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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.

 

Abhinandan Ka Abhinandan on safe return to India

Our brave Pilot finally returned home safely. I am extremely happy. I was not able to sleep properly last night. I was concern about him as he was in Pakistan and any moment it might happned that Pakistan could change it decision. According to one news in Economic times, “A Pakistani citizen on Friday filed a petition in the Islamabad High Court to stop the imminent release of the captured Indian Air Force pilot Wing Commander Abhinanadan Varthaman, saying he committed crime against the country and should be put on trial here.” Which makes me more worried.

Since morning I was watching news to get some more information about timing of his release. But our news channels are becoming useless piece of shit. You can find every baseless news, useless debates on religion and political drama but it is very hard to get any sensible information. Finally when I saw wind commander Abhinandan entering Indian Territory from Wagah-Attari joint check-post on social media video, I feel relaxed and happy like all Indians.   

We all must learn a simple lesson from this episode: when other party is willing to talk, we must first give “peace a chance”. Between two nuclear nations, war is not an option to solve any dispute. Learn from America and North Korea. America built enormous pressure on North Korea but never drop a bomb on its territory. I am not a fan of Donald Trump or USA, however, I this case; they definitely show the world that by using diplomatic pressure and talks, we can resolve issues. War is not a solution. It never was. Since WWII, we have not seen war between nuclear nations. Because, once you have nuclear weapons and striking power, you became equal to any mighty country in the world. No country can afford loss of entire city or its capital.

Stop Watching News Channels

Indian media has lost all its credibility. They are working like paid servant for politicians. For money, they can sell their nation. Instead of keeping details secret about Wing Commander Abhinandan Varthaman, they were showing his home and family members. Not only that, when Pakistan announce release of Abhinandan, instead of asking right question from Indian Govt. about, what diplomatic action they took or whether Pakistan is really showing a positive gesture to start dialogues, these media channels were busy in war mongering and cursing Pakistan even before detained Indian Pilot reach India.

If Pakistan changes its mind at last moment what will we do? Will these media houses bring him back?  

Stop watching such news channels that run political propaganda & war mongering and make lots of money for themselves. Tell them that we want sensible news and ground reporting not just imaginary reporting. We want to see debates on facts and figure not on Mosque and temples. We want proper analysis and neutral views from both sides rather judgement by reporter.

Shift to neutral channels running on social media and on internet. Do not rely on one channel. Use your own brain and cross check everything before accepting and forwarding it.

I want to appeal everyone, do not praise Pakistan. Try to understand diplomacy of Imran Khan. Not at once, he talk about banning Jaesh e Mohammed who are actually Jaesh e shaten as rightly pointed out by Owaisi in his speech in Maharashtra. Imran Khan is trying to create divide between secular and communal Indians. Pakistan’s PM understand it very well that Mr. Modi is not a popular Prime Minister. By showing goodwill of Pakistan he is actually trying to create divide. Do not fall prey to Pakistan. Stand united with India. We must praise Indian forces and our brave soldiers.

Think twice before you say or write anything. Control your emotions and temptation. Use your all intellectual faculties before opening your mouth. This is a difficult time and politicians can use it in any way.

Pulwama Attack and Indian Retaliation

Indian air force carried out a successful operation.It is a proud moment for Indians. However, It is shameful to encash Armed forces success for political gain. Surgical strike is not meant for publicity. Why such critial news made public ? What is the stratgic gain India will have by disclosing such confidential information to public? Same Govt. had problem in disclosing price of Rafale aircraft giving excuse of national security. But they have no problem in disclosing details of air strike ?
 

Election makes all things possible.

India is having General Election in next two month. It was quite obvious since long time that Modi Govt. will use any means to win this election. instead of stopping election campaign to focus on pulwama attack and to build deplomatic pressure on pakistan, Mr. Modi gave free hand to army. He is fully focussed on election. He has no time for anything else.

However, Pakistan will not keep quite. Pakistan will try to retaliate. One thing both nation must understand that war is not a game that you can use for political gain. War means death, distruction and loss of property. Think sensably. Act practically and dont behave emotionally.

Eat Healthy-Live Healthy

After industrial revolution, our life style and eating habits both changed drastically. Our calories requirement reduced but our fat and sugar intake increased because of mass production of everything including food items. This gave rise to obesity, diabetes and heart problems. All due to our eating habits. If you eat sugar that is more refined, sweets and high calories diet, you will become diabetic in few years. Similarly, if you will consume more fats (Oil, butter, animal fats, and meat) your cholesterol level will increase and it will block your arteries. You will suffer with coronary heart disease.

People fail to understand that our life style has changed drastically in last hundred years. Most of the middle class and upper class people need not to walk anymore. We do not indulge in heavy work too. However, our calories intake, sugar intake and fat intake has increased considerably compared to our daily activity. Due to which we faced many problem like obesity, diabetes and heart problems. To avoid this problem, stop eating processes and refined product, fried items, junk or fast food and red meat with high fat. Also, stop drinking cold drinks, beers, wine and high-energy drinks. Replace these things with healthy alternatives.

Instead of leaving everything together, adopt eating everything in moderation. If you like to eat meat, eat one small piece (not more than 75 gm) a day as it gives you protein which is essential for your body. Eat a balanced diet. A balance diet must have protein, vitamins, carbohydrates and small quantity of fat. Drink lots of water slowly in regular interval. Many dieticians recommend eating small portion of meals five times a day rather big meals three times a day. Keep some space empty in your stomach for proper digestion.

Several food products contains proteins. However, not all Proteins are alike. Proteins are made up of amino acids. There are around 20 amino acids found in our body. Amino acids are the building blocks of protein. They are organic compounds containing an amino group (-NH2) and a carboxy group (-COOH). As about twenty percent of the human body is made up of protein, amino acids make up a large proportion of our cells, muscles, and tissue.

Amino acids are integral to the biological processes that happen within our bodies, such as giving cells their structure, transporting and storing nutrients, as well as forming our organs, glands, arteries and muscles. They’re also essential for healing wounds and repairing tissue, especially in the muscles, skin, bones, and hair.

There are 23 proteinogenic (protein building) amino acids in total, and over 100 natural amino acids, which are non-proteinogenic. Of the proteinogenic amino acids, 9 are essential, 11 which are nonessential, and 3 of which are not found in the human body.

Essential amino acids are not produced naturally by the body, so they have to be obtained from the foods we eat. The 9 essential amino acids are:

Histidine, isoleucine, leucine, lysine, methionine, phenylalanine, threonine, tryptophan, and valine.

Foods containing most of the above amino acids are:

meat, fish, Chicken, eggs, cheese, dairy, beans, seeds, chia seeds, brazil nuts, oats, wheat, figs, whole grain rice, Peas, beans, legumes, onions, and cacao.


Whey protein
 is one of the few sources that naturally contain all 20 amino acids, making it a complete protein. Whey protein is a mixture of proteins isolated from whey, which is the liquid part of milk that separates during cheese production.

Milk actually contains two main types of protein: casein (80%) and whey (20%).

Whey is found in the watery portion of milk. When cheese is produced, the fatty parts of the milk coagulate and the whey is separated from it as a byproduct

Don’t panic if you have a chest pain.

There can be several reasons for chest pain; heart trouble is just one of them. So, if you have chest pain, do not be afraid until it is diagnose as heart problem. If your chest pain is not severe, keep yourself calm. If you will panic, it will increase your blood pressure which is not good for your heart. Smile and divert your attention to other things.

Seeking doctor’s help is a right decision. However, some doctors can try to frighten you and suggest for angiography. Angiography is an invasive test to check your heart condition. In this test a thin tube is inserted inside you though your artery and a dye are injected in your heart. Through x-ray doctor will monitor the heart condition. In case of blockage Doctor can perform angioplasty.

Before making your mind for any invasive test and further treatment, you must first go through non-invasive tests like ECG, ECHO, stress test, X-ray and blood test. Now a day, you can’t rely on one doctor or one test. First you should take medication in case your ECG is abnormal. However, do not consider ECG as final result.  ECHO is more reliable test than ECG. As I said earlier, do not panic. Keep yourself calm and compose.

In most of the cases, life style change and medication can help you without angioplasty and by pass surgery. Even after angioplasty, you have to change your life style to remain fit for long time. Else you will develop blockage again.

So, it is always better to change your life style than to go for angiography.

Disclaimer: Writer is not a Doctor or Cardiologist. The above information is based on writer’s own experience and study from medical sites.  

Charity is not Enough!

It is quite easy to live life by ignoring problems around you which are not directly related to you. However, it is not the best way tolive. Indeed it is very insensitive way to live your life. By closing your eyes,reality will not change. Quantum physics does not work at this level.

I am talking about poor and underprivileged peoples. There is no end to their suffering. Every winter people die because of extreme cold as they do not have shelter and woollen cloth to keep them warm. In summer they die because of extreme hot temperature. In between they die because of hunger, malnutrition and due to non-availability of medicine and healthcare.

All this happens around us. We read in newspapers, watch inTV and sometimes saw from our own eyes. But instead of doing something, we gossip about it and move on! As if someone else has to do something for them. Manypeople hold government responsible as if someone else elected government forthem. In democracy, it is responsibility of every citizen to be politicallyactive and caste vote to right candidate. Blaming government is futile. As blame come back to us.

It is not that no one is doing anything for them, there are many NGO’s doing remarkable work to help needy people. The main problem is at individual level. We have time for everything except to help someone to live life better. You might consider yourself nice person because you regularly give charity. But did you ever enquire whether your charity is reaching to right hand or it is consumed before by others?  According to one Hindustan Times report:

 “The Delhi high court has called for toughening of licensing norms for NGOs observing that 99% of them are “fraud” and “merely money making devices”.

In such scenario, giving charity is not enough. On contrary, it may happen that your charity is being used for wrong purposes. The best way out is to check personally where your money is going or find needy people around you and help them in whatever way you can. Your little time and effort can bring huge change in someone’s life.

Charity is not the only way to help. Sometimes your kind words, a smile and little time can make bigger impact then money. It is not always the poor who need help, sometimes well to do peoples stuck in such situation that they are on mercy of poor peoples. Surprisingly, they never let you down. Thus, do not think yourself superior and other inferior if you are helping them. We all are human and we all are equal. It is our responsibility to help those who left behind because of various reasons. Love all, help others and hate none.

Muslims in India

I am an Indian Muslim. However, neither my nationality nor my religion is chosen by me. No one asked me, no one took my approval. Just based on my birth in a Muslim Indian family, I was tagged with this label. I was given a Muslim name and for everyone in my country, my name is enough for my religious identity. During riots, no non-Muslim mob will ask my ideology or my faith. My name is enough to kill me. 

When I was in secondary school, I realise that different religions have different morals, eating habits and even Gods. In my class of 60 students only 5 students were Muslims. However, to your surprise none out of five were friend together even though we come from same community. I had three best friends, all of them were Hindu. Being a Muslim is not easy though. My friends seldom embarrass me for my eating habits enquiring about what is in my tiffin. They were suspicious that I might have meat in my lunch box! Thanks to my mom, she was smart enough to give me only bread and vegetables.

When I compare that time to present time, I feel those were golden days. My parents and parents of my friends never taught us to stay away from someone because of religious differences. I used to visit my non-Muslim friend’s home and they visited my home. I never feel scared. No such thought ever came to my mind.

When Babri Mosque was demolished, I and my friends had a consensus that on disputed land government should build a hospital or school so that everyone will be benefited.

Slowly but steadily things changed across the north India. Communal forces succeeded in spreading communal poison across many states especially UP, MP, Maharashtra and Gujarat. RSS and BJP finally started gaining success in convincing Hindus that they are indeed in danger because of Muslims who are in minority. Inspired by Nazi ideology, they portray Muslims as culprit of every problem in India, whether it is over population or terrorism. However, fortunately, thanks to globalization and information technology, intellectuals are still against such ideology. Unfortunately, in democracy, only heads count not intellectual ability. Whether you are an illiterate or a graduate you can caste only one vote.

I do not want to pretend like I am victim. Certainly I am not. Even today, my constitution gives me more rights as a citizen of India then in anywhere in the world. I am free to speak and I am free to follow any faith or abandon it. I am happy to be Indian. Indeed, I feel indebted of my country. My country gave me an identity when I travel abroad. I am proud to be Indian. I know many countries where constitution is heavily influence by one religion and for others there is no space. Other people have to live as a second grade people. Sometimes even citizens belonging to the majority feel suffocated because of heavy dose of religion in constitution.

In my opinion, there should be a separation between religion and state. Religion is a private affair, whereas government is for public work. Let me give you an example. When you pray to god or give charity, you give it for your own rewards which you receive in your afterlife. However, if someone asks you to build a road or a mobile tower, you will be reluctant. If a religious person has to choose between making a school or a Mosque, surely he will choose to build a mosque. Because, mosque will fetch him more rewards in afterlife.

People already have enough motivation for religious deeds. But for secular things we need a government who can develop infrastructure, make policies without discrimination based on religion and caste and colour, open more school for scientific education, secure the national borders and to provide employment etc.

Coming back to Indian Muslims, ironically, Muslims are nomore important for any political party. Even in past, no political party didenough for them. Congress and other so called secular parties use them as avote bank. In last 50 years, even Muslim leaders fail to do anything forMuslims. Indian Muslims are living in very funny situation. On one hand theyhave to give proof of their patriotism and on other hand they have to balance their religious identity.

Take Pain Seriously!

 

Everything that we have in our body has a reason. We hate pain; however it also has a purpose. You may like it or not but pain is the language of our subconscious mind through which it convey a message to conscious mind.

Last week I had severe pain in my ear, initially I avoided it as it was not severe. As pain increased with time I decided to go to ENT specialist. After examination doctor told me that I have ear infection.

Pain may be annoying and irritating but sometimes it is due to pain that we seek treatment. Never ignore pain. Pain is not without reason. Sometimes pain is early sign or warning for some big trouble like heart attack or kidney failure. By taking pain seriously, you can avoid many serious illnesses.

In writing, often times, we are weighed down by our own passion to create the best pieces; pieces the world has never seen nor read. If anything, this passion pressure gets the better of us and there are… Read More

#Quoted: Write one true sentence… — The Musing Quill

Failures are good

Republishing

We live in a world where only achievers and successful persons are recognized. Failures are highly undesirable and inadvisable. Not just society treat such persons who fail in some endeavor awfully but the person himself feels ashamed. No doubt success is great. But failure too has a great hidden side which very few appreciate or even recognise.

When you fail you break away from your routine daily life and find some free time for yourself. This time you can utilize in introspection and reasoning for your failure. Don’t waste this time in worrying and feeling dejected. Everyone fails, but you are not a failure until you give up. Greatness is not in never falling but in rising higher every time you fall. This is very precious time. Use it to start a fresh.

In daily routine life we are so occupied that we never get chance to think about our life, our priorities and the values. We became like a programmed machine. We forget what matters most for us when we initially started. Some people even forget to take a vacation and work continuously for years. A Failure gives you time to break away with this monotonous routine life. Use this time to remember what was most important for you? Ask yourself question: Is this type of life I wanted? This is the time to make a 360 degree turn if required. Else start preparing to turn your failure into bigger success by learning from it. Tension, worries and procrastination waste time and energy. Don’t waste time in worrying. It will not solve any problem. Meet Peoples who always encouraged you. Read inspirational books.

Every one of us is surrounded with small thinkers. These people de-motivate you and create a doubt in your mind about your ability. Don’t listen to such people. Start Believing in your strength. We all have tremendous power hidden in our mind. This power only comes out when we faced with difficulties. Never give up. Don’t feel guilty. Human are born to make error. Forgive yourself and forget anything which makes you feel guilty. But don’t forget to learn from mistakes. Anyone can make a mistake; fool insist on repeating it. So don’t be a fool. Life teaches you lesson in harsh way. It is always better to learn from others mistake instead of making one.

Enjoy and cherish your failures as you cherish your success. Because failures make you strong. They give you time to think about yourself and most importantly they teach you a lesson.

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