Saturday, September 29, 2018

"Experience should define your age and not no. of years".

Investoshashtra !!!📜📜📜
इनवेस्टोशास्त्र !!!📜📜📜

Just watching an advertisement of Flipkart which defies age related stereotypes.(Link : ) 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

Raj Talati

Saturday, September 22, 2018

"Defining true friendship"

Investoshashtra !!!📜📜📜
इनवेस्टोशास्त्र !!!📜📜📜

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.

Raj Talati

Saturday, September 15, 2018

Every seat is a Hot Seat

Investoshashtra !!!📜📜📜
इनवेस्टोशास्त्र !!!📜📜📜

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*

Raj Talati

Saturday, September 8, 2018

*Time to reset expectations*

Investoshashtra !!!📜📜📜
इनवेस्टोशास्त्र !!!📜📜📜

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.

Raj Talati

Saturday, September 1, 2018

What is the guarantee of Guarantor

Investoshashtra !!!📜📜📜
इनवेस्टोशास्त्र !!!📜📜📜

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.

Raj Talati