Author: Chillmaadi Admin

There are several types of fees involved in buying a property, whether for the first time or as a next-time buyer. The ones discussed here are the main ones, but fees are not limited to this list:

Valuation Fee – There are three main types of valuation; a basic valuation for mortgage purposes, a homebuyers report and a full structural survey. The basic valuation is a valuation mainly for the benefit of the mortgage lender, but it will point out any defects which might either need further investigation or might adversely affect the value of the property. This type of valuation is the cheapest of the three, but still be prepared to pay a significant amount for it, and this has to be paid at the time of the application.

Arrangement Fee – These are the fees charged by some lenders for arranging the mortgage. They have risen quite drastically in recent years and can range from zero up to a couple of thousand pounds, depending on the deal. Some lenders also charge this fee as a percentage of the loan amount, so always check how the lender calculates this fee and if they do in fact charge it. Lenders usually allow this fee to be added onto the mortgage amount, but be aware, this means you’ll be paying interest on the fee and you’ll increase the loan secured against your property.

Booking Fee – This is a fee charged by some lenders for securing a particular special rate deal. It’s similar to an arrangement fee in that it can be added to the loan, but again, if you do this you’ll be paying interest on the fee. The amount of the fee can vary from lender to lender, but it’s not usually as high as an arrangement fee.

Higher Lending Charge – These are fees charged by some lenders for lending you a high loan amount compared to the value of the property (known as the Loan to Value ratio (LTV)). The typical LTV at which this charge may kick-in is 75%. This fee, once again, varies from lender to lender and can be added to the loan amount; however you will pay interest on it if you add it to the loan.

Legal Fees – These are charged by your solicitor to manage the legal side of any purchase or re-mortgage. It is possible to get mortgage deals where the lender will offer a contribution towards these fees, as long as the solicitor is approved by the lender. In the case of re-mortgages, many lenders offer to meet the full cost of the conveyancing. The cost of the conveyancing depends on the solicitor you choose however, they tend to charge on a sliding scale the more expensive the property the higher the fees will be. It’s worth checking what their charges are before you commit and it’s always preferable to use one that has been recommended to you.

Stamp Duty Land Tax – This is payable to the government on the purchase of a property and won’t be included in the cost of your legal fees. It usually depends on the value of the property being purchased and can range from zero to a small percentage of the value.

Look out for the smaller fees, eg the telegraphic transfer fee for transferring the funds from the lender to the solicitor, there’s also sometimes an insurance administration fee for not taking your buildings insurance out with the mortgage lender.

Here are some helpful pointers, and recommendations to reduce your home energy and water consumption.

1. Setting the thermostat above 78 degrees. (You could also buy a timer for your thermostat to keep the temperature up while you are at work or gone and then lower it when you are coming home.) We don’t have a timer but we are pretty careful about watching what the thermostat is set at. It really does seem to make a difference.

2. Use ceiling fans. Of course, you need to remember to turn them off when you leave a room. Closing the blinds and/or drapes can help to keep the house cooler too. We’ve installed window tinting on the windows that take the brunt of the afternoon heat. Another helpful tip is to consider planting some trees to give shade on the house. Put up trees to give shade to you home.

3. Changing the air conditioner’s filter at least once a month (or cleaning it once a month if you have an electrostatic air filter.)

4. Check the doors and windows for gaps, which will allow the cooler air to escape. Make repairs where needed. Now, proper insulation levels are important too.

5. Plan on using your microwave more and your stove less. We do this at our house. My wife usually cooks the meals in the morning, and then we reheat them for dinner. It saves time this way as well as prevents us from heating up the kitchen during the hottest part of the day.

6. Make sure you are not over watering your lawn. We have pretty strict watering requirements where we live. If there is a good bit of rainfall you can reduce watering for a couple of days.

The cost of clothes for a family of five can be quite high. There are quite a few ways to save money on clothing. Here are some of the best ways I’ve learned to save a few dollars on clothing for us and for the kids.

1. The best tip is to train yourself to think “in advance”. Last minute purchases will always cost more. Maximize your money by planning out as far as possible what your clothing needs are and then searching for those items on sale or clearance, at a garage sale or thrift store.

2. Shop for sales on clothes. I check the Sunday newspaper for sales but I also watch the local stores that I shop often for when they are clearing clothing. For the kids, I look to buy the sizes for the next year. I can find some especially good bargains when shopping the “end of season” sales. For example when the winter clothes are clearanced out, I look for stuff for my kids for the next year and purchase clothes in the sizes that they will be wearing the next year. I then put these clothes into storage bins either under their beds or in the closets. I do leave the tags on because that way they feel like they are getting new clothes! I do the same thing for shoes. I purchase the next sizes for the kids and try to make a good guess as to what sizes they will be in during the next year’s seasons. I’ve had great success using this method by shopping at Target, WalMart, Payless, Kohl’s, Dillards, JCPenny, and Sears.

3. Shop at Garage Sales. In my area, garage sales are a usually held in the Spring and the Fall. There are many neighborhoods that will have a community sale. I can usually get to 10 to 15 houses per neighborhood sale. I have found lots of great deals on kids clothes this way. Even better, when I find a lot of clothes for my kids at a Spring garage sale, I make a note of which neighborhood and which house. Then I make sure I visit that neighborhood/house at the Fall garage sales because usually their kids will have outgrown more clothes which would be just right for my own children. I even had one lady offer to call me when her child had outgrown clothes so I could see if there was anything I wanted. It was a win-win situation. I could find great clothes for my child and she would make more money than if she took her stuff to a consignment store.

4. Consignment stores and thrift stores. This method entails more time but can definitely pay off. To find the great deals you have to go often and the earlier in the morning the better. I used to make the “Saturday morning rounds” as I would call them. I could make 2 thrift stores and a consignment store in just a couple of hours. Again, I used the technique described above. I looked for sizes for the kids for the next year.

Each month I sift through my bills and wonder when I’ll stop receiving a statement from my student loan lender. When I graduated from college, I looked ahead to my future feeling confident. Then reality hit. I realized that I had thousands of dollars to pay back for my education. How would I pay it? How could I live with this debt? Would my children be heading off to college when I finally paid it off?

It’s sad to say, but I know I let that debt hold me back from making certain decisions and going different places. My dream is to make sure my daughter doesn’t have the same hefty debt hanging over her head when she begins her journey into the “real world.” It seems slightly ridiculous to think about this now when my daughter isn’t even a year old, but now 529 plans offer a way to invest for college early on a tax-free basis. Similar to how 401(k) plans help families save for retirement, 529 plans can help you save for higher education.

529 plans, legally known as “qualified tuition plans,” are sponsored by states, state agencies, or educational institutions and are authorized by Section 529 of the Internal Revenue Code. There are two types of 529 plans: pre-paid tuition plans and college savings plans. All fifty states and the District of Columbia sponsor at least one type of 529 plan.
You can choose from two types of plans, a pre-paid tuition plan or a college savings plan. Here are the major differences.

Pre-paid Tuition:

• Locks in tuition prices at eligible public and private colleges and universities
• All plans cover tuition and mandatory fees only. Some plans allow you to purchase a room and board option or use excess tuition credits for other qualified expenses.
• Most plans set lump sum and installment payments prior to purchase based on age of beneficiary and number of years of college tuition purchased.
• Many state plans guaranteed or backed by state.
• Most plans have age/grade limit for beneficiary.
• Most state plans require either owner or beneficiary of plan to be a state resident.
• Most plans have limited enrollment periods.

College Savings Plan:

• No lock on college costs.
• Covers all “qualified higher education expenses,” including: tuition, room and board, mandatory fees, books and computers.
• Many plans have contribution limits in excess of $200,000.
• No state guarantee. Most investment options are subject to market risk. Your investment options are subject to market risk. Your investment may make no profit or even decline in value.
• No age limits. Open to adults and children.
• No residency requirement. However, nonresidents may only be able to purchase some plans through financial advisers or brokers.
• Enrollment open all year.

For all too many of us we know that we should be saving for our future but we don’t. Every month we say we will start a savings account or put money away for retirement but it just never happens. We have become a materialistic society and the implications of that will be financially disastrous as we get older.

One of the easiest ways to save is to always remember one simple golden rule, “Pay yourself first”. Before you spend money on eating out, going to the movies or buying new clothes, set aside money for your future. It doesn’t have to be much, even a few dollars can add up over time. The most important thing is that you need to start saving now. Your greatest return on that savings, whether it is a savings account or a 401k plan, is going to come from the fact that returns on the money will compound over time. As you earn interest on an account or get dividends through stocks that money will add to the principle and continue to earn more returns over time.

Start out small. Make it a goal to set aside 1% of your weekly pay towards a savings instrument. To help encourage you to “pay yourself first” check with your employer to see if they offer the ability to direct deposit part of your paycheck into a savings account. Better yet, investigate your employer’s 401k plan where you will earn even greater returns on your investment. Often times employers will match contributions meaning that for every dollar you put into the account they will match it fully or a percentage of that dollar.

If you think that you don’t need to worry about starting a savings account or a retirement plan then think about this. What would happen if you were to become unemployed? What if Social Security isn’t going to be around? Are you counting on that pension plan your employer offers – what happens if they don’t offer it 10 years from now? All of these questions may seem “distant” to you now, but they can creep up on you without you realizing it. Being prepared now is better than worrying about it when (not if) they happen.

Many people will take $50 or more to a casino to gamble, yet they complain they don’t have enough money to start a savings or investment account. Maybe your dream is to hit the jackpot, but the reality is that you aren’t going to hit it. That $50 you spend at the casino every month can be worth thousands or tens of thousands down the road if you make regular, scheduled investments with that money.

The next time you are preparing the family budget take some time to find ways to start your savings plan today. Don’t worry about how little it is at first. You are taking a step, and that first step will lead to rewards that you may never have thought possible. You will be prepared for your future, no matter what life throws at you.

Understanding the working of the stock exchange is an on-going process. No one will be able to fathom its intricacies to perfection. Its discipline is known only to it. Stock market accommodates everybody but listens to none. Strength of its armor lies in its moods and trends. An investor needs to carry on with the available discipline and learn from the past mistakes. Stock market is a great college of self-education. Look, how it humbled all the analysts, brokers, bankers and the so called investment wizards in the current volatility. None could avert the impending events and millions of investors lost their life’s savings. You remember and recall the gains made by your friends. But there were occasions when they too lost much and then recouped their energies to challenge the stock market with the experience gained.

In the game of stock trading you need to be an incessant learner to save yourself from the trading mistakes. Some of them are:

1. Prediction of stock movements is a difficult task. Do not indulge in it.
2. Try to learn the timing of the market, how to enter and exit trades.
3. Apart from your own study and judgment, extensive reading of reputed stock journals, advice from at least two competitive experts before embarking upon heavy investments in a particular stock is essential. Along with the positive aspects that you have identified with the company, give serious consideration to the negative factors.
4. Have a perfect theory understanding of the fundamental concepts and working of NSE, NASDAQ, Bull and the Bear Markets and the need to quickly adjust to the developments taking place in the volatile market.
5. Mistakes in investments often happen due to impatience and the greed to make quick profits. This is not the proper way to understand and respond to the market.
6. Before the advent of the internet, tools of trade like stock results, access to instant trades, analysis tools, charts, trading trends were not available to an average investor and one had to depend on the of the brokers. Now an investor can be self-sufficient and trade independently. This means one has opportunities for the asking, and the need to learn about the possible mistakes is all the more.
7. Day trading is tempting but the chances and results of the mistakes are grim. Get associated with an active trading consultant, the expert in this area.
8. In day trading, at the end of the day, you need to come out with a clean slate, as you are not expected to hold the instruments for more than a few minutes and not at all till the end of the day. You start each day afresh. Stock market index movements are linked to the share prices in one way or the other. Just like a boatman understands the movements of small or big waves and uses the oar at the appropriate degrees, your buying and selling activities need to be guided by the short term trends in the market. This is the critical area where an investor commits mistakes. With no fixed formula to avert the mistakes, your experience and confidence are the only guiding stars for you that will lead to profits or take you to losses.
9. Do not trade beyond the limit of your liquid funds( funds available with you after providing  for  all living needs)
10. For on-line trading, a high-speed Internet connection is a must. Trades are finalized in a fraction of a second in stock market, and you miss the opportunities, if your equipments do not deliver optimum level of efficiency and speed.
11. Have a financial plan and a trading goal. Develop the habit of keeping records.
12. Remain guided by the ground realities in the market, than by your moods. Do not have unrealistic expectations.

Keep the lessons of your past mistakes in the front row of your mind, and work in the stock exchange with a positive mindset and with proper understanding of the psychology of trading.

Certain golden rules for investment in shares need to be remembered at all times under all conditions that govern the stock market. You have seen the traffic signal colors, red, amber and green–stop, look and then proceed. One visiting the stocking market for the first time or even the regular investor must remember these signs. What is profit through stocks? It is mainly cashing on the intelligence of other persons, through your intelligence. No one comes to the stock market with the intent to lose. Everyone wants the profits as quickly as possible. Many carry the feelings that the stock market is the granary of profits. Fields with ready harvest-just go and pluck the ripe fruits! You feel you are the owner of a perennial fruit-giving tree!

And suddenly there is a tempest! The ripe and unripe fruits fall to the ground. The flowers wither away…. with a loud thud, the tree crashes to the ground right in front you, as you watch helplessly. All your hopes are shattered. That was the position of the investing public when the markets crashed in 2008.

When you own the stocks, the normal expectation of even the conservative investor is to watch the company grow, receive dividend checks regularly and get periodical bonus shares. Since the industrial revolution, stocks have been important financial instruments for building wealth through a good and imaginative investment portfolio. The stocks listed in the Exchange are in thousands, the internet revolution has made it possible to trade in stocks in any part of the world.

Stocks are popular mode of investment with the common man, and most of them do not know the technicalities involved in making the investment decisions. Popular talks, deliberate misinformation, get-quick-rich mentality, belief that investment in shares is the magic answer for amassing wealth play their roles in this area. Guidance from the brokers is accepted, for the common man has no time for making detailed analysis for each and every share listed in the Exchange, but the best option is to make one’s own decisions for investment, and gradually learn the importance of timing in buying and selling shares. Selling the shares well in time to maintain the correct balance of the portfolio is as important as buying. One steeply sliding share may undo the good that has been happening to your portfolio through rises in other shares. The basic issue is, you must know what the numbers under various heads in the balance sheet of a company mean. Such a study helps you to avoid costly mistakes.

Whether it is long-term investing or short-term investing, you need to know where to begin and the amount that you are willing to invest. A good grasp of the broad perspective of the market is the fundamental requirement. With the internet revolution the exchange of information is very fast. The best company may face severe competition to its products by similar innovative products being produced in a distant country and made available with excellent market strategy.

The new technological innovations have the potentiality to wipe out a particular product from the market as the common man may discontinue using it, in preference for the new product. Granted that you have arrangements to handle your portfolio with the broker, that doesn’t mean you need to relax your guard. It is your money. Remember what happened to the market two years ago. The financial analysts, the brokers, the economists, the banking advisers, the mutual fund experts—all of them failed and the stock market played truant with millions of investors and brought their doom! Turn the pages of the history of the stock market and learn lessons how the market has been a great leveler!

If he were not a famous investor in shares, he would have been a famous author. To be frank, he is both! Warren Buffett is well-known for his quotes and one-liners, which reveal the inner joy he must be experiencing while on the serious game of investing. Buying and selling shares! He has the keen sense for doing both, for each transaction means tens of thousands of dollars for him. He recognizes the worth of each dollar that makes the millions and millions that make billionaires. He is one of richest billionaires in the world today, like of which you count with your fingers. Other billionaires have the great industrial empires behind them. As for Buffett, he is an empire by himself! His brain is the economist, analyst, think-tank, Managing Director and what not!

Luck favors the brave. The world of investing is interested to know how he chooses the stocks and why he does what he does. His way of working has become the philosophy for the investors. The best way to understand Buffet is to follow him. Buy what he buys. He is considered as a long-term investor. According to him “the best holding period fort a share is, forever”.

Some of his golden methods of investing are:

1. As Ryan Barnes says “Warren Buffett has an uncanny ability to pick the stocks with the greatest potential for growth.”
2. He has the patience and the worthy pockets that permit him to wait. Do you?
3. According to him, “the stock market is a method for transferring money from the impatient to the patient”.
4. Choose some stocks that have the latent capacity to tender more than average returns in the long run. Be not afraid of the short term market ups and downs.
5. Among the index investing and active investing which are popular in the stock trade, Buffet chooses the index investing. He doesn’t stop there. He talks about the third alternative, which makes what Buffet is! That is “focus” investing which is a specific type of portfolio strategy, which has the capacity to beat the index. This is the big canvas for Buffett.
6. Focus means, to select some stocks that are likely to produce more than average returns  from the long-term perspective, invest the substantial percentage of your investible funds  and have the fortitude to hold on to them when the market hisses and fumes, goes up and tumbles down.
7. Buffett gives top priority to the management of the company. He tracks the share price, analyzes the economics of the business it is doing, but who does the business is more important to him. It is the question of common sense. Great people will not do great mistakes. The stock of well-managed companies is bound to rise. Buffet thus, reaches out to the outstanding companies.
8. Buffett goes to find the stability of management, which according to him leads to high probability of performing better in future.
9. Buffett advocates, ‘less is more’. For the investor who doesn’t have time for deep studies and stock analysis, his advice is simple and straightforward. Find five to ten sensibly priced companies, which have the long-term competitive advantage. Study their products and the market for them. Own the stocks of a limited number of very good companies.
10. Buffett mainly focuses on consumer foods, newspapers, insurance companies and furniture stores.
11. From the point of an analyst, Buffet ensures that the debt of the companies that he is going to invest is not too high. Due to change in banking regulations, the credit squeezes, the company may have problems of raising finance for expansion. He wants the investor to have a close look at the debt to equity ratio, the current ratio and the quick ratio.
12. His great emphasis is on “holding the stocks forever”.

One final advice– Do your homework well,   before following anyone and investing.  Follow your conscience and judgment. Take a decision in ten minutes that will last for a decade.

If you wish to make good profits in the stock market, then you will need a lot of patience. Many times it’ll happen that you buy a stock and then it starts to go down. If it is a good company, then you will need to hold onto the stock till you get a profit. It could even take 6 months to 1 year to get good returns from that stock. If you lack patience then all you’d do is keep booking losses even in the good companies that are bound to give you profit in a longer term. A lot of time we buy a stock and we sell it in a loss within a week and call it a bad or stupid stock. This is not the correct way to invest your money. I personally still have some stocks in the red for several months but I’m still holding to it because I know that it is definitely going to give me good returns in future.

Holding onto your stock is very important if you wish to make profit in stock market. Investing into stock market is not a get rich quick scheme and so make sure you enter the market with a lot of patience. The rally in the stocks occur only for a few days and the rest of the time the stock consolidates. The stock consolidates for most of the time and then rallies up for a few days and then corrects a bit and consolidates again. So if you want to continue making profits with your stock, holding onto it is very important.

Lack of Patience

I sold a stock at the levels of 80 with making a mere 2 rupees profit per share because the stock wasn’t moving anywhere for months. In a matter of time, the stock rallied up to almost 120 and is now trailing around 110. If I had been a bit more patient, I would have had made a lot of money here.

With Patience

I had bought a stock around 45 and within a couple of weeks the stock had dropped to levels of 39. It was a good company and so I decided to not sell and continue to hold it. Now the stock is trading close to levels of 50. Had I sold it around 39, I wouldn’t have a chance to make the deserved profit.

So are you going to make the same mistake that I did or you will gather some patience and make good profit here?

Our markets have been performing horribly, completely under performing it’s peers and specially the west. There is hardly any buyers out in the markets due to all the negativity.

On the positive side, each fall on this market is giving a very good entry point to long term investors where one can cherry pick good quality stocks on cheap valuations and hold tight till markets rebound in future. I don’t recommend trading short term at all. A lot of people are buying into the markets for 2-3 months perspective, well please don’t. This free falling market is not the right time to buy with such a short duration. Invest into the market at current levels and using each declines to buy some more ONLY if you are going to stay invested with a long term horizon, atleast 24-36 months.

There is a lot of uncertainty in the markets and it is going to remain so lackluster for a few months more. The best part for this consolidation move in the lower levels is as each month is passing, the investors are getting their salaries from where they could fetch some money to buy good quality stocks on these prices. I shall advice investors to keep buying into good quality stocks on every declines and have a 36-60 months view, you will definitely make a lot of money. The only risk to your return is if you’re not buying into the right company. Stick to good quality stocks and avoid stocks you have no clue about.