Akshat Shrivastava

Akshat Shrivastava



Sushil Kumar, won 5 Cr rupee in 2011 on the famous show KBC. After tax this would have been 3.5Cr. If invested at 6%, it would be 7 Cr today. Unfortunately, he invested poorly and lost most. Why? Because investing is hard. 7 Money rules that could help:- [A thread...]

[1] Money loses value very fast - USD has lost its buying power by 96% since its inception. - Value of 1Cr Rupees 15 years from now will be 36 Lakhs (assuming 7% inflation). - Goal of investing (for most) is to beat inflation.

[2] Target returns differ from country to country In Japan, you can keep your savings in the bank, sit back and relax. Why? Because the ~ 0% inflation won’t eat up the money in your bank account. Even the markets have given close to 0% returns over the last 30 years.

Point to note is, in faster growing economies (like India), we need to invest in slightly riskier assets to beat inflation.

[3] Buy insurance Early Medical inflation in India is 14% But the rate of increase of premiums (at 25 vs at 35) are, a crazy 70% Buy insurance. More importantly, buy the right type. Speak with an insurance expert for free from Ditto here:

[4] Investing in FD: -An emergency fund (about 6-7 months’ salary), should be in FD or liquid debt funds. - Some additional liquid money should be reserved. - Having liquid money, ALSO enables us to take good, timely opportunities in the market. (Ex: The 2020 market crash).

[5] Buying non-paper investments: -Land or property, physical Gold etc. are hard assets. - Government can't print crazy money and deflate these assets. Every time government prints more, these assets would go up. Why? because there is a limited quantity of these assets.

[6] Taking good loans: What is a good loan? Anything that either gives you tax benefits or helps you make more money/produce a cash flow. (Ex: Loan for Education, Loan to start a business)

- Taking a loan for buying a car or an iPhone is bad debt. There are no tax benefits and it results in a recurring expense. -Buying land (or property) is good debt. You get tax benefits, and it can also become a passive income stream.

[7] Manage your cashflows: -Your EMIs should not be more than 30% of your salary. If you have a huge cash outflow every month, an urgent requirement of cash results in a distress sale of investment. One shouldn’t be exposed to incurring an avoidable loss this way.

Building wealth And keeping that wealth Both are needed to ensure your financial freedom. Whether we like it or not, learning to invest is becoming a critical skill that everyone should cultivate.

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