Archive for the ‘Banks’ Category

Time is of the essence – Part 1

April 16th, 2008 Vijaianand

Time is Precious. Time can’t be brought back.

You might wonder, “Why is this guy telling me the fact which we all know?”.


I truly agree, we all know very well about TIME. But I feel we should be reminded of its importance know and then. We think we have real good sense of TIME as we deal with it day in and out. But you don’t. We just let TIME slip away and lose everyday without making any progress in our goals whether its financially or . Don’ t you think we take TIME for granted. 

Today marks the one year anniversary of Virgina Tech massacre which killed 16 innocent lives. We all were sad when we heard the horror news. It seems to have just happened but one year just flew by taking along with us. I even wonder, I just celebrated my 31st birthday and now its time for the next one. I am growing older every day.

Without us noticing real hard, TIME just flies too fast, very fast these days. I don’t know why “Is earth moving fast ?” Not really but it feels like time is moving fast. Alright, as TIME is set to take us along the ride. If we don’t take timely decisions by playing along with TIME, we are going miss out on it. TIME is the real key for many of our life factors. It is a viable factor for your financial growth and all of our future.

Magic of Compound Interest

Compound interest is a very powerful formula if you have definite plan can make you a millionaire. Yep, No kidding!!! A little bit of money invested well over a long period of time can equate to a lot of money! It’s really a simple concept, but so many people fail to make use of the amazing power of compound interest. Compounding simply means you earn interest on the interest. In other words, interest is calculated on the basis of the principal sum plus any interest that has accrued — unlike simple interest, which is interest calculated only on the principal amount.

Let’s just take for how TIME plays in the Savings arena. Let’s say I have big junk of $50,000 right now at the age of 32 and I invest in a vehicle which returns me merely 6%(I feel to be safe than sorry than big returns). When I am 62 year, it will come back to me as $300,000 with yield of 250,000. Check the graph below with difference of compound interest on daily or monthly. Most banks do monthly compounding which is the market norm.

On the other hand, I just slept 10 years or didn’t have $50,000 early enough. So I was able to get hold of $50,000 when I am 42 years. I invest on the same vehicle for 6% return APY. Check out the return, its only 165,000.


See the difference 10 years can make for your investment. Its nearly $135,000 just gave away because I didn’t put money at the right time. Compound interest is so powerful and fantastic tool if used properly can yield good returns. Visit this site and try to calculate different variation and play with it to understand the compound interest magic.

Let me show the savings plan which can make you a millionaire. If you are 25 years and can put away $500 month in a investment vehicle which can yield 8% APR, you will be a millionaire at 66 years after considering taxes and inflation deductions.

(Graph Courtesy: bankrate.com)

Click to check out this tool (courtesy: dcu.org). You can play with it to find your own plan to become a millionaire. It’s easy and simple if you stick with a good plan. I have more to show on how TIME can be a real genie when played well can make you financially strong for your future. Wait for my part 2.

Posted in Banks, Finance, Financial Planning, Investing, Investment Planning Tags: , No Comments »
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Savings made simple and easy…

March 20th, 2008 Vijaianand

Saving is a habit and not a hobby. Let me start with that note. You might have read lot on “How to Savings?” over the Internet. They always suggest some hard to follow strategies that doesn’t fit to all type of people. I am share my simple, realistic, and ideal plan which sure won’t turn you down on your thoughts about savings. So go and read on… Whether you are looking to save small for your IPOD or little bit more for a new car or bigger amount for your first home. Let me tell you first thing you should know.

Savings is hard and never comes off the cuff. Not many of you like to hear that but Sorry that’s the truth. You should first and foremost realize that fact. I always like to expose the truth/fact first so one can understand before diving deep in it. When I was kid(6th grade), my mom showed the value of real money. She taught me about how to save every paise(Indian currency equivalent of penny). I started my first savings bank account when

I was doing my 7th grade and started putting every rupee(Indian currency equivalent to dollar) I earned. That’s the foundation for my savings and spending habit. If you don’t have that Saving habit built into you, its going to be hard to start with but it was never tough act. Anything is possible under Sun and above earth if you ask me. It’s just needs your determination and to make it habitual by constant practice.

A quote by Frank Outlaw goes very well at this point.
“Watch your thoughts; they become words.
Watch your words; they become actions.
Watch your actions; they become habits.
Watch your habits; they become character.
Watch your character; it becomes your destiny.”

You need to first cultivate the thought about Savings. Then talk about it to your spouse or friends anytime you talk about money or expenses. Then act on it by following any or all of 3 methods.

Prerequisite: Open a savings account either with Internet banks or local banks with just minimum deposit of $1. Credit unions are best for small saving accounts.
1. Start putting your change(pennies or dimes) which you gather every day or week in a piggy bank or a simple container. Every month, take the change to near by bank and deposit it to your bank account.

2. On every ATM withdrawal, take $10 out of it and put it away in the secret compartment in your wallet. Don’t ever touch that whatever comes. At the end of the month, take it all out and deposit in your savings account.

3. I call this one it Blind savings – Put away a small amount from your paycheck automatically as a Payroll deduction or auto deduction from your checking account to your CD or Savings account.

Once you start taking actions. Everything falls into picture automatically transforming yourself and the savings habit gets built slowly into you. Once you got the habit, it comes off the cuff without even thinking about like your second nature.

Don’t think its not possible. You already took your first step thinking about it on the path towards making savings a habit. So start working your next step by talking and taking action.

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