Random Ramblings

Chasing returns is a good goal, but ... Are you underestimating the inherent risks while chasing lofty goals like - 18 percent annualized returns via equities? Or doubling your property worth in 5 years via real estate? Or hoping to double your money via cryptocurreny? Are you someone who looks at fixed returns instruments like FD/ PPF etc as something that is for losers? Well, I am no one so say which asset class will give what returns (except fixed returns instruments) but when you are "sold" something with a "grantee" of "assured" x% returns, do you see the risks? Or is seeing risks is for the boring or losers or unexciting people? When you are chasing 15  percent returns via equities, do you understand that there may be times when the returns may be higher but there may be times when returns may be lower, or even negatives. Historically it has always been good and will hopefully continue to be, but are you so over-enthusiastic that you e...

Some time back, I happened to read an amazing book called The Power OF Habit by Charles Duhigg . Among many things he talks about in it, one is about different small cues/ triggers and mini-habits which can help shape up larger habits, hopefully for good. Since last couple of years, I have made a constant endeavor to be healthier than before and have cultivated some mini habits that have helped me achieve some of these goals. And I believe that these mini-habits have been quite helpful.  Here are some of the mini habits I tried to adopt while trying to make my lifestyle healthier. Restricting this to 3 for the sake of brevity.  1. Since some time (guess 2-3 years) I have a kind of "permanent alarm"set for 6 AM in the morning (which I disable only if there is some really important). This, on most of the days ensures that I am in a position to get up early, and hence, do some kind of workout. At least, lack of time is not a stopping factor most of the days. So far, it ...

"I want to save money and then travel the world" "I want to live life in the hills, without any worries" "I want to follow my passion, but my finances worry me" "I want to join an NGO and work pro bono, but I need to secure my family's financial life" What is the underlying thread connecting the above?  One of the possible answers is - the need for financial independence. One hears the term - "financial independence" not too infrequently these days, and this is often used very loosely. There are lot of people aspiring for it - some with all seriousness, some with half baked approach, many others with academic disinterest. And it is often uttered in the same breath as talking about home loans, car loans, personal loans etc. How do you define financial independence? It can have different meanings for different people. But the underlying theme in all of these is reaching the level of wealth where investments will be suffi...

Over last 3 years or so, I have made conscious efforts to be in a better health and have taken some steps toward slowly reaching some milestones. There have been several small triggers for the same and several omens which pushed me towards pursuing a healthier lifestyle. While there is still a long road ahead, I believe that some habits which I have adopted are for good! So, While my weight was  in early-mid 90s back then (I stopped checking at around 93kg), it is now a shade under 80kg, and my BMI just under 25. From my peak to lowest in last few years, I must have shed 15 kg or so.  Just sharing few thoughts on this journey & the steps I took: Overhauling the diet - I believe that there are several good tasting things available and I can't have them all. So one can prioritize such that healthier things get more space in diet! I didn't reduce eating as such, but I have, to an extent, changed what I eat. Some of them are elaborated below. Reduced intake of s...

In one of the recent discussions I had, I heard an offhand remark, something like - "Even if stock markets give just 15-20% returns per annum, I am OK with it." How many of us, especially the ones who haven's seen too many downs in the stock markets think so? How many of us think that it is OK to take a debt/ loan (real/ virtual) put money in equity markets because we have been promised "assured" returns, which is like 15-20% according to conservative estimates. And how many of us think that this recent bull run will continue till eternity? Optimism is a good thing. But does it mean that we ignore the possible caveats? It may happen that the person who quoited the above will able to get more than "OK" returns, as he defines it. It may be possible that the returns will not be much "OK" or even not at all "OK". Most of us can't predict the future. Sure, there are many people who claim (some of them probably rightly!) to b...

Inflation is a powerful term. It has helped change public discourse & has also been instrumental in rise and fall of governments. It is this fancy number which, of late, has been hovering not too far from the 5% (per annum) mark in India. Roughly put, this means that you are paying 5% more for the commonly used things than a year back. Of course, there are some bad years too as far as inflation number is concerned. And these bad years can dent your finances, especially if you are living paycheck to paycheck. But has your cost of living really increased by around 5% (or whatever the inflation number is) over last year. And 5% over year before that? There is no one size fits all answer to the above question. But for a good chunk of people this "inflation" number is probably more. This is more to do with tendency of ones needs, wants and desires increasing over a period of time. So, while inflation measure the price increase in a fixed basket of ...

Are you someone who can't wait for the Amazon or Flipkart sale to begin and put on your shopping hat? Or you shop for (almost) all your major needs like grocery, medicines and more via eCommerce, irrespective of the offers? Apart from the regular discounts they offer and using wallets to get cashbacks & discounts, here is another way you can get additional cashbacks -- Use affiliates to to the website where you want to shop! There are several affiliate websites which can help you get a good deal. T he way they work is that they send traffic to the eCommerce website & get a commission for referring the users and enabling purchase. Many of these affiliates pass on the benefit  to the end customer in form of cashbacks.  In India, some of the affiliates you can use are  Cashkaro , GoPaisa , Cash Pe Cash on JioMoney  and many more. Most of these cashbacks work on mobile websites only (and not Apps). Cashback rates usually varies according t...

In my earlier posts I have often argued that personal loan is one of the worst form of loans, and I stand by it. And maybe, this subject line may seem to be a click bait! Yet there are few benefits (relatively speaking!) of taking a persona loan vis a vis the other alternatives available at that point of time.  Here are a few of them: It can help you tide over unforeseen emergency. (e.g medical, or sudden unplanned expense for child's education).  It may, at times be, less worse option than taking a credit card debt, or maybe even a consumer loan (depending upon the rate of interest offers) If you analyse your personal loans and realize that you have been losing lot of money, you may be tempted to take corrective actions and this can do wonders for you in long run! It may help you build a credit history. Not sure, if taking personal loan is worth it, though.  And if instant gratification at the cost of potentially paying more for it (and jeopardizing financial ...

In one of my earlier blog posts - Saving & investing money versus living life king size I have broached upon the concept of  opportunity cost of saving/ investing. Post which I had discussion with few people on this and realized that this can be a concept that can be explored further. Whatever you choose to spend/ splurge has a associated associated opportunity cost in terms of what that money can do in terms of future value if it is invested somewhere. For instance the fifth wrist watch you added to your collection after spending Rs. 3500 could have been avoided, and you could have invested equivalent amount elsewhere. Or the 4 unnecessary weekend pub hopping which costed you Rs. 5000 could have been invested somewhere. Or spending Rs. 500 per month on your DTH subscription which you don't use because you have Netflix & YouTube! Or the Rs. 1200 worth of new gym bag when a regular bag may suffice ... Agreed that one can't keep on doing this for each and every spen...

There are several approaches to investing one can take. And there can be many of these approaches that can be right. Not necessarily the ones with maximum returns, but the ones which fit your objectives. It can be maximization of returns (but with capacity to take risk), capital protection, diversify and so on. Yet we make mistakes. Almost everyone does at some point of time or other. And many times. However, some mistakes are more common than others.  Based upon my observations, here are the most common mistakes that investors make: 1. Too much debt in life - These people typically correlate affordability of things to access to loans & availability of EMIs. EMIs can come in different shapes and sizes. It can be 10% car loan, 12% personal loan, 14% consumer loan or 36% credit card debt! And before you realize. you are in a debt trap. Many of these people may though, not stop SIPs in stock market, because "stock markets give 15% assured returns in long run", they h...