Running The Interest Rate Race
January 19, 2011 2 Comments
In inflationary times fixed income instruments may not be such a great idea , especially if the interest rates are just not that high.But there is no way we can avoid these instruments.
1.We need them to add steadiness to our portfolios especially when the stock markets show volatility.
2.We need them to park the money we plan on using within a definite time horizon.
3.We need them again when we have to route a steady stream of payments into another investment and want to simultaneously avoid both the risk of a capital loss due to a short term investment in a mutual fund and the low returns of a liquid fund.
In such a situation we just need to find the highest possible interests which our funds can earn in a given time over and above the rate of inflation while simultaneously reducing the risk of capital loss. Read more of this post
If you are a typical Indian,and have some spare cash,you probably buy gold and that too as gold jewellery.The jewellery might be for personal consumption but it is still going to have to do double duty as a safe,low-risk and liquid investment . So the jewellery is going to be bought with a sharp eye on its resale value.Purity and grammage will be important considerations.Also getting a good price will be a major consideration and there is bound to be a bit of bargaining.
Conversations about charity and philanthropy often make me acutely uncomfortable.There is a bit too much sanctimony, one upmanship and pretence for my tastes.Unfortunately ever since Warren Buffet came up with his “The Giving Pledge” , philanthropy is frequently in the news and such conversations have become increasingly commonplace. I just don’t think much of using social pressure to get individuals to comply.It just offends the Libertarian in me.Moreover,I find it hard to see every act of charity I hear of as completely altruistic and having to go through the motions of pretending otherwise is a drag.Worse , I’m all too aware of my own motivations and social expectations of altruism makes giving so stressful.
In the book ” The Millionaire Mind” the authors Thomas J. Stanley and William D. Danko explain the concept of Prodigous Accumulators of Wealth (PAWs) and Under-Accumulators of Wealth (UAWs). For their age and income levels,the PAWs are people who have accumulated an exceptionally good amount of wealth and the UAWs are those who fail to impress on the wealth front.This is because many people with huge incomes have equally large expenses because of their lifestyle choices.To check if you are a PAW or UAW use the calculator here 



