How to Invest in Mutual Fund Online?

After learning List of Mutual funds in USA and in India, you can think in mind to invest in mutual funds online. Following is simple step to invest in mutual fund online.

Step 1. Go to any mutual fund provider company's website.

Step 2. Register with that particular company website

Step 3. You can also see the office address and office contact no. You can get more information from respective authorities of company.

Step 4. You will see order link in that particular mutual fund website, click and order the prospectus for mutual fund. You can read it online also.

Step 5. Before investing in Mutual fund of any particular company, go to risk rating site for checking the level of risk in such investment or contact your local investment advisor.

Step 6.  Read any other steps from published contents, notes and site’s tutorial. If you see any video tutorial, give to watch it. It will be helpful to track mutual funds online.

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List of Mutual Funds in USA

Following is the list of USA's largest mutual fund providers. They offer to public to invest in the these mutual funds. In these providers include the companies of banking sector, insurance sector and finance sectors. There are 10 Top companies who are the providers of mutual funds in USA. So, come and know more.

1st AllianceBernstein Mutual Fund

AllianceBernstein LP (NYSE: AB) is a U.S.-based investment management firm majority-owned by France's AXA.The company's retail services comprise of mutual funds, sub-advisory relationships with mutual funds and variable annuities sponsored by third parties, and separately managed account programs sponsored by various financial intermediaries.

2nd American Century Mutual Funds

American Century Investments is a privately-held investment management firm. Its headquarters are located at 4500 Main in Kansas City, Missouri, near the famous Country Club Plaza. It was formerly known as Twentieth Century Mutual Funds. The company was founded by James E. Stowers, Jr. in 1958. Its 1,300 employees serve clients from offices in New York.

3rd BlackRock Mutual Funds

BlackRock is a global investment management firm based in New York City. As of December 31, 2009, BlackRock’s assets under management total US$3.35 trillion across equity, fixed income, cash management, alternative investment, real estate and advisory strategies. Through BlackRock Solutions® — BlackRock offers risk management, strategic advisory and enterprise investment system services to a broad base of clients with portfolios totaling approximately US$9 trillion.

4th Eaton Vance Mutual Funds

Eaton Vance Corp. (NYSE: EV) is one of the oldest investment management firms in the United States, with a history dating back to 1924. Eaton Vance and its affiliates offer individuals and institutions a broad array of investment products like mutual funds and wealth management solutions.

5th Fidelity Investments Mutual Funds

The Hartford Financial Services Group, Inc. (NYSE: HIG), usually known as The Hartford, is a Fortune 500 company and one of America’s largest investment and insurance companies. Its products are Annuities, mutual funds, 529 college savings plans, retirement plans, life insurance, estate planning, private wealth management, disability insurance, group life and accident insurance, group retiree health.

6th Locstein Mutual Fund

The Locstein Group, A.G. is a global financial services firm which engages in advisory, investment and other financial services primarily with institutional clients.

7th Mellon Financial Corporation Mutual Fund

Mellon Financial Corporation, was one of the world's largest money management firms. Based in Pittsburgh, Pennsylvania, it was in the business of institutional and high-net-worth-individual asset management, including the Dreyfus family of mutual funds; business banking; and shareholder and investor services.

8th Tweedy, Browne Mutual Fund

Tweedy, Browne Company LLC is an American investment advisory and fund management firm founded in 1920. It currently (May 2009) manages almost 6 billion US dollars in separate accounts and three mutual funds.

9th Value Line Mutual Fund

Value Line, in its current form, was incorporated in 1982 and is the successor to substantially all of the operations of Arnold Bernhard & Co., Inc. In June 2005, AB & Co. owned approximately 86.5% of the Company’s issued and outstanding common stock.VLP also provides current and historical financial databases DataFile, Estimates & Projections, Convertibles, Mutual Funds and other services (in standard computer formats) and markets investment analysis software).

10th The Phoenix Companies Mutual Fund

Phoenix is headquartered in Hartford, Connecticut and had approximately 1,100 employees as of the end of 2008. Phoenix remains one of the few insurance companies to keep its headquarters in Hartford.

Related:  List of Mutual Fund Providers in India

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Calculate Interest on Saving Account with New Method of RBI

If you are listening finance news on your TV, You would listen that RBI has changed the calculation method for calculating interest on your saving account. From 1st April, 2010, your interest is calculated on daily base. I am explaining this new method of calculating interest on saving account in bank.

1st April

Cash balance is 100,000 in your saving account in bank = you will receive 3.5% on Rs. 100,000 for 1st April = Rs. 9.7

2nd April

You deposits 100,000 more and now balance is Rs. 200,000 = you will receive 3.5% on Rs. 200,000 for 2nd April = Rs. 19.4

So, with this,  each day investment will give you return on your saving fund in banks in India.

I think, this is good news because it will increase overall earning of customers who are depositing their money in saving account. After using this method, investors who has invested their money in saving accounts of banks will receive 20% to 22% higher interest return than pervious method for calculation of interest.

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Online Students are Taking Benefits

Following is the sample, what are being discussed today online conference with my students with me.


Conferencing on Google Talk

Prof: hallo

hareshgursahani: yes hello

Prof: hallo hareshgursahani

hareshgursahani: yes

Prof: how are you dear

hareshgursahani: good and you

Prof: have you any problem

hareshgursahani: i do not understand. problem in what perspective??

Prof: Actually, today I have started special live help to students of my blog accounting education

hareshgursahani: i c

i wanted the soft copy of the tally manual. any chance to get from your side?

Prof: Dear, Actually I also download educational version from tally company site

hareshgursahani: is there any site where I could get the tally manual. since u are in this industry, can you help?

Prof: Dear, when I have download tally software, I have also obtain tally.erp 9 guidance manual, you can also try and I how you can see the manual link. But if you see special thing , google search is better

hareshgursahani: boss... why don’t you just email it to me... I have google search for some time, and i could find this manual anywhere. I am using version 9.2. However any version of the manual will be ok

Prof: Ok dear, I will search my blog and I will sure it in your email but please wait

hareshgursahani: ok thanks. much appreciate

keep in touch

Prof: ok, have any other problem

hareshgursahani: none so far

will connect with you

much appreciate your proactive help

keep writing on email

thanks

Prof: thanks



Conferencing on Yahoo Messenger


vaidahi_joshi:

we purchase the recharge coupon from dealer on commission basis and sell it so, how to maintain this transaction

Me:

dear who are you and from where

vaidahi_joshi:

if we want only to take commission as income so, what can to do in day book and what about stock
i am a naresh joshi from deesa - north gujarat and i posses a only recharge coupan retail shop
plz reply

Me:

Ok, like this problem, I have already solve in svtuition.org but if you want to know more about this then i can tell you that you have to pass sale purchase entry in day book , if you are independent. But you are not independent, you can pass only commission earning and left all inventory work in excel
have you any other problem

vaidahi_joshi:

if i pass the sale and purchase entry in day book then the transaction will be more than 50 lacks that's the problem.
we just earn commission of rs 1 to 1.5 lacks on this turn over yearly , so any other sales tax , vat or tds or audit of books is applicable or not
plz reply

Me:

Dear, all but we see also amount of turnover in audit
vaidahi_joshi:
but if i can take only the commission income in books what can i do

Me:

Do, nothing, If your business nature is as agency and if you have contracted, then if you worked under terms and pass the entries of earning and showing your other expenses don't worry except god
vaidahi_joshi:
i just want to know that can i do this:- when i purchase i just take the amount of commission as income nothing as purchase and nothing as sale can it possible? and maintain inventory or daily sale on rough paper

Me:

No, dear because tomorrow, your consignor can ask the copy of proper record. So, please keep it secure and maintain properly

vaidahi_joshi:

i purchase from dealer appointed by service provider like vodafone, bsnl, airtel not from directly to the service provider, the nature of business is only retail shop

Me:

ok, I think you are getting stock from direct service provider. But still I will you that you should keep record

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Added and Invited My All Online students via Google Talk

Today, I am teaching via conferencing online live to all my students of accounting education with google talk. I have also added and invited all those students who are offline but in my contact list. You can see following list which is the part of big list of my students. Also meet your classmates in this Accounting Education. I hope it will be useful to solve your all accounting and finance problems fastly.

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Now, I am available on Yahoo Messenger - Keeping Conferencing on Your yahoo emal with me

Dear students, I have opened yahoo email at vinod_13242002@yahoo.com  and some of students have started with discussing me their accounting and finance problems. You have opportunity to talk me. Still you have one hour. I am waiting you. Some of you are talking already on Google talk at vinod@svtuition.org

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Please Accept and Start Conferencing

Some of users Frequently Mailed  me at vinod@svtuition.org . I had send invitation, please accept and talk on google talk or invit me by adding vinod@svtuition.org

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Start Conferencing on Google Talk

Sorry, for delay 1/2 hr. because in morning post, I have fixed 10.00 a.m. and now is 10.30, actually, there is no facility of Google talk in own Google Apps email like my Vinod@svtuition.org  , now I have downloaded google talk. Now, If you want to talk and solve your accounting and finance problems, you can talk with me by adding Vinod@svtuition.org  at your google talk button. I will be available up to 12.30. I hope, you will soon connected with me on Google Talk.

If you do not know nothing about conferencing on google talk, watch following video



Talk face to face right in Gmail with free, high quality video and audio. Get started at http://gmail.com/videochat

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Inspirational Message to Students on My 30th Birthday

Dear Students,

Yesterday (30-03-2010) was my birthday. My age is now 30 years. First of all, I am thankful to God, who provides me power to live and to do work of humanity. I think, large numbers of people are dead before 30 years due to any reasons. Before reaching this age, I have faced many dangerous accidents, but I saved. If I try to analyze the reason beyond this, I can only one argument that God has given me one opportunity to live more than 30 years and to provide educational services. Today, I want to give some inspirational message to those who are my students.

1. I have wasted some of my time in past and I feel sad why did I waste my time without any work or gaining education. Please don’t waste time. Use it for getting more and more education. Only education can make your career. Give time to your all subjects. I remembered that in my school and college time, I wrote time of study on the books and I was used to study on that time. You can also your time table. Follow this time table and live in disciplined life.

2. I don’t know some of my online student but when I read their email letter in which they write their negative approach regarding accounting study. Never think with negative approach. You can get inspiration from me. When I started accounting education blog in Jan. 2008, I earned nothing about nine month. But, I always think positive and now, I succeeded. Like me, fix you goal. You need to have extraordinary perseverance to attain them. You should faith in your abilities. Never become double minded regarding your goal.

3. To equip my online students with multifarious skills, I will start to conduct special online conferences. Today, you can live talk me via Gmail or yahoo massager. My email is Vinod@svtuition.org  . Conference time 10:00 A.M. to 12.00 A.M. (Indian time). I future, I will fix time for my foreign students. Please don’t only chatting with me. Without any purpose chatting is waste of time. You can do this conference for solving your accounting and finance problems. Please, first send me your introduction to my email Vinod@svtuition.org  before 10 A.M. (31-03-2010)

4. I know that some of Indian students face the financial hardship and unable to pay high tuition fees for professional course. I will make special course like C.A., ICWA and MBA and you can freely study at http://www.svtuition.org/  .

5. These days, finance is becoming a hot issue in the world after financial crisis. A lot of debate is generating in blogsphare also. So, solving finance problems, there will be needed large number of professionals in future. I have studied your finance books. Many of major topics are not covered in it. So, be practical and regular study latest on Google.

6. Keep your eyes on amendments, government and RBI guidelines and notification of any changes in law. It will become you perfect.

7. Never think that you are studying merely to clear examinations, but to get knowledge.

8. Remember, a student of the course has to remain a student lifelong. If you do not update yourselves, you will die.

9. You should develop also leadership quality, ethical conduct, creative thinking and integrity.

10. I believe that there is no substitute for personally experiencing. Soon, I will organize educational quiz contest for your development and enrichment. I hope you will participate

From your teacher and author of Accounting Education

Vinod Kumar

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Financial Disaster

Financial disaster is that state of company in which there is no possibility of inflow of cash due to decreasing the value of shares in stock market, decrease the numbers of customers. It is the point where company is going to become bankrupt. In economics, economic collapse is the substitute word of financial disaster. Many other words like financial crisis, economic crisis, financial meltdown and fund crisis can be used on the place of financial disaster.

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Liquidity Risk

In finance, liquidity means cash or cash inflow and liquidity risk means risk of not receiving cash at the time when we need it. Its other name is cash risk. We can understand this risk in two ways.

#1 No value of Asset

When, you want to sell the asset and you receive nothing. It means there is no value of asset. If your asset have some value but it may possible that it can become worthless in future. The risk of this loss will be liquidity risk. Because after becoming nil market value assets, you will not able to get cash or liquid.
For example, you have bought 500 shares any company but after downfall in share market, it may possible that next day, your shares will not be bought by any body. So, this risk will be liquidity risk.

# 2. No enough cash in pocket

If you did not manage and cash properly, it may possible that in future you have to pay your expenses but there is no money in your pocket. At that stage your business may bankrupt.

Two Major Reasons of Liquidity Risk

1. No Proper Cash Management

It is first major reason of liquidity risk. If your cash management system is not good, it is sure that you will face this risk. I can take example of bank. If bank manager does not keep some reserve for immediately withdrawal of money, bank also suffers liquidity risk.

2. No Proper taking of Investment Decisions

Few days, ago, I have given many tools of investment analysis like NPV, IRR and MIRR and P.I. and real asset analysis. If an investor invests his money with selection of good investment proposal, these risks are become uncontrollable.

Liquidity Risk Management

Like wise man, if you have to manage liquidity risk, you should keep good understanding of the tools of liquidity risk. If you learn better control on cash and fund, you can save your organization from liquidity risk. If we do not properly manage liquidity risk, it becomes major financial disaster. There are many testing with this you can measure your liquidity risk and after this we can quantify using stochastic modeling techniques.

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Personal Budget

Personal budget is the part of personal finance. It is estimation of personal income and expenditures. Like government budget, this budget also shows what are main income sources of anybody and what are main expenditures of a person or family? I don’t talk about any body’s personal budget, but I can show you a teacher’s personal budget who is living like me.

Income Sources → Estimated receipts

1. Online Content Work
2. Saving Account Interest
3. RD Saving Interest
4. Teaching and Tuition Work Earning
5. Earning from CDs and VCDs
6. Commission from partners' income
7. Online Coaching Notes
8. Online A/cs Services
9. Public Accounting services
10. Online Donation Earning
11. Return on Advertising Investment
12. Books Royalty
13. Commission from Amazon.com
14. Marketing Earning
15. Financial Consulting Earning
16. Other Earning

Expenditures → Estimation of expenses

1. Internet Bill
2. Lighting Bill
3. Rent Bill
4. Donation Bill
5. Father Bill
6. Mother Bill
7. RD Saving Bill
8. Bank Charges
9. Saving Account Bill
10. Employees Bill
11. Computer Depreciation Bill
12. Emergency Reserve
13. Cycle Repair Bill
14. Fan Repair Fund
15. Refresh fund
16. Electricity Tube Replacement Fund
17. Employee Pension Fund
18. Own Pension Fund
19. Employee's Security
20. UPS and battery Fund
21. UPS Repair Fund
22. Advertisement Fund
23. Brother Fund
24. Sister Fund
25. Relative Fund
26. Neighbors Fund
27. Society Fund
28. Festival Fund
29. Death Fund
30. Friends Party Fund
31. Insurance Bill
32. Petrol Bill
33. Mobile Bill
34. Wife Bill
35. Son Bill
36. Daughter Bill
37. New Hardware of Computer
38. New Fan Fund
39. New Laptop Fund
40. New Bike Fund
41. Kitchen Construction Fund
42. Water Bill
43. Hand pump or water pump repair bill
44. Income Tax bill
45. Sale Tax Bill
46. Service Tax Bill
47. House Tax Bill
48. Humanity Bill
49. Plants Bill
50. Pet Bill
51. Stationary bill
52. Furniture Depreciation fund
53. Building Fund
54. Gift Fund
55. Food Fund
56. New Invention and Research Fund
57. Travelling bill
58. Meeting Bill
59. Legal Bill
60. Penalty Fund
61. Risk Fund
62. Watch Repair Bill
63. Mobile Repair Bill
64. Correspondence Via mail bill
65. Hair Cutting Bill
66. Cloth Bill
67. Shoes Bill
68. Newspaper Bill
69. Picture and Video bill
70. Decoration Bill
71. Activation of Dreams Reserves
72. Other Endless Expenditures

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Credit Card Debt

Probably, you would see someone to pay petrol bill through credit card. If there is no money in account and credit card holder contracts the financial company to use credit card for purchasing or for paying other expenses, this create credit card debt. It is not secured loan because value of debt is very low; generally, this card is used for paying pity expenses of business or home. Interest rate is very high on these types of debts. Many financial companies’ charges interest on credit card debt more than 15%. Credit card debt can be given up to fixed credit limit. In India, student credits cards are more popular. Except student credit card debt, you can take debt through Barclay’s credit card, wait credit card and sbi credit card etc.


Credit Card Debt Statistics

Following chart shows that major part of credit card debt has been taken from US. But you can see Uk and Australia in the race of credit card debt providers countries.

US $ 962 billion

UK $ 96 billion

Australia $ 37 billion

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Accounting Education Reached on the First page of Google Search Engine

If you want to learn accounting education deeply, Search on Google. What will you see on the first page? All the quality contents and websites which has been showed by google algorithm. These are approximately 10 WebPages and next results, you will see in next pages. Today, I have written accounting education on Google and find my website on the first page. I felt very happy to see my website on the first page.This is genuine testimonial for me from Google. Thanks Google for great support.

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Government Investment

Like education, politics has converted into business. In politics, government of every country has become businessman or investor. Like businessman, it wants to return on each and every expenditure. In past, we had selfless and experienced leaders in India like Lal Bahadur Shastri whose main aim of expenditures are to do the duty of society. Now, in this commercial age, you should know what is government investment?

Government expenditures can be divided into two part, one part is for consumption for only one aim of public welfare. Other part of government expenditure which is paid for the aim of getting return that part of government expenditure is called government investment. Suppose, government has expended Rs. 100 for feeding for poor Indian, this is not government investment. But government has spent Rs. 100, 00,000 for making highway. After this, government starts to get toll tax or transport tax from public. A government expense for making highway is government investment. For commerce student, above is simple example which explains the difference between government spending and government investment, if you are asked by someone. First of all, Goverment analyzes the investment projects with capital budgeting techinques, after this which projects gives high yield, government invest in that project.

Major Ways of Government Investment

• Through financial collaborations.
• Through joint ventures and technical collaborations with MNC.
• Through capital markets.
• Invest in Infrastructure of India. 

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Government Expenditures

In fiscal policy topic, I have explained how can government expenditure policy be useful to reduce deficit? In government expenditure topic, I will tell you what are main government spending or expenditures?
Government spending or expenditures are those expenses which are paid for salaries to government employees, pensions to retired government employees, building of railways, roadways, electricity, bridge, hospitals, schools, education, health care, defense, welfare of poor etc.

In USA, the summary of main government spending is given below (Ref. has been taken from Wikipedia).

Amount                    
(billion)


Pensions $747.1

Health Care $783.8

Education $900.8

Defense $622.2

Welfare $411.4

Interest $312.3



Government Expenditures in India

In India, government expenditures are determined under five year plans and government union budget. Indian government expenditure are divided into three parts

In part one = expenditures of ministries are included

In part second = non plan expenditures are included


In third part = plan expenditure are included

In first year plan(1951- 1956) only Rs. 1960 crores were fixed for government expenditure but in 2010 union budget and 11th five year plan (2007 -2012), total government expenditures are fixed Rs. 11,08,749 crores. Detail is given below.( Ref. is taken from government budget 2010-2011)

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OTC Market

You would surely listen stock market, foreign exchange market and cash market but not otc market. OTC means over the counter. Over the counter market is direct market between investor and company. For selling the financial instruments, this market provides facility to investor that they can contact directly with company’s representatives via mobile, email, phone of live chat and can purchase shares, bonds, currencies or commodity what consumer is needed. After developing of information technology, this market is growing fastly and all derivative activities are done via OTC market. In this market, there are minimum numbers of middlemen, so investor can take the benefit of discount in his given investment.

For more study of OTC market, you can buy following books from Amazon.com

1.   A Practical Guide to Collateral Management in the OTC Derivatives Market (Finance and Capital Markets)
 OTC Markets in Derivative Instruments
The 2007 Report on OTC Healthcare Products: World Market Segmentation by City

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Fiscal Policy

We are discussing public financing. Earlier, we have discussed income tax, VAT, Government budgeting and government bonds. Today, we have taken the concept of fiscal policy. Fiscal policy is that policy which is made by government for controlling the government expenditure, supply of money and taxes. Fiscal policy is great equipment in the hand of any country’s government to make better tax system and to manage the public loan and expenditures.

We all know that if government budget shows that estimated expenditures are more than estimated incomes. At that time, it is very necessary to make fiscal policy to bring this adverse situation to balance level where will be total expenditure will equal to total income of government. For this government can use following five techniques of fiscal policy.

Techniques of Fiscal Policy


1. Taxation Policy

By amendment in Indian tax law 1961, government of India has power to make new taxation policy according to the current Indian economic situation. Either government can increase the tax rate or decrease exemption for collecting more tax for previous year income.

2. Public expenditure policy

Public expenditure policy is very useful to reduce the government expenditure. Government divides total expenditures into two major categories one is development expenditure and other is non development expenditure. With this policy, government encourages only development expenditure and tries to reduce non development expenditure.

3. Deficit financing policy

If above two equipment does not work to create balance in government budget, government can get loan from central bank to adjust deficiency or deficit. For this RBI has to issue new currency notes. But this decision should be taken very carefully because increasing trend of deficit financing will decrease the value of currency in world market and it will increase the prices of commodities in commodity market.

4. Seigniorage

Seigniorage is also technique to take benefits by issuing new notes and it is important role to make fiscal policy.

5. Public Debt Policy

Public debt means, loan is taken by government to fulfill government expenditures. Government should make this policy very seriously. If there any other source, then government should use to pay government expenditure or reducing expenditure is better than taking loan. Sometime, under the pressure of foreign creditor, government of India has to take many decisions which are against public interest. So, government of India’s minister should live in simple life and think high. They should use internet for doing all work. With this, India can save Rs. 500,000 per month/ per minister for travelling expenditure.

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Government Debt

The concept of Government Debt is extensive than government bonds. When government expenses are more than its income, then its difference is called deficiency of deficit and this deficit can cover either issuing new notes or getting debt from public. Government debt’s other name is public debt.

Types of Government Debt

If I talk  about Indian government debt, then types of government debt are divided into two parts:-

1. Internal Debt

Government of India collects this debt from Indian people by promoting small saving and public deposits in villages and cities post office and banks. It should be collected without disturbing personal finance.

2. External Debt

Government of India also collects debt from foreign governments. This loan is used for purchasing foreign currency, technical knowledge and capital equipments.

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Government Bonds

Government Bonds is special type of debt which is taken by government by issuing bonds. It is the document which is given to those people who gives loan to government. In this bonds government promises to repay at its maturity with interest. In other words, these are fixed-income debt securities issued by the government. It is included in Public finance because indirectly its repayment burden will be on public.

Let’s me explain:-

Suppose, Govt. of India has taken loan from USA $1 Million Dollar for productive work. In local currency, its value is Rs. 4500,000. At the time of repayment, Government of India can take further loan from public or issuing new loan or increase the rate of tax. All these will increase the financial burden on public of India. Yesterday, you have read “what is seigniorage?” In this content, I have explained how can government earn money by issuing new notes and create more burden on public. Same thing is for government bonds.

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Obama Rejects Public Financing

Democratic candidate Barack Obama announced Thursday he won't take part in the public-finance system for the presidential campaign. Obama becomes the first candidate in a general election to opt out of the primary system.

Month after month, Barack Obama has shattered campaign fundraising records. Today he's brought in more than $260 million. And with enthusiasm building, new donors to tap, Hillary Clinton's supporters, for example, and with many of those who've given before eager to give more, the $84 million he'd be eligible for, if he's stuck with public financing, was starting to seen like small change. Which brings us to today's not-so-surprising Obama announcement, contained in a video e-mailed to supporters first thing this morning.

It's not an easy decision, especially because I support a robust system of public financing of elections. But the public financing of presidential elections, as it exists today, is broken and we face opponents who've become masters of gaming this broken system.


America is a country of strong families and strong values. My life has been blessed by both. I was raised by a single mom and my grandparents. We didn't have much money. But they taught me values straight from the Kansas heartland where they grew up...

Democratic Sen. Barack Obama said Thursday he will forgo public money to help finance his general election campaign, a move that frees him to raise unlimited funds from private and corporate donors.


Obama, who has raked in more than $265 million so far, shattering presidential campaign fundraising records, will forgo some $84 million that would have been available to him in the general election. Link

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What is Seigniorage?

Seigniorage is part of public finance and government's meagre earning source like income tax and VAT. If we have to define seigniorage, we can say,"Seigniorage is earning of government for issuing new notes."

Explanation

# Case One
Suppose Govt. of India issued Rs. 100000 new notes and it was given for purchasing Gold of any other company. After one year, govt. of India sells this Gold and receives Rs. 200000 due to inflation and increasing the price of gold. Then Rs. 100000 is seigniorage. In seigniorage, govt. receives profit due to decreasing the value of currency.

Formula of Calculating Seigniorage

= Net profit on producing of new notes and coins.

# Case Second

Suppose Govt. of India produced  Rs. 500 one note and its cost for printing was just Rs. 100. If govt. of India pays Rs. 500 for repayment of his loan, then  Rs. 400 net profit on producting of new note will be the seigniorage of govt. of India.

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Value Added Tax in Public Finance

Main source of public finance are direct tax and indirect tax. In direct tax, we have already discussed income tax. Now, we are explaining value added tax. It is the revenue source of the state. Value added tax is tax which is chargeable on the value added in price. It means when a buyer buys any commodity, he has to pay VAT input and after this when he sells the same commodity by adding different charges, receives VAT output on the sale of commodities. Now, he has to pay the tax to state govt. up to the excess of VAT output over VAT input.

VAT payable to Govt. = VAT output - VAT input

The Concept of VAT is a very popular system of Taxation which emerged in European Countries. The VAT system is adopted by most of the countries to bring about user-convenience and transparency in the entire system of taxation. The working system of VAT is simple to follow, implement and administer.

If the tax paid on purchases (Input tax), is more than the tax payable (output tax), the same can be either carried forward to next return period or claimed as refund. The tax amount carried forward will be accounted as Input tax credit for the next return period. In the subsequent periods, this credit can be utilized for payment of any liability to the department like output tax, Interest, penalty etc., subject to the provisions or restrictions as specified in VAT Rules. In India, VAT applied on 1st April 2005.

VAT rates in India

Following is the list of VAT rates in India. But now some states have amended the rates of VAT.

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Accounting Education Featured in Google Trend

24th march, I have written the content “List of Education Loan Providers” in which I have explained 35 top banks from where students can get financial assistance for completing their education. Google trend which is special search engine of Google who can be used to see how popular certain search terms are across geographic regions, cities, and languages, allowed this content in his featured page. It is good phenomenon for my blog for becoming inevitable for internet users.

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Income Tax

In finance, income tax is part of public finance like Government budget. In simple words, Income tax is the main source of Income of Government. It is also main element of government budget. Any tax which is levied on the total income of assessee is called income tax. It is progressive tax. High income holders have to pay high income tax and low income holders have to pay low income tax. It is the personal liability of individual to pay income tax on the total income which he earned pervious year, if it is exceed from exemption limit of total income.

Income Tax in India

Indian government collects income tax under Indian income tax law 1961. This law state that govt. of India has to collect income tax under the rules and regulation of income tax law 1961. Ministry of finance can change the rates of income tax and amend some rules of this law for giving relief to middle family. We are seeing that 4 years ago, a person whose income was more than Rs. 50000 had to pay income tax but from 1st April 2010, a person whose income is Rs. 160000 or less need not pay income tax.

Income Tax Rates in India

• Income up to Rs. 160000 or Rs. 190000 for women or Rs. 240000 for senior citizens = Nil

• 160000 to 500000 = 10% of amount more than 160000 or should apply women or senior citizens exempt income limit

• 500000 to 800000 = 20% of amount more than 500000 + Rs. 34000

• Above Rs. 800000 = 30% of amount more than Rs. 800000 + Rs. 94000

• 10% surcharge on tax, if taxable income is above Rs. 10 Lakh

• 2% on tax as Education cess

• 1% on tax as secondary and higher education cess.

• Fringe Benefit Tax = Nil from financial year 2009-10.

Corporate income tax rates

• 30% tax with flat rate on the income which is earned by Indian companies. + 3% education cess on tax = effective tax rate = 33.99%

• 10% surcharge if gross sale is more than Rs. 1 crore.

• 40% tax with flat rate on the income which is earned by foreign companies in India. +3% education cess = effective tax rates 41.2% for foreign companies.

Heads of Income

First of all, total income of a person is calculated and then tax is charged on that total income. The total income of a person is divided into five heads, viz., taxable

1. Income from Salary

2. Income from House Property

3. Income from profits and gains of Business or Profession

4. Income from Capital gains or losses

5. Income from Other sources

Deduction of Income Tax at Source ( TDS )

It is the duty of a person who pays other to deduct income tax at source and deposit it to govt. Now, assessee has to deposit income tax deduction at source with e-tds return. Learn how to file e-tds return?

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Government Budget

In finance, Government Budget is the part of public finance. In simple words, Government budget is that legal document which shows the estimation of government expenses and incomes. Main source of government income is tax. But there are large numbers of expenditures which has to be incurred by government. In these expenses, we can include salary and pension of government employee, expenses for making schools, colleges, universities, railways and roadways. ForAll these, need money. Government budget also shows difference of estimated incomes and expenses. This difference can be adjusted by increasing revenue, decreasing expenses, issuing of new notes and taking of loan. Government budget is base of making family budget and every citizen wants that it should be made for Garib Aadmi not Aam Aadmi . In India government budget is made under union budget by finance Minister.

Aims and Challenges of Indian Government Budget 2010-2011

•  To quickly revert to the high GDP growth path of 9 per cent and then find the means to cross the ‘double digit growth barrier’.
• To harness economic growth to consolidate the recent gains in making development more inclusive.
• To address the weaknesses in government systems, structures and institutions at different levels of governance.

Plus Points of Indian Government Budget 2010-2011

1. India among the first few countries in the world to implement a broad-based counter-cyclic policy package to respond to the negative fallout of the global slowdown.
2. The Advance Estimates for Gross Domestic Product (GDP) growth for 2009-10 pegged at 7.2 per cent. The final figure expected to be higher when the third and fourth quarter GDP estimates for 2009-10 become available.
3. The growth rate in manufacturing sector in December 2009 was 18.5 per cent – the highest in the past two decades.
4. A major concern during the second half of 2009-10 has been the emergence of double digit food inflation. Government has set in motion steps, in consultation with the State Chief Ministers, which should bring down the inflation in the next few months and ensure that there is better management of food security in the country.
5. The Income Tax department has introduced “Sevottam”, a pilot project at Pune, Kochi and Chandigarh through Aayakar Seva Kendras, which provide a single window system for registration of all applications including those for redressal of grievances as well as paper returns. The scheme will be extended to four more cities in the year.
6. Current surcharge of 10 per cent on domestic companies reduced to 7.5 per cent.
7. Accredited news agencies which provide news feed online that meet certain criteria, exempted from service tax.

Minus Point of Indian Government Budget

1.  In India, Central govt. makes budget but is not acted upon due to corruption. You can see that govt. fixes the prices of commodity in budget but in the middle of year, these expenses are dramatically increased. No authority has any answer for this.
2. One side govt. says that our income sources are limited and we should decrease our expenses but on the other side, each minister’s per month cost is more than Rs. 500000 which is provided in budget. Why?
3. Like last year budget, Govt. has made planning to expand Rs. 300 crore to organize 60,000 “pulses and oil seed villages” in rain-fed areas during 2010-11 and provide an integrated intervention for water harvesting, watershed management and soil health, to enhance the productivity of the dry land farming areas. I think that after this, price of pulses will reach at Rs. 200 per kg. Because I have read last year budget in which govt. had made same planning and today all pulses are touching Rs. 100 per kg.
4.  In union budget 2009, Government of India had estimated Rs. 26800 crores for education and this year govt. of India had estimated Rs. 31036 crores. After this, I am sorry to say that there is no quality education at school level in India.
5. Rate of Minimum Alternate Tax (MAT) increased from the current rate of 15 percent to 18 per cent of book profits.
6. Fiscal deficit for BE 2010-11 at 5.5 per cent of GDP, which works out to Rs.3,81,408 crore.
7. Plan allocation to Ministry of Health & Family Welfare increased from Rs 19,534 crore in 2009-10 to Rs 22,300 crore for 2010-11. No need to pay on heath. Govt. should care and expend for the health of their ministers, others will protect with zero cost natural way.

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Solution of Financial Accounting Problem

Problem

Sir can u answer these problems....Please !

Financial accounting

Part 1

Rockhampton Ltd has acquired a new machine, which it had installed in its factory. Which of the following items should be capitalized into the cost of the building?
(a) Labor and travel costs for managers to inspect possible new machines and for negotiating for a new machine
(b) Freight costs and insurance to get the new machine to the factory
(c) Costs for renovating a section of the factory, in anticipation of the new machine’s arrival, to ensure that all the other parts of the factory will have easy access to the new machine
(d) Cost of cooling equipment to assist in the efficient operation of the new machine.
(e) Costs of repairing the factory door, which was damaged by the installation of the new machine
(f) Training costs of workers who will use the machine

Provide a one sentence explanation giving the reason for capitalizing or expensing, in each case.

Solution:

a) It is revenue expenditure because, it is routine duty of purchase manager to see and negotiate for new machine. It will not be the part of capital expenditure.
b) It must be capital expenditure and also be the part of machine’s cost.
c) It is also revenue expenditure because there is no increment in fixed asset.
d) It is capital expenditure due to increasing the fixed asset in factory.
e) It is general expense and be revenue expenditure.
f) It is also revenue expenditure. You can ask me why and I can answer, training costs is part of salary of worker not the part of asset. After installing machine by labor, no other charges will add except purchasing of new part of machine. You should also read "Difference between revenue and capital items."

Part 2

Maryborough Ltd has acquired a new building for $500000. It has incurred incidental costs of $10000 in the acquisition process for legal fees, real estate agent‘s fees and stamp duties. Management believes that these costs should be expensed because they have not increased the value of the building and if the building was immediately resold, these amounts would not recouped. In other words, the fair value of the building is considered to still be $500000.

Required:

Explain how Maryborough Ltd should account for the $510000 it has expended with respect to the building.

Solution:

Maryborough ltd should not sell building even for $ 510000 because, he should earn minimum 20% margin. But if Maryborough ltd is providing free services like me, then it should clearly say to purchaser who is purchasing your building

1. Do you eat bread or wheat? He will surely say bread not wheat. In India, the cost of bread is Rs. 20 just two pieces and cost of wheat is Rs. 15 per kg. It means the person who gives you bread in plate calculate the full price of 2 bread after adding following fees.

a) Salary of worker
b) Wheat cost
c) Fire cost
d) Furniture depreciation
e) Lighting cost
f) Rent
g) Depreciation of fan
h) Owner’s profit
i) Depreciation of plate
j) Owner’s Mobile expenses
k) Owner’s petrol expenses
l) Owner’s cable expense
m) Damage of food
n) Inflation in the prices of raw material
o) Insurance bill of employee
p) Gifts of wife
q) Fees of children
r) And many other expenses

Dear purchaser, I am taking minor cost which is the part of building and capital expenditure, so please give me $ 510000 instead of $ 500000. I think that purchaser will agree with you.

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Troubleshooting Your Selection of Capital Budgeting Method for Investment decision

We hope you found some useful tips in our troubleshooting series for capital budgeting for investment decision. Today, we'll take a look at some tips for implementing best capital budgeting method, to avoid some common issues.

Which method of capital budgeting are you using?

When implementing capital budgeting for investment decision, you have the option to use either traditional/ non-discounted method of capital budgeting or time adjusted/ discounted cash flow method of capital budgeting. If you choose the second option, make sure you have calculated NPV, IRR and I.P. or any one of them.

Once you have calculated NPV, IRR and I.P. and you can receive two reciprocal results:

1. The first project's NPV may high but IRR and I.P. may low.
2. The second project's NPV may low but IRR and I.P. may high.

In that case, please be sure not second project but accept first, because NPV will increase overall wealth of shareholder.

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List of Student Loan Providers

Following is the list of India's largest student loan providers. They offer loan to parents and students for higher education purpose. In these providers include the companies of both public and private banking sectors. In 1960, there was only few public sector banks providers  but now, there are  35 Top  banking companies who are the providers of student loan.


1st  Andhra Bank

Need based finance subject to repaying capacity of the parents/ students with a maximum of Rs. 10.00 lacs. The scheme will apply to deserving/ meritorious students who wish to pursue studies abroad. Students can take loan for Graduation and post graduation – For job oriented profession/ technical courses offered by reputed universities.

2nd  Allahabad Bank

Need based finance subject to repaying capacity of the parents / students with following ceilings:
Studies in India: Maximum Rs 10.00 lacs
Studies abroad: Maximum Rs. 20.00 lacs.
Repayment Holiday / Moratorium is Course Period + 1 year or 6 months after getting job, whichever is earlier. Loan to be repaid within a maximum period of 7 years after commencement of repayment.

3rd Axis Bank

Axis Bank's Study Power aims to provide financial support to deserving students for pursuing higher professional or technical education in India and abroad. The loan would be provided to students who have obtained admission to career-oriented courses eg, medicine, engineering, management etc., either at the graduate or post-graduate level.

4th Bank of Baroda

Education is the most important investment one makes in life. Higher studies and specialization in certain fields call for additional financial support from time to time.
Whether you are planning school education (nursery to standard XII) of your child, pursuing a graduate or post-graduate degree, the Bank of Baroda Education Loans, can help finance your ambitions and goals.

5th Bank Of India

The Star Educational Loan Scheme aims at providing financial support from the bank to deserving/ meritorious students for pursuing higher education in India and abroad. The main emphasis is that every meritorious student is provided with an opportunity to pursue education with the financial support on affordable terms and conditions.

6th Bank of Maharashtra

Rate of Interest
Loans up to Rs. 4.00 lac (BPLR – 2.00%)
Loans above Rs. 4.00 lac (BPLR - 1.25%)
Student can apply education loan in online mode through our website. This Facility is presently available only in selected 75 branches

7th Canara Bank

Financial assistance to needy and meritorious Indian students for pursuing studies from High School onwards including graduation, technical and professional courses.
Loans are also provided for study abroad for job oriented courses at degree level and advanced studies in all areas for post-graduation.
For payment of fees to school/college and for purchase of books, hostel fees, examination fees, etc.

8th. Central Bank of India

For payment of Hostel fee caution deposit, refundable deposit, admission, examination, library, laboratory, cost of books, equipments, uniforms, computer (Hypothecated). One-way air passage in case of studies abroad. Reimbursement of admission fee books airfare etc., if already incurred, within 1 month for studies in India / 6 weeks for abroad. Repayment to commence 12 months after completion of studies or 6 months after securing jobs whichever is earlier. Maximum period 5 to 7 years. Repayment on EMI basis.

9th. Centurion Bank of Punjab

For payment of Hostel fee caution deposit, refundable deposit, admission, examination, library, laboratory, cost of books, equipments, uniforms, computer (Hypothecated). One-way air passage in case of studies abroad. Reimbursement of admission fee books airfare etc., if already incurred, within 1 month for studies in India / 6 weeks for abroad. Repayment to commence 12 months after completion of studies or 6 months after securing jobs whichever is earlier. Maximum period 5 to 7 years. Repayment on EMI basis.

10th. City Union Bank

The Educational Loan Scheme aims to provide financial support to deserving/meritorious students for pursuing higher education in India and abroad. The Scheme also aims to provide financial assistance to the needy poor to undertake basic education. Need based finance subject to the repayment capacity of parents/guardian subject to
a) Max. upto Rs.10 Lakhs for studies in India.
b) Max. upto Rs.20.00 Lakhs for studies abroad.

11th. Corporation Bank

12th. Credila Financial Services

It doesn’t cost you anything to apply online to Credila. It just takes
5 minutes of your time!

13th. Dena Bank

 Ensure a bright future for your children. Provide them with the best of higher education in India or abroad. Avail Dena Vidya Laxmi Educational Loan.

14th. Development Credit Bank

Educational Loans for providing financial support to deserving/ meritorious students for pursuing higher education in India and abroad.
Post graduation courses from recognised universities
Professional courses from reputed institutes:.
Courses conducted by IIM, IIT, IISc, XLRI, NIFT, etc.
Courses conducted by CIMA – London, CPA – USA, etc.,
Courses in Universities which take admissions through TOEFL,GMAT,GRE,SAT exams
Only one course at a time will be financed

15th. Dhanalakshmi Bank

16th. HDFC Bank


17th. HSBC

HSBC India Student Education Loan Program can help ease students' financial concerns as they embark on one of the biggest decisions in their life – attending the college / university of their dreams. The program enables you to borrow funds to cover the cost of education – tuition, fees, room charges, boarding, books, and other education-related expenses.

18th. Indian Bank


19th. IDBI Bank

Education loans from IDBI Bank aim at providing financial support to deserving/ meritorious students for pursuing higher education in India and abroad. With an array of courses to choose from and easy repayment options, IDBI Bank makes sure you get complete financial backing.

20th. Karnataka Bank

Vidyanidhi Education loan scheme

21st. Oriental Bank of Commerce

Air fare for joining the course abroad, Boarding & lodging expenses of hostel/boarding houses, where charges are standardized and paid to the Management of the Boarding House. Any other expenses required to complete the course like study tours, project work, thesis etc. Indian nationals not above 45 years of age those who secured admission in a recognized course of an approved university (AICTE approved institutions) OR institutes recognized by a statutory body.

22nd. Punjab & Sind Bank

The educational loan scheme outlined below aims at providing financial support from the banking system to deserving and / meritorious students for pursuing higher education in India and abroad. The main emphasis is that every meritorious student though poor is provided with an opportunity to peruse education with the financial support from the banking system with affordable terms and conditions. No deserving student is denied an opportunity to peruse higher education for want of financial support.

23rd. Punjab National Bank

The Scheme aims at providing financial assistance to deserving / meritorious students pursuing higher education in India or abroad. viz., Graduation courses – B.A., B.Com., B.Sc., etc., Post-Graduation courses, Masters & Ph.D; Professional courses, Engineering, Medical, Agriculture, Veterinary, Law, Dental, Management, Computer etc., Computer Certificate courses of reputed Institutes accredited to Department of Electronics or institutes affiliated to University; Courses like ICWA, C.A., CFA, etc., courses conducted by IIM, IIT, IISc, XLRI, NIFT, etc., Regular Diploma/Degree courses conducted by Colleges/Universities approved by UGC/Govt./AICTE/AIBMS/ICMR, Regular Degree / Diploma courses like Aeronautical, Pilot training, Shippling etc. approved by DGCA/ etc., Courses offered by National Institutes and other reputed Private Institutes.

24th. State Bank of Bikaner & Jaipur

To extend financial assistance to all eligible / deserving / meritorious students for pursuing higher education in India & Abroad. Need based finance subject to repaying capacity of the parents / students.-
Studies in India - Maximum Rs.10.00 lacs
Studies abroad - Maximum Rs.20.00 lacs

25th. State Bank of Hyderabad


26th. State Bank of India (SBI)

SBI Student Loan Scheme
Loan Amount Rate of Interest
Loans upto Rs. 4.00 Lacs 0.50% below SBAR i.e. 11.25% p.a.
Loans above Rs. 4.00 Lacs and
upto Rs. 7.50 Lacs 1.00% above SBAR i.e. 12.75% p.a.
Loans above Rs. 7.50 Lacs At SBAR i.e. 11.75% p.a.


27th. State Bank of Indore


28th. State Bank of Mysore

To enable students with academic brilliance to meet tuition and other fees / maintenance costs / books and equipment and cost of passage for studies abroad etc., for pursuing studies at recognized school / college / institution.
Diploma / Graduate / Post-graduate courses in the faculties of Engineering, Technology, Architecture, Medicine, Dental Science, Agricultural Science, Veterinary Science and Computer Certificate courses of reputed institutes accredited to department of electronics or affiliated to university

29th. State Bank of Patiala


30th. State Bank of Travancore

To meet the tuition and other fees\Examination\Library\Laboratory fee, cost of books\purchase of Computers\equipments\instruments\uniforms and the cost of passage for studies abroad. Caution Deposit, Building Fund, Refundable deposit subject to 10% of the Tuition Fee. Any other expenses required to complete the course like study, tours, project work, thesis etc. also be financed.

31st. Syndicate Bank


SyndicateBank's involvement in education dates back to the decades prior to the Nationalization of Banks. The Bank was also the first to set up a string of Rural Training Institutes aimed at empowering the young India in rural areas through entrepreneurial education and training.
Continuing this commitment to education, the Bank has introduced a comprehensive Education Loan Scheme-SyndVidya, which is more student responsive and parent friendly. The Scheme covers the entire spectrum of educational needs from the school education to super specialty courses including overseas courses. The scheme makes available need based finance to cover expenses related to education such as fees payable to College, Hostel, Examination, Library, Laboratory fees, caution deposit/building fund/refundable deposit upto 10% of tuition fee, Cost of Books, Equipments, Travel expenses for studies abroad etc. Only capitation fees, donation or external coaching fee are not covered. The loan scheme carries liberal limits of Rs.10.00 lac for courses within the country and Rs.20.00 lac for overseas courses.

32nd. Tamil Nadu Mercantile Bank Ltd

This is scheme of choice for parents who wish to educate their children in professional courses in India / Abroad and help them get graduation / post graduation in any field of choice of the student. The cost of the education can be born by the loan from our bank.

33rd. UCO Bank


34th. Union Bank of India

35th. Vijaya Bank

Eligibility

Student should be an Indian National and should have secured admission to the relevant Professional/ Technical courses in India or Abroad through Entrance Test/ Merit Based Selection process. However there is no age restriction for the applicant.

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Student Loan

Student loan is that type of loan which is given to students. For helping students to fulfill their higher education, education loan is very important. Today, higher education has become costly. A simple graduation cost has reached Rs. 100,000. Other higher education in the field of engineering or technology needs high money. So, in personal finance, it is very important to take the decision regarding student loan. All countries' govt. wants to increase the level of literacy. So, govt. provides tax rebate for paying the interest of student loan. Interest on student loan is very nominal and student has to pay very small amount after completing education.

Student Loans in India

There are 35 top of public and private banks in India who are providing the facility of student loan. Students can take the loan for all education including accounting education. Income tax law 80 (e) provides 100% deduction on the amount of interest paid against the interest of the education loan for self or his children.

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Private Equity

Few weeks ago, a financial company came to my home. It offered me some investment plans. They knew my home address from one of my old friend. I was not interested to invest. Due to my nature, I asked its plan and after studied, I found that these marketing guys are operating limited partnership and they created private equity fund and encourage people to invest in these fund by showing high return on this investment. Even, their company is neither registered under Indian company Act nor its shares are listed in any stock exchange in India. They collect money from private and personal network and then they invest either in stock market or commodity market and give share to the investors of private equity. So, we can simply say that private equity is just investment in limited partnership firms. Many countries allow investor to invest in private equity. They create venture capital or growth capital fund and any body can buy the share after paying its price.

Private Equity in India

You can see large number of limited partnership in India. They accept cash as private equity. Simple search on google by “writing private equity in India”, you can see millions limited partnerships who offer this fund in which you can invest. I have opened the sites of BPEPindia.com, iciciventure.com and some other sites and read their written contents. After reading, I can explain you that all these organization gets money from public and invest in information technology, media, manufacturing, logistics, textiles and real estate. No control , no regulation, just funda of trading on equity!

Asian private equity opportunities

Pak-Seng Lai, Asia managing director at Auda International LP, talks with Bloomberg's Bernard Lo about investment opportunities in China. Lai also discusses the outlook for the private equity industry. Link
According to Auda," Asian private equity investment has reach $ 4 billion in India and it is estimated that it will grow more from this point"

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Retirement Planning

If you ask any employee what are your retirement plans. He will offer his own views which will be differ from other employee’s retirement plans. Retirement planning is relating to utilization of money and fund in consumption and investment purposes which employee receives at the time of his retirement. In this amount, he can receive provident fund, maturity amount of his insurance policy and gratuity dues.

 Employee can take dream to live in good and newly built residential house or he can plan to travel whole world or his own country. Some of employee can think to invest in residential house to realize their dreams. Other may invest their money in risky but high ROI schemes. But according to my view, retired persons should priority only invest in secured investment. They should understand that they earned their money after working life hardwork. It will become water, if they capture in bad investment schemes.

I know one retired person who invested all his money in house construction business by creating partnership. Because, he did not know housing construction business, so after making of houses, no house was sold by them after spending of 4 years. Now, their whole retirement money has bound in houses which are not generating minimum interest earning. Many of us, waste money in real estate market without knowledge. If you are going to retire in this year or next 30th year, pick the note book or google note book and write year all retirement planning.

I can help you what are your main retirement planning

1. To buy car

2. To go to travelling and fun tour

3. To use money in enjoy with family

4. To support children in their career or business setting

5. To support children in their marriage

6. To open old age home

7. To open orphan home

8. To open school where poor students are taught freely

9. To invest money on health

10. To donate all retirement money to Wikipedia, relief fund or any other NGO

11. To invest in any scheme of financial company for getting earning a satisfying income

12. To live your life on pension

13. To create Contingency reserve

After this, analyze what will be your source of earning after your retirement. Will it cover all your expenses when you will not get any salary or pension from govt. or employer. Prefer secure earning and increase the sources of earning. Try derivative market, hedge fund or mutual fund for creating more source of earning without risk.

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