Thursday, January 31, 2008

It's the Stock Market ... RUN (but do not hide)

Partly due to the exorbitant volume of information that needs to be digested and partly due to fear of losses, most of us tend to shy away from the stock market. I am, of course, referring to those of us who do not work in the financial field.

As soon as I got my job, and after the initial fascination with the elevated income wore off and the realization that student loans were pending kicked in, I started thinking of saving and investing.

Retirement plans apart, I wanted to actively start investing in the stock market. However, most of us are well aware of the horrors of the stock market. With sudden crashes and fortunes lost, quite often accompanied by loss of lives, it somehow seemed more of a gamble than a strategy for growing my money.

The alternatives - mutual funds. Depending on the type of mutual fund, you are indirectly investing in the stock market. Only, you are now relying on, and paying, a group of individuals to take investment decisions for you. This is a perfectly acceptable plan, as quite often, the group of individuals actually knows what it is doing. Sure, you pay a small premium but, if they play it smartly, you can make a lot of money in the process.

Personally, I am interested in finance and the functioning and the dynamics of the stock market has always aroused my curiosity. Watching financial news and following stocks started attracting my interest on a more regular basis. However, then, and even now, I am not financially stable enough to begin playing the stock market. And more importantly, I am not armed with enough information.

I started visiting the Google Finance and Yahoo Finance pages regularly. This is one of the few places where Google actually performs worse than Yahoo. The Yahoo page is so much more informative. It gives you all the information you could need about a stock, and more. Google on the other hands seems to be in its infancy with its financial page. Its interface and usability, however, keep you on it for a while. Given some time to develop their content, I am sure their page will become much more popular than Yahoo.

Another interesting website I found was Stocksquest. It is an interesting and engaging concept where you are given a certain amount of capital to begin with. You can then invest it in stocks you pick and basically build up a mock portfolio which you can monitor over time. It also has a very basic tutorial, the kind someone like me with no background in finance needs. And what's more, its free. I just started on it a while back. Lets see how far I go with it.

I am sure there are tons of other such sites out there. If any of you have ever gotten interested in the stock market. and tried similar ways of playing it safe and learning the game before actually investing your money in it, I am all ears, or in this case, eyes.

I hope to continue this practice and will keep you informed of how it goes. Hopefully, as and when I do find myself in a comfortable financial position to invest directly in the stock market, I would have gained some ideas on how to predict trends in the market. If not, mutual funds and bonds will always be around.

Image credits to [ azrainman ]

Saturday, January 26, 2008

Of impulse buys and small furry creatures - Part 2

Firstly, apologies for being so irregular with my postings.

If you haven't already, please do read the first part of this blog here.

I appreciate your curiosity in coming back for the concluding part of this blog. Today, I answer the most important question you might have had from the previous blog. What has this blog got to do with small furry creatures ? Be patient, and thou shalt be rewarded.

Let's start off with a DAQ.

DAQ: I may not have gone where I intended to go, but I think I ended up where I needed to be.

So back to impulse buys. Here I was, fresh out of college, just started earning some money at my new job. I managed to convince myself that although I barely had the energy to stay awake after I got home, I needed a way to spend my time more fruitfully than watching television. Here is a simple equation:

Money + foolishness = impulse buy

This is exactly what happened. And I became the owner of a sparkling new Xbox 360. Brand new. Not even a used unit. Absolutely new. And I also had the shopkeeper throw in $100 worth of games to play along with it. Why ? Because I could. But should I have ? In retrospect, no. The reason being that as much as I liked the new system and was super excited about it for the first 2 weeks, I first grew tired of the games. And 3 months later, suddenly realized that I was using it just as a glorified DVD player. Thats about the time I started becoming financially aware. One fine day, I came across a blog here. This, and the pain of seeing a perfectly good system sitting there in my apartment, not serving its purpose, made me take the radical step of getting up off my butt and trying to sell it. I am glad to announce that although I sold it for a loss, I have received more than an average ebay user would have paid for it.

DAQ: There is a theory which states that if anybody discovers what exactly the Universe is for and why it is here, it will be replaced by something more bizzare and inexplicable. There is another theory which states that this has already happened.

So what does it post have to do with small furry creatures ? Nothing actually. These quotes are from Douglas Adams' well known humorous science fiction series The Hitchhiker's Guide to the Galaxy. This is a form of comedy not many people might be acquainted and, since I liked it so much, thought I should share it with you.

One final thought on impulse buys. Not all impulse buys spell doom and almost all of them are easy to get out of. So if you are just reading this post and feel "Oh man, I wish I had not bought that Cappuccino-maker-cum-facial-massage-giver for my car", think again. Almost everything can be sold on ebay. But the other point I wanted to make was that before you sell of the item, see if it truly is not of any use to you. Sometimes impulse buys can be one of your most used items. For example, my Ipod nano which I purchased at a time when nothing was going my way, I hardly had a few dollars in my bank and I was of the opinion that this was the only way I could put a smile on my face. This was over 2 years back and I still have it as my trustworthy companion.

Thanks for lending me your eyes and mind for a short while. I enjoyed the company and leave you with a parting DAQ.

DAQ: In those days spirits were brave, the stakes were high, men were real men, women were real women and small furry creatures from Alpha Centauri were real small furry creatures from Alpha Centauri.

Thursday, January 24, 2008

Of impulse buys and small furry creatures - Part 1

Warning: This post is rife with quotes by Douglas Adams (henceforth denoted as DAQ) which, although irrelevant in certain places, and nonsensical in most, provide a humorous diversion.

Just like every other year, I made a list of new year resolutions this year. And just like every other year, I promised myself I would abide by them. And just like every other year, I was almost lazy enough to conveniently blot out the list-making incident from my memory by the end of the first month. Alas, I could not. The reason was simple. One of my resolutions was to stop being lazy enough to conveniently blot out the list-making incident from my memory by the end of the first month of the year. However, I did not include any statements about the second month. So there is still hope.

One of my resolutions was to start looking at my personal finances once in a while, as opposed to trying to understand them after being surprised by the bills, unpleasantly of course, at the end of the month. Included in this resolution was to cut down on impulse buys and to try and get rid of my current mistakes. Following are the action items on my plate:

  • Keep regular tabs on my bank accounts
  • Cut down on impulse buys & needless spending
  • Read more from people with similar ideas (personal finance blogs)
  • Get rid of items which are useless to me but could be of use to others
  • Keep track of my spending trends
DAQ: It is a mistake to think you can solve any major problem just with potatoes.

Has it been helpful at all ? Yes, yes and yes. And yes again, although there was just one question there. An important aspect of this has been the containment of impulse buys or the far more dangerous entities - impulse buy urges.

So what are impulse buys you might ask. I personally define it as your loss of self-control when you see something attractive and purchase it to satisfy yourself. I know what you perverts are thinking of, but I mostly meant material possessions like mp3 players, new shoes, LCD TVs, pacemakers, etc. The urge to habitually eat out could also be counted as an impulse buy. Many businesses thrive on these urges of yours in order to even exist. And they take special care to see that these urges are not suppressed through the magic of marketing.

Digest that. In the mean time, here's a DAQ.

DAQ: He attacked everything in life with a mix of extraordinary genius and naive incompetence, and it was often difficult to tell which was which.

As invincible as I may sound, I too was lured into many impulse buys and expenditures. Of course it was not my fault. It was the damn advertisements. But it was my money. From my wallet. And I ultimately did deal with it. Hopefully permanently.

Stay tuned for the next part tomorrow.

Monday, January 21, 2008


Often times in life, we are lost and don't know which path will lead us to our destination, or in some cases, our destiny. Sometimes, it so transpires that we suddenly wake up from our slumber of ignorance and find ourselves craving for a goal to run towards, an objective to accomplish and a purpose to fulfill. I find myself in such a predicament at the infancy of my blogging efforts. I have two paths to choose from. One would be strict adherence to a topic of public interest. Another would not be as rewarding in the traditional sense, but would let me wander and explore my creative urges rather than channeling them towards a particular subject.

Which do I choose ? I choose to live life by the hour. I have certain ideas, certain interests, certain long term ambitions. I wish to treat this as a picture which will gradually fall into place.

Was that me up there or did an 80 year old Freudian enthusiast's spirit just posses me for an instant ? I'm glad its over though, aren't you?

So, I am interested in books, music, management, personal finance, cooking (Indian) and many more topics. I shall make an earnest effort to try and find my comfort zone. But in the process you might have to tolerate blogs on a variety of different topics. The ride will not be smooth, but I assure you it will be fun.

Gear up !

Tuesday, January 15, 2008

Why I chose to sign up for a gas credit card

I run the risk of appearing to be an advertisement for gas credit cards. But this is a risk I am prepared to take if only to share some valuable thoughts with you.

I just signed up for a gas credit card. Today I run you through the process, of how and why I chose to sign up for one. This, in my opinion, is a more important question as compared to which gas credit card to sign up for. The reason I say this is because, with the number of credit cards people tend to have nowadays, it really does take some serious thought to decide whether you need another one or not. This article is basically intended to be a sanity check before you go and sign up for one.

What got me thinking: I absolutely love my car and do a LOT of driving. I just graduated. While in school I did not have the luxury of owning a car and hence, when I finally did get my little beauty, I felt free as a bird. To cut a long story short, I was returning home last weekend from a road trip and happened to stop over at a Shell gas station to fuel up. While I was waiting there, my eyes fell on the advertisement for a Shell Gas Card which announced a 5% rebate on all fuel purchases from Shell. With the amount of money the average car owner in America spends on gas, 5% seemed to me like a significant amount. It was then that I started entertaining thoughts of having a gas card.

The initial hesitation: All of us have heard horror stories of people having tons of credit cards and buried neck deep in credit card debt. Thus, when one thinks of getting another credit card, however attractive the accompanying offer may be, one is always wary of the possible consequences. This is a very realistic possibility. When we see the attractive offers that usually come along with credit cards, we might think that the credit card companies lose money. But with the ridiculously high interest rates, they more than make up for it if you happen to have even a small balance on your card at the end of the month. That's the reason I make it a point to see that I do not carry any balance on my credit card.

Does it make financial sense? This is a question that poses a conundrum of sorts. In my experience, the answer is never a clear yes or no but is more of an exercise in weighing out the pros and cons. In my case, I evaluated the following to be my pros and cons for this argument.

  • It will put 5% (or the advertised percentage) of all my gas expenses back in my pocket.
  • It will help me keep a track of how much gas I am consuming.
  • Since most of these cards have an upper limit, it might help control my gas consumption.
  • Since I am pretty efficient with my personal finances and I have just one credit card to date, I stand a very good chance of benefiting from the deal.
  • It shouldn't hurt my credit history.
  • It is, after all, another credit card on which my balances need to be tracked and paid off.
  • There might be hidden costs/fees once the introductory period expires.
  • I forget to make one payment and the result is an avalanche effect potentially snowballing into huge debt.
In conclusion, to me, it does make financial sense. I do consider myself conscious enough to be aware of the fact that another credit card needs to be paid off regularly. And hence, I went ahead and signed up for it.

But to many, it might not. Having multiple credit cards is not only a hassle as far as self management is concerned, but also a bonus for the credit card companies which thrive on you not repaying your debt in time. If that is the case, does it really make sense to get a measly 5c back on the dollar with such a high price waiting to be paid? I do not think so.

Actually choosing a card: Now comes the process for which there is ample guidance available on the internet in the form of websites, blogs, news articles and what not. The internet is indeed an excellent resource for credit card selection as there are tons of reviews on the available credit cards which help you decide whether a particular card is tailored to cater to your specific spending habits or not. Some amount of research and talking to co-workers and friends helped me zero in on a Discover Open Road Card for my needs.

I hope this article, though verbose, was slightly helpful. If you invest the right amount of time and effort into your search, I am sure, as with other areas of your life, you will find your perfect match.

Monday, January 14, 2008

Creative overflow

Reflective Soliloquy.

One might assume that this is going to be a series of self-reflective and spiritually motivating blog posts. One might end up assuming way too much.

There are tons of bloggers out there with opinions galore on topics ranging from politics to theology. What is so special about this one ? Does he have something significant to contribute to the "Blogosphere" that was hitherto absent ? or is he just another smart ass with nothing better to do ?

Wow, you ask a lot of questions! Did you know that it is considered a tad bit impolite to continue talking to a person without letting him get in a word or two ?

Ha Ha HA you might say. It was a "below the poverty line" PJ, as someone I am close to would say.

Time for some honesty.

I am a twenty-something just starting out in life. I have all this creativity bubbling inside me and keep looking for new arenas to satisfy my creative urges. Blogging is not new to me. I have tried my hand at it once and then got caught up in the rat race of grad school. But this time, I have decided not to repeat the same mistake. And hence, I am going to try my hand at horse racing now.

Seriously, get serious.

So, thats the reason I have got back to blogging. I have all these ideas and read about so many new things everyday. I might not have the time to comment on each and every issue I come across everyday, but maybe this time I will be at it long enough to look back after a year and say to myself that that was definitely worth it.

So down to business.

Of late I have been reading a lot about managing personal finances. Its interesting to say the least. Mind you, this can sometimes be an extremely dry lunch conversation topic. But something about it ignites a spark inside me. For me, its not about saving a truck load of money because I need to repay loans. Sure I do. But for me its more than that. Its like that game of Sim City I used to play as a kid where I would manage my finances. This is like that. Its more of a game to me. I love money. I crave financial independence. A book I read by Robert Kiyosaki called Rich Dad Poor Dad has really inspired. I would not go as far as to say that I agree with each and every aspect of it.

Sorry for the abrupt end. More tomorrow. Either about this or something else. I promise.