Another mail from the iconic moron :D
1 view
Skip to first unread message
mohanish chopra
Jan 29, 2013, 1:57:08 AM1/29/13
to adwit...@gmail.com, devvrat...@gmail.com, devikam...@gmail.com, mishra....@gmail.com, natasha...@gmail.com, me.a...@gmail.com, aakash...@gmail.com, dheeraj...@gmail.com, abi....@gmail.com, paul....@gmail.com, kunalb...@gmail.com, shubhang...@gmail.com, anush...@gmail.com, pachisi...@gmail.com, snb.c...@gmail.com, alwayslu...@gmail.com, prakhar...@gmail.com, bhushan...@gmail.com, kanupriya sharma, adityad...@gmail.com, padmesh....@gmail.com, dhruvbh...@gmail.com, email...@gmail.com, parakh...@gmail.com, gagandeep.s...@gmail.com, gayatrip...@gmail.com, iq.h...@gmail.com, saket...@gmail.com, kulkarn...@gmail.com, anoopr...@gmail.com, sanam.l...@gmail.com, walnut...@gmail.com, sula...@gmail.com, shahb...@gmail.com, bahld...@gmail.com, er.akash...@gmail.com, hardee...@gmail.com, nagpal...@gmail.com, parag...@gmail.com, abhishek_...@yahoo.co.in, bach...@gmail.com, coolhone...@gmail.com, meghaonli...@gmail.com, anugeet...@gmail.com, malhotr...@gmail.com, kissla...@gmail.com, khoslaab...@gmail.com, jatin....@gmail.com, pankajv...@gmail.com, bahar....@gmail.com, siddhart...@gmail.com, jain.pu...@gmail.com, kunalha...@yahoo.in, mohit....@gmail.com, neelam.ne...@gmail.com, deepak...@gmail.com, mohit.t...@gmail.com, honey.un...@gmail.com, sagar.bh...@gmail.com, navdeep...@gmail.com, club.e...@gmail.com, ibs-se...@googlegroups.com, ibs-section-...@googlegroups.com, ibs-sect...@googlegroups.com, tc_...@googlegroups.com, transport...@gmail.com
Dear Friends,
I hope you all are doing good, haven't heard from most of you for months now. Would love to know how life is unfolding itself before each one of you in the most transitionary of times we are facing.
Recently i found this article on internet and thought of sharing it. It's a small article on investment and savings, which i strongly feel should be one of the focus areas for all of us right now.
The thing i really appreciate about the article is that it is far away from big baloney terms of C. Accountancy and stock markets and has been written assuming that maybe a few of the readers might be just metric pass. Do read. Hope we all get rich soon :D
1. Magic of Compounding: In 1626, Peter Minuit of Netherlands bought
the island of Manhattan from the Lenape people for a basket of clothes, beads and other stuff that would have been worth just $24 then. Now, you might think that the native Americans were robbed. Actually, if they were able to invest that $24 in a 8% bond, that account would be worth $26 trillion in 2012 - enough to buy entire America. That is the magic of compounding. Your money keeps multiplying the longer you save. If compound interest is the only thing you remember from your highschool math, you will survive.
2. There is no Return without Risk: Your return in any investment is always proportional to the risk you take. There is no such thing as a low-risk, high-return investment. If somebody says that, run as fast as you can from them.
3. There are 3 main classes of investment - Stocks (owning a part of a company), Bonds (loaning a company money) and Commodities (holding the rights to a physical good). Unless you are a smart trader, stick to only the first 2 classes of investment. Also, when someone tries to sell you a Forex account don't walk, run. (Unlike stocks, which are quite strongly regulated in favor of investors thanks to the SEC, forex has very weak protection for common traders as CFTC is usually very non-aggressive in going after scammy brokers).
4. Own stocks when you are young and own bonds when you are old:Stocks are high-risk, high-return investment and is suitable for an investor who doesn't need the money in the short term. As you age, you must slowly move your money from stocks to bonds. Stocks are ALWAYS riskier than bonds given the fundamental reality - bondholders ALWAYS get their money before stockholders in any liquidation. Here is the quantitative data to back that up.
5. You can never be too young to save. Save & invest as early in life as possible. If you have kids, make them learn investing skills. It should be like learning to walk, swim or drive.
6. Inflation kills. Assuming an annual inflation of 6% (over long term), in 40 years you need $11 for every $1 you have now, to have a comparable lifestyle.
7. Diversify enough. Always spread your money in 5-7 different types of investments (bank deposits, tech stocks, broad market index, bonds, etc.)
8. The Rule of 72. If you have put your money in an investment earning 9%, how do you calculate when your investment doubles without a calculator? There is a simple rule of thumb. Just divide 72 by your interest rate and that gives you the number of years it takes to double your investment. Thus, if your investment gives 9%, you will double in 8 years (72/9), if you investment gives 7%, you will double in 10 years and so on.
2. There is no Return without Risk: Your return in any investment is always proportional to the risk you take. There is no such thing as a low-risk, high-return investment. If somebody says that, run as fast as you can from them.
3. There are 3 main classes of investment - Stocks (owning a part of a company), Bonds (loaning a company money) and Commodities (holding the rights to a physical good). Unless you are a smart trader, stick to only the first 2 classes of investment. Also, when someone tries to sell you a Forex account don't walk, run. (Unlike stocks, which are quite strongly regulated in favor of investors thanks to the SEC, forex has very weak protection for common traders as CFTC is usually very non-aggressive in going after scammy brokers).
4. Own stocks when you are young and own bonds when you are old:Stocks are high-risk, high-return investment and is suitable for an investor who doesn't need the money in the short term. As you age, you must slowly move your money from stocks to bonds. Stocks are ALWAYS riskier than bonds given the fundamental reality - bondholders ALWAYS get their money before stockholders in any liquidation. Here is the quantitative data to back that up.
5. You can never be too young to save. Save & invest as early in life as possible. If you have kids, make them learn investing skills. It should be like learning to walk, swim or drive.
6. Inflation kills. Assuming an annual inflation of 6% (over long term), in 40 years you need $11 for every $1 you have now, to have a comparable lifestyle.
7. Diversify enough. Always spread your money in 5-7 different types of investments (bank deposits, tech stocks, broad market index, bonds, etc.)
8. The Rule of 72. If you have put your money in an investment earning 9%, how do you calculate when your investment doubles without a calculator? There is a simple rule of thumb. Just divide 72 by your interest rate and that gives you the number of years it takes to double your investment. Thus, if your investment gives 9%, you will double in 8 years (72/9), if you investment gives 7%, you will double in 10 years and so on.
Reply all
Reply to author
Forward
0 new messages