DON'T RETIRE RICH

Friday, 21 January 2022

IS SILVER THE NEW GOLD ?






WILL SILVER OUTPERFORM GOLD? 

With the slew of new fund launches by the Mutual Fund houses on Silver, the spotlight on Silver has shot up.

The topic trending on social media these days has shifted from Bitcoin and Equities to Silver.

 

The SEBI has now allowed Silver to be offered via the Mutual Fund Route.

Mutual Funds now offer not only Equity, debt, Gold, Real Estate but also Silver.

So, now instead of having to depend on the Physical Option of Silver, you can now consider buying Silver via Mutual Funds with even a small monthly investment.

 These Silver ETFs (Exchange Traded Funds) will be listed on Stock Markets and can be bought/sold ANYTIME and even in small quantities.

 

 

SILVER ETFs


Silver ETFs will invest at least 95% of their assets in silver and silver-related instruments i.e., Exchange Traded Commodity Derivatives (ETCDs) that have silver as the underlying asset. Accordingly, Silver ETFs will have a dedicated fund manager having relevant skills and experience in the commodity market including the commodity derivative market.

 

Silver ETFs will have to own physical silver of standard 30 Kg bags with 99.9% purity confirming to LBMA Good Delivery Standards. The exposure to silver ETCDs should not exceed 10% of the net asset value (NAV) of the scheme. However, the 10% limit will not apply to Silver ETFs if they intend to take delivery of the physical silver instead of rolling over its position to the next contract cycle.

 

 

WHAT IS THE OUTLOOK FOR SILVER?

Traditionally, Silver has been a poor cousin of Gold moving in tandem or slightly lesser than Gold but the past 15 months it’s been a completely different story.

 Yes....the way demand for Silver is shaping up....it wouldn’t be a surprise to see Silver demand only going up more and more than Gold in the days ahead  Investment in Silver is done for the same type of reasons as for Gold.

Precious Metal, Rare, Safe Haven, Hedge against Inflation amongst others, albeit at a lesser. 

The steadily increasing usage of silver vis a vis Gold which is purely used for Hedging purposes points to a bullish outlook for Silver. 
  The Gold-Silver Ratio too supports the point that Silver prices could see a spike 



 

NEW USAGE OF SILVER:

Silver is largely consumed for Industrial purposes. 50% of Silver Demand is for Industrial Production (btw, for Gold, the usage is very limited at around 10%).

Silver is largely used in the Electrical and Automobile Industries.

Silver usage which was ZERO earlier in many places are being used in plenty especially where high-pressure heat generation is required, be it Semi-Conductors, Printed Circuit Boards, Wireless communication, aerospace, automotive, etc

 

In fact, Silver is used more in Industry than for decorative purposes.

 

Going ahead, Silver is widely touted to be used in Electric Vehicles, Solar Panels, and 5G Towers.
Silver usage is increasing due to its usefulness in making our Planet Greener and Cleaner. 

Digital technology is creating unprecedented demand for silver which cannot be recycled, almost all digital

Technology products use silver as one of the main components.

The Silver Institute estimates that silver demand from the automotive industry will reach 88 million ounces by the middle of this decade (up from just over 60 million ounces in 2021). In 2040, electric vehicles could even devour almost half of the annual silver supply (currently, a good 1 billion ounces). Yes... 50% of all Silver Supply could well be gobbled up by Electic Vehicles. 

All these are poised for EXPONENTIAL GROWTH and obviously, the biggest beneficiary will be Silver.

In fact, it may not be a surprise if Silver outperforms Gold by a good margin in the coming years.

 

 

DEMAND SUPPLY SCENE FOR SILVER: 

Silver Demand has been increasing quite sharply since 2019 resulting in more demand than supply.


While supply is rising by 8% year on year, the demand has been rising at 15% making a case for Bullishness in Silver.

With increased demand was seen from Solar Energy Sector, Silver being a great conductor of both heat and electricity, the demand for Silver will only increase.

 

The Global economic scenario is improving which will only add to the demand for Silver.

 

Silver supply not matching the surging Silver Demand is a definite possibility. 
Silver, historically, has been MORE volatile than Gold.

Silver and Gold tend to do well when Equity Markets are in the bear phase and thus make a strong case for Asset Allocation.

 

One more POSITIVE for Silver is that, unlike Gold, Silver does not have to face the sword of the threat of selling by Central Banks. World over, all Central banks hoard Gold in huge quantities and often sell tons of Gold to tide over distress times which sharply affects Gold Prices.

 The ratio of silver recycling is far too less compared to Gold: 

 

 

BEST WAY TO SILVER INVESTMENT:

Paper form of investment in Silver is a great form of exposure to Silver not only due to purity factor, taxation, liquidity.




Silver ETFs will be one of the preferred ways for investors to take exposure to silver as one need not worry about the bulky nature of silver, purity, quality, or liquidity of the investment. Silver is among the preferred options globally when it comes to investing in precious metals. This is because silver is considered as a store of value, hedge against inflation and has a very limited correlation with other asset classes

 

Obviously, the best way to get exposure to Silver will be the PAPER form.

Silver is very bulky in nature and there is always a question mark on the purity of physical silver followed by the safety of keeping it and then the liquidity of disposing silver.

All these is taken care of by 1 single form of investment...that’s the PAPER form and hence the Fund of Funds will be a good way to get exposure to Silver

 

 

 

ETF or FUND OF FUNDS:

Many AMCs have now launched Silver ETFs

Silver ETF is a passively managed exchange-traded fund that will employ an investment approach designed to track the performance of the Domestic Price of Silver as derived from the LBMA (London Bullion Market Association) AM fixing prices. As per the SEBI rules, all Silver ETFs must hold silver having 99.9% purity.

 

While both have their pros and cons, the Fund of Fund route outshines.

 

1. In ETF, you need to mandatorily have a DEMAT account

2. In ETF, you will be paying BROKERAGE both while buying and selling

3. In ETF the rates can be volatile and depends on the market movement and demand/supply scenario

In Fund of Funds, no need for Demat account

In Fund of Funds, I don’t pay an entry load nor an exit load

In Fund of funds, the AMC will pay/issue units and no worry or liquidity and no case of Demand/supply scene here

We have observed over the years how Gold ETFs have suffered liquidity issues on stock markets and hence the Fund of Fund route is a better way to take Silver Exposure.

 

Taxation Of Silver ETFs

Gains from Silver ETFs will be treated as short-term if you sell them within three years of purchase. Short-term gains will be added to your income and will be taxed at your income tax slab rate. After 3 years, gains from Silver ETF will be treated as long-term and will be taxed at 20% plus indexation.  Thus, since the indexation benefit is there…your net tax could well be in a single digit.






FINAL WORD:

Silver has always been looked at as a tactical allocation, but the way things are shaping up.... maybe it’s time to have a strategic allocation towards Silver.

 

Silver as an asset class is an investment that makes for a good case for hedging against inflation and with its rising demand, we could well see the days of SILVER outpacing Gold in demand and price rise.


It's a fact that Gold has no PRACTICAL usage and is mainly for decorative purposes whereas



Silver has many practical usages and the usage of Silver is only spreading further, wider and deeper. 

 


People who now say

GOLDEN CHANCE/ GOLDEN OPPORTUNITY

may well change to

SILVERY CHANCE / SILVERY OPPORTUNITY!!

 



Silver is very volatile and hence makes sense to look at silver investment via the SIP / STP mode and also be sure to have the right entry/exit points

It would be prudent to take your Investment Solutions Provider’s guidance as they would be in a better position to guide you appropriately.

 

 

I would only say….
You may not have been born with SILVER SPOON, but you could live and enjoy the rest of your life with a SILVER SPOON with the right kind of investment based on your risk profile and asset allocation.

All the best,

Srikanth Matrubai

 







All the best,
Regards,
Srikanth Matrubai
MUTUAL FUND DISTRIBUTOR
REBALANCE VOLATILITY CERTIFIED COACH
Srikanth Matrubai, Author of the Amazon Best Seller DON'T RETIRE RICH




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

 
And who knows, in the future instead of saying 

Silver is poor man's Gold

they may well say

Gold is poor man's Silver

Disclaimer: the above statement is definitely an exaggeration 

However, my view on Silver is that it could make a better investment than Gold at least for the next couple of years
(These are my personal views. You are strongly advised to take the guidance of an expert and then take appropriate investment decisions. We will not be held responsible as this blog is purely personal in nature and is generic in nature and shared purely for educational purposes)



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. https://amzn.to/3cHUM6M/ 

You can purchase the book on Amazon and Flipkart 

For the best of ideas on where to invest to create Mountains of Wealth 
join my TELEGRAM channel
WEALTH ARCHITECT
    https://t.me/joinchat/AAAAAELl4KUnaJzi-JJlDg/

Friday, 14 January 2022

WEALTH CREATION LESSON FROM COPPER BEECH TREE



Greetings,
My friend on a recent visit to the Lyautey's estate at Thorey noticed a hugely attractive tree and asked the Guide about it.

Brimming with pride, the Guide said..."Sir...this is a Cooper Beech Tree and is more than 100 years old. It was planted by Marshall Lyautey who was a General in Napoleon's army"

The guide continued "General Lyautey used to love GREENERY and possessed an huge garden with variety of trees. One day he and his gardener were looking over the Estate and the Gaint Trees planted there from all over the World. 
Lyautey said to the Gardener "I do not see Copper Beech Tree". 
The Gardener signed and said "It is a slow growing tree and takes more than 100 years to reach maturity. Hence didn't plant".


Without a second’s hesitation, Lyautey said “Then we must plant one TODAY- we have no TIME to WASTE Plant it NOW !!!”.












Just imagine the far farsightedness of the Marshall.
Whoever plants the Copper Beech Tree will never see it fully grown and thus you need REAL LONG TERM VISION to plant it. 

Now, even after planting, after you, someone should take it forward, nurture with patience, love, and care and make sure it actually grows properly.
Besides, the tree during its growth stage will definitely face huge challenges in terms of Cyclones, Floods, Famine, Pest, all of which will play their part in blocking the growth.

But, TRUE tree lovers will go ahead and plant it. 

These trees when fully grown reach heights in the range of 65-110 feet and live for 200 years plus sometimes as long as 400 years.

The tree is truly huge and requires about 5-6 adults holding hands to ring its trunk.

It takes GUTS/COURAGE and real long-term vision to plant a tree that takes 150 years to mature.

True Wealth Creators actually have a lesson to learn from this tree…

You need to have this kind of patience, vision, discipline, faith to CREATE HUGE WEALTH

Actually, to create WEALTH, you don't wait for that long and in fact, you can ACTUALLY SEE AND EXPERIENCE THE WEALTH CREATED BY YOU IN YOUR LIFETIME ITSELF. 

What is needed is Discipline, Vision, Focus and Faith. 

And the magic of you being  WEALTHY AND PROSPEROUS is sure to be a reality.

Do you have that VISION?

If yes...welcome on board.

If No.....then, DEVELOP the Wealthy Habits shared regularly by Srikanth Matrubai on his tweets, Facebook posts, blogs, Telegram channel and no one can stop you from being a SUPER WEALTHY person.

All the best
Regards,
Srikanth Matrubai




All the best,
Regards,
Srikanth Matrubai
MUTUAL FUND DISTRIBUTOR
REBALANCE VOLATILITY CERTIFIED COACH
Srikanth Matrubai, Author of the Amazon Best Seller DON'T RETIRE RICH


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

 
Srikanth Matrubai Author of the Amazon Best Seller DON'T RETIRE RICH
By savings, you’re buying your future.
By borrowing, you’re selling your future. And by investing, you are creating your future.
Read my book DON'T RETIRE RICH and become SUPER WEALTHY by implementing thoughts shared
Kindle version
https://amzn.to/2QRnjNY
Do read the book and give your valuable feedback and request you to post positive comments on Amazon. https://amzn.to/3cHUM6M/ 

You can purchase the book on Amazon and Flipkart 

For the best of ideas on where to invest to create Mountains of Wealth 
join my TELEGRAM channel
WEALTH ARCHITECT
    https://t.me/joinchat/AAAAAELl4KUnaJzi-JJlDg/

Saturday, 8 January 2022

ARE YOU READY TO BUY YOUR FIRST HOME ?


ARE YOU READY TO BUY PROPERTY?

 


ARE YOU READY TO BUY YOUR 1ST HOME?

 

 

 

Gone are the days when Property used to bought only after getting WELL SETTLED (married and have kids)

Now…immediately post landing a job, and after the mandatory Apple iPhone and a Bike, the youngsters are ready to swoop in on the newest gadget (home) and show off!

Yes..its exciting when you start scouting for that DREAM FIRST HOME but before that there are some factors that should be compulsorily considered.

Buying a property is a SERIOUS Decision and needs SERIOUS INTROSPECTION. Not just financial but it has turned into even an emotional roller coaster when it comes to buying your first home.

 

 

Property typically increases in value over time and provides SECURITY IN RETIREMENT.

Not having to pay rent when you don’t have or steady income in indeed a blessing.

And of course, the status you get in society when you are living not on Rent but OWN HOUSE is something different.

Isn’t it?

 

But have you checked whether you truly are ready to buy property?

Are you ready to take such a huge financial decision?

Will you be able to digest such a big dent in your corpus?

 

ANSWER THE FOLLOWING QUESTIONS YOURSELD AND YOU CAN FIND YOURSELF WHETHER YOU ARE INDEED READY TO BUY THAT PROPERTY

 


1.  Do you have a Steady Income?

90% of Property buyers go for EMI which means a committed monthly expense.

If you are a salaried person, then its easier to plan for the house but if your income is variable and volatile, you may get stuck in financial mess when you may not be able to pay the EMI during lean periods of income. How will you overcome that?

Even when it comes to salary, you need to answer if the job is steady, and capable of giving you SIMILAR salary if you have to move out.

Let me reiterate that it’s not salary that makes for STEADY income. It could be even your Dividend income, Interest Income (or even Rent from other properties you may have)

Only thing for you to answer is WILL YOU BE ABLE TO PAY THE MONTHLY EMI WITHOUT FAIL MONTH AFTER MONTH

 

2.  Do you have Emergency Fund?

Of course, once you don’t steady income, the obvious next question would be whether you have at least the Emergency Fund.

Emergency fund ensures that you can tide over the temporary financial crises and pay any EMI and other expenses without an issue. Medical contingencies, job loss, salary cuts are some of the Emergencies that you MUST be prepared for.

Ideally, 6 months of expenses is a good enough buffer to have as an Emergency Fund. This Emergency Fund acts like a SHOCK ABSORBER and you can easily sail through the tough periods. It is not that you should keep 4-6 months of your Monthly Expenses in Contingency Fund at one go. Go about it slowly. Start with 15 days of expenses, then 1 month and gradually scale up.

 

3.  Is your Debt manageable?

If you have any existing Loans and committed interest outgo, you need to check whether you can manage the additional EMIs that may come up. It is inevitable that once the new Home EMI starts hitting you, the spending will invariably see a reduction but it should not result in NEED based spending cut.

Debt is pleasure today and pain tomorrow.

Be honest about what you can afford

If you spend too much on a high EMI, it could hurt your day to day expenses (especially in terms of cash crunch)

Needs are a must.

 

4.  Do you have a Lumpsum Corpus?

Prudent Financial Plan says that you should pay at least 50% of the Total Property as Lumpsum from your side

The value of the property you are buying should NOT be more than 3 times of your Annual Income.

Suppose your annual income is 50 lakhs, the value of property you are considering to purchase should NOT cross Rs.1.5 crores.

You cannot take a Rs.80 lakh loan for a Rs.1 crore property.

You should not even if the Loan Provider is ready to give you.

The Higher Lumpsum from your side, lower will be the EMI. Hence make sure you have sufficient Lumpsum for that Property

Home Loan EMI should not 30% of your take home pay.

 


5.  Ready to take care of your own maintenance?

When you are living in a rented home, the maintenance is taken care by the landlord or the Association. But when it come to your own property, you need to get your hands dirty be it fixing the Geyser, the Electric Switch, the Leaking Tap.

And actually, there is nothing wrong in it, right?

So, either you should be mentally ready to do all this (dirty) things or PAY someone to do this for you.

 

6.Have you answered the question whether it is Cheaper to Rent than Buy?

               Yes....sometimes it may well be cheaper to stay in Rent than buy a house depending on the Housing Market situation.

A house is an expensive investment.

Make sure that you have factored the cost of Interest Payments, maintenance of the property, the Taxes to be paid

Suppose the house you plan to purchase is Rs.1 crore and the annual rent you are paying is, say about Rs.3 lakhs…then the rent ratio works out to 33 which is very expensive.

Any Rent Ratio which is above 20% means, you are better off owning a house rather than paying rent.

 

 


 

BEFORE CLOSING…KNOW THIS….

Besides the above, things which are ignored by most buyers are small small things but which can add up to tidy sums

a) The closing costs
The registration of property, the brokerage, lawyer fees, the license fees to electricity board, Water board, Home Insurance,  etc all these add up to quite a sum.
Also, you need to understand that the property you purchase will be BARE without any furnishings and you need to provide for the same.
And of course, the Interiors cost depends on the taste you have and the cost could well end up for 10% to 15% of the property cost.  

 

b) Moving Expenses

Moving from your existing home to new home costs not just the 1 time shifting transporting of stuff but also the factor of your distance to office from the new house and also the distance for your kids to school/college

 

c) RESALE VALUE:
Not exactly a point which many consider but cannot be ignore at all is the RESALE VALUE.

Yes...you are indeed buying your first home to stay FOREVER but you never know...future is unpredictable.

Your job may change, your kids may move out....

and I am not just talking about moving to different city altogether but even within the city, you may be forced to relocate.

Thus, the resale value is an important factor

 

d) Even as you accumulate the HUGE corpus required for purchasing your first home, consider REITs. Owning a Real Estate is a challange both financially and legal hassles, REITS is an easy simplified asset class to own the same without owning it Physically.

c) Your future family size must be definitely considered before purchasing.

You may have kids in future or maybe your parents may join you. Consider all these things before zeroing on an property

 

 

And, before saying YES to going ahead with your purchase of your FIRST HOME, make sure your credit history is in good shape. Build up the score beforehand.

The Interest could go up or down steeply depending on your credit score. Make sure you have a good CIBIL score.

Your Cibil score is a measure of how trustworthy you are and hence higher the score, the better it is.

 

 

 

Remember unlike earlier days, your first property could well be your LAST property in life.

So, make sure that you are zeroing in on the right property in all aspects

Cost is only 1 factor.

Your need to look at the distance to work, the neighbours, the facilities nearby, etc

 

And without missing, also read our article on MAKING YOUR HOME LOAN INTEREST FREE!

https://srikavimoney.blogspot.com/2021/04/make-your-home-loan-interest-free-heres.html/ 

https://srikavimoney.blogspot.com/2021/04/make-your-home-loan-interest-free-heres.html

 

 

Finally, You don’t have to buy a house just for society sake. There is no rule that ONE MUST HAVE OWN HOUSE.

Buy only if YOU WANT to not because the society is asking you questions.

Ultimately what matters is WHETHER YOU ARE COMFORTABLE in where you are

Buying a property should result in satisfaction and not Tension!

Enjoy the experience of getting your First Home and all the very Best.

Wish you all the very best

Srikanth Matrubai

Author - DONT RETIRE RICH

 







All the best,
Regards,
Srikanth Matrubai
MUTUAL FUND DISTRIBUTOR
REBALANCE VOLATILITY CERTIFIED COACH
Srikanth Matrubai, Author of the Amazon Best Seller DON'T RETIRE RICH


You are strongly encouraged to consult your financial planner before making any decision regarding this investment. The views expressed here are the author's personal views and should not be interpreted 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. https://amzn.to/3cHUM6M/ 

You can purchase the book on Amazon and Flipkart 

For the best of ideas on where to invest to create Mountains of Wealth 
join my TELEGRAM channel
WEALTH ARCHITECT
    https://t.me/joinchat/AAAAAELl4KUnaJzi-JJlDg/

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