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Blind Marriages

There are many broken marriages because of the physical or mental incompatibility. People marry without knowing each other. They take the oath of living together forever as soul mate and in very first night they come to know this relation will not last any longer because of incompatibility! Still you try to patch up things but within a year or so you feel like enough is enough. You can’t spoil your whole life for your oath. You deserve a better life and with a heavy heart you broke up and move on.

In Indian sub-continent, this is a tremendous problem. We can call such unions as blind marriage where boy and girl didn’t see and talk to each other until they get married. Families of bride and groom make all the arrangements and they feel quite proud about it and believe it is morally correct. We can minimize such incidents of illogical practice resulting in divorce, if we let boy and girl to meet and understand each other completely before marriage. Let them spent some time together before they marry each other.

We do see some successful blind marriages, but in most of the cases such marriages succeed only because of wife does all the sacrifices to save her marriage. Her parents always tell her that if she disobeys her husband she is wrong, and there is no space in their home for her if she came back after fighting with her husband. Can there be anything more ridicules’ than this? Society preaches such behaviour as morality!

Time had come when we should raise our voice against such stupidity so-called morals. In small cities and villages you can still find such practice. I do not understand logic of it in a society which allows co-education . But when it comes to marriage it becomes somewhat objectionable if bride and groom want to see or talk to each other before marriage, the whole family will have problem. As blind dates are dengerous, so are blind marriages which can ruin your entire life.

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How to Invest intelligently?

Below are some points about investment which you must keep in your mind while investing.

  1. Diversification: Never put all eggs in same basket. Always invest money in two to three different places like real estate, gold, equity and debt instruments like FD and Debt funds etc.. By doing so, you can minimise your risk of losing your entire investment.
  2. Start Saving and investment early in your life: Time is money. It is not just a saying but a proven fact. Always put your money to earn for you. As you give your investment more time, your return will grow faster due to compounding effect. To reap benefits of compounding, you need to give 5 to 10 years time to your investment. Encourage your youngsters to start investing in safe avenues like PPF and debt funds. Even Rs500 investment over a period of 20-25 years can fetch you big corpus. You can even start with Rs100 in some mutual funds through SIP. To know more about Mutual Funds you can read my article by clicking here.
  3. Discipline and regular investment: Small amount invested regularly can give you bigger amount than big amount invested irregularly. Most often, we wish to accumulate big amount for investment. However, when we have some need, we take out some money from this amount and this way our investment plan remain a plan! Invest monthly whatever surplus you have and discipline yourself to save every month that small amount whatever be the condition. Make regular investment a rule of your life not a habit.Because habits you can change, rules you can’t.
  4. Egg, Chicken and Hen: Whenever you invest, always invest with short term, medium term and long term perspective.Because you will need money in every part of your life. Thus, investment must be goal orianted like retairement, education, foreign tour and marriage etc. For short term, always keep some money (equivalent to minimum 6 month of your earnings) in saving account or in liquid funds, which can be redeem immediately. For medium term (2-5 years), invest in large cap. Mutual funds, Gold and other such instruments. For long-term investment, invest in PPF, Index funds, FD, NPS, debt funds, gold and govt. securities. You may not get high return but your money will be safe and with time it will grow rapidly.

Happy investing!!!

How To Love Your Work Which Is Not Your Passion?

It is true and now a days a general advise that do what you love. However, sometimes our love and passion are not financially viable source of income. In such case we can’t do what we love to do for our survival and wellbeing. In such scenario, we have to do what we ought to do!

From college itself we start making wrong carrier choices. Later on we get job based on those wrong carrier choices. We became mediocre employee and keep cursing everyone. In schools and colleges, we choose courses based on peer pressure, parents’ wishes and because of our inexperience.

Most of parents force their kids to choose professional courses. Most importantly, in India, parent knows only two profession- Medical and Engineering. As if no one else is making fortune. Without knowing and asking their kids, parent force them to take mathematics or biology. One more problem with Indian parents is that they think their child is genius but not studying enough to get good marks (90%). They don’t care about interest of their children. Suppose if a child is very good in painting, instead of motivating and supporting him to become great painter, parents will force him to become Engineer. Every parent in India wants his child to top in class and even in school. Somebody must tell them that only one person can top the school at one time! So, parents should have realistic goals and do some more research about new courses and professions available now days. Till this happens, people have to find some methods to love what they are doing.

Now question is how to develop your interest in what you have to do for living? Firstly, you must learn completely about your job and try to understand what is the importance of your job? No job is small or big. Every job is important. Find out how your job, you company or your industry is bringing positive change in society. For example: if you are working in HVAC company, you may be a small part of your company but always remember that for perfectly running  any machinery every part, how so ever small it may be, is equally important. Your work may not be changing anyone’s life, but your company is providing comfort and clean air to lot of peoples and making their life better. By knowing this you can develop love for your job. Because you are not just preparing drawings, presentation or doing execution work at site but you are working to make life better for thousands of peoples who will come to that building.

Secondly, work hard to become expert of your profession. When you will become expert, you can work based on your own rules. You will receive recognition; increments and appreciation which will help you love your work. Most of the time it is our laziness and habit of procrastination that makes us hate our work. You do not love your job when you do not know your job. When you work hard and learn completely about your job, you will no longer depend on company, but company will depend on you. You will gain extra freedom and flexibility in work, which will definitely improve your working environment and make you love your job.

If you can’t do what you love, love what you do.

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Water crisis in Indian villages and its solution.

Population growth is putting enormous pressure on natural resources. Underground water, which was available in abundance few decades ago is depleting very fast. Rich peoples always find a short-term solution to avoid such problems without thinking about long-term effect. First, they come up with above ground pumps to store municipal water in overhead tanks and to use it 24 hours uninterrupted. Due to which poor peoples were unable to get water. Later, when there was not enough water in municipal water line, they start using submersible pumps. However, no one think about its long-term effect on water table and its permanent solution.

Water level is going down very rapidly. In many villages, hand pumps are not working anymore. You have to bore as deep as 200m depth to find sweet water, such boring cost more than one lakh Indian Rupees. Poor’s and even lower middle class peoples cannot afford such huge amount of money.

In Neem village in Mathura and Dori nagar in Aligarh, potable water crisis is increasing day by day. Poor farmers and villagers are suffering daily. Daily women have to walk for 2 km for sweet water. Submersible pumps with less than 200m boring are no longer working. If such scenario will continue for long time, even plants will start dying causing double havoc for human being.

What is the solution of this problem?

Rainwater harvesting, reducing wastage of clean drinking water and using treated water can be the solution of this grave problem. Without Government and NGO involvement, this will not be possible. However, Government is giving slogans. No concrete action until date.

What is Rainwater Harvesting?

Rainwater Harvesting refers to the practice of collecting rainwater from a roof or other surfaces and to use this water for different purposes. Water collected is typically used as a non-potable source for uses such as toilet flushing, urinals, and irrigation.  If the water is treated it can also be used as potable water for drinking, dishwashing or bathing. 

Time waste is a life waste.

If you waste money, you can earn it back. However, you do not have any such facility with time. I have seen people killing time when they do not have anything else to do as if they will recover that time back whenever they want!

Time is most precious thing because as of now, we do not have any technology to reverse time or create time. Hence, use every second of every minute of every hour of every day of your life properly. To use time effectively, always carry some good books with you. Whenever you do not have anything else to do, you can start reading books. If you find it clumsy then you can download some books in your mobile and read it in your mobile whenever you have free time. If you are not interested in reading, then watch educational and motivational videos on YouTube. Meet peoples; call your friends and family members in free time. Make new friends, attend seminars, functions and fairs.

                World is changing very fast. Everyday some new technology is coming in market. Keep updating yourself. Whether you are a student, serviceperson or a businessman, it is equally important for you to learn continuously about new ideas, technologies, politics, cultures and religions. Utilise every moment instead of killing time in doing useless things. Whether rich or poor, we all have only 24 hours a day. No one can buy more time for himself. Hence, make most out of it.

Following are some time saving tips which can help you to save time:

  1. Wake up early. Start with to do list.
  2. Walk faster. When you do not have any goal in mind you walk slowly. Always set your goals and try to exceed them.
  3. While it is good to make friends, avoid wasting time in meaningless gossiping, backbiting and sitting idle.
  4. Plan before you start any activity. Rework waste time, money and energy. Hence, always plan in your mind first.
  5. Entertainment is important in life, however, do not waste whole day watching movies or cricket matches on TV. Try some outdoor games and creative entertainment for few hours.
  6. Take good care of your health to enhance your efficiency.
  7. Try to live near to your workplace. Daily two hours travel does not make any sense in long team.

Happy Eid ul Fitr to Everyone

After 30 days of fasting, Muslims around the world will celebrate festival of Eid Ul Fitr tomorrow based on sighting of moon.

Happy Eid ul Fitr to all Muslims across the globe!!!

To learn about Eid, you can read my post by clicking below link.

What is Eid Ul Fitr? 

Caution: Small retail investors must stay away from stock market for some time

Sensex is trading in the region of 40,000 points. A big correction was expected since the start of this year. However, Sensex is climbing higher and higher even after slowdown in GDP and much other negative news. It seems some players do not wants Sensex to go down and they are pumping money even on small positive news and ignoring negative news such as trade war altogether.

Most of large cap stocks are already overvalued and market PE ratio is at its high, which is the very important indicator of over valuation. In such scenario, small retail investors and new investors must not buy new stocks to avoid huge losses. Because stock market can crash anytime and wipe away all your hard earned money in a day or a week.

Wait for correction in stock market for few months before investing. Invest your money in less risky alternatives or keep it in your saving bank account for few months and just wait. If you are very keen to invest, invest through mutual funds which are less risky. To read my post about mutual funds, click here.

Does Congress Party needs a new Face?

Early trends of 2019 election vote counting are showing clear majority for BJP. Exit polls were right this time. Congress paid the price of its Ego and family politics. They could have made alliances with several regional parties like in UP, they could have joined the Mahagathbandhan. But their overconfidence and ego came in between. They bring Priyanka Gandhi at last moment as if she is a magician and can turn things upside down.

Post-election it is easier to criticise but Congress need to understand root cause of their successive shameful failures. Root cause is that Congress do not have suitable Prime ministerial candidate. Just few months ago Congress won elections in three states because RaGa was not fighting for CM from there. Even today, when Ra Ga has improved himself and can face media independently his “Pappu” image is not leaving him. No one has courage to take Rahul Gandhi name when someone ask question-who will be next PM if not Modi?  

Mr. Modi is a Hero for powerless peoples. He is a match maker for business tycoons. He has amazing art of adaptation. He keeps his mission above himself. There is no limit that he cannot cross and there is no trick that he cannot use to achieve his mission.

We can continue to blame EVM hacking for election results; however, it is quite clear that India has changed considerably in last one decade. Pseudo secularism is haunting Congress. They let RSS to grow exponentially.  Now when RSS has poisoned millions of minds towards Hindu Rashtra and have accumulated lot of resources, it is very difficult for any other party to win in elections.

Congress desperately needs a better face. Someone like Shashi Tharoor will be a great choice. Rahul Gandhi must accept his defeat and must give chance to another leader to come up as a PM candidate in 2024 elections if that election ever happened!

On other hand, Mr. Modi is looking more humbled and talking more sensibly about 130 Crore Indians after getting unimaginable victory yet another time. I hope Modi-2 will be far better than Modi-1 and India will prosper and progress in coming years as expected by  more than a billion Indians.

Mutual Funds-How to maximise your earnings?

There are two ways of investing in Mutual funds:

  1. Lump sum Investment
  2. SIP (Systematic Investment Plan)

Above two methods are used by most of new investors. If you do not have big amount of money in your hand, you must opt for SIP where you can start monthly investment as low as Rs.500. whereas if you already have money at your disposal, you can invest as lump sum. In lump sum investment you will start getting profit/loss on whole amount from day one. Whereas in SIP, as your initial investment will be very small, thus, you will gain very small or insignificant return till you accumulate big amount after several months.

Talking about advantage of SIP, SIP average out the risk of share market as you keep investing regularly.

Both SIP and lump sum has their own advantages. Is there any method by which you can take advantage of both the world?

Answer is yes, and this is the reason why I am writing this blog. This method  is called STP-Systematic transfer plan. Suppose you have a lump-sum amount and you want to reduce risk by investing through SIP. In this case STP is best solution.

First you choose two funds from same company. Invest your full amount in first fund which has zero exit loads. Using fixed monthly withdrawal through  STP option you can invest in second fund as SIP. In this way, you will be able to earn return on both the mutual funds.

Suppose I am having two mutual fund schemes from Aditya Birla mutual fund namely:

  1. Aditya Birla Sun Life Low Duration – Direct – Growth
  2. Aditya Birla Tax relief 96

First fund has zero exit load, so I will park my lumpsum in first fund and I will opt from STP which I will use as SIP for second fund. In this way I will earn return on both the funds.

Disclaimer:

1) Names of mutual funds mentioned are only for example and are not any recommendation to buy or sell.

2) Mutual Fund investments are subject to market risk. Please read the offer document carefully before investing

Best Investment

Some of us do regular investment in mutual funds, PPF accounts, FD and in some other such instruments to earn passive income. However, there is another type of investment which can give us better returns than any other investment.

This best investment is one where you invest in your own skill development. Here, you can generate several times more return than ordinary investment. Unfortunately, most of us never think about this investment and they have to settle for 10-15% profits.

World is changing very fast. Everyday new technologies are replacing old one. Investing in you is not only rewarding but also necessary. Learn new methods used in your industry, attend seminars, read good books daily, watch YouTube video’s and utilise your free time in creative habits like exercise, playing outdoor games, networking, meeting people etc.

Your health and your knowledge are your best investment. Keep investing to gain best results.

Earn Passive Income through Mutual Funds Investment

Indian stock market is as sentimental as Indians themselves are. Even a small negative news can cause huge panic in market. Big players and well-informed investors exit at high price immediately and buy shares at low price later. Whereas, small investors who want to make one time investment and become rich in short span of time mostly suffer losses. One very important fact about share market is that, it is a zero sum game. Your loss is someone else’s profit. Those who buy shares based on speculations mostly lose money.

Presently, any passive investment does not yield more than 10% profit in India. Property rates are going down, rental income is between 5 to 8% maximum and interest rate on FD are between to 7 to 8%. However, share market is booming from last 10 years. Share market can give you higher profit or loss.

To minimize risk and to gain more than 10% return, Mutual funds are good investment in long term. They restrict your losses within a narrow band. For low risk and low return of 8% to 12%, you can invest in mix funds known as balanced funds (debt +equity). If you are willing to take moderate risk, and want better returns (if market does not crash abruptly), opt for large and midcap or Multi-cap equity funds. Small cap equity funds are associated with high risk and high return. It is better to avoid pure small cap fund.

If you want to avoid high expense ratio, always buy direct mutual funds. Regular funds always have around 1% higher expense ratio, which can cost you huge amount of money in long term. In addition, direct Index funds are even better having expense ratio around 0.5% or even lesser.

Important terms used in Mutual fund market.

  • NAV: NAV stands for net asset value. It is the value of one unit of Mutual fund. Higher NAV does not mean over price of units like in stock market. It means Mutual fund performance is good and it is more famous with investors so they are investing more money.
  • AUM: asset under management. It is the total amount of money managed under particular scheme.
  • Expense Ratio: It is nothing but fund management charges. Lesser is better.
  • S.I.P.: Systematic investment plan. It refers to monthly investment of small amount of money in any Mutual fund. You can invest even Rs500 per month in some funds. In this case, your SIP will be Rs500.
  • Lump sum: One time investment.

If you do not have big amount of money to invest, then SIP is the best way to start investing in mutual fund as it average out your risk and profit. Do not save money to invest one time.  Start SIP as early in your life as possible. Read my previous blog to understand benefit of starting early by clicking here.

Start investing early to attain financial freedom:

 

As we start earning, most of us do not have long term financial goals due to which we spent almost whole monthly income on trivial things such as shopping, outing, movies, expensive accessories and parting with friends and family. Since we have no financial liabilities at that age, we are not interested in saving and investing. Even our elders do not motivate us for investing; only few fortunate people may differ! Some of us start saving though for short term goals like marriage, honeymoon, car or bike etc. But no one think about investing at the age of 21 to 25 when we start earning.

Unfortunately, most of us do not understand power of compounding. If you will understand power of compounding you will definitely start investing early. Amount of investment is secondary; time is primary for magic of compounding to take place. If you invest today instead of starting investing  after 15 years, your return will be much higher after 25 years . Below table shows an example to prove above statement. There are two persons- Tom and Jack. Tom starts investing at the age of 22 and invested Rs1000 for 25 years till he reached age of 47 years. Jack started investing Rs2500 monthly at the age of 37 and he also invested till the age of 47. Both invested Rs.300,000 but for different duration. Now let us see returns of both persons at the age of 47.

Interest=8 % pa
Years Tom age 22 Jack age 37
1 12000 30000
2 24960.0 62400
3 38956.8 97392
4 54073.3 135183
5 70399.2 175998
6 88031.1 220078
7 107073.6 267684
8 127639.5 319099
9 149850.7 374627
10 173838.7 434597
11 199745.8  
12 227725.5  
13 257943.6  
14 290579.0  
15 325825.4  
16 363891.4  
17 405002.7  
18 449402.9  
19 497355.2  
20 549143.6  
21 605075.1  
22 665481.1  
23 730719.5  
24 801177.1  
25 877271.3  

 

Even though both invested same total amount, Tom return is almost double of Jack return, even though Jack monthly investment was 2.5 times lesser thne that of Tom monthly investment.

This means, by increasing duration of investment, even with smaller monthly investment you can earn better returns. This is the power of compounding.

Start systematic monthly investment plan (SIP) as early as you earn. How much amount you invest is not important. There are mutual funds and PPF account where you can invest even Rs500 per month, which means Rs.17 per day. Every person who is earning can save and invest this small amount of money and increase it with time. This will help him/her to achieve financial stability and freedom before reaching age of 50 years. After that you will no longer need to work for you necessities. You will have a secondary income to take care of your necessities; you will work for your own joy and passion.  By investing Rs5000 per month, you can save Rs68,00,000 in 30 years if we consider mere 8% profit compounded annually.

There are many equity mutual funds which can give you around 15% profit too. This will increase your wealth faster. However, Equity mutual funds are subject to share market risk. For safer option, you can opt for debt mutual funds, FD’s, PPF account, liquid funds etc.

 

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