— Satish 🇮🇳 (@bombaylives) August 24, 2017
Rule#1 Use Banks for financial transactions, short term cash management and credit management.
Rule #2 Use Insurance to cover the risks.
Rule #3 Use Gold to hedge your currency (i.e. Rupee).
Rule#4 Use Real Estate for consumption (Residence) or regular income (rent).
Rule#5 Use Capital market to create long term wealth.
Unfortunately, it happens otherwise.
People tend to use Banks and Insurances for investments,
Gold for consumption (Jewelleries ),
Real Estate for long term wealth creation and
Capital Markets for speculation and short term gain.
Needless to say, why they fail to create wealth.
12 key moments from Berkshire Hathaway’s annual shareholders meeting
Each year at Berkshire Hathaway’s shareholder meeting, CEO Warren Buffett and vice chairman Charlie Munger sit down for 8 hours in front of 40,000 live spectators — and many more online — and wax philosophical on all topics imaginable.
Here are some of the highlights:
Buffett: Self-driving cars and trucks would certainly hurt our business
Self-driving cars and trucks may be years off, but when they come, they will hurt Berkshire Hathaway, according to Buffett. “Autonomous vehicles, widespread, would hurt us if they spread to trucks and they’d hurt our auto-insurance business,” Buffett said.
The one thing Warren Buffett would like of Berkshire’s next CEO
Warren Buffett plans to run Berkshire until he’s “buried in the ground.” The question of his successor has come up in recent years as he has gotten older. On the subject, Buffett says there’s one thing that he would like to see from his replacement, and that’s a willingness to accept modest compensation. Ideally, that person would be already very rich.
Buffett: Wells Fargo made a mistake that dwarfs all others
Warren Buffett spoke about Wells Fargo and its 2016 scandal, in which up to 2 million credit card and bank accounts were created without customers’ permission. “At Wells Fargo, there were three very significant mistakes, but there was one that dwarfs all the others,” said Buffett. “At some point if there’s major problem, the CEO gets wind of it. And the CEO has to act.”
Munger: ‘We failed you’ by not investing in Google and Wal-Mart early
Berkshire Hathaway has historically shied away from investing in technology stocks, though it has invested in IBM and Apple.
Berkshire’s vice chairman Charlie Munger added that they avoided tech stocks in the past because they felt they had “no advantage where other people did.” He added that he thought they were “probably smart enough” to figure out Google, though.
‘That $9.5 billion is real’: Buffett explains how a Trump tax cut would help Berkshire
President Donald Trump’s plan to cut corporate tax rates to 15% would almost certainly be a boost to Warren Buffett and Berkshire Hathaway. “The deferred taxes that are applicable to unrealized gains on securities would all be applicable to us,” Buffett said. “We have $90 or $95 billion in gains, and our owners, dollar for dollar, will participate in that … If the rate were to drop 10%, that $9.5 billion is real.” Buffett added that the impact of lower corporate taxes, however, would be uneven across its holdings.
Charlie Munger: I think the Chinese stock market is cheaper than the American stock market
Charlie Munger thinks stock market investors might find better investment opportunities overseas right now. Munger said, “I do think the Chinese stock market is cheaper than the American stock market. And I do think China has a bright future. There will be growing pains of course.”
Buffett: The stock market’s casino-like characteristic can be agonizing for investors
A value investor from China asked how to spread the value investing philosophy in a market system where so many are speculating. “There’s always some speculations, always some value investors in the market,” Buffett said. The problem arises when people start to see others benefitting from playing the market.
Buffett: Hedge fund-style compensation in any other field would ‘blow your mind’
In typical fashion, Warren Buffett railed against the hedge fund industry and its notorious fees. “In all the professions, there is value added by the professionals, as a group, compared to doing it yourself. In the investment world, that isn’t true,” Buffett said. He added that the active managers cannot do better than the aggregate of “the people who just sit tight.”
Jack Bogle envisions ‘chaos, catastrophe’ in markets if everyone were to index
The godfather of index investing knows there is a limit to the strategy’s usefulness. “If everybody indexed, the only word you could use is chaos, catastrophe,” said Jack Bogle, founder of Vanguard. “There would be no trading. There would be no way to turn a stream of income into a pile of capital or a pile of capital into a stream of income.”
Warren Buffett: AI is good for society but ‘enormously disruptive’
Artificial intelligence will kill some jobs, but on the whole, help improve society. That’s essentially the insight Warren Buffett had to offer on the subject. “I would certainly think they [artificial intelligence developments] would result in significantly less employment in certain areas, but that’s good for society,” Buffett said. “It may not be good for a given business.”
Buffett: ‘Medical costs are the tapeworm of American economic competitiveness’
Warren Buffett said that rising health care costs, not the tax system, is the number one problem that American businesses face. “If you go back to 1960, or thereabouts, corporate taxes were about 4% of GDP, I mean they bounced around some. And now, they’re about 2% of GDP,” Buffett said. “At that time, health care was 5% of GDP, and now it’s about 17% of GDP.” In Buffett’s view, this says a lot of what’s playing a bigger role in hindering business activity in the economy.
WARREN BUFFETT: In America, ‘nobody should be roadkill’
Over the last several decades in America, our economic prosperity has not been shared equally, and the impacts of globalization have taken a large portion of the blame. Asked about this trend, Warren Buffett said that in America, “Nobody should be roadkill.” He added, “You’ve got an enormously prosperous country. You’ve got $60,000 in GDP per capita. So we’ve got prosperity, and that prosperity is enhanced by trade.”
Got this as a Whatsapp Fwd, Originally posted by http://blog.wealtharchitects.in/2017/05/wasteful-money-habits-why-we-fail-to-be-rich.html
*50 Financial Mistakes and Illusions*
( Which ones are you guilty of ?)
1. Just can’t manage to fit our Expenses within our Income. And, even when the income increases, the expenses invariably rise much faster.
2. Generosity is in our blood. We happily pay 30-50% p.a. as interest charges to the Credit Card companies.
3. We respect our culture and old customs. We keep our money in the OUTDATED Bank Fixed Deposits.
4. Another example of respect for our tradition… creating a huge pile of (useless) gold jewellery.
5. Yet another example of holding our customs in high esteem… feeling proud if we can leave behind a “20-25 year old dilapidated property” for our children as a legacy [and not a “20-25 year old equity mutual fund portfolio”].
6. Spent more than half a lakh of rupees on a top-end smartphone — just to show off (even though we will not use even one tenth of its smart features).
7. Replaced the same top-end smartphone in just 6 months? Oops… wasn’t it smart even after paying all that money? (Psst… the new model is no different from the previous one, except for some minor tweaks).
8. Haven’t read the blog post ‘My name is Insurance and I am not an investment’.
9. More than 50-60% of the monthly take-home pay is gobbled up and devoured by various loan EMIs.
10. Hotel and restaurant owners love you. You are found at these places, far more than even their most regular staff members.
11. For you (financial) PLAN is a four-letter insulting and derogatory word.
12. Believing that “budget” is only the Finance Minister’s job, not ours.
13. Believing that “managing inflation” is RBI’s problem, not ours.
14. Financial lethargy… not paying the bills by the due date (often resulting in late fees and penal interest).
15. Financial shortsightedness… thinking only of today or tomorrow; and not the next year or next decade.
16. Still waiting for the so-called BEST DAY to invest in equity mutual funds.
17. Never seen our Credit Report, even though it is now available free of cost… forget about working to improve the Credit Score.
18. The Emergency Fund account shows a Zero Balance.
19. 99% focus on earning money. Mere 1% attention on managing the same.
20. Never heard of (or not knowing the meaning of) “delayed gratification”.
You may be blowing away your money due to carelessness and stupidity.
21. Repeatedly falling below the minimum average monthly balance in one’s Savings Account.
22. Making our neighbours jealous with our extravagant lifestyle is our life’s primary goal.
23. Replace is our motto. We don’t believe in Repair and Reuse.
24. Blindly and needlessly chasing Maximum Returns from our investments.
25. You ask “what does this investment or financial product offer” instead of “how is this investment or financial product beneficial for me.”
26. Investing in the world’s biggest con job — a scheme that has the word “child” in it.
27. Paying Rs.150-200 for a cup of coffee, when the same stuff is available at 1/4th the price.
28. You suffer from ‘investment paralysis’ due to Fear of Loss.
29. Not having a ‘professional’ financial mentor as your friend, philosopher and guide.
30. Blissfully unaware that Gym is an expensive fad. Running, walking, yoga are free and superior alternatives to remain as fit.
31. IRR, YTM, CAGR are bouncers that simply go over your head.
32. You think you can beat Roger Federer.
33. SIP, STP and SWP is all mumbo jumbo for you.
34. Hear the word RISK and your legs go jelly with anxiety.
35. Hear the word TAX and again your legs go jelly with anxiety.
36. Spending Rs.250 on a pizza every week? No issues at all. Buying a Rs.250 book on personal finance even once a year? No, that’s a waste of money.
37. In your opinion Stock Market is a Casino and buying equity shares is gambling.
38. If you think that ups and downs are good only at roller coaster rides; and not at the stock markets.
39. The word Pension is music to your ears.
40. Our portfolio is a carbon copy of Rakesh Jhunjhunwala.
41. The biggest gamble we play with our finances — no mediclaim policy.
42. THICK forms and FINE prints scare you.
43. Not yet realized that SUVs burn more fuel, burn more money, burn more environment (thus creating a hell for our children).
44. Not yet realized that Extended Warranties are almost always a waste of money.
45. You are more brand-conscious than price-conscious.
46. Pay for 400+ cable channels. Watch at most 10-12 of them (many of which are anyway free).
47. BUY TWO GET ONE FREE. One of the best ways to make money… for the mall owners.
48. We shamelessly (and foolishly) seek free financial advice and tips on hot stocks.
49. Buying lavish and luxurious Dream Homes, way bigger than our budgets (that often end up as bad dreams).
50. Our plate is often filled with pizzas, burgers, samosas, chips, colas and such other junk food.
51. We forget that “Trust” is an extremely rare commodity in the financial world.
Welcome to new financial year.
Few thumb rules help in financial decisions-
1) 100 minus our age should be our equity allocation.
2)Minimum 20 times of our yearly income should be our retirement fund.
3) We all should save minimum 30% of our income
4) Cost of our house should not be more than 6 to 8 times of our family income.
5) EMI should not be more than 35% of our gross monthly income.
6) Rate of returns ideally should beat inflation.
7) Rule of 72 & 115……
How many years double or triple our money ?
* 72/Returns= double in yrs
* 115/ returns = triple in yrs.
8) Rule of 70= Future buying power of your money.
*70/Inflation= Number. of yrs.
9) Life cover should be Minimum 10 times of your yearly income.
10) We should keep 3 to 6 months expenses as an emergency fund.
11) we should have minimum Mediclaim of 10 lakhs.
People want shortcuts, that’s why thumb rules find some place.
Wish you all disciplined investing & start investing.
Investing rules – Maximise money per hour of research
-Read books from successful investors.
Stop watching TV News Channels.
Nobody knows the future, so stop asking.
Money is only one of the types of Wealth.
Crazy people of like nature enforce yet conceal each others’ craziness. Find your craziness and tone it to saner proportions.
Mean reversion is an enduring truth of market.
Average common man will buy more in peaks and less in trough.
Excesses in under and over valuation is an enduring theme.
Find High Growth Companies in Low Growth Industries.
Stop Finding companies in High Growth Industries.
Find out the type of investor you are, someone who buys on borrowed tips of one who researches on their own.
Find market leaders in small niches, not #3 or #4 players selling cheap.
Thinking in 3-5 year time frames and not 3-4 months / quarters.
Understand the business, competitive forces and ability to predict future of the business.
Stop thinking solely in PE terms.
Stop playing greater fool game.
Bet on four stocks at a minimum, don’t over concentrate, don’t over diversify.
Think independently. You will outperform the majority.
When there is no company worth investing in the country, go all cash, to go out of the country.
Get rich slow-but-sure, don’t buy lotto, don’t play in casino, don’t gamble, don’t leverage.
Maximise money per hour of research, no point buying into a position requiring active monitoring. The person who makes 100 million from stock market by investing 1 hour per day wins over the person who makes 100 million by investing 6 hours a day. Time is finite and limited. Learning and knowledge is infinite.
Make money and stock market both your slave, make money and forget about them.
Never retire, work incessantly.
Money is means and not an end. Money is a slave to free you from your daily routine.
Show you have the creative potential and do something that nobody has ever done.
Have more creative ambitions in life than earning billions, you are more than your body (thankfully) that needs to be fed on money supplied goods and services alone and very soon you will enter a dimension where money will not work. How soon ? Likely before 2500 weekends.
Gradually drift into a field which you are passionate about, otherwise you are a big disservice to yourself and the society in a profession that is not your passion.
Buy damaged stocks, not beaten down companies.
Learn from own and others’ mistakes.
Explain your picks to yourself with four convincing reasons.
Before your Zero down on your next dream home or investment property, You can refer to this map of the 7 Metro lines that are coming up in Mumbai