurance, portfolio management schemes, structured products, et al. Selling to their kith and kin helps these kids keep their jobs, and there is happiness all around! These kids, themselves prey to financial pitches, have now made it an art when they are selling to their own natural 'circle of friends' and relatives.

~ Buying financial products from 'obligated persons': This is perhaps one of the worst things you can do in your financial life. A friend, relative, neighbor, colleague who has been doing something else suddenly becomes a financial guru because they have become an agent! They, in great enthusiasm, sell you a financial product and promptly in 2 years time give up this 'business' because it is too difficult. You are saddled with a dud product for life! What a pity. Charity begins at home, not financial planning.

~ Financial illiteracy: Most people do not wish to know or learn about financial products. They simply ask, "Where do I have to sign" -- so buying a mutual fund is easier than buying life insurance! Selecting products based on the ease and simplicity of buying is a shocking but true real life experience in the financial behaviour of the rational human being!

~ Ignoring small numbers for too long: What difference will it make if I save Rs 1,000 a month? Well over a long period it could make you a millionaire! So start early and invest wisely. It will make you rich. That is the power of compounding. 

~ Urgent vs important: Most expenses, which look urgent, are perhaps not so important -- the shirt or shoe at a sale. That luxury item which was being offered at 30 per cent discount is such an example. These small leakages are all reducing the amount of money you will have for the bigger things like education or retirement. 

~ Focusing too much on money: Money is no longer a commodity to buy things. It is a scorecard of one's life. That will cause stress, and yoga might help. However if you will seek a branded yoga teacher -- so that your friends think you have arrived, yoga it self could cause financial stress! (Sounds wierd but very true.)

7 Common Investor Mistakes

There are seven common mistakes made repeatedly by investors. Unfortunately, investors have been making these same mistakes since the dawn of modern markets and will likely be repeating them for years to come.

You can significantly boost your chances of investment success by becoming aware of these typical errors and taking steps to avoid them. In this article, we'll show you these seven mistakes and how to avoid them.

No plan
As the old saying goes, if you don't know where you're going, any road will take you there. Solution?

Have a personal investment plan or policy that addresses the following:

Goals and objectives - Find out what you're trying to accomplish. Accumulating $100,000 for a child's college education or $2 million for retirement at age 60 are appropriate goals. Beating the market is not a goal.

Risks - What risks are relevant to you or your portfolio? If you are a 30-year-old saving for retirement, volatility isn't (or shouldn't be) a meaningful risk.

On the other hand, inflation - which erodes any long-term portfolio - is a significant risk.

Appropriate benchmarks - How will you measure the success of your portfolio, its asset classes and individual funds or managers?

Asset allocation - What percentage of your total portfolio will you allocate to US equities, international stocks, US bonds, high-yield bonds, etc. Your asset allocation should accomplish your goals while addressing relevant risks.

Diversification - Allocating to different asset classes is the initial layer of diversification. You then need to diversify within each asset class. In U.S. stocks, for example, this means exposure to large-, mid- and small-cap stocks.

Your written plan's guidelines will help you adhere to a sound long-term policy even when current market conditions are unsettling. Having a good plan and sticking to it is not nearly as exciting or as much fun as trying to time the markets, but it will likely be more profitable in the long term.

Too short of a time horizon
If you are saving for retirement 30 years hence, what the stock market does this year or next shouldn't be the biggest concern. Even if you are just entering retirement at age 70, your life expectancy is likely 15 to 20 years! If you expect to leave some assets to your heirs, then your time horizon is even longer.

Of course, if you are saving for your daughter's college education and she's a junior in high school, then your time horizon is appropriately short and your asset allocation should reflect that fact. Most investors are too focused on the short term.

Too much attention given to financial media
There is almost nothing on financial news shows that can help you achieve your goals. Turn them off. There are few newsletters that can provide you with anything of value. Even if there were, how do you identify them in advance?

Think about it - if anyone really had profitable stock tips, trading advice or a secret formula to make big bucks, would they blab it on TV or sell it to you for $49 per month? No - they'd keep their mouth shut, make their millions and not have to sell a newsletter to make a living.

Solution? Spend less time watching financial shows on TV and reading newsletters. Spend more time creating - and sticking to - your investment plan.

Not rebalancing
Rebalancing is the process of returning your portfolio to its target asset allocation as outlined in your investment plan. Rebalancing is difficult because it forces you to sell the asset class that is performing well and buy more of your worst performing asset classes. This contrarian action is very difficult for many investors.

In addition, rebalancing is unprofitable right up to that point where it pays off spectacularly (think US equities in the late 1990s), and the underperforming assets start to take off.

However, a portfolio allowed to drift with market returns guarantees that asset classes will be overweighted at market peaks and underweighted at market lows - a formula for poor performance.

Solution? Rebalance religiously and reap the long-term rewards.

Overconfidence in the ability of managers
From numerous studies, including Burton Malkiel's 1995 study entitled, "Returns From Investing In Equity Mutual Funds", we know that most managers will underperform their benchmarks. We also know that there's no consistent way to select - in advance - those managers that will outperform. We also know that very, very few individuals can profitably time the market over the long term. So why are so many investors confident of their abilities to time the market and select outperforming managers?

Fidelity guru Peter Lynch once observed, "There are no market timers in the 'Forbes' 400'." Investors' misplaced overconfidence in their ability to market-time and select outperforming managers leads directly to our next common investment mistake.

Not enough indexing
There is not enough time to recite many of the studies that prove that most managers and mutual funds underperform their benchmarks. Over the long-term, low-cost index funds are typically upper second-quartile performers, or better than 65-75% of actively managed funds.

Despite all the evidence in favor of indexing, the desire to invest with active managers remains strong. John Bogle, the founder of Vanguard, says it's because, "Hope springs eternal. Indexing is sort of dull. It flies in the face of the American way [that] 'I can do better.'" Solution?

Index all or a large portion (70-80%) of all your traditional asset classes. If you can't resist the excitement of pursuing the next great performer, set aside a portion (20-30%) of each asset class to allocate to active managers. This may satisfy your desire to pursue outperformance without devastating your portfolio.

Chasing performance
Many investors select asset classes, strategies, managers and funds based on recent strong performance. The feeling that "I'm missing out on great returns" has probably led to more bad investment decisions than any other single factor.

If a particular asset class, strategy or fund has done extremely well for three or four years, we know one thing with certainty: we should have invested three or four years ago. Now, however, the particular cycle that led to this great performance may be nearing its end.

The smart money is moving out and the dumb money is pouring in. Solution? Don't be dumb. Stick with your investment plan and rebalance, which is the polar opposite of chasing performance.

Investors who recognise and avoid these seven common mistakes give themselves a great advantage in meeting their investment goals. Most of the solutions above are not exciting and they don't make great cocktail party conversation. However, they are likely to be profitable. And isn't that why we really invest?

Wednesday, May 12, 2010

An important message......!

Mohammed (SAW)

Tax Free Economy

With a population of around 7 Million the Emirates ID is another compulsion on every resident of the UAE be it a Citizen or an expat. The Emirates ID card is a great means for collecting data that can help the authorities tackle issues related to crime, identity and much more though it would also incur a risk of privacy breaching but it can be acceptable if its used wisely and securely for the betterment of the society. 
However, the Emirates ID comes with an Yearly fee of 100 AED which would accumulate to approximately 700 Million AED that would equal around 200 Million USD and they say that the country is Tax free.

Monday, May 10, 2010


This is attitude


This is attitude


This is attitude


This is attitude


This is attitude


This is attitude


This is attitude


This is attitude

"You never conquer a mountain. You stand on the summit a few moments;
Then the wind blows your footprints away."
-Arlene Blum

This is attitude

The greatest waste in the world is the difference
Between what we are and what we could become.
-Ben Herbste

Thursday, May 06, 2010


My name is Gossip. I have no respect for justice
I maim without killing. I break hearts and ruin lives.
I am cunning and malicious and gather strength with age.
The more I am quoted the more I am believed.

My victims are helpless.
They cannot protect themselves against me because I have no name and no face.
To trap me down is impossible.
The harder you try, the more elusive I become.

I am nobody’s friend.
Once I tarnish a reputation, it is never the same.
I topple governments and wreck marriages.
I ruin careers and cause sleepless nights, heartaches and indigestion.

I make innocent people cry in their pillows.
Even my name hisses. I am called Gossip.
I make headlines and headaches.
Before you repeat a story, ask yourself:

Is it true? Is it harmless? Is it necessary?

Lets all attain Aqa Maula(TUS) Khushi Mubarak by avoiding Geebat (Gossip) and building Geebat Free Zones in our homes, our workplace, our community.

Hussain Noman