01 June 2014

The article is all about the very important Economic Indicator : Gross Domestic Product (GDP). Till now we use to hear about the sayings GDP growth is increased or decreased, because of which the economy is booming or going down etc. Have anyone went into deep and try to know how the GDP is calculated, who will release the figure and when the GDP rate will released etc.? I think very least common man will bother about these things. Do not worry, keeping in mind the persons who have neglected such things, this article have covered some basic things in easy to read ways. Read and get knowledge on GDP.

What is GDP?

GDP is the abbreviation of Gross Domestic Product. GDP is the very important economic indicator. GDP data will be released in the form of rate by which it is increased or decreased from the previous release. If the GDP rate increased as expected then it is good for the specific country economy. The GDP rate will be released for sector to sector, like real estate, Automobile Manufacturing, FMCG etc. Depending on the net GDP rate the whole economy will dip or boom. By this time you would come to a rough idea what a GDP rate means.

When the GDP will be calculated and released?

In common all such data are calculated quarterly and released. Quarterly means the financial year quarter. But the GDP rate release at the financial year end will give an impact on economy. While releasing the GDP rate, we can get the planned growth for the next year. Normally, in a sector, if the real GDP growth increased the expected (previous year planned), then we can expect the specific sector in the Boom.

Who will calculate and release the GDP rate?

The GDP growth will be calculated by the Economists in Central Statistics Office CSO, New Delhi. As the GDP rate depends on the economy part, economists are the right person to calculate it. This rate when go in deep, we can easily find out which state contributes more for the GDP growth in sector wise. Now we have 29 states (As on June,1 2014), to get the complete GDP rate. CSO is responsible for all such kind of data to be calculated and released every quarter. It will also announce, if any changes in the data released already.

How GDP will be calculated?

GDP can be calculated by two major ways. One is expenditure method and other one is Income method. The first one will be calculated by the expenditures made by the country in the current period and the later one will be calculated by the income for the country in the current period. The GDP rate by the above two methods should be the same, because the Income = Expenditure. The expenditure method includes Expenditure, Investments, Government Spending and Net exports. The income method includes Income, Profits and Taxes.

  • Income or Expenditure of an Individual
  • Profit or Investment of Corporates
  • Taxes or Spendings of Government
  • Please let me know if you are not clear with the above two methods.

    Why the GDP is important?

    As already said, GDP is the Very important Economy Indicator. Economy involves money and hence the GDP growth will directly affect the currency growth of the country. The growth rate varies from sector to sector and also the changes next year also varies. The contribution from each sector affects the net GDP growth rate of a country.

    Where the GDP importance is seen?

    GDP growth rate determines the Economy of the country and also decides whether the country is developed or developing country. India consists of 29 states and each state will contribute for the country GDP rate. So a country can be a developed one only if all the states contribute much for the counties GDP rate. GDP rate of the country also determines the stock’s value in the specific sector. How it will affect? If the GDP rate in the specific sector shows high then it will be attracted by the foreign investors and the share price will go up.
    Click on the below link to know the exact GDP rate for every county
    Data from World Bank

    Posted on Sunday, June 01, 2014 by Unknown

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    11 February 2014

    This article will briefly tell you about the work done by a financial planner. You also can have clear answer for the question "why can't we become a financial planner on our own?" You also can find the requirements to become a successful financial planner. Finally, you will have a confidence on you to become a good financial planner.

    In my previous post I have presented you the ways to earn money full time and also in part time. By this time everybody should know the source of income, either full time or part-time. Monthly we will have a sum of money in our bank savings account or salary account. Many will start spending it without a plan and by end of the month they will end-up with debt. This is the time when we need to know about the financial planning. Financial planning is not only required for a company, it is also required for every family. Company will spend some money to plan its finance. But as an individual many of us will not like to spend money for it.

    Many will think why can't we plan our future. YES we can do our own planning better than a planner. It required many inputs like annual income, short term goal and long term goal etc. But every inputs is there with in us. It can come out by answering few simple questions. In the market there are many financial planners available. Approaching them is like giving your hard earned money to some other guys to achieve your goal. Is anyone there like in giving your money to someone. Literally you will not give your money to anyone, but going to a planner is like, we cannot think ourselves in critical situations. Some of the planners may change our goals itself. Which is important to us will not be important for others. So it is better to plan by ourselves. Come let us plan our future ourselves.

    6 Major questions a planner will ask

    Have the answers for the below 6 major questions. If you have right now, then you are ready for planning.

      What is your monthly income? (Including all your income from part time income, rent from some property etc.)
      What assets are with you at present?
      What Liabilities are with you now?
      What are your short term goals? (Like fees for kids education, buying a car or two wheeler etc.)
      What are your long term goals? (Like owning a property or for kids higher education's etc.)

    Don't you feel that these simple questions can be answered by us. Once you have a goal then it is very easy to frame the ways to achieve it. The main aim of this blog is to make you aware of all the possible ways to achieve your goal.

    What a Financial Planner will do

    In common, all the financial planners will collect all the information by asking simple questions like above. They will have some tools which will have an expected GDP growth in coming years as percentage. These percentages will be available on net. They will enter all in numbers in their tools. They will get some data from their tailor made software, from which they will start suggesting. There are 50 percent of the chances, they will frame the ways in their own way. Their ways may suitable for some, who will not find time to think.

    I am not telling the financial planner is not required. They are required for only companies, where there will be a macro inputs to calculate for the future. As an individual, mostly we will not go to any such planner and hence I am preparing this blog to make aware of the financial planning. We can do our financial planning according to our wish and time frame. It is so easy for any educated professionals in any field.

    Requirements to be a good financial planner

    Financial planning is very crucial part to achieve your short and long term goal. It is very important to have the below mentioned points before planning. If you do not have any of the below things, I request you to make it ready before moving to next topic.

      Pen or Pencil
      Papers in a file or a Note book
      Standard Calculator
      Ruler with a pencil (it is not must)

    Always I use to do new things in Ancient Way. If anyone feels that, in this modern world who will use pen and paper, then they must a Personal Computer or a Laptop with Microsoft Excel (or equivalent). It is my belief that modern technology makes human not to think at all. While you write anything in a hand written it will go to your subconscious memory also. The knowledge in your subconscious memory will be coming along till the end. So it is better to have a practice of writing with pen and paper is advised.

    So, now you all come to know that the materials required for planning is very cheap and readily available with us. As this is a step-by-step process, you cannot get all the details in one stretch. Have patience for the next post to be edited and published very soon.

    Whatever the plan you make, it must need a frequent review to keep track of our goal.

    Posted on Tuesday, February 11, 2014 by Unknown

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    26 January 2014

    This article has useful information about the ways to earn money in this modern world. It will not suggest you how to earn money. It will just tell you how others are earning money without a huge investment. As this blog is to make the fresh guys to know about the information which I missed while I enter this financial world. So the readers should not expect this blog as money making one.

    After a 3 weeks long gap I was managed to finish this post. It is very important that this article should not lead any of my readers to wrong path. First, I started listing the available ways to make money. The list went to more than 3 pages of my notebook. Then I stopped listing, as I do not want to mix-up too many things. Then I started categorizing the listed ways. Finally I got below 3 important categories on the whole.

  • Earnings from Employment
  • Earnings from Part-Time jobs
  • Earnings from Business

  • Later I strike off the third one. I cannot say it as "Earnings from Business", as it should be "Profit / Loss from Business". Here we are seeing about the ways to earn money and not about a balance sheet. Let us have a look at the other 2 categories in deep.

    Earning from Employment

    The title itself self-explained, yes it is the money earned from employment. It is very common that 80 percent of human beings will search for a well paying job once they come out of their colleges. 10 percent of them will plan for their higher studies and then join those 80 percent. So, in total 90 percent of the students will be searching for the well paying job, once they completed their academic studies. This is also a reason why I have strike off the third category.

    About 2 to 3 decades back, everyone needs to search for the government jobs once they completed their academics. But in recent days, it has been changed from "searching for government jobs" to "searching for well paying private jobs". Still the government jobs are given the first priority. Why this type of situations is not changing? From the young age itself all the students are seeded with such thoughts by their parents. Unless the parents change their thoughts of being their kids to get placed in a well paying job, these type of situations will not change.

    All right, you are now into the employment which gives you monthly payment. What next? This world is surrounded with competition in all fields, so you need to know how to sustain in this competition world. On the other side of the coin, increase in the cost of living also threatening us. You cannot let yourself away from the competition happening around. How to participate in the competition? The only way to participate in the competition is to keep yourself up-to-date in the field which you are working. Always try to update yourself about the latest technologies available in the field, otherwise you will get lost in this competition world.

    The easiest way to compete the race is to Love your job. Why? It is a simple psychology. If you love something you will try to know everything about it. So do not try something which you cannot love, as it will be tough to compete. If you are too far to change the field, let it be, from now onwards try to love your job and become a successful employee. Thumps up.

    Earnings from Part-Time jobs

    This technological world is overflowing with number of part-time jobs. While I planned to list some of them, the list became unstoppable. I could have listed all those things in this blog, if I do so, the main theme of this blog will change. I always need to make me remember the niche of this blog. That may help my readers not to search for the other information apart from the knowledge on finance. Now I am back to topic. Keep on scrolling to find some example on part-time job, so that you can also think in your ways to find your part-time job. One main thing I need to insist is do not select your part-time job only for making lot of money, it may ruin your daily activities. The part-time job is something that should give you some real money and also relief from all the stress created in the days work. The selected job may pay you less, but it should not create mental stress with unnecessary commitments.

    How to select a Part-Time job

    You can select your part-time job only and if only you have at-least 4 free hours daily. You should have a proper time management before going for a part-time job. The selected part-time job should not affect your career. It would be better if the part-time job related to your regular job (It is not must). The selected part-time job should not eat your brain much. It depends on your regular job, if your job eats your brain much; select your part-time job that should not eat your brain. There are many jobs available online also. While selecting online jobs BEWARE of fraudulent. Before go for the online job, check if it is a genuine one.

    Some example for Part-Time Job

    For instance Mr. Suresh, who is working as a senior engineer in a private industry, may have interest to give lecture in his own field. So, he can approach the nearest college and can find the opportunity for the requirement in his field. In such way he can give guest lecture to the upcoming engineers. He can also select a specific subject for each financial year in a particular college, and make it as a part-time job which will fetch him a monthly part-time income.

    In the above example both the jobs need to have some home work to be done. For part-time lecturing job, subject planning is very important. If you are not ready to select such type jobs, then if you are interested in driving you can go for that. Many places, there are requirement for part-time drivers job, as they do not want to pay for the drivers for his ideal time.

    For the above two examples, we need to have a good communication circle in our locality. If you are frequently changing your locality, it is little tough to have good communication. In such condition, you can go for the Online Part-Time Job. For this type of job, we need to have one personal computer and good internet connection. You can earn through Affiliate Marketing; you can earn through guest Blogging; you can earn through trading online (not share trading or Forex) and many more. As I do not want to make constrain to your thinking, I am not listing the exact way to earn online. Go and Google yourself. You can find hell lot of website which may guide to do the online job.

    Posted on Sunday, January 26, 2014 by Unknown

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    05 January 2014

    This article is the continuation of its first part “Basic terms to know in Finance - Part-1”. This article also will share you some basics before you start your financial planning. This article will surely give clarity of each term like insurance, investment etc. OK with this brief intro I am moving into the second part.

    Before starting the second part I would like to inform which are the topics covered in its first part. The first part of this article covered what is Money, Credit, Debit, Debt, Asset and Liability? Everyone must have some idea about all these topics, but now this article will give you a clear picture exactly what it is. While preparing this article I need to browse more things to put it in a right way and simple. I could not find a website showing all the financial related basic term in one page. So, that also makes my blog a different from other blogs. These two posts now contains very few basic terms, while we proceed forward, the new basic terms will surely be updated in these two post only.

    The content of “Basic terms to know in Finance - Part-2”

      What is Investment?
      What is Insurance?
      What is Interest?
      What is Profit / Loss?
      What is Savings?

    What is Investment?

    Investment can be explained as a process or action of putting money in purchasing some property like plot, inventory, stocks, mutual fund etc., with the expectation of creating some profit after some time period. Investment king Warren Buffett will always say that Do not put all eggs in same basket, while he is asked about investment.

    What is Insurance?

    Insurance is a kind of investment (Actually not a kind), to serve us in an emergency situation. For example if we have met with an unexpected accident, the insurance company in which we have insured for accidental insurance will take care of our hospital expenses up to the maximum amount for which we have insured. Many of them considering insuring as an investment, actually it is not. Insurance is the equitable transfer of the risk of a loss, from one entity to another in exchange for payment. www.wikipedia.org There are many kind of insurances with many insurance companies. There are many categories also, among that Term Policy is must for everyone in the family. Apart from this we can have life insurance, vehicle insurance, health insurance

    What is Interest?

    Interest in finance can be explained as the percentage of the total amount invested for a certain period of time. Interest will be calculated normally for the period of one complete year. But the credit card loan interest will be calculated for the period of one month. There are two basic types of interests, one is Simple Interest and other one is Compound Interest.


    What is Profit / Loss?

    This term must be come across in everyone’s life often. In very easy way to put this term is, if Income – (minus) Expenditure number comes in positive it is profit and if the same calculation gives negative number, then it is loss.
    Income – Expenditure = Positive (PROFIT)
    Income – Expenditure = Negative (LOSS)

    What is Savings?

    Savings can be explained as a part of the income kept aside for the future requirement. In olden days there was a saying “Save remaining money after the monthly spending”, but now-a-days it has been changed as “Spend the remaining after savings”. It is been observed that saving became mandatory for all level peoples. There are people plan for the future and start saving, and many people simply have a habit of savings and will use it for the emergency needs.

    Posted on Sunday, January 05, 2014 by Unknown

    3 comments

    03 January 2014

    This article will narrate the basic terms to know in normal life about Financial studies. The way it narrates is to make everyone to understand. This blog will mostly concentrate on the content (which may be known to all senior peoples), to the people who is starting their life in finance management. This is the first part of the blog in defining the basic terms.

    Posted on Friday, January 03, 2014 by Unknown

    1 comment