Daily Musings 001

 Daily musings 1:

When people come to know that you enjoy reading, the best thing they do is start giving you books as gifts.

This would’ve certainly sounded great few decades ago when I wasn’t able to afford the relatively expensive books because of total lack of any income. But this time it turned out that the books became actually cheaper than the growing income levels of people. Now as it happens… I get to have more than 2-3 copies of the same book.

And when people come to know that you are mainly interested in personal finance, start gifting, you books on finance And that too of people like Warren Buffett, whom I don’t consider much of my competition for obvious reasons …hahaha…

Anyway, the book that I have been more prolifically gifted is IKIGAI - Certainly very much talked and the least read and even lesser understood book.

IKIGAI as it turns out means the reason of one’s existence.

But it is not so much as the reason rather the understanding of the reason of being or existence.

The elements of  IKIGAI are least understood and even lesser followed.

In the world where our eyes,ears, and hence the mind is always being torpedoed by Constant external stimuli, which may or may not have relevance to us it is very difficult to make a selection of those stimuli before they actually impinge on your sentence, but it is very easy. Erase them immediately once a person has screamed them.

So today, a person who gifted me the last of the additions of IKIGAI book phoned me up. First, she wanted to test me by asking if I had opened the gift wrapping and when I confirmed the name of the book to him, he asked me if I had read it and when I confirmed that also ,then she asked me the inevitable question what is your IKIGAI …

IT WAS RATHER EASY QUESTION FOR ME BECAUSE A LOT OF PEOPLE HAVE ASKED ME THIS QUESTION AT VARIOUS STAGES OF LIFE AND SPECIALLY IN THE PAST 11 YEARS SINCE I GAVE UP GAINFUL EMPLOYMENT.

I told him that the way I live and what I do is my IKIGAI .

Since we were not on a video call, I could only sense her thoughts behind the long pause in the discussion. Finally, he said that can you enumerate that for me?

I said OK then take it down in the classical exam book style:

I get up at different times in the morning without an alarm and the first thing that I do is thank the people who come to my mind for the difference that they have made in my life.

Then I thank various parts of my body for still working in the morning at my age.

I raise the blinds to look at the vast expanse of my town or on the other side the mighty Himalayas being slowly denuded and torn down.But I do not feel any animosity or remorse at the conditions around me. I feel that it is simply a change that is taking place around me and I cannot and should not try to stop it or change it because I know that I cannot.

Then After sumptuous breakfast, I sit down to answer my WhatsApp messages, emails or schedule the phone calls that come in from various Mariners. 

To this he retorted How can I equate material gains to IKIGAI. 

I replied - for me It is not the gains that I am trying equate For me, it is an education to self sufficiency and security of self and family that I am trying people to help build up.

I told him about this Capt.,, who is in the hospital with serious issue and the family needs close to 10 lakhs every month. This, I had precisely foreseen Quite early in life and had been working towards it rather whole of my life.

I said that I find fulfillment in that department for two reasons and that ;  firstly I do not seek anything in return and secondly, I’m simply trying to share a knowledge that I did not acquire from any formal education.

When I gave up my career, I was given a choice of teaching in a few institutions and even going back to my own college, but I realized that there were a lot of people more qualified than me who could do those jobs better than me. But this was one thing in which I have been marginally, successful and satisfied for myself. Therefore, if I tried to reach out to people and teach them the same thing, they would probably have a reason to listen to me.

And what about your personal front? What do you enjoy?

I said that I have enjoyed various things that different points of life. 

There was a time when I enjoyed long drive of few thousand kilometers .

I also enjoyed physical activities specially those that I had not done earlier in my life like scuba diving.

I enjoyed going long bicycle rides daily.

I enjoyed learning various languages to speak and scripts to write.

In the same series now I enjoy long and daily Vipassana meditations and playing with my grandchildren.

I enjoy connecting Buddha and his teachings with all archaeological discoveries and finding the connect between the two. I have started learning the most ancient language of Pali and Brahmi script to understand what people in those times felt.

By now my friend was visibly getting bored so she finally threw me a Trump card…No, not of the contemporary American variety…

She said that she had just given the book to me recently So how could I possibly find so many Ikigai.

So now it was my turnTo call for a show…

I said the first time I heard about Japan and their few words was very early in childhood and possibly I was in class fourAnd had been read out the travelogues of the editor of a children’s Hindi magazine called Parag.

The few sentences that my mother read out to me, made a great impact on my mind about the civilization, which was considered to be very violent and aggressive because of their military pursuits, but on the personal front, they were so gentle and caring about themselves and those around them.

Finally, she hung up..

So it is not about various terminology that we use what we need to be a simply be at peace with ourselves And to be normal in our interactions with the external world of people and nature. There is no need to be projecting what we are not and there is also no need to hide of what we actually are.

An explanation on my investing methods

 An explanation on my investing methods

I have been asked in the past and also constantly every few weeks that why am I so conservative and my suggestions for fund Selection .

I am asked why I do not suggest ETF or direct stocks or other avenues like REIT or INVITS.

The simple reason is that when I have to offer a common advice to over 1000 people it has to start on a plane and a simple platform.

The question here is not just of investing, but developing a habit and a subconscious activity that you’re saving and investment is a very important part of your working life.

And since our working, life is very unpredictable and uncertain, it is important that we accumulate that Wealth as soon as possible.

At various stages of wealth generation that is after reaching levels of 30-50 lakhs or even one CR people contact me to ask what changes can they make in the portfolios?

Since this communication is mostly direct with me, I suggest that they can diversify into various other channels because then the discipline becomes intact and it is possible for them to take calculated risks.

But all this has to be built up upon a base of a minimum corpus, which can be different for different people.

In the process of accumulating and building wealth up to a certain amount that is 50 or 60 or 75 lakhs you develop a kind of patience and also become familiar with different aspects of investing NR ready to take any risks further on.

By then your salary also increases, and then apart from the standard mutual fund portfolio, which you have been investing in, you can start taking your own chances with sector, funds, index funds, thematic, funds, and other formats of various hybrid funds.

By this stage, you will also realize that all the current themes which keep coming up every few years are actually seasonal and if you get into them, you must also learn how to get out of them.

This group serves as a kindergarten for lifelong financial planning. It is not your college or university for that either you will have to contact me directly or you will have to take your own route with the help of a professional financial planner or MFD.

I have absolutely nothing against direct stocks you can always invest in them, but a small warning from my side would be to keep it parallel with your mutual fund investments.

One mantra that I will give you for your direct stock investing is that whatever amount you set aside for investment you should never let it disappear .

that is after selling a particular stock Make sure it comes back to your stock portfolio back account. 

I have seen that even multi bagger stocks been sold the proceeds are spent on frivolous things.. and that is why the Wealth is never built via stocks.

Mutual funds create wealth because one rarely touches them even if they are not performing adequately.

The moment the moment fluctuation of prices in stocks and the high profile treatment on the television and social media gives a very short life to each stock and does not allow you to hold it for long for it to give you benefit .

I have myself been investing in direct stocks and later in ETFs for as long as my working life, but two things that I have been able to understand this …

Firstly, the returns overall are not worth the time that you spend in it 

Secondly, only about 10% of your stocks may actually turn out to be multi bagger or worth investing and their history becomes much longer than the human memory .

So if you are new to investing join the group to get into the habit and start building your wealth and later with the help of a professional financial advisor, you can decide on other formats

Parallels between Health and Wealth

 Parallels between Health and Wealth

I have never been a sportsman or an athlete. Despite being the house captain in school, I could never lay a claim for anything except a consolation prize in cross country.

However, despite that since early childhood, I have been a yoga practitioner and something that I have managed to carry through my college and three decades at sea .

Even though I have tried running and Gymns in between but yoga stayed.

Around six months back, I discovered HABUILD yoga by Saurabh Bothra who is an IIT engineer. 

While doing yoga with him, I realized that his movements were too simple for me and actually his asnaas were very few but repetitive and hence very effective.

Every time he gets us on the mat in the morning, he just says one thing that coming for exercise is what matters and is sufficient .

While mulling over my coffee today, I realized that isn’t that precisely what we also insist on this group .

Just get into the habit of investing in simple products, but be continuous and consistent .

In the past, I have tried cycling in a big way had two accidents and gave it up .

Went on to body building in the gym got bored and slightly injured and again gave it up .

Isn’t that quite synonymous with what we do in investing .

Jumping from one format of investing to another . Moving from high risk to higher risk and losing capital and then coming back to bank deposits and saving accounts and calling stock, investing, bad and  synonymous to speculation and gambling.

So in various walks of life, I have seen that similar high profile movements don’t really make much difference in one’s life.

I have been an ardent fan of following the middle path in life- right from school time when I read Richard the second by Shakespeare.

It clearly says that violent fires and thunderstorms don’t last long , he who runs fast gets tired, very easily and fast, he who tries to eat like a glutton chokes on his food…

So in life, it is consistency and discipline which matters . And of course, we know that daily consistency and continuous discipline is the most difficult.

Those who have been to the gym, maybe knowing the difference between repetitions of an exercise or using higher weights or resistance, in a single movement for long. Both are good, but serve different purposes.

So certainly take up different avenues and formats available to you in investing your hard earned money and grow it more and more in keeping with your risk appetite…

But before that, make sure that your basic joints and muscles are in good shape in form of a good bank, balance, and wealth, created by regular investing in vanilla mutual fund schemes.

Once your approximate corpus is achieved, or you feel that your main investing process has been going on for a few years and nothing will move you away from that- then you can take the decision of going in for slightly riskier things …

Risk is not something that is in an activity which you take without understanding or knowing of.

Risk means a calculated uncertainty, the process of which is well known to you, but only the outcome is not certain.

So define the philosophy of your life on your own, and please move on always keeping in mind that MONEY IS NOT EVERYTHING IN LIFE, BUT BEFORE SAYING THAT YOU SHOULD HAVE MADE ENOUGH OF IT…

So help you, God …

A Century here as well

 Weekend Musings 

Today is a very special day for me .

A young master is celebrating his 39th birthday today .At the same time he has given a feedback about his retirement corpus which he has reached about 95% value.

Not everyone gives me a feedback after reaching their milestones, but of those who do this young captain is the hundredth person which makes it a century for me .

His success has also encouraged me to think about reaching your retirement corpus, much before 45 .

What this gentleman makes me happy about is his desire to do something for the society now and he has expressed his specific desire in doing something for senior citizens or the geriatric care in the country.

This is exactly what happens when you become financially independent through your own efforts .

The organic growth up to your milestone makes you think about so many people who may have helped you in your journey, but remain largely unrecognized . And then a really sensitive person thinks of sharing his wealth acquired by noble way with less fortunate ones in the society.

Very often have I said that when a piece of property which may have costed, you one lakh becomes one crore, then it does not involve any of your efforts or intelligence . The value of that real estate increases because of the collective efforts of every small to big person in the society and also the government actions. Therefore, in such cases, it makes a Dharmik sense in paying your correct taxes is a mark of respect to the under privileged of the country.

May all of you have a successfully, Dharmik life, and peace and the time to think about others .

So help you god.

NCDs and other Debt Instruments

 NCDs and other Debt Instruments

- Rajeeve Kaushik

I have been getting regular queries about investing in NCD on nonconvertible adventures and various type of bonds .

To start with as a nonresident, you cannot apply in these NCD and few other type of debt instruments, except the debt mutual funds .

However, you may  invest in your spouse name by first transferring to her bank account and then letting her invest directly from her account.

There has also been appointed that these are SEBI regulated and controlled .

This may be a matter of slight comfort, but actually in case of a default which is more likely in case of a debt instrument than equity- the process to get your money back maybe quite long.

Secondly, you must remember that with the new tax rules. The interest on those date instruments will be added to your income and not your spouse’s .

And now the mechanics of debt and debt instruments …

Debt is most essential to the working of the economy and development, whether of a country or a company or any entity, which needs to work . Just like you take various loans for your needs the government and companies also do the same.

The same way that you have the rate of interest attached to your loan. It is also part of the debt instrument which the government or companies use. 

Only thing here is that the debt paper, whether it be the government treasury bill or corporate commercial paper or debentures of various types or corporate fixed deposits they are all tradable in the market, which means somebody can buy them at a higher or lower interest rate than what is printed on it, which is called the coupon rate .

It is this buying or selling, which creates the opportunity to make profit in various types of debt funds .

The tenure for which a debt paper is issued determines that which category of the debt fund it belongs to .

For a individual, it is virtually impossible to invest directly in a debt fund, because not only each paper is of substantial value which goes in lacks and crows, but there is a quality of debt rating, which is issued by various agencies that determine the safety of a debt instrument .

So just like you prefer not to buy shares because you have to do too much research in that and you prefer to buy via equity MFs - in the same way it is always advisable to invest in different types or duration of debt funds.

This is the best way to secure your investment while ensuring reasonable return returns on it .

I personally find debt funds as the best asset allocation to fix income instruments .

Grihastha at 60 or AN Ode to Vanprastha

 Grihastha at 60 or AN Ode to Vanprastha

With 15 years of serious meditation in the Vipassana format behind me and having been eulogising the virtues of letting go of physical acquisitions, it must have been quite a fall for the natural forces around me when yesterday we moved into a new small hutment on top of a hill. 

Picturesque or otherwise it certainly provides an ideal atmosphere to delve inside myself, And even though it may not be exactly convenient for my wife but she is loving it more than me.

Economically and from investment point of view it certainly does not make sense to have or expand a physical acquisition at this age but perhaps my progeny and her young ones will probably understand my deviation from what I recommend as ideal financial situation

Technically located at exactly 1000 metres above MSL at least at present it has an untrammelled view of the Doon Valley around it. 

But it is true so many times we do things irrationally which normally would be considered in the range of human stupidity. However again the question arises that if one does not do such things then what does one spend on apart from charity; As a young entrepreneur told me some 16 years ago that how much can you drink and how much expensive car can you drive for how long?

With the children topshot busy in their own world and being unavailable for important milestones, the happiness and satisfaction is only partial.

Nonetheless let's see how far this goes and how much we are able to enjoy this...

Make your own Rules

 Query: Sir you said if your profolio is good redeem them in alphabatic order.should we redeem one alphabet one year & another next year or redeem A completely 1st then go to B.

Reply:

Good morning 

We are the first generation of mass investors, and the children of liberalized India .

So who will set the rules for us? 

Our parents provided the land, but we sowed the seeds and now we will see our trees growing, and very soon the overhanging fruits will be there.

Just imagine your Orchard will have different trees for different fruits and some just for shade .

When the time will come, you will yourself be able to select which ones to the redeem .

Each of the fund will be a portfolio by itself, and you will be easily be able to decide on your own .

Everyone’s story and situation would be different .

I will give a very good example here .

Generally, I was redeeming the funds which were not performing very well for past three years and one of the funds which came up quite high by looking at the XIRR was Birla SL  Frontline equity with a return of about 12% over the last 13 -15 years.

However, this year for the purpose of offsetting my cost of building a house  against capital gains I had to sell off some funds when I was doing it from the DSP small cap which, in my opinion would have been most volatile and expected to fall during the downturn, which I was expecting last year.

But a meeting with my CA revealed that in order to take the maximum benefit, I need to look at the gross returns rather than the percentage.

In this category again, the fund which came up was ABSL FL and ICICI which have actually been multi baggers over last 3 decades.

So different situations will require different response from you, but one thing is for sure that you will be in a sweet spot.