Sunday, 6 December 2020

DON'T SAVE MONEY !!

Don't just save money. Invest It. 


Yes. You read the title right. 
Why?
Having cash reduces the value of your money over a period of time

In fact, Escobar would every year LOSE $1 billion of his Cash because rats would eat it or would be damaged by wear and tear!

Having cash can easily induce into spending it. 
  
Keeping money in SB Account is no good either. 
At the current rate (4%pa), it will take 18 long years to just DOUBLE !!


Let's dig deep and understand 

INVEST, DONT SAVE 
When I say Invest and don't just save, it obviously means that there is a definite difference between SAVING AND INVESTING. 
Yes. Indeed there is. 
Depending on where you are putting that money decides where you are SAVING or INVESTING. 


1. 
SAVING is a process of accumulating money. With Saving, you are safeguarding your money, and is risk-free. 
INVESTING is the process of CREATING WEALTH and could involve some form of Risk. 

2. 
SAVING does NOT grow your money in REAL Terms
Inflation tends to eat the return. 
For example, an SB account may give you a 4% return but if the inflation is 5%, your money becomes LESS VALUABLE month after month. 
You will be able to purchase LESS of the same item next year even with increased money you have 


INVESTING ensures that your money DOES GROW IN REAL TERMS


3. 
SAVING is for SHORT TERM
INVESTING is for MEDIUM TERM AND LONG TERM


4. 
SAVING gives INSTANT access to your money
INVESTING may not be accessible instantly 

5. 
SAVING makes your money LAZY 
INVESTING makes your money WORK HARD and gets your MORE MONEY


6. 
SAVING is very easy to UNDERSTAND 
Keeping money in Savings Bank, 
Keeping money under your Pillow, 
Keeping money in your cupboard is called SAVING. 


INVESTING is relatively DIFFICULT to understand. 
Keeping money in Stock Markets
Keeping money in Mutual Funds
Keeping money in Real Estate



7. 
Under SAVINGs your lifestyle could remain more or less the SAME throughout your life. 

Under INVESTING your lifestyle has a SURESHOT chance of having a BETTER LIFESTYLE continuously. 


Your income and savings could see a continuous uptick but your lifestyle will remain at a standstill, resulting in a vicious cycle of you trying to increase INCOME with little to show in terms of BETTER LIFESTYLE. 


8. 
Under SAVINGS, invariably you will have a specific idea of how much you are getting at the end of your saving period. 
Under INVESTING, the returns are variable, volatile and hence the end corpus is vague and not possible to predict/calculate accurately. 

9. 
SAVINGS doesn't need much expertise 
INVESTING is complex and expert hand-holding is a MUST at least in the initial stages and in some products, inevitable. 



So...What should I do?

But Srikanth, SAVING means YOUR MONEY IS SAFE... isn't it?
No...NOT AT ALL
Saving actually not only erodes your value of money but also since it's easily and instantly accessible could be at the risk of BEING SPENT on the spur of moment. 

So, is INVESTING done only by BRAVE people?
Once you UNDERSTAND Risk, there is nothing to be feared. 

Anything you do with money involves RISK. 

Even keeping money in your cupboard involves RISK as this depletes the VALUE OF YOUR MONEY. 

Hence, it is better to interact with a Knowledgeable person and understand the RISKs involved with INVESTING and make sure your MONEY GROWS and you do become WEALTHY. 

You need to come out of FEAR of INVESTING which is possible when you read more, interact more, and most importantly have a MENTOR who can guide and HAND-HOLD you through your Wealth Creation Journey. 
Without Saving, Investing is not possible. 
So Saving is the BASE and not to be ignored. 
Both help you accumulate money for future expenses.


Both SAVING & INVESTING have their places under the SUN but you need to understand HOW MUCH TO SAVE AND HOW MUCH TO INVEST and most importantly WHERE TO INVEST

In INVESTING there could be SHORT TERM pains and periodic bouts of VOLATILITY, you should DIGEST these and STAY INVESTED which will ensure that you just DONT RETIRE RICH but actually F.I.R.E. AND RETIRE WEALTHY !!!


FINALLY, 
HOW MUCH TO SAVE?
HOW MUCH TO INVEST?

SAVING IS MONEY KEPT ASIDE FOR AN FORESEEABLE EXPENSE (NEED)

INVESTING IS MONEY KEPT ASIDE FOR A FUTURE EXPENSE (WANT/COMFORT)


Saving or Investing depends on 
a) Your Risk Profile
b) Financial Status
c) Financial Goals
d) Your Passion to become Rich

So, firstly make sure that your 1 year of expenses is SAVED. 
Also keep aside money for annual expenses like Tuition Fees, Insurance Premiums, Taxes, etc
and most importantly, keep at least 3 months (minimum) as EMERGENCY money. 
All of these should be SAVED. 

Whatever is left is what should be mandatorily INVESTED. 

Anything less than 3 years should be in SAVINGS instruments

Between 3 to 5 years should go to a mix of Saving + Investment products

Above 5 years can and must go to INVESTMENT products

Again here, under-investment comes various asset classes and products which should be invested under the expert HAND-HOLDING so that you actually CREATE WEALTH. 

Remember, 

Cash is NOT KING but CASH FLOW is !!

All the best to a Healthy, Wealthy Future. 

Regards, 
Srikanth Matrubai





You are strongly encouraged to consult your financial planner before making any decision regarding this investment. The views expressed here is the author's personal views and should not be assumed as a recommendation to invest/avoid.


Srikanth Matrubai Author of the Amazon Best Seller DON'T RETIRE RICH

Do read the book and give your valuable feedback and request you to post positive comments on








Amazon.

You can purchase the book on amazon and flipkart 


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Friday, 20 November 2020

Why HAND-HOLDING IS A MUST FOR WEALTH CREATION

Except God and a Fraud, no one expected that COVID would stop the entire World for 6 full months.

During the March lockdown when the Sensex tanked by more than 40% in a matter of under a week, there was widespread panic.

There was fear on everyone’s face whether the stock market would go down to ZERO as Corona was something no one had prepared for and no one knew what destruction it can cause.

I then plunged head long into reassuring all my investors about their investments and the equities.

I wrote lots of messages in Whatsapp, facebook and even on my blog all highlighting one single fact that LOSS IS TEMPORARY AND GROWTH IS PERMANENT.



I encouraged all my readers to hold on to their investments and if possible, to even top up if the finances allowed.
I strongly put across the point not to get feared and sell their equities and kept requesting DO NOT CONVERT YOUR PAPER LOSS INTO PERMANENT LOSS.

Reporting some of the messages here so that we can recall those time when our confidence at the lowest ebb and how these messages pulled the spirits up…

 

 

 

MESSAGE NO.1 :

BEFORE INVESTING KNOW THIS...

Every Stock Market falls has everntually proved to be temporary and a BUYING opportunity.

Use Market falls to boost your returns as ultimately FALL IS TEMPORARY, GROWTH IS PERMANENT.

 

 

MESSAGE NO.2

Nobody likes to see their portfolio going DOWN but its essential to remember that these are NOTIONAL LOSS.

Stopping Sip and worse, REDEEMING at this point of time will only convert temporary Notional Loss into a PERMANENT REAL LOSS!

 

MESSAGE NO.3 (The most important one)

TREAT EQUITY LIKE YOU TREAT LAND AND GOLD

 

The biggest issue with Indian Investors that when

1.     GOLD prices fall, their first reaction is....GOOD.....Now I can buy more

2.      

3.     When Land Prices fall, their reaction is ….CHALEGA....I AM HOLDING FOR LONG TERM

But when the same investors's mutual fund or equities fall, their reaction is....

IS THE END OF STOCK MARKETS....
Has my money gone??
Let me Take out whatever is left!!

 

When anyone is looking at selling off Real Estate and the land rates have fallen by 30%, their ONLY reaction is.....”WHY SHOULD I SELL NOW?? ITS DOWN BY 30%....i WILL WAIT
but, the same investor, will not even blink when it comes to selling Equities even at a loss!!

DO NOT ALLOW YOUR NOTIONAL LOSS TO TURN INTO PERMANENT LOSS!!

 

 

SOME MORE MESSAGES

1. Negatives are inevitable (its a part and parcel of any business including Equities)

 

2. Equities is NOT for Short Term. Never was. Never will be.

 

3. Positive Growth is a given. Equities have outperformed all other asset classes by a reasonable margin but the problem is VOLATILITY.

You have to bear with it.

 

4. When the Investment is LONG TERM, why should you even bother to look at your portfolio??

You will only be increasing your BP.

So, bear with the volalitility. Enjoy the Ride. \

 

5. Stick to Asset Allocation. Stick to Good Quality Funds. Invest in Funds which are aliging to your Goal.

 

Due to my constant messages, reassurances and understanding the depth of potential loss and the possibility of recovery…..ensured that almost all of my investors STAYED ON.


And because they stayed on (including you), the loss actually has now converted into PROFIT.


Let me take one real live example of my investor


On 24th March, the investor’s portfolio was down by 37 lakhs and like everyone, this investor too was in panic mode.

 

 

 

Because the investor did not sell but held on to the investment. The Investor’s potential loss of 37 lakhs has now turned into a paper profit of 32 lakhs…A GAIN OF 69 LAKHS in less than 6 months.

 

 

 

 

 

Some of my articles shared during those times

1.           Dont fear the CARONA..    https://www.goodfundsadvisor.in/2020/03/carona-se-daro-na-kick-out-carona-fear.html

2.         Correction is Temporary…Growth is permanent     https://bit.ly/2O8iaBF

3.        http://www.goodfundsadvisor.in/2020/03/carona-se-daro-na-3-back-to-basics.html

4.         http://www.goodfundsadvisor.in/2020/03/corona-se-daro-na-part-2-brutal-and.html

5.        http://www.goodfundsadvisor.in/2020/04/greetings-sharpunforeseen-unprecedented.html

6.        http://www.goodfundsadvisor.in/2020/04/corona-se-daro-na-part-4-how-to-get-out.html

 

 

All my messages ultimately reinforced that YOU SHOULD HOLD AND IF POSSIBLE ADD MORE.
And almost all my messages would end with this quote….

Don’t forget..

ALL BEAR MARKETS HAVE ONE THING IN COMMON…….THEY END” !!

 

 

 

Because the investor did not sell but held on to this investment, the potential loss of 37 lakhs has now turned into a paper profit of 32 lakhs…A GAIN OF 69 LAKHS in less than 6 months.

 

 

This is the biggest advantage of interacting with a HUMAN rather than a Robo or a Web portal as the Human here…i.e. the IFA…..oops the MFD will ENSURE THAT INVESTORS DO NOT SELL UNDER PANIC AND PREVENT THEM FROM CONVERTING THEIR PAPER LOSS INTO REAL LOSS.

The MFDs have been doing a yeoman’s service in not only bringing new investors to the industry but ensuring that these investors are HAND-HELD and guided on every step.

 

 

 

 

Finally,
I would like you to note that Equity like a Business will have volatility. Strongly urge you to treat Equity Investment like the way you treat Land Investment or Gold.

When we are investing in Stock Markets...either directly or through the Mutual Fund route, the simple fact is we are INVESTING IN A BUSINESS.

Business is FOREVER and always having its ups and down.

No business will do well all the time.

“If we are facing in the right direction, all we have to do is keep on walking,” goes a Buddhist proverb.

 

So, when the Direction is right....in this case...our Direction is Wealth Creation and our vehicle also right...that is the EQUITY MUTUAL FUNDS...then there is absolutely no need to keep looking at the NAV on a daily or even a Weekly basis.

 

Sometimes it makes great sense to be like an Ostrich and ignore the noise all around.

 FINALLY PLEASE UNDERSTAND THAT HAND-HOLDING IS PARAMOUNT TO ENSURE THAT WEALTH IS ACTUALLY CREATED.

Do not be #PaisaWiseRupeeFoolish

 

Mutual Funds Sahi Hai only if MFD Saath Hai

 



 






 



Regards and all the very best….
To your Financial Growth,

Srikanth Matrubai

MFD,
Author – Don’t Retire Rich

 












You are strongly encouraged to consult your financial planner before taking any decision regarding this investment. The views expressed here is the authors personal views and should not be intrepresented as a recommendation to invest/avoid.
Srikanth Matrubai Author of the Amazon Best Seller DON'T RETIRE RICH
Do read the book and give your valuable feedback and request you to post positive comments on the Amazon. https://amzn.to/3cHUM6M/ You can purchase the book on amazon and flipkart Please subscribe to my TELEGRAM channel https://t.me/MutualFundWORLD/

DON'T SAVE MONEY !!

Don't just save money. Invest It.  Yes. You read the title right.  Why? Having cash reduces the value of your money over a period of tim...

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