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Offline fasee

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Money Management
« Reply #-1 on: September 26, 2011, 09:31:13 PM »
sir jee me tu khud isi ka kail hoon..ke Omore ki icecreaem kharednay ke bajai EFL ka share hi kareed dalo, icecreame say ziyada acha maza ata hai... :arrowhead:

i do have an eloborate mechanism for my investments with cash flowing in between salary to PLS account, Mutual Funds, Saving certificates and stocks....saalry savings first go to mutual funds..where they earn 12 %+ tax arbitrage of 15-16 % cummulative 28 % return....then after 1 year when they are tax-CGT exempt, they go to stocks or special saving certificates....returns from dividents & coupons of saving certificates agin goes to stocks while home expnse are well met by a decent portion of my salary....in case of any evantuality funds frmo any source can be chanelised to other source at proper time interval
@PF


so the cavalry arrived in shape of dividents eh  :arrowhead:

in my case, salary wud be arriving tommorow or day after tommorow...so i can spend a few bucks if i want to, but am in no mood at the moment.

dividnet from PICT n ABOT wud arrive after some time...and NML and CPPL to abhi XD bhi nahe huway

I think you should give a piece of your salary to stocks at these rates. Otherwise kharch to waise hi ho jane hain. Better buy something worthier than icecream  :biggthumpup:
Dividends keep supply lines running
Otherwise Army will get stuck like Indian Army in Kargil War.  :biggrin:

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Money Management
« Reply #-1 on: September 26, 2011, 09:31:13 PM »

Offline Poker Face

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Re: Money Management
« on: September 26, 2011, 09:35:20 PM »
oh my...you are damn good at financial management   :biggthumpup:
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Offline fasee

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Re: Money Management
« Reply #1 on: September 26, 2011, 09:57:33 PM »
while risking being waay of topic...i wud like to tell that minimum return frmo PLS still gets be 5 %...but thats only the revenue n receipts side...link it with expense and it gets mroe intresting.

expesnes are round 60-70% done on credit cards @ 0 % service charge( hospital+fuel+kitchen+utility bills all can be paid via card...i stoped utility bills since now they charge service chrgs on it now)..u get 15 dasy min to 45 days max credit depending on when you shop....so u have ample time to have stoped enoigh funds when teh bills arrive.

so bascially my current account hardly is in 3 digits...100 to 300 ruppes at max..while PLS has harldy 1 to 5 thousand rupees only....eventualityes are met with short term advances agsint salry n paid by next months certifcate coupons+sal+divd if any.
 :goodc:
oh my...you are damn good at financial management   :biggthumpup:
« Last Edit: September 26, 2011, 10:00:55 PM by fasee »

Offline Poker Face

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Re: Money Management
« Reply #2 on: September 26, 2011, 10:20:27 PM »
One more question.
How much reduced ur expenses would be had u been still unmarried?
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Offline fasee

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Re: Money Management
« Reply #3 on: September 26, 2011, 10:38:12 PM »
alot....expense do balloon after ones get married...money managment ko lasaan lag jatay hain...then things settle down in 6 months...but then shoot up again after first  kid arrives, then sky rocket by 2nd kid..as 1st ke medical bills oevrlapping 2nd ki education expense.....gets tricky depending on teh lifystyle choices we make.
like personaly i hate costs i throw away in shape of diapers...i mean 4 k per child gogin to dustbin is cruel wastage, per kerna perta hai....education is crazy , but best investment you can do for yoru children.....mdecial bills r another killer depnding on teh facilities u may go to.
on teh positve side, expenses on night life alone with friends drop down to negligble....no more bowlings, no more shopping binges buying things whcih u might say "yeh me ne kiya soch ke kharida tha".

do see many a people around get into serious financial troubel by not managing there fundsd properly
One more question.
How much reduced ur expenses would be had u been still unmarried?

Offline imran.hafeez

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Re: Money Management
« Reply #4 on: September 26, 2011, 11:09:57 PM »
@fasee bhai

aap kee aur meri story same ha. I am also a salaried person. And also apply the same tactics as you. I also invest in Money Market Mutual fund and Pension Fund to get 12% Fixed+tax Credits.

This year I am planning to shift my Mutual funds from money market to equity market to get 30% (Equity)+tax credit=40%+ return.

My life is very similar like using credit cards for paying bills and moving my salary intro stocks as soon as it arrives to earn some profit till any expense needs arises.

sir jee me tu khud isi ka kail hoon..ke Omore ki icecreaem kharednay ke bajai EFL ka share hi kareed dalo, icecreame say ziyada acha maza ata hai... :arrowhead:

i do have an eloborate mechanism for my investments with cash flowing in between salary to PLS account, Mutual Funds, Saving certificates and stocks....saalry savings first go to mutual funds..where they earn 12 %+ tax arbitrage of 15-16 % cummulative 28 % return....then after 1 year when they are tax-CGT exempt, they go to stocks or special saving certificates....returns from dividents & coupons of saving certificates agin goes to stocks while home expnse are well met by a decent portion of my salary....in case of any evantuality funds frmo any source can be chanelised to other source at proper time interval
@PF


so the cavalry arrived in shape of dividents eh  :arrowhead:

in my case, salary wud be arriving tommorow or day after tommorow...so i can spend a few bucks if i want to, but am in no mood at the moment.

dividnet from PICT n ABOT wud arrive after some time...and NML and CPPL to abhi XD bhi nahe huway

I think you should give a piece of your salary to stocks at these rates. Otherwise kharch to waise hi ho jane hain. Better buy something worthier than icecream  :biggthumpup:
Dividends keep supply lines running
Otherwise Army will get stuck like Indian Army in Kargil War.  :biggrin:
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Offline investment.guru

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Re: Money Management
« Reply #5 on: September 26, 2011, 11:16:02 PM »
sir main mutual funds k bare mein bilkul nhi janta, plz aap thora explain krein ge? kya mutual funds mein 28% tk return milta he? :dunno:

sir jee me tu khud isi ka kail hoon..ke Omore ki icecreaem kharednay ke bajai EFL ka share hi kareed dalo, icecreame say ziyada acha maza ata hai... :arrowhead:

i do have an eloborate mechanism for my investments with cash flowing in between salary to PLS account, Mutual Funds, Saving certificates and stocks....saalry savings first go to mutual funds..where they earn 12 %+ tax arbitrage of 15-16 % cummulative 28 % return....then after 1 year when they are tax-CGT exempt, they go to stocks or special saving certificates....returns from dividents & coupons of saving certificates agin goes to stocks while home expnse are well met by a decent portion of my salary....in case of any evantuality funds frmo any source can be chanelised to other source at proper time interval

Offline investment.guru

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Re: Money Management
« Reply #6 on: September 26, 2011, 11:19:07 PM »
even higher return :shock:

@fasee bhai

aap kee aur meri story same ha. I am also a salaried person. And also apply the same tactics as you. I also invest in Money Market Mutual fund and Pension Fund to get 12% Fixed+tax Credits.

This year I am planning to shift my Mutual funds from money market to equity market to get 30% (Equity)+tax credit=40%+ return.

My life is very similar like using credit cards for paying bills and moving my salary intro stocks as soon as it arrives to earn some profit till any expense needs arises.

Offline imran.hafeez

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Re: Money Management
« Reply #7 on: September 26, 2011, 11:19:37 PM »
Mutual Funds and you yourself investing in stocks are same thing.

Only difference is that in case of Mutual Funds, their is a fund manager who is investing your money in stocks on your behalf.

He/she charges around 2% annual maintenance fee for managing your money.

Meezan Equity Fund, Atlas, UBL gave 38-40% return last year.

Apart from that there are tax credits on top of that, which can make your return cross 50%

sir main mutual funds k bare mein bilkul nhi janta, plz aap thora explain krein ge? kya mutual funds mein 28% tk return milta he? :dunno:

sir jee me tu khud isi ka kail hoon..ke Omore ki icecreaem kharednay ke bajai EFL ka share hi kareed dalo, icecreame say ziyada acha maza ata hai... :arrowhead:

i do have an eloborate mechanism for my investments with cash flowing in between salary to PLS account, Mutual Funds, Saving certificates and stocks....saalry savings first go to mutual funds..where they earn 12 %+ tax arbitrage of 15-16 % cummulative 28 % return....then after 1 year when they are tax-CGT exempt, they go to stocks or special saving certificates....returns from dividents & coupons of saving certificates agin goes to stocks while home expnse are well met by a decent portion of my salary....in case of any evantuality funds frmo any source can be chanelised to other source at proper time interval
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Offline fasee

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Re: Money Management
« Reply #8 on: September 26, 2011, 11:43:20 PM »
sir as i am new to this fourm, dont know where teh proper thread for this discussion is, per mere khiyal me adminz ka paimana labreez honay hi wala  hoga....bechara NML me siwai NML baki sab hi discus hu chuka... :laugh:

lets move teh discusion to proper threads adn i can teach you guys all that i can botu mutual funds.

as for PF , i havent enrolled in it yet...as i am still working on whether to comit fudsn to it yet....bcoz as per my knowldge is a life long commitment....and if withdrawn before 65 yrs of age, it gets heavy peanultys

Offline imran.hafeez

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Re: Money Management
« Reply #9 on: September 27, 2011, 08:17:04 AM »
I also had the same impression about Pension Fund, but it is not a life long commitment.

It is not as attractive as Mutual Fund, but near it.

Lets take an hypothetical example that my tax rate is 16%.

When i will invest my money in PF, i will get tax credit at 16%.

When i will went to withdraw the amount, PF fund manager will deduct amount @3 yr avg tax rate from my PF principal amount.

But through tax credits i would have killed my effective tax rate to 8% and due to lesser income in previous yrs my average tax rate will come around 6-7%.

So effectively i will get 9-10% spread due to tax credits and around 30% return from PF(Equity), making my return for year more than 40%.

sir as i am new to this fourm, dont know where teh proper thread for this discussion is, per mere khiyal me adminz ka paimana labreez honay hi wala  hoga....bechara NML me siwai NML baki sab hi discus hu chuka... :laugh:

lets move teh discusion to proper threads adn i can teach you guys all that i can botu mutual funds.

as for PF , i havent enrolled in it yet...as i am still working on whether to comit fudsn to it yet....bcoz as per my knowldge is a life long commitment....and if withdrawn before 65 yrs of age, it gets heavy peanultys
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Offline fasee

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Re: Money Management
« Reply #10 on: September 27, 2011, 09:59:05 AM »
hmm...ncie to talk to you sir, otherwise what homework i had done on PF showed not a good enough scenario...let me eloborate, then you can check it for errors

suppose i have effective rate of same 16 %....i invest 1 lakh p.a in PF in equity with return of 20 %...

total return 20 %+16% tax arbitrage= 36 % return.

run same loop for nxt 3 yrs with effective rate increasing due to incremnts 16%+17%+18% ..so avg rate wud be 17 %

suppose i wthdraw my investment at 3rd year..with an avg rate of 17 % i wud be taxed on whole amount ( thast what the gusy have told me )

so effectively it wud wipe out all the tax arbirtage i had gained in previous years+ some more hit due to higer rate plus hit on gains aswell...so my total gain wud be even lessser than if i had invested it only as equity fund without claiming any tax credits on it...

Offline Laoo Maal

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Re: Money Management
« Reply #11 on: September 27, 2011, 10:16:25 AM »
pehle maal laoo phir manage kar ke dekhate hain  :tongue:

Offline fasee

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Re: Money Management
« Reply #12 on: September 27, 2011, 10:56:41 AM »
sir maal manage ker ker ke tu itna bachta hai ke yahan laa ke daboo sakain :tongue:

Offline imran.hafeez

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Re: Money Management
« Reply #13 on: September 27, 2011, 07:47:55 PM »
No it will not be like that.


When you will went to withdraw it, your effective tax rate will be calculated using following formula:

Effective tax rate at withdrawal time: (Tax payable-tax credits)/Annual taxable income

Because of tax credit, your effective rate would have come down to 8% from 17%.

This is what i do:

I invest 500,000 on 1st Jan, get my my tax credit at 16%. After exactly 1 year i go and withdraw it and get deducted at last 3 yrs avg tax rate.

I have killed my current yr tax rate to 8-9% due to tax credit and my previous 2 years taxes were less as compared to current year because of lesser income in previous years and also i would have killed them too through tax credits, therefore my 3 yr avg tax rate at withdrawal time will be around 7-8%.




hmm...ncie to talk to you sir, otherwise what homework i had done on PF showed not a good enough scenario...let me eloborate, then you can check it for errors

suppose i have effective rate of same 16 %....i invest 1 lakh p.a in PF in equity with return of 20 %...

total return 20 %+16% tax arbitrage= 36 % return.

run same loop for nxt 3 yrs with effective rate increasing due to incremnts 16%+17%+18% ..so avg rate wud be 17 %

suppose i wthdraw my investment at 3rd year..with an avg rate of 17 % i wud be taxed on whole amount ( thast what the gusy have told me )

so effectively it wud wipe out all the tax arbirtage i had gained in previous years+ some more hit due to higer rate plus hit on gains aswell...so my total gain wud be even lessser than if i had invested it only as equity fund without claiming any tax credits on it...
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Offline imran.hafeez

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Re: Money Management
« Reply #14 on: September 27, 2011, 07:53:34 PM »
I will prefer rotating the same money every year to get tax credits.

Invest, get tax credit, withdraw after 1 yr, reinvest, again get tax credit
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Offline fasee

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Re: Money Management
« Reply #15 on: September 27, 2011, 09:33:20 PM »
ooohhh now i get it.....hud hu gai,, itni see baat na jana.....its a good enough lacuna in the tax alw

credit is given at tax's effective slab rate.

while tax penalty is to be made on effective tax fater rebates have watered i down..isnt it.

have to cross check tommorow with some more number crunching or refreing to law to see any word twisters.

one more question sir...is it all hypothetical or have you really have made a withrdral from PF account till now...??

and confirmation can only be in case of a full dress rehearsal....

persoanlly, i am planning to go ahead with opening a PF account in october..

any recomendation out of these 5 which one is the best and why...oterhwsie i was longing for arif habib...but nothng final as yet
No it will not be like that.


When you will went to withdraw it, your effective tax rate will be calculated using following formula:

Effective tax rate at withdrawal time: (Tax payable-tax credits)/Annual taxable income

Because of tax credit, your effective rate would have come down to 8% from 17%.

This is what i do:

I invest 500,000 on 1st Jan, get my my tax credit at 16%. After exactly 1 year i go and withdraw it and get deducted at last 3 yrs avg tax rate.

I have killed my current yr tax rate to 8-9% due to tax credit and my previous 2 years taxes were less as compared to current year because of lesser income in previous years and also i would have killed them too through tax credits, therefore my 3 yr avg tax rate at withdrawal time will be around 7-8%.




hmm...ncie to talk to you sir, otherwise what homework i had done on PF showed not a good enough scenario...let me eloborate, then you can check it for errors

suppose i have effective rate of same 16 %....i invest 1 lakh p.a in PF in equity with return of 20 %...

total return 20 %+16% tax arbitrage= 36 % return.

run same loop for nxt 3 yrs with effective rate increasing due to incremnts 16%+17%+18% ..so avg rate wud be 17 %

suppose i wthdraw my investment at 3rd year..with an avg rate of 17 % i wud be taxed on whole amount ( thast what the gusy have told me )

so effectively it wud wipe out all the tax arbirtage i had gained in previous years+ some more hit due to higer rate plus hit on gains aswell...so my total gain wud be even lessser than if i had invested it only as equity fund without claiming any tax credits on it...

Offline imran.hafeez

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Re: Money Management
« Reply #16 on: September 27, 2011, 11:17:42 PM »
Visit the Al-Meezan Asset Management website.

Go to their download section and look for Meezan Tahafuz Pension Fund Redemption form.

You will get know how they actually deduct the money at the time of withdrawing.

I am personally in favor of Al-Meezan. It is the 2nd biggest asset management company after NIT and most importantly it is shariah compliant.

2ndly it gave 38% return on its equity last year

ooohhh now i get it.....hud hu gai,, itni see baat na jana.....its a good enough lacuna in the tax alw

credit is given at tax's effective slab rate.

while tax penalty is to be made on effective tax fater rebates have watered i down..isnt it.

have to cross check tommorow with some more number crunching or refreing to law to see any word twisters.

one more question sir...is it all hypothetical or have you really have made a withrdral from PF account till now...??

and confirmation can only be in case of a full dress rehearsal....

persoanlly, i am planning to go ahead with opening a PF account in october..

any recomendation out of these 5 which one is the best and why...oterhwsie i was longing for arif habib...but nothng final as yet
No it will not be like that.


When you will went to withdraw it, your effective tax rate will be calculated using following formula:

Effective tax rate at withdrawal time: (Tax payable-tax credits)/Annual taxable income

Because of tax credit, your effective rate would have come down to 8% from 17%.

This is what i do:

I invest 500,000 on 1st Jan, get my my tax credit at 16%. After exactly 1 year i go and withdraw it and get deducted at last 3 yrs avg tax rate.

I have killed my current yr tax rate to 8-9% due to tax credit and my previous 2 years taxes were less as compared to current year because of lesser income in previous years and also i would have killed them too through tax credits, therefore my 3 yr avg tax rate at withdrawal time will be around 7-8%.




hmm...ncie to talk to you sir, otherwise what homework i had done on PF showed not a good enough scenario...let me eloborate, then you can check it for errors

suppose i have effective rate of same 16 %....i invest 1 lakh p.a in PF in equity with return of 20 %...

total return 20 %+16% tax arbitrage= 36 % return.

run same loop for nxt 3 yrs with effective rate increasing due to incremnts 16%+17%+18% ..so avg rate wud be 17 %

suppose i wthdraw my investment at 3rd year..with an avg rate of 17 % i wud be taxed on whole amount ( thast what the gusy have told me )

so effectively it wud wipe out all the tax arbirtage i had gained in previous years+ some more hit due to higer rate plus hit on gains aswell...so my total gain wud be even lessser than if i had invested it only as equity fund without claiming any tax credits on it...
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Offline imran.hafeez

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Re: Money Management
« Reply #17 on: September 27, 2011, 11:24:32 PM »
I have invested in Al-Meezan Tahafuz Pension Fund.

Had done all the research before entering it. And got unanimous answer from all the PF giving Fund Managers(JS, Atlas, AH, Meezan, UBL)

All they say is that, you have to give your salary certificate/salary slip at the time of withdrawal(no need for FBR Return).

Salary certificate clearly shows how much tax i paid after rebates and what is my total annual income.

Based on it they deduct the avg tax.

I invested in PF on 10-Feb and planning to withdraw on same date and will reinvest it back to get tax credit again
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Offline fasee

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Re: Money Management
« Reply #18 on: September 28, 2011, 04:30:38 AM »
zaberdast....till now i had only contacted arif habib's..and they said they wud requrie 3 yrs tax returns...but frankly all the mutual fund people i have asked till now , there answeres were quite dodgy...thats one reaosn i havent done the transactiosn as yet.

2ndly, even if they do it in a reduced manner..i wud be more intredted to knwo what teh legal penaluty in full amount is....as deduction at source frmo PF can be an advance tax not necesarily a full tax as per law....so when we declare it in next years tax return.....in shape of reducded balance in wealth staatment and surcharges deducted and PF balance withdrwan in annula tax return columns...will have to see what law saws n how much tax credit we have to give back in addition to teh one deducted.

will go thru mezan in the morning..thanks bro