ONGC is India''s biggest wealth creator

ONGC has been rated as being the biggest wealth creator in India in terms of market capitalisation, for the second year in succession. Subir Raha, chairman and managing director, of the company was presented the award in the 10th wealth creation awards function organised by Motilal Oswal Securities Ltd and CNBC-TV 18, in Mumbai on December 20, 2005.
ONGC topped the list as the biggest wealth creator for generating Rs1,065 billion between 2000 and 2005. The wealth created by it outstrips the combined wealth created by IOC (Rs349 billion), Reliance Industries (Rs349 billion) and State Bank of India (Rs240 billion) for the the same five-year period.
ONGC says this award is not a decision of any panel of judges. It is the verdict of nearly twenty million investors in the last five years. Thus, it truly reflects the investors confidence in the company''s capabilities and future prospects.
Last year ONGC was recognised for creating the highest wealth among all Indian corporates from 1999-2004 in the same survey.
Accepting the award for the second year in succession, Raha attributed the success to ''Team ONGC'', and hoped that it would achieve a hat-trick by bagging the award in the coming year, as well.

Wharton honours India's biggest wealth creator

The Wharton Business School honoured the late Dhirubhai Ambani by dedicating a state-of-the-art auditorium in his memory. Dhirubhai will continue to inspire and motivate many more young and daring minds, not just from India but from across the world, believes his wife Kokilaben Ambani who inaugurated the auditorium.The Ambanis have been associated with the Wharton Business School for generations.Paying rich tributes to Dhirubhai Ambani, Kokilaben Ambani, widow of Dhirubhai Ambani, took the centrestage at Wharton Business School on Monday as the premier institution dedicated an auditorium to the memory of her husband. The 300-seater-auditorium in Jon M Huntsman Hall at Wharton, christened Dhirubhai Ambani Auditorium, has been made possible thanks to a 'multi-million-dollar' gift by Anil Ambani, son of the late industrialist and now chairman of the Anil Dhirubhai Ambani Group."It is my hope and desire that the naming of this auditorium (after my late husband) will inspire and motivate many more young and daring minds, not just from Dhirubhai's beloved India but from across the world to learn from his outstanding example, to think ahead, to think fast, and most of all, to bring greater prosperity to humanity," Kokilaben Ambani said in voice choked with emotion at the hour-long event.
Dhirubhai's widow Kokilaben Ambani took a journey down memory lane reminiscing how her children and grandchildren are associated with the institute."Yesterday, as a proud grandmother, I saw Vikram, the eldest of my nine grand children graduate from the Wharton School. But today's event is even bigger and more special. Today, I am a very proud wife and even a prouder Indian as we commemorate the life and legacy of one of the world's greatest wealth creators of the modern era, my husband, the late Dhirubhai Ambani," she said.Dressed in a yellow sari, the 70-year-old matriarch of the Ambani family was emotional as she visited the hallowed portals of Wharton after a gap of 25 years. She had come here earlier to see her son Anil, then a graduate student at Wharton."Yes, I feel very emotional today. Dhirubhai did so much of good work for the community,' she told rediff.com.
It has been a privilege for the Ambanis to be at the Wharton. A tradition started by Anil Ambani will continue over the years, with his son Anmol also joining the School, Kokilaben said."There have been three generations of (the Ambanis) involvement with Wharton. First came Anil, then came Raj (son-in-law Dattaraj Salgaocar) and then Vikram (Salgaocar's son) and Anil's son Anmol will also come," she said. "So generations of people will come and get inspired. It is such a good opportunity to come to Wharton," she said.About 20 people, most of them faculty members of Wharton, including Dean Patrick Harker, associate dean Jeff Sheen, and Prof Jitendra Singh, besides the Ambani family members that comprised Tina Ambani, wife of Anil Ambani, Dhirubhai's daughter Dipti and her husband Dattaraj Salgaocar, and three grand children listened deferentially to the brief speech of the 70-year-old matriarch of the Ambani family.Both Salgaocar and Tina Ambani seemed to take the back seat as they urged Kokilaben Ambani to speak about Dhirubhai's association with Wharton, his life and what he dreamt of in terms of both India and the company he founded. Kokilaben being ushered into The Wharton Business School in Philadelphia on Monday
Lauding Kokilaben Ambani for her efforts in inspiring and encouraging Dhirubhai Ambani soar to enviable heights, son-in-law Dattaraj Salgaocar said it was indeed a privilege to introduce his mother-in-law. She is a woman of substance and has been the pillar of love, strength, and support to her husband and her children, more so to the family after his untimely demise in 2002."She was born in 1934 in a small village in Jamnagar. By next year, Reliance will have the largest grassroots refinery in the world in Jamnagar."This remarkable lady with no formal education but outstanding qualities and great intelligence has encouraged and inspired the foremost wealth-creator in India. She is also very businesses savvy and a great investor and involved in many social and religious causes," he said before inviting his mother-in-law to the podium. Kokilaben being handed over a book on Dhirubhai Ambani at The Wharton Business School in Philadelphia on Monday
Tina Ambani was at her vivacious best as she recollected fond memories at the Wharton School, where she first met Anil Ambani.Tina began her remarks with 'respected mummyjee' as she paid respects to the memory of Dhirubhai Ambani. "It is a solemn moment for me and it is also special as this is taking place in Wharton an institution with which I have enjoyed an exceptional relationship over the last 20 years," she said."As many of you know my father-in-law, the legendary Dhirubhai Ambani, was awarded the Dean's medal in 1998 for revolutionising the concept of investing in India, creating value and wealth for shareholders. He was the first Indian to receive such an honour. But what is less known is that it was here that I first met my husband Anil," she said."It was in the summer of 1982, I met with Anil just after mummy (Kokilaben) left (after visiting Anil Ambani, then a graduate student at Wharton)," the erstwhile Bollywood actress said. Anil Ambani's wife Tina Ambani gets a copy of the book on Dhirubhai Ambani
The next generation of Ambanis are already gearing up to follow their father's footsteps. "I must say that matters of heart are clearly not ignored at Wharton and this is for the future generation to know," Tina Ambani said with a chuckle."I wish when the time comes for making big academic decisions, my sons Anmol and Anshul, who are here with me today, will choose Wharton over other schools and of course prove themselves deserving of a place here."For Anmol and Anshul, and millions of young men and women in India, Dhirubhai's life is an inspiration. I hope that today's commemoration also inspires young people outside India to learn from his life and legacy,' she said."Visionaries like Dhirubhai do not belong to any nation or people or family. They belong to the world. On behalf of Anil and my family I thank you all." Kokilaben amidst Wharton officials and guests
The Wharton School honoured Dhirubhai by naming the new auditorium after him. Kokilaben cut the blue-ribbon to ceremoniously inaugurate the new auditorium. Dean Harker in his introductory remarks paid a glowing tribute to Ambani as he expressed the school's gratitude for the wonderful gift."He was a true pioneer in the development of the Indian economy, opening opportunity to thousands of his fellow citizens through his then-innovative public stock offerings," he said."We are honoured to have this outstanding opportunity to pay lasting tributes to Mr Ambani and the companies he built, and the important role he played in India's economic growth, and we are grateful to his son Anil for choosing to remember him in this meaningful way," he said.Kokilaben, along with family, cuts the blue-ribbon to inaugurate the new auditorium named after her late husband Dhirubhai Ambani was awarded the prestigious Dean's Medal from the Wharton School in 1998. As the 24th recipient of this honour, Ambani was recognised for his work as chairman of Reliance Industries, and for his role in revolutionising the concept of investing in India through the creation of wealth and value for millions of shareholders.Anil Ambani got his MBA from Wharton in 1983 and currently serves as a member of the Board of Overseers. "Imagine 50 years from now when India becomes one of the leading economies of the world, not just in purchasing power parity, but in real dollar terms and by that time tens of thousands of students would have walked through the halls of Wharton. imbibing Dhirubhai Ambani's legacy, the Reliance saga and India's great success story. By dedicating this auditorium to him today, we honour Dhirubhai and his memories," Prof Jitendra Singh said. Friends and family remember Dhirubhai Ambani, the legend

'Making money is short-term, creating wealth is long-term'

All those who are willing to be rich or rather create wealth through investing in stocks, in the long term, here is the piece of advice from Mr. Vikas Khemani, executive VP and co-head, institutional equities at Edelweiss.Which sectors do you think can help an investor create wealth, in say, 10 years?Ten years is too long a time period. Probably by that time you will have two cycles (ideally, any economy moves in two cycles: the up cycle and the down cycle, with each making its presence felt for at least five years or more) in place. So I will talk about a long-term horizon, which could be between five to 10 years. The sectors which we at Edelweiss like -- with a three to five year time horizon -- are the banking and financial spaces.One has to take a structural call on whether India's GDP growth is going to continue at eight to 10 per cent. The answer to that is India is likely to grow for the next three to five years at eight to 10 per cent. In this context, the banking and financial services spaces become the most important. This makes me bullish on this space with a one, two, three, four, five and possibly 10-year perspective if the growth cycle continues.Which other sector/s do you like for the long term?Given the fact that there is huge amount of opportunity, the other sectors that we like are the infrastructure and capital goods and the engineering space. As you know, India is still a hugely infrastructure-starved country and we need to build sea ports, airports, roads, improve electrical supply and all such infrastructure related sectors.Huge amounts of investments are likely to be made in building these infrastructural facilities. In this process wealth creation is going to happen for two set of people: people who are going to create these assets and infrastructure and people or companies who will enable creation of these assets. Both these sections will do very, very well in the long-term: asset owners and asset enablers.Can you elaborate on these two themes for our readers?Let us first talk about infrastructure creators or asset owners. These will be companies owning ports, airports, power plants. These companies will own assets, run them and this will be like an annuity (a business that generates fixed returns or steady cash flows every year) kind of business.For instance, somebody who will own the mines will be an asset owner; those who are operating the mines will be asset enablers. Reliance [Get Quote] Power (yet to be listed) and NTPC are building power plants so they are asset owners. But other companies in the capital goods sector like BHEL will be enabling this process of building power plants.GMR Infrastructure [Get Quote] will be building airports; but somebody has to help them to build the airport. In the process, both parties benefit a lot. However, asset enablers will yield faster results than asset owners.Do you see investors making money in the banking and financial space and the asset owner, asset enabler companies?Absolutely! Here I must also add the domestic consumption story in India. If you are talking about a five to seven year time horizon then I am sure India's per capita income will increase, wealth creation will happen, poverty and illiteracy will go down. All these things will happen structurally. When this happens, consumption in the economy will go up and the companies that cater to the domestic consumption sector will benefit tremendously.FMCG companies, retail stories and any company related to consumerism will offer a lot of wealth creating opportunities in the coming years.Companies that would possibly benefit from the above three themes?Banking and financial services is a fairly large space and if I have to name a few companies than the first name that comes up is ICICI Bank [Get Quote]. They have captured the entire gamut of financial services and I think this bank is going to gain big time in this space.Another company that I like in this space is Axis Bank. It has done well in the last seven to eight years, and if one has to look at this bank from another five to seven year perspective, then the quality of management that Axis Bank has will help it reap the benefits of a booming Indian economy. Also, both these banks can scale their operations with great ease.Companies that attract your attention in the asset owner and asset enabler space?In the asset owner space, I would go for something like GMR Infrastructure, Mundra Port -- they own large assets which are going to yield returns over a period of time. Though there aren't many companies in this sector that are available at reasonable valuations now. Having said that, I would still want to go for GMR Infrastructure and Mundra Port as they are into a space that offers new and exciting opportunities going ahead.Right now, we are only seeing the initial phase of what is likely to come in these spaces of ports and airports. In the next few years, you can see more wealth creation happening. Other asset owners that come to mind are JP Associates.In the asset enabler space, L&T comes immediately to mind. The company has displayed an excellent track record over a period of time and they are likely to continue with that. Their organisational platform is strong and I think this company will do very, very well in the next 3-5 years. It can be a potential multi-bagger.In this space you can also consider BHEL, BEL, BEML. All these companies are large asset-enablers with good quality management support and scalability. I am talking only about large caps here. You can also find a lot of good names in the small cap space in this theme.However, in this space, the main concern is the scalability of their business models. Otherwise, if I have to give a pick from the small cap space, then Mcnally Bharat will be a strong small cap contender in the asset nabler space.Stock picks for the long term from the domestic consumption space?Pantaloon [Get Quote] Retail is one name that can ride the boom in this segment. The management understands the retail game very well. The other story that is a part of domestic consumption story is ITC. It is a part of the FMCG sector, in the agricultural space -- which I believe also offers a huge opportunity for investment. Another name in this space could be McDowells.Your advice to young investors?Don't think you can make quick money in stocks. Don't go by tips and hearsay. It is a dangerous thing that people can do at your age. You have to understand what companies you are investing in, what is the aim of your investments is and then put your money in stocks.If you can't follow this path, then mutual fund route is better for this age group to create wealth. If you look at it, over a period of time, large part of wealth is created through asset allocation rather than stock picking. If you are able to get right your asset allocation mix then I think you have done 90 per cent of your job.My suggestion to young people would be if you are investing directly in equity, do your home work thoroughly. Read research reports, read about the company you want to invest in, gather more information about it. Then make an informed decision.Typically, I have seen most young people these days call up their friends working in a stock broking house and ask them for tips. This will help them make money in the short-term. But, on a net basis, they won't be able to take this money out. This way, they will make money but not create wealth. Making money is short-term, creating wealth is a long-term process.Will you be able to make money out of the markets using trading tips? It never happens. Creation of wealth can only happen if an investor is looking at it as a serious business. Look at it this way: People will work for 8-10 hours in their jobs and make Rs 8-10 lakhs a year. And the very same people want to make the same amount of money in a month's time purely acting on tips from their friends. From the effort and return point of view, there is some disconnect, right?When you come to the stock market, you should come with a long-term perspective. But they don't look at what kind of input they are putting in this effort. They should ask these questions: What kind of intellectual effort I am putting in this? What kind of research am I doing? Most young investors don't do this. In my opinion, this is a very dangerous sign.

HOW TO CREATE WEALTH FROM WASTE

WHEN MOHAMMED Arif Noorzai, Afghanistan’s minister for light industries, came calling a while ago, he made a rather unusual request. He insisted on visiting Panipat in Haryana.
Why Panipat? Not because it’s the site of ancient battles, but because it has an unusual industry: scores of the city’s inhabitants make a living spinning blankets from woollen rags. Known as shoddies, these coarse, low-cost blankets are made on looms set up in backyards, and everyday consume over four containers of cut rags imported from the US and Canada.
Both raw material and finished product are cheap, and it generates employment. It is this vibrant community industry that Noorzai wanted to take back to his war-ravaged country.
Scavenging angels. And it’s not blankets alone. The town boasts of a huge subsidiary market that runs on discards. "Zippers, buttons and cloth lining are salvaged from the tonnes of woollen garments everyday," says Puneet Agarwal, S.K. (India) Marketing, in the business for 15 years.
Agarwal and his ilk are only now being recognised for their gutsy entrepreneurship. Over the years, they have battled reluctant bankers, poor product acceptance and the lack of coherent policies.
Waste management, in fact, did not start off as a business opportunity. Environment-conscious people across the country took the initiative to clean up their world and, in the process, more often than not, found that their initiatives could help someone somewhere make money as well (See sideshow: Citizen clean).
Now, we have waste entrepreneurs all over the country–people who have tinkered with technology and come up with the best way to not just dispose of garbage but to convert it into solid, money-making proposals. Which should not really be such a surprise. After all, Indians are no strangers to recycling and its merits. Every little thing is salvaged and reused in several incarnations over several generations. Add a profit angle to this, and there you have your waste entrepreneur. As N.B. Mazumdar, chief of waste management at Hudco, says: "Conservation and thrift are integral to our attitude."
Initiatives in this field are wide-ranging. On one end of the spectrum, you have housewives like Delhi-based Asha Pandey who converts milk bags, thread and paper to teaching aids and rugs. On the other end are giant waste-to-energy (WtE) units like the Rs 78 crore power unit in western Maharashtra driven by bagasse from sugar mills. Ranging from the usual suspects like plastic, metal, glass or paper, right down to human hair, dog fur, animal and human excreta–there seems to be little that cannot be reconverted and sold.
Gold from dross. Much of the action can be attributed to judicial activism and the subsequent stipulations of the Municipal Solid Wastes (management and handling) Rules, 2000 and Biomedical Wastes (management and handling) Rules, 1998. This makes it mandatory for municipal bodies to set up waste-processing/disposal units before December 2003.
The municipal dumping grounds are virtual gold mines, as cash-strapped municipal bodies invite private enterprise to help them get rid of garbage and take the profits. Says Mazumdar: "This area holds tremendous potential, not only for small business but also for large corporates."
In the US, the solid waste industry generates $43 billion in annual revenue and contributes $14 billion as direct and indirect taxes. Over 27,000 companies, employing 3,67,800 people, are engaged in this business, which accounts for 0.5 per cent of the GDP.
The potential here is tremendous: India generates around 48 million tonnes of municipal solid waste (MSW), with an organic, biodegradable content of over 40 per cent, ideal for composting. Municipal bodies spend between Rs 500 and Rs 1,500 per tonne on collection, transportation, treatment and disposal; only 5 per cent of this is spent on final disposal.
Private players are now being enticed to take on the task. The announcement in Budget 2002 of a Rs 500 crore Urban Reform Incentive Fund and a City Challenge Fund, which seeks to rope in the private sector in the provision of civic services, may trigger activity here. The Mumbai-based Excel Industries has set up aerobic (microbial treatment) composting plants in 12 cities. The municipal bodies supply free MSW, the entrepreneur runs the plants, and Excel provides the know-how. "Over 500 tonnes of MSW are turned into 200 tonnes of compost in a 45-day cycle," says Excel’s Ramesh Gade.
In 20 Class 1 towns of Rajasthan, including Jaipur and Jodhpur, the state has offered 30-year land leases for MSW projects at a mere Re 1/sq.m/year. Hyderabad and Pune have given private parties the task of collecting and disposing hazardous waste from hospitals and small clinics.
Money from MSW, hospital waste, ash... the possibilities are endless. Intelligent Investor looks at six areas where entrepreneurs have made money from muck.
Composting musicMrudula Saptarshi of Mumbai started by campaigning to separate garbage at the household level into wet/organic (kitchen) and dry/synthetic waste (plastic, glass, paper, metal). Separation is the key to modern waste management practices. She began with vermiculture (using earthworms to convert garbage to compost) in her kitchen garden.Soon, companies, hotels and housing societies were calling her in as consultant.
MRUDULA SAPTARSHIVermigold International, MumbaiKind of waste: Municipal solid wasteConverted into: VermicompostTurnover: Rs 25 lakh a yearContact: 022-6463589vermigoldinternational.com
That’s when her passion turned into a business. Today, Vermigold International, her company, is a Rs 25 lakh a year business that has graduated to large projects, like the one she has launched with the Municipal Corporation of Greater Mumbai (MCM).
MCM has leased her 2,400 sq.m of land for free, and has promised to provide 35 tonnes of vegetable and flower waste daily from the Dadar market. The unit cost Rs 10 lakh, and MCM gave an interest-free mobilisation advance of Rs 5 lakh (to be repaid in 10 instalments over 28 months, with an 18-month moratorium). The other Rs 5 lakh came from Saptarshi.
The unit has a monthly capacity of 100 tonnes; compost will be retailed at Rs 15 a kg. Saptarshi will pay MCM Rs 25,000 a month or 10 per cent of profits, whichever is higher. "I have offers from other states to set up similar plants," she says.
Blood, toil, sweatHospitals are a major source of dangerous and noisome waste. Incineration, the preferred method of disposal, releases toxic fumes and has many critics. Pune’s doctor couple Nirmala and Hamir Ganla is dedicated to the task of safely recycling the waste generated from their 12-bed maternity home.
In October 1997, the couple started a three-year experiment in collaboration with Pune’s B.J. Medical College. They used the aerobic process to convert all bio-medical waste from their hospital–sanitary napkins, placentae, blood-soaked dressings–into manure. They tested the results. "The manure was as benign as ordinary soil and no pathogens were detected," says Ganla.
To convince sceptics, the Ganlas then injected samples of treated hospital waste and garden soil with HIV-positive and Hepatitis B-positive blood and some salmonella cultures. "Follow-on studies revealed no trace of virus from the treated samples," says Ganla.
HAMIR GANLAOm Maternity Clinic, PuneKind of waste: Bio-medicalConverted into: ManureSavings: Rs 20,000 a yearContact: 020-6694182
Over the years, the couple has carted 400 kg of manure from their clinic to the 22-acre farm where they grow over 15,000 fruit trees, mostly chickoo and mango. "The trees don’t show signs of any infection," says Ganla. Chemical fertilisers and insecticides would have cost around Rs 20,000 a year. Considerable savings indeed, and from a most unlikely source.
Ash to cashPower generation through coal combustion produces minute particles of ash that pose enormous problems of disposal. Over 70 million tonnes of fly ash is generated every year from over 80 thermal power stations.
Despite ingenious means of disposal, ash utilisation is a poor 10 million tonnes per year. One way out is to substitute clay bricks with fly ash bricks. NTPC (National Thermal Power Corporation) supplies free fly ash to entrepreneurs and the Orissa government has even banned the use of top-soil for brick manufacturing within a 70-km radius of thermal power stations. Consequently, over 50 fly ash brick manufacturing units have come up in the state.
New Delhi’s Jitendra Pareek saw the potential in 1998. He invested Rs 3 lakh to set up Eco Vision Industries, which uses over 26 tonnes of fly ash a day.
JITENDRA PAREEKEco Vision Industries, New DelhiKind of waste: Fly ashConverted into: Bricks, blocksTurnover: Rs 25,000 a dayContact: 011-5267603
The start was not easy. Why would anyone want to buy expensive fly ash bricks at Rs 1.50 when baked clay bricks cost Rs 1.30? But once he convinced doubters about its greater strength and thermal insulation, and the considerable savings in mortar, there was no looking back.
"I had to train masons at construction sites," recalls Pareek. His clients now include industrial houses. "I haven’t tapped even 5 per cent of the local market," he claims. Eco Vision’s product range has extended to kerbstones, pavement tiles and inter-locking blocks. The daily turnover: Rs 25,000. "By next year, I hope to make Rs 1 lakh a day," he says.
Paper tigerFor centuries, waste has been integral to the manufacture of handmade paper. The villagers of Sanganer, near Jaipur, are called kagzies and have been making handmade paper since the time of Maharaja Sawai Man Singh.
New Delhi’s Rajinder Singh chucked a career in medicine to emulate the kagzies. He bought a sick handmade paper unit four years ago and pumped in Rs 10 lakh to set up Eco-Shop.
RAJINDER SINGHBuds & Blossoms / Eco-shop, New DelhiKind of waste: Cotton ragsConverted into: Handmade paperTurnover: Rs 12 lakh a yearContact: 011-3317501
His initial expectations haven’t materialised but Singh is optimistic and on his way to Germany to survey the market. However, breaking into the export market means taking on titans from Bangladesh, the Philippines and Nepal. Handmade paper traditionally uses agro waste, silk waste, cotton rags, straw as raw material. Ironically, it’s Indian recycling ingenuity that has been a damper to Singh’s business. "Cotton rags are now fluffed up and used for making dhurries, which leads to erratic and expensive raw material supplies," he explains.
Hair-raisingThere’s money even in that most scorned of household waste–hair. And Chennai’s Kishore Gupta has discovered it. He’s not the only one. Human hair export is a Rs 200 crore business in India today. Of this, Gupta Enterprises alone accounts for Rs 44 crore. "Hair that’s thrown out is waste, hair that is collected is money," says Gupta.
Hair export is nothing new. Gupta’s father started off in the late 1960s by supplying hair to exporters, then set up his own unit in Eluru in Andhra Pradesh a decade later. His company has since bagged export awards for 14 years.
KISHORE GUPTAGupta Enterprises, ChennaiKind of waste: Human hairConverted into: Wigs, toupeesTurnover: Rs 44 crore a yearContact: 044-6403737
The business does not depend entirely on hair from barber cuttings and temples, though the Tirupati temple alone sells a staggering Rs 20 crore worth annually. A large portion of it comes from households across India, collected by rag-pickers and garbage collectors, which then finds its way to Eluru.
Here it is sorted into lengths and colours, cleaned, washed and dried, and then shipped out in containers. Each month, 30-35 tonnes of hair is exported to 32 countries. China is the biggest buyer: the hair is made into wigs, toupees and braids for the US and European markets.
The roof with a farmRetired Mumbai industrialist R.T. Doshi has now turned farmer. His field is his rooftop. He uses the organic waste from his kitchen as soil and harvests about 5 kg of vegetables and fruits every day, enough for his family of 10.
The science he uses is neither hydroponics nor bonsai, but much simpler. The top and bottom of a drum are cut off, then 12 holes of 8-10 cm diameter are cut into the body at varying heights.
R T DOSHIMumbaiKind of waste: Wet kitchen wasteConverted into: Farm manureSavings: Rs 18,000 a yearContact: 022-6401439
It is then filled with sugarcane bagasse to a height of 5 cm. Kitchen waste is dumped into the drum every day, till the pile reaches the first hole. At this point, a sapling or seed is placed in the hole.The process is continued till the drum is full. The plants grow out of the holes. It involves minimal labour and time, and needs watering only twice a week.
"An urban family produces a kilo of garbage a day, enough for city farming," says Doshi. Drums can be placed on the terrace or balconies. Doshi spends just half an hour a day to farm his 1,200 sq.ft roof, and grows figs, guava, lemon, brinjal and beans. "City farming works wonders for the budget. I save Rs 18,000 a year on vegetables," he says. Over 100 Mumbai families have emulated his example.
On balance. The going has not been smooth. The main problem for such businesses has been marketing. First, convincing users to switch and, second, breaking the stranglehold of established producers, whether of chemical fertilisers, plastic bags or clay bricks. Evidently, entrepreneurs in this area must be interested in more than just making money. They are in the business of finding feasible and profitable solutions to some very big problems of garbage disposal and environment pollution.

Indian blue-chip cos create 3 times more wealth than US firms

India’s 30 blue-chip companies, part of the stock market benchmark Sensex, may be minnows compared to their US counterparts, but they have created nearly three times more wealth for their investors this year so far compared to the American giants.
The total market value of the 30 Indian companies is less than one-sixth of the same in the US.
Similar to the Bombay Stock Exchanges 30-share barometer index, the US market’s benchmark index Dow Jones Industrial Average (DJIA) also has 30 companies.
However, cumulative market capitalization of 30 Sensex companies stands at just about $668 billion (Rs26.3 trillion) against $4,158 billion of the DJIA constituents.
But when compared in terms of the gain in market value since the beginning of this year, Indian blue-chips have outperformed the US giants by a wide margin.
Those listed in the US have together added $84.48 billion to their investors’ kitty in this period, while the same figure for the Indian market stands at a whopping $219 billion.
Besides, the total gain recorded by the 30 DJIA companies is less than than the increase in the market cap of just two biggest Sensex gainers. Mukesh Ambani-promoted Reliance Industries has registered the highest gain of $61.3 billion , followed by state-run power generation major NTPC with $26.8 billion.
In the US, the highest gain has been recorded by energy giant ExxonMobil, whose market cap grew by $45 billion.
Even in the percentage terms, the Indian stocks have appreciated by an average of about 37% against just about 7% in the US.
This is despite the Indian market seeing a higher number of companies seeing a dip in their market value. In India, 11 Sensex companies have recorded a market capitalisation dip against 10 in the US.
Among the US firms, banking giant Citigroup recorded the biggest plunge of $108 billion, while Home Depot, AIG and Altria Group saw an erosion of $25-40 billion each.
The gainers among the US blue-chips include Microsoft ($38.2 billion), Coca-Cola ($34 billion), Merck & Co ($32 billion) and Intel ($31 billion).
Besides, AT&T, Hewlett-Packard, P&G, Verizon Communications, United Technologies, McDonald’s, IBM and General Electric have also seen a surge of more than $10 billion each.
In India, RIL has recorded the biggest gain of $61.3 billion, followed by NTPC ($26.8 billion), L&T ($22.1 billion) and ONGC ($20.4 billion).
Bharti Airtel, Reliance Communications, ICICI Bank and SBI have also seen a gain of over $10 billion.
Among the losers, IT giant Infosys saw the biggest erosion of $8.1 billion, followed by other two software majors TCS and Wipro which saw a fall of $5.9 billion and $5.1 billion respectively.
Tata Motors lost about two billion dollar, while Cipla and Mahindra and Mahindra lost close to one billion dollar each. The losses have been below $1 billion for five other companies — Dr Reddy’s Labs, ACC, Bajaj Auto, Hindustan Unilever and Satyam Computer.
The four IT firms — TCS, Infosys, Wipro and Satyam — together lost $19.9 billion, forming a major portion of the total loss of $26.9 billion by 11 companies.
Among the Indian blue-chips, RIL has the highest market cap of about $106 billion, ExxonMobil is the most valued firm in the US at $465 billion.

Create Wealth - How to Make Money Fast With Low Risk!

Anyone can create wealth and there are 4 main points to consider, there easy to learn and if you implement them, you will create wealth with low risk.
You don't need to work long hours and you don't need to be innovative, all you need to do is follow the tips below.
So, here are your 4 simple tips to create wealth and an example of how to put them to work for you.
1. You are Responsible
No one else is going to do it for you. You're on your own, but that's the best way.
In today's society we like to consult experts on a wide variety of things, however if you consult an expert on how to create wealth, the only people likely to get rich are them!
Forget, MLM, gambling and finance sure fire systems from a guru, or any other scheme where you pay a few hundred dollars to unlock the door to unlimited wealth.
They don't work.
Wealth creation is all about having some capital and putting it to good use make it grow. We will give you an example of how to do this however for now lets look at the other 3 tips:
2. Working Smart V Working Hard
Lots of people work hard, however hard work does not result in wealth creation and there is no correlation between working hard and making money.
If you want to make money you need to work smart and there's a big difference.
Working smart means, spotting an opportunity and using your own judgment in an area that offers you good risk to reward.
3. Understanding compound growth
Most people are in to much of hurry to create wealth and want to get rich overnight.
Because they are in to much of a hurry, they end up losing their money by taking to much risk.
Wealth creation does take a bit of time to get started, but once you start making money compound growth soon kicks in and your money builds exponentially.
For example.
If you have $30,000 to start, to get to $120,000 will take 3 years (at 100% annual growth ) giving you a profit of $90,000.
However, the next year at the same growth rate you will make $120,000 profit in just one year.
As your nest egg builds your money works for you and grows exponentially.
The important point to remember is:
Make your money work for you.
That means taking advantage of compound growth as illustrated above.
4. Understanding risk & reward
Compound growth makes your money work for you as it grows as your profits are re invested.
You must be careful however to keep risk low and NOT lose it.
You need to target:
The highest growth rate to lowest downside risk – Not the highest growth rate.
For example, if you lose 50% on $100,000 you have $50,000 left. You then have to make a 100% to get back to square one.
Which investment would you rather have?
A. One that has potential growth of 200% with a 80% chance of losing all your funds.
Or:
B. One that has 100% growth potential with a 10% chance you will lose all your funds.
If you have understood the above, you will see the way to create wealth is to pick investment B.
As you create money, compound growth kicks in accelerating your gains.
Balancing the risk to reward will ensure your money grows swiftly with low downside risk.
That's great, but can you give me an example of a good investment ?
A great investment to create wealth is land.
It's cheap, in short supply, has massive growth potential, low risk and finally, it's simple to understand and invest in.
Prime land is simply in short supply.
If you buy in booming economies and target land next to growing urbanization or a growing infrastructure, you can sell it on at huge profits once the land is developed.
One of the best locations is just 3 hours direct flight from the USA.
In Costa Rica, Americans are buying beachfront property at up to 70% less than in the US and of course it has to be built on land.
This is yielding profits of up to 100% per annum for savvy land investors
buying in the right locations.
Even better downside volatility is very low.
So, if you put the 4 tips to work we have given you above buying land in Costa Rica you could soon see your money growing quickly with low risk.

SIP — A Powerful Tool to Create Wealth

Mutual Fund (MF) is a special type of
investment institution that pools the
savings of the community and invests
largefundsinawell-diversifiedportfolioofsound
investments. It employs professionally qualified
and well-experienced investment consultants
and fund managers to take the pooled money
and invest it in a wide range of industries with
the objective of minimising risk and maximising
return on investment.
An MF is set up in the form of a trust, which
has a sponsor, trustees, an Asset Management
Company and a custodian. The Mutual Fund
industry in India started way back in 1963 with
the formation of the UnitTrust of India. However,
aneweraofthisindustrybeganwiththeentryof
public sector banks, private financial companies
and foreign institutions.
Avarietyofschemesareavailabletoinvestors,
including Debt-Oriented schemes, Equity
Schemes, Balanced Schemes, Equity-Linked
Savings Schemes, Money Market Schemes,
Sector-Specific Fund, Index fund, etc. An investor
in MFs generally chooses the scheme as per his
investment objective, risk profile, time horizon,
etc. If the investor invests a sum of Rs 10,000 at a
Net Asset Value (NAV) of Rs 10, he receives 1,000
units of the fund. The timing of the investment
in such a case may turn out to be favourable or
unfavourable to the investor. Thinking on this
line, it may be a wiser decision for an investor to
goinforaSystematicInvestmentPlan(SIP)rather
than a regular MF investment.
UnlikeMFinvestments,inwhichallhismoney
is invested at one go, SIPs allow the investor to
invest a specified amount at predetermined
specific intervals. It works the same way as a
Recurring Deposit. For example, an investment
of Rs 10,000 can be spread over 10 months, with
Rs 1,000 invested every month. The number of
unitsaccruingintheSIPisdependentontheNAV
of the scheme prevailing at the time of purchase
of the fund.
Advantages of SIP
l
The biggest difficulty in investing is in
deciding when to invest. SIP helps us to
overcome this problem. It is a disciplined
investment irrespective of the state of the
market. It makes the market timing totally
irrelevant. And especially with the next 2-
3 years looking good from the economy
point of view, one can expect good returns
through regular investing.
l
MF allows us to invest amounts as small as Rs
500–1000 in SIP. This makes investing easier,
as it does not strain monthly finances. It is
therefore an ideal investment option for a
small investor who would otherwise not be
able to enjoy the benefits of investing in the
equity market.
l
In SIP, an investor invests a fixed sum of
money regularly for a pre-determined

Do bonus shares create wealth for Indian Investors ??

Bonuses do not necessarily bring free gains for investors. Except for technology heavyweights like Infosys Technologies and Wipro, bonus issues did not add much to investor wealth, especially in the long run. In fact, investors in several companies have lost substantially, even after taking into account extra shares they received through bonus issues. Sterlite Industries, Sun Pharmaceuticals and Wockhardt are among notable examples of this phenomenon. Their shares are currently quoting at a discount to the ex-bonus prices, which are adjusted on the basis of bonus ratio. From an ex-bonus price of Rs 636 on February 6, Sterlite Industries has fallen by 15% to end at Rs 539 on Friday on the BSE. The company had issued bonus shares in the ratio of 1:1. Wockhardt, too, has witnessed a fall in investor wealth after the company issued one share for every two shares held, in April this year. Since turning ex-bonus on April 28, the shares have lost 9% to Rs 271. The pharma major gave one share for every two held by its shareholders. Sun Pharmaceuticals, which has paid 1:1 bonus, is currently quoting at Rs 376, which is 5.5% down compared to the ex-bonus price of Rs 398 on May 27 ‘04. Investors in technology heavyweights Infosys Technologies and Wipro are, however, relatively lucky as these shares are quoting at a premium to the ex-bonus prices. For instance, Infosys Technologies, which turned ex-bonus at Rs 1,409 on July 1, is currently quoting at Rs 1,480, up 5%. Apart from capital gains, investors also made a windfall in the form of a whopping 2,590% dividend from the technology major. The Wipro shares ended at Rs 534 on Friday, compared to the ex-bonus price of Rs 532. The company has rewarded its shareholders with a 2:1 bonus issue and a 1,450% dividend for ‘03-04. Apart from high-profile large-sized companies, several other mid-and-small-cap companies have also joined the bonus bandwagon over the past few weeks. While their shares have been attracting a lot of interest in the current market, the sustainability of the up-trend would also depend on other factors like fundamentals and general market conditions, according to market sources.

'Futures trading will create wealth'

If anyone asks who should be named the pioneer of online Futures trading exchanges in commodities, the first name that would prop up will be that of Kailash Gupta.
The National Multi Commodities Exchange of India, founded by Gupta, was the first to provide online transaction facilities to investors who wanted to buy and sell Future contracts of commodities.
The electronic platform and the system of online trading became so successful that other players jumped into the fray. Today, there are over a dozen online commodity exchanges in the country, a majority of them dealing only in specific commodities.
Commodity Market caught up with the globe-trotting managing director of NMCE soon after a board meeting he had convened to discuss the fate of Futures trading and the policy decisions the Indian government should take to enable 100 million farmers to realise remunerative prices for their produce while providing food security to over 1.1 billion consumers.
Gupta strongly believes that in a globalised economy, India needs to put in place systems that can make the most of free trade while protecting its national interests. He points out that only a fully aware Indian producer and consumer, backed by a transparent and accountable trading system, can prosper.
He cites the example of rubber and spices exchanges that have benefited the farmers and traders of Kerala to prove his point.
In an hour-long interview with Rajesh Shah of Commodity Market, Gupta delves into the complex issues that policy makers have to deal with to make Futures trading in commodities a vehicle of growth and prosperity for Indian farmers and consumers.
NMCE introduced the concept of online commodity exchanges in India. After over four years of running this concept successfully, what is your take on commodity Futures in India?
Yes, NMCE introduced or rather 'revived' the concept of Futures trading in India, in demutualised or electronic form - from concept to commissioning. The NMCE initiative has resulted in two more similar exchanges coming up.
The other exchanges have followed the best global trading practices and the reliable delivery system evolved by NMCE. Farmers could now plan the cropping pattern too through Futures trading. The stakes are too high for 100 million farmers and one billion consumers, creating wealth for the nation.
Interestingly, producers are also consumers in a way. A wheat grower in Punjab would like to buy pepper or cardamom grown in Kerala at reasonable rates and so on. Commodity Futures in India will bring about a revolution, marking a ten-fold increase in the volume of trade within the next three years. This will benefit both producers and consumers. Futures trading has brought about awareness among the producers. Farmers' price intelligence has also increased.
What would be the scenario five years from now especially trading through commodity exchanges?
Five years is too long a period to predict for the commodity market. One thing is certain. It is no more an exclusive domain of some traders. Top B-schools in the country have introduced relevant courses in commodity markets, risk management and price discovery. Foreign institutional investors and multi-national corporations are eying a pie in this hitherto unexplored market. Foreign direct investments, if permitted, may change the entire complexion of the commodity trade. Let us not forget banks and mutual funds have changed the name of the game in a very short span.
Much depends on the policy decisions of the government. It is high time the government removes the control over Futures trading. Any control would cause more damage than benefits to the economy.
Which are the other commodities that can be traded on Futures exchanges?
At present, nearly 90 commodities are traded on the three national exchanges. They include bullion, base metals, mineral oil, food grains and cash crops like cotton and jute, spices, plantations, sugar, oilseeds, edible oils and their derivatives.
NMCE began with 24 commodities on November 26, 2002. Today, it trades in 59 commodities, in certain commodities like pepper in six series concurrently. It just added 'Erode' variety of turmeric this month.
If one looks at the commodities traded at New York, London, Chicago and Tokyo metals and commodity exchanges, it is mind-boggling. Any commodity that is subjected to high volatility and fluctuations in price could be traded in Futures exchanges, with the permission of the regulator.
Proposals for weather Futures, carbon emissions, energy etc are also in the pipeline and can be the next generation choices for investment. Before introducing new commodities on the Futures exchanges, it is important to carry out an in-depth research on each of the commodities to find out the viability of trading.
There is no point in introducing new commodities when the trading has remained dormant for many a commodity already listed on the exchanges.
When compared to Futures exchanges abroad, what is severely lacking in Indian exchanges, especially NMCE, MCX and NCDEX?
Nothing is lacking. In fact, we are far ahead of the Futures exchanges of the developed countries. While the more successful exchanges in a developed economy like the USA are still functioning in open outcry method, we have jumped to 100% online transparent trading platform.
Therefore, we are much advanced in terms of technology. The improvement could be in the investment pattern, approach, understanding and awareness for which efforts are collectively being made by the regulator and of the exchanges to educate the investor. There is scope for increasing the volume here. Global foreign exchanges trade in volumes 20-25 times the size of physical trading, depending upon the commodity. In India, there is scope to increase it to at least $2 billion (Rs 40,000 crore) daily from around Rs 10,000-12,000 crore (Rs 100 billion-120 billion)
What additional facilities do you require from the government side to develop commodity trading in India?
The Future Contract Regulation Act, 1952, needs to be amended to remove restrictions on options. Futures without options is like dancing without music. While the government has allowed options in securities trading, it is still to do so for commodities.
The government has initiated moves to provide financial support to growers through Venture Capitals and Small Farmers Agri-Business Consortium. Similarly, Nabard and Regional Rural Banks can play a greater role in this direction.
With institutional credit, the online commodity exchanges could free the growers from the clutches of rural indebtedness.
Are commodity exchanges creating wealth for its users and what is the combined figure till now?
Unlike securities exchanges, commodities exchanges are not for creating wealth. They are meant for better price discovery and to help farmers plan cropping pattern and help them hedge risks.
One cannot quantify the wealth generated by the stakeholders as is possible for the Securities. There are many stakeholders of the national online commodity exchanges.
Individuals, partnership firms, sole proprietorship, co-operative societies, companies, corporations and institutions incorporated under the Companies Act are eligible to be members of the exchange.
It may be recalled that NMCE was formed with a view to fulfilling some national goals. The basic objective is to protect the growers, notably farmers, from the value of their crops going below the cost of inputs through a transparent online price discovery and foolproof warehouse delivery systems.
We believe that once the dynamics of this mechanism are well placed and understood, wealth creation is not far to attain.
There is a general notion that price rise in pulses few months back was fuelled due to forward trading in pulses. How much this allegation holds true? What should be done to contain such kind of situation in the future?
It has been clarified umpteenth time by the FMC that Futures trading was not responsible for the rise in the prices of pulses or wheat. If it were so, all the commodities traded on Futures market should also have shot up.
India is a basic importer of pulses. The announcement banning exports of pulses sent out a signal, which had its singular effect in the market. Similar price hike was subsequently witnessed in case of wheat for different reasons, but vested interests and disgruntled elements pointed accusing fingers at everybody else.
There are other factors too, like sentiment, panic and seasonal cycles, which analysts often overlook or ignore. Five per cent shortfall in production in a certain commodity could trigger off a 10 per cent panic.
What was your major achievement during last four-and-a-half years of operations?
Over the years, we have increased the number of commodities traded on NMCE terminals from 24 to 59, as we plan to add few more shortly. We became the first commodity exchange in the world to get ISO 9001:2000 Certification. We were the first to offer Futures trading in rubber, cardamom, and raw jute - on an electronic platform - offering guaranteed clearing and settlements by assuming counter-party risks.
We are also in for horizontal growth. We have opened branch offices in metros like Mumbai, Delhi, Kolkata, Bangalore, Cochin as well as in traditional trading towns like Jodhpur Bikaner, Sriganganagar (Rajasthan).
We have been mandated by government of Rajasthan for creating an Electronic Spot Market.
Your (NMCE) had many firsts like launching various commodities in India on Futures exchange; but why is it so that other exchanges got off later on are ahead of NMCE in terms of volumes?
Volumes are no barometers to judge an exchange's capability and what it is trying to offer to the investors. NMCE's objective is not to get into the numbers game but to follow the criteria laid down by the government for setting up a 'Model National Exchange' with robust mechanisms.
Where do you place NMCE in terms of ranking with other exchanges operating in the country especially NCDEX and MCX and why?
NMCE will always remain the country's premier online multi-commodity exchange with nationwide reach, as the trendsetter in formulating and upholding its national objectives. And I rank NMCE as the leader and others will follow.
Your delivery mechanism is believed to be strong. Can you elaborate on how you made it strong?
We believe that a commodity Futures market without delivery-based settlement system is a crown without feather. Our delivery system is strong for two main reasons: One, because it is backed by the receipt system of Central Warehousing Corporation, a neutral organisation.
Second, we have a thorough understanding of logistics involved in this market.
Is this delivery mechanism which makes you believe in delivery of contracts unlike other exchanges where delivery is far less than what you have?
Yes, for sure, our model to form NMCE had a deep-rooted motive to have settlement of these contracts only via delivery and not cash settlement. In India, where any agri commodity has 50 different prices at 50 different locations you cannot come to one price to cash settlement and therefore delivery is important and the fair way to settle contract. NMCE does not want to become an arbitrator between buyers and sellers.
Your Kerala model is well appreciated. Do you plan to replicate that in other states? Which are the states and how different?
Our Kerala model has seen success mainly because of the high literacy rate of the people of Kerala. People there look at long-term benefits and not short-term profits. Kerala is rightly called 'God's own country'. Education and implementation of land reforms laws have made it the 'God's own country'. We need to educate people of other states if we want to replicate the Kerala model there. Indeed, we intend to replicate the Kerala model in all the states.

Save Taxes & Create Wealth

Equity linked saving Scheme, equity and debt oriented mutual funds. * Unit linked insurance plans * Multi-purpose & endowment insurance plans * Money back plans for children & mutual fund schemes for children's education * Mortgage insurance & retirement plans * GOI bonds, IPOs, NFOs & Fds, fixed maturity plans * Mediclaim & overseas travel insurance

Does high dividend yield stocks create Wealth?

I was very surprised after reading a piece on Wealth Creators by Moneylife given the returns generated by high dividend yield stocks over 1998-2008. Here is the list of companies whose payout is high with the returns (including dividends earned).
Castrol India : 31%
Abbott India : 26%
P&G Hygiene & Healthcare : 21%
GlaxoSmithKline Consumer : 13%
Wyeth : (-7%)
Merck: (-22%)
Ingersoll-Rand (India) : (-22%)
Gillette India : (-27%)
Novartis India : (-30%)
Clearly, from above, one get a sense that high dividend yield stocks have turned out to be wealth destroyers rather than wealth creators. One would have been better off with bank FDs. According to ace investor Rakesh Jhunjhunwala, Multinationals have the worst corporate goverance standards in India. That might be one of the reasons for such pathetic returns.
But on the other hand, we have stocks like Phoenix Mills, Orient Abrasives, Motherson Sumi and Sesa Goa, where dividends have created wealth for the shareholders. If one goes by the top 20 wealth creators of 1998-2008, only 6 stocks have earned more dividend than the capital gains. That’s a mere 30% success. So, it would be fair to say that high dividend yield stocks should be avoided from a longer term perspective.

How to create wealth successfully

If someone were to ask me what is the best investment to do, my perpetual answer is and always will be, 'Invest in You'. That's right, you are your greatest asset and you are responsible for everything you do whether you create or destroy wealth.
The number of people who create wealth is much lower to people who destroy wealth. That is to say that amongst us there are more individuals who are more wealth destroyers than creators. There are 3 reasons for that:
Majority of the people don't understand 'risk' and the inherent wealth creation within a calculated risk, hence they let their money stay in banks and bonds.
The ones who understand the real concept of 'risk' start on the right track but often do not succeed because they simply lack the conviction in their own self.
Most people have a fear, the fear of failure i.e. to say that people are not risk averse but loss averse. To explain further, if one could have a certainty of returns from a risky investment, one would have no problems to deploy money in that investment.
But in all the above situations, wealth is not created and this is more due to lack of knowledge and this lack of knowledge has its roots in investing in yourself, that's as simple as it is.
So what does 'Investing in you' mean? It means trusting your own conviction. Here is a diagram that will help you understand better.
How do you understand the correct concept of risk?
Risk means volatility and volatility is inherent to risky investments. You would be more worried if your capital fluctuates but you would not be so perturbed if your profits fluctuate. Having said this, you must first allow for profits to get created, which require time and patience. Then if profits fluctuate it is better than your capital fluctuating.
Risk of capital erosion diminishes as profits build up with time. Capital will fluctuate in the beginning but over time, say a couple of years then it's only the profit. You can still take home 14 per cent to 16 per cent average returns each year totally tax-free. Now tell me where is the risk here?
Gaining more conviction, how?
It is very important to come to your own conclusion. To give you an example if you did analysis of say some FMCG (fast moving consumer goods) company and came to the conclusion that this company has a great strategy and will continue to grow at 15 per cent for the next decade - in my view that is the safest, brilliant and a highly rewarding investment avenue that you have discovered.
So then why fear putting more than 50 per cent of your money? But this comes out of knowledge and research, which comes by investing in your own self, that is, investing in learning and building investment skills.
What is the greatest fear?
Not trusting your own self. Your greatest enemy is you, yourself and not the stock market. Don't sell when you see a good investment is down by 20 or 30 per cent. Don't be timid and act in panic.
Understand it is momentary and not perpetual. Taking the same example above, if you see prices down it's time to buy and not to fear and eject out of the investment. If you want more proof just rewind to May of 2006, the stock markets fell by 30 per cent or so and by now, much of that fall has been retraced. If you sold our earlier, you are probably still waiting to re-enter. Having fear is understandable but irrational behaviour happens due to lack of knowledge.
If you have to do something right, you got to have the learning and skills to do it right, else like they say don't play with fire that you don't understand.

What are the various small savings schemes?

JUST a decade ago, the most sought after investment option were small savings +schemes.
Though many investors have taken a liking to equities now, some allocation to safe fixed income investments helps to balance the portfolio.
Here are the popular small savings schemes you can include in your investment portfolio.
1. Kisan Vikas Patra (KVP)The Kisan Vikas Patra or KVP was launched with an eye on the large potential in the rural areas. Investments in KVP double every 8 years and 7 months. The rate of interest is 8.41 per cent pa approximately.
• Certificates are available in denominations of Rs 100, Rs 500, Rs 1,000, Rs 5,000, Rs 10,000 and Rs50,000. • You can purchase the certificates at any Post Office. • There is no maximum limit on the number of certificates purchased. • An identity slip will be issued to you on request. • On maturity, you can encash the certificates at the issuing post office. They can also be encashed at any other post office, once the officer-in-charge verifies your identity.• You can also nominate someone to receive the money.
2. Post Office Monthly Income SchemeIf you want to receive a monthly income, this scheme may be right for you.
• You can open an account with any post office either singly or jointly, with a nomination facility available.• Interest rate of 8 per cent pa is payable monthly.• Minimum investment amount is Rs 1500 and maximum is Rs 450,000 for single accounts and Rs 900,000 for a joint account.• Maturity period of the scheme is six years.• You can transfer your account from one post office to another across India, without any cost.
3. National Savings Certificates (NSC) (VIII Issue)This scheme has been designed for the benefit of not only adults but minors as well. The rate of interest is 8 per cent pa with a duration of six years.
• You can purchase NSCs for yourself or for a minor, where it can be taken jointly by two adults, a minor and a trust. • Nomination facility is also available.• Certificates in denominations of Rs 100, Rs 500, Rs 1,000, Rs 5,000 and Rs 10,000 can be purchased from any post office, either directly or through authorised agents. • Besides cash; local cheques, pay order or Demand Draft (DD) drawn in favour of the postmaster are also accepted.• You can encash these certificates at the post office where they are registered or at any other post office once the officer in charge verifies the registration.4. Post Office Time DepositsThis scheme take investments by minors a step further since it makes it possible for minors themselves to invest in directly.
• You can open an account either singly or jointly. Even a minor of 10 years and more can open an account directly.• The duration and rate of interest is: one year -- 6.25 per cent, two years -- 6.50 per cent, three years -- 7.25 per cent and five years -- 7.50 per cent.• Nomination facility is also available. • Different accounts for different maturity periods can be opened in one name.• If you withdraw your amount after six months but within a year of investment, you wont get any interest. If you withdraw prematurely after one year of investment, interest will be paid at 2 per cent less than the rate of interest specified for the period for which you deposit the money.
5. Reserve Bank of India’s Savings Bonds This is one of the safest investment since it is issued by the country's central bank.
• There is no maximum limit for investment in the bonds. • Both half-yearly and cumulative interest options are available. • The bond's duration is five years. • Earlier, RBI bonds were of two types: 6.5 per cent tax-free bonds and 8 per cent taxable bonds. The former, that is, 6.5 per cent tax-free bonds have been discontinued since July 9, 2004. Today, only the 8 per cent bond is on issue.Disclaimer: The contents of the article or are for information purpose only and are in no way meant to be advisory in nature. The author does not claim responsibility for actions taken by readers on the basis of the Article. Please consult your financial advisor for your personal money management.

Want to be as rich as Bill Gates?

WHO doesn't need money? What's more, we want a lot of it. And we are always looking out for ways to earn more.Have you asked yourself how much is that 'more'? Just how much will satisfy you? Because, beyond a certain point, any amount will not matter. If you are satisfied with Rs 5 crore (Rs 50 million), the pleasure you derive from Rs 20 crore (Rs 200 million) or Rs 25 crore (Rs 250 million) is no different. In economics, this is known as the theory of diminishing marginal utility. You may be excited at making your first million, even more at making Rs 5 crore (Rs 50 million). It may climax at Rs 4 crore (Rs 40 million). Thereafter, for each additional million you make, the excitement reduces. And, beyond Rs 500 million, it hardly makes a difference.So what is my point?There is only one Bill Gates, Richard Branson or L N Mittal in the world. Everyone is not as lucky to have the same fortune. Though we still tell ourselves secretly, "I wish it were me." Think about it. You need much lesser, perhaps just a fraction of what these legends own. You don't need to worry and feel bad if you don't have the mansions, the private jets or the fleet of Mercedes. Perhaps you just don't need it. Say I give you Rs 5 crore (Rs 50 million). What would you do? Make a list. How would you spend it? Do this exercise very seriously.Perhaps that was easy. What if I gave you Rs 10 crore (Rs 100 million)? Perhaps you managed to make a list again or enhance your existing list? Now how about Rs 50 crore (Rs 500 million)? The more the amount rises beyond a certain point, we tend to run out of options, right? Unless, of course, you plan to set up petrochemical plants. If you think crores is too big to work with, apply the same to your monthly salary. If it were Rs 25,000, you would do a few things. If it were Rs 75,000, you would do a lot more. Once it crosses Rs 200,000 or Rs 400,000 per month, you run out of options.So how much is really enough?In my view, if you earn, say, Rs 3 - Rs 4 lakh (Rs 300,000 to Rs 400,000 ) per month, you could live luxuriously, and match the lifestyle of the wealthiest you know. This is not to say you cannot derive satisfaction from Rs 40,000- Rs 50,000 per month. It depends on where you live, how you live and what you want your life to be. For example, you could buy the best dinner in town for two at Rs 15,000 in Mumbai. The same in Madurai could cost you Rs 1,500 and you would be equally happy. The secret is, know your critical or optimal level. Once you know that, you know that, no matter what, life is never compromised on anything. You will have ample. And you will love whatever you do, feel complete and have an optimal level of satisfaction and accomplishment.Anything beyond your critical level is money you can splurge. Critical level is that quantum of money you need to have. Aim to touch that threshold. Else, nothing will change, life will be just the same.