Asset management, broadly defined, refers to any system that monitors and maintains things of value to an entity or group. It may apply to both tangible assets (such as buildings) and to intangible assets (such as human capital, intellectual property, goodwill and/or financial assets). Asset management is a systematic process of developing, operating, maintaining, upgrading, and disposing of assets cost-effectively.
The term is most commonly used in the financial sector to describe people and companies who manage investments on behalf of others. Those include, for example, investment managers that manage the assets of a pension fund.
Alternative views of asset management in the engineering environment are: the practice of managing assets to achieve the greatest return (particularly useful for productive assets such as plant and equipment), and the process of monitoring and maintaining facilities systems, with the objective of providing the best possible service to users in all dimensions (appropriate for public infrastructure assets).
The best time to start planning your tax-saving investments is at the beginning of the financial year. Most taxpayers procrastinate till the last quarter of the year, and end up taking hurried decisions. Instead, if you plan at the start of the year, you can make investments that can also help you fulfill your long-term goals. Tax-saving investments should be used to build wealth as well, not only to just save tax.
Use the following pointers to plan your tax-saving for the year:
Check the tax-saving expenses that you’re already making that you can claim. This includes expenses like insurance premium, children’s tuition fees, etcDeduct this amount from ₹1.5 lakh to figure out how much to invest. The entire amount doesn’t need to be invested if expenses are covering it.Choose tax-saving investments on the basis of your goals and profile. ELSS funds, PPF, NPS and fixed deposits are some of the popular options.
This way, you can figure out how much you need to invest to save taxes. It is best to begin investing in the first quarter of the financial year so that you can spread the investments over the year. Doing this won’t burden you at the end of the year and will also allow you to make informed investment decisions. Read More…
Because low, stable inflation is necessary for optimal economic growth, it is one of the main economic objectives of central banks, which they try to control by using their tools of monetary policy. However, to control inflation, its causes and their interrelationships must be understood.
Inflation typically results when the providers of goods and services raise their prices because of an increased aggregate demand, which is the demand of all goods and services in an economy. As is well-established in economics, when aggregate demand increases relative to aggregate supply, which is the supply of all goods and services in an economy, prices increase. The greater the increase in demand relative to supply, the greater the inflation rate. The factors affecting aggregate demand and supply are complex, but the role of money is significant. Because of its simplicity and the obvious connection, economists have studied the role of money variables as causes of inflation, especially the supply of money and the velocity of money.
The classical theory of inflation, as espoused by the philosopher David Hume and other early thinkers, only considered money growth, which is the increase in the money stock supplied by the government, to be the main cause of inflation, but money growth is a necessary, but not sufficient, condition for inflation. The velocity of money must also be considered, since there can be no inflation unless the money is spent. For instance, if the money supply has expanded, but the people take it home and stuff it in their mattresses, then it will have no effect on inflation.
Saving is income not spent, or deferred consumption. Methods of saving include putting money aside in, for example, a deposit account, a pension account, an investment fund, or as cash. Saving also involves reducing expenditures, such as recurring costs. In terms of personal finance, saving generally specifies low-risk preservation of money, as in a deposit account, versus investment, wherein risk is a lot higher; in economics more broadly, it refers to any income not used for immediate consumption.
Saving differs from savings. The former refers to the act of increasing one’s assets, whereas the latter refers to one part of one’s assets, usually deposits in savings accounts, or to all of one’s assets. Saving refers to an activity occurring over time, a flow variable, whereas savings refers to something that exists at any one time, a stock variable. This distinction is often misunderstood, and even professional economists and investment professionals will often refer to “saving” as “savings” (for example, Investopedia confuses the two terms in its page on the “savings rate”).
In different contexts there can be subtle differences in what counts as saving. For example, the part of a person’s income that is spent on mortgage loan principal repayments is not spent on present consumption and is therefore saving by the above definition, even though people do not always think of repaying a loan as saving. However, in the U.S. measurement of the numbers behind its gross national product (i.e., the National Income and Product Accounts), personal interest payments are not treated as “saving” unless the institutions and people who receive them save them.
Saving is closely related to physical investment, in that the former provides a source of funds for the latter. By not using income to buy consumer goods and services, it is possible for resources to instead be invested by being used to produce fixed capital, such as factories and machinery. Saving can therefore be vital to increase the amount of fixed capital available, which contributes to economic growth.
However, increased saving does not always correspond to increased investment. If savings are not deposited into a financial intermediary such as a bank, there is no chance for those savings to be recycled as investment by business. This means that saving may increase without increasing investment, possibly causing a short-fall of demand (a pile-up of inventories, a cut-back of production, employment, and income, and thus a recession) rather than to economic growth. In the short term, if saving falls below investment, it can lead to a growth of aggregate demand and an economic boom. In the long term if saving falls below investment it eventually reduces investment and detracts from future growth. Future growth is made possible by foregoing present consumption to increase investment. However savings not deposited into a financial intermediary amount to an (interest-free) loan to the government or central bank, who can recycle this loan.
In a primitive agricultural economy savings might take the form of holding back the best of the corn harvest as seed corn for the next planting season. If the whole crop were consumed the economy would convert to hunting and gathering the next season