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From the Rat Race to Financial Freedom... A common man's journey
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Happiness Unlimited...How to be happy..always !!
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Dream On...Every setback is a little nudge from HIM to Dream On
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The Autobiography Of A Stock
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A Father's Diary
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Manoj Arora    About Me
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Saturday, April 27, 2013

Mark your evening : Friday, 10th May 2013

Mark this evening in your calendar - Friday, the 10th of May 2013.

For what you are going to witness this evening is ultra special.

You are going to witness how a common man can break the shackles of the arrogant and stubborn rat race and achieve something that only 1% of the world's human population has ever done - Financial Freedom.

Welcome to the official book launch of "From the Rat Race to Financial Freedom" at Landmark, Gurgaon.

If you have dreams that are big enough, if you have the willingness to learn, if you have a burning desire to do something extraordinary in life, then let me tell you that you have all it takes to be financially free and then go on to lead a life of your dreams. For this is all it takes to be financially free - a dream, a burning desire, a willingness. Rest everything is secondary, because this everything else, can be learnt and acquired relatively easily.

Is it a fact that you are pre occupied? Is it a fact that you are busy, more busy than what you want to be? Is it a fact that you had to sideline your own dreams for your family and its financial security? Is it a fact that you do not earn or save enough to fulfill your dreams? Is it a fact that life has been tough for you? All of these facts may be valid and genuine. But here is the biggest fact of all : "When the dream is big enough, facts do not count."

Nurture your dream, do it every day, every hour - and you are bound to achieve it. I have read Alchemist so many times and i am a firm believer of the fact that "When you chase your dreams with the right intent, the entire universe conspires to make it happen."

Come on then, bring your friends and family along, for this one evening can re-ignite some of your old forgotten dreams and give you hope to chase them in this very life span. Financial Freedom can be the first step towards achieving your dreams.

See you there !!

LG 17/18 DLF Grand Mall
Mehrauli – Gurgaon Road
Gurgaon - 122 002 

Time : Will be conveyed soon.

More updates and formal invites to my known friend circle will follow...


Manoj Arora

Saturday, April 20, 2013

What are Gold Deposit Schemes

What are Gold Deposit Schemes
The Gold Deposit Schemes is not a very popular option but can be a very prudent choice in the Indian context as we still continue to keep immense deposits of gold in our bank lockers. As the name suggests, this scheme essentially allows the owner of gold jewellery to deposit the gold with the bank and earn a safe interest on the same.
Gold deposits schemes in India offers excellent tax effective opportunity for investor who is looking for long-term coverage from gold and getting tax benefits too.

How did it start?
As per the estimates of an RBI committee, about 20,000 tonnes of idle gold is lying with the people. The central bank wants to channelize the idle gold for productive purposes and also check the demand for imports. Gold deposit scheme was launched in 1999 by the Government of India to save valuable foreign exchange by using the gold property stored in households and many religious trusts. Government of India also issued guidelines for individuals how to investment in gold in India. Rising gold imports have been a major concern for the government as it contributes substantially to the widening Current Account Deficit (CAD).

Who can invest?
Any individual can take benefits of gold schemes in India either applying for gold deposit scheme singly, or jointly, or even on behalf of a minor. The application also can be made in the name of HUF, charitable trusts, religious trusts and companies. In case of individual depositor, the benefit of nomination is attached under gold deposit scheme India. However the nomination facilities are not available HUF, trusts or companies.
Off late, SEBI registered mutual funds and exchange traded funds may also deposit under the scheme.

How much can one invest?
There is no cap on investment. The investor can place a minimum of 200 gm of gold with the bank in exchange for gold bonds which carry a tariff-free interest rate of 3% - 4%, depending upon the period.

What are the lock in periods?
The lock-in period ranges between 3 and 7 years. Seeking to unfreeze idle gold, the Reserve Bank of India recently made the Gold Deposit Schemes of banks more attractive by lowering the investment time period to as low as 6 months. Of course, the interest rate is higher for a higher lock in period.

What are the Tax Benefits?
The gold bonds are not subject to capital gains tax and wealth tax. The interest earned on the deposit is exempt from income tax and the value of the gold offered is exempt from wealth tax. The bonds will be redeemed in cash or gold – the choice is left to the investor.

What are other Benefits?
1) Gold deposit scheme India enables earning from gold.
2) It also helps to save insurance or bank locker cost.
3) Gold deposit schemes in India also gives opportunity to gain from price appreciation according to current gold price in Indian bank.
4) The scheme also offers a direct benefit in the form of interest which you earn on the value of your gold. The interest earned from this certificate is exempt from income tax.
5) An individual can also get loans in rupees against security of the certificates of gold deposit from bank.

How does it work?
Under gold schemes in India the gold owner gets a certificate against the deposited gold from the authorized banks. One can keep gold in the form of gold coins, gold bars, coins and jewellery. Gold biscuit rate gets higher interest rate than the gold coins in banks. Although the minimum denomination of the certificate is 500 grams, India’s largest bank State Bank of India offers minimum denomination of 200 gms.

Gold investment in bank is very easy and transparent process. The investor needs to provide proof of identity and address, as well as a photograph, along with the application form for opening the account, nomination form in case of individuals, ECS form for credit of interest directly in the bank account, and an inventory form, giving description of the gold deposited. The bank will issue a provisional receipt against accepting the gold. The bank will test the purity of gold which need to be deposited The gold deposited is then melted to determine the content of pure gold with uniform fineness and is converted into bars. Subsequently, a gold deposit certificate is issued for the weight.

Demerits and Precautions
1) Since there is a lock in period involved, you cannot buy and sell gold like you can do it in an ETF. ETFs definitely offers more liquidity vis a vis Gold deposit schemes.
2) If the price of the gold goes down at the time of maturity, you have no choice but to take it or may be , reinvest.
3) If you opt to go for Gold Deposit schemes, make sure that you opt for nationalized banks rather than a local "trusted" jeweler near your house.
4) You lose the original jewellery design (and the making charges) since the gold is melted for valuation.
5) If you want to recreate the jewellery, you will have to spend again on the making charges (which can be pretty hefty)

From a pure financial angle, Gold Deposit Schemes are better than keeping the gold locked in a bank locker, but ETFs are much better and more liquid. The most important aspect in the Indian context, however, is the emotional attachment to the jewellery that our families have. A prudent decision would be to strike a balance between the family's emotions and financial prudence.


Manoj Arora

Tuesday, April 16, 2013

I Dare to Dream

John F Kennedy once said: "We need men who can dream of things that never were." 

I dared to dream.

- When everyone laughed at me being overweight as a teenager, i dared to dream to be the fittest around.

- When my school teachers and classmates made fun of me for failing in Class 9, i dared to dream to be a Gold medalist at my Engineering University.

- When the orthodox society i live in, told me that it is not a good practice to chose your own spouse, i dared to dream to marry my childhood friend and neighbor.

- When everyone laughed at my movement from Electrical Engg background to IT industry after serving a good 5 years in L&T, i dared to dream to be among the best in the IT industry.

- When all my friends said that it is difficult to earn enough money legally to live a comfortable life, i dared to dream to be a financially free person

- When everyone said that my English was not good enough, i dared to dream to author an English book.

I dare to dream..do you?

People will come and challenge you in every walk of life, at every stage of life. Welcome all of then with open arms, for they can give you the motivation to be the best.

Finally, it does not matter what they say, what matters is what you tell your mind. Your mind listens only to what you say. Your mind is your slave. Dare to Dream. Chase your dream. Dare to chart your own path. Open up your mind. Think big and bigger. Your mind is extremely powerful. Whatever you can dare to dream and believe, your mind can dare to achieve. The challenge to you is that how much you can convince your mind to truly believe.

The very act of getting motivation from the negative energy around you speaks volumes about the strength of your dreams. The stronger the dream, the more energy it can extract from the negativity around you. (Related post : The power of negative energy)

Shoot for the moon. Even if you miss, you'll land among the stars. ~Les Brown

I know you have dreams. I know you wish to do certain things in life which have absolutely no correlation with what you are doing today. You have every reason in the world to continue doing what you are doing, to crib, to sympathize with your situation and to stay in your comfort zone. It is just that you do not have enough will power today to go out and tread your own path, to convince your mind that it is feasible.

Just stop sympathizing with yourself and your situation and start visualizing your dream. Do it every day morning, do it every day evening. The more you dream, the more you will convince your mind that it is possible. The more your mind is convinced, you will be surprised what all it can achieve.

Someone told me 10 years back, and i repeat this line every day in my heart
If your dream is big enough, facts do not count.

So, if the fact is that you are already late, or your situation is unique, or you are stuck, or you don't earn enough, or you have extraordinary responsibilities, or anything else, just make your dream bigger than these facts. You will find a way.

Obstacles are those frightful things you see when you take your eyes off your goal. ~Henry Ford

I am not sure of re-births and re-incarnations, but if this happens to be your only life and you do not go on to chase what you dream of, then when will you?

Financial Freedom is one such milestone which once achieved, can help you chase your true dreams in life. It is not the end by itself. It is a means to achieve something extraordinary in life. It is up to you now to convince your mind to go and achieve financial freedom.

I can help you. The book (From the Rat Race to Financial Freedom) can help you. But first things first. First, you have to convince yourself that you want it, and want it badly enough. You have to make this dream big enough, rather than just being a wish.

- There are a lot of people around me who are now saying that your book may not do that well...and i am dreaming for it to be a bestseller.
- Many around me are saying that all this fine but your ultimate goals of planting trees and helping underprivileged children have already taken a back seat, and i am dreaming of planting 10 million trees and helping 1 million children to be self reliant in life.

People are questioning me even today, and i am using all the negative energy to make my dreams bigger.

Success isn't a result of spontaneous combustion. You must set yourself on fire. ~Arnold H. Glasow

This is how life is, and this is how it will be, for most of the people will learn the art of questioning while a few will master the art of daring to dream.

I dare to dream...do you?


Manoj Arora

Friday, April 12, 2013

What is CTS (Cheque Truncation System) 2010 Compliance

You may have heard a lot about being mandatory to have cheques which are CTS 2010 compliant. There has been a revolutionary change in how cheques are being processed now a days and it is important to keep abreast with the change. Since banks have already moved to daily interest calculation, each day saved earns you more interest now a days.

What is Cheque Truncation?
Truncation is the process of stopping the flow of the physical cheque issued by a drawer at some point with the presenting bank en-route to the drawee bank branch. In its place an electronic image of the cheque is transmitted to the drawee branch by the clearing house, along with relevant information like data on the MICR band, date of presentation, presenting bank, etc. Cheque truncation thus obviates the need to move the physical instruments across branches, other than in exceptional circumstances for clearing purposes. This effectively eliminates the associated cost of movement of the physical cheques, reduces the time required for their collection and brings elegance to the entire activity of cheque processing.

What is the process flow in CTS
In CTS, the presenting bank (or its branch) captures the data (on the MICR band) and the images of a cheque using their Capture System (comprising of a scanner, core banking or other application) which is internal to them, and have to meet the specifications and standards prescribed for data and images.

To ensure security, safety and non-repudiation of data and  / or images, end-to-end Public Key Infrastructure (PKI) has been implemented in CTS. As part of the requirement, the collecting bank (presenting bank) sends the data and captured images duly signed and encrypted to the central processing location (Clearing House) for onward transmission to the paying bank (destination or drawee bank). For the purpose of participation the presenting and drawee banks are provided with an interface / gateway called the Clearing House Interface (CHI) that enables them to connect and transmit data and images in a secure and safe manner to the Clearing House (CH).

The Clearing House processes the data, arrives at the settlement figure and routes the images and requisite data to the drawee banks. This is called the presentation clearing. The drawee banks through their CHIs receive the images and data from the Clearing House for payment processing. The drawee CHIs also generate the return file for unpaid instruments, if any. The return file / data sent by the drawee banks are processed by the Clearing House in the return clearing session in the same way as presentation clearing and return data is provided to the presenting banks for processing. The clearing cycle is treated as complete once the presentation clearing and the associated return clearing sessions are successfully processed. The entire essence of CTS technology lies in the use of images of cheques (instead of the physical cheques) for payment processing.

What are the benefits of CTS to customers?
CTS brings elegance to the entire activity of cheque processing and clearing. Here are some of its typical benefits
1) Shorter clearing cycle
2) Superior verification and reconciliation process
3) No geographical restrictions as to jurisdiction
4) Operational efficiency for banks and customers alike
5) Reduction in operational risk and risks associated with paper clearing

What is Cheque Standardisation and what does CTS 2010 Standard mean?
Standardisation of cheque forms (leaves) in terms of size, MICR band, quality of paper, etc., was one of the key factors that enabled mechanisation of cheque processing. Over a period of time, banks have added a variety of patterns and design of cheque forms to aid segmentation, branding, identification, etc., as also incorporated therein a number of security features to reduce the incidence of cheque misuse, tampering, alterations, etc. Growing use of multi-city and payable-at-par cheques for handling of cheques at any branches of a bank, introduction of Cheque Truncation System (CTS), increasing popularity of Speed Clearing, etc., were a few aspects that led to prescription of certain minimum security features in cheques printed, issued and handled by banks and customers uniformly across the banking industry.

RBI has prescribed standardisation of cheques issued by banks across the country. This standardisation is in form of quality of paper, watermark, bank’s logo in invisible ink, void pantograph, etc., and standardisation of field placements on cheques. In addition, certain desirable features have also been suggested to be implemented by banks based on their need and risk perception.
The set of minimum security features would not only ensure uniformity across all cheque forms issued by banks in the country but also help presenting banks while scrutinising / recognising cheques of drawee banks in an image-based processing scenario. The homogeneity in security features is expected to act as a deterrent against cheque frauds, while the standardisation of field placements on cheque forms would enable straight-through-processing by use of optical / image character recognition technology. The benchmark prescriptions are collectively known as "CTS-2010 standard".
All banks providing cheque facility to their customers, have been advised to issue only 'CTS-2010' standard cheques

What is the prescription relating to alterations / corrections on cheque forms ?
The prescription on prohibiting alterations / corrections on cheques has been introduced to curtail cheque frauds on account of alterations in the various fields of cheques and to give protection to customers as well as banks. No changes / corrections can be carried out on the cheques (other than for date validation purposes, if required). For any change in the payee’s name, courtesy amount (amount in figures) or legal amount (amount in words), fresh cheque leaves should be used by customers.

Sunday, April 07, 2013

What is Repo, Reverse Repo and CRR

When you are an investor, you must understand a few basic things regarding economy and how it works - specifically when it comes to Interest Rates. Repo Rate, Reverse Repo Rate and CRR are some of the terms that we must understand.

Thursday, April 04, 2013

Pre-Ordering now available for "From the Rat Race to Financial Freedom"

Are you all set to beat the rat race?
Do you have the guts to chase your dreams?
Are you ready to create a second stream of income for yourself?
Do you have the belief that you can be wealthy, really wealthy..within this life span?
Do you think that any common person can be financially free?

If you wish for any of the above but are not sure how to achieve these goals, this book is just the right starting point for you.

Whichever phase you are in your life, whatever amount of money you earn today, whatever stage of financial wisdom you are in, whatever is your net worth today...nothing matters. 

What matters is the strength of your dream. What matters is the willingness to achieve something extraordinary in this life. What matters is the readiness to take money out of your life's equation and then go on to chase your true calling in life.

The book takes you on my journey to beat the rat race, get financially free and then go on to chase my true dreams. It will guide you step by step on how you can do it too !!

For freedom seekers in India:
Pre-ordering of "From the Rat Race to Financial Freedom" is now open at Flipkart. You can use the below link to place your order.
There is a one-time special pre-order discount of 25% as well :).

For freedom seekers outside India:
Have a little more patience. It will pay. Book will shortly be available at Infi-beam, Amazon and URead. Will keep all of you posted.

Have fun...Get wealthy !!

Manoj Arora