Readers Please Be Aware

wealthymattersThis is a post I feel compelled to do after an unfortunate incident yesterday night.I thought I’d sing like the blackbird and make my boundaries clear.Link

First off,wealth building is a primary motive for me.Link

Secondly I believe that want and poverty, like suffering are optional and totally unnecessary.I think Dhirubhai had it right when he said:“If you’re born poor its not your fault but if you die poor its your fault”.Think!our mental abilities ,which we are born with, are not as far apart as our wealth positions.Also some of the world’s wealthiest people are self made.

Thirdly I believe that people can learn to be wealthy.Link

I blog to maintain a personal record of stuff I find useful in wealth building.Its also my attempt to leave a record for my family,long after I am gone in much the same way as I find the old business papers of my ancestors illuminating.I choose to make the blog public as I’d love for others to benefit from my efforts in any way possible.I believe that wealth is not a zero-sum game.Wealthy people,simply by being,help increase the wealth of people round them. Read more of this post

5 Financial Homilies To Reconsider

wealthymatters.comFinancial advice always needs to be nuanced.What is good for one person in a certain situation many not be so good for another in a different situation. Unfortunately people are always looking for simple advice and rules of thumb.If we over-generalize on generally sane financial advice we can come to a sorry pass.

Here are some common homilies that need some reconsideration:

1. A house is always a good investment:A house is a tangible investment that you could potentially live in.You could rent it out and make some money.Maybe it will help you save tax.Maybe you could invest in one to save for retirement.Generally saving for a house to live in is good in that it gets a family to start saving.But at the time of buying a house it’s important to remember that you are buying a house and not a home.So do not go sentimental and over pay.Buying a house requires a deal of legwork and hard-headed thinking.Overpay and you will have to worry about the fluctuation in market prices.Try to buy an encumbrance-free house at a discount.It adds a greater measure of safety to your investment.Buy when the markets are down to safeguard yourself.Next how you pay for the house makes a big difference.Try to put down a large payment to save on the total interest you will pay.Shop around for a good loan if you need one.Read the fine print.Check if there is a penalty on prepayment.Lower rates matter.Also check if the interest is calculated on a declining balance.Check for hidden costs starting from the processing fee,the lawyer’s fee and structural engineer’s fee and insurance.When you consider the EMI you want to pay, don’t be too optimistic.Pay increments and bonuses might not come on time.Remember that over longer periods something is bound to go wrong.It’s the way of life.Also if you pay too much of your income into house payments you will not have any money left over to diversify into other assets and derisk your investments. Read more of this post

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