How Children Education Planning can be very different ?

How Indians should focus on doing things differently for their children ?

I grew up in an India where getting a job mattered the most for survival ,

India has changed and there are many parents having enough Wealth not only for themselves but also for their children.

How does this change things?

Our fetish for Engineering, Medicine, MBA needs to be nipped in the bud & Parents need to open up to new possibilities & new ambitions of Gen Next.

We are in a position to offer our children opportunities to excel in non conventional fields; those that have longer gestation period like sports and the arts.

Sports, Music, Acting, Arts, Writing, Blogging, You tubing, Dancing, Comedy, Entrepreneurship and so on are all new possibilities that never existed like how it does today.

 Sports like Tennis, Golf, Equestrian Sports etc need investment in terms of huge Money, Time & Passion.

Many parents today are wealthy enough to help their children to discover and grow their passion .

This is a much better path than following convention blindly and studying Science or Commerce, CA etc mindlessly and then ending up doing some course abroad and helping some University there to make the moolah .

Any investment in non conventional education will certainly have many posit outcomes including the development of character and personality, the most important ingredients required to be successful in Entrepreneurship and Life .

Unfortunately non conventional career planning needs to start very early in the child's life .

Children while preparing for unconventional careers generally are more focused and purposeful which as explained above leaves a very positive imprint upon their personalities and characters .

As a country emerges out of the shadows of poverty and moves into the developing Economy zone, one should reassess Goals and Purpose .

Looking into the past will rarely yield optimum results .

 One needs to have clarity of thinking and understanding the Power of Wealth is a prerequisite to be able to make the most for Gen Next .

Being Wealthy is the license to experiment and take a detour off the beaten path to help our children realize their potential .

And being wealthy and still pushing our kids to do the stuff that we did in the path is clearly a mockery of the opportunities that are there for the grabs .

Child Education Planning has Changed Big Time & We Need to Plan  based on both the Child's Passion & Potential as well as the Parents' Net Worth .

https://www.investmentjunctions.com/

All you Need to Know about Stamp Duty on Mutual Fund Investments.

All you Need to Know about Stamp Duty on Mutual Fund Investments.

There are different costs associated with mutual fund investment. Expense ratio is the annual fee that fund houses charge from its investors. Till this July, there was no fee for investing or buying mutual fund units. The mutual fund regulator had implemented a ‘no entry load’ rule on mutual fund way back in 2009. However, fast forward to 2020 and entry load has taken a new avatar as stamp duty.

As per SEBI’s directives, all your mutual fund investments, irrespective of the category of mutual fund and investment route, will attract stamp duty. However, the stamp duty is negligible, and it will not make any significant impact on your mutual fund returns in the long-run.

In this article, we will explain all that you need to know about stamp duty and its impact on your mutual fund investments.

What is Stamp Duty?

Stamp duty is the charge that is applied to all mutual fund investments. Stamp duty came into effect from July. To put it simply, stamp duty is akin to the earlier entry load, as mutual fund investors have to pay stamp duty for every new investment. 

So, whether you are investing in mutual funds through SIP, lump sum, transferring units from fund to another through Systematic Transfer Plan, your investments will attract stamp duty. It will also apply on all types of mutual fund schemes: equity mutual funds, debt mutual fund and hybrid mutual fund.

Fund houses will levy the stamp duty while purchasing of units, while redemption/ withdrawing funds from your earlier investments will not attract any stamp duty.

Stamp duty charge

As mentioned earlier, the stamp duty is insignificant. The rate of the stamp duty is 0.005% and the amount of stamp duty will depend on your investment amount. So, the stamp duty of 0.005% translates into Rs.5 for every investment of Rs.1 lakh.

Let us assume that you are making a lump sum investment of Rs.1 lakh. Prior to July, fund houses allotted units based on your investment amount. Depending on the current market scenario, they would allot a specific number of units. This means they invested the entire Rs.1 lakh in the market.

But the introduction of stamp duty has changed this process. Fund houses will now allot units worth of Rs. 99,995 after deducting the stamp duty of Rs.5. Therefore, you will get fewer units than earlier.

What should I do?

The registrar and transfer agent(R&T) of your mutual fund house will automatically debit the required stamp duty from your investment amount. You need not pay for the stamp duty separately. As the investment process remains same, you can continue with your SIPs and other investments as before.

As the stamp duty is negligible, you need not worry about stamp duty making any significant dent in your investments. With the increase in the holding period, the impact of your stamp duty will decrease.

Mutual fund investments have the potential to outperform other traditional saving options. Hence, even if we include the various costs associated with mutual fund investment, you would be better off by investing in equity mutual funds to fulfil your long-term financial goals. 

Things to keep in mind

• The stamp duty will apply on every SIP instalment
• Check for overlap in your portfolio. If you have invested in two or more funds of the same category , look for overlap in their portfolio, i.e. investments in the same underlying securities. Funds with higher overlap will cost you more, as you are buying the same stocks or securities.
• Look to invest in high-quality funds as per your investment horizon and risk-taking capacity that you can hold for the long term. A higher frequency of shuffling between funds may mean higher costs and affect the overall portfolio returns.

 

Conclusion:

Individual investors like you and me do not have to worry about the insignificant stamp duty of 0.005%. The cost associated with mutual fund investments will keep on changing. Planning and focusing on your financial goals is the best way to invest in mutual funds.

Consult me to know more.

This blog is purely for educational purpose and not to be treated as an personal advice. Mutual fund investments are subject to market risks, Read all scheme related documents carefully .

Raja Bhattacharjee

 https://www.investmentjunctions.com/

 

The World Has Changed and How?

The World Has Changed and How?

..........................................................................

Why our Kids have to face Challenges which we Never had to, why we can't afford to ask our 

children to tread the same kind of Career Path that we did, why our children are living through 

very different  times, why acting now can pave a beautiful Life for our children and how delay 

can jeopardize their lives

When I started my career, we were living through early liberalization  and consumerism too was at it's Peak , employees were being paid very well and looked forward to a long career.

it was the EMI Era and it was seen perfectly ok to take loans to fund a house, a car, house renovation and so on and so forth, the confidence of earning and doing well in the job for the next 20 to 25 years meant that the EMI would be easily dealt with, in just about 20 to 25 years the tables have turned 180 degrees, careers have started shrinking due to , a large proportion of youth population ready to take over the jobs erstwhile done by older people , automation and Technology and AI , rapid changes in the ecosystem is making the older work force obsolescent and irrelevant, 40 will soon be the new 60 and retiring at 40 has to be accepted as a normal way of Life & therefore the concept of FIRE - Financial Independence Retire Early has emerged , FIRE (Financial Independence Retire Early) is getting hugely popular across the world and this applies even more to India owing to our large proportion of young population , shrinking Careers has given rise to the Start Up Culture , while at one time "Job Security" was the buzz word now we are starting at "Job Insecurity", Entrepreneurship is the best way to move forward and also the most secured way to live a life of purpose and respect , Employees too have to think differently and act as if they are running their own business. this is called Intrapreneurship Culture and it means the Fixed Salaries would be Limited and Variable Rewards  would be Massive , so Employees will need to treat the organization as their own, learn and deploy skills and get rewarded in proportion to their efforts , the erstwhile concept of trading your "time" for salary is quickly fading away and what we are now staring at the rise of the GIG economy or skill economy  which in a manner of speaking is - get paid for your work your do and not for the time you spend in doing the work , so what all this means for today's youth? , throw consumerism out of the window , take Responsible EMIs and only if necessary , EMI back in those days was as high as 40% of Income , now it should never cross 20% under any circumstances , plan for Financial Freedom at 40, so first 15 years of career needs to be all to do with Modest Living, Double Income, Higher Savings and Investment so that by the age of 40 you have a healthy Cash Flow Corpus that sets you Financially Free.

Financial Freedom allows you to do what you wish to do in Life and allows you to Live Life on your own terms , so from Opulent Consumerism we have  transformed into Modest Consumerism & a Life of Purposeful Investing for Building one's Freedom Corpus , Instead of Ostentatious Weddings, Parents need to help the married couple (their Children) by providing them with the Nest Egg (an amount that can be invested and provide support towards creating  Freedom Corpus and Lifetime Cash Flow)

A reasonable Corpus provided by Parents and invested immediately after marriage would reduce the burden on the newly wed making it possible for them to live a better life by affording smaller SIP contributions towards Freedom Income due to the support provided by the Gift Corpus to  compliment the SIP Investing

It won't be wrong to say that from Pure Consumerism we are now in a sense looking at Adopting Principles of Simple Living and Purposeful thinking .

Parents need to be educated about such changing trends and should not view their Children's Future prospects in the same way as they viewed their own lives.

 Right Education and Right Guidance can prevent a Massive Social Problem in our life , 

 Raja Bhattacharjee

 ---------------------------------

 

The Concept of "Life Investing"

1) Greed and Fear are the source of contamination in our Investing Journey

2) A person, let's say, has Rs 1 cr. which is more than sufficient for his lifestyle expenses 

3) However if Greed drives him to speculate in the Stock Market, there may be a probability of making say  Rs 5cr. 

4) However, this kind of speculation also comes with the probability of seeing his wealth vanish and reducing his corpus from Rs 1 cr. to Rs 20 lac

5) While Rs 5 cr. will hardly make a big difference in his life because people's habits drive lifestyle decisions and therefore other than increasing net worth, the 5 fold increase may not make a huge lifestyle difference.

6) However, if their Wealth were to reduce to Rs 20 lac, his entire life would be in a disarray from which recovering would be next to impossible

7) It is hence very important to manage a significant portion of one's wealth conservatively as long as it has the power to produce requisite Cash Flows

8) A small portion (say 10%) though may be set aside for taking some undue risks.

9) So net-net Wealth Erosion brings Havoc to one's life while "beyond needs" Wealth Expansion may not do anything more than an additional vacation to Havelock Island 

10) Unfortunately this simple rule of "Life Investing" is more often than not challenged by the Winds of Greed that blows across our time line 

11) So Greed drives us to make money which we never had and never needed by Risking what we have and need to live a respectful life. And that’s plain foolish.

12) If you risk something that is important to you for something that is unimportant to you, it just does not make any sense.

                                                 

                                                    

                                          Raja Bhattacharjee

                                          Email:  investment.junctions@gmail.com

                                         Phone: 09830146206

                                         https://www.investmentjunctions.com/

 

 Learning from Money Buffet and not Warren Buffett

1) Buffet is a place where you are provided with Unlimited food

2) Eat as much as you want is the promise which is always kept

3) Greed is the driving factor that attracts us to Buffet. We pay a little more with the desire to ear a lot more

4) Usually the thought of unlimited food attracts  unlimited excitement

5) However, those who get most excited and make  eating more their target

a) Feel full and uneasy

b) Don't know what they actually ate because instead of relishing the food, they were busy devouring it

c) By the time they are leaving the buffet all the excitement has faded and instead they feel too full, uneasy and unwell

6) But those who treat Buffet differently like any other meal do not focus on eating more but appreciate the variety;  pick and choose a few things which they stick to 

7) For them the Buffet is just any other meal the only difference being the Opportunity to Choose from several items. Making a choice and not not choosing to go for all is the difference

8) Having made their choice, they eat a few items, eat limited quantity, relish it and treat the buffet just like any other meal

9) For them the focus is not on what is available but what they need

10) This is what happens in the real world of Money

11) In a growing Economy like India, a lot of people are having more money than they need

12) But Instead of figuring out what they really need and what they really should do with their lives to feel happy, their focus moves to how to 

a) Acquire Even More Money without knowing what to do with it (making money for the sake of making money)

b) Spend money on Stuff that is not their Need

c) Move into Exclusive, Show Off, and One Upmanship Zone

d) Buy stuff which may be Exclusive but Harmful like Drugs 

e) Get involved in kinds of vices and bad habits that destroys their Family Equilibrium

f) Get desperate for attention & use money to seek attention and fail miserably at that because money attracts only for a moment

g) Rarely discover happiness

h) Too involved with Self and no Sensitivity for the Ecosystem around

13) Having tons of money is as much a problem as having less money unless one knows how to manage the money

14) Smart Entrepreneurs know there is only so much they can do with Money and beyond that it will not serve them personally

15) If the distance that life allows them to travel is 100 kms then they only need at best 20 litres of fuel which they are very clear about

16) So having 1000 litres means either they leave behind 980 litres as Fuel after them 

17) Else they can use their resources to create a better world 

18) This is exactly what Bill Gates, Warran Buffet, Azim Premjee, Narayan Murthy, Ratan Tata are doing 

19) The beauty about this approach of spending on greater good is that it again attracts abundance and Wealth becomes your reflection 

20) Today Valuation of a person means what the world values him or her

21) Wealth flows where Influence grows

22) So whenever we use our resources to enhance the world, more people know us and our influence grows and the market bestows upon us the Wealth of Valuation

23) More awareness about us linked to positive stuff we do for the betterment of the ecosystem leads to Massive Valuations making us Magnets of Wealth 

24) So despite of all the money one has it is important to realize one's limitations

25) If we try to consume it all, we will feel as sick as we felt when we over ate at the Buffet

26) Be a Warren Buffett instead of conquering Food at a Buffet..

 Raja Bhattacharjee

 Email:  investment.junctions@gmail.com

 Phone: 09830146206

 Office : 09681518774   /  7449858289

https://www.investmentjunctions.com/

 

The Journey Of A Business

1) Journey starts with the Business Owner trying to master the Profession. This is the time to dirty one's hands and to learn the nuts and bolts. His thinking is restricted to Salary in this leg of the journey

2) Then the journey continues and the Businessman begins to Scale up slowly one step at a time. He hires a few team members & learns  to delegate work. However he still supervises everything and is the Captain of the ship. In this leg focus moves from Salary to Profit

3) The next leg of the business journal is most crucial. In this leg focus is on transforming a Profession into a Business. Many businessmen find it very hard to navigate this stage because here his focus shifts from running a Practice to Building a Business. He needs to start looking inside rather than outside. Some of the focus areas for him are:-

A) Brand

B) Trademarks

C) Systems and Processes

D) Hiring Team Leaders 

E) Implementing Technology

F) Deciding on Company Structure

G) Deciding on how to  Capital raising strategies 

4) His focus is on increasing Volume & Building Brand

5) This leg is transforming from Profit into Cash Flow Stage

6) Now we move further into the Business Journey when the Business Owner recruits a CEO and replaces himself

7) Now he focuses on playing an Invisible role. Many Businessmen fail badly in this stage. Their love of being in control comes in the way. Letting Go of control & Power is the hardest of all things to do but this is perhaps the most important decision for a business. 

8) In this leg the whole idea is to Inject the Brand & Values into the Business and to make the Business stand on its own feet and truly self sustainable. 

9) This is when the Valuation of the business sky rockets because Market Loves Self Sustaining Businesses 

10) Truly Self Sustaining Business means a Business System that can run by itself with the help of Available and Easy to Recruit Professionals without undue Interference from the Promoters 

11) While at the same time Promoters show their commitment to their Business System by owning a significant share of the business even when they have let go Management Control. 

12) Market in a manner of speaking says, "if the Promoters can own such a Significant Share of the Business and still have the confidence and conviction of staying Inactive then it is worth buying this Business even at a higher Valuations"

13) This is the Cash Flow to Valuation Transformation Leg of the Business Journey

14)  Now the Promoter  starts the process of Going to Public with his Company's IPO. 

15) This is the Point of Wealth Maximization .

 Raja Bhattacharjee

 Email:  investment.junctions@gmail.com

 Phone: 09830146206

 Office : 09681518774   /  7449858289

https://www.investmentjunctions.com/

How SIP takes care of Present Bias ?

You must have heard about the Systematic Investment Plan and the importance of setting up a SIP. But what is the reason behind Systematic Investment Plan or automating your savings and investments?

This blog post will talk about how automation of investments can take care of Present Bias.

What is automation ?

As the name suggests, automation is the process where you put things to run on auto-pilot. We can automate different parts of our lives, such as bill payments, paperwork and even investments. There are several benefits of automation, especially with investment.

When we automate our investments, a part of our income gets automatically diverted to an investment account. It is much easier to save or invest an amount of our income through automation.

But deciding on investing a sum of money every month isn’t easy for many people, especially for people who haven’t invested consistently.  

What is SIP ?

A Systematic Investment Plan (SIP) is a way to automate mutual fund investments. After setting up a SIP, a pre-determined amount of money is debited to your mutual fund investment amount from your bank account.

SIP is essential for many investors as it can help save or invest more money. But why does this take place?

It is because SIP helps us to overcome Present bias. Present bias is our tendency to overvalue immediate rewards at the expense of long-term goals. It is the inclination to prefer a smaller present reward than a larger later reward. However, the preference is reversed when both rewards are equally delayed.

Present Bias in Everyday Life

Present bias is not just an investing behavior, It shows up all the time. Some examples of present bias in everyday life are delaying preparing for a meeting until the last moments or ditching your plan to clean your wardrobe to binge-watch.

So, we can see that binge-watching feels better than cleaning our wardrobe. This is even though we know that cleaning our wardrobe is important than binge-watching.

How does Present Bias impacts investment decisions ?

Present bias may have devastating consequences when it comes to financial decisions. Overspending or expecting a future windfall might make it challenging to save now and hinder long-term investing performance.

Take, for example, retirement. When you’re young, unmarried, and just starting in your job, saving for retirement may seem insignificant compared to enjoyable holidays or extravagant purchases. However, the strategy of “I’ll get to it later” might result in a higher hill to climb the longer you wait. That lack of long-term planning and saving might eventually have an enormous influence on your retirement preparation.

If the money was in your account, you might be able to persuade yourself to spend it.

How SIP removes present bias ?

You can’t spend money you don’t have. You can only spend money when it is in your account. Placing it out of sight serves as a reminder that it has been set aside for other use.

Paying yourself first allows you to put the money you need for savings and expenses “out of sight, out of mind.” When confronted with an appealing purchase, this makes it much simpler to resist temptation.

You might feel the pinch in the first few months. You may not be able to buy everything that you want. But slowly, it will become a part of your life, and you will design a fulfilling life around it. SIP is a simple yet powerful way to achieve your goals.

Conclusion: Present bias is a common bias. Besides our day to day lives, present bias also influences our investment decisions. Because of the bias, we postpone our investments and focus on activities and things that make us feel good in the present situation. Automation is the best way to overcome present bias in our investment decisions. You can carry out automation in different investment options. If you invest in mutual funds, SIP is a facility that allows you to automate your investments and achieve your financial goals.  

This blog is purely for educational purposes and not to be treated as personal advice. Mutual fund investments are subject to market risks, read all scheme-related documents carefully.

Raja Bhattacharjee ,   MAB ,CFP, UFP

Email:  investment.junctions@gmail.com 

https://www.investmentjunctions.com/

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By now your organization must have handed out the bonus and increment. If you are one of the few lucky people to receive an increment and bonus or at least one of the two, it is crucial that you use it wisely and don’t squander it. Planning your increment and bonus money can help you to achieve your financial goals and be debt free.

You may have got a single digit percentage hike or double digit, the percentage of your hike is not of much significance. The essential part is that you plan your finances according to your bonus and salary hike. There is no wrong in splurging once in a while but planning for it will help you to avoid burning a hole in your pocket or regretting about your decision later.

Choosing the right way to handle your bonus and increment is comfortable with these simple steps.

Build an emergency fund: If you haven’t yet built an emergency fund, now will be the right time to do so. It is recommended that you keep at least three months’ worth of expenses in your emergency fund. The emergency fund can help you to tide over any unfortunate scenarios such as job loss or minor accidents. You can use your bonus to create an emergency fund. It is essential to have funds earmarked for emergencies as with emergency fund in place; you will not be tempted to dip into your long term investments.

While building an emergency fund, it is essential to park it in a product with the highest liquidity. Savings account and the liquid fund have the highest liquidity and individuals can redeem money within minutes. You can keep one-third of the emergency fund in a savings account for easy access and the rest in a liquid fund. Liquid fund is a category of debt mutual fund with the lowest risk. Also, liquid funds give a higher rate of returns than savings accounts.  

Start Investing or Increase your SIP amount:

If you always waited for the right time to start investing or have enough money to start investing, this is the right time for you. If you don’t have the technical knowledge of investing directly in stocks, mutual funds would be the best option for you. There are different types and categories of mutual funds to suit and cater to the various kinds of investors. No matter how many days or years you want to invest, what kind of risk-taking capability you have, there is at least one mutual fund for you.

Typically, before investing, you need to list your financial goals and time horizon. Your financial advisor can help you through this investment journey. You can invest the bonus amount as a lump sum investment, and you can set up a systematic investment plan(SIP) with your monthly increment. It is advisable that at least 20% of your take home salary should be invested.

If you already have SIPs running, you can step up your SIP as per your increment percentage. Stepping up your SIP amount regularly can help you to reach your financial goals faster. If you invested Rs.5,000 per month for ten years at a 12% rate of return, your corpus at the end of the ten years would be RS. 11.6 lakh. On the other hand, if you had increased your SIP by 10% per year, your corpus would be grown to Rs.15.36 lakh.

You can also invest your bonus in that fund. You can segregate the bonus equally between the different funds, or you can invest in a financial goal that you want to achieve at the earliest. 

Lessen your debt obligations:

No one likes to live debt, especially when the loan attracts a high-interest rate. If you are in a journey to cut your debts, repaying your loans with your bonus can be a move in the right direction. You can start by paying off your credit card debts and personal loans as it carries a high interest rate and gives you no tax benefit. Once you pay off these debt obligations, you can move to the vehicle and home loans.

You can also invest a portion of your increment towards repaying of the loan. However, before you do that, it is vital to check the prepayment charges as many banks charge prepayment charges for foreclosing the loans.

To summaries, knowing how to maximize your increment and bonus can go a long way in helping you achieve your financial goals. Thanks to technology, various facilities such as step up SIP among others can automatically increase your SIP amount every year by a certain predetermined percentage. Use your increment and bonus wisely so that your future you will thank you.

 Raja Bhattacharjee

 https://www.investmentjunctions.com/

Want to know your SIP returns? Calculate it in 3 Simple steps using XIRR.

Do you invest in mutual funds through a Systematic Investment Plan (SIP)? Or, do you invest in mutual funds from time to time? For most of us, investments and redemptions take place over a period. In that case, what is the best way to calculate the returns on your mutual fund investments?

There are different ways to calculate mutual fund returns. Compounded Annual Growth Rate (CAGR) is mostly used to calculate the returns. It is a simple formula where you take the invested amount and the current investment value into account. The formula helps to calculate point-to-point returns. However, to calculate regular or irregular investments or redemption at different points in time, you need to adopt a different method.

Extended Internal Rate of Return (XIRR) may be a better way to calculate returns on your periodic investments.

What is XIRR?

While investing in mutual funds through SIP, you are investing regularly at a pre-determined interval. As each investment stays invested for different periods, the returns generated on these investments would differ. This is because each investment would remain invested for a different time frame. Also, the returns generated during the period would vary. Hence, to make it easier for for the purpose of calculation, we can assign an average CAGR.

We can call this adjusted CAGR as XIRR.

MS Excel automatically calculates the XIRR for you through the XIRR function.  

How is XIRR calculated?

To calculate XIRR, you need the SIP amount, date of investment, date of redemption, amount of partial redemption (if any) and the total redemption amount.

The formula for XIRR is

XIRR= XIRR (values, dates, guess)

Values are the SIP or transaction amounts, dates are the transaction dates, and guess is the approximate return you expect from the investment. You may skip the guess part.

When calculating in excel, we consider the SIPs and other investment amounts as outflow. Hence, we put a minus sign before the invested amount. Please note that there is no negative symbol for inflow or the redemption amount.

Also, make sure that you input the investment or redemption date in the dd-mm-year format as the formula may not work in other formats.

Let us take an example:

Let us assume that person A invested Rs.10,000 per month in a scheme for a year. At the beginning of the 13th month, the person redeemed the total investment worth Rs. 1.30 lakhs.

Here are the steps that you need to follow:

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LESSON FROM YOUR SHOWER

 LESSON FROM YOUR SHOWER

 Your shower has a water mixer that mixes Cold water and Hot water ,this ensures bathing experience is good, imagine in winter you had to take cold water bath or imagine in summer  the hot water bath may burnt your skin, clearly the extremes don't provide a great experience , and based in the external temperature one has to regulate the mixer to give you a great experience, investing is quite similar in the sense that Equity or Debt alone fail to provide a great investment experience , while Equity hurts us with volatile spells debt hurts is in providing very little returns, good investing experience emerges only when a mixer mixes two asset classes and regulates the mix based on market conditions (like the water has to be adjusted or regulated by others as per the  weather conditions) , the person who adjusts the mixture of Equity and Debt in your portfolio is the Financial Coach who is responsible for not just providing you returns so that you may get to your goals but also ensures that the journey is pleasant and smooth, 

Raja Bhattacharjee . MBA,CFP,UFP..  

https://www.investmentjunctions.com/

NINE PERSONAL FINANCE RULES WE ALL  MUST KNOW 

1) Rule of 72 (Double Your Money)

2) Rule of 70 (Inflation)

3) 4% Withdrawal Rule

4) 100 Minus Age Rule

5) 10, 5, 3 Rule

6) 50-30-20 Rule

7) 3X Emergency Rule

8) 40℅ EMI Rule

9) Life Insurance Rule

Read more »

 

     F I R E 

     F  -  financial

     I   -   independent

     R  -  retire

     E  -  early

1) The FIRE movement, which started gaining traction soon after the global financial crisis of 2007, requires following a disciplined approach of saving aggressively and starting to invest from a young age in a prudential manner. 

2) Proponents recommend even saving as high as 75 per cent of one's income to retire very early

3) There are some challenges facing us today which were never seen or heard of before 

4) From being the youngest economy with large number of young people we are on the path of growing older and already the proportion of old people has exceeded the proportion of children

5) Currently in India the proportion of Working Age Population is the largest ever

6) This means the stock of people having the age and energy to work is the largest ever which does not augur well for us because competition for our jobs from competent people is larger than ever

7) To makes matters worse Automation and AI are adding massively to productivity

8) Hence despite the availability of people who are willing to sweat out, technology is robbing them of their opportunities

9) The youth of today is facing unprecedented threat to his or her future prospects for no faut of theirs. They have not choice but to think like an entrepreneur. Entrepreneurship isn't an option. It has become the only way of thinking. Even while doing a job you must have to think like a. Entrepreneur

10) Too much of competition means people are available in large numbers to replace you because they will offer the same or even better service at a lower cost

11) Technology too is nibbling away jobs that were done by people 

12) This the scenario facing our youth today

13) EARLY RETIREMENT is not an option. It is the UNDECLARED RULE which makes it even more vicious because the system ain't warning us

14) People above 40 are certainly serving their last job because job ads are clearly mandating that if you are above the age of 40 then please do not apply for the job being advertised

15) Careers spans across every profession is shrinking 

16) It will be almost impossible in the future to witness cricketers like Tendulkar or Stars like Big B or the Khans who ruled Bollywood for a few of decades

17) IPL and OTT will prove the be the nemesis of future cricketers and film stars by adding unprecedented competition

18) Recently for the first time we had 2 Indian cricket teams playing simultaneously in the UK and in Sri Lanka 

19) Many cricket stars perhaps will play one season before their careers dissolve into oblivion

20) Many Film Stars will remain the One Hit Film Super Star never to see another dawn for himself or herself. Talented and gorgeous TV stars will continue to feel the heat of competition, insecurity which will drive them into breakdowns

21) Look at the Abundance of Actors, Singers and Dancers

22) Talent is Abundant and just a few will grow into Brands and even the brand's will be short-lived

23) There will never be a Lata Mangeshkar, Asha Bhosle, Alka Yagnik kind of long term rule 

24) This is the same that will be seen in corporate India 

25) Too much of competition will drive  salaries down

26) And Too much of competition will truncate career spans despite one being sincere and having loads of talent

27) Just like the stock markets are decoupling from the real economy and are being driven by liquidity induced irrational demand in the same way jobs will no longer remain a function of competence alone and talent is sooner than latter becoming a slave to the forces of market demand 

28) The previous generation lost their jobs only if they proved to be incompetent or unethical

29) Today you may lose your job despite being competent and ethical

30) A high salary means nothing because you never know how long it will last. Salary is nothing but an irrational hope that it will continue and rise in the future. Best of luck to those who believe in this kind of a future. I too thought like this many years ago only to be surprised by an ever changing world 

31) We are today driving a Mercedes Car with a leakage in the fuel tank

32) The car will fail despite it being a Mercedes

33) Therefore the significance of FIRE (Financial Independence Retire Early) today is more than ever before

34) If you were to jog your memory by a decade or 2 you will recollect that we were in the thick of a "credit culture"

35) Buy now and pay later

36) Hence people could think of buying homes taking a 20 years loan

37) Today you are not even sure of holding on to your jobs for 5 years leave alone 20 years. What loan you will take and if you take a loan it may cause more pain than pleasure

38) We are staring at a future which is 180 degrees opposite to the Credit Culture

39) We are staring at a Savings and Investing Culture

40) Start Working Early, Start Saving and Start Invest Early 

41) The sooner you reach your Magic Number that guarantees Financial Freedom the better it will be

42) Financial Freedom is the Freedom to do whatever you wish to do; do the work you like to do; work with people you like to associate; true freedom of living your life and enjoying every breath you take

43) Financial Freedom is the Freedom to live your dream

44) The sooner you reach this the better because you still need to be young enough to have enough time to explore the world and it's opportunities; travel explore and enjoy 

45) Ideally one should plan to be Financially Free by the age of 40 if not 35

46) Financial Freedom is the point when your investment corpus becomes a Money Making Machine delivering you your Lifestyle year after year till eternity

47) The world has changed and we cannot dig out heads in the ground like an ostrich and remain oblivious to the changes taking place around us; time to smell the coffee

48) The old story of studying Medicine, Engineering, MBA and aspire for a long career in Corporate is a thing of the past 

49) Stop dreaming about the life your father lived. You're not in a position to repeat it even if you are more talented than your Dad

50) Stop following the stories of the past. The future has good stories but they are different

51) Managing your Money was never more important than what it is now and what it will be in the near future

52) Keep Greed and Fear at Bay is even more significant today

53) Have a Balanced Portfolio that has energy to benefit from both from a Bull and a Bear Market

54) Be Conservative and Circumspect

55) Be Frugal and not a Spendthrift

56) Money saved early in life is a potent force that provides the good life energy and prevents any sort of mid life crisis 

57) If you can save an additional Rs 2000 per month do it. It will assist you by helping you reach your Financial Independence that much faster

58) Today all of us have a new goal to look forward to; a Goal that your Father and Grand Father knew nothing about when they were writing their stories 

59) Today we all stare at a single most significant Goal called Financial Independence

60) Retirement has become younger and smarter and let's not now forget that; I rest my case.

 Best of 🤞 Luck

Raja Bhattacharjee

 Email:  investment.junctions@gmail.com

 Phone: 09830146206

 Office : 09681518774   /  7449858289

https://www.investmentjunctions.com/

 The Price of Greed

1) Ravi stayed 10 km away from his office

2) His drive to office took him 30 mins 

3) His driver always drove carefully and anyone in the 🚗 car would enjoy the drive while Shyamlal (driver) was at the wheel

4) Then one day Ravi was approached by another driver Tony who claimed to be an expert driver

5) Tony said he had been a part of a few local car 🏎️ racing competitions and had also some victories to his credit

6) He told Ravi that he could cover the distance between office and home 🏠 in just 20 mins 

7) Tony explained that if Ravi could reach office in 20 mins then why should he take 50% extra time for the same journey

8) Ravi got tempted at the prospect of 50% higher Returns

9) So he fired Shyamlal his old driver and hired Tony

10) But Ravi had no idea what was ahead of him and what he was getting into

11) Tony, his new chauffeur, would drive really fast taking several undue risks

12) Day in and day out Ravi was sitting with his heart ❤️ in his mouth 👄 while commuting to office

13) None of Ravi's friends would sit in Ravi's 🚗

14) But Ravi was driven by 50% higher Returns

15) And that Greed kept him going 

16) Till one day, when Tony and Ravi met with an accident 

17) The 🚗 car was completely smashed 

18) Both Tony and Ravi suffered injuries and had to spend months in the 🏥 hospital

19) Ravi realised how lucky he was to be alive 

20) He also learnt on that day the difference between experience and results

21) Ravi also realised that his investment style had been unidimensional & Returns oriented just like Tony's driving

22) He immediately reconstructed his Portfolio by consulting a Money Coach who immediately diversified the portfolio and used the Asset Allocation and Rebalancing strategy

23) Now he started experiencing an Investment Experience and better 💤 sleep in the 🌃 nights

24) A Professional 💰 Money Coach like driver  Shyamlal is one who not only provides a great experience by not taking undue risks but also ensures that Investment Returns are healthy and also at the same time sufficient

25) Ravi realised that reaching office 10 minutes late honestly made no difference to his work and moreover 🚦 traffic several times l delayed him despite Tony driving him

26) The problem was Ravi did not look at the delay as 10 mins but as 50% extra time

27) Many times in investing we get carried away by % Returns without assessing it's Absolute Impact and the Price of the Risk we assume

29) If Returns is the only measure of investment success then welcome to the world of Speculation

 Best of 🤞 Luck

Raja Bhattacharjee

 Email:  investment.junctions@gmail.com

 Phone: 09830146206

 Office : 09681518774   /  7449858289

https://www.investmentjunctions.com/