Hi all beautiful and blessed people,
Navratri Festival: Day 6 – Sashti – Yellow
Greetings to you on Mahasasthi,
Day of the Yellow, one that reminds me of the Yellow Metal aka Gold, be it ETF, Bars or Jewelry, is closer to every Indian since ages. Displaying Gold has huge significance to our mind in terms of value of the person showing off.
If wealth is valuable, how do we measure the value of wealth we have accumulated?
We often come across monikers like ROI, YTM, Mark to Market, High Net Worth, Capital Gain/Loss, Indexation, Inflationary Cost and Taxation. All these are related to “Your Wealth’s Appreciation or its Depreciation”. Now you need to ask these questions.
1. What is my net worth?
2. How do I calculate my real wealth?
3. How will I monitor what is pulling down my growth?
Previous 5 write ups were all about creating wealth; today we will address what makes wealth float above the water and shine like Yellow.
Law of Averages is the most important factor. Which means if you make equal investment in 5 products, then what will be your collective return?
FD – 5.5% , PF – 6.9%, LIC – 4%, Saving Account – 2% and Mutual Funds – 15%.
Your Average Return is = 6.68%
Your Post Tax Real Return is = 4.6%
If you deduct the 5% Inflation then you will end up in negative.
Monetary Policy of RBI and Indian Economy has huge impacts on the Guaranteed Return we earn. Hence that is not in our control. To negate this very low return on your parked amount, you must take professional help.
It is advisable to use an excel sheet to put all your data and find out what is happening to your hard earned money?
This exercise is more than what we all think. It will be an eye opener for you. If you put your Loans, Term Plan and Mediclaim expenses also in to this chart, you will immediately become very serious about the Process of Wealth Building and also become mindful about the Actual Growth of your Wealth.
Mutual Investments are Subject to Market Risk.
FD, Post Office & PF are Subject to Interest Rate Risk.
Wealth is Subject to Ignorance Risk.
On the lighter note, the first two I can manage, the last one you have to.
Now get down to jotting all the data you have and send me to look at what is your real growth. Wherever you find the ROI is not as per your expectation, let’s rework on them to enhance its performance.
“Price is what you Pay, Value is what you get”. That is what the Wealthiest Man on Earth said.
Founder & CMD
Trackfinder Financial Consultancy +919969828224, +919869927212.