Random Ramblings

Stocks (and hence mutual funds) are often sold as something that give "assured" long term returns over a period of time. While this has been true for most of the times, and all time if we consider a long enough time horizon in India's recent history but is this always true? Can it be possible that stock markets can give lesser, say 10% returns over next 10 years? Or 5 percent annual returns? Or, taking inspiration from Nicholas Taleb, a black swan event happens and your end up barely recovering 80 percent of your principal amount (i.e. 20 percent loss) -   Theoretically yes.  Hopefully no.  I am not a predictor of future, nor are thousands others who claim to have more than 1000% percent surety of future events. So, if you are contemplating taking a personal loan @ 12% for some financial need and want to be invested in a mutual fund for "assured" 12 / 15/ 18/ 25 percent returns, maybe you need to rethink. If you want to borrow money @ 12% just to inv

Taking a loan for buying a car, and paying around 10 percent interest on it is not uncommon. On one hand it gives ownership of a car while on other hand it makes you feel the pinch of EMIs. But is taking a car loan worth it? Sharing few thoughts - - If you don't have enough cash in hand but buying car is a necessity due to commuting requirements or business requirements, there may not be any other option. - If you think that you will become more financially disciplined & avoid unnecessary spending, then go ahead. But then, it poses a large question about your fiscal discipline. - If you are using for your business, then you may be able to get tax benefits & loan may help. - If you think that - "Interest rate is 10% only and mutual funds will give me 15 percent", then revisit your assumptions. Mutual funds/ stocks have historically given good returns, but are you sure that you will get 15 or 12 or 24 or whatever percent of "assured"returns th

How often have you heard that - Real estate prices never fall? Given the recent woes in the sector, this is no longer true for most of the markets in India. And the question of whether real estate sector is worth investing, especially for investing purpose, remains. Let's look at some arguments made by pro-real estate enthusiasts & sharing my comments on the same. 1. Tax savings on home loan - Yes it makes sense, and you can save a substantial amount if tax by investing in a house. These can fall under: Section 80C - Payment of principal of home loan can make you eligible for tax exemption under Section 80C. And so can PF/ PPF/ NSC/ ELSS etc, which may give better returns too. Current limit for this is Rs. 1.5L per year across all instruments. Section 80B - Payment of interest of home loan (up to Rs.2 Lac per annum). Does tax savings in this case offset the cost of borrowing? Probably by a little. But if you are hitting an interest of close to the maximum amount with

There are people who love splurging, thanks to credit card. There are people who avoid credit card like plague, due to fear of overspending or online frauds? There are people who love credit cards due to rewards they offer. Which category do you belong to? _____ Credit cards can be an amazing tool to manage your finances. Sure, the savings may not be huge if you don't spend much, but then, you can always enjoy those extra rewards that come along side. Few ways this is possible: 1. All credit cards have a rewards system associated with it. Regular use of credit cards can help you accumulate points and later on redeem it for anything ranging from a pen drive to shopping vouchers to flight tickets to vacations. 2. Most credit card usually offer up to 48-50 days of credit period. Assuming that you pay 3 days before the due date, for a purchase made in any monthly cycle you can usually get 15-45 days of time to pay it off. Averaging this over long term, this is interest

Rahul heaved a sigh of relief. Finally his loan tenure was over, and his car was paid for. The loan which took away some chunk of his not-too-high-but-not-too-low salary was all paid for and he was the owner of a not-so-new Honda City now. Not that he needed it in a city like Mumbai where he used to use public transport to commute to office, but yes, it was used for his weekend trips to shopping malls with his wife. Rahul was in early 30s, and with the Honda city paid for, he had now arrived in life. Now he would have some buffer amount to save, and take his savings from five digits to six digits. He finally had a sigh of relief. With the car loan over, now he could now make a down payment for Royal Enfield and still have some cash for down payment for his new iPad too, soon. __ You can also check out this article on BeingFinWise

Of late, I have been observing people around and specifically trying to understand their attitude towards personal finance. And during several of several such observations, I have realized that there are a lot of things that people are probably not doing right. While everyone has his or her own priorities while planning for personal finance and chasing goals or things in life, here are some of my observations about some of the possible flaws and incorrect assumptions made by people.  1. Assuming that stock markets give almost assured returns  While historically markets have given good returns over long run & will probably continue to do so in future, the returns are not "assured" . So a person selling you mutual funds saying that it gives 15% annual returns is intentionally or unintentionally misleading. Markets may give you 15% annual returns. Or even 25%. Or even 10%. Or even no returns at all. Probably, the recent rally in markets has made people to assume and sal

Between hope and despair, I lie somewhere. The path in between, Has caught me unaware. Between utopia and indifference, Between nonchalance and reverence, I see and try to, Make some sense. And at a distance, I see a shining light, It sometimes fades away, And is sometimes bright. I talk to myself, Is it the destination. Or maybe it is just A figment of my imagination. I wish one day, Deep inside me, The dichotomies will die, And I'll let it be ...

He was a magician. But he was insane. At least, this is what the world said. He woke up people from their graves. This was not acceptable to the society. So they shunned him and sent him to a remote cold land, where there was nothing but ice. And maybe, some oilfields underneath which some company would have exploited. He chanted his magic chant again. And the magic wand worked again. And the dinosaur woke up from the dead. Where it was buried eons ago. Like a Frankenstein monster, the dinosaur killed him instantly. But he had a hearty laugh in the end.

Few thoughts: Heinous crimes like rapes & female foeticide/ infanticide are symptoms of some larger malaise plaguing the society. While handing out exemplary punishment, speedy judiciary, teaching the kids and adolescents to respect everyone is a part of it, I believe it is incomplete. Some systemic issues need to be addressed to minimize these issues in long run. I believe that the most important of this is economic independence of women. - I don't have any data to support it, but economically independent women are more likely to raise a voice against wrongdoings against her, be it physical or mental abuse, sexual harassment, foeticide or rapes. These issues are often under-reported because of economic reasons & tendency to "live with it", chiefly because of economic reasons. If more and more women are economically independent, more likely would be the protest & it will deter a substantial chunk of people from mistreating women. - The proportion of f

Sometimes deep within me, There are some voices And I then delude myself, They are nothing but noises. Sometimes they long to come out, Words that lie within me inside, I wonder if it'll disturb the sleep, Of people who are awake beside. Sometime I dream of dreams, That once kept me awake, And that silent whisper then says, That is was some mistake. That I should keep these thoughts, Far, far away from myself, And let them silently die Sometimes I tell to myself; Some things are better left unsaid. Some words are better left unspelt. Some dreams are better left undreamt. Some feelings are better left unfelt.