Smartmoney

The challenges. Without proof of a regular income you’re too risky for lenders, so be ready for a larger down payment on that new car. Unforeseen expenses seem insurmountable when incomes dip, especially since you don’t have the savings discipline enforced by a provident fund and the like. Further, you don’t have the insurance cover provided by employers, which adds to the risk. Here’s how you can bring method to the madness.

• Save during high-income months; set aside money that’ll see you through 9-12 months.
• Take on adequate insurance, since you have so much more to lose...
• Establish a good credit record. It’ll help when you need a loan.
• Never take on a bigger loan than you need; prepay whenever possible.
• Enforce financial discipline, and earmark part of your savings to meet long-term goals.

Expert Advice: Stocks
Should I buy Rolta India?
Rolta’s dominant position in providing software solutions for computer aided design and manufacturing, and geographic information systems, has enabled it to consistently log operating margins above 50 per cent. For the quarter to March 2002, revenues were Rs 81.4 crore, up 1.7 per cent over the previous corresponding period. Net profit grew 1.4 per cent, to Rs 31.2 crore. Given the economic slowdown, the company’s 2002 projection of 20 per cent growth in revenues and net profit seems ambitious. Further, the company’s recievables for more than six months have been increasing— Rs 23 crore in 1998 to Rs 69 crore in 2000.

Rolta’s stock, trading at Rs 140, discounts its first-quarter earnings, annualised, seven times. Cheap, but given the concerns, I’d stay away.

Safe Passage
Travelling abroad? Pack an Overseas Mediclaim policy, available from public and private insurers. Policies offered by the latter cover other travel-related risks too.

Sum insured ($)

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