_*The Richest Man In Babylon - The Laws of Wealth which never change*_

_Principles of Wealth_ which never ever change with times

_THE RICHEST MAN IN BABYLON_

*Start thy purse to fattening* - pay yourself first before paying others even if you have debt

*Control thy expenditures* - 'whst each of us call as Necessary Expenses will always grow to equal out incomes unless we protest in contrary

*Make thy gold multiply* - Gold, meaning Wealth. _Money begets Money_  and _Uncontrollable Debt begets more debt_

*Guard the treasure from a loss* - Understand risk & avoid / lessen the blow from losses

*Make of thy dwelling a profitable investment* - well, a debatable point on whether to Own a Home or Rent a Home.....but, we'll have to run down the numbers always (in this case). It's not always profitable to own a home

*Insure a future income* - Insurance and future cash flow planning (including retirement)

*Increase thy ability to earn* - and so did Benjamin Franklin reiterate, _Invest in yourself_.....one sure shot way to increase the earnings.

Bottomline.... *My ten on Money in Life*

_Earn Money_

_Save Money_

_Invest Money_

_Multiply Money_

_Spend less Money_

_Don't borrow Money_

_Greed drives away Money_

_Fear also drives away Money_

_Cautiousness averts losing Money_

_Take appropriate advise on Money_

Let your children / grandchildren know the _*importance and place of money in our lifes*_

_*Eclipses, Investments & Beliefs*_

Every now and then, we get to see the solar and lunar phenomena...the Eclipses

Many *belief systems* (some true & some ridiculously false) are followed during the time frame of these Eclipses.

The truth....

Earth doesn't stop rotating / revolving

So does the time ... It doesn't stop

Celestial bodies... All continue to do their works

Sun ... Keeps doing his job

Moon ... Keeps doing his job

But, somehow we humans happen to stop going through our normal lives during this period of the Eclipses.

Personally, i feel it like responding to the *stock market phenomenon of volatility* which keeps recurring every now & then.

We tend to *react* to things which are beyond our control. Sometimes, it's called *precaution*, but the sanity of mind is lost most times, in the garb of precaution. 

*Celestial bodies continue do their work*

*Volatility continues to do it's work*

*We need to go out lives as is*

_*Aging, Portfolio & Wisdom*_

In life....as one keeps aging, there is *No Guarantee that one's wisdom levels have gone up*

In Investing.....as the Portfolio ages, the *Elasticity / Wisdom of the portfolio* to remain within a specific range of returns (maintaining the balance) is extremely strong

Most people, neither understand the former nor the later 🤷🏼‍♂

_*Seat Belts, Airbags, Spending & Asset Allocation*_

_Seat belt & Airbags are life savers in an unfortunate accident on the highway of driving_

_Need based spending & Asset Allocation are the financial life savers on the highway of a comfortable money life_

_*Earnings, Cash Flows & Stress*_

I'm always at *PEACE* with myself, when my _Cash Inflows match with my Needs & some Wants / Luxuries (if needed)_

I'm always at a *BATTLE* with myself, when my _Cash Inflows are always a Monthly Struggle to my Needs & some Wants_ 🤔

I'm always at a  *WAR* with myself, when my _Cash Inflows are sufficient to meet my Basic Needs BUT, are insufficient to meet the never ending Wants / Luxuries_

Cash Inflows = Earnings

Cash Outflows = Spending

How much ever is my earning, if *frugality* is not a virtue within myself, it'll destroy my present & my future.

Frugality means.....being careful when using money. I'll better say, *it's being sensible & thoughtful when spending money*

It doesn't mean to be miserely.

_Thoughtful Spending_ is meaning, *where & what should i spend on & where and what shouldn't i spend on*

It's quite simple to follow, if the _*thoughts in our brain are filled with Clarity of Purpose....on money & life matters*_

_*Diagnosis, Medication & Recovery*_

The base case for any *recovery* from an illness is the appropriate *diagnosis*

If, *what is the problem?* is not understood, the, *how to cure it?* can never be got.

_Incorrect Diagnosis, Incorrect Remedy_

Be it an illness or *Savings, Spending & _getting priorities right_*

We miss the *diagnosis* within our own perceptions & biases. Even if we get it right, *do we accept it*?

Earnings

Savings

Investing

Debt (Borrowings)

Liquidity

Risk understanding

Life as a whole

Diagnose the problem, objectively and accept it.

Medication is available.

We diagnose it & don't take the medication 🙂....situation doesn't change

_*Robo, Human & Decisions*_

Can Robo Advisory beat an Individual Human Advisor (Money or Life)?

Money ....Yes & No

Life .... Never

Everything in Money & Life is not filled with 1 & 0....for a program to be run.

There are so many *subjective variables* at stake.

The day we handover our Money & Life decisions to machines....we're on a  highway to hell.

I'll prefer to defer the decision of going onto a highway to hell as long as possible.

It's hip to talk about Robots / Automation / AI etc....but, the value they bring to one's life Vs the complications that are bundled along 🤔.....is it really worth ?

A human remains a human

Trying to make a human out of a machine is a disastrous decison.

Automate only what needs to be.

The rest needs to be kept at a simple.

Data is good but what we do with it, is what counts. 

That decision of, What we do with that data, should never be a machine's call for us.

It should always end as a  *human decision*.

_*Certainty, Uncertainty & Money Life*_

*Life & Politics are so uncertain*

*Money & Investments look to have a certain, _Certainity_*

_*Children, Growth & Investing*_

Quite a cliched statement which compares the growth of a child to one's investments. 

Nevertheless...

The stages most forget are these....

_Just Born_ starting to invest

_Infant_ getting adjusted to the investing process

_Baby_ highly dependent & does nothing but eat (earn), sleep (doing nothing after investing) & play (enjoying the process of investing)

_Boy / Girl stage_ serious work & play starts as in serious accumulation of savings & investments

_Teens_ the *volatility* stage but we need to let the phase pass through. It will, eventually. 

_Grown up Adult_ into the best phase of *compounding growth*. All that has been accumulated & stayed out throught the 20 to 25 year period starts to deliver the best results.

Don't we know these phases 🤔?

Yes, we all know and we've gone through them.

Then, why do we still keep getting panicked about every fall that an investment child is taking.

No worries.

_Invest_

_Keep track_

_Review_

_Let it grow_

_*Philosophy, Structure & Money Life*_

Lego blocks fit perfectly well with each other.They have a *philosophy* in the way they are built & structured.

*Money, Investing & Life* should also perfectly fit each other in the way they're to be built or structured.

We can't have the current situation as in Maharashtra, in our Money & Life. 

_No Philosophy_

_No Structure_

*Do we fit with each other?*

*Do our Assets for with each other?*

_*Income, Returns & Adjustments*_

_STRESS ADJUSTED INCOME_

&

_RISK ADJUSTED RETURN_

More stress, more income 🤔

Do i need it?

More stress, less income 😩

Eeks, horrible situation.

Less stress, more income 😌

Ideal state.

Less stress, less income 😏

What am i doing?

The same analogy holds for _risk vs return_

_*Basic, Comfortable or Luxury Lifestyle*_

Am I positioned for a *basic lifestyle*? 

Roti, Kapadaa, Makkan & some healthcare

Am I positioned for a *comfortable lifestyle*?

In addition to the above, some decent health care cover,  materialistic & experiential goodies of life taken care of without beating the head for cash inflows.

Am I positioned for a *luxury lifestyle*?

Top end lifestyle with not thinking about the sustenance of wealth for life.

Charity & Philanthropy included in all the 3 variants.

_Where do I stand today?_

_Did I set myself a target on this?_

_What am i supposed to do to get there?_

_Am I going in the right direction?_

If I don't fall into any of the 3 categories above, then I'm in a *struggling cash inflow* scenario.

It's a *month on month* & *year on year* repeat.

_How do i get out of this?_

Analyse

Understand

Action

Review

Repeat 👆🏼

_*Parking Space & Asset Space*_

Apparently, Cops and Lawyers clash in Delhi court's parking lot 

Dispute....Parking space

Thankfully, we don't need to fight for *Allocating / Parking our Money* in the *Asset Space*

_*Kids, Reality Shows & Sustenance*_

_Kids in reality shows or Investments in real life_; if they can't deliver consistently over a time period & sustain their performance...the purpose is defeated.

*_Indian Americans, Investors & Returns_*

Whenever an *Indian American* is in limelight, we all invest & celebrate into that Indian American's success & start listening to him / her 😊

Whenever *a particular investment / asset's* performance is in the limelight, investors start to notice it and pour their money into it 🤷🏼‍♂

In both the scenarios.....the celebrating individuals who wouldn't ever have heard of the Indian American or the successful Investment / Asset until then; would never have contributed to their success nor be a direct beneficiary of the end result.

Both the situations are diseases which need to be treated in our minds.

I term these as - 

*IAS - Indian American Syndrome*

&

*IRS - Investment Returns Syndrome*

Oh... IAS & IRS are not a part of our esteemed Civil Services, here 🙂

They are a part of our *mindset*

We need to transform and reframe our thoughts & actions from...

_Indian American ➡ Indian (our)_

_Investment Return ➡ Investor (my) Return_

I'll be happy when a headline reads - 

 *An Indian wins......*

and an Investor says to himself -

*My returns are optimised to.....*

*_Debt, Slavery & Choice_*

_Debt is slavery_ - a statement from Ben Franklin's time.

I agree too 🙂

But, let's take a step back & disect it a bit; there is a difference between Debt & Slavery.

It's in the *choice* one makes.

*No Individual, in all sanity of mind will ever choose SLAVERY as an option in life*

But

*Many Individuals choose DEBT (needed or not) from their heart & mind.....just because it is available or there is a genuine need, want or a luxury*

We think we control debt, but once into it, in reality, debt controls us.

If one can avoid choosing slavery, debt too can be avoided...

_CHOOSE THE RIGHT PRIORITIES_

_MAKE THE RIGHT CHOICE_

Else, debt slavery can't be avoided.

*_Great Indian Festivals, Spending & Festivals_*

Once upon a time, *great indian festivals* referred to the really fantastic indian festivals celebrated culturally across the length & breadth of the country.

We've now equated a festival's benchmark to *e com's discounted sales programs*

What else can we say when we end up with the *3rd great indian festival* within a month's time.

_Swiping credit cards to the available credit limits?_

_Swiping debit cards to the available balance in the savings bank account?_

_Borrowing from family & friends, just to buy a new gadget?_

_Loading up homes just because there is something selling at a discounted price?_

Where are we headed? 🤔

*If there is a no need of something in our life, there is no need to buy it*

*If there is a genuine need for something, there is a need to buy it; and yes, in the great indian sale*

_Spending money, needs a lot of clarity in mind_

Clarity to differentiate between a 

_Necessity_

_Comfort_

& a 

_Luxury_

The issue is....we've messed up our brains with no line of differentiation among the three variables.

So, there is *_utter chaos in today's reckless spending  which leads us to utter chaos in tomorrow's survival_*

The Good, Bad & Ugly; Earning Vs Spending

The Good
The Bad
The Ugly

Not only a classic movie, but also the Classic tale of Earning Vs Spending  with all of us.

Which one is the most comfortable situation to be in?

The Good...future secure

The Bad...future at stake

The Ugly...present and future at stake / struggle

Life / Time, Money / Wealth, Allocations

How do we allocate our resources?

*Time in Life*

Or

*Money in Wealth*

_The % allocations of time will define our life_

_The % allocations of money will define our Wealth_

Focussing too much on any one or two variables will definitely bleed the others

*Allocate resourcefully for a happiness filled money & life*

_*Viral Fevers, Aches & Markets*_

Every now and then we are struck with these so called *viral fevers* .

These fevers keep evolving with time, getting more and more resistant to drugs.

Symptoms of the latest viral -

_High body temperature for 3 to 4 days_

_Acute joint pains_

_Extreme body weakness_

_No other external symptom seen - like cold or cough_

_*Markets also go through these Viral Fevers, every now and then*_

Symptoms of a market viral -

_High volatility in stocks with some of them falling way beyond_

_Acute pain for investors_

_Extreme negative sentiment_

_External symptoms of an investor - Fear of Investing, holding onto the current investments & extreme withdrawal symptoms on current holdings_

No drugs are working on these latest viral fevers 🤷🏼‍♂

No govt impetus is working on the latest market viral 🤷🏼‍♂

Recourse -

_take the prescribed drugs (whether they work or not) / keep investing & stay invested_

_drink lots of fluids / lots of equity purchases have to be made_

_control the fever / control emotions_

_take rest / stay calm_

*Eventually, the viral will be taken care of, but takes time* 🙂

_*Things don't go OUR way?…What to do?*_

Sometimes, our decisions based on all the information & wisdom at that moment, just don't get the end result the way we expect 🤷🏼‍♂

It happens all the time....

Food
Movie
Politics
Travel
Purchases
Experiences
Spending
Investing
Life

What are we supposed to do?

*Just keep moving ahead*

No point in looking back but learning helps 🙂 to understand on the *why it went wrong*..... Does it help in the future.... yes & no

Yes...when a similar situation with all similar variables in play (but we can still make the same error again)

No....with all the information, knowledge & wisdom, variables beyond our control play a major havoc.

But the biggest lesson.....

*Everything reverts to the mean in the long run; just that we need to keep moving forward*

_Investing or Life, it's the same_

_*The forgotten Asset & Investing*_

_Interest rates are low_ ....I've forgotten about the Fixed / Term deposits

_Interest rates are high_ ....I've forgotten about buying a home

_Equity markets moved down_ ....I've forgotten about investing into Equities

_Companies which borrowed heavily are defaulting_ ....I've forgotten about investing into Bonds

_Equities are doing quite well_....I've forgotten about my allocation to other assets

_I'm getting so much of a good advice from my well wishing friends, peers, family & extended family, boss etc_ ... That, I've forgotten every basic detail of my money that I need to be thoughtful about

But.....

_I'll never forget to keep buying Land / the next apartment or home_

_I'll never forget to keep thinking about Gold_

These are the bread & butter of my life 🤷🏼‍♂

_*Noblest Profession & Money*_

Which is the noblest profession in the world? 🤔

Many professions come to the mind but, probably there is only one..... *Teaching*

Where there is no learning, there is no progress

Where there is no guru (one who imparts the learning & takes the darkness away), there is no learning

Whether it was the Gurukul style or today's web style.....

There is a seeker of knowledge & wisdom

There is a giver of knowledge & wisdom

Unfortunately, from times immemorial, there is one aspect in life where the presence of a guru is absolutely essential but unfortunately missing.

Yes..... for *Money Management*

I hope there is more structure given to the learning of this most essential commodity of life.

Human life revolves around this Money Management, but, no one imparts the true value of this to the NextGen.

Parents

Family & Friends

Teachers @ School, College, University

Peers & Mentors @ work place

Kids @ home (lots of learning from them as well 😀)

_*Anyone from whom one can learn even a bit of knowledge or a byte of wisdom*_

_Happy Teachers' Day_

_Happy Teachers' Day to all who impart Money Virtues to the NextGen_ 🙂

_*Rivers, Ponds & Wealth*_

_A flowing river always goes though uphill, downhill & flatbeds but eventually makes it way into the sea / ocean_

_A pond stays a pond as it's surrounded by land on all the sides. It can never flow into a larger water body but only waits for the rains & showers to fill it up. It can never end up in the sea_

*Equities are like a flowing river*. They go uphill, downhill & sometimes run over flatbeds; wherein, it's difficult to see with our naked eye if the river is actually flowing or not. Many streams keep filling up the river.

And because _equities keep running & never stop moving, they have the best chance of ending their journey into the Sea of Wealth_

A pond on the other side looks full & brimming with all excitement when there are fresh thundershowers.

*But, it can hold only that much amount of water*. When it's summer time, the pond dries up faster & their is no external source to fill it up. We'll have to wait till the next thundershowers.

*Equities are the flowing rivers into the Sea of Wealth*

Other Asset Classes are mostly like ponds. They never add wealth like the equities but help in basic survival (fixed income, parts of real estate etc).

*We need both Rivers & Ponds*

*Allocation %s* 🤷🏼‍♂

_*Smarter, Better & Markets*_

Many mortals have an iron faith in themselves that, they can beat the market at its own game.

Alas, it's a fool's paradise to be in....
Because the *market* does

What it has to do
When it has to do
How it has to do
Where it has to do
&
Who, it has to do it to

There is no escape there.

The faster one realises that, one can't be ahead of the market....the better.

The only way an investor's hand can be above the market is....when it's beaten down or getting beaten down. But only as long as one can have cash to handle it.

Every investor who thought to be smarter & invested last Friday (the 2nd weekend press briefing of our FM & team)...thinking that the market is going to go up today (Tuesday)… due to various measures which were to be announced - *the reality seeped in today*

*One can't be ahead of the market*.....definitely not in the short end

Maybe in the longer term....Yes...if and only if we stay inside the market and not trying to *play around it*

_*A dash of poetry on Need & Expectations*_

😀

_I need the safety of a Govt Guarantee_
_But I expect the returns to be of an Equity_

_I need the Liquidity of Cash_
_But I expect the returns to be of an equity_

_I need a linear Positive Upward Sloping performance_
_But I can't digest any ups & downs on the path of this line_

_I need the Cash Flows as in an Annuity_
_But I can't lock-in the money for life_

_I need the best available Tax Efficiency_
_But I am not willing to sacrifice on many other variables for this efficiency_

_I need the tangibility of a Real Estate_
_But I always choose this asset to be over 90% of my net-worth_

_I need the emotional comfort of Gold_
_But I never look forward to liquidate it_

_I need a flight to safety, Now_
_But I expect to see equity returns in my portfolio when there is a turnaround_

_I need *Tips, Bits & Bytes* of Inside News to make a killing_
_But I feel quite uncomfortable when *Sane Advice* comes my way_

_*I need*, is what I Need to lead a comfortable life_
_But I'm he'll bent of complicating it perpetually_

*This is the truth for majority*

*The minority ofcourse are in minority*

😀

_*Endurance, Equities & Enriching*_

_Marathons are run on Endurance_

Needs tremendous preparation, training, skill, vision, strength etc...

Equity investing is not a 100m dash, it's a marathon (an old cliched statement)

An Equity investor needs to have certain basic qualities before venturing out, like a marathon runner....

*Mental Ability* .... Ability to take a decision that; *Yes, I have the mindset and lifeset to get into equity investing*

*Vision* ...an ability to look beyond the common sight with the larger purpose on *WHY equity for me*, *WHERE am I going with it?*

*Faith* ... In what's getting invested into, in the plan & in the future end result.

*Strength* .... to withstand the real & unanticipated hardships while the journey is on

*Discipline* ...to stay the course while training & to stay the course on the investing time frame, what so ever might be happening in & around

*Trust* .... having the belief in oneself & equities that, *Yes.... we'll finish the marathon*

Investing into equities is quite *enriching* both during the journey phase & at the finish line aswell, but only if one has the *endurance* to take it along.

*If one can't bear the pain of the journey or the pain of a never ending marathon run, it's better not to get into it*

Endure the pain in equity investing

Enriching gain at the end of the marathon (the probability is very high)

The damage is immense if one starts with running a marathon in the mind but then keeps  counting how many seconds have lapsed (as for a 100m dash).....it's the most dangerous thing to do.

100m speed can't be run for a marathon....faster one realises this, the better.

But yes....sometimes equities run those 100m dashes 😀, bit we don't know when. If one misses those phases, the average time to finish the race only goes up 🤷🏼‍♂

Long, Short & Holding Tenor

1991 till yesterday...data of 3 main indices

This is what long term, means

The pain of the last 18 months is not even visible

This is how the last 18 months looks, for the same 3 indices

The patience of 28 years Vs the Irritation of 18 months or maybe even the last 3 to 5 years...... 

The choice is not too difficult to choose from, but the control on one's emotions is quite a task in itself

Bears, Attacks & Markets

A bear swipes its paw downwards to attack it's prey.
A bear market swipes the market downwards to attack it's investors.

Can we escape the bear's paw & grip as an investor?

Yes & No

Yes..... a couple of times in a lifetime if there is that much of a knowhow coupled with intense luck (definitely not because of one's future reading of the economy or the market)

No.....most / majority times (there is no escaping this paw, unless one is not invested)

Indian equity bear market timeline...

1990 - 91
1992 - 93
1994 - 98
2000 - 01
2008 - 09
2010 - 11
2015 - 16
2018 - (mid & small cap indices)

Is there an escape route for bear attacks?

• Real Bear Attacks - 

• try to know (understand) the bear
• stay clam and do not ever run
• lie dead, if needed
• stay away from 'kill sites' / carcasses
• carry a bear pepper spray
• give the bear an escape route to pass off
• if the bear is getting aggressive become aggressive (make lot of noise and stand on the ground)

• Market Bear Attacks -

• try to understand on the 'why' of this bear market scenario
• stay calm, stay the course to your goal & definitely do not panic, run or sell off in the worst possible phase
• just don't do anything; lie dead
• stay away investing from "killing stocks (momentum ones) and the fallen angel kinds (perceptive angels)
• carry a mindmap on where your ultimate goal is. keep spraying the 'sell off now thoughts', with the mind spray
• the bear phase will leave, ultimately. just stand the ground
• if the bear fall is aggressive, get aggressive in your buying. Invest more (have liquidity to invest, though)

Bear attacks can be fatal if not wisely handled.

Real bear attacks might not cause as much harm as Market related bear attacks.

What to do?

• Know the bear
• Handle the bear
• Let the bear pass off
• The big bull will return one day
• Until then, hold tight 🙂

_*Stocks, Loss & Appetite*_

Individual stocks....yes one can & probably should invest

But be ready for something like this as well before one goes ahead

Yes Bank

20 Aug 2018 - Rs. 404/-

20 Aug 2019 - Rs. 71.35/-

An erosion of 82.33% in the stock holder value 🤷🏼‍♂

What would happen if 50% of stocks in one's portfolio go this way 🤔

Long Term Holding might actually turn into a Long Term Realised Loss 🙂 or......will there be a turnaround somewhere?

I don't know

*Individual stock's behaviour = Individual Human's behaviour*

Both are quite *individualistic*

_*Real Estate Allocation, Headline Allocation or Asset Allocation*_

This early morning, a good friend of mine forwarded an article from a leading daily..... The headline of the article said - *Real Estate maybe a safer bet than equities*

The catch.... Data base studies done from 1870 & in 16 developed / advanced countries (India was not in the data) and we don't know how advanced were these 16 counties for over a century from 1870 to 1970 😂

Btw....some of these countries didn't even exit in 1870 as we know them today.

And then, the article goes onto say... *India might be a bit different* 😂, but is in tune to the other credit cycles in the economy. Well, every asset is linked to credit cycles in someway or the other.

Poor researches...they fundamentally missed on *the most important variable* that drives the real estate market in India 🤔

_When Equities are down.....headlines focus on Real Estate_

_When Real Estate is down.....headlines focus on Equities_

_When both are down.....headlines focus on Fixed Deposits / Govt Saving Schemes_

_When Fixed Income is down....headlines focus on Cash is King_

_When all asset classes are going down...headlines focus on gold_

_When gold goes down....headlines focus on the Intrinsic Value of gold_

When everything is going down...headlines focus on *we're doomed & there is no future for humankind*

When everything is going Up....headlines focus on *there is never going to be a downside in our lives*

Is Real Estate the best investment?
Is Equity the best investment?
Is Fixed Income the best Investment?
If Gold the best Investment?
Is Cash the best holding?

or

Is Asset Allocation which is in tune to one's needs, aspirations and future secure is the best way forward?

But for all the Asset Allocation to work......we need to give it *Time & Patience* 🤷🏼‍♂

_*Daily Media Headlines, Markets & Us*_

A very old post of mine; but upgraded now...... because -

Market movements repeat, again.
Media headlines repeat, again.
Time to refresh our memory, again. 🙂

Media Headlines have always been fascinating but if we follow the history, they are also so repetitive that we get seriously bored of reading / listening to the words, language or content being used....

So, what are some of these words / phrases which might get used during *the Good, the Bad & the Ugly* times.

Here is how it might possibly go around....

_*During Bear grips*_

*Manic* Monday (only sellers)

*Terrible* Tuesday (blood bath)

*Wobbling* Wednesday (chaotic & directionless)

*Tears* Thursday (to some investors aka speculators)

*Frightening* Friday (all doomed for the future)

_*During Bull grips*_

*Moving* Monday (great moves)

*Terrific* Tuesday (super performance)

*Wheezing* Wednesday (unstoppable)

*Tall* Thursday (new highs)

*Future* Friday (all rosy, nothing to worry)

Thank god, Saturday & Sunday are non trading days.

If they were trading days, we'll end up with the below....

*In bears*

*Sickening* Saturday (after a painful week)

*Solitary* Sunday (none, one or very few investors left in the markets)

*In bulls*

*Super* Saturday (great weekend)

*Sunny* Sunday (brightness ahead for the coming week)

😂

*We as Investors* should ignore these *Medotions* 😀 (a new word 🤔) - _*Media with or for Emotions*_

_Investing decisions based on these headlines will ensure a sure shot *regret, for & in life*_🙂

_Emotions from our heart_

_Medotions from media_

Embrace or Ignore 🤷🏼‍♂

_*Equity, Crashes & Life*_

Money invested into equity markets / fixed income / currency / real estate / commodities etc.

A *biggest one in a century crash happens on a day*(capital markets).....

*DOES THAT EVENT IMPACT YOUR LIFE FOR THE NEXT 5 YEARS?*

*Have you thought about this?*

*Are you prepared for it?*

The largest falls in % terms in global equity markets which happened in *one trading day*

1989 - Colombo Stock Market for -61.7%

2019 - Argentina (S&P Merval Index) -48%

2002 - Argentina (S&P Merval Index) -45.2%

2002 - Kazakhstan Stock Index for -38.6%

2004 - Mongolia Stock Exchange for -35.4%

(Source - Bloomberg)

So..........

Should we stop investing into Equities & Capital Markets?

Should we stop investing into Fixed Income Markets?

Should we just put all our money into Govt Bonds and schemes?...... Btw... Governments can go bankrupt & default as well - *pls check on Wikipedia on the # of countries and the # of times these defaults have happened over the last century or more* (including USA, China, India, Spain, France, Sweden, Denmark, Austria, Germany, Portugal, UK, Argentina, Brazil, Canada, Chile, Colombia and many more)

Now.....

Should we stop investing 🤔

If so, where do we hold the money 🤔

Gold?
Cash?
Bitcoin?
Land?

Any ideas???

*No phase in life or investing lasts forever*

But, *good / bad / ugly events do happen repeatedly*

_*We'll have to go through these phases again and again over a life time*_

Is there any other way out?
I'm willing to learn, if there is so 🙂

_*Satisfaction, Spending & Investing*_

_Today's satisfaction in Spending is tomorrow's Misery_

_Today's pain in Saving & Investing is tomorrow's Satisfaction_

_One who understands this has a bright future ahead, but the one who ignores this need not ever carry a purse_ 😀

_*Wealth, Control & Sharing*_

An extract from Sri. Adi Sankara's, _Bhajagovindam_...

____________________

'Wealth is calamitous', thus reflect constantly: the truth is that we can get No Happiness from it.

To the rich, there is fear even from his own progeny. This is the way with wealth, everywhere.
____________________

🙂 yes, whether it was Sri. Adi Sankaracharya or Benjamin Franklin -

*Wealth stinks, if not shared / passed on & is left in one's full control*

For the Wealth one accumulates...one has the right to reflect & share as one wants it to.

But, for the Wealth that is *inherited*, he / she has to reflect as a *true trustee* to that wealth &  pass it onto the next generation but, along with the *values that protect, grow & share it*.

If one can't pass on the  *wealth value system* down the generations, how much ever wealth is *created & protected*, it is bound to get ultimately *destroyed & not shared*.

Create Wealth

Protect Wealth

Share Wealth

Pass it on in a *Value based healthy wealthy way* 🙂

_*Capital Markets, Behaviour & Kids*_

It doesn't *behave as*, the way we want it to behave as.

It doesn't *listen to*, the way we want it to listen to.

It doesn't *grow up*, the way we want it to grow up.

It doesn't *deliver results*, the way we want it to deliver results.

It doesn't *manage itself*, the way we want it to mange itself.

It tests our *Patience & Temperement*, to the possible limit 😬

Oh...this is NO CHILD or a TEENAGER 🤣

This is called a *Capital Market* (Equity or Fixed Income)

Btw....managing kids or capital market investments is the same 🙂. Same set of fundamental rules, apply.

*They just don't grow, we'll have to make them grow with _time & patience_*

_*Sale, Stocks & Investing*_

A fund manager used to always say this statement....

_When I need money to buy stocks for the scheme, I never get it; but when I don't want money, I get it_

I always agreed with him.

That's how majority of investors' work.

Invest, when markets go up 🙂

Don't invest, when markets keep going down 🤷🏼‍♂

_Shouldn't it be working the other way around?_

*How many take the faith plunge on equities, especially when the stocks are getting beaten ?*

Flipkart sale is beginning

Amazon freedom sale is also round the corner

*Stock Market sale is nicely on, now 🤔*

_*Thought process, Asset Allocation & Investing*_

*Why is Asset Allocation so important*...... __because it's the simplest tool to manage risk, liquidity & returns_

Else, we'll end up thinking as below -

During *bull markets* - portfolio comparison is done to the *equity markets*...... Why the miss in making these stellar returns?

During *bear markets* - portfolio is comparison is done to the *base fixed deposit rate*...... Why did we not make atleast a fixed deposit return?

A well thought out *asset allocation* ring fences us from these not so sane thoughts.

For that, we need to be clear on...

*Why have we invested?*

*How long is the tenor of our holding?*

*Do we need any cash from these long term invested assets?*

If the investments made do not match with the true responses to the stated questions..... _*there is trouble for sure*_

Waxing and Waning of a celestial object like *moon* happens every 15 days... _will it not happen in life, physical or financial assets 🤷🏼‍♂?_ *It Will* & *We need to have the strength to withstand these phases*

Savings & Debt Vs Taxes & Interest

Save and Invest - end up with Taxes

Borrow and Spend - end up with Interest Payments

What's a better option ?

_*Brands, Stocks & Returns*_

*Friend:* I always buy stocks of good brands & well known companies. I have a very good stock portfolio 😊

*Me:* Have you made money?

*Friend:*: Yes, Yes

*Me:* I'm happy 😃. What's the return you made? CAGR or Total Return, since you ran the portfolio?

*Friend:* (99% scenario): It's good, but I don't know the #. Let me revert 😐

A conversation mostly goes this way and surely ends the way, as above.

_Popular / well known / perceived good companies *do not equal* good stock returns_

Need some data?

Check the below table 😎

_*Markets, Markets & Markets_*

The 18 month carnage

*The Red Sea*....not inbetween Asia and Africa but in the Indian Equity markets

The impact of it seen in 3, 5 and 10 yr returns as well

Is this going to stay this way, bleeding at a slow pace and forever 😔

So.... SIP s did well 👇

The regular portfolio I keep talking about which I run for myself since Jan 2016... that's about 3 years and 7 months - *CAGR of 1.94%*

12 schemes with

1 equity hybrid,
3 multicaps,
1 focused fund,
2 mid caps, 
1 value fund,
1 small cap
2 large caps &
1 thematic

All the schemes have been purchased at random periods (when the market went down by some %) and via SIPs....

Am I stopping now?
NO

Do I continue to keep buying?
YES

Will this carnage continue?
I DON'T KNOW

Will this carnage continue forever?
DEFINITELY NOT

Can I hold onto my investments without a liquidity / cash flow worry?
YES

Does it hurt that the Hyderabad real estate market gave a phenomenal return in the last couple of years and I've not out a penny into it?
NO

Am I clear about the *Purpose and Why* I am investing?
YES

😊

_*Great Expectations vs The Big Reality*_

Investor starts investing with Rs.100/- and then....... *The Classic Thought Process*

_One acts when one is NOT SUPPOSED to act_

_One doesn't act when one is SUPPOSED to act_

Buy Right…Sell Wrong - happens

Buy Wrong...Sell Wrong - always happens

Buy Wrong....Sell Right - 樂樂樂

Buy Right....Sell Right - a few good humans get it

_*Value(s), Money & Life*_

*Value* -

The importance or usefulness of something

Principles or standards or behaviour, one's judgement on what is important in life

An estimate of monetary worth

Considered (someone or something) to be important or beneficial; have a high opinion of

*Price* -

The amount of money expected, given or required in payment for something

An unwelcome experience or action in achieving a specific objective

*Value* is perceived
*Price* is the reality

*Value*....in investing, is what we think it is worth.
*Price*....in investing, is what we actually pay to acquire the asset

*Value*....can be very deceptive
*Price*....is not an illusion

But...........

*Values*.... _in life_, *are not relative* to ones circumstances, situations, financial or monetary considerations, life stage, relationships etc.

*Values are Principles*… that one sticks to, in every breath.

*Price is the Experience*...that one has to undergo (good, bad or ugly), for sticking to those underlying values.

*Investing or in Life*, if we can't differentiate between the *value(s) & price*.....both turn out to be an expensive affair🤷🏼‍♂

*_Collapse, Money & Life_*

How many can still stand, walk & keep going ahead in life & lifestyle if...

• the market goes down another 25% from here ???
• a scam breaks out???
• currency plunges???
• some big institutions collapse???
• bonds collapse???
• markets don't move anywhere for the next 3 years???

*_Secret to, Money, Life & Investing_*

"The secret to living well and longer is: eat _half_, walk _double_, laugh _triple_, and love _without measure_." ~Tibetan Proverb

"The secret to *investing* is:

Spend Half or Save Half...of Income

Invest Double....every Bonus

Buy Triple Assets... Equity, Fixed Income, Real Estate (Gold is an Insurance plan) 🙂

Hold without...a timeframe (perpetual)

_*Wisdom, Knowledge…in Money & Life*_

There is so much knowledge (information) available on the web & so much wisdom to be used from head.

In reality....

There is so much perceived knowledge in head & the wisdom of herd from the web.

It is believed that a swan can separate milk from water; but most people's wisdom is restricted to & in believing water for milk.....and then, they try to make curd from that water which is thought to be milk.

Swans or Ducks in waiting?

Why don't things go wrong 🤷🏼‍♂, when there is no clue about the line separating them or there is no clarify?

Yes, thinks can go awry even with all our thought wisdom getting into life or money; but then, there is only a limited damage.

Make a choice but a suitable one 🙂

_*Decisions, Life & Money*_

Tough decisions are always taken *alone*

Collective decisions are the ones which are relatively the, *easy ones*

Investing or Life......it's the same 🤷🏼‍♂

_*Home, Life & Money*_

Home, lovely home 🙂
It's a wonderful feeling to be back at one's home after a long day at work :)
But, do we need to own that home?

May be, May be not 😑

• What happens to a 25 year old who buys a home with some kind of down payment (money from parents / borrowings from family / friends etc.) & the rest on monthly EMIs for 25 years?

• What happens to a 30 year old who buys a home with some kind of saved money from his income + borrowings from family / friends and the rest on monthly EMIs for 25 years?

• What happens to a 35 year old who is rolling in his career & buys a home with all his savings + some borrowings from family / friends & then, the rest on monthly EMIs for 25 years?

• What happens to a 40 year old getting into the prime of job / career / life, buys a home with a majority of his savings / liquidity / accumulated investments & then, the remaining on monthly EMIs for 20 / 25 years?

• What happens to a 45 year old who seriously contemplates whether to actually buy a home or not due to an affordability issue but then, jumps into owning one beautiful grand home (keeping up with the Joneses / peer pressure, family pressure etc.) with all that he has saved for everthing in his / her life, and the rest on monthly EMIs for 15 / 20 years?

• What happens to a 50 year old who is on the verge of major family / children life goals and then, jumps to own a home with digging most of life savings + maybe additional borrowings (to keep up with the neighbourhood), and the rest on monthly EMIs for 10 / 15 years?

• What happens to a 55 year old who has been sensible all the way along but due to the emotional baggage of 'not owning a home',  buys a home now, for enjoying a peaceful retirement, soon. Buys the home with mostly the left out savings + maybe a little short term borrowings from family /friends & or the rest on monthly EMIs for 5 / 10 years?

• What happens to a 60 year old who has just retired and now plans to buy a home of his / her choice to settle down in a home. Buys the home with accumulated savings + retirement proceeds and or maybe a little help from children?

At each life stage,  there is an imminent and affirmative reason to own a home. 

Noting wrong with it. Life goes haywire when, the decision to buy a home goes beyond ones own means & bounds. Annnnnnnd........ TROUBLE STARTS TO BUILD ON FINANCES. 

The "second home / land ownership".....another animal 🙂

By the way.......one needs to fill a home with all that is needed & not needed 😇😇😇

How does a home ownership stackup for oneself?

ASK QUESTIONS - ANSWER THEM HONESTLY

• A place that one owns? (what a lovely feeling)
• Home Equity / Long term investment? (the most misplaced thought)
• Tax breaks / advantages? (depends how one works it out and is it really so good)
• Is it part of an Asset Building process? (is it really an asset to build from age 25?)
• Cash Inflow / Outflow? (how much do I earn & how much do I need to pay for EMIs)
• Sustainability of EMI payments? (can i afford it for the long tenor)
• Liquidity? (can i continue to pay if something goes wrong with life / career / job, can't sell a room / portion of the house for any emergency needs etc.)
• Taxation muddles? (all the running taxes etc.)
• Maintenance Issues? (regular upkeep, remodelling, insurance etc.)
• Flexibility to move or can't move? (anchored to a place)
• Succession? (Am i leaving a burden on my successors)

_*Money, Life & Questions*_

*QUESTIONS*

when asked in the right way, should ideally lead towards *impactful decisions*

Do we ask ourself *honest questions*?

If we do so, do we also provide *honest answers*?

Ask questions to yourself.

_Honest responses are always inward & not outward_

The probability of making a mistake in Asset Allocation comes down dramatically, if we can focus on these inward looking questions & leave the outward variables alone.

Investing or Life....the questions beginning with *Why, What, Where, When, Who, Whom, Whose & How*… remain the same.

*Right set of Questions & Responses*

⬇⬇⬇⬇⬇⬇⬇

*Impactful Decisions*

_*Is fate the ultimate game winner*_

*It's fate again*

We think, all is under *our control*....
*THINK AGAIN*

What else to say on the happenings in England, yesterday

Yes.....

One at *Lord's*

The other at *Wimbledon*

England wins the ICC ODI World Cup with a bizzare rule 🤦🏼‍♂

Roger Federer, even after scoring more # of points than Djocko, ends up on the losing side 🤷🏼‍♂

Both New Zealand and Federer did what ever they could, but still the win eluded them.

Whether one believes or not in destiny, fate, luck or karma..... *what's the explanation for these losses*

Btw....

_*Investing is no different*_

_*Money, Sports & Investing - are they fair? _*

Is the distribution of Money in the world, the rules in sports, & the investing of money; fair in life?

a No or a YES.... or I don't know?

The world is truly illusionary with the amount of rationality & logic that can be tipped off a cliff in infinite instances.

Just look at it

• The distribution of World Wealth into the hands of a few (Oxfam report source - 42 million people, or 0.8 percent of the world’s population, have net worths in excess of $1 million. This group is roughly the global 1% & controls 44.8% of the world’s wealth - Distribution of Money... Is it fair or not ?

• The absurd rules in sports which might not have a base of rationality (e.g. in the game of cricket, a No Ball is declared when the fielding side breaks certain pre set conditions - like, if the # of fielders outside the inner circle are more than the required # of fielders to be present when a bowler delivers the ball. Good, that the bowling side is penalised for it by giving up an extra run, an additional ball to be bowled & the batsman is not given out (if so). But the absurdity is that, a batsman can be given out if he hits this delivered ball, tries to squeeze a run & can't make it to the other end  - Now, is this fair or not?, especally when there are fielding restrictions but the bowling team ignores this rule and ends up with an advantage. Isn't this rule a bit illogical? Is it fair to the batting side or not?

• The amount of money lost by investing into ridiculous investment schemes, owing to one's own misunderstanding of the product or one's own behavioral patterns - ridiculous amount of wealth goes down the drain. Why? Is this fair or not?

Well, thats what is Money, Sports & Investing.....losing sometimes & winning sometimes for things which might be under our control or not.

But over a time period, all these square up & get even.

Do they for all?

Maybe No, Maybe Yes....I don't know?

Is that karma?

Maybe No, Maybe Yes....I don't know?

As long as one follows the rules & keeps moving the scoreboard, its going to be a decent positive outcome. 

But yes, some times things just don't end up on our side; but, maybe, the need of the hour is to amend some rules of the game for a better equation....as is with the Run Out & the No Ball.....

No Run Out when the basic fielding rules are broken

No Investment Returns when the basic Investing rules are broken

_*Money, Life & Equities*_

So, equity investments deliver superlative returns in the long term....

Pls think again 樂

Check the above point to point ...data

A lot depends on

*When did we start to invest*

*How long have we stayed invested*

*How frequently or how infrequently did we buy / sell / continue to hold*

*What kind of investments have we done*

*What's out Asset Allocation mix*

*Are we tracking our entire financial assets at a portfolio level and then, check the CAGR returns over a time frame*

*Did we lose money?*

*Did any Asset / Product pull our returns down*?

*Did we have better options to invest when we started out to actually invest or in the midst*

*Where our expectations more or less, to where we stand?*

*If so, is it being looked at from the holding period of the portfolio, and along with the kind of Asset mix we hold?*

*If not, could we have taken a higher or a lower risk with our money?*

And not to leave out the *things which are never ever under our control*.....

Govt Policies
Taxation
Economic Direction
Collective Financial Market moves
Regulations
Global developments
Domestic issues
Etc.

_What we can do, is what we can do_

The rest is not in our hands.
That's the bottom line.

Ifs and Buts are always there.....but, it's mostly retrospective 😊

_*Money, Children & Investing*_

_If you want your children to turn out well, spend twice as much *time* with them, and *half* as much money_ - Abigail Van Buren

So is the learning for us...

_If you want your Investments to turn out well, *spend twice as much time in them*,  and *half as much thinking & flipping them like coins*_  🙂

_*Money, Life & Cryptos*_

Bamboos - some of the fastest-growing plants in the world, due to a unique rhizome-dependent system.

Certain species of bamboo can grow *91 cm (36 in) within a 24-hour period*, at a rate of almost 4 cm (1.6 in) an hour (a growth around 1 mm every 90 seconds, or 1 inch every 40 minutes).

But they probably don't break the soil and are not visible until the 1st, 4 or 5 years have passed 🙂.

A nice story which represented the concept of *compounding*.

But, i also think that this story represents the latest trend / fad / genius investing into the concept of *cryptocurrencies*. _Lying underneath for over the last 6 or 7 years & then growing up to become the tall bamboos_  🤔

Btw, *they are not currencies*.

They are, *bits of code* like *bits of notes & coins*

Risk?....oh, no risk....everything is transparent. Everyone knows what is there in the system.  Great👍🏼

So, are these absent from

Liquidity Risk? (How fast can an investor sell it)

Hacking Risk? (Security systems & privacy)

Network Risk? (Collapse of the network, Yes...it happens quite often)

Counter Party Risk? (Yes, a full exchange collapsed, some time ago - Mt.Gox)

Price Imbalance Risk? (Everyone in the world holds the same thing)

Acceptance Risk? (2 companies in the fortune 500 accept it...it was 5, a year ago. Yes, in some countries its legal & others illegal ).

Security of the wallet? (Personal wallets getting stolen & coins missing from them)

Illegal & terror funding risks? (Less said, the better)

Holding, Concentration Risk? - *Less than 4% hold over 95% of it*

Demand & Supply Risk? (Of the X number of bitcoin supply, close to a Y amount is already mined. If they need to increase the supply....apparently, the protocol has to get changed).... more supply; price ??? 🙂

And finally....what would happen if there is a single cyrpto like this 🤔

No price discrepancies
No wage growth
No Inflation
No currencies to hold
No investments to be made
No need to manufacture anything
No need to service anything

*the concept of money has changed* 😀

_*Money, Life & Extrapolation*_

When we try to extrapolate *today's event*, to a 10 year *tenor*.... disaster is waiting to happen in one's life or an investment portfolio, both in the short & long run 🤷🏼‍♂

*Elections* keep happening, all the time.

*Budgets* keep happening, all the time.

*Interest Rates* keep moving up & down, all the time.

*Policies* keep changing, all the time.

*Future Taxation* is uncertain, all the time.

*Global & Local events* keep happening, all the time.

*Money* in life keeps flowing in & out, all the time.

*TIME in Life  & Investments*, keeps moving forward, all the while.

*Stay the Course*

*Stay until the time*

*Stay Resilient*

*What can't be controlled is best left out*

Stop extrapolating today's event to a future probability.

_*Money, Investing & Luck_*

Luck - success or failure apparently brought by chance rather than through one's own actions

Is there a bit of luck in everything we do?

YES, for sure 🙂

The 50% probability between the head & tails in a game's toss is the team's luck

The 50% probability between a fielder holding onto or dropping a catch is the batsman's luck

The 50% probability that a batsman can be given out or not using the advanced tech, is the batsman's or the bowler's luck

Is there a 50% probability that our investments cross the boundary ropes of our money & life goals, or will we falter with a very low score and lose the game? 🤔

This is definitely not luck.

It's got more to do with our skill of hard earnings, discipline of savings, patience of staying to play the 5 odd bowlers (assets like - Equity, Fixed Income, Real Estate, Gold & Commodities, and all other misc. assets) & playing a long innings by sticking onto the investing pitch for the entire 50 overs of the game (cricket). 

If the team of assets can bat through the innings without throwing their wickets (hard earnings) into the hands of the eagerly waiting hawkish fielders (investing traps) to lap it up and throw us out of the field, we'll probably do enough scoring to take the later part of the game (retirement), quite comfortably.

If we don't reach the targeted score, at least we'll end up close to it, and fight the game on quite comfortably.

Mostly, Luck plays an important role for events beyond our control, but the rest is in our hands.

Don't throw away your wicket. 

Play carefully, the money game for life.