wealthymatters

How Well Would You Have Done if You Had All Your Savings In Gold?

December 27, 2012 3 Comments

wealthymatters.com Today financial planners and daily wage earners speak of ” investing” in gold.In fact,given the dream run of gold in the last decade,most people can’t see past gold.Never mind that between last Diwali and this one there was no substantial increase in the price of the metal and that there was a fall in price in between and then it struggled to rise for a while.

There is no denying that in the dark days after the stock crash of 2008 and the poor economy thereafter, gold provided good comfort for all of us who worried about our financial health.And the fact that gold price rose fantastically in uncertain times was the icing on the cake.

Also gold has helped us hedge against inflation.Here is the link to an older post.

Gold also does superbly well when the equity markets and debt markets are giving negative real returns.

So should you just have all your savings and investments in gold?Far from it!Aside from the wealth tax you might be forced to pay every year on an asset that will give no returns till it is sold, at which point it might attract capital gains tax,keeping your money in gold over the last three decades wouldn’t have given you stellar returns.Check out the chart here:Long Term Returns from Gold Vs SENSEX While gold keeps up with inflation,just buying and holding it for long is unlikely to make you rich any time soon.So be certain to enjoy the touch and feel and beauty of your gold.

Filed under Paper Assets, Precious Metals, Tool Kit Tagged with Capital Gains Tax, financial planners, Gold Inflation Hedge, Historical Gold and Sensex returns over 30 years, Inflation, Investing In Gold, keeping your savings in gold, negative real returns, postaday, wealth tax

So How Well Would You Have Done With FDs Only?

December 26, 2012 2 Comments

wealthymatters.com Every time the stock markets tank or or equity returns look less than appealing,there is a tendency to want to return to the stable and predictable FDs. Why lose capital on the stock market or risk one’s money for lower rates than FDs?Why not just invest in FD’s and avoid the hassles of investing in the stock market?

In fact,what would have happened to you if you invested exclusively in FDs over the last thirty years?Ever wondered about that?If so,this link will give you your answer:Long Term Returns From FDs

Of course by locking in the higher rates ,when they appear, for as long as possible, and taking care to avoid FDs when they trail inflation rates for prolonged periods, you will be able to do a little better.Also these rates are those of the nationalized banks.You could earn a bit more by opting for smaller private banks and scheduled co-operative banks.You would still enjoy the same deposit insurance.

However the ravages of inflation should give you a pause before you decide on an all FD approach. Equity at worse is a necessary evil.

Filed under Paper Assets, Tool Kit Tagged with equity returns, Fd interest rate, inflation rates, investing in FDs, postaday, SENSEX returns

Why Get Yourself A Few Credit Cards?

December 26, 2012 2 Comments

wealthymatters,com Here are the reasons to get a credit card:

1.There are some businesses which will accept payment by no other means.And asking to borrow someone else ‘s card is not always an option.

2.There are some societies where they are so ubiquitous that if you don’t have one you raise suspicion about your identity, character, creditworthiness and ability to pay for your purchases.

3.Stupid as it is,there are a lot of places where you are judged by your cards ,their exclusivity and their limits.This is a lot like being judged by your clothes,your accessories,the vehicle you drive and the accent you sport.A FU attitude is not always an option…… conversely, if you are feeling the need for a bit of power dressing,your cards will again come in handy. Read more of this post

Filed under Paper Assets Tagged with air miles, building a credit history, buyer protection, cashbacks, credit cards, discounts, free credit, free money, internet purchases, online purchases, postaday, rewards program, statement date

The Parallels Between Business And Poker

December 25, 2012 Leave a comment

I had quickly tripled my starting stack in a cash game but, just as quickly lost it on a series of bad beats; bad calls (by them, not me); and bad luck.

When you’re running hot, you feel invincible.

When you’re running cold, nothing that you do turns out right.

… and, your poker bankroll quickly slips away.

Well, it’s pretty much the same thing in business and personal finance:

Your investments and/or businesses are ‘on fire’ … the market’s running hot, and – if you’re smart – you cash out at the peak, building up quite a bankroll.

Maybe you even reach your Number.

What should you do then? STOP and smell the roses!

But, the trouble is, greed and the adrenalin kicks in … you believe that you’ve got the Midas Touch. And, you push for the next project.

… and, that’s the one that gets you.

You know, market downturn, bad luck, bad advisers, etc., etc. sob, sob, sob.

-From 7million7years.com

Filed under Theory Tagged with feeling invincible, Midas Touch, postaday, similarities between business and poker

Historic Sensex Ratios

December 25, 2012 Leave a comment

wealthymatters,com Memory has its limitations.If ever you want to step back and go over historic P/Es,P/B and Dividend Yields of the SENSEX to get a better grip on things, here are the links: