Sunday, October 15, 2017

Festivals brings families together....

Diwali is approaching.

The mood is festive. The families are coming together.

Friendship and love pervades the atmosphere.

This is the season of fun, enjoyment and frolic.

Have a great festive season with your near and dear ones.

May you be blessed with good health, happiness and wealth.

God Bless.

Friday, October 13, 2017

Kinds of Risk...

Financial Five Series 3

1. Financial Planning isn’t about money and let’s be clear about it. It’s about life & living a respectable life

2. Success happens in uncomfortable zones. If the market makes you uncomfortable, it’s a sign of future success

3. SIP is a tiny window into a large, growing and prosperous economy

4.You neither make good ‘returns’ by churning players in cricket nor by churning funds in your portfolio basket

5.If you want the best computer then keep waiting. If you want the best mutual fund then don’t even waste your time waiting


Sunday, October 1, 2017

Financial Five Series

1. Accumulation of money is like accumulation of crowd. It is vital to provide direction to the money

2. “Showing off” your wealth isn’t a financial goal

3. “Living within your means” is like driving within speed limits.

4. Zero debt life is like zero calorie diet. One looks after your wealth while the other looks after your health

5. “Debt” is for storing wealth. “Equities” is for creating wealth

Saturday, June 17, 2017

EMI Jhatka...

A man chooses to buy a house for investment.

House value 1.25 cr

Loan amount 1 cr

Interest rare 10%

After 5 years the value of the house is say 1.6 cr based on 5% compounding

He decides to sell it.

While closing his loan he has to pay up approx Rs 1.5 cr

So his total cost turns out to be

Rs 5 lac registration

Rent 25 lac initial amount

It all equals to Rs 1.8 cr

Against this his house fetches Rs 1.6 cr

Les capital gains would be say approx 3 lac

Add his rent income approx of Rs 15 lac

Add tax saving 3 lac

Total income is equal to 1.75 cr.

So in the end he incurs a loss of Rs 5 lac

If the house had appreciated at even 10% he would be left with a profit of Rs 20 lac

So between 5 lac loss to 20 lac profit is what he makes

On the other hand had he invested the 25 lac in an Equity mutual fund and had done a SIP of Rs 1 lac (approx EMI amt) he would have earned Rs 1.6 cr

(Assume Equity returns of just 12% in this period.)

Net profit would be 1.6 cr less

investment of 85 lac
( 25 lac + 1 lac SIP for 60 months)

= to 75 lac.

He could also earn tax rebates in ELSS schemes upto 2.5 lac taking his earning to Rs 77.5 lac

Now compare Rs 77 lac profit with Rs 2 lac loss or at best Rs 20 lac profit.

Even a bank FD would have provided a net profit of 40 odd lac

Next time think a 1000 times before saying house investment is smart thinking.

The equation will only get worse for longer periods of investing.

Without taking a loan if one were to invest in a house then at best case scenario the returns from the house may come close to that of a mutual fund.

But remember that is without taking a loan.

How many people ever buy a house without taking a loan.

Friday, June 16, 2017

Hum kaale hain toh kya hua cricketwale hain...

Hum kaale hain toh kya hua cricketwale hain
Although England invented the game of cricket they seem to have lost the plot.
They have never won the world cup or any big tournament even though they host many of these tournaments.
England has very little sunshine and mostly inclement weather throughout the year.
Cricket or for that matter any outdoor sports requires a lot of practice.
Perhaps, England had planned India as the colony with all the Sun for practicing and training.
But alas that was not to be.
They left us alone and we made a lagaan team that is now turned the tables on our erstwhile masters by taxing them on the cricket field.
No wonder all Asian teams who were their slaves are left to contest the CHAMPIONS TROPHY.
The clear message from this is the need to practice, practice and practice in a conducive environment.
Now did you get your investment lesson. If not, read on.
In investments too, wealth championship can be won by SIP, SIP, SIP in a conducive economic environment.
Yet again, India seems to be offering the environment where you can win big time by SIP, SIP and SIP.

Featured Post

Festivals brings families together....

Diwali is approaching. The mood is festive. The families are coming together. Friendship and love pervades the atmosphere. This is the se...