Manage Time

Everybody has the same amount of time. Yet some people get more done in the same amount of time and some people don’t get anything done.

The truth is, that most of the people who don’t get anything done are probably lazy people who just “relax” for most of their day. Or they, are probably people who “procrastinate” a lot. These are “personal problems”. This article will NOT help you to solve these problems.

This article is written for those people, who work and work and work and work and still do not seem to get any work done. I know this sounds funny! But this is a problem that many people have. They devote their complete day to working but at the end of the day, they are not any closer to their aim. If you are one of these people, this article is for you.

If you are just “lazy”, then this article will not do any miracle for you.

The 80/20 rule of time management!

As we have already mentioned, everyone has the same amount of time. Yet some people, manage to achieve better results in a shorter period of time. Others take a much longer to achieve the same results.

Why?

The complete understanding of time management is understood if you just understand what I am about to say next!

Since you have a “finite” or “limited” amount of time, each day, use your time each day to do the “right” things. Don’t waste your time doing the “useless or wrong” things. If you just do this, you will be able to achieve results at a much faster rate!

Obviously, the next question you will ask is, what do I mean by “right” things and what do I mean by “wrong or useless” things?

One obvious answer that probably comes to your mind is that, “watching TV for 3 hours or surfing the net and reading forwarded e-mail” is an obviously “useless or wrong” activity to waste “limited” time on.

To some extent you are right. Though it is not a good idea to spend the whole day doing these things, you must relax from time to time or your ability to work will reduce. Also the quality of the work you are doing will reduce.

However, this is NOT what we really mean by “wrong or useless” work!

To understand what we mean by “wrong or useless” work, you need to understand the “80/20 rule”. If you are doing an MBA or have studied economics, you probably have already come across this rule in some form or the other.

The 80/20 rule has many different forms. However, the form that maters to us is that:
“Only 20% of all the effort you make, causes 80% of your final results!”

Please Note: The above rule is only true if you do not manage your time properly. If you do manage your time properly, then this law does not hold true for you. The law represents the "average public".

This rule tells us that we can do many many things to get the results we want, but only 20% of the things we do, actually produce 80% of our final results. The other 80% of the things we do just produces the remaining 20% of the results.

This law is almost everywhere, in business, in your personal life, in your work etc. For example:

• 80% of the world’s money is in the hands of 20% of the people
• 80% of total business sales come from 20% of your clients
• 80% of the India’s problems are caused by 20% of the total causes.

Let us try to understand this rule by taking the example of a student who wants to learn how to solve the sums in a particular chapter. Let us assume that the student has devoted 4 hours for this.

Now, the student can do many things to achieve the result he wants.

He could “learn up” all the sums in the chapter. This would probably take him more than the 4 hours he has decided to give to the task.

He might decide to “learn up” all the formulas and then practice all the sums. This might take him the complete period of the four hours.

He might decide to read and completely understand the fundamental concept behind the formulas, the derivation of the formulas and how they are applied. Then he might try to apply the formulas to a few sums until he is satisfied and that’s it! This might take around 2 hours.

This is how you must use the 80/20 rule. The above example is crude, but you do get the basic picture. When you want to achieve a particular result, there are many things you can do. But there are certain things, (the 20%) if you do them, 80% of the result you want to achieve will take care of itself!

If the above example did not clear your doubts, consider this:

Assume, that you have to convince a group 20 people to do something for you. You can achieve this result in different ways.

You could go and approach each and every person of the 20 people and convince all of them seperately. This will probably take up a huge amount of time. Another way in which you can achieve this result would be:

• Identify the leaders or the influential people in the group. Identify the people in the group who the other people follow. This will be a small number, two or three.
• Approach these people and convince them.
• Once these people are convinced, they will convince the other people.

This is another crude example. But, what needs to be understood is that, by just doing 20% of the work, you can get the result you intend. The remaining 80% of the work that you have to, is done on its own. This way, you save time and you concentrate on what really matters.

This way, you do the “right” things and the “wrong or useless” things take care of them selves. This is the key of time management.

Next time there is a particular task you want to complete, don’t just jump head on into the task. Stop. Plan. Think about the task. Locate the 20% part of the task. Most tasks have a 20%. Once you identify it, then work it. This will give you 80% of your results. This way you will end up saving on a whole lot of time.

There is much more to learn about the 80/20 theory. To really appreciate the power of the principle, we suggest you read the book "80/20 Management". You can get your self the book from ebay.in.

If you are new to ebay, do not worry, you can just sign up from here free and buy whatever you are interested in right now! It's quite easy!

Once you are signed up, search for "80/20 Management". You could then choose one of the results and buy the book!

We recommend that you buy the book from Ebay.in since it is quite safe & secure and you will get a good deal. If you are not comfortable with Credit Card payments, there are always other options like DD, money order etc. that you can go in for.

Do what you need to do!

You can do work very efficiently if you use the 80/20 rule explained in the last section. You will be able to save a whole lot of time if you identify the 20% that controls the 80%. However, to save even more time, just don’t work at all!

I know this is a little shocking. But many of the things that we do are simply “not worth doing”. What do we mean by not worth doing?

To understand that, you need to find out: What YOU want? Or :
“What result you want to achieve?”

If you are a student, you probably want to achieve a result like:
“I want 85% in my coming exams!”
Or you may have a smaller result like “I want to finish this chapter today!”

If you are a business you may want to achieve a result like:
“I want to double sales by the end of the year!”

First thing you need to do is decide: “What specific result do you want to achieve?”

Once you find this out, half the battle is won. Now, whenever you are doing a particular task, ask yourself, does this task help me to achieve “the result”? You will find that most of the tasks you do in the day, probably do not help you to achieve “the result”. Then why are you doing them?

There is nothing complicated about this. If you spend your limited time doing something that is “useless” because even if you do it, it will not help you reach “the result”, then why are you doing it? Don’t do it!

Ask your self before taking up any major time consuming activity (1 hour or above):
Will this help me reach “the result”?

Please note: You may spend some time each day “relaxing”. This is okay. You need to relax from time to time to keep the quality and speed of your work high. You may also spend some part of your day “exercising”. This is also good. These activities help you to work.

There are some activities that you do that are not directly related to “the result”. However, if you do not do them, you will not be able to work towards “the result”. For example, eating food. You might think that eating food will not help you to achieve “the result” so why should you do it? Because if you don’t do it, you will die of hunger!

Food is a very basic example, but I am sure you can differentiate between activities that must be done and must not be done.

After doing things fast by using the 80/20 rule and not doing all the things that don’t help you reach your aim, you will find there is a lot of time on your hands.

This is a short article. In this article we have not talked about "recording your time" and "making a daily schedule". These things are much easier to say than do. They are not practically possible for most people. On indiahowto.com we try to provide you with only practical "How to.." solutions that you can apply.

You may be able to form a schedule but there are a large number of “random” things that happen in every bodies day that come in the way of a schedule. This leads to certain work that was to be done in a certain period not being done because that time was used up by something that was unpredicted. Over time, work piles up due to “random” interruptions and you will find yourself with a lot of work but little time. This is the opposite of what we want from "time management".

Personal time management though scheduling is a concept of the past. It is not practical. Now, a far more flexible time management system is used. In fact, there is no “time management” anymore. There is “personal management” that concentrates more on achieving results than “managing time”.

Best Of Luck!

Create a working budget

A budget is a great way to take control of your finances and save for some goal or maybe just get out of debt.

Steps:

1. Calculate how much money you earn in a month after taxes. For this budget plan, use your net pay or take home pay. Include tips, supplementary income, side-jobs, investments etc. This is your income.
2. Figure out your expenses. The best way to do this is to save receipts for a month or even a couple weeks. Knowing how much per month you spend on groceries or gas makes the next part much easier. If you want to start writing your budget today, and don't have receipts, that's OK, it's just a bit more difficult.
3. Set your goal. Why are you going on a budget? Maybe you want to start saving for college, or maybe you want to get out of debt. Whatever your reason, define your goal clearly so you can determine if you are meeting it or not.
4. Break your budget up into some basic categories. Some categories you could use are: Housing, Food, Auto, Entertainment, Savings, Clothing, Medical, and Miscellaneous. You might want to organize your expenses into needs - such as your loan and electricity - and wants - such as clothing and entertainment.
5. List all your spending under each of these categories. Let's take Auto as an example: $300/month car payment, $100/month insurance, $250/month on gas, $50/month on maintenance, 10$/month on fees such as registration. So, your total Auto budget for the month would be $710/month. If you don't know the exact amounts you spend, try to make good estimates. The more accurate you are, the better chance your budget has of working.
6. Once you have broken down all your spending into your basic categories, add it all up. This should show your total monthly spending. Compare it to how much you make each month after taxes.
7. Obtain some kind of record-keeping method to keep track of your budget. Some people like to use computer programs like Quicken or Microsoft Money. If you prefer you could just use a good old-fashioned ledger book. You can find one at Wal-Mart for about $5.
8. Set up your ledger. Skip the first 5 or so pages for later, we'll come back to it. Divide the rest of the ledger into as many sections as you have main categories. Put each main category on the first page of each section. This will give you room for lots of entries in each category. Some categories, like food, are going to need lots of pages.
9. Decide what period of time you want your budget set up for. I found monthly to be the most useful for me, since most bills are monthly. However, I decided to make the deposits to my budget categories twice a month. In other words, if my Auto budget for the month is $710, I showed "deposits" of $355 in the Auto section on the 1st and 15th of each month.
10. Show a deposit in each category at the start of each period, then show all the expenditures from that category throughout the period. So, for Auto, you would start off with $710 for the month, then show several expenditures for gas, one expenditure for car payment, maybe one expenditure for insurance(depending on whether you pay insurance monthly or not).
11. Use that first section of the ledger book to record income and then show the budget being subtracted from it each period. For instance, I get paid every other Friday, so there are corresponding entries in the income section showing income deposits every other Friday. My budget is ~$2800/month, and gets subtracted on the 1st and 15th. So on each 1st and 15th, the income sections shows a budget subtraction of $1400.

Tips:

• The very first month you set up a budget, it's probably not going to work for you, because if you've never kept track of this stuff before, you're not going to magically know how much to put in each category. DON'T BE DISCOURAGED. The second month might be a little better, but most people don't have a good, working budget until the third or fourth month. You didn't ride a bike without training wheels the first time you tried, and you weren't Michael Schumacher the first time you got in a car, either. Practice makes perfect!
• There are occasionally pay-periods where may make some extra money, and when that happens there is a surplus! It's up to you on how to use that surplus. You could put it directly toward your goal, or you could let it sit in your bank account as an emergency fund.
• As time goes by, you will find that your original budget has some flaws. Some areas you underestimated, some areas you overestimated. Some things come up that you didn't account for at all. That's OK! Just make revisions as you get a clearer picture of your spending. Remember to keep your overall spending less than your earning so you can meet your goal.
• The first time I tried this, my spending was more than my earning, and that was without putting anything into savings! If that happens to you, do what I did: start making cuts in your spending plan. For instance, my first budget had $150/month for clothing. After making changes, I reduced my spending to $80/month for clothing. You might have to make many changes like that to be able to accomplish whatever goals you have set for your budget.
• If you keep your emergency fund in your checking (or savings!) account, it could be very difficult to avoid the temptation to spend it when you see that shiny new must-have item you've been wanting. Find a money-market account with a decent rate of return (4-5%) and check-writing privileges and you'll be ahead of the game.
• A common problem people have when making budgets is that they'll come up with an excellent plan, but then the car breaks down and the plan goes out the window. This is why you have the above-mentioned emergency fund. If you use the emergency fund money for an emergency, don't forget to budget for putting that money back next month!
• Another common problem is people see the shiny new must-have item at (insert store here) and they buy it, even though it's not on their budget. Maybe it was on sale and they couldn't pass it up! This is why it's good to have a budget category called "Blow" (or whatever you want.) No, it's not for cocaine, it's the category for impulse purchases! I highly recommend including this category.
• Don't try and begin a budget for the first month after an event in your life where money was significantly spent or saved, such as a vacation or a move, or coming into an inheritance or winning the lottery. Wait until your finances have been "in order" or at a steady pace, usually from three to six months afterwards, before starting fresh.

Buying NOTHING

In O. Henry's classic Christmas story The Gift of the Magi, Della Young sells her most prized possession, her long, beautiful hair, in order to buy her husband, Jim, a Christmas present. The present she chooses is a chain for Jim's heirloom pocket watch, the only valuable thing he owns. When she presents her gift to Jim, she discovers that he has sold his watch in order to buy a set of ornate combs for her beautiful locks. Is there a lesson in here for us? The lesson is you don't have to buy anything to be happy. Here's how to resist the urge to splurge.

Steps:

1. Examine your spending habits. Are your buying decisions motivated by your own values or by advertisements? Don't be influenced by consumerism and an obsession with spending.
2. Stay home. If you don't need to shop, don't go shopping simply because you are bored. Don't use shopping as a recreation or amusement.
3. Leave the money at home. The easiest way to not buy anything is simply not to take any cash, checks, debit cards, or credit cards with you when you go out. At most, take a small amount of cash with you for emergencies.
4. Avoid plastic. Try putting your credit card in a container with some water and freezing it. That way you have it for holidays and emergencies but not just to go buy stuff.
5. Buy used. If you really need something and haven't been able to beg, borrow, or dumpster-dive it, go to a thrift shop and get one for pennies on the dollar. Online auctions and yard sales are also good, although there is still the temptation to buy "stuff" you don't really need.
6. Pay cash. Studies show the average person spends less when paying with cash and much more when paying with credit, possibly because when you use a credit card it feels as though you are not parting with "real" money.
7. Make a budget and stick to it. Don't treat your budget like a New Year's resolution. While creating and sticking to a budget requires self-control, it's a really good way to get your finances under control and avoid accumulating a pile of crippling debts and a bunch of worthless crap in the process of destroying your self-respect.
8. Make a list and stick to it. Make purchasing decisions at home, where your needs are apparent, instead of in stores where shelves full of other products will distract and entice you. A list can also help you postpone and consider purchases and consolidate trips out.
9. Ask yourself some questions. Will I use this every day? Will I use it enough for it to be worth buying? How many hours did I have to work to pay for this? Employ the 3-month forecast. Ask yourself if you'll still be using the product regularly in 3 months. If you have lived this long without it, do you really need it? If you move frequently, contemplate whether this purchase is really worth hauling around each time you move. If you don't, ask yourself if it's worth sacrificing some of your precious living space to own it.
10. Repair, don't replace. If you shopped carefully and got good service out of something, don't assume you have to replace it when it breaks. A good repair shop might be able to restore it to "near-new" condition for less than the cost of a replacement, and you won't be adding to the landfill problem.
11. Try to get things you need or want for free. In a surprising number of cases you can get whatever you need without spending a dime.
    
    
    • Check local "free sales". Visit websites such as freecycle, Freesharing,Sharing is Givingor craigslist. These sites are so useful precisely because so many people buy things they don't need or replace perfectly good things with similar but newer things. You can decide to be smarter than that.
    • Borrow. If you need a product for just a short time, why not borrow someone else's? There's no shame in borrowing as long as you are willing to reciprocate when someone needs to borrow something of yours.
    • Try bartering. Your past extravagances have probably left you with a lot of things you no longer need, but which other people may want. Experience some of the gains from trade that economists are always talking about.
12. Oh, my! This would look nice in the bathroom.
    Avoid shopping malls, if possible. If you need to purchase something, go to a store that sells that thing. Don't automatically head for the mall, where you'll likely get lured into buying things you don't need. If you go to the mall just to hang out with your friends, consider finding new hobbies, or new friends. If you have to walk through a shopping mall to get to a restaurant or a movie theater, keep yourself engrossed in conversation (either with yourself or your companions) so that you don't focus on your surroundings. Concentrate on where you are going, but pay no attention to the stores along the way.
13. Use the buddy system. If you go out with friends, you may find that you enjoy yourselves so much that you don't even feel like buying anything. You could all make a pact to prevent purchases. It's kind of like a 12-step program to escape the consumer culture.
14. Avoid unnecessary upgrades. Yes, that new toaster has a little chime and can toast eight slices at once, but seriously, how often do you need eight slices of toast at once? Our consumer culture pressures people to replace perfectly good products with newer products for silly reasons, like fashion. Remember, an avocado-colored oven works just as well as one that's mango-colored.
15. Buy for durability. If you decide to purchase something, choose something that won't wear out, or won't wear out quickly. Also avoid purchasing items that will go out of fashion. Think through how you will use the item and how your choice will meet your needs for as long as possible. Thinking in the long term, a more durable item costing 30% more up front will still save you money if you can use it twice as long.
16. Buy for easy compatibility. If you really like an item, think carefully about how well it will work with what you have already. Maybe a clothing item is fresh and flattering, but if it doesn't coordinate well with at least two or three pieces you own, you'll either get limited use out of it, or worse, you may 'need' to buy more to use it at all.
17. Use the "Rule of 7." If something you want is over 7 dollars, wait 7 days and ask 7 trusted people whether this is a good purchase. Then buy it if you still think it is a good idea. This rule will curtail impulse buying. As you get more financially secure and have a larger disposable income, you can gradually increase the threshold upward from 7 dollars.
18. Make gifts for people. Use your own skills (or learn a new skill) to make gifts that people will remember long after they've forgotten store-bought presents. Don't forget that gifts needn't be wrapped. You can make a gift of time or skills, too. Remember the lesson of The Gift of the Magi: it really is the thought that counts. Money can't buy you happiness or self-respect or any friends worth having.
19. Tax yourself. Every time you make a purchase over $10 (or $50 or whatever limit you choose), take 10% of the price and put it into your savings or your investments. This way, you discourage yourself from buying something just because the item is "marked down" or "a bargain" and boost your financial security every time you make a significant purchase. If you use a debit card or a credit card, try using one that has a savings program, American Express offers a card with a savings account and Bank of America offers their "Keep The Change" program to automatically transfer money into your savings account.
20. Grow your own food. If you have even a small garden, it's easy to grow your own food.

Tips:

• Read books such as Why We Buy, so you understand retailer tactics that are used to get people to buy things they do not need. Get the books at the library; no need to buy them!
• If you have children, bring them with you when you shop. Ask them to remind you to think twice when you pick up an item. Have them say "Do we really need that?" or "Can we really afford that?" This tip helps you AND teaches your children the value of properly managing their spending. Use common sense. Young children, especially, could become scared if you ask them to regulate your behavior. Children can sense how stressful a topic money can be, and sometimes find it scary and confusing.
• Can't think of any place to hang out but the mall? Try visiting a friend, taking a walk on a nature trail, going to a free concert or event, or playing at the park. Your life will be richer in more ways than one if you eschew shopping malls.
• Instead of renting movies, check your local library. Many libraries offer a wide selection of movies for free. While you're there, check out their other offerings, too. Remember, libraries are nice places to hang out in and reading is free.
• If you're really weak-willed, freeze your credit cards in a coffee can full of water so you will have to thaw them out before you use them. Or if you have a trusted neighbor, put your credit cards in safekeeping with them, explaining to them you're trying to limit your spending. Chances are you won't be able to face them to ask for your cards if you don't have a compelling reason.
• "Buy Nothing Day" is November 23, 2007, in North America and November 24th elsewhere. Participate by not joining in the mad and often mindless holiday shopping rush on that day.
• Buy second hand! That way you'll save money and spare the environment by reducing waste, also more likely than not you'll support a charitable organization.

Buy a flat

For most people, buying a flat is one of the biggest buys they make in their life. It involves a huge amount of money. When you put in so much money, you want to be sure that you are making the right decisions and not doing anything wrong. That is exactly what this article will help you with.

The actual process of buying a flat is not very complicated. Even if you do not understand it, your seller will be more than happy to explain each and every thing to you. The difficult part is, knowing that you are not being "fooled" or "conned" by someone. This guide will give you all the possible tips and tricks you should keep in mind so that you can make your decision wisely. We hope you find it helpful.

Please Note: This guide is designed to help people who are interested in buying flats in brand new constructions as well as already existing buildings. Some of the points may not be applicable to you depending on the kind of flat you are buying.

When choosing the location of your flat, you must consider these questions:

Is there a “daily market” from which you can buy fruits and vegetables near-by?

Is there a doctor’s clinic or hospital nearby?

If you and your family relies on public transport, is there a buss stop, railway station etc. close-by?

If you have small children, is there a playground, park, garden etc. close-by?

What about post offices, banks etc.?

Does the area have proper drainage, sewage and water supply?

Is there a regular system for garbage disposal in your area?

What about schools, collages, offices? How far are they from the location?

What will the daily transport cost be?

What is the pollution and noise situation in the area?

How is the neighborhood? Is it a safe place to raise children?

It would be best if you choose a flat that satisfies your needs and also suits your life style. You could use these questions to guide you:

What is the age of the people who will be living in the flat? If they are old, you might want to choose a flat that is on the ground floor or first floor?

If the flat is on a high floor, is there a lift service available in the building?

Does the lift service have a generator backup?

If you choose a flat on the first or ground floor, you must consider the possibility of floods affecting the area!

How are the flats in the society arranged? Is there privacy or can everyone see into your house?

When people are talking in the flat next to yours, can you hear it in your flat? This would mean that your conversations too will not be private!

How are the windows of the flat arranged? Does enough sunlight come into the house?

Is there enough ventilation?

What are the amenities the society is providing?

Are there too many corridors in the apartment? You will be paying on basis of area. Corridors eat up room-area!

Ideally, there should be at lest one common toilet so that the visitors do not have to enter your bedroom to use your bathroom.

The kitchen, dining room and entrance should be close to each other. This ensures easy serving of food to guests etc…

Ideally, the building design should include “curtain walling”. It is required to protect against “seepage” problems!

Check the heights of railings, distance between each railing etc. from the point of view of safety of children.

The builder might tend to design the flat such that the bathroom is close to the kitchen. This is done to reduce plumbing costs. But this tends to clutter up the house and reduces the ventilation of other rooms of the house. Make sure that this is not the case.

Try to draw the furniture on the ground and see how much space is left free. Is the house too cluttered?

It would be a good idea to check up on the quality of construction before you go in for a particular project. Let the following points guide you:

You need to check up on the reputation of the “promoter”, “contractor” and “architect” of the construction. Visit other projects by them. Try to find problems and faults in their construction by talking to people.

One of the most important criteria is the cement being used in the construction. Try to check up often, though surprise visits about the type of cement being used. Ask the builder about this? Ask him to explain why he feels the particular cement being used is the best…

Check up on the thickness of the external walls. If they are 6-inches walls, it is not a very stable construction. A 9-inch wall is always better.

You must ask for a 'performance guarantee' clause or at least a 'structural liability' clause in the sale agreement. This will insure that the builder remains liable for any defect in the building for at least one to three years from the day he hands over possession to you.

Having used all the above given points, let us assume that you have finally found your dream house. Now, comes the question of paying for it. Most people will go in for a home loan…

There are many different companies that are providing home loans. There are many different offers and features. How do you decide what loan you should go in for? To help you answer that, here are a few things you might want to consider….

Best way to compare offers: Go to the different institutions providing housing loans and ask them to calculate and give you the “net” amount of money you will have to pay over 10-Yrs and the “net” amount of money you will have to pay over 20-Yrs. When we say “net” we mean that the money includes everything, the administration, processing and all other possible fees. Note all the different rates that all the different organizations give. This will give you the best idea about the different rates.

You will also have to choose between a 10-Yr or 20-Yr loan. A 20-Yr loan will mean lower EMI (equal monthly installments) but probably a higher interest rate. In the long run, you'll be paying more for your house because you will be making more interest payments.

With a 10-year loan, the EMI will be higher but the interest rate lower; thus you'll pay less for your house because it will be paid off in a shorter period of time. You will have to decide what suites your needs.

Find out about “processing fees”, “administration charges” and the “quantum of loan”. Get each institution to provide you with a written statement of all fees. Then, ask to reduce one or more of the fees. Use the lowest fees you to negotiate with other institutions. (Don’t be shy. Seriously!) You must negotiate.

If a sales person asks you to include false information on your home loan application to get quick approval, do not agree to this. Also don’t get confused into borrowing more money than you need or can afford.

A lot of Income Tax savings are possible with home loans. The Income Tax saved can be used to pay the EMI. So do not loose out on the income tax saving oppertunities.

Ideally, you should choose the bank which does not require a "guarantor" and offers home loans without "pre-payment penalty" (or a penalty for repaying loan before it is due). This helps you re-pay your loan as early as possible.

The following documents will be required if you approach an institution with a home loan request. Try to take these documents along with you. If you show them that you are a serious buyer, they are more likely to be open to negotiations:

If you are a Salaried Employee:

1. The latest salary slip showing statutory deductions
2. Form 16 (showing tax deducted at source by employer)
3. Proof of age (birth certificate/voter identity card/passport/school-leaving certificate/valid driving licence)
4. Proof of residence (phone bill/electricity bill/ration card)

If you are Self-employed:

1. Computation of income for the previous two years, certified by a Chartered Accountant
2. Profit & Loss Account and Balance Sheet for the previous two years, certified by a Chartered Accountant
3. Proof of age (birth certificate/voter identity card/passport/school-leaving certificate/valid driving licence)
4. Proof of residence (phone bill/electricity bill/ration card)

Choosing "fixed" or "floating" interest rate!

Just incase you are not sure about what these mean, let us explain them first. A "fixed" rate would be a rate that would be set right at the beginning when you apply for the loan. Suppose you apply for the loan and choose a “pure fixed” rate, then if the rate of interest is 9% at the time of application, it will remain 9% for the complete period of the loan.

This could be good if the interest rates increase during the period for which you are paying the loan. This could be bad if the interest rates reduce during the period for which you are paying the loan. But, if you want a safe option, then you should go for this.

However, there is another version of “fixed” interest rates. These are “semi fixed”. This means that the interest rates remain the same for 3 or 5 years. And at the end of every 3 or 5 years, the interest rates are changed again. If you decide to go in for “fixed” rates, be very clear about the kind of “fixed” rates you are choosing.

In the case of “floating” interest rates, the interest rates change depending on basis of some other external interest rate. For example, some banks decide the “floating” interest rate on basis of their fixed deposit interest rate. And the fixed deposit interest rate generally depends on the market.

However, in some banks, the “floating” rate may depend on some "internal interest rate" that is not market dependent. This is as good as a “fixed” interest rate. It will just give an impression of a “floating” rate. So, make sure you know what the “floating” rate is dependent on, when you go for it.

Now a days, some banks even allow you to split your loan amount and pay part of it on the “fixed” and the other part on basis of the “floating” rate. Ask about this. Also ask whether there is a way to switch from “fixed” to “floating” interest rates in the middle of the tenure. If that is possible, you should be constantly vigilant of changes and make switches appropriately for getting the best rate!

Basically, the choice of “fixed” or “floating” rate depends on your situation and how much risk you can take.

Keep these few things in mind. If you are not clear about the procedure of taking a loan, do not worry about that. Just go to a institution, and tell them you want a home loan, they will be more than happy to tell you everything you want to know!

Before you short-list a particular property, you need to make sure that the land on which the property is being built, is free of any legal problems. If you do not do this, a few years down the line, in a Govt. drive to remove illegal property, your home may be destroyed. So it is better to be safe than sorry.

The first thing you need to check, is the "permitted use of the land" in the government records. Land CANNOT be used for real estate, unless it is "buildable" land as per government records.

You should ALSO get your lawyer to find out from the land registration office whether the land has been sold or mortgaged to other parties, or whether any other fact has been left undisclosed by the owner of the land.

If the land area is more than 500 sq. m. check with the builder on whether he has obtained the "ULC Clearance" for development on the land.

Make sure that all the required property taxes to the municipality departments are properly paid and up-to-date! Ask the builder to provide you with the receipt of the latest tax payments to make sure that they are being payed.

Inquiries should also be made in various departments of the municipality to find out whether any notices or problems relating to the property have been issued and not yet satisfied by the builder. Finally, it should be checked whether the property in the name of the seller according to government and municipal records.

Any land that is clear from all these issues mentioned above would be an ideal site for building.

There is a simpler way to go about all of this investigation. You see, most municipal authorities seek "clearances" and "no objection certificates" from the relevant departments before sanctioning a building plan. So, if a promoter/builder is able to show you a sanctioned building plan, this could indicate that the land is free from legal issues. However, of course, some bribery etc.. may have been used to obtain the sanction of the building plan. So to be really sure you should investigate yourself.

But, if you do not want to take the trouble, at least ask the builder to produce the sanctioned building plan!

Finding out how much the flat will cost you...

Flats are generally priced on basis of area. But, how much area? What area? We shall discuss the way this area is calculated and how flats are priced here...

Saleable/ super built-up area: Carpet area is defined as "the net usable area measured from the inner faces of wall to wall". However, the trend nowadays is to calculate area on the basis of built-up area or "super built-up/saleable area".

Built-up area is the net area of a flat, including space covered by the wall thickness. This is generally 15% more than the carpet area of a flat. This are also includes the "common spaces area".

There are two types of "common spaces" area:

1. Common Spaces on each floor
2. Common spaces in the building

Common spaces on each floor:
The staircases, lobby, lift, etc. on the floor are to be divided "proportionately" among the flats on the particular floor. For example, a building may have four flats per floor with different built-up areas. The built-up areas of the four flats may be 1000, 2000, 3000 and 4000 sq. ft. It means that the proportionate shares of floor space among the four flats are 10%, 20%, 30% and 40%.

Now, if the area of staircase, lobby, lift, etc., is 100 sq. ft. then it should be shared among the four flats as per the proportion of floor space enjoyed by them. So, out of 100 sq. ft., 40 sq. ft. goes to the 4000 sq. ft. flat, 30 sq. ft. to the 3000 sq. ft. flat and so on. Therefore, the gross area of the four flats on a floor becomes 1010 sq. ft., 2020 sq. ft., 3030 sq. ft. and 4040 sq. ft. respectively.

If this is too complicated, just remember that if you have a bigger flat, you have to pay for more of the common space on each floor. If you have a smaller flat, you have to play for less of the common space on each floor.

Common spaces in the building:
Every apartment building must have a lobby, a staircase, a pump room, an electrical room, etc., at the ground level. There must also be one or more stair-room at the terrace level and sometimes, also a lift machine room. All these areas should be proportionately divided among all the flats.

So, "Super built up area" = built up area + common spaces on each floor + common spaces in the building all together!

Now, generally, when calculating the cost of the flat, you are charged on the basis of per square feet of super built up area.

Other costs...

You will have to pay a "stamp duty" of 6% to 12% of the total cost of the sale. Besides that, you will also have to pay around 1% as registration fees. All these will increase the total cost you pay, so they must be considered.

There will also be "maintainance costs", property taxes...and many other minor things. So, when calculating how much you can afford to spend, calculate all these things. Also when negotiating with the seller, negotiate on the basis of these things and ask the seller to give you a complete break up of all the prices involved.

After everything else is done....

After you find out how much the property costs you, after you negotiate over the price, it would be a good idea to take down all your negotiations "in writing" from the seller. If the seller has promised certain things like parking, a certain rate per square foot etc., take all that down in writing. Do not rely on the "seller's promise".

The next step is to prepare the "agreement of sale". Basically it is a agreement that covers everything you have negotiated and decided and other legal formalities...

If the seller insists on drafting the agreement, get it checked properly by your lawyer. There may be certain loop holes in the agreement because of which you may end up in trouble. You could also draft the agreement though your lawyer. Once the agreement is ready and accepted by you and the seller, you need to officially get the flat to be transfered to your name though the "registration" of the agreement though the Govt. Sub-Registar in your city. Pay the money and the flat is yours.

This process is a little more "long-drawn" than it seems by reading the above paragraph. However, it is not too complicated and you can easily ask your lawyer to help you with the process. What is more important is that you keep in mind the points discussed in the previous pages about the choice of flat, home lones etc.

Best Of Luck!

Make cheap International calls

Technology not only makes the world smaller; it makes it cheaper too. Making international calls from your landline or your mobile is still still expensive. For frequent callers here are a few cheaper options.

These are pre-paid cards that allow the user to make international calls even from an STD- or ISD-barred landline or mobile phone for lower rates. The user needs to buy the card, which has a hidden pin number, follow instructions printed on the card and then the ones on the voice mail.

The calls are charged to a separate account. Higher the card denomination, more is the talktime and lower the rates (see Talking Value). For example, a call to the US would cost Rs 1.75-1.99 a minute through a calling card, and as much as Rs 6.40 per minute on the mobile phone.

Internet telephony

If you have an Internet connection, you can download a messenger service and speak to anyone connected by Net. Of course, there are the Internet usage charges. This uses a technology called Voice over Internet Protocol (VoIP) and is essentially a PC to PC calling solution.

However, service providers have schemes where you can make calls from your PC to landline or mobile at nominal rates. For this you need to download the software and pay your bills via credit card. You would also need a computer with adequate system requirements and a good (preferably broadband) Internet connection.

Skype

The leader in this space has many dedicated users. "It's been a great help in connecting to friends and colleagues abroad," says Saptarshi Roy Chaudhury, a search engine optimisation consultant who uses Skype almost everyday to call professional contacts abroad.

"The higher your Internet speed, the better is the call quality. If you are on a slow connection, the time lag between words will be high and the calls might drop as well," he adds. Skype allows users to make unlimited (10,000 minutes) calls to 34 countries worldwide at euro 10.29 (Rs 657)/month. (For details see www.skype.com.)

Save Enough money

You might have read W. Somerset Maugham's classic short story, The Ant and the Grasshopper. In the story, Maugham, the master storyteller, turns the wisdom from an Aesop's Fable on its head.

The fable talked of how an ant that labours through the summer preparing for winter ends up a winner instead of the grasshopper who does nothing to prepare for the harsh months ahead. In Maugham's short story, Tom, the carefree but proverbial black sheep of his family, constantly gets into trouble only to be bailed out by his hardworking brother George.

Tom beats his brother's predictions of ending up in a gutter when he marries a rich lady, who, on death, leaves him a fortune, making him a winner and his brother a perpetually sulking loser. When it comes to real life, especially saving for the future, we all know that it is the fable's moral that works. The boring, but diligent, Georges triumph in the end.

How much should you save?

Whether you save regularly or irregularly, a question often comes visiting: "Am I saving enough?" Saving the right amount is crucial for at least two major reasons.

First, it is only when you save money that you can invest in options such as fixed deposits, public provident fund, stocks, mutual funds, real estate and gold to create a future income for meeting small and large requirements, such as the education and marriage of your children and your retirement.

Second, while it is necessary to prepare for the future, current needs also have to be taken care of. Equally important, we would like to have a life and enjoy it with our families.

But the problem is that beyond a point, the more you live it up, lesser are the chances of accumulating enough savings for a minimum decent standard of living in the future.

Clearly, drawing a balance between the present and future holds the key. The good news for you is that the balance is achievable if you follow certain rules that we present here.

We, at Outlook Money, crunched numbers to give you an indicative idea of how three kinds of people -- those who start early, in their 20s (Early Birds), those who begin in their 30s (Late Bloomers), and finally, those who first reach for a piggybank in their 40s (Final Chargers) -- should save at various life stages.

The savings thumb rules

The Early Birds. When it comes to savings, the early birds have an advantage over those who are off the blocks late. They manage to save a decent pile for all their requirements with much lesser fuss. If you start saving from the age of 25, when you are likely to be in your first job, you can begin with saving 10 per cent of your net income (post-tax income) till the age of 30, by which time you are likely to be married.

If your savings horse proceeds even at a canter in this period, marked often by the absence of familial responsibilities, you will need lesser abstinence to save later, when responsibilities increase.

Step up your savings to 20 per cent in your 30s, 30 per cent in your 40s, and finally, to 50 per cent in your 50s. With this, you would have clocked a very healthy 30 per cent since age 25. Not a bad deal, is it?

Our assumptions for this as well as other categories are: income is net of taxes; partial withdrawals are made from savings for house down payment, education and marriage of children and for lifestyle needs; and average salary increments of 15 per cent take place.

Importantly, 30 per cent of the income at the time of retirement is earned in the 60s, after retirement, from jobs or assignments, and work life finally ceases at the age of 70, something already happening in urban India.

We have also assumed that the entire corpus is invested at 7 per cent and the surplus of the resulting income flow over current needs is reinvested in index funds that return 12 per cent a year.

Another assumption is that the corpus is liquidated at the rate of 6 per cent per annum starting from age 70. This gives a cushion if the person lives till the age of 90, or leaves an inheritance for the next generation.

The retirement money will be reinvested at 12 per cent per annum and will not be used fully till the expected life of 90 years. A portion of it will be left as a cushion, or for bequeathing.

Late Bloomers. Life is not rocket science. Circumstances might have prevented you from keeping your promise to yourself to start the savings journey early -- a super specialisation qualification that had to be completed, or a doctorate that took too much time, younger siblings who needed your support, or simply failure in meeting the right person to get married.

Such people need to start their savings vehicle in the second, if not the third gear. Assuming you start at age 35, you can begin this game of catch up by saving 30 per cent of your post-tax income till 40, zoom up to 40 per cent in your 40s and press the gas pedal further by saving 50 per cent in the 50s, till the chequered flag of the retirement finishing line looms up. You end up saving 42 per cent of your net income during the period.

Final Chargers. If you haven't been saving till age 45, you better hear the last and final call for the savings flight. Till age 50, you will have to jet at 40 per cent of your net income, followed by 50 per cent of net income in your 50s.

This will enable you to clock an average savings rate of 47 per cent, or almost half of what you get during this period.

Why you need to step up savings with age. The savings rates are higher for people who start saving later in life because the early risers get the benefit of compounding. This also spares them the agony of denying themselves in the present in order to provide for the future.

At the same time, you need to step up savings as you move on in life. At the beginning of your work life, you do well to even cover your expenses. At this point, a small but consistent amount of savings is crucial. Often, taking some practical steps is all it needs.

By the time you get married, your income has risen, but so have the costs, as you get down to setting up your own establishment, which, among other things, often involves taking loans for big-ticket items such as cars and consumer durables.

This stage typically lasts till your mid-30s or early 40s, after which your income simply pulls away from your expenses. The reason is that expenses don't grow as fast at this stage and, in many cases, the growth slows down. This is also the time when your savings should be the maximum and get invested.

In your 50s, you could have to bear big expenses such as higher education and marriage of children, besides relocation preparations for retirement. But the rise in your income with salary increments and investment income will let you continue saving.

You can also step on the gas when the big-ticket expenses get over and reinvest the residual savings.

Why saving enough is half the job done

You can save a lot and yet be forced to be miserly when you need money. This slip between the cup and the lip can happen if you haven't invested your savings in the appropriate order to give it the right opportunity to grow.

On an average, Indians are saving more, but the savings are getting invested in lower risk-lower return options such as FDs and mandatory retirement funds such as provident fund and life insurance. Some investments of this sort happen by default. Employees' Provident Fund is a case in point, where 12 per cent of your basic pay gets stashed away every month.

Besides, the risk averseness of many Indian investors, lack of awareness of options that bring higher returns, absence of quality financial advice and, sometimes, simply lethargy makes people invest money in their savings account in fixed deposits of the same bank.

This is despite the fact that equities have been found to be providing the best returns among all asset classes -- 18 per cent compounded annual growth rate (CAGR) since 1979. For instance, if Rs 1 lakh (100,,000) was invested in the Sensex, a PPF and a 5-year bank fixed deposit in 1982, today you would get Rs 55.12 lakh (5.512 million), Rs 7.69 lakh (769,000) and Rs 15.07 lakh (1.507 million), respectively.

Thumb rules for equity investing

Thumb rule No. 1: (100 minus your age). If equity is the best bet for brisk growth of our savings, then the logical question is how much should we invest in them either directly or via mutual funds?

The standard rule of thumb to determine your ideal equity exposure is a simple formula that suggests you subtract your age from 100. For example, if you are 35, then 100-35 or 65 per cent of your portfolio should be exposed to equity.

While this can be taken as an indicative formula, it would not, of course, be applicable to everybody at every point in their lives. For example, if you are a 30-year-old and part of a double income family with one young child, you could put in 70 per cent of your investments into the market.

However, if due to a sudden turn of events, you also have to provide for dependent parents and siblings, you should change your allocation and tweak down your equity exposure.

Thumb rule No. 2: Keep debt-equity proportion constant. If the age-based thumb rule does not apply to you, use a tactical allocation thumb rule. Here, you start off by investing, say, 60 per cent in equities and 40 per cent in debt, and continue keeping the ratio constant at all times.

If you find at the end of the year that equities have done well, you should trim your equity exposure in the next year, the assumption being that there is likelihood of a market downturn. However, in times of a long-running bull market, like the one we have been witnessing, this strategy may not be ideal.

Thumb rule No. 3: Factor in the trend. This thumb rule on trend-based asset allocation is the opposite of the previous one. The assumption in this one is that if the stockmarkets are going up, then that is the trend of the cycle, and you should enhance your equity exposure for the next year. Of course, trends could change and you might be trapped with a high equity exposure in a falling market.

How to follow the thumb rules. Since the thumb rules tend to contradict each other, you can adopt the following approach. Use the '100 minus age' formula if there is nothing exceptionally different in your profile and the assumptions fit you.

Keep that as the guiding number, and tweak it upwards or downwards depending on your specific circumstances. If you are in your mid-30s and single, you could invest more than 70 per cent in equities. If you are 60 and do not see yourself retiring for another eight years, you could invest more than 40 per cent.

How many mutual funds are enough?

Once you decide how much money you should place in equity, you need to figure out how much to keep in equity mutual funds and how much in stocks, if at all. Then, you will also have to figure out how many equity funds and stocks to buy.

The truth is that there is no magic number, though the number of funds in your portfolio should give you adequate diversification without making your returns suffer. Let's first examine mutual funds and then stocks.

How many mutual funds? You can target up to about 10 equity mutual funds. Apart from 10 being an easy number to track, academicians like J.L. Evans and S.H. Archer have shown in their research that most of the risk reduction due to diversification takes place in an aggregation of 8-10 securities.

Which categories of mutual funds? Typically, if you're venturing into equities for the first time, you can start with an exchange-traded fund (ETF). ETFs are low-cost cousins of index funds and invest in all the securities that lie in their benchmark index in the same proportion in which the index has them.

ETFs don't have risks associated with fund managers. They aim to give you returns in line with the market, so you don't lose or gain more than what the market does. Says Mumbai-based financial planner Jayant Pai: "It's not possible for active funds to outperform the market on a continuous basis. ETFs ensure that your returns are at least in line with the market." One ETF tracking a large-cap index like Nifty or Sensex should do fine.

Diversified equity funds. One ETF in your equity portfolio can be supplemented by a couple of diversified mutual funds, including equity-linked savings schemes. This will form the core of your portfolio and provide a baseline of expected growth.

As diversified equity funds invest in around 30-50 or in an even higher number of scrips, chances are the same scrip will feature in more than one fund if you have too many funds in your portfolio. Also, ensure that these schemes are different in styles. For instance, Franklin India Bluechip and SBI [Get Quote] Bluechip are similar in objectives, so it does not make sense to have both in your portfolio.

Mid-cap funds and thematic funds. You can supplement your core funds with higher growth investment options. One of them is mid-cap funds. Though there are 26 mid-cap funds in the market, almost all of them target the same universe of stocks and there are negligible differences among them.

Then, there are thematic funds that invest according to a theme, such as infrastructure. You can invest in one mid-cap and one thematic fund.

How many stocks are enough?

After gaining equity experience through equity mutual funds, you can invest directly in stocks. Financial planners believe there isn't much merit in holding top-line equities as they would be anyway present in your mutual funds.

"Target some good, small companies that your funds may not have," says Pai. Although Nifty has 50 scrips and Sensex has 30 scrips, you don't need to hold as many, as tracking would be a problem then. Here, too, 10 sounds like a decent number. "Ensure that these 10 scrips are from different sectors," adds Pai.

Winning the savings game is about succeeding in providing for the future without losing out on your present. It is here that thumb rules serve as great guideposts. They show a happy middle path that lies between the ways of the ant and the grasshopper. In the end, you still win.