Plastic Currency

PLASTIC CURRENCY = DEBIT CARD + CREDIT CARD FACILITY

The use of credit card is already prominent in developed countries and the use and circulation of credit card facility is growing gradually in other countries without any exception. In all developed countries the credit card has curtailed the currency circulation to good extent. It is felt that there is imperative necessity to inculcate the credit card culture and strengthen its usage across the world in view of fast paced globalization

The concept of debit and credit card was emerged as an alternative to holding currency on person for all spending purposes. The visible success of this plastic card has lead to introduction of DEBIT CARD/ATM CARD. As such there are two variety of cards broadly categorized viz. debit card and credit card

DEBIT CARD

One is DEBIT CARD/ATM CARD. This card is issued by the financial institution, the account holder holds deposit account. In the olden days the account holder has to visit the FI (financial institution) to draw his money by way of cheque or prescribed withdrawal form generally made available by such institute with or without charges subject to average balances in the account. The person has to use currency for all practical purposes and also carry the required cash in hand while on the move, which can be risky sometimes.With the improvement of technology the debit card money has almost replaced across the counter cash transactions, also minimized the usage of cheques and moving with required currency on long journeys and enhanced the longevity of the currency notes.

The intensive usage of debit card has facilitated the financial institutes to serve the clients instantaneously with the help of technology more accurately, minimize their counter and back-office staff-saving lot of operating cost and as such improving the economics of the institute on the part of the organization side. It also helped the client to feel free to take exactly required currency prefer to use the DEBIT card for all allowed transactions and save expenditure, time and efforts in visiting the institute for every transaction and also avoiding social risks . Another important advantage is that the merchant establishments/recipients of charges are getting their dues instantaneously and accurately directly to the credit of their accounts with financial institute.

In view of the foregoing advantages the DEBIT CARD was already playing dominating roll in all the developed countries and is being picking up gradually in the developing and underdeveloped countries. However one must remember to use the debit card duly placing the funds in the account and to the extent of quantity of funds available in the account. The DEBIT CARD holder has to take precautions about securely keeping the card and password.

CREDIT CARD

The credit cards are generally issued on request after verification of proof of residency, profession and remarks in the SOCIAL SECURITY ID (in respect of countries where SSN is in vogue). The issuing authority is having sole discretion with regard to issue of the CREDIT CARD. In all developed countries the CREDIT CARD and its limit is basing on the ratings gained by the client with his already displayed way of discipline in money matters. There are two different limits one limit is for purchases and the other limit is for availing cash facility. The credit card holder need not have any deposit balance in his credit card account as it is real CREDIT for the card holder of limited duration.

Depending on the rating of the client, the credit cards are issued either with initial deposit or without any initial deposit. However over a period of time the initial deposit is totally waived in almost all countries across globe (barring few instances of newly entered foreign citizens). There is no annual charge for issue of credit cards in developed countries; however in other countries still the issuing authorities are levying annual charges towards issue of credit cards in most cases. However the life-time-free credit cards are being issued in the recent past by some reputed organizations in these countries. Still the process of application and issue is not streamlined effectively and the usage of technology in these developing/underdeveloped countries is left with lot of scope for improving the efficiency.

The applicant must prefer to go through all the terms and conditions invariably whether online or offline. The applicant can prefer only LIFE-TIME-FREE credit cards. In certain countries the issuing authorities themselves do not adhere the terms and conditions and they test the memory/wisdom of the cardholder by charging annual fees, service taxes etc. However these authorities will reverse back once the card holder promptly reminds the top of the authority suitably as such the card holder has to be aware of all aspects.

THE MOST IMPORTANT ASPECT IS THAT THE CARD HOLDER WILL BE FAVOURED WITH MONTHLY BILL FOR HIS USE IN THE PRECEDING MONTH EITHER ONLINE OR THROUGH SNAIL MAIL (DEPENDING ON THE TECHNOLOGY USAGE) INDICATING THE LAST DATE FOR PAYMENT.

ALL CARDHOLDERS BETTER PAY THE TOTAL DUE AMOUNT ATLEAST WEEK DAYS IN ADVANCE TO THE INDICATED DATE WITHOUT FAIL in their own interest. THE CONSISTENT PAYMENT OF THE BILL BEFORE OR BY THE TIME OF DATE WILL ENHANCE THE RATING OF THE CARDHOLDER and this fair rating will help the cardholder in getting various other facilities also in some parts of the world..

Some agencies will indicate in the bill that payment of certain per cent of bill money is sufficient to avail the total allowed limited again/afresh. In developed countries these agencies will respect their indication and will not charge any interest on the balance due, however certain agencies in developing/undeveloped countries will levy hefty charges ranging from 24% to 36% per annum (rate) over the balance due besides late payment charges, service charges and taxes etc. Further the cardholder should desist from availing cash facility as it attracts application of interest. Hence whatever the country one resides, it is ideally suggested to clear dues before the due date. The credit cards can be used for all purposes subject to its acceptability in the merchandise establishments, tax receiving agencies, travel agencies, grossary-establishments etc.

In some parts of the world there is excellent encouragement for using the cards as effectively, extensively and intensively as possible. The encouragement process involves surprise gifts, money back (certain %), discounts, feeding with lot of useful information and limited free services etc.

VISA symbolised cards are universally accepted irrespective of the issuing agency. However certain cards are having geographical restrictions means validity is being restricted to certain parts only. If the client requires universally accepted card, the client has to approach the issuing authority with specific request of INTERNATIONAL CREDIT CARD or even for INTERNATIONAL DEBIT CARD.

In the recent past a system of ADD-ON CARDS was emerged in the field of credit cards. The primary credit card holder can apply for ADD-ON CARDS for use independently by family members of the main cardholder or of his close associates.The industrialists/companies are also benefited with the facility of ADDONCARDS as these companies are provided with credit cards to their directors, employees or interested group of their industry at the final billing to the company/industry. These facilities are more convenient both for individuals and industrialists/companies.

USING THE CREDIT CARD for need based purchases keeping in view one’s own financial strengths will always keep the credit card holder in good stead. Alternatively if the credit card holder uses the card without proper financial planning will lead the cardholder into difficult days because unplanned and excessive use of credit card and resultant nonpayment of the dues will erode the rating of the cardholder, subjected to bad remarks in his SSN IDs and personal records. Such persons’ patronization is not accepted by any establishment/agency in technology driven society. Further the issuing authorities are having every right to recover the dues along with penal charges by adopting legal recourse.

Prefer the plastic money, use it as much as you require without carrying any currency, pay the used limit before the due date, increase your rating and avail other facilities derived thru good rating.

Stock Market Basics

Many people across the globe are showing more interest to know atleast some basics on the stock markets, so as to venture into this activity and earn something to supplement their income. And many people despite their interest to enter the stock market activity hesitate to deploy their resources due to lack of awareness regarding the stock market. This article is to share the certain basic aspects of the stocks and I hope it helps you add some revenue to your income.

It may be noted that the growth of economy in all fields with the demand for production, services, technology, and other aspects has accelerated during the last two decades across the world. This has lead to growth of big establishments with huge investment plans. For establishing a company, the company requires huge investment. This investment is basically mobilized as capital and debt. The debt is being mobilized from financing agencies.

The capital is mobilized from own resources, friends and relatives and/or also from public. The total capital is divided into shares—each share is of some specified sum. The interested parties/concerns can bid for such number of shares if offered either on the basis of private placement or through open offer. Subject to the established guidelines the companies will accept the bids and allot the shares to such parties a specified sum of shares. The companies can list all such shares or a part of such shares in the open market. Government has encouraged promotion of markets at all important centers for allowing the exchange of shares. The entire share capital is named as STOCK. The markets promoted are named as STOCK MARKETS.

The objective of promoting these STOCK MARKETS is to allow easy flexibility/liquidity among the investing public, the stock markets are also promoted with a view to enable even small investors to put-forth their savings in STOCKS, by contributing and being a part of the company.

The shareholders are eligible for share in the profits of the company; shareholder need not spare his time for the ongoing managerial activities of the company. In case of adverse conditions/loss, it is only limited to the extent of share capital actually held by the shareholder. The shareholder is having right to attend the annual general body meetings of the company with or without voting rights depending on the nature of shares holding in the company (such as preferential/general etc) In case of spurt in the market valuations or in case of need of liquidity the shareholder can dispose of shares either partly or completely through the STOCK MARKET. For exchange of these stocks, the stock market levy nominal rates as prescribed from time to time. As such the emergence of the STOCK MARKET is enabling the shareholders/investors to deal as comfortably as possible.

Regarding the aspects to be taken care of before investing in the STOCK MARKET of a specified script (company), the following points may be looked into for the safety of their investment-----the functioning of the company, managerial capabilities of the company, longstanding of the company, previous profitability, earnings per share, present reserves, present debt, nature of product/service which the company is dealing- what is the scope of demand and competitors past, present and future; the prevailing policies of the governments globally affecting these products/services and ultimately arrive the business prospects of the company in which investment is contemplated. Keeping all these aspects the investor can exercise decision either to exit or further increase in investment at an appropriate time depending on the market conditions. The above stated information is available at the company website, with the regulatory authorities or it can be ascertained from the stoke broker through which the concerned is dealing.

The government encourages investor’s especially long-term investors (long term presently is indicated as holding more than six months) with tax relaxation and simultaneously government is discouraging day-operators or short term investors with tax levies on the net earnings derived through stock market transactions. In every country the entire stock market dealings are being regulated by the REGULATORY authority constituted through local laws. This regulatory authority is expected to act as watch-dog to safeguard the interests of the investors. The interested investors can look for guidance or for redressal of their grievances if any emanated out of the stock market dealings

It is suggested that the prospective investors may observe the trends, techniques and other practical aspects consistently for not less than three months either on his own through internet or personally attending the dealing rooms. The practical experiences will help the investors to understand the concept and proceed cautiously initially. Across the globe various awareness programs are being organized, at the instance of government, to impart basic knowledge on the stock market activities on an ongoing basis. The interested prospective investors can avail these opportunities and proceed as deems fit depending on the individual options.

IDEAL FINANCE MANAGEMENT FOR YOUNG PEOPLE

Money is key factor for many aspects, minimum necessities, comforts, luxuries and or for other mind-deserving enjoyments. The incoming earning either thro employment, returns on accumulated properties, trading or other vocational aspects is the limiting factor for spending, saving and investing for multiplication of resources for the use of self, spouse, parents, children or even for next generation.
The individual perceptions are unique and the ideal finance management aspects have to be TAILOR made inconcurence with the perceptions of each person, each family and group.
However in the previaling situations especially in INDIA, SOUTH-EAST ASIA or for that matter identically economic zones in the world, there are broad parameters which the citizens expects and needs broad guidelines for the effective management of their income and other resources.
The human life span ranging between 60 to 70years on an avarage in the above geographical zones. The earning capacity is mostly confined betwen 25years to 50years. The free enjoyment thrills are confined btween 22 years to 30years. The social and family obligations/compulsions increases proportionate to the age increases. The self and dependent health maintaince expenses will be growing much disproportionate to the advancing the age after late 40s or from 50s.
In the emerging necleous family establishments in the above geographical areas the love, affection and above all concern is showing negative trend which was not prevalent in the earlier years.
All the above factors have to be kept in mind while starting planning and managing process of the resources both existing and earning right from the day one earning process begins.
With the globalisation of various factors linked to money, there are umpteen options to manage the finance aspect by each individual, family or group. If the earning plus yield on existing resources is Rs100/-., (Maximum income restricted to Rs20000/-)

a) not more than 10% of the resources to be earmarked for comfortable (rental) accomodation or maintaincce of existing accommodation to suit the present living standards

b) livelihood depends on the number of members under the earning team- however not more than 20% out of Rs100/- may earmarked to aveage family in ordinary society.

c) The cost of mobility of all members may be confined to 5 to 10%.

d) Earmark 20% of the resources towards present education or future education of the next generation right from the day one of earning.

e) Depending on the thrillness of the family, earmark not less than 10 to 15% towards insuring the life of breadearners in variably which generaly gives low yield at a future date to the policy holder.

f) There is element of direct income tax deductable from earnings which may be around 10% of the total income.

g) There is a surplus of 20% after meeting the minimum needs of the family. This surplus is to be used with care and due deligence to get high returns. High returns are always linked to high risk factors. This point is is to be analysed carefully applying own brain plus others since the scope is very wide and marketing personal are after us. One has to prioritise the choices with least posible risk aspects. The following points may be considered depending on the interests and family background

1) BUY A HOUSE WITH THE ASSITANCE OF BANK LOAN. TIEUP THE REPAYMENT WITH REGULAR INCOME SOURCE. STAY IN THE HOUSE OR LETITOUT.... Adds house rent, saves payment of house rent and appreciates the value over a period of time. Risk element is minimum or rather nil since the loan itself is insured for the house.

2)If there are house properties bequethed from ancesstors. Moderate the house with bank loan and follow point no. 1.

3) If there are many houses and are moderate. If not interested in the property.Insure further your life, children life, spouse life with such a policy that that generates income either for children higher education, children marriage which are must; or take pension policy which generates income on monthly or regular intervals to meet unforseen expenditure after late 40s; 50s and after not fit for earning income to lead independent remaining life with grandchildren and children.This aspect covers RISK ITSELF.

h) If income is growing by virtue of various factors, go for little comforts at home and at travel and also simultaneously think of venturing investing in HIGHYIELDING MUTUAL FUNDS only with reputed mutual fund agencies with proven experience/background either in growth fund or dividend aspect depnding on the needs of once own/group.

i) If invested in mutual funds, review the growth trend after first year, 2nd year and maximum third year.... mostly it may increase by three times or four times, Then liquidate, retain the profit after taxes and again invest in fresh mutual funds which are available on PAR rates. The concept is: One takes to time of 1 or 2 years to become 2 or 3; but thereafter growth rate may not be same; hence liquidate and again invest on AT PAR funds.

j) Still once own income and accumulated sources are more than comfortable. Study online trading initially not less than three to six months either in person or thro business news closely

k) Invest in industries whose production is always on demand/use by the general public with due assessment of managerial aspects of the promotors.

So Young guns ..Keep managing your financials.