Keerthika Singaravel

Life Lessons From the Very Wealthy

August 22, 2011 1 Comment

wealthymatters.com 1. Having money is better than not having money.

Money may not buy you happiness, but it buys many other important things. Like financial security, excellent health care, education, travel and a comfortable retirement.

2. Don’t become “cash rich” and “time poor.”

Devoting all one’s waking hours to making money is a problem that especially plagues professionals. Lawyers, doctors, bankers and accountants can get so caught up in the competitive nature of their jobs that they lose touch with their family. Any semblance of a normal personal life disappears, and a very unhealthy balance between work and home develops.

Work is the process of exchanging time for money.If you are working so much to become rich but you ignore your spouse and miss seeing your kids grow up, you are actually poorer than you realize. Read more of this post

Filed under Theory, Tool Kit Tagged with cash rich time poor, Goals, Lessons from the Wealthy, lifestyle leverage, luck, planning, postaday2011, RandomBlog2011, vision, work

Don’t Anticipate the Markets – Rakesh Jhunjhunwala

August 21, 2011 3 Comments

wealthymatters.com For a while now I have been expecting the stock markets to tank and keeping aside a lot of cash to go bottom fishing. I thought that the S&P downgrade of the US would be the trigger event.However as things panned out,at the time the markets didn’t slide as much as I expected.But in the time since then my expectations have come to pass.Meanwhile I’ve been assailed by doubts so often during this time that I’ve considered just rushing in and buying stocks for fear that I might not get a lower price.The video below also added to my doubts at the time but it has also given me a way to deal with doubts for all time.I just have to remember“Markets are going to do what they are going to do….In uncertain conditions you can’t really anticipate markets and valuations have no base………so let’s not anticipate markets,let’s watch them.” Read more of this post

Filed under Paper Assets Tagged with Don't Anticipate Markets, postaday2011, Rakesh Jhunjhunwala, RandomBlog2011

Bill Gross and Frogs

August 20, 2011 4 Comments

wealthymatters.com Using the metaphor of frogs Bill Gross explains Financial Repression and the ways of dealing with it.Of course he speaks of the situation in the US but there is no reason why investors in other countries whose governments are struggling with debt can’t learn from him.All said and done not for nothing he is the Bond King!

To quote him “Put a frog in a kettle of boiling water and he’ll jump out faster and further than any of those blue ribbon winners at the Calaveras County jumping frog contest.Put him in a pot at room temperature, however, slowly turn up the temperature to boiling, and you’ll have frog legs for dinner. This latter, more unfortunate toad temporarily adapted to his external environment, which seemed like a practical thing to do, until – well, until he reached 212 degrees at which point he was cooked.”Financial repression is similar to slowly turning up the heat on poor froggy/the bond holder/saver. And the boiling point is when the nominal returns on bonds turns negative. Read more of this post

Filed under Paper Assets, Theory Tagged with Bill Gross Frog Story, bonds, cheap bonds, debt, Financial Repression, nominal return, postaday2011, RandomBlog2011, savers, transfer of wealth

Bill Gross – The New Normal

August 20, 2011 2 Comments

wealthymatters.com

Normally whenever I hear some version of why something is different this time over I become a skeptic and start tuning out the person.However I am drawn to the idea of ‘The New Normal’ propounded by the Bond King-Bill Gross of PIMCO and Mohamed El-Erian his Co CIO.This is because they are not so much telling us that economic cycles are bunk but that we are blind to the larger economic cycles.

Bill’s message is anything but easily palatable for a lot of people.It is also true that his timing has been wrong in the past. I won’t go so far as to say every minor detail of what he describes as the ‘New Normal’ will come true but I believe he has gotten the big picture right.I fear that we are in for an extended period when equities might not on an average give the high rates of returns they did in the recent past.Bonds might outperform stocks in this period and investors will have to re-examine their beliefs.Assumed rates of return on various long term savings might have to be revised. The most successful investors during this period will probably be those with common sense and importantly the powers of intuition, observation, and the willingness to accept uncertain outcomes. And all the talk of countries like India escaping the international turmoil unscathed will be wishful thinking. Read more of this post

Filed under Paper Assets, Theory Tagged with Bill Gross Bond King, low returns, Mohamed El-Erian, New Normal, PIMCO, postaday2011, RandomBlog2011

Burgernomics

August 5, 2011 2 Comments

wealthymatters.com

After 25 years, India has recently made it to the Big Mac Index.The Big Mac Index is a “lighthearted” guide published by’ The Economist’ to compare the currencies of different countries. It does so by looking at the price of a Big Mac burger, which is available in more than 100 countries with an identical recipe. Thus, a Big Mac in the U.S. costs $4.07 whereas in China it costs $2.27, using nominal exchange rates. From this, the index suggests that the Chinese yuan is 44% undervalued versus the U.S. dollar, otherwise the price of a Big Mac would be the same. Read more of this post