- Savings is for capital protection and an investment is for wealth creation.
- When you invest in stocks/equity mf , your are investing in underlying business of the company. Unlike stock prices, business doesn’t fluctuate on day to day basis.
- A dividend from mutual fund is return of your capital and a dividend from equity shares is return on your capital.
- Short-term and long-term needs require to be addressed by short- term and long-term investment instruments.
- We always overestimate the change that will occur in the next 2 years … …and underestimate the change that will occur in the next 10 years, Don’t Let Yourself Be Lulled Into Inaction. Bill Gates
- Lifespan (i.e. Longevity)of life is increasing and working life span is decreasing.
- Your net worth or value to your family is your Human Life Value which should roughly be 10 times your net take home income. This would ensure your family maintains the same standard of living- should anything happen to you today.
- Falling inflation means price is rising at slower pace compared to previous years. It does not mean prices are falling.
- Lock-in period in case of sip is on rolling basis and not from original investment date.
- Wealth can’t be earned; it can be created or inherited.
- Money does not grow on trees. It grows like a tree
- In investing the odds are in your favour, in gambling, the odds are against you.
- Risk comes from not knowing what you are doing. Because fear is real, panic is optional.
- If you focus on risk, profits will follow but if you focus on profits, risk will follow.
- In the long run, investing is not about markets at all. Investing is about enjoying the returns earned by businesses. Over the short term, however, the fundamentals are often overwhelmed by the deafening noise of speculation.- John bogle
- The greatest enemies of equity investors are expenses and emotions ... John bogle
- If you have trouble imagining a 20% loss, you shouldn't be in stocks. .... John bogle
- If your monthly expense is Rs 10000 today, you would need Rs 21580pm 10yrs and RS 100600pm 30 yrs from today to maintain the same standard of living at an inflation of 8%p.a.( Inflation robs your purchasing power
- Dividing a portfolio of one’s investments, over asset classes with negative correlation (that is do not move up / down at the same time) helps bring down the risk of the entire portfolio.
- Rebalancing in Asset allocation, helps investors enter equities at low levels and exit at high levels, thereby avoiding “timing of the market”
- "Rule of 72" is the simplest formula to understand "power of compounding".
- Time is the most important component in "compounding formula".
- Insurance is not an investment, it's a tool for Risk management and hence an expense.
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