Musings of a (Financially) Illiterate Father
Page 17
The sceptics may scoff at my attempt as I am not a ‘finance person,’ but tell me how many ‘finance persons’ meaning the stockbrokers (there are 7,831 stockbrokers registered with SEBI, employing lakhs of employees, ostensibly all financially literate,) employees of banking, NBFI sectors and AMC of mutual funds, insurance, pension fund or hedge fund sectors et al are contained in the list of India’s richest? Last I saw there were none in top 1000 or indeed 10,000 also.
The point I am trying to get at is that a quest for knowledge in any field and attendant reading or learning will give adequate tools to any common person to attain mastery in that particular field. I have done it through my efforts and now wish to share the same as a guide for the youngsters who may like to build upon, modify, delete or add to these musings, in order to create their own Shangri la of financial success.
I wish financial peace and wisdom to all my brothers/sisters and children.
“Personal Finance, like most important aspects of life, is a never-ending quest. The competent investor never stops learning137.”
Essential Reading Resources
SERIAL BOOK AUTHOR
1 The Total Money Makeover Dave Ramsey
2 Money-Master the Game Tony Robbins
3 Rich Dad Poor Dad Robert Kiyosaki
4 The Richest Man in Babylon George S. Clason
5 Think and Grow Rich Napolean Hill
6 The Automatic Millionaire David Bach
7 The Millionaire Next Door Thomas J Stanley & William D Danko
8 All Your Worth Elizabeth Warren & Amelia Warren Tyagi
9 Retire Young Retire Rich Robert Kiyosaki
10 How to Make Money in stocks William J O’Neil
11 I Will Teach You to be Rich Ramit Sethi
12 The Intelligent Investor Benjamin Graham
13 The Little Book on Common Sense Investing John C Bogle
14 Common Sense on Mutual Funds John C Bogle
15 13 Steps to Bloody Good Wealth Ashwin Sanghi & Sunil Dalal
16 The Four Pillars of Investing William J Bernstein
17 The 12 percent Solution David Alan Carter
18 A Random walk Down Wall Street Burton G Malkiel
19 Secrets of Millionaire Mind T Harv Eker
20 What Every Indian Should Know Before Investing Vinod Pottayil
21 The Legacy Journey Dave Ramsey
22 The Compound Effect Darren Hardy
23 The One Minute Millionaire Mark Victor Hansen
24 7 Habits of Highly Effective People Steven Covey
25 The Alchemist Paulo Coelho
26 The Unshakeable Tony Robbins
Notes
1 Clason George: The Richest Man in Babylon.
2 Wikipedia: accessed on 31 Mar 2018.
3 For all the calculations in the book, online calculators from www.thecalculatorsite.com have been used.
4 Clason George: The Richest Man in Babylon.
5 Robbins Tony: Money- Master the Game.
6 Robbins Tony: Money-Master the Game.
7 You may also like to study the “Li Kashing model” which is a 30:20:15:10:25 model. It will improve your financial IQ.
8 Clason George: The Richest Man in Babylon.
9 Warren Elizabeth and Tyagi Amelia Warren: All your Worth.
10 http://indianexpress.com/article/insurance/the-biggest-flash-sale-in-life-insurance-happens-when-you-are-in-your-20s/: accessed on 14 Apr 2018.
11 Ramsey Dave: The Total Money Makeover.
12 The Times of India, 23 Apr 2018.
13 http://www.financialexpress.com/money/insurance/health-insurance-10-tips-to-keep-in-mind-before-buying/66223/: accessed on 14 Apr 2018.
14 http://www.financialexpress.com/money/insurance/health-insurance-10-tips-to-keep-in-mind-before-buying/66223/: accessed on 14 Apr 2018.
15 The present bias refers to the tendency of people to give stronger weight to payoffs that are closer to the present time when considering trade-offs between two future moments-https://www.behavioraleconomics.com/mini-encyclopedia-of-be/present-bias/: accessed on 15 Apr 2018.
16 http://optionsguru.org/2016/06/11/who-wants-to-get-the-heck-out-of-the-rat-race-read-on/: accessed on 15 Apr 2018.
17 The Holy Bible- Proverb 22:7.
18 The Economic Times Wealth, Nov 27-Dec 03, 2017.
19 The Economic Times Wealth, Nov 27-Dec 03, 2017
20 Ramsey Dave: The Seven baby steps.
21 Stanley Thomas and Danko William: The Millionaire next Door.
22 Turner Alan Scott: The 99 Minute Millionaire.
23 Eker T. Harv: Secrets of the Millionaire Mind.
24 Kiyosaki Robert: Retire Rich.
25 Suppose a company with a stock price of ?100 declares a dividend of ?10 per share. In that case, the dividend yield of the stock will be 10/100*100 = 10 percent-The Economic Times.
26 Paulson Matthew: The Ten Year Turnaround.
27 The Times of India, 09 Apr 2018.
28 Graham Benjamin: The Intelligent Investor.
29 https://economictimes.indiatimes.com/markets/expert-view/what-the-pe-ratio-tells-about-market-direction/articleshow/51722191.cms: accessed on 10 Apr 2018.
30 https://www.bemoneyaware.com/blog/transaction-costs-buying-selling-shares/: accessed on 10 Apr 2018.
31 Malkiel Burton: A Random Walk down Wall Street.
32 https://wisewealthadvisors.com/2016/04/02/37-years-of-performance-sensex-fixed-deposits-gold-and-silver/: accessed on 07 Apr 2018.
33 https://wisewealthadvisors.com/2016/04/02/37-years-of-performance-sensex-fixed-deposits-gold-and-silver/: accessed on 07 Apr 2018.
34 Malkiel Burton: A Random Walk down Wall Street.
35 Alpha, often considered the active return on an investment, gauges the performance of an investment against a market index or benchmark which is considered to represent the market movement as a whole. The excess return of an investment relative to the return of a benchmark index is the investment’s alpha: Investopedia.
36 Malkiel Burton: A Random Walk down Wall Street
37 Bernstein William: The Four Pillars of Investing.
38 Sanghi Ashwin and Dalal Sunil: 13 Steps to Bloody Good Wealth.
39 IFA.tv - The Documentary Film: Index Funds: The 12-Step Recovery Program for Active Investors.
40 Bogle John: The Little Book of Common Sense Investing.
41 Bernstein William: The Four Pillars of Investing.
42 http://www.nbcnews.com/id/37740147/ns/business-stocks_and_economy/t/historic-bear-markets/#.Wt7knNRubMw, accessed on 24 Apr 2018.
43 Ibid.
44 Bernstein William: The Four Pillars of Investing.
45 Robbins Tony: Money-Master the Game.
46 Stanley Thomas and Danko William: The Millionaire next door.
47 William J Bernstein: The Four Pillars of Investing.
48 Stanley Thomas and Danko William: The Millionaire next Door.
49 Kiyosaki Robert: Rich dad Poor Dad.
50 economictimes.com: accessed on 26 Jan 2018.
51 Malkiel Burton: A Random Walk down Wall Street.
52 http://www.thehindu.com/business/markets/is-india-losing-its-gold-fetish/article17898033.ece: accessed on 24 Mar 2018.
53 https://economictimes.indiatimes.com/wealth/invest/why-gold-is-not-a-good-investment/articleshow/59296448: accessed on 24 Mar 2018.
54 Malkiel Burton: A Random Walk down Wall Street.
55 Malkiel Burton: A Random Walk down Wall Street.
56 Bernstein William: The Four Pillars of Investing.
57 Robbins Tony: Money- Master the Game.
58 Swedroe Larry: Wise Investing made Simple.
59 Value Research: February 2018.
60 Robbins Tony: Money-Master the Game.
61 Robbins Tony: Money – Master the Game.
62 https://www.forbes.com/2011/04/04/real-cost-mutual-fund-taxes-fees-retirement-bernicke.html#17ea5c463244.
63 Robbins Tony: Money – Master the Game.
64 Burton Malkiel:
A Random Walk down Wall Street.
65 Bernstein William: The Four Pillars of Investing.
66 ibid.
67 Bernstein William: The Four Pillars of Investing.
68 Stanley Thomas and Danko William: The Millionaire next Door.
69 Bernstein William: The Four Pillars of Investing.
70 https://www.investopedia.com/terms/e/equalweight.asp: accessed on 22 Mar 2018.
71 https://www.valueresearchonline.com/story/h2_storyView.asp?str=33939: accessed on 13 Mar 2018.
72 Robbins Tony: Money- Master the Game.
73 Outlook Money, December 2017.
74 https://www.investopedia.com/articles/mutualfund/07/etf_downside.asp: accessed on 14 Mar 2018.
75 https://www.investopedia.com/terms/s/smart-beta-etf.asp: accessed on 22 Mar 2018.
76 Robbins Tony: Money- Master the Game.
77 Bogle John: Common Sense on Mutual Funds.
78 https://news.morningstar.com/classroom2/course.asp?docId=2943&page=2&CN=COM: accessed on 19 Mar 2018.
79 https://www.valueresearchonline.com/fundrating.asp: accessed on 19 Mar 2018.
80 https://www.youtube.com/watch?v=CXgpULcRHDA: accessed on 19 Mar 2018.
81 Bogle John: Common Sense on Mutual Funds.
82 Robbins Tony: Money- Master the Game.
83 Mutual Fund Insight, November 2017.
84 Ibid.
85 Malkiel Burton: A Random Walk down Wall Street.
86 Bogle John: Common Sense on Mutual Funds.
87 https://www.youtube.com/watch?v=mi50nQtk5h8: accessed on 20 Mar 2018.
88 SEBI Circular dated 06 October 2017.
89 Mutual Fund Insight, Apr 2018.
90 SEBI Circular dated 06 October 2017.
91 https://economictimes.indiatimes.com/definition/arbitrage-fund: accessed on 20 Mar 2018.
92 https://www.valueresearchonline.com/story/h2_storyview.asp?str=4020 : accessed on 20 Mar 2018.
93 Bernstein William: Four Pillars of Investing.
94 Mutual Fund Insight, Apr 2018.
95 An essay by Russel H Conwell, 1890.
96 An essay by Russel H Conwell, 1890.
97 https://economictimes.indiatimes.com/markets/stocks/news/wary-of-ltcg-tax-on-equity-funds-try-international-schemes/articleshow/62765203.cms: accessed on 15 Apr 2018.
98 https://economictimes.indiatimes.com/markets/stocks/news/wary-of-ltcg-tax-on-equity-funds-try-international-schemes/articleshow/62765203.cms: accessed on 15 Apr 2018.
99 The Economic Times Wealth, Oct 23-29, 2017.
100 IFA.tv - The Documentary Film: Index Funds: The 12-Step Recovery Program for Active Investors.
101 Bernstein William: The Four Pillars of Investing.
102 The Economic Times Wealth, Oct 30-Nov 05, 2017.
103 Bernstein William: The Four Pillars of Investing.
104 Graham Benjamin: The Intelligent Investor.
105 https://timesofindia.indiatimes.com/articles/Understanding-FMP-and-its-benefits/articleshowhsbc/46700531.cms: accessed on 29 Mar 2018.
106 The Times of India, 19 Mar 2018.
107 Bernstein William: The Four Pillars of Investing.
108 https://www.valueresearchonline.com/story/h2_storyview.asp?str=200489: accessed on 31 Mar 2018.
109 SEBI Circular dated 06 Oct 2017.
110 Mutual Fund Insight, Apr 2018.
111 Mutual Fund Insight, Apr 2018.
112 https://www.valueresearchonline.com/story/h2_storyView.asp?str=34715: accessed on 31 Mar 2018.
113 Mutual Fund Insight, Jun 2017: Research covering period from 1992 to 2017.
114 IFA.tv - The Documentary Film: Index Funds: The 12-Step Recovery Program for Active Investors.
115 Robbins Tony: Money-Master the Game.
116 Turner Alan Scott: 99 Minute Millionaire.
117 Robbins Tony: Money-Master the Game.
118 SEBI Circular 16 Oct 2017.
119 Bogle John: The Little Book of Common Sense Investing.
120 Sanghi Ashwin and Dalal Sunil: 13 Steps to Bloody Good Wealth.
121 https://www.wealthenabler.in/knowledge-center/financial-freedom-demystified/annualized-returns-vs-cagr/: accessed on 21 Mar 2018.
122 Bernstein William: The Four Pillars of Investing.
123 Sanghi Ashwin and Dalal Sunil: 13 Steps to Bloody Good Wealth.
124 The Economic Times, 30 May 2016.
125 Ramsey Dave: The Total Money Makeover.
126 Times of India, 02 Feb 2018.
127 O’Brien Derek, the Times of India-24 Apr 2018.
128 https://www.rupeeiq.com/content/nps-doesnt-have-expense-ratio-but-has-charges-a-primer: accessed on 04 Apr 2018.
129 Robbins Tony: Money –Master the game.
130 The Economic Times Wealth, Dec 04-10, 2017.
131 https://www.investopedia.com/terms/a/annuity.asp: accessed on 05 Apr 2018.
132 Robbins Tony: Money-master the game.
133 https://www.thecalculatorsite.com/finance/calculators/compoundinterestcalculator.php. Annual Compounding used for the calculations.
134 http://content.time.com/time/magazine/article/0,9171,2019628,00.html: accessed on 11 Apr 2018.
135 Kiyosaki Robert: Rich Dad Poor Dad.
136 Eker T. Harve: Secrets of the Millionaire Mind.
137 Bernstein William: The Four Pillars of Investing.
About the Author
Anand Saxena, hugely popular blogger (andysfinancial.blogspot.com), holds triple Masters Degrees to his credit-Master of Science, Master of Philosophy and Master of Management Studies in which he majored with Financial Management. He is currently pursuing his PhD. He is also a Helicopter pilot with vast flying experience.
The author feels passionately about the lack of institutionalized financial education to the children in India which results in their long term financial doom despite handsome pay packages. He has extensively read on this subject building upon his core knowledge. He has distilled these financial nuggets in the form of short Musings which a 20–22 year old youth can understand, internalize and apply in real life.
He has traversed this journey of financial wisdom and peace with his protagonists-Anshreya and HoneyCool, whose life journey from getting employed to retirement has been delightfully captured in the book.