Warren Buffet - A Principle to Learn

Warren Buffet

There was an hour interview on CNBC with Warren Buffet, the second richest man who has donated $31 billion to charity. Here are some very interesting aspects of his life:

1)He bought his first share at age 11 and he now regrets that he started too late!

2)He bought a small farm at age 14 with savings from delivering newspapers.

3)He still lives in the same small 3 bedroom house in mid-town Omaha, that he bought after he got married 50 years ago. He says that he has everything he needs in that house. His house does not have a wall or a fence.

4) He drives his own car everywhere and does not have a driver or security people around him.

5)He never travels by private jet, although he owns the world's largest private jet company.

6)His company, Berkshire Hathaway, owns 63 companies. He writes only one letter each year to the CEOs of these companies, giving them goals for the year. He never holds meetings or calls them on a regular basis.

7) He has given his CEO's only two rules. Rule number 1: do not lose any of your share holder's money. Rule number 2: Do not forget rule number 1.

8)He does not socialize with the high society crowd. His past time after he gets home is to make himself some pop corn and watch television.

9) Bill Gates, the world's richest man met him for the first time only 5 years ago. Bill Gates did not think he had anything in common with Warren Buffet. So he had scheduled his meeting only for half hour. But when Gates met him, the meeting lasted for ten hours and Bill Gates became a devotee of Warren Buffet.

10)Warren Buffet does not carry a cell phone, nor has a computer on his desk.11)His advice to young people: Stay away from credit cards and invest in yourself.

I think we all need to follow his policy to the extent it does not harm our Investment.

Thanks for Reading :)
Vinay Danageri

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Chanakya – A Thought Leader

Who was Chanakya?

For centuries to come and the centuries that went by, which recorded in history talking of the great men and legendary characters who shaped time through their vision and exemplary actions. Chanakya, perhaps is the only personality who has been accepted and revered as a genius both by Indian and Western scholars. He is a historical milestone in the making of India amidst tremendous upheavals and myriad’s of reversals. Celebrated as a shrewd statesman and a ruthless administrator, he comes across as the greatest of diplomats of the world. He had the guts to speak his heart out even in front of the rulers, which shows his strong inclination to democratic values and the audacity to put his views through. Although, he lived around the third century BC, his ideas and principles show concurrence and validity in the present day world. Politics was his forte. Diplomacy in a politically charged environment shows his self-confidence and the ability to stay calm in trying situations. His foresight and wide knowledge coupled with politics of expediency founded the mighty Mauryan Empire in India. He was a great laureate of economics with a glittering intellect to perceive the intricate dynamics of the various economic activities and principles. The centuries that succeeded him show distinct effects of his thoughts on the way a kingdom is managed and other facets of economic administration. Even today, one of his maxims on taxation is very much alive and calls for adherence by the governments of the world. According to Chanakya, "Taxation should not be a painful process for the people.

His Dreams.

Chanakya envisioned India as a nation which would place itself as the forerunner – politically, economically and socially. His magnum opus, "Arthashatra", depicts in many ways the India of His dreams. When he wrote this volume of epic proportion, the country was ridden in feudalism and closed and self-sufficient economy. The economy based on indigenous ways of production; was in a transitional phase, moving towards the advanced aspects of distribution and production. Culture and regional politics directed the way in which trade was done. The main activities of the economy were agriculture, cattle rearing and commerce. Among the three, Chanakya considered agriculture to be the most important constituent of the economy. It’s a fact today that the Indian economy of today is an agro based one. Covering various topics on administration, politics and economy, it is a book of law and a treatise on running a country which is relevant even today. People who think that the society in which we live will remain the same; are dissuading themselves of the truth. Society is a complex and dynamic system changing constantly leaving those people behind who say no to change. Broadly speaking, Chanakya dreamt of a country reaching the following levels of development in terms of ideologies and social and economic development:

Some Of His Thoughts

• A self sufficient economy which is not dependent on foreign trade.

• An egalitarian society where there are equal opportunities for all.

• Establishment of new colonies for the augmentation of resources. He also advocated the
development of the already annexed colonies. His imperialistic views can be interpreted as the development of natural and man made resources.

• According to Chanakya, the efficient management of land is essential for the development of resources. It is essential that the state keeps an eye on the occupation of excess land by the landlords and unauthorized use of land. Ideally the state should monitor the most important and vital resource – Land.

• The state should take care of agriculture at all times. Government machinery should be directed towards the implementation of projects aimed at supporting and nurturing the various processes; beginning from sowing of seeds to harvest.

• The nation should envisage to construct forts and cities. These complexes would protect the country from invasions and provide internal security. The cities would act as giant markets increasing the revenue of the state.

• Internal trade was more important to Chanakya than external trade. At each point of the entry of goods, a minimal amount of tax should be collected. The state should collect taxes at a bare minimum level, so that there is no chance of tax evasion.

• Laws of the state should be the same for all, irrespective of the person who is involved in the case. Destitute women should be protected by the society because they are the result of social exploitation and the uncouth behavior of men.

• Security of the citizens at peace time is very important because state is the only savior of the men and women who get affected only because of the negligence of the state. Antisocial elements should be kept under check along with the spies who may enter the country at any time.

• Chanakya envisioned a society where the people are not running behind material pleasures. Control over the sense organs is essential for success in any endeavor. Spiritual development is essential for the internal strength and character of the individual. Material pleasures and achievements are always secondary to the spiritual development of the society and country at large.

Lets have a full fledged discussion on Chanakya.. from Next Edition..

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Some of the Tax Tips for Salary Earners :

Some of the Tax tips for salary earners

The main aim of tax planning is to reduce the incidence of income tax on you. This becomes imperative if you are the sole earning member of your family.
Reducing Your Tax Liability
Being salaried, you can reduce the incidence of tax in two steps: Firstly, by structuring your salary in a manner that will enable you to optimally utilise all the deductions related to it.
Secondly, by making investments/payments in pre-determined avenues which offer a deduction from the total taxable income, to the extent of the investment /payment made, subject to the maximum permissible limit.
STEP 1
Minimising The Tax Liability On Your Salary Income
Here’s taking a look at the various components of your salary and the tax exemptions attached to them...

House Rent Allowance (HRA)

If you stay in a rented house and receive HRA from your employer, you can claim a tax exemption to the extent of the least of the following three: 50 per cent of your salary, if your house is situated at Mumbai, Calcutta, Delhi or Madras and 40 per cent, if it is in any other place or Actual HRA received or Rent paid less 10 per cent of the salary. Alternatively, if you are staying in your own house and you have taken a loan from a financial institution, on or after April 1, 1999, for the purpose of construction /acquisition of the house, then you can claim a deduction of up to Rs 1.5 lakh per annum from your total taxable income. If, however, you have taken the loan prior to April 1, 1999, then the deduction available is only Rs 30,000. employer (in the form of ticket restaurant coupons, etc.) do not attract tax.

Medical Reimbursement

You are eligible for a deduction of up to Rs 15,000 in the form of “medical reimbursements ” from your employer. However, in order to claim this benefit, you must produce proper vouchers, such as medical bills, certificates from your doctor, etc.

Leave Travel Allowance (LTA)

If the entire amount available under LTA is actually incurred for travel for two journeys which are undertaken in a block of four calendar years, the entire LTA component does not attract tax. However, if only a partial amount is utilised, then the balance (i.e. the LTA available less the actual expenses) will attract tax.

STEP 2

Availing Of Provisions Under Section 80
Under Section 80 of the IT Act, you can claim tax deduction from your total taxable income to the extent of the investment/payment made in certain pre-determined avenues. Here’s taking a look at some of them...

Section 80C:
This section allows you to claim a 100 per cent deduction from taxable income for any investment in or purchases of certain specified instruments up to a consolidated amount

Cash Vouchers

Non- refundable cash vouchers such as free meals provided by your of Rs 1 lakh per financial year. Some popular instruments allowed as deductions under this section include premiums paid for servicing life insurance policies, equity linked savings schemes of mutual funds, PPF and fixed deposits held with scheduled banks for a term of 5 years or more.

Section 80CCC:

This section offers a tax benefit on the servicing of pensions plans. As per the last union budget, the ceiling fixed for such deductions is Rs 1 lakh. However, there is a condition that the total deduction available to you under sections 80C, 80CCC and 80CCD (i.e. deduction in respect of contribution to pension schemes of the central government) are restricted to an aggregate of Rs 1 lakh.

Section 80D:

As per this section, premium paid towards servicing of health insurance can be deducted from your taxable income. However, this section comes with a ceiling of Rs 10,000 (Rs. 15,000 for senior citizens).

Section 80DD:

This section allows you to claim a deduction from your taxable income for expenses incurred for the medical treatment, training and rehabilitation of a dependant who has severe or ordinary disability. The benefit can be extended to specified amounts deposited in schemes framed by LIC, UTI and other identified institutions for the benefit of such dependants. Section 80DDB:
Under this section, deduction for expenses that you incur on the medical treatment of certain specified ailments is available to the extent of Rs 40,000. For senior citizens, the limit for the deduction is raised to Rs 60,000. However, if you receive any reimbursement for these medical expenses from an insurer or your employer, you have to reduce the reimbursement amount while arriving at the final deduction applicable under this section to you.

Section 80E:

This section allows you to claim a deduction for interest on loans taken for pursing higher education .
Section 80G:

Any sum that you have paid in the current financial year as donations to certain specified funds, charitable institutions, etc., can be deducted from your taxable income.

Hope this Would Help you to Save your Moner Legally. :-)

Want to Invest??? Some Options...

INVESTMENT - Different Colors Of Investment...

We've already mentioned that there are many ways to invest your money. Of course, to decide which investment vehicles are suitable for you, you need to know their characteristics and why they may be suitable for a particular investing objective.

Bonds :

Bonds Grouped under the general category called "fixed-income" securities, the term "bond" is commonly used to refer to any of these securities founded on debt. When you purchase a bond, you are lending out your money to a company or government. In return, they agree to give you interest on your money and eventually pay you back the amount you lent out.
The main attraction of bonds is their relative safety. If you are buying bonds from a stable government, your investment is virtually guaranteed (or "risk-free" in investing parlance). The safety and stability, however, come at a cost. Because there is little risk, there is little potential return. As a result, the rate of return on bonds is generally lower than other securities. The tutorial "Bond Basics" will give you more insight into these securities.

Stocks :

When you purchase stocks (or "equities" as your advisor might put it), you become a part owner of the business. This entitles you to vote at the shareholder's meeting and allows you to receive any profits that the company allocates to its owners--these profits are referred to as dividends.
While bonds provide a steady stream of income, stocks are volatile. That is, they fluctuate in value on a daily basis. When you buy a stock, you aren't guaranteed anything. Many stocks don't even pay dividends, making you any money only by increasing in value and going up in price--which might not happen.
Compared to bonds, stocks provide relatively high potential returns. Of course, there is a price for this potential: you must assume the risk of losing some or all of your investment. More information on this type of investment can be found in the tutorial "Stock Basics." After you have a grasp of what stocks are and how they function, you might want to read about how to choose them in "Guide to Stock Picking Strategies."

Mutual Funds:

A mutual fund is a collection of stocks and bonds. When you buy a mutual fund, you are pooling your money with a number of other investors, which in turn enables you (as part of a group) to pay a professional manager to select specific securities for you. Mutual funds are all set up with a specific strategy in mind, and their distinct focus can be nearly anything: large stocks, small stocks, bonds from governments, bonds from companies, stocks and bonds, stocks in certain industries, stocks in certain countries, and the list goes on.
The primary advantage of a mutual fund is that you can invest your money without needing the time or the experience in choosing investments. Theoretically, you should get a better return by giving your money to a professional than you would if you were to choose investments yourself. In reality, there are some aspects about mutual funds that you should be aware of before choosing them, but we won't discuss them here. You can, however, check out the "Mutual Fund Basics" tutorial if you'd like to explore the advantages and disadvantages of mutual funds.

Alternative Investments:

Options, Futures, FOREX, Gold, Real Estate, Etc.So, you now know about the two basic securities: equity and debt, better known as stocks and bonds. While many (if not most) investments fall into one of these two categories, there are numerous alternative vehicles, which represent the most complicated types of securities and investing strategies.
The good news is you probably don't need to worry about alternative investments at the start of your investing career. They are generally high-risk/high-reward securities that are much more speculative than plain old stocks and bonds. Yes, there is the opportunity for big profits, but they require some specialized knowledge. So if you don't know what you are doing, you could get yourself into a lot of trouble. Experts and professionals generally agree that new investors should focus on building their financial foundation before speculating. (For more on how levels of risk correspond to certain investments, check out: "Determining Risk and the Risk Pyramid.")

Calculating EMI

Hi Friends,

Here is the way you calculate your Equated Monthly Installments:

(P x r) (1 + r) n / (1 + r) n - 1

Being...
P = Principle Amount
r = Interest Rate
n = Number of Years of Loan

Example :-
P = $ 4000000
r = 15% (0.15)
n = 20 Years

= (4000000 x 0.15) (1+0.15) 20 / (1+0.15) 20- 1

= 600000 x 16.36 / 15.36

= 9816000 / 15.36

= $ 639062.5 p.a

Therefore Per month EMI would be = $ 639062.5 / 12 = $ 53255.208

Hope this would help you in understang the Concept before you go for a LOAN