All about money matters!

You must have heard of the ' POWER OF COMPOUNDING '. Unfortunately, we don’t really understand the real "power" of it, neither do we do anything about it unless it is too late . Some people I know are very particular about money and often focus on how they save and invest it. I also know others who have no clue about saving and live for the day. This blog isn't about being stingy and saving every dime you earn. It is about being SMART with money ! Let's take an example of two people. Let's call them Rita and Sunil. Rita is 30 years old while Sunil is 45 . Both of them are looking at building a 1 crore corpus each before they turn 60 . They are conservative investors (like your next-door uncle) who don’t want to take much risks with their savings. These days savings account in a bank like SBI gives a meagre return of 3% p.a. Building a portfolio using a 3% return does not fetch anything. Hence, they turn to PPF which gives 7% p.a. return to create their dre...

During the lockdown period, most of the world's businesses were struggling to survive but daily news headlines were filled with positive news about one company in India: Reliance Industries Ltd. (RIL). On the first day of lockdown, 24th March, 2020, RIL’s share was at 900 and as on today, it is trading at 1841 i.e. in roughly 3 months, Reliance has doubled its value . This has not only made Mukesh Ambani 6th richest in the world, but has also helped build many shareholder’s wealth.  Below is a snapshot of RIL’s stock performance in the last 3 months   Highlights of the Annual General Meeting (AGM) of RIL    SEGMENT ANNOUNCEMENT WAS IT ALREADY ADJUSTED IN THE PRICE? Jio RIL has become debt free post 13 investments in 12 weeks. Investors include leading tech giants & VCs such as Facebook, Silver Lake, Vista Equity Partners, General Atlantic, KKR, Mubadala, ADIA, TPG, Qualcomm, L. Catterton and PIF. RIL has sold a total stake of 32.94% in Jio Platforms. ( My commen...

Stock market crash is not a daily occurrence but whenever it happens, it is mostly severe and can erode investors’ wealth. Most people fear investing or trading due to the possibility of a crash. This year, the Coronavirus pandemic and the fears of an economic recession, led to a severe crash in the stock markets worldwide. Many of my well-wishers who knew about the recent change in my profession were often skeptical  that I am losing heavily in the stock markets because of the crash. Well, I did make some money during the crash. In this blog, I will explain the concept of short selling which enables you to sell today and buy later thereby making a profit in a falling market. Let’s first understand the difference between buying a stock and short selling a stock. BUYING A STOCK : Imagine a situation where you are a customer who wants to buy a biscuit. You take sufficient cash to a grocery store, look at the types of biscuits available, select the biscuit...

Cash, which had become a forgotten asset class, is regaining its importance since the beginning of the Coronavirus pandemic. The current health crisis is bringing up questions about the need for having emergency funds and liquidity funds. Typically, personal finance specialists advise three months of your fixed expenses (such as rent, food, travel, EMIs, etc.) to be kept as emergency fund and additional three months of fixed expenses as liquidity fund . However, if we look at the current scenario where the health insurances are not covering some of the expenses incurred during the COVID-19 treatment and there is severe job crisis in major parts of the world, keeping only six months of cash reserve doesn’t seem to be adequate. Having said this, hoarding cash is not appropriate as well. Reserve banks across major economies have slashed interest rates severely in the past six months, which means you wouldn’t earn anything if you keep all your money in the banks. Currently, established com...