Idle money is as good as burning it. It does not give pleasure to anyone. Rather than burning money or keeping it idle, you may as well spend it or use it to speculate, gamble, so on. At least, such activities give a brief moment of pleasure, don’t they?
Idle money does not work for you. Instead, it works for others. For example, if money is left idle in a savings account in a bank, which until recently was earning around 3% (now it is around 7% at Yes Bank), for more than six months, you have lost out on earning 8% by not placing it in a fixed deposit with the same bank.
In absolute terms, idle money of Rs1 lakh would have earned Rs1,500 for six months (assuming 3% interest rate) in a savings account. But, if you had placed the same money in a fixed deposit at 8%, you would have earned Rs4,000 for six months. In effect, you may have binned Rs2,500 while the bank would ‘save’ Rs2,500 because you let the money lie idle in the savings account.
Article continues below the advertisement...You could have earned and spent the extra Rs2,500 by placing your money in a fixed deposit rather than a savings account. As you can see, the beneficiary here is the bank, not you. Why let the bank benefit from your hard earned money?
The fundamental of fixed-income investing is that interest is earned every day. You should, therefore, look to maximise the interest earned on your investments. If you don’t, then, in effect, you burn money.
So, what is idle money? How to ensure it does not stay idle? How to make money work for you?
Money left in cash at home (not black money) is idle. Money left in low-interest instruments is idle. Money left in financial products that has no relevance to your portfolio is idle.
Let me elaborate. Cash lying idle at home can earn at least 6% in a savings bank account. Money in a savings bank account if not required for liquidity can earn 8% or more in a fixed deposit. Money left in a fixed deposit can earn more in liquid schemes of mutual funds or can earn more in FMPs (Fixed Maturity Plans).
Money invested in financial products that you do not require (such as investments in mutual fund schemes or insurance schemes that are actually earning less than even a bank savings deposits) is idle. You should revisit such investments and look to shift it out as quickly as possible as the charges keep adding up. Mutual funds and insurance companies charge fees that accrue on a daily basis and your investment should be making good returns to compensate for the fees you pay. If your fund is offering 4% returns after charging 2% fees, it’s time to shift it out.
There is no bigger wastage of money than leaving money idle.
Money that could have been spent fruitfully or reinvested for savings is sacrificed.You will be the loser while the gainer is usually a bank or a financial service provider.
Start making your idle money work for you and gain in the process. There is no better time to make idle money work for you than now.
The author is the editor of www.investorsareidiots.com, a website for investors.
CHAPEL HILL -- Frank Capra's 1946 film "It's a Wonderful Life" appears every Christmas: George Bailey, the reluctant small-town Savings & Loan manager fends off the ugly side of capitalism (personified in the odious land grabber Potter) by lending money to trustworthy but impecunious townspeople. Often billed as a "little guy against awful corporate fat cat" story, or as an "every single life makes a difference" parable, the film embodies yet another theme: It celebrates the work of Americans who did not go to fight Hitler, or Tojo, in World War II.
Read more here: http://www.newsobserver.com/2011/12/24/1730340/life-on-the-home-front-then-and.html#storylink=cpy
CHAPEL HILL -- Frank Capra's 1946 film "It's a Wonderful Life" appears every Christmas: George Bailey, the reluctant small-town Savings & Loan manager fends off the ugly side of capitalism (personified in the odious land grabber Potter) by lending money to trustworthy but impecunious townspeople. Often billed as a "little guy against awful corporate fat cat" story, or as an "every single life makes a difference" parable, the film embodies yet another theme: It celebrates the work of Americans who did not go to fight Hitler, or Tojo, in World War II.This Christmas, as President Barack Obama welcomes home the last American soldiers from Iraq, we should consider how future Frank Capras will represent not only the huge majority of us who have failed to fight for our country in the first decade of the 21st century, but also the sometimes-fraught relationship between fighters and civilians.Capra's George Bailey, if you recall, played by Jimmy Stewart, cannot join the Army because he damaged his hearing as a child when rescuing his younger brother from a frozen pond. That same brother, now a decorated wartime flying ace, arrives home just in time to celebrate home-front brother's triumph of faith and friendship in support of financial solvency. (You remember, too, that the Bedford Falls S&L doesn't break - but only because all Bailey's customers recognize their debt to his faith in them by chipping in with enough 11th-hour dollars to save it.)
Read more here: http://www.newsobserver.com/2011/12/24/1730340/life-on-the-home-front-then-and.html#storylink=cpy
CHAPEL HILL -- Frank Capra's 1946 film "It's a Wonderful Life" appears every Christmas: George Bailey, the reluctant small-town Savings & Loan manager fends off the ugly side of capitalism (personified in the odious land grabber Potter) by lending money to trustworthy but impecunious townspeople. Often billed as a "little guy against awful corporate fat cat" story, or as an "every single life makes a difference" parable, the film embodies yet another theme: It celebrates the work of Americans who did not go to fight Hitler, or Tojo, in World War II.This Christmas, as President Barack Obama welcomes home the last American soldiers from Iraq, we should consider how future Frank Capras will represent not only the huge majority of us who have failed to fight for our country in the first decade of the 21st century, but also the sometimes-fraught relationship between fighters and civilians.Capra's George Bailey, if you recall, played by Jimmy Stewart, cannot join the Army because he damaged his hearing as a child when rescuing his younger brother from a frozen pond. That same brother, now a decorated wartime flying ace, arrives home just in time to celebrate home-front brother's triumph of faith and friendship in support of financial solvency. (You remember, too, that the Bedford Falls S&L doesn't break - but only because all Bailey's customers recognize their debt to his faith in them by chipping in with enough 11th-hour dollars to save it.)
Read more here: http://www.newsobserver.com/2011/12/24/1730340/life-on-the-home-front-then-and.html#storylink=cpy
CHAPEL HILL -- Frank Capra's 1946 film "It's a Wonderful Life" appears every Christmas: George Bailey, the reluctant small-town Savings & Loan manager fends off the ugly side of capitalism (personified in the odious land grabber Potter) by lending money to trustworthy but impecunious townspeople. Often billed as a "little guy against awful corporate fat cat" story, or as an "every single life makes a difference" parable, the film embodies yet another theme: It celebrates the work of Americans who did not go to fight Hitler, or Tojo, in World War II.This Christmas, as President Barack Obama welcomes home the last American soldiers from Iraq, we should consider how future Frank Capras will represent not only the huge majority of us who have failed to fight for our country in the first decade of the 21st century, but also the sometimes-fraught relationship between fighters and civilians.Capra's George Bailey, if you recall, played by Jimmy Stewart, cannot join the Army because he damaged his hearing as a child when rescuing his younger brother from a frozen pond. That same brother, now a decorated wartime flying ace, arrives home just in time to celebrate home-front brother's triumph of faith and friendship in support of financial solvency. (You remember, too, that the Bedford Falls S&L doesn't break - but only because all Bailey's customers recognize their debt to his faith in them by chipping in with enough 11th-hour dollars to save it.)
Read more here: http://www.newsobserver.com/2011/12/24/1730340/life-on-the-home-front-then-and.html#storylink=cpy
CHAPEL HILL -- Frank Capra's 1946 film "It's a Wonderful Life" appears every Christmas: George Bailey, the reluctant small-town Savings & Loan manager fends off the ugly side of capitalism (personified in the odious land grabber Potter) by lending money to trustworthy but impecunious townspeople. Often billed as a "little guy against awful corporate fat cat" story, or as an "every single life makes a difference" parable, the film embodies yet another theme: It celebrates the work of Americans who did not go to fight Hitler, or Tojo, in World War II.This Christmas, as President Barack Obama welcomes home the last American soldiers from Iraq, we should consider how future Frank Capras will represent not only the huge majority of us who have failed to fight for our country in the first decade of the 21st century, but also the sometimes-fraught relationship between fighters and civilians.Capra's George Bailey, if you recall, played by Jimmy Stewart, cannot join the Army because he damaged his hearing as a child when rescuing his younger brother from a frozen pond. That same brother, now a decorated wartime flying ace, arrives home just in time to celebrate home-front brother's triumph of faith and friendship in support of financial solvency. (You remember, too, that the Bedford Falls S&L doesn't break - but only because all Bailey's customers recognize their debt to his faith in them by chipping in with enough 11th-hour dollars to save it.)
Read more here: http://www.newsobserver.com/2011/12/24/1730340/life-on-the-home-front-then-and.html#storylink=cpy
CHAPEL HILL
CHAPEL HILL -- Frank Capra's 1946 film "It's a Wonderful Life" appears every Christmas: George Bailey, the reluctant small-town Savings & Loan manager fends off the ugly side of capitalism (personified in the odious land grabber Potter) by lending money to trustworthy but impecunious townspeople. Often billed as a "little guy against awful corporate fat cat" story, or as an "every single life makes a difference" parable, the film embodies yet another theme: It celebrates the work of Americans who did not go to fight Hitler, or Tojo, in World War II.This Christmas, as President Barack Obama welcomes home the last American soldiers from Iraq, we should consider how future Frank Capras will represent not only the huge majority of us who have failed to fight for our country in the first decade of the 21st century, but also the sometimes-fraught relationship between fighters and civilians.Capra's George Bailey, if you recall, played by Jimmy Stewart, cannot join the Army because he damaged his hearing as a child when rescuing his younger brother from a frozen pond. That same brother, now a decorated wartime flying ace, arrives home just in time to celebrate home-front brother's triumph of faith and friendship in support of financial solvency. (You remember, too, that the Bedford Falls S&L doesn't break - but only because all Bailey's customers recognize their debt to his faith in them by chipping in with enough 11th-hour dollars to save it.)
Read more here: http://www.newsobserver.com/2011/12/24/1730340/life-on-the-home-front-then-and.html#storylink=cpy
-- Frank Capra's 1946 film "It's a Wonderful Life" appears every Christmas: George Bailey, the reluctant small-town Savings & Loan manager fends off the ugly side of capitalism (personified in the odious land grabber Potter) by lending money to trustworthy but impecunious townspeople. Often billed as a "little guy against awful corporate fat cat" story, or as an "every single life makes a difference" parable, the film embodies yet another theme: It celebrates the work of Americans who did not go to fight Hitler, or Tojo, in World War II.This Christmas, as President Barack Obama welcomes home the last American soldiers from Iraq, we should consider how future Frank Capras will represent not only the huge majority of us who have failed to fight for our country in the first decade of the 21st century, but also the sometimes-fraught relationship between fighters and civilians.Capra's George Bailey, if you recall, played by Jimmy Stewart, cannot join the Army because he damaged his hearing as a child when rescuing his younger brother from a frozen pond. That same brother, now a decorated wartime flying ace, arrives home just in time to celebrate home-front brother's triumph of faith and friendship in support of financial solvency. (You remember, too, that the Bedford Falls S&L doesn't break - but only because all Bailey's customers recognize their debt to his faith in them by chipping in with enough 11th-hour dollars to save it.)
Read more here: http://www.newsobserver.com/2011/12/24/1730340/life-on-the-home-front-then-and.html#storylink=cpy
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