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Is your return expectation 'REAL'?

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In the normal course of investment journey, we save money; we select an asset and then we invest. In this process, it is necessary to know the answer of one important question - Why are we investing? So, a basic idea of investing is that we invest money and we get benefit in return and thus we call it as “Return on Investment (ROI)” . First, let us understand what ROI is and how it is measured. Suppose you invest Rs. 1 lakh on which you generate profit of Rs. 10000, so your return on investment is Rs. 10000 and in terms of percentage, your ROI is 10% (i.e. 10000/100000*100). This is how we normally calculate return on investment. Hence, primary and a very simple goal of investing is to earn income or profit. But that’s not all! We further need to know how this return is generated. An investment would generate return over a period of time either in the form of regular cash flows or in form of capital appreciation or both. Regular cash flow is earnings from investment such as dividend, i...
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Health Insurance: Mathematics, Purpose & Emotion

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  The COVID situation has been an extreme event around the world, where at least once, we all must have felt like dumped into a war zone. It has been a challenging time since last 6 months; where some of us are battling with this either physically, financially, mentally, socially or by any other means. On the contrary, there is also a positive side to this. We all got good time with our family, we restored & enjoyed the hobbies which we left out earlier due to daily routine; we also tried to become chef in our own way and many more things which we missed earlier. More importantly we all have reshaped our awareness or trying to do so. This primarily includes necessity to keep ourselves really healthy & protected. At macro & micro level, each one of us are compelled to think about health care and its infrastructure. One of the significant parts of health care system surely includes Health Insurance. Owing to this, I thought to pen down about the mathematics, purpo...
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Which Investor Class do you belong?

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Have not been through such a terrible atmosphere any time before where health and wealth both are at stake. Though this is not an end of the world but most certainly it gives us a realization of an emotion called FEAR !  Sometimes it is a very helpful thing that keeps us from harm. But many times it’s an inner voice and barrier that keeps us stuck. When such fear takes a form of Envy or when it becomes Fear of Missing out (FOMO) , a bias emerges inherently and gives birth to a new emotion. Such an emotion is called GREED. Greed and fear are most common behavioral bias in human which are cyclical in nature. If you try and observe the pattern of both these biases, you would understand that greed follows fear and vice versa. But Wait! Why are we indulging ourselves in such greed & fear philosophy? Because, in this cycle of two emotions, there lies an opportunity .  When the cycle is at or near to extreme fear, it gives an opportunity to those who w...
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Wealth Management: Putting into Perspective !!

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One day, late evening I got a call from my brother, who recently graduated as an Engineer and started his job. He asked me about one mutual fund scheme which apparently looked lucrative to him. He asked, “Do you know about this scheme? Its returns are so much better. I want to start my savings. Can I start putting my money in this scheme?” Also, he just turned 23. So I kept listening to him and how keenly he was telling me about the scheme and also appreciate his thought to start his financial planning from the very beginning of his career. At the same time, it is also important to note that such random encounter with any financial product and attraction towards the same based on prima facie information may become financially fatal. Thus it is of utmost significance that such nascent, enthusiastic & curious thought process should be driven with proper guidance and planning so that one can inculcate a good financial discipline during the journey of life. Owing to this, I ...
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