उच्चतम रिटर्न देने वाली संपत्तियों में निवेश करने से भी आप अमीर नहीं बनेंगे, जानना चाहते हैं क्यों?

लोग अक्सर मुझसे पूछते हैं कि:

• सबसे अच्छी म्यूचुअल फंड स्कीम कौन सी है जहां मुझे सबसे ज्यादा रिटर्न मिल सकता है
• ऐसे कौन से निवेश विकल्प हैं जहां मुझे कम समय में अधिकतम रिटर्न मिल सकता है?

 

खैर, रिटर्न का पीछा करना एक फंड मैनेजर का काम है,

 

एक वित्तीय विशेषज्ञ का काम उच्चतम रिटर्न का पीछा करना नहीं है, बल्कि:

 

1. आपको आपकी भविष्य की वित्तीय जरूरतों के बारे में जागरूक करना

2. आपको सही वित्तीय निर्णय लेने में मदद करना

3. जब बाजार में भारी गिरावट हो तो घबराएं नहीं, इसका मार्गदर्शन करना

4. जब बाजार तेजी से बढ़े तो आपको अति उत्साहित न होने के लिए सावधान करना

5. आपका मार्गदर्शन करना कि आप भावनाओं के आधार पर निर्णय न लें बल्कि ठोस तर्क के आधार पर निर्णय लें, खासकर तब जब बाजार अजीब तरीके से व्यवहार कर रहा हो

6. आपको अपने वित्तीय लक्ष्यों पर न कि कुछ त्वरित पैसों पर ध्यान केंद्रित करने के लिए प्रेरित करना,

7. आपको अधिक बचत करने और समझदारी से निवेश करने के लिए प्रेरित करना

8. आपको सावधान करना कि जल्दी पैसा कमाने के लिए शॉर्टकट न अपनाएं

9. आपको भारी रिटर्न की पेशकश करने वाले घोटालों और धोखाधड़ी वाली स्कीमों से सावधान करना

10. आपको विभिन्न जोखिमों से अवगत कराना और उनसे आपकी रक्षा करना

11. आपको अपने खर्चों के बारे में जागरूक कराना और उन्हें कैसे प्रबंधित करना है

12. निवेश में चक्रवृद्धि, निरंतरता और अनुशासन के लाभों से आपको अवगत कराना

13. उचित परिसंपत्ति आवंटन करना

14. आपातकालीन निधि, जोखिम प्रबंधन और संपत्ति योजना के संबंध में आपका मार्गदर्शन करना

15. आपको अच्छे और बुरे ऋणों के बारे में मार्गदर्शन करना और ऋण जाल से कैसे बचें/बाहर आएं

16. आपको उन निवेश विकल्पों का सुझाव देना जो आपकी उम्र, जोखिम प्रोफ़ाइल, निवेश क्षितिज और वित्तीय लक्ष्यों के आधार पर उपयुक्त हों।

17. आपके वित्तीय व्यवहार का मार्गदर्शन करना

18. और अंत में, आपको अपने वित्तीय लक्ष्यों तक सुचारू रूप से पहुंचने में मदद करना

 

महाभारत में सर्वश्रेष्ठ धनुर्धर अर्जुन को भगवान कृष्ण की सलाह की आवश्यकता थी और भगवान राम ने हनुमान, जामवंत और विभीषण से सलाह मांगी थी। उसी प्रकार, जीवन में वित्तीय लक्ष्यों को प्राप्त करने के लिए एक वित्तीय सलाहकार की आवश्यकता होती है।

याद रखें: अमीर बनना केवल उच्चतम रिटर्न प्राप्त करने से अधिक व्यवहारिक मामला है, और एक विशेषज्ञ उसे प्रबंधित करने का प्रयास करता है...

Investing in the highest returns giving assets won't make you wealthy, want to know why?

People often come to me and ask:

 

·        Which is the best mutual fund scheme where I can get the highest returns?

·        What are the investment options where I can get maximum returns in the shortest period?

 

Well, chasing returns is a fund manager’s job,

 

The job of a financial expert is

 

Not to chase the highest returns, but

 

1. To make you aware of your future financial needs

2. To help you to make right financial decisions

3. To guide you not to panic when the market falls steeply

4. To guide you not to be over-excited when the market rises sharply

5. Guide you not to make decisions on emotions but sound logic especially when the market behaves another way

6. To make you focus on your financial goals, not some quick bucks

7. Motivate you to save more and invest smartly

8. To caution you not to try shortcuts for making quick money

9. To Beware you of scams and fraud schemes that offer huge returns

10. To make you aware of various risks and protect you from them

11. To make you aware of your expenses and how to manage them

12. To make you aware of the benefits of compounding, continuity, and discipline in the investments.

13. To guide you about good and bad loans and how to avoid/come out of a debt trap

14. To guide you regarding Emergency Funds, Risk Management, and estate Planning

15. To suggest you those investment options that are suitable based on your age, risk profile, investment horizon and financial goals.

16. To do proper asset allocation

17. To guide your investment behaviour

18. And finally, to help you reach your financial goals smoothly

 

In Mahabharat, the best Archer Arjun needed the advise of Lord Krishna and Lord Ram asked for advise from Hanuman, Jamvanta and Vibhishana. Similarly, a Financial Advisor is required to achieve financial goals in life.

Remember: To become wealthy is more of a behavioural matter than just getting the highest returns, and a financial expert tries to Manage that....

रियल एस्टेट में निवेश, क्या यह वास्तव में लाभदायक है?

हम सभी रियल एस्टेट में निवेश करना पसंद करते हैं, क्योंकि हम इसे देख सकते हैं और महसूस कर सकते हैं, और यह एक स्टेटस सिंबल भी होता है। लेकिन क्या यह वास्तव में फायदेमंद है? आइए हम रियल एस्टेट में निवेश के बारे में और समझें कि  इसके फायदे और नुकसान क्या हैं।

हम में से अधिकांश लोगों को रियल एस्टेट पसंद है, इसके मुख्य कारण इस प्रकार हैं: 

• रियल एस्टेट एक ऐसी बड़ी चीज है जिसे हम देख और महसूस कर सकते हैं।
• हम इसे अपने परिवार के सदस्यों और रिश्तेदारों को दिखा सकते हैं क्योंकि यह एक स्टेटस सिंबल बन जाता है।
• इक्विटी की वृद्धि के साथ रियल एस्टेट को 100% सुरक्षा के रूप में देखा जाता है।
• लोग मकान में न रहने पर उसे किराए पर देने की कल्पना कर सकते हैं।
• किसी घर को किराए पर देकर उसके कैश फ्लो मूल्य की कल्पना करना आसान है।

 

लेकिन रियल एस्टेट में निवेश करते समय हम जो नहीं देख सकते वह है: 

• ऋण पर संपत्ति खरीदने से ब्याज का बोझ बढ़ जाता है और वर्तमान बढ़ती ब्याज दर के परिदृश्य में यह ब्याज के बोझ को और बढ़ा देता है।
• जब हम अपना घर किराए पर लेते हैं तो हम एकाग्र जोखिम उठाते हैं क्योंकि पूरी संपत्ति एक ही व्यक्ति को किराए पर दी जाती है।
• हाउस रेंट यील्ड्स महंगाई के सामने टिक नहीं सकते।
• तथ्यों की जांच करें: मुंबई में एक ₹2 करोड़ का फ्लैट लगभग ₹ 35-40000 मासिक किराया देता है। जिसका मतलब है कि 2.1-2.4% का वार्षिक रिटर्न, अगर हम मेंटेनेंस चार्ज और प्रॉपर्टी वियर एन टियर खर्च घटा दें तो यह और कम हो जाएगा।
• अचल संपत्ति में तरलता जोखिम एक और महत्वपूर्ण कमी है क्योंकि हम इसे उचित मूल्य पर जल्दी से बेच नहीं सकते हैं।
• इसके अलावा, अगर हमें पूरी राशि की आवश्यकता नहीं है, लेकिन केवल पैसे के सिर्फ एक हिस्से की आवश्यकता है, लेकिन हम या तो पूरी संपत्ति को या कुछ भी नहीं बेच सकते हैं।
• अचल संपत्ति खरीदने और बेचने में लेन-देन की लागत होती है यानी स्टैप ड्यूटी, पंजीकरण, दलाली शुल्क आदि जो एक डूबती हुई लागत है।
• आज की दुनिया में जब लोग नौकरी और शहर बदलते रहते हैं; एक घर खरीदना और फिर दूसरे शहर में शिफ्ट होना दोहरी मार बन जाता है।
• एक घर आज के संदर्भ में एक सफेद हाथी है क्योंकि यह बहुत कम रिटर्न देता है और इसे बनाए रखने के लिए बहुत अधिक धन और देखभाल की आवश्यकता होती है।

 

उसके स्थान पर: 

• हम उस पैसे को ठीक से निवेश कर सकते हैं।
• हम एकाग्रता जोखिम को कम करने के लिए विभिन्न परिसंपत्ति वर्गों और उप-वर्गों में निवेश में विविधता ला सकते हैं।
• हम अपनी जरूरतों के आधार पर अपने नकदी प्रवाह को समायोजित कर सकते हैं जैसे कुछ परिसंपत्तियां नियमित नकदी प्रवाह दे सकती हैं जबकि कुछ सिर्फ बढ़ सकती हैं।
• विभिन्न परिसंपत्ति वर्ग और कैशफ्लो भी हमारी कर देनदारियों को अनुकूलित करने और विभिन्न बाजार चक्रों को मात देने में मदद करते हैं।
• इक्विटी में निवेश हमारे पैसे को लंबी अवधि में मुद्रास्फीति को मात देने में मदद कर सकता है।

 

स्वयं के रहने के लिए घर खरीदना भावनात्मक और आराम कारणों से एक उचित निर्णय हो सकता है लेकिन निवेश के दृष्टिकोण से यह एक अच्छा विचार नहीं हो सकता है। इसलिए निवेश के लिए संपत्ति खरीदने का निर्णय लेने से पहले अच्छी तरह सोच-विचार कर लें।

Investment in Real Estate, does it really makes sense

We all like to invest in real estate, as we can see that and feel, and it also gives a status symbol. But does it really makes sense? Let us understand more about investments in real estate and what are pros and cons of real estate investment.

Most of us Love Real Estate, the main reasons for it are as follows: 

• Real Estate is something big that we can see and feel.
• We can show it to our Family Members and relatives as it becomes a status symbol.
• Real Estate is seen as 100% Security with the growth of Equity.
• People can imagine renting the house if not living in it.
• It is easier to imagine the Cash Flow value of a house by renting it out.

 

But what we can’t see while investing in real estate is: 

• Purchasing a property on loans leads to an interest burden and in current rising interest rate scenario it further increases the interest burden.
• When we rent our house we take the concentrated risk because the whole property is rented to a single person.
• House Rent Yields cannot stand up to Inflation.
• Check the facts that a ₹2 cr flat in Mumbai gives a monthly rent of approx. ₹ 35-40000. Which means annualised return of 2.1-2.4%, if we deduct maintenance charges and property wear n tear expenses it will further come down.
• Liquidity Risk is another important drawback in real estate as we can’t sell it quickly at a fair price.
• Further, if we don’t need whole amount but just a part of the money we can’t sell the property in parts; either full property or nothing.
• Buying and selling real estate has transaction costs i.e. Stamp duty, Registration, brokerage charges etc. which is a sunk cost.
• In today’s world when people keep on changing jobs and cities; buying a house and then shifting to another city becomes a double whammy.
• A House is a White Elephant in today's context as it gives little returns and needs a lot of money and cares to maintain.

 

Rather then that: 

• We can invest that money properly.
• We can diversify the investments in different asset classes and sub-classes to reduce concentration risk.
• We can adjust our cash flows based on our needs like some assets may give regular cashflows while some may just accumulate.
• Different asset classes and cashflows also helps to optimize our tax liabilities and beat different market cycles.
• We can liquidate investments partially in case of emergency even we can take loan agains the securities.
• Investment in Equities can help our money to out beat inflation over a longer duration.

 

While purchasing a house for self-living could be a fair decision due to emotional and comfort reasons however it may not be a good idea from an investment perspective. So think rationally before making a decision to buy a property for investment.

The learnings from FY-21

The FY-21 will be one of the most memorable year in every one’s life. It was most challenging, disruptive and unpredictable and affected almost everyone, it also breached all boundaries of imagination and forecasts. Most of us will agree with me that it was one of the toughest years of our lives as far as investing is concerned. The S&P BSE Sensex was at 29,468 on March 31, 2020, and is at 49,509 as on March 31, 2021. From the lows of the market to its life time high, the year not only taught us a great deal about investing behaviour, but also imparted some crucial life lessons. So let’s learn some lessons from this most unique and toughest years, and how to take advantage of the situations we faced during the year.

Key learnings from FY 20-21

Cover the RISK, It is a necessity: The uncertainties in this year has taught us the importance of taking proper health and life covers. Always cover yourself with adequate insurances for the unfortunate eventualities for yourself and your loved ones.

LIQUIDITY is very important: Money in hand or convertibility of your investment to cash is an important factor in the decision-making while planning for investments or emergency use. In all this panic, products like mutual funds stood out as a great investment product because we can get the money back in T+1 or T+3 days.

TECHNOLOGY makes a difference, benefit from it: The lockdown taught us that we can do lot many things without stepping out of our home. Seamless online transactions, mobile apps, UPI, digital payment platforms and video-conferencing which were sparingly used became a part of our routine life and yes it is easy, fast and cheap so use it for your benefits.

‘Wants’ are different from 'NEEDS’ Identify them: The year taught us that we can live without many things like eating outs/malls/movies etc. Buying many things on EMI can be financially destructive, we need to prioritise expenses while taking loans. We should identify between good and bad borrowing. Taking loan for needs like home or education could be fine but indulging in credit cards and personal loans for lifestyle “wants” can be disastrous.

Be calm in PANIC: The year showed that how the market overreacts and those who get panicked in that situation regret later. Investors who stopped their SIPs March’April-20 will always regret their decisions. A few very good months (For example Apr’20 to Feb’21) can dramatically change the past returns, we also learned how investors can benefit from the cost averaging and the power of compounding in the long run.

Understand the concept of ASSET ALLOCATION: FY-21 also taught us that asset allocation is important. In this year we saw of the equity market meltdown in March 2020 and a credit crisis in April end. It has taught us a very important lesson that don’t go overexcited in any asset class and never keep all your eggs in one basket whatever secure it may look like.

We CAN'T OUTSMART the Market so be with it: We saw sharp fall in equity market in March’20 when the COVID cases were just few and it rose continuously during the worse period of lockdown. It taught us not to try to time the market and should spend ‘time’ in the market to build wealth.

LEARN some basics:  Understanding the basics of finances is a necessity for everyone irrespective of their age, gender, or socio-economic background. Information is easily available and we need to make our self-aware with the basics. But remember everything can’t be answered online so when we need help in-person, there are professionals like your banker, financial advisor and broker who are equipped to provide with suitable solutions. Take their guidance.

Finally, this year has taught us a lot and we must be grateful for its teachings and treasure our learnings, because a year like this does not come often. And yes, it is not over yet, so Be careful, Stay invested, be disciplined and don't go by hearsays, before embarking on the investment journey seek qualified advice.

Right Asset Allocation is equally important for wealth creation:

For good health we should take balanced food. We need all important ingredients like protein, carbohydrates, vitamins, minerals calcium etc to live a healthy life. Similarly for creating a good wealth a proper Asset allocation is one of the most important factors. Various studies have shown  that major portion of the returns can be attributed to asset allocation. Still most of the investors don’t focus on  asset allocation. In this article, we will try to find out some common asset allocation mistakes that investors should avoid.

• First thing first:  Have definite Goal Planning:

The first mistake we normally do, that we start a journey without knowing where we want to go. Similarly most of us start investing without having clarity that for what purpose we want to invest. We sometime start investing because one of our friends has made money and we also want to achieve it. There are others who want to invest in equity because the market rose by nearly 50% last year and they feel they have missed it. There are some who have excess funds that they do not know where to deploy and want to evaluate options like fixed deposits, mutual funds etc. Lack of clarity on the objectives results wrong investment decisions. Unless we have clearly defined financial goals and time horizon we cannot determine the optimal asset allocation.

• Fear or Greed results into a wrong asset allocation  

    

Due to fear we don’t invest in certain asset classes and similarly out of greed we put on more than required money in one asset class. If we are not investing in the desired asset classes in the right proportion the result will be sub-optimal returns from the portfolio. Allocating a sub-optimal portion of the investment portfolio to equity is a common mistake most of the retail investors make. We should not forget the impact of inflation and taxes in their investment planning. There are several broad asset allocation guidelines that can help investors determine suitable asset allocation for their individual needs. We have discussed some of these in our post on 2^nd June 2016 regarding Asset Allocation strategies for different age groups. We should also note that while asset allocation is commonly used to refer to the allocation between debt and equity, it also includes other asset classes like real estate, gold, cash etc. One should consider all these asset classes, when determining their asset allocation.

• Think Long:

We always crave for assured returns while our important goals are long term in nature without realizing that assured returns this reflects a short term focus, which in the long run can leave investors short of their financial goals. While we prefer risk free high assured returns, we should also understand that there is no such thing as assured returns in the long term. Let us take the case of risk free fixed return products in India. 15 – 20 years back risk free assured return products were giving returns, as high as 14 – 15%. Now, it is almost impossible to find any risk free fixed return product that will give anything higher than 9% pre-tax return. Extreme risk aversion also makes investors oblivious to factors like inflation and taxes that negatively affect their risk free returns. The investors in highest tax bracket get the shock of their lives, when they come to know that they have to pay a large amount of tax on their fixed deposit interest, even after the 10% tax deduction at source. The truth is that taxability of fixed deposit interest is nothing new. We are either uninformed or deliberately choose to ignore it because of our short term focus.

• We want the moon:

We want to get as much as possible but not ready to take any risk. Unrealistic return expectation is another common mistake in asset allocation which reflects the human’s greed and this often leads investors compromising on their financial objectives. Lack of awareness and human’s greedy nature is a root cause. Just because a stock price doubled in a year, it does not mean that it will double next year also. Some mutual funds gave 50% returns in the last one year, but expecting them to give 50% returns this year is unrealistic. Real estate is one asset class, where investors often have unrealistic expectations and this leads them to make the wrong investment decisions. While lot of real estate investors made very handsome returns, there are lot of investors who have lost and are still losing money on their real estate investment. Possession delays, interest cost, market dynamics, litigations and infrastructure delays can have a huge impact on real estate investment. From being one of the most favoured investment sectors in the hey days of the 2007 bull market, real estate has now become one of the most unfavoured sector. The stock prices of real estate companies are just reflections of the underlying problems the sector faces. It does not mean that real estate will not be a good investment. But we need to make a well researched investment decision with the appropriate time horizon. In order to determine an optimal asset allocation, we need to have realistic return expectations.

• Moving from one to another won’t make you faster:

We try to time the market and keep on changing asset allocation based on market conditions, but is this the right strategy. It is like changing your trains at every stop so as to reach your destination faster. This is another common mistake many of us tend to make. One of the basic tenets of equity investing is buy low and sell high. However most of the retail investors often tend to do the opposite. Investors sell their equity mutual fund units or stop their SIPs in a bear market. Whether it is to prevent further losses or waiting for the market to correct further, investors should note that it is almost impossible to time the market. Many investors who exited the market in 2008 and shifted to fixed income, invested again in equities when the market was 3.5 times higher than the 2008 lows. On the other hand investors, who continued their SIPs throughout the bear market and into the bull market created wealth. There are some investors who shift their asset allocation, when some other asset classes catch their fancy. There are investors who shifted from equity to gold, when gold was rallying. Now, when gold is giving negative returns over the last 2 years, they are regretting that, they did not get into equities at the right time. There are other investors, who sold their mutual funds to buy multiple properties because their friends or relatives bought in some hot projects. Many of these properties did not take off as anticipated and now these investors are complaining that they have been left with these illiquid assets while having to service the home loan debt at a high cost. Asset allocation comprises the right mix of equity, debt, gold, real estate and cash. One should ensure that they maintain the proper mix so that they can get consistent returns.

• Sitting idle is equally dangerous:

Although changing asset allocation frequently is a mistake, not changing it at all is also a mistake, especially if we are nearing our financial goals. A person  know to me, wanted to take an early retirement from his job in 2010 and start his own business. He started planning for it from 2000 onwards and based on the guidance of an excellent financial advisor had the right mix of investments. By 2007 he was well on track towards his retirement goal and plan of starting his business. Unfortunately in 2008, his investments, which were heavily in equities, lost nearly 50% of in value. His employee stock options, which he was hoping to exercise to invest in his business, was 30% below the strike price and was worthless. What was worse that, he lost all confidence and made several wrong investment decisions after that. Today he is still working in the same company where he was working before. He is bitter about what happened in 2008, but much wiser. His plan of early retirement definitely had a setback, but he still plans to retire in the next 5 years. Over the last 3 years he has started investing in equities again, only this time he plans to shift his investments systematically to income funds through systematic transfer plans (STP) two to three years before his planned retirement. It is important that you shift your asset allocation to less risky assets when you near your financial goals.

So what we learned?

AS discussed above there are few things which we should keep while making investment decisions. There are few common asset allocation mistakes that can be avoided if planned properly. Proper education regarding asset allocation and risk profiling will help to . We should also educate ourselves about the various factors impacting the returns of your assets. It is always prudent to seek the guidance of an experienced financial advisor to make sure that we are on course towards our financial goals.