  | | January 10, 2014 | | | | | | | Weekly Facts | | | Close | Change | %Change | | BSE Sensex* | 20,758.49 | -92.84 | -0.45% | | Re/US$ | 62.08 | 0.19 | 0.31% | | Gold Rs/10g | 29,650.00 | 260 | 0.88% | | Crude ($/barrel) | 106.93 | -3.89 | -3.51% | | FD Rates (1-Yr) | 8.00% - 9.00% | Weekly change as on January 09, 2014
*BSE Sensex as on January 10, 2014 | |
Impact 
If the property tax is collected as per new method proposed by Mumbai Municipal Corporation, you might end up paying more tax on your property than the rent you may collect. If you have a self-occupied property, or otherwise, your property tax payment may go up by about 100%-300%.
But no worries, you can take a breather atleast for the time being. Mumbai High Court has allowed property owners to pay property tax as per old method along with only 25% of the difference in amount. Recently the state Government has hiked ready reckoner rates in Maharashtra. As per the new method of calculation of property tax, tax amount for residential properties is taken as 0.35% of the capital value of the property. Capital value is arrived at by taking ready reckoner value into consideration. However, this move has attracted a lot of criticism from property owners as well as property developers. Many of them have gone ahead calling it unconstitutional.
PersonalFN is of the view that, the order of Mumbai High Court may give respite to a number of property owners including trusts in Mumbai. Before, the new method of tax calculation is implemented, several amendments / abolitions need to be done in order to make levy of tax uniform and just for all. Moves such as rise in property tax and ready reckoner rates may hurt redevelopment projects in the town as well as in suburbs, making the job of home hunters even more difficult.
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Impact 
For last few years returns from equity have remained low. Income from fixed income instruments is merely compensating for inflation. Gold which stayed strong till now has started cracking. Certainly, it has been difficult for investors to generate good returns on investments. Under such circumstances a number of rich investors are going in for California-style investment and investing in start-up businesses.
When liquidity situation is tight and getting loans become difficult the founder of companies might try to rope in new investors by diluting their liquidity. Getting lured by the possibility of reaping huge returns either on listing or on transfer of shares at higher value, investors consider taking over about 10%-20% stake in start-up business. Successful listing of relatively new businesses of late has caught the eye of wealthy investors.
PersonalFN is of the view that, being an angel investor to some business can prove to be risky if one has a low risk appetite. Companies operating on small scale might be less regulated and thus may expose investors to higher risk. Moreover, as an investor you must have time to analyse industry trends and shouldn't merely think like a financer. Every important business decision may have huge impact on your investments. One should consider supporting start-up businesses only when one already has well-diversified portfolio.
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Impact
This is unusual and has never happened in last 12 years. Gold prices measured in U.S. dollars have recorded a loss in 2013. Monetary authorities in developed nations slashed interest rates and pumped in huge money by launching stimulus programmes in response to fighting recessions over last few years. As a result, gold prices moved up consistently since 2008. However, Federal Reserve (Fed) in the U.S. has now decided to reduce the pace of stimulus and yields on government treasuries in the U.S. have nearly doubled in last 6-8 months, making yellow metal less attractive. In 2013, gold prices fell off nearly 27% to record their steepest annual fall in last 30 years. But gold in India remained stagnant over 2013 and didn't see such huge erosion in price. Although depreciation of rupee supported gold prices in India, they have been commanding premium in India even when adjusted for currency fluctuations. There have been supply constraints due to import restrictions which are making gold prices dearer in India as compared to those in other nations where there are no such restrictions.
Are you paying more for buying gold in India?
Data as on December 31, 2013
Reflects price trends in the future market
(Source: ACE MF, PersonalFN Research)
Indian Government had taken a number of steps to curb gold imports as they were the primary source for widening of India's Current Account Deficit (CAD). It hit a high of 6.7% of GDP in the third quarter of Financial Year (FY) 2012-13. Due to higher import duty and other restrictions discouraging imports of gold, India's gold imports reduced by nearly 90% in six months through November. But since the CAD fell to 1.2% of GDP in the July-September quarter this fiscal, there has been a growing demand to unwind restrictions imposed earlier.
To read more about this news and the view of PersonalFN over it, please click here.
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Impact
Many of you might be frustrated with topsy-turvy of equity markets. Stock markets have moved nowhere since 2007, although they made a new high last year. Returns generated by equities and equity oriented mutual funds might have been lacklustre for many investors. Returns on fixed deposits have barely managed to beat inflation which has been persistently high for last few years. Taking advantage of this, some companies have promoted ponzi schemes promising supernormal returns. Such schemes have proliferated in the recent past.
What are Ponzi Schemes?
In simple words ponzi schemes are fraudulent investment schemes which promise to generate unbelievably high returns such as doubling your money in quick time. Initially these schemes might yield good returns but eventually, investors don't only lose money but are left high and dry since ponzi schemes are not strictly regulated and investors bear the risks associated with investment.
Why people get lured to ponzi schemes?
It is often greed of generating higher returns entices people to invest in ponzi schemes. These schemes, on many occasions, provide high returns till they get popular to become big enough for promoters to run away with monies.
To read more about this news and the view of PersonalFN over it, please click here.
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- It is rare to find someone who doesn't use social media these days especially in urban areas where the computer literacy is high. Social media is a powerful tool as it makes communication faster and effective. But when used without responsibility, social media can be used for spreading rumours.
There has been a well circulated rumour that from January 01, 2014 banks won't accept currency notes if there is something written on them. The spread of rumour was so much that RBI had to had to officially communicate that, it has not issued any circular instructing banks to do so. PersonalFN is of the view that it is important to be aware about developments which may affect your daily life and personal finances. However, believing in any news without checking its authenticity may lead you to take hasty decisions. PersonalFN believes one should stay informed but only follow authenticated sources. PersonalFN gives unbiased view on anything that affects your finances.
- If you want to secure a loan against gold from Non-banking companies, you may get higher value for gold you pledge. Earlier gold-loan companies were granting loans upto 60% of the value of gold. The limit has now been raised to 75%. However, to curb the gold demand, RBI has already banned use of money received as loan for buying gold.
PersonalFN believes that you should wisely use money received as debt. Leveraging your investment portfolio with borrowed money is not a wise idea since you may suffer a dual loss arising on account of erosion of asset value and cost incurred for servicing debt. Right asset allocation may help you optimise your returns.
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Angel Investor: "An investor who provides financial backing for small startups or entrepreneurs. Angel investors are usually found among an entrepreneur's family and friends. The capital they provide can be a one-time injection of seed money or ongoing support to carry the company through difficult times. "
(Source: Investopedia)
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Quote : "If you would be wealthy, think of saving as well as getting." - Benjamin Franklin
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