February 2, 2022
What Is Your Liquidity Ratio (Basics – 3)
It indicates the amount of cash or cash equivalent you need to have in case of emergency to meet monthly household expenses.
Basic Liquidity Ratio = Liquid Assets / Monthly Expenses
Example: Mr. Beeham has Annual Salary = 6L, Annual living expenses = 3L, Car loan EMI = 5,000, CC outstanding = 10,000. Cash in hand = 15,000, SB a/c = 65,000, Liquid fund = 1,00,000, FD = 60,000, Income fund = 50,000.
Liquid Assets = ₹1,80,000 | Monthly Expenses = ₹30,000.
Liquidity Ratio = 6 (Equates to 6 months of household expenses. Minimum requirement is 3).
January 14, 2022
Nomination in Investments (Basics - 2)
A nominee has no rights over the money or assets unless specified under a will—acting as a mere custodian (except for shares).
- Life Insurance: Custodian to receive and distribute claims as per legal heirs or Will.
- Shares: Nominee gets absolute right to shares upon death, superseding the Will as per Companies Act.
- Mutual Funds: Up to 3 nominees can be added at the folio level with defined whole-number percentages totaling 100%.
January 7, 2020
Bottom Line of Investment R-Cube (Basics - 1)
The nominal return after compensating for factors such as Taxation and Inflation is called the real rate of return.
Example: Rs 1 Lakh in FD @ 10% for 1 year. Highest tax bracket (30%) drops nominal return to Rs 7,000. Adjusting for 6% inflation, your actual Real Rate of Return is just Rs 943!
"Bottom line of investment is R-Cube to be positive."
January 23, 2017
How to Save Up to 50% on Your New Vehicle Insurance
Most vehicle buyers ignore insurance discounts. When you sell your old vehicle, ensure ownership transfer and obtain a No Claim Bonus (NCB) Certificate from your existing insurer.
Forward the NCB certificate to your new vehicle dealer to secure up to 50% discount on your new vehicle insurance policy.
September 9, 2015
Gold: The Illusion of Safe Return
In India, people believe gold never depreciates, but historical data shows periods of zero returns or heavy corrections globally (e.g., taking 28 years from 1980 to break even globally).
Gold prices reflect global fear/anxiety, and currency depreciation in INR often masks global asset corrections. “Everything that goes up has to come down one day.”
April 14, 2014
Your Friend and Enemy in Investment
Inflation (Enemy): Erodes purchasing power. Leaving ₹1,000 idle in a safe for 10 years means you'll need ₹1,791 (at 6% inflation) to buy the same commodities later. Always invest to beat inflation.
Power of Compounding (Friend): Adding earnings back to the principal. Starting early lets your money work exponentially over time.
"Simple things take lots of courage and patience to practice."