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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
Author Mission    My Mission
Credentials & Awards   Awards & Credentials

Corporate & Family Gifts   Corporate & Family Gifts [NEW]

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Flipkart Author Page   Visit Author's Page at Flipkart

Sunday, October 27, 2013

e Gold Vs Gold ETFs

The debate about physical gold versus gold exchange-traded funds, or ETFs, was settled in favour of the latter a long time ago. Now, e-gold, another product that gives exposure to the gold market, is laying claim to the crown. But before you take a plunge with your investments, make sure you understand the pros and cons about each one of them.

What is e-Gold?
E-gold, an electronic way to buy the yellow metal. It is an electronic form of Gold as a commodity.

How is e-Gold different from Gold ETFs?
  •  e-Gold gives better returns than Gold ETFs. In 2012, it returned over 16 per cent compared to the 11 per cent average return given by gold ETFs. In 2011, e-gold and gold ETFs had returned 32 per cent and 31 per cent, respectively. But remember that these are pre-tax returns. 
  • E-Gold is a commodity while Gold ETF is an exchange traded fund
  • E-gold is held electronically in the demat form and in India, it is offered by commodity exchanges such as the National Spot Exchange Limited (NSEL). Gold ETFs are traded in a stock exchange like NSE or BSE. Gold ETFs can be bought and sold like mutual fund units through the demat account via a depository.

Positives of e-Gold
  • e-gold will always beat gold ETF. in returns as the latter's net asset value, or NAV, is computed after deducting the fee of the asset management company plus storage and custodian charges, which vary from fund to fund. The cost of trading e-gold in the spot market is nominal. So the product is a lot more cost-effective for people who have a long investment horizon.
  • E-gold is held electronically in the demat form and can be freely converted into physical gold. Gold ETFs have to be sold only for cash, though there are some ETFs which do offer an option to convert it into physical gold at the time of delivery.
  • Since Gold ETFs are traded on stock exchanges, they can be traded (bought and sold) only between 9:00 AM to 3:30 PM on weekdays. However E-series products i.e. E-Gold can be traded from 10:00 AM to 11:30 PM on weekdays.

Positives of Gold ETFs
  • E-gold is treated like physical gold and qualifies for long-term capital gains benefits if held for three years or more. However, gold ETFs qualify for long-term capital gains treatment after being held for just one year. 
  • Gold ETFs are considered financial assets and hence are exempt from wealth tax, which is not the case with e-gold
  • If you have been trading in stocks, you can trade Gold ETFs from your existing demat and trading account, while you will need a commodity account with a Spot Exchange to buy e-Gold.
At present, investing in gold though ETFs would be more prudent for small investors. While it's true that investing in e-gold is relatively cost-effective, it's also a new product. It was launched only in March 2010 and, hence, should be given more time to evolve before retail investors venture into it.
Gold ETFs, on the other hand, have been around since 2007, are traded on reputed stock exchanges and are backed by good fund houses. The average daily volumes are significantly higher in the e-gold segment, but this could also be due to the authorised participation and contribution of high net worth individuals as the commodity markets have been seeing encouraging turnover growth for some time compared with that in the equity markets.


Manoj Arora
Lead a Financially Free Life !!

Wednesday, October 23, 2013

NRIs, PIO / OCI Card Holders and their Investment Options in India

[Rev. 2 Updated 31st Aug 2018]
Did you know that PIO Cards are no more valid after 30th Sep 2018?
Did you know that NRIs / PIOs with OCI Cards are almost at par as far as financial investments in India is concerned? 
Do you know where all NRIs or OCI Card holders can invest in India?
Do you know who qualifies to be an NRI?
Do you know the advantages of holding an OCI Card?

Sunday, October 20, 2013

Lets meet a Freedom Seeker : Mr. Sailesh Damani

Well, it has been almost 6 months since so many of the financial freedom seekers have connected with me one-one over telephone and email, and shared their life's situations, dreams and also their financial portfolios. I have tried to mentor them to build a financial freedom plan of their life. This monthly track-able plan, once executed, has the potential to bring them out of the rat race and allow them to chase the true dreams of their lives. This plan can make them experience "freedom" in life.

I thought it would be a great idea if you could meet a few freedom seekers - to know who they are, what their dreams and goals are, why they are chasing financial freedom, and above all, how has been their experience since they have set themselves on this journey to financial freedom. So, here we go, lets meet with the first such freedom seeker : Mr. Sailesh Damani.

Sailesh is passionate about planting trees, helping others achieve financial freedom (once he has achieved it), and learning a musical instrument.
He wants to focus on the things that "really" matter to him in life.
With age still on his side, he was prompt in sharing his assets, liabilities, cash flow and has now started on his journey towards financial freedom with a target of Dec 2037 to be free from rat race and start living the life of his dreams.

We will be together monitoring his journey and tuning his plan during the course of the journey, so that we stay on track and maximize the returns from his investments.

I wish him all the best for his life and wish that he can go on to chase his dreams.

He is just one among all of you. He is no different except the fact that he took a step to connect with me, was open to accept advise, and then worked on that advise. He took the first step.He came out of his comfort zone.

Do you think it is wise to have a financial plan in place for your life, instead of randomly doing investments with no target in mind? 
How much money you need to get financially free? 
How much time you need to accumulate that kind of corpus
How can you maximise your returns on your net worth?

If you have any of the above questions pondering your mind, or you have any genuine financial query, or you have strong dreams on which you are yet to start working, do write to me at help@ratrace2freedom.com and i will be happy to share my experience with you, so that you can plan your future better.


Manoj Arora
Lead a Financially Free Life !!

Thursday, October 17, 2013

Honored with "Financial Wizard of the week" by the Economic Times

The Economic times, one of the most sought after financial newspapers in India, was kind enough to honor me with the "Financial Wizard of the week" for giving a "seemingly" wise solution to one of their reader's financial situation.... read on...

This was published in the recent edition of the "ET Wealth" magazine published by "The Economic Times" for the week October 14 to 20th, 2013

Such recognition has been growing off late. The number of freedom seekers have been piling up, they have been shooting queries, getting their personalized financial freedom plans prepared, and above all, have started to learn to dream in their lives. They always wanted to give some meaning to life, but were just held up by the "unknown" - which most of them realized was the rut of earning money called as the Rat Race in the book : "From the Rat Race to Financial Freedom".

As these freedom seekers go on to change their lives, i am sure many of them will continue to impact lives of so many others.

Have any query related to personal finance?, want to get on the road to financial freedom?, want to track your personal and customized financial freedom plan, or want to know why all this is so important for you and your life, write to me at help@ratrace2freedom.com... and i will be happy to help.

No charges, no constraints, only freedom !!


Manoj Arora
Lead a Financially Free Life !!

Wednesday, October 09, 2013

3 Life Lessons after 100+ Book Reviews

It does not happen by fluke. With more than 100+ Reviews on the Freedom Portal and 30+ reviews on Flipkart, an average rating of 4.8 stars out of 5, thousands of followers, being ranked in Top 5 and Top 10 in India for almost 3 months at a stretch now - all this does not happen just by chance...and there are lot of life lessons i have learnt during this 5 month journey of my book. Want to change your life? read on.....

(1) Set your objective and start moving.

There was a time when i somehow wanted this book to be out in the market, even if i had to self publish the same. That it will finally achieve what it has actually done now, after getting published by one of the most renowned publishers in India, and that too in a short span of less than 5 months of launch, is a testimony to the fact that hard work with right intention can work wonders.
Lesson: So many times, we seem to get stuck with an idea because we are not very clear how we are going to reach the end goal. Remember that "how" you are going to achieve your goal is insignificant compared to "why" you want to achieve the goal. It is normally the lack of enough strength in "why" that prohibits us from taking the next step.
"How" will get figured out on the way, if you are passionate to achieve the goal (i.e. if your "why" is strong enough). Take the first step forward. You will fail a few times, you will learn and then try different things, but ultimately you will find a way out. 
The problem with great minds sometimes is that they wait for the "how" to be absolutely clear before they take the first step...and by the time they can figure out the "how", the over analysis from the "over intelligent" mind is likely to kill that great idea for ever.

(2) Nature will conspire to make it happen for you.

"Right intent" has always been the key differentiation for me. Believe me, it has never been about "selling" the book. Lot of my colleagues and friends have been insisting me to publicize and market the book, get into a selling mode, take seminars etc...I know the fact that marketing is what makes the biggest impact on sales now a days. 
But here is my point. Who is bothered about "sales". Sales numbers will take care of themselves, if i continue to solve someone's life problems. I strongly believe in the fact that if i am solving someone's problem, word of mouth will take care of everything else. What if word of mouth alone cannot build the required momentum. Here is what i believe in. Even if it does not, my objective was always to solve the problem of those who are stuck in a mindless rat race, with no solution in sight. I am solving that problem irrespective of the sales numbers.
I have experienced that in such situations, when you go with such an intent, and go for your goal passionately, nature will make things happen for you. And i not only believe in this, i experience it almost every day - from getting the best publisher in India for my first ever writing venture, to so many "chance incidents" that hundreds of freedom seekers tell me over phone. So many freedom seekers have told me their story as to how, "by chance", they caught attention of this book and their lives changed for ever after that. You can read more from these "by chance" freedom seekers via the links given below.
Lesson : So, go on, have passion, focus on solving a problem for the world, and forget everything else, forget all the numbers, focus and focus hard only on  solving the problem right. Leave everything else to the ALMIGHTY, nature's conspiracy, or any other name you want to give it to it. Trust HIM, and you will never be disappointed.

(3) Keep focused

There will definitely be times when you will be tested, when your passion towards your goal will be tested. Keep focused, Keep moving forward. Do not feel unfortunate or feel dejected as to why you are being tested. Remember that this test is vital because this is what is going to separate you from everyone else around you. 
Lives of so many freedom seekers are undergoing a change, so many of them have their financial plan of their life ready, they know what they need to do each month to achieve freedom from the biggest trap of life i.e. rut of earning money. I have made sure that i am loud enough to say that purchasing the book is not mandatory to seek one-one appointments with me, to plan one's financial life. Also, there are no charges for any appointments with me. 
I am also not leaving them orphaned after their monthly financial freedom plan is ready, but i am reviewing their journey as well, because i am intensely focused on the end goal - I want to make them financially free - i have to help them till i reach this goal. So many times, freedom seekers will take an appointment and not turn up, not respond to emails, and so many other distractions will come on the way..but the focus on the end goal has made sure that i have started churning out financially free individuals. These are the individuals who will start making an impact on the world around them.
Lesson : Keep focused, all the distractions from your goal are a test for you. You ought to pass the test to move on. These tests will elevate you above the majority.

Having learnt these 3 life lessons, i know that i need to stay humble. I must not ever forget that i am just a medium which the Almighty is using to get things done, to change the world for the better.

Need any help?
Write to me at : help@ratrace2freedom.com

Read what people feel about this venture : 
100+ Reviews on Freedom Portal | 30+ Reviews on Flipkart

Read why i am doing this for free :
My life's mission

Read why you definitely need freedom :

Look at the Book Ranking Charts :


Manoj Arora
Lead a Financially Free Life !!

Saturday, October 05, 2013

What are NRE and NRO accounts for NRIs / PIOs

Non-Resident Indian is often faced with the situation of maintaining a Rupee account in India. This post clarifies what are the options available for NRIs, specifically whether they should choose NRE or NRO accounts.

Why do we need a separate account for NRIs / PIOs
Primarily, there are two reasons for opening such an account: 
  1. NRI wants to repatriate overseas earned money back to India
  2. NRI wants to save and invest India based earnings in India.

What are the account options for NRIs?
NRI has the following two options of accounts available for opening in India:
  1. A Non Resident External Rupee (NRE) account
  2. A Non Resident Ordinary Rupee (NRO) account. An NRO account can also be opened by a Person of Indian Origin (PIO) and an Overseas citizen of India (OCI).

Similarities between NRE and NRO accounts
  1. Both accounts can be opened as Savings account as well as current accounts
  2. They are Indian Rupee accounts. 
  3. The average monthly balance to be maintained for both NRE and NRO accounts is dependent on the bank.
  4. NRO or NRE account may be in the form of savings, current, recurring or fixed deposit accounts.
NRO Savings accounts can also be maintained with the Post Offices in India. However, individuals/ entities of Bangladesh and Pakistan require prior approval of the Reserve Bank.

Differences between NRE and NRO accounts
  1. Repatriation: NRE account is freely repatriable (Principle and interest earned) while the NRO account has restricted repatriability i.e permitted remittance allowed from NRO is up to USD 1 million net of applicable taxes in a financial year after giving undertaking along with a certificate from a chartered accountant.
  2. Tax Treatment: NRE account is Tax free (no Income tax, wealth tax and gift tax) in India. On the other hand the interest earned in NRO account and credit balances are subject to respective income tax bracket and are also subject to applicable wealth and gift tax.
  3. Deposit of Rupee funds generated in India: If an NRI/PIO/OCI is earning income originating in India (such as salary, rent, dividends etc.) he/she is only allowed to deposit it in NRO account. Deposit of such earnings is not permitted in NRE account.
  4. Joint Holding: NRE account can be jointly held with another NRI but not with resident Indian. On the other hand NRO account can be held with NRI as well as resident Indian (close relative) as defined under Section 6 of the Companies Act 1956.

When to choose NRE accounts
  1. When you want to park your overseas earnings remitted to India converted to Indian Rupees.
  2. When you want to maintain savings in Rupee but keep them liquid.
  3. When you want to make a joint account with another NRI (possible only in a NRE account)
  4. When you want your Rupee savings to be freely repatriable.

When to choose NRO accounts
  1. When you want to park India based earnings in Rupees in India.
  2. When you want an account where you can deposit any income earned in India such as rent, dividends etc.
  3. When you want to open account with another resident Indian (close relative)

Interest Rates in Savings, Term Deposits for NRE and NRO accounts is very similar to what we get in the resident savings account in India.


Manoj Arora
Lead a Financially Free Life !!

Tuesday, October 01, 2013

Understanding Repo Rate and MSF Rates

Understanding these two rates (Repo rates and MSF rates) lets you make an informed decision on when to enter or exit specific stocks and / or mutual funds. Even if not that, it helps you understand the general market movement whenever RBI (Reserve Bank of India) decides to alter these rates.

We have already studied about Repo Rate in one of our earlier posts - What is Repo, Reverse Repo and CRR. But since MSF Rate is a new concept and is related to Repo Rates, it was important to refresh our memories.

Repo Rate (Reverse Purchase Option), in nutshell, is the rate at which the banks borrow money from RBI (and they must sell their govt bonds to do that). Any increase in Repo rate by RBI means that banks need to shell out more interest to borrow more money. This in effect leads to liquidity crunch and slows down the economy. This is often a measure used to reign in inflation as well.

Many economy lovers and enterprise houses, including the general market sentiments feel that an increase in Repo rate is anti-economy. But there is another vital factor that must be understood before we derive any conclusions about the impact of increase or decrease in repo rates. This factor is called as MSF (Marginal Standing Facility) Rate.

Understanding MSF
At present, banks can borrow a limited sum of around Rs. 40,000 Crores from RBI at the running Repo Rate. Any amount above this level has to be borrowed at the running MSF rate. Since the banking systems borrowing requirements are much higher than this cap of Rs. 40,000 Crores, the MSF becomes the effective borrowing rate for a large portion of the banks. MSF rate is usually 1-2% higher than the Repo rate.

Impact of MSF Rate change
So, if the MSF rate has come down, while the Repo rate has gone up, it is very likely in a growing and stable economy like India that it is pro-economy rather than anti-economy. It is only in under developed economies where the banks borrow at Repo rates that there is a direct impact of repo rate hike on the economy and growth.

So, while the market may have reacted with emotions and reacted negatively on repo rate hike, understanding of the wider picture may just give you a golden opportunity to invest more funds in the stock market at the right time.


Manoj Arora
Lead a Financially Free Life !!