Wednesday, April 15, 2020
My article in ET on *"Corona crisis is teaching millennial investors importance of financial security".*
Friday, February 7, 2020
Thursday, December 19, 2019
Wednesday, December 11, 2019
Saturday, June 15, 2019
As always, Mutual fund Sahi hai has come up with another beautiful advertisement promoting direct investment in mutual fund, obviously with a caution "If you have knowledge of MF" and a disclaimer at the end.
It is a kind of ad which promotes to buy a toothpaste which you don't need to get a toothbrush free.
Have you ever thought why Virat Kohli or any of the best players inspite of being best, needs a coach. Does coach teaches them how to play, absolutely not.
Biggest role a coach plays is to guide them through their ups and downs, specially when they are performing well, that is the time they are prone to commit big mistake and hand holding them during lows.
Coach can help to see possibilities which you can't and they will make you stay focused on preparing and executing to meet the goal. They act as the lighthouse which is stationary and secure and provides a beacon to direct when you lose focus.
Investing or selecting a fund to invest in MF is not a big deal, but to stay focused and being rationale is.
That is where advisor comes handy.
A media house promoted platform is also publishing full page advertisement comparing extra money generated in 25 years, if invested directly or through MF distributor.
But the question of comparison arises if you invested for 25 years. Who will ensure, handhold and help you to make that journey of 25 years smooth.
Just seatback for a while and think whatever worth you are at today, was it possible to reach, if you wouldn't had an advisor.
*So don't be "Penny wise pound foolish".*
Just one right advise of advisor is worth much then saving few bucks by experimenting yourself.
Have a great weekend.
Saturday, March 30, 2019
The most hot topic of discussion or time-pass these days is IPL and politics.
Normally, a player have limited career. Inspite of being in form they get retired in late 30's or many a times even in mid 20's. Think of a person getting retired in 30's and kind of retirement planning he would require to live atleast 50-60 years.
Atleast for cricketers IPL came as the biggest saviour to boost their career and delay retirement.
Similar, is the case with politicians, they hardly retire. If retirement is enforced even at age of 91 years they make a headline.😜
Most of us are not a cricketer or politician or an actor, but luckily our career graph is much longer.
In the era of fast changing technology and being one of the youngest country, we might not have option to delay our retirement. As our job might become obsolete or will be taken away by an youngster.
*Skip one match of IPL or hot debate of prime time and plan for your retirement corpus judiciously during this working years, we won't have any IPL or political career to support us.*
Saturday, March 16, 2019
Summer is next door, when it comes brings sand/dust storm with it. Sandstorms usually arrives suddenly in the form of advancing wall of dust and debris may be kms long and several feet high.
They strike with little warning, but best thing is they don't last long. If not handled properly It may damage our eyes, lungs or even result in big accidents.
Similar is the case with investing. Here are also Storms of uncertainty and volatility keeps striking irrespective of summer or monsoon in India, It will strike even if temperature rises in U.S.,North Korea, Europe,China or middle east.
Whenever, such storm of news flows, instead of being reactive we should look at our needs, goals and ask big question "does it have any implication on my financial future."
If planned properly, you can sail through storm easily and reach financial destination without being hurt avoiding accidents.
So, don't make news to be *basis* of your investment decision.
Have a great weekend.
Saturday, December 8, 2018
Just after 12-14 months of planting mango plant, if it's well grafted plant flower will start coming during the season, but first thing they do is pluck off the flowers.Next season again flower comes and are again taken off. They keep doing like this for few years. They don't let that flower to bear the fruit.
They will wait for plant to grow because they know if fruit starts coming out of that plant it would never grow to a full-fledged tree. It will not bear as much fruit as it could, if it bears too early.
This is what an investor must learn from farmer's wisdom, don't try to leave too early. This is the time to think about future as well and for bigger goals, liabilities and expenses in life.
So together with living in today, also *"plan for future as _that is the place you are going to spend most of your life._*"
If you start living too early, you might not be able to live a full-fledged life.
We have built habit of spending without planning, *since 2011 India's household savings has fallen from 26.1% to 16.3% of GDP.*
*Most surprising part is, in past consecutive 6 years personal consumption expenditure has outgrown household income. That means we are spending much more than our earnings.*
So this weekend let's learn and implement some of farmer's wisdom for creating a secured and safe future.
Have a rocking weekend.
Tuesday, December 4, 2018
Was part of Panel discussion for knowledge series on debt conducted by Reliance MF in association with Cafemutual
Saturday, November 3, 2018
Most of the investors during fall in equity markets become sceptical about it and about future of their investments.
I, suggest an easy 3 step decision making process which will be handy to decide whether you should hold on to equities or come out of it.
*1) Just ask yourself how you see our countries _economic_ future as far as income, spending, infrastructure, development, savings, education, power etc etc...*
If you have a conviction it is going to be *better or much better* compared to today. Then, here comes result of first test that you may continue with your equity investments or make fresh allocations as well.
*2) How Much time according to you it will take to see few or all of above changes to happen. If answer is 3,5,10 or 15 years, then here comes answer for your time horizon to invest in equities.*
Let's say you feel there are challenges in short term due political uncertainty, geopolitical issues, crude, Inflation, current account deficit, fiscal deficit, imports, depreciating currency etc... but you are sure that we will be well off or _atleast better_ in 5 years then here comes your horizon to look for equity investing i.e 5 years. If your assumption is 10 years then for you it would be 10 years.
But for few of you who feels nothing will change or economy will go in doldrums, then *please please* stay away from equities.
*3) Now, match your goals which you have tagged to equities with above horizon and stop worrying about day to day market movement.*
Have worry free weekends.
*_Wish you all happy and prosperous Diwali and New year._*
Monday, October 29, 2018
Saturday, October 27, 2018
Recently we conducted an Investor awareness program for investors of our association members. We had a capacity of 500 pax.
We invited India's renowned speaker Mr.Krishan Sharma and event was organised at one of the best venue i.e. INOX, Vadodara with food.
Only guests who confirmed their availability, were invited. To take care of last moment cancellation due to some emergencies or unavoidable situation we distributed additional 7% invites.
Each one of us worked really hard to ensure it's packed to capacity.
But to our surprise only 65% of investor turned up out of total invitees.
*I was wondering if we had invited similar no. of guests at same venue for screening of movie _"Badhai ho"_ which was running in adjacent screen, I am sure situation would have been totally different."*
First of all we would have got full capacity by may be calling only 700 pax instead of making over 3000 calls. Secondly, provisioning of 7% for last moment cancellation had to be brought down to 1-2%.
We all want to have entertainment in life so nothing wrong with it.But awareness, knowledge and preparing for future is equally important..
I, always believe majority of Investor's considers financial planning as last priority. Amongst few who are conscious they also have big gap in decision making and implementation or may be goes out of their focus in few years.
*Remember "Future is not decided by how much we earn, but by how we manage it."*
*This weekend give a serious thought and make financial planning atleast your 4rth preference in life.(After may be job, family and entertainment).*
Saturday, October 13, 2018
Word *Sale* made me puzzled of what it actually means.
As per dictionary Sale means "Period during which goods are sold at a discount to it's MRP (Maximum retail price)."
*The big question is who decides an MRP and does it remain same during the lifetime of the product. _Obviously no_. It keeps on increasing or decreasing depending on seller's wish.*
So only aspect which decides *sale* is real or not is the *value* we get against such *discounted products.*
That is the reason 90% (In many a cases 100%) of shopping my wife does online, goes for a return. (Thanks to free return policy😜😜). Reason is inspite of buying it in a sale she doesn't find value and that shows how word "Sale" is being manipulated by seller's.
Similarly, I have been getting lot of forwards from advisors as well as investor's regarding Big Billion sale going on in Indian Equity Market.
Big question strikes me again can this be termed as sale.May be "Yes" reference to historical prices, as it is available at big discount. *But what about value against the price we will be paying even now.*
Remember "The markets is most intelligent and dumbest at times". It's our job to find when it is behaving as a dumb (Opportunity) and when intelligent (Safety).
Looking at present macros like ; Crude price, Depreciation of Rupee, Increasing interest rate, Challenges with fiscal prudence, current account deficit, political uncertainty, trade war etc etc, I don't think market is behaving like a dumb at all.
Actually, It was running much ahead of fundamentals due to heavy liquidity and Tina effect (there is no alternative).
*"Market can remain irrational for longer than you can remain solvent - John Keynes."*
*So do not try to leverage your equities looking at "Sale" even now and stick to asset allocation.*
Remember, it doesn't mean stopping SIP's these are the times it is best suited for.
Have a great weekend.
Saturday, October 6, 2018
Once a wise man was taken to a construction site. He was blindfolded and given a task of identifying what job 3 people standing in front of him do, by just asking one question.
He thought for a while and asked each one of them "What does you do at this site".
First one replied I am laying bricks, second one replied building a wall and third one *I am building a beautiful House 🏠.*
For same question there were totally different reply *although all of them doing the same job.* Which also explains reason for kind of income they earn.
Same is true with investors, there are the one's who just enters the market to trade, other set of people who speculate or follow herd mentality enters the market to make quick gains and very few comes with clearcut vision of *building a beautiful House 🏠.(Wealth creation or achieving a long term goal.)*
So the gains are dependent on outlook or purpose either lay a brick(trader and have small gains), build a wall(speculator - gains when calls go right and lose when it's wrong) or can be an investor who dreams, lay down a plan and work for ultimate final goal ignoring intermittent hick ups.
*This week just ignore noise around, think of your goal and stay committed, everything else will automatically fall in place(But ensure you goals are long term).*
Saturday, September 29, 2018
Just watching an advertisement of Flipkart which defies age related stereotypes.(Link : https://youtu.be/3WFGHCqC_1c ) Very often we deny ourselves opportunities and experiences because we are being afraid of failed or judged by others.
Do we stop driving vehicle after an accident or do we stop living life because of a big failure.Obviously no, rather *we count it as an experience and learn lessons for future to be more wiser.*
But, why is it that when when it comes to investing we consider our mistake as permanent. If we dig dipper into it to find reasons, *It can make us wiser investor to be benefited out of it next time instead of falling prey to it.*
The best example is recent turmoil in mid and small cap segment which *would have been sensed by any experienced advisor more then a year back.*
There were investors who kept pumping money by ignoring valuations dazzled with charts, returns and growth shown by newspaper,NFO's, business channels and even business hungry distributors.
So, there is nothing wrong in investing in equities or even mid and small cap stocks or companies. But try to be wiser with your experiences instead of moving away.
*_Financial Advisor wisdom not only comes with the knowledge and experience he have, but is much wiser because of lessons learned from mistakes done in past._*
*So you can be wiser by experiencing mistakes yourself or can become one by hiring a financial advisor.*
Have a great weekend
Tuesday, September 25, 2018
Saturday, September 22, 2018
Sorry for using true before friendship, I believe it's granted that friendship is always true. But I was digging little hard how can we define it. I came out with following criteria.
It's like you understand each other by just looking or talking each other and many a times even without talking.
They will abuse you, fight you, pull your leg, try to do everything to irritate you and even calling with wierd names. (My friends can understand which names I am pointing to😜). *There is only one relation where you can be yourself and are least bothered what others think because of your social, financial or even marital status.*
*_They will forget thousands of reasons which can break it but don't need one reason to make it everlasting._*
It's difficult to have both quality of a true friend and wisdom as well as professional qualification in a financial planner. *But there are some basics which a financial planner should possess like: being Loyal,Good, helpful, understanding, truthful, trustworthy, supportive, always with you, intelligent and with little sense of humour.*
*_Like friends they should never judge you, help to avoid mistakes, take informed decision, guide and continuously counsel for a successful financial future._*
"If you are really rich can you find an hour a week for your friends." - P.V.Subramanayam
Take some time out with friends this weekend to make it wonderful.
Saturday, September 15, 2018
Most of the time seating at home and playing "KBC along" is totally different then being a contestant. In playing along you have hardly anything to loose. So you play it for fun, but if you get a chance to play in front of Big B, situation might be totally different. Inspite of knowing an answer just in pressure you go for a lifeline or give a wrong answer.
A wrong answer before second leg won't affect much, but any wrong answer after 2nd stage of Rs.320000 comes with a big cost. That might be the reason many contestants instead of trying a sure guess to double prize money, settles down may be for 12.50 or 25 or 50 lakhs, as a wrong answer at this stage can bring them down to Rs.360000.
*The most reliable and consistent lifeline at this stage of game is expert advice*. There might be cases when they would say sorry for not knowing the answer *but I have hardly come across an instance when they went wrong. The irony is you can use this lifeline only once.*
Thank god! there is no such limitation in real life.You can have a reliable advisor, specially in financial planning who will always be there to help and guide you to path of success.
*In absence of good advisor most of the time investors makes big mistakes time and again, to settle for a lower value (3.60 lakhs).They needs to make big compromises later in life instead of making it bigger and better.(may be 50 lakh, 1 crore or even a jackpot).*
Advisor helps to avoid mistakes and handholds you in tough times to achieve goals comfortably.
*Good things in life comes with a price, but value and wisdom comes with it is - _priceless._* Only one right advise can make good of cost paid during lifetime.
*So don't be Pennywise and pound foolish.*
Have a great weekend with Bappa.
*Ganpati Bappa Moriya*
Saturday, September 8, 2018
We are again entering election season, whereby every political leader or party will try to divert attention from real issues and divide us on the basis of religion and casteism.
"Rome was not built in a day and India is an under construction country, thodi dhul to udegi". We are at an inflection point and need to overcome such pity issues. *It's time to reset expectations and concentrate on bigger issues viz employment and housing for all, better cleanliness and hygiene, medical facilities, education, infrastructure etc.*
Similarly, I think it's time for investors to reset their expectation from equity investing as well.
Historically, index has given an average return of 15% and we assume it as an standard for calculating future returns for financial planning.
But, we need to understand logic behind the number 15%. Historically we have seen average inflation of 8-9% and equity generated real return of 6% (15%-9%) (net of inflation).
Now as we know RBI/MPC stated objective to keep inflation in 4% +/-2% range.
If we add real return of 6% then figure of 11-12% will be genuine return expectation from equity over a long term.
Secondly, enough liquidity is flowing in equity market due to TINA effect (there is no alternative for investment) making it more and more costlier, so chances of making additional brownie point there is also limited.
*So, It's time to reset return expectations and alter your financial plan, otherwise chances are high that you might end up way short of required amount.*
Have a fantastic weekend.
Saturday, September 1, 2018
Recently, I come across an advertisement wherein a company has put big signboards around the city guaranting income for 9 years @9%, *by purchasing a pre leased commercial property through them.*
On website it's mentioned that they lease property to IT companies. Also occupancy or non occupancy doesn't impact Investors return of 9%.
As a financial planner when I digged into the offer found following points to ponder for investors, before falling prey to it :
1) Price of property is decided by them: Even in this bearish phase they dictate their price and inflate it, making it costlier for investor.
2) Rate of return@9% is not adjusted for inflation. Assuming even 6% inflation your return would be meagre 3% from very next year and will keep going down with every passing year. After 6 years effective real return would be negative.
3) Income tax on rental income : Obviously person buying such a costly property must be falling in top tax bracket.So if accounted for tax their is hardly any income.
4) Maintenance and wear and tear.
5) Property tax - Being a commercial property taxes are going to be high.
6) They are giving post dated cheques as a guarantee for rent.PDC's really😖😖
*_The big question is what is the guarantee of Guarantor._*
*With a little common sense, a little patience, and a little sense of humour you can live well on this planet - W.Somerset Maugham*
When we all know rental yields are in the range of 3-4% then why we fall for offers which is *too good to be true.*
It always helps to have a professional by you side, who can guide,analyse pros and cons and help you take a informed decision.
*So next time whenever see such lucrative offers think twice before investing or contact a financial advisor to help you with.*
Have a rocking weekend.
Saturday, August 25, 2018
*What if God is against you*
We recently witnessed the worst flood in nearly a century in God's own country - Kerala.Hundreds of people died, more then 33000 people rescued and estimated 13 lakh people took shelter in camps.
This is not the first instance of such natural disaster. Every year India's one or other part is divastated by either flood, landslide, tsunami, cyclone or earthquake.
It keep reminding us that in the race of development or growth *we are killing our own mother earth.* That might be the reason God is annoyed of his own kids.
Can anyone in this world save us from god's fury anwer is obviously "no",One need to handle hardship and physical losses himself.
*But to be precise "Yes" there is something which can save us from it's effects.*
For financial losses we as a mankind have created a wonderful tool which can even challenge God and the *weapon is Insurance.*
Many a times we ignore most important aspect of finance rather foundation of financial planning i.e. *Insurance.*
Most of the people see it as a cost, but fact is *Insurance is financial guardian of our future and dreams. _It ensures and provides financial security at a nominal cost._*
_So, this weekend just check whether your financial guardian is capable enough to cover your assets and dreams._
*Happy Onam and prayers for people of Kerala. I can assure that whole of India stands with you. We will re create a Kerala which even god will be envious of.*
Saturday, August 18, 2018
Since my childhood, I was a bit chubby and worked really hard to come in a perfect shape😉.
The best thing which helped me is brisk walking. But was never satisfied and started running, Inspite being Asthamatic.I presumed that exercise means perspire, exhert and to get tired or exhaust.
Yoga changed my perception of fitness. Fitness is not too much of physical exhertion. Pranayam and yoga with proper knowledge of inhalation, hold and exhalation of breath can give much better result without force or strain.
Specially, in 40's running or gymming may cause more harm then to help, resulting in problems related to back or knee.
So, it is not essential for achieving anything only way is to hard work, *But smart work can get better results with minimum strain.*
Many a times investor also over work on their Investments. Planning for retirement and checking portfolio daily or weekly doesn't result in anything more then to damage it. *Investment also requires right mix of inhalation (accumulation), hold(gestation) and exhalation (distribution) to have healthy financial life.*
So, try not to exhert and smartly achieve desired goals.
Saturday, August 11, 2018
Today I was surprised to see board reading "Buy clothes on Easy EMI".
We are still a developing country, but our spending pattern can amaze even developed countries.
That made me think actually from a consumer perspective, loan and Investment are two sides of same coin. Both of them fulfill a person's desire which is not affordable today. Loan given instant gratification whereas Investments doesn't.
Then why is loan a cuss words, while savings and investments are habits taught us from childhood.
In case of *loan we trade our future income today.* As we all know future is uncertain and tomorrow's expense are going to be much more than what it is now. *So, when it's not affordable today, how will it be paid tomorrow.*
Secondly, even in future needs will keep escalating, how that will be taken care of.. which might prompt for another loan and drag us to never ending vicious circle of EMI.
It's prudent to understand, impulsive buying on loan (In form of credit card, personal loan or consumer loan) might give temporary delight, but comes with penalty in the form of higher interest and a never ending stress, whereas buying it with own savings or investments gives satisfaction and contentment.
I think that was the reason our parents used to enjoy and cherish their big purchases. As they used to plan, work hard and compromise on many small things to buy it. *Every purchase was a long awaited dream and so used to carry enormous value to them.*
So, try *atleast never to buy your WANTS on loan* and *plan in advance for your NEEDS as well as WANTS* to avoid your financial future from getting derailed.
Have a wonderful debt free weekend and life ahead.
Tuesday, August 7, 2018
*Meaning of success*
Yesterday, I got opportunity of listening to Gaur Gopaldas Live in one of the conference.
He beautifully explained how this generation has moved up ladder of success very fast. We all are proud to be successful...but irony is how many of us *feel successful..* being successful is what others think about us and *feeling successful is from inside.*
Happiness has nothing to do with how much you own. That is the reason inspite of being more successful compared to last generations, we are less happier and more stressed, depressed and anxious.
The only reason is we unnecessary do things we don't want to. Certain things can't be avoided like job, profession or business even if you don't like because you have mortgages, EMI and bills to be paid.But what about rest.
Why not to try utilising balance time in what we love to do.Which can make me feel successful of having power with me to do what I want to and not have to.
Similar, is the case with financial planning. People keep dragging it, inspite of having no in depth knowledge, passion and zeel. By the time they realise they messed it up, it's too late which results in depression, stress and anxiety.
So, start living what you love to do for everything else there are people who love to do it, so outsource it.
"Not only Be Successful but FEEL successful."
Have a rocking weekend.
Saturday, July 21, 2018
Few days back I was watching again movie "PK" another excellence featuring Amir.
In a sequence he explains how same word "Achha hai" have different meaning, the way it is spoken..
"Yaha Bolte kuch aur hai matlab kuch aur nikalta hain, ek hi Shabd ke char char matlab hai...if you shake your head and say Achha is different then said with eyes wide open, if spoken loudly is different from spoken softly.."
Similarly, in investments products or asset classes are same but for every investor it carries different meaning..
A PPF deposit for businessman is different from an employee, it's different for a young graduate then a married couple or couple with kids. It's different for one who has bigger future needs with lesser income, from one who is financially free.
So investment in Mutual fund/ PPF/ Insurance/ Real Estate/ FD/ Gold is Sahi hai.... but advisor bahut zaroori hai to decide and guide which investment and for whom."
So this weekend instead of deciding which product "Achha hai" and end up with an alien (PK😉)👽 try to find kaunsa advisor Achhaaa hai☺☺.
Saturday, July 14, 2018
Roti, Kapda aur Makaan (Food, Clothing and Shelter) is the basic necessity of every individual. Food and clothing is still not that difficult manage. But Makaan has become a distant dream for many.
In recent past lot of my young investors, who are in their late 20's and early 30's went for buying a house. Most of them are just married or married with one kid.
Most surprising is the house they are buying is 3 BHK or 4 BHK.
When asked why not 2 BHK their reply was tomorrow when we have kids and when they will grow they would need 1 room and other one is for guests or parents.
First thing is that in Indian context normally kids tend to sleep with parents till the age of 7-8 years in some cases even more. Secondly as working couple, there are hardly any guests which visits them regularly, apart from own parents.
So most of the time atleast 1 bedrooms is going to be unoccupied.
Then why to stretch your finances to go for a house which eats up all the savings leaving you with EMI which makes today's life more vulnerable.
In many a cases EMI is as high as 60% of take home against which *rented house is costing hardly 3-4% of price.*
Most importantly being young not yet settled in carrier what if need to face a job loss.
Over-planning results in stress and anxiety.
On a lighter note, the way our habit of eating out is increasing my wife always tells me that very soon you would be advising you clients to buy a house without kitchen. (Think how much you can save😉😉)
So don't fall in trap of over-planning and have a stress free weekend.
Saturday, July 7, 2018
Every person in our life whether it's our life partner, busineas partner, friend or family have some distinctive qualities which bonds our relationship.
Why is it that later on, we start expecting them to be perfect or to be the way we want. Every individual in this world is unique and none of them is perfect. So why don't we accept them the way they are.
On a lighter note the way Raj of DDLJ says "मुझे तो कोई एक लड़की पसंद आ ही नही सकती....अब किसी की आंखे अच्छी है, तो किसी की नाक अच्छी है, किसी के होठ अच्छे है तो किसी के कान"! It's a different issue that even he understands mistake and settles for one at the end.😉
Born in computer age, makes me think that our brain is also getting programmed like computers. The way computer understands only 2 outcomes (binary language) i.e. 0 (wrong) and 1(right), we are also expecting our relationships to be only (1) perfect.
But life doesn't come with only 2 outcomes and *individuals are not computers.* _There are some good things in everyone to cherish about and not so good things to ignore._
Even investing is about understanding distinctive quality of each and every asset class.
Nothing wrong in investing in Gold, FD, PPF, NPS, Debt, Equity or Real estate.
Why would you invest in equity at the age of 75, when you can comfortably live remaining years without affecting your blood pressure jump due to sudden fall in markets.
Every asset class has it's own merits as well as demerit. So understand asset classes and make a winning team by combining them.
So listen to this Raj😉 and go beyond 0 and 1 in analysing your investments or personal relationships.
Have a wonderful weekend.
Saturday, June 30, 2018
Today morning while on my way back from jogging, I saw a person riding on his bike and pushing other vehicle which ran out of petrol.
Whether it is laziness or illogical thinking that people keep testing their vehicles fuel efficiency and most of the time end up running out of gas and in accordance with Murphy's law "at a location where there's no gas station".😔😔
Similar is the situation of most of the millennials. Inspite of having a good take home salary they end their month dragging their vehicle to the next fuel station, with the help of friend as the last rescue (who is more of a enemy in mask of friend named as credit card or consumer loan.)
Burdened with big EMI's, partying with friends, going to pub, restaurants, vacations, latest gazette, big billion sale, impulsive buying is the way of life for them.
Friends and relatives can push their vehicle to fuel station just once or twice.Then a stage comes when they are hardly left with any fuel and end up in dragging their vehicle of life to reach fuel station(Salary day). What if the vehicle breaks down (you lose your job or some medical emergency comes).
So instead of living life on the edge start live it smartly, start a #Good EMI. (http://www.franklintempletonmutualfund.in/thegoodemi/ )
Good habits are hard to form but very easy to live with.
This weekend have fueltank full of happiness.
Saturday, June 23, 2018
Have you ever thought which are the songs which will always remain in our playlist. Is it the most hit songs(Honey Singh types- दिल चोरी साड़ा हो गया...), trending nos. (रंग दे तो मोहे गेरुआ) or most viewed one ( दिल पे पत्थर रख के मुँह पे मेक अप कर लिया - 21 crore views). Mostly none of them.
Our playlists have songs which are close to our heart, they may be enjoyed listening with friends on a Manali trip (Why Manali-as I have some😉) or with family on a road trip, may be from a movie you can connect with or may be the one with extraordinary music, lyrics and singer combo.
So it has nothing to do what others like or want, it has to do more with your own inner happiness and delight.
It's sort of personalisation. Isn't it!!
Then why we try to copy others when it comes to investment. Why we invest in Gold in 2012, real estate in 2013, Equities in 2007 and mid and small cap funds in 2017-18.
Just go with the songs (investments) which you enjoy, I like combination of Kishore,Asha,Gulzar and R.D.Burman, but many of you might have a different choices. So my asset allocation or investment in equity or real estate or gold can't be like yours.
Even siblings can't have similar asset allocation the way they don't have similar playlists.
This weekend decide on your favourite investments (playlist) which suits your goals, risk profile, income, expenses, assets, liabilities, responsibilities, health condition etc etc..and enjoy musical journey of life.
Have a musical rainy tip tip barsa Paani weekend!!
Saturday, June 16, 2018
Investoshashtra !!! 📜📜📜
ईनवेस्टोशाष्त्र !!! 📜📜📜
I was watching a TED talk by Jon Jandai a farmer from Thailand, he has beautifully explained how simple life is. https://youtu.be/21j_OCNLuYg
Mostly, we are not able to differentiate between our needs and wants. Needs are basic necessities the way Jon explains but there is no end to wants.
At times society we are living in decides what we should buy. We know a small car will suffice need to commute small distance we need to travel daily to office or shop or showroom, but still settle down on buying a luxurious car on loan.
I heard lot of people saying "Money can't buy happiness but I would prefer to cry in Mercedes then in bus".But what if Mercedes is the real reason behind sadness.
To achieve Nirvana in this world you can follow path of Jon Jandai. But if you find it difficult then financial planning can be the only option.
It helps to understand and decide your needs and wants,to overcome peer pressure of the society, quality time with family & friends and be secured about future.
I think that is what we wish in life.
This weekend decide how to make life more simpler, so that it can be happier (even in a Alto), healthier and satisfying.
Saturday, June 9, 2018
Investoshashtra !!! 📜📜📜
ईनवेस्टोशाष्त्र !!! 📜📜📜
This week we decided to buy new vehicle for my wife.
Since then only thing we can see around is different vehicle options, color and look.Even while riding on road or standing on signal instead of looking at the beautiful girl standing besides me, I was lookng at her vehicle😉😉.
I was surprised by my behaviour, untill last week inspite of everything being same it was non existent for me, and after 2-3 months of buying the vehicle everything again will be non existent for me. Rather I would be list concerned with even color, model or brand WE BOUGHT.
It reminds me of investors who invests on their own and falls prey to such behaviour.
Whenever they have surplus money just invest looking at what everyone else is investing in or most fancied product or asset class in the market. They forget purpose of investment and in many a cases even purpose is undecided.
But investment is not like buying a vehicle, TV, refrigerator or Home theatre. It is like growing a plant, it needs regular care, watering, nurturing and even trimming as and when required.
So it's always better to have a good financial gardener who will help and nurture to blossom garden of your Life.
Have a blooming weekend.
Saturday, June 2, 2018
Investoshashtra !!! 📜📜📜
ईनवेस्टोशाष्त्र !!! 📜📜📜
Recently while reviewing portfolio of a new investor, I recommended him to surrender high premium traditional insurance plans.
But the problem is inspite of paying premium for 3 years he is not getting even 40% as surrender value. So instead of surrendering he wishes to continue with it for the full term.
In behavioral finance we call it "Sunk cost fallacy".
For example :
-I wish to take a gym membership but can't. Reason, I bought a treadmill 6 months back which I hardly use.
-Keep watching a pathetic movie till end which costed your pocket 500 bucks or overeating at a restaurant as you ordered more just to get money worth.
We always live with a misconception that we make rational decisions based on the future value of objects, investments and experiences.
But the fact is our decisions are tainted by the emotional investments we accumulate.More you invest in something the harder it becomes to abandon.
Sunk cost fallacy makes us stupid.
Try and get rid of sunk cost fallacy in your investments for a better financial future.
Sunday, May 20, 2018
Investorshashtra !!! 📜📜📜
ईनवेस्टोशाष्त्र !!! 📜📜📜
Now a days *Murder, Suicide and accident* are the news which fills each and every page of newspaper.It is so common that Divya Bhaskar a leading daily who started a movement "Positive Monday" is forced to cover atleast one or two such news on every page by giving excuse "required to know".
Our reaction to such news is just read the heading check for any known names and breathe a sigh of relief that no one is from our known circle.
*Only difference with me is for few moments I just imagine financial situation of the family and instead of praying for RIP, I first pray to God that deceased must have had enough coverage to provide financial security to his family.*
_Like they say "Only 'love' which comes with guarantee in life is 'parents love'_ and *only guarantee "life" comes with is Death.*
So, if you do not have enough insurance coverage for your family's financial security, just for a moment try and put your name in that news *(God forbid)*.It will make you understand it's real need.
We all know we are going to die. *But in absence of proper financial planning-if you die early your family will suffer and if you live longer both you as well as your family suffers.*
"So, this weekend just check for your insurance needs and cover it." *(Only term Insurance),*
Have a positive weekend.
Saturday, May 12, 2018
Our PM Shri Narendra Modi embarked a revolution on birth date of Father of our nation in 2014 named *"Swachh Bharat Mission".*
The mission aimed to achieve a swachh bharat by 2019 as a fitting tribute to Mahatma Gandhi on his 150th Anniversary..
Lot of debate can be done about effectiveness of mission. But I think everyone will unanimously agree that it brought a big change in our mindset and specially of next generation. I don't have any doubt that our next generation will have a *real swachh bharat.*
Habits are difficult to change whether it is related to cleanliness of our surroundings or *finances*. So keep. Bharat clean but do not forget cleaning up your financial life as well.
*Financial life cleanse doesn't require too much of time. Only thing it needs is determination, decision, action and little professional help.*
So this weekend:
1) Get rid of Investment done in obligation or low return giving insurance policies.
2) Buy a term insurance.
3) close down high cost loans by withdrawing low return investments.
4) Compare returns net of taxes.
5) check asset allocation - don't overboard any one asset class.
6) have adequate health coverage
7) consult a professional financial planner.
8) don't leverage...never ever take loans for investment.
9) Have proper and updated record of investments and discuss it with your spouse.
10) make a will.
11) reduce dependence on credit card.
*Have a Swachh Financial Life.*
Saturday, May 5, 2018
Start of academic session was most exciting time when I was a kid. The smell of new books📖, enjoyment of writing in a new notebook, wearing new uniform, meeting friends etc etc...
I used to make detailed time table for entire day...when will I sleep, when will be the play time and specially dedicated time for studies. Not only that within study time it was fixed which day which subjects needs to studied.
But within few days time table used to become just a show piece on my study table.
Similar is the case with financial planning. Lot of clients comes to us understanding need of financial planning , fully motivated and committed .
Within a year or two goals and motivation gets lost in between.. and they just remains guesses without any action.
Realisation and regret comes when actually goal falls due.
*"Your level of success is determined by your level of discipline and preservance"- Annonymous*
Being kid we had liberty of taking resolution again for the next year to be more disciplined.. *but being adult we can't afford it.*
Have a wonderful weekend.
Saturday, April 28, 2018
Tuesday, April 24, 2018
Ensure this fund doesn't imbalance your Retirement
Mutual fund is witnessing historical inflow for last few years courtesy TINA effect (There Is No Alternative for Investment) and Demonetization.
The biggest inflow came in category named "Balanced Fund" which is a quasi Equity category having minimum equity allocation of 65%, actually most of the time funds are having equity exposure of more than 70-75% in equity in it. This category grown the more than 9 times in last 4 year's.
The reason for big inflow was not for some genuine reason but was for the reason that many fund houses adopted a strategy of declaring monthly dividend ranging from 9% to 12% per annum.
Most of the FD investors and senior citizen tapped this category looking at high dividend payout and decreasing FD rates "without understanding risk involved."
Untill now all such investors who switched to this fund from their traditional conservative investment are having a ball of a time..but remember every party needs to end... today or tomorrow even this party will end.
My worry is for the investors who are dependent on this income. If market falls these funds will also fall in proportion to it and dividend will make it more worse.
Just to illustrate if you had invested Rs.100000 in one of the biggest and famous balanced fund and have taken a dividend option with payout @12% per annum since 01/01/2008 with all the ups and downs it's value as on 01/04/2018 would have been 23752. It's CAGR return comes to 7.12% worst then bank FD.
Above scenerio we are discussing during a bull period where for last four years market has given us double digit returns.Think of a longer bear cycle.
Second important aspect is dividend is taxable from this April@10%, effective rate for investors actually work out to be 12.942% for investors.
So, if you have made such Investments in last 2 years in any such fund on advise of your banker or a MF advisor friend and you don't want your retirement to be at Mercy of a pity advise or markets, it's the best time to review such Investments.
Don't allow balance fund to imbalance your retirement.
Saturday, April 21, 2018
According to a Chinese proverb there are 4 categories of people :
1)He who *knows*, and *knows* he knows, he is *a wise man*
2)He who *knows*, and *knows not* he knows, he is *asleep*
3)He who *knows not*, and *knows* he doesn't know, he is *a child*
4)He who *knows not*, and *knows not* that he doesn't know, he is *a fool*
The problem is percentage of people doubles as you move up the hierarchy and more than 80% fall in final 2 categories.
In financial world, most of the time initial investment success makes investor's overconfident and tends to believe that they belong to category 1😊😊. But by the time they realize that actually they belonged to category 4, it's too late.😪😪
Frankly most of so called _*"Experts"*_ also don't fall in category 1 as it requires regular upscaling of knowledge and skills to maintain that spot.
Investors in category 2 or 3 are at lesser risk, as good professional advisor can help and ensure that their financial goals are met.
Irony is majority of investors fall in category 4 and they are ignorant about it. I pray to God to watchover and protect them.
Have a wonderful weekend...
Saturday, April 14, 2018
When we born we were like tender flower.But in zest of living life unknowingly we accumulate so much of trash (for others) which becomes difficult to manage for next generation.
Recently, I come across couple of cases where children's have settled down abroad and parents are no more.
Parents had bank account with multiple banks, investments in all possible instruments like LIC, Bank FD, Postal Schemes,MF,Shares, SCSS etc etc.. and cherry on the top had several real estate.
Misery is now kids themselves doesn't know about what they have inherited whether it is a wealth or mess.
More than grief of losing parents they are worried about sorting out this mess in little time they have.
In Gujarat this is the story of most of the families and will grow bigger as migration of next generation is increasing more and more.
So if you are one of such parents try consolidating holdings and limit it to financial assets as you grow older, which will ease transmission.
Most important - Create will. If you fail to do so you become a reason for dispute amongst your own children's who had harmonious relationship when you were alive.
Try and *inherit memories, values together with wealth, but not the mess.*
Saturday, April 7, 2018
Whether it's government or entrepreneur, a shopkeeper or an employee, chartered accountant or insurance agent, everyone takes a breather as soon as March is over..
Someway or other everyone manages to take over with March financial blues.
But have you ever thought how will you take over month of ''March of your life...(Final stage of Retirement)'' the biggest problem with life is we do know when Jan or Feb (Retirement) will arrive but no clue of when will March arrive and specially the D-day i.e. 31st March.
It might not be a big problem if you don't meet 31st target professionally, but you can't afford to lose March target of your life.
One thing I can guarantee, if not planned properly in advance it could be a worst nightmare which will become reality.
So, if you have not given a serious thought to your retirement planning, take sometime this weekend and do plan and review it.
Remember sooner the better.
Saturday, March 31, 2018
Saturday, March 24, 2018
We share data from whom it should not be and never share it with the one we should
This week we witnessed data leak issue on Facebook and also how serious it's impact could be on privacy of an individual and a country.
We keep sharing most of our secret data on social networking site without even knowing that it has been compromised.
Contrast to that we hardly share our financial data or details with the person who is going to need it after us i.e. our family.
One of my investor who was on his 40's passed away 2 years back. He used to share all Investments and other data with his wife which was stored in a laptop.
But tragic irony is just few days before his cardiac arrest, he changed password of laptop.
Think of the situation of the family, which is already struggling emotionally due to his sudden demise and doesn't know how they are placed financially.
So this weekend sit with your family *even if they don't want to* and share all your plans and Investments.
Don't forget to share contact details of your financial planner who can act as an financial guardian to your family in such adverse situation
Saturday, March 17, 2018
Saturday, March 10, 2018
India might be the only country where people accelerate instead of applying brake when signal starts turning to red from green.
We all know importance of brake as well as accelerator for smooth commuting.
*Accelerator keeps us moving whereas brake ensures we reach our destination safely....*
A good driver knows very well when to push accelerator and when to apply brakes.
Many a times investors while investing forget this simple concept and enjoys acceleration so much that forget applying brakes, inspite of reaching destination (Goals) which eventually results in accident (losses).
Financial planning helps you in deciding when is the time to accelerate and when to slow down or even stand still.
If you are still just investing it's high time *switch to financial planning.*
Thursday, March 8, 2018
Happy Women's day!!!
4 financial lessons world learnt from you
1) Creator - You taught us how from just a seed a whole new life can be created... *Power of compunding*
2) Securing what's achieved - You taught us how to create balance in family so that each one of us is happy and secured - *Power of asset allocation*
3) Keep growing - Being a mother you took care of us to help us grow and to be a better human being - *Power of Investing*
4) Sharing is caring - You always taught us since our childhood to share whatever little we have with others - *Charity - to take care of less privileged*
*Saluting most amazing Creation of God.*
Saturday, March 3, 2018
Seat belt pehni Kya!!
As soon as we settle down in a flight Airhostess starts safety demonstration. Does that mean flight is going to crash.
Does wearing a seat belt or helmet assures that we won't have injuries in case of accident.
No but certainly it will help to avoid severe injuries.
Financial planners are actually seat belt or life jacket for the clients, who ensures that during a accident(sudden change in behavior of asset classes) your goals Don't have severe injuries.
They would ensure that your goal funding is safe in Black box which gets unaffected even if flight crashes.
The most important part of financial planning process is selection of a competent financial planner.
Saturday, February 24, 2018
We always plan our road trip timings considering average speed.
There would be a stretch on which we may accelerate at 130-150 kmph and undoubtedly a roughy or crowded patch where we won't be able to exceed even 20-30 kmph, Unless driving on a formula 1 track.
So during our journey we will be moving somewhere in between the lower and upper band. Does that mean we should try and accelerate even on roughy patch at a speed of 100. Obviously NO
Then why we want to drive our investments either in top or first gear only. It is dangerous for our future to drive throughout financial journey only in extreme gears.
Why is it that if we are investing in Equities we try to chase best performing stock or mutual fund and keep playing with our money in shifting from one to other. Remember data only shows past performance and *past performance is not guarantee of future.*
So this weekend decide average speed required to achieve your financial goals which will help you to avoid unnecessary diversions. It will minimise risk and make you reach destination safely in time.
Saturday, February 17, 2018
What is more important
"Journey or Destination"
Many a times in rush of reaching our destination we forget to enjoy journey....Joy in reaching destination is only when you relish journey as well.
Same way while Planning investments advisors and clients miss pleasure of journey.
*Don't forget In financial planning majority of time is spend in journey.*
In hurry of achieving goals or getting higher returns we miss to enjoy the moment. Make sure your journey is refreshing so that reaching destination delights you and doesn't strain you.
What is the sense of buying a Bullet at age of 55 with own funds which you wanted to buy at age of 25 with loan.
Having said that don't forget all of us *have to reach destination* but with pleasant memories of journey.
Saturday, February 10, 2018
Dear friends ,
There is a big correlation in traveling and financial planning. I will use this analogy in Investoshashtra broadcast for next few weeks.
*SPEED or DIRECTION* - What is more important??
Whenever I ask this question during my presentations, majority of audience reply speed.
Actually, right *direction* is more important to reach our destination.
Even if we drive with full throttle, one wrong turn and will end up nowhere.
In financial planning most of the time investors concentrate on returns (speed) instead of where they want to reach-Goal(direction).
This weekend decide your direction right, speed could be managed afterwards to reach destination.
Have a rocking weekend.
Thursday, February 1, 2018
Sunday, April 30, 2017
Just thought of sharing some interesting facts about gold today.
There is roughly 7000 years (beginning of civilization) of history of gold.
We all seek permanency and gold comes near to that.
Gold does not get corroded or rusted. It is not soluble in any acid. It is very difficult to demolish.
Most of the gold digged from time immemorial is still in circulation.
So we may even be using the some of the gold (recycled) that was used in the times of Rama, Krishna, Buddha and Jesus.
It is very soft that you can beat the gold down so thin that sunrays can shine through it.
The quantity of steel poured in an hour in our planet is more than what has been poured for gold since the civilization. That is how limited the availability of the gold is.
It is estimated that total gold available (in circulation and storage) in the world is 1,65,000 tonnes.
1 tonne is 1000 Kgs. At Rs.3000/- a gram, the cost of 1kg of gold is Rs.30 lakhs. So 1 tonne of gold is worth Rs.300 crore.
Indians privately own anywhere between 15,000 to 20,000 tonnes of gold. Even pegging it at 15,000 tonnes, the value comes above Rs.45 lakhs crore.
Since I cannot not talk about equity, the entire fund management industry in the country only manages Rs.6 lakh crore worth of equity assets.
Indian government owns only around 550 tonnes of gold.
No one knows how much gold the Indian temples have.
Tirupathi is estimated to have gold worth Rs.90,000 crores. Around 4000 kgs of gold is offered annually by his devotees to Lord Balaji. Interestingly as per legend, Balaji borrowed from Kubera 1.14 crore coins of gold for his marriage. Marriages have always been expensive in this country. By any standard, Balaji’s wedding with Padmavathi is the most expensive marriage that has ever happened so far in our world.
Till few years ago, we never knew Lord Padmanabha is so rich. Is that why he is very relaxed (ananda sayanam)? The very conservative estimate suggests that the value of gold in his abode is around Rs.4 lakh crore.
Reading various estimates and guesstimates looks like we (including deities) may have even 30,000+ tonnes of gold in our country. So we own around 20% of the entire gold in the world.
This means at today’s price, we have Rs.90 lakh crore worth of gold. India can be amazingly rich and poor at the same time.
Since gold is so malleable, just one gram of gold can be beaten into a sheet of one square metre.
The entire gold available in the world today can easily fit within a cube measuring 67 feet. Just one good shipping container would do. Golden Voyage!
75% of the gold available today has been extracted only after 1910.
The U.S.government (Fed Reserve + FortKnox) has close to 10,000 tonnes of gold.
During great depression, in 1933, U.S. government banned private holding of gold. People were ordered to handover the gold they have and were provided instead with dollars of equivalent value. Once the process was over, the government devalued the currency by over 40% eroding people’s wealth overnight. This coupled with high inflation was an extremely tough time for its citizens.
This ban was subsequently lifted only in 1975 and Americans were again allowed to own gold.
Since China has lot of dollar or dollar denominated assets; they understand the above risk better than anybody else. Chinese people were not allowed to own gold for more than 40 years and possessing gold was a severely punishable offence. Sometime during last decade this ban was removed and China has been encouraging its citizens to buy gold and silver.
Talking about silver, Buffett who rarely touches commodity, purchased 37% of the entire silver available in the world (yes, you read it right) in late nineties and sold it some time in the middle of the last decade. I think that considering the growing industrial demand and limited supply then, he saw value in purchasing the same and selling it at a very good profit. Silver was selling at abysmally low prices during the time of his purchase.
Every year, the new gold produced / recycled is consumed 50% as jewellery, 40% for investments (including ETFs) and 10% for industry. I was under the impression gold has no industrial use whatsoever till one of our client told me that electronics industry uses gold.
Though South Africa has been one of the world’s largest producers of gold, its citizens were not allowed to own gold till 2009.
For sports fan, do you know that Olympic gold medal is not made of gold! A ‘gold’ medal contains only 6 grams of gold. Only till 1912 Olympics, the gold medals were actually made of gold.
In 1991, our country’s situation was so bad that 65 tonnes of gold was taken out of the country and mortgaged to tide over external payment crisis.
If you are worried that gold’s supply would get exhausted soon, fear not!
About 10 billion tonnes – 10,000 million tonnes (yes, you read it right) of gold is estimated to be held in the oceans of the world. An economically viable model of extraction is being explored.
Necessity is the mother of invention. If gold prices continue to rise and if the demand would only increase, who knows, a technological innovation can happen in extracting gold from ocean.
May be we can all then plan for building with our own golden bathrooms and specially bath tub so that we can have a golden bath....
What about our bappida???
Friday, February 24, 2017
Invited as "Guest of honor and Speaker" at "Parul University - Management faculty" during inauguration of their 2 days annual event "Arize".
Took a session on
"Importance of financial planning for today's youth"