New age DEBT on CREDIT CARDS

 While the real essence of DEBT has remained the same, its applicability has changed over the years.

Earlier people would borrow money for bigger needs such as house, after due consideration. Low Debts could also be credited to the difficulty of getting loan. Today you borrow money for even small wants such as an earphone. The easy availability of credit is alluring.

However, the seemingly helpful loan come with hidden cost. Here's what you don't realize

• You will keep paying interest on the interest that gets added to your outstanding credit card amount. If you dont clear your dues, you can end up by paying between 36-42% interest in a year.
• Once you enjoy the credit facility, you will not shy away from living on credit, which is one of the initial signs of entering the DEBT TRAP.
• Multiple credits not only affect your credit score but also make repayment difficult. Missed payments attract additional interest or penalties which will only push you further into DEBT TRAP.
• Defaulting on credit card payments also attract 18% GST on the sum accrued interest and charges.

Cut the flab to stay financially fit this year

Today there is just too much of financial flotsam that just a passbook and a notebook is not enough to keep check on your investments. Its time to clean up the financial wardrobe
Let's see how
1. Its wise to to not to have more than two bank accounts. Choose bank with a wider reach so that you don't have to change one when you Re relocating or changing job.
2. Asset Allocation:
# review portfolio every year
# check under performers and schemes with high expenses and low returns
# don't go for more than 8-10 funds
# avoid new funds
3. Keep only two cards.
# go for EMI options to pay delayed outstanding
# close the card with a high interest rates
4. Do not invest in more than three or four policies . ideally go for policies that can vè closed after certain no of years.
5. Use you hindsight while investing in stock market. Don't follow the tide. It takes a lot of time for money to grow even in the markets.
6. The Loan portion ideally should not exceed 40% of your monthly pay.
Lastly Play wise for a Happy New Year :)

Meaning of underwriting

Term of the Day  Underwriting The underwriter (normally known as investment banker ) brings a new security issue to the investors in an offering. In this case, the underwriter guarantees a certain price for a certain number of securities to the party that is issuing the security (in exchange for a fee). Thus, the issuer feels secured that they will raise a certain minimum from the issue, while the underwriter bears the risk of the issue. Thus it is the process of insuring someone or something. The process by which a lender decides whether a potential creditor is creditworthy and should receive a loan.