Circle is About To Complete

Because of my penchant for Economics and Finance , very often amongst my friends and known circle I am mistaken to be a materialistic and money minded person.
Whereas nothing can be farther from truth. And this I can say with absolute certainty because I have been in touch with my self for most part of my life. I have never wandered very far away from my inner self and have always striven to complete that circle of life which involves everyone and everything.
The name of this blog "holistic" , is an indication of my journey to try to complete the circle of my life by connecting various dots representing divergent aspects of human life...The Noble Eight Fold Path.
For me  money simply represents a fulfillment of today's needs and a modest security of future. Beyond this I always believed in putting this money to some use towards those people who were not only needy but also deserving. Otherwise who doesn't need money today.
However this charity part , I was able to realize quite late in life since I never had time or maybe  the direction.
Vipassna meditation helped me take this into different walks of life.
In my objective of guiding my colleagues was a necessary urge to help them plan a definitive life and retirement. Also a hidden desire was that once most of them had been put on that path I would introduce them to the virtue of charity and paying it forward.
Then I came across this association for Seafarers in Dehradun called DSWA. It was formed by a set of very young officers and they had succeeded where efforts by our seniors and ourselves had failed.
The acronym DSWA stands predictably for Dehradun Seafarers Welfare Association.
However what the association has been working for past 2.5 years is for the welfare of the society; giving back part of their very hard earned money to those whom they don't even know.
This was a compassion that I wished to impart to my younger colleagues, but it was already there.
Bright young people spending their quality time in orphanages, even celebrating their birthdays with those who don't even know their own birthdays.
Recently a Trust working with affected children and ladies ran out of money and gave a SOS call.
The members of DSWA immediately responded and in a span of 48 hours collected a sum which is a dream of most of NGOs.
The entire feeling of seeing humanity in the hearts of those who are so away from humans for most part of their lives, is so very touching.Probably the physical distance away from family makes them so sensitive.
There is huge personal satisfaction for me too, in knowing that my objective is almost over and THE CIRCLE IS ABOUT TO COMPLETE.

With Gratitude and Compassion to all my Colleagues

With Gratitude and Compassion to all my Colleagues at Sea

Exactly 30 years and a few weeks ago I had entered the hallowed portals of Shipping.
I was overawed by the traditions and beliefs that were passed down to us and were repeated at the cost of insanity and lack of logic...but we accepted.
As through a lot of mindless beliefs and traditions I also saw through the apparent lack of social security for the average sailor, despite being what looked like uniformed services and the discipline attached.
The Indian companies did have a defined system of Retiral benefits, but such was not the case with the Foreign entities. It was a "Soldier of Fortune" or hire and fire concept there- more of firing of course.
At the outset I understood that I had to find my own way out or "Retirement Nirvana" for myself, could not depend upon the shore management of the big and rich companies , however many slogans of loyalty they shouted.
Through a constant reading of books (mainly) by A.N.Shanbhag and International Retirement funds, I tried to find some easy and consistent way.
Even before my promotion to Chief Engineer , I had got almost 75 Officers and crew to open their PPF accounts which guaranteed 12% interest p.a. tax free.
Coinciding with my promotion in 1995 , the Indian Mutual Fund industry which was shackled by UTI till then- was opened up to private players.
Next 3,4 years were spent simply finding out how, where, which to invest in.
Till then. the desire  and drive was also not so great as the NRNR deposits gave almost 18% which compounded to 20% for a 3 year period.
By 2002 I was finished with the discovery and my basic tenets of investing were in place. Most of these tenets were of psychological nature.
I had understood that What was good for me is quite different from WHAT I WANT.
As I was investing myself , I was also introducing my colleagues to the Mutual Funds- who were not very keen on my theme.
However by 2005 I decided that I will help at least 500 of my colleagues to not just invest but plan their future in a systematic way .
The journey was very slow and painful. But I was patient for a change.
In 2014 I myself said goodbye to my beloved Sea and hence to a steady income stream. By then I had barely helped 175 people, to form their portfolio.
In 2015 I published my first e- book with the help of marineinsight.com titled- "Financial Planning for Seafarers".
The book was priced very cheap ( at about Rs.150 or $2.25) , still not people were able to buy because of payment platform issues. So the publisher consented to my request to make it free.
Today I'm happily told by a lot of colleagues returning from sea- that the book was there on all the Desktops and Laptops of the ship. Nothing could make me happier- in a world where everyone talks of piracy .

Then Dehradun Seafarer Welfare association (DSWA) roped me in and we had 2 seminars within a span of 5 months.These were attended by over 175 officers and their wives.
From here the movement of Seafarer's Financial Planning took a whole new turn.
Everyone was enthusiastic and livid. Even the young cadets were talking in terms of Equity exposure and STPs. My target figure of helping 500 Seafarers has long been crossed.
Now something even more phenomenal is happening.
Each one of these young officers have turned advisors to their ship-mates.
Captains have their new role cut out- as a financial guardian.
A young Captain who teaches part time in a college- says that he regularly teaches youngsters about finance during his regular classes.
I get about 5-6 calls a day and equal no. of emails asking me to help them fine tune their portfolios.
Last 2 years have been very important in the life of Mutual Funds when the retail small investor has helped the industry surge ahead of other Financial entities like LIC and other Insurance companies.
Somewhere in all this the seafarers also have their contribution. They do not even know that they are directly helping the country and helping themselves in return.
I am very happy for whatever is happening around me now.
No Sailor will be cheated by LIC and other insurance companies into buying expensive ULIPS.
Everyone will be adequately covered by Term Plans and Health Insurances.
All these gentlemen will slowly build wealth with aim and option to retire early.
And wherever I am then, I will always be thankful to them for having their faith in me and helping me to help them.
I hope and wish them success in their lives...
... their lives which are tough because of the nature of duty
... their lives which are tough because of being away from their loved ones
...their lives which are tough because of missing the birth, the marriages and the deaths of their loved ones
... their lives which are threatened by all the entropy and disorder in the world
... their lives where time is not counted in hours and minutes but in the number of stamped pages on their CDC.
May God bless my Sailors and their families.

Equitable Wealth Revolution of a kind

There are revolutions of various types... some very noticeable , some hidden...Political, agricultural , cultural...

But nothing can close to this.

The Fiscal revolution.

In 1993-4 , the Mutual Fund space was opened to private players.This was the euphoric period of IPOs and Harshad Mehta was behind everyone's memory. With great reluctance, few informed investors started investing.Internet was not around , so information was not common.

In the ensuing 20 years these few investors were richly rewarded... while a majority failed to comprehend the concept and avail the opportunity.

With some public connect over print and AV media people took nimble... very nimble steps... and something happened.

The Mutual Fund space was flush with funds.

In 2017 the Mutual Funds of MFs as we call them became the biggest Domestic investor in the Indian market .

To give you an idea the Total size of Indian Budget stands at Rs. 21.47 Lakh Crore for yeaar 2017-18.

Compare this with the size of  Indian Mutual Fund Industry Rs.17.54 lakh crore at the end of March 2017.

The slow to catch on - Indian investor has ultimately realised the virtue of slow and steady investing on one hand and the Power of compounding on the other.

SIP and STP are buzz words now .

I get daily 8-10 phone calls with the flawed question- "which is a good SIP plan?"

The question shows poor understanding of Mutual Funds- but nonetheless...

Why is it working- the concept of Mutual Fund that is?

Why there hasn't been any scam in this space so far (barring that of the grandfather scheme of UTI- called US64)? Not that there cannot be any in future- but let's talk about what happened so far.

The credit can be fairly given  first to the concept of MUTUAL itself and then to the governments of the day. 

Overlaying itself over the era where the share price was a very opaque issue. Which means whatever or whenever you bought a share - you could be sure that you got the highest price and vice versa while selling.

But when you bought a MF unit- the price that you would pay would be the one that was declared as the NAV at the end of the day (rather evening). It did not matter who bought the MF units - my purchase of 100 units got the same treatment as someone else's 10,000 units. There was no preferential treatment and price was universal. This is an important feature of MFs even today.

Then there were continuous improvements in the structure:

- Cash purchases were banned.

- Third party cheques and DDs were not allowed.

- In 2007 - entry load , which used to be a hefty 2.25% was removed by SEBI.

- Insistence by the SEBI of the Fund employees investing in their own funds.

All these ensured that clean money of genuine investors was flowing into the market.

The rise of Mutual Funds gave employment to a new genre' of trusted (largely) financial advisors, MF industry employees and the cult of STAR FUND MANAGER.

The fortunes of various fund houses changed by the entry and exit of a handful of Fund Managers who enjoyed cult status.

Toady people like Prashant Jain who despite heading the fund house that they once worked in at a lower level- still individually manage the funds. The AUM of his funds may far exceed the GDP of small countries.

One of the features of MFs is that in case of a downturn you do not have to rush in to take your money out like people do in direct stocks. Since it is the responsibility of the Fund manager to buy and sell- you just have to sit back and enjoy the show. If you are continuing to have some funds for investing- it makes more sense in investing it in a market crash rather than running away- as I have fortunately learnt.

Mutual Fund concept is a very Indian kind of concept where you are not bothered about the vagaries of life (market in this case). It gives equal opportunity to various classes of people to increase their wealth according to their input without bothering to learn too much.

So there you are enjoy the show while the market is rising and make sure that you also buy the ticket to the show when they are falling.

 

WARNING!!! Earthquake- Build The Right Home

Whenever we start earning, our first instinct is to buy a land or house for ourselves. Of course some like to simply splurge on- but that is not what we are discussing here. For the last few years I am seeing the rush to buy apartments in the Doon Valley. The only criterion that is followed is to have a good view of Mussourie, all other parameters are simply ignored or dwarfed. No one is interested in finding out how the sewage will be taken care of or from where will the water come in next 3 years.
The builders are simply finding  small areas anywhere in the nooks and corners, behind and below each and every small hillock. They have even encroached the River bed and built seven floors on stilts.
As you may be well aware that Dehradun lies along the most seismically sensitive area- and as I have learnt from few Geologists, that thee Rispana lies along a fault line, especially near the northern part of the Doon valley .
The kind of earthquake that we witnessed last night on 6th Feb2017 night is exactly what is waiting to happen. There are no calculations for the past earthquakes proffered yet, so obviously all these so called multi-storied apartments are also built without taking any calculations into account.
I am not discouraging the reader from buying a home for himself , it is a must and you must buy it if it is a must.However do not ignore even one aspect of safety- since more than your money- your and your family's life depends on it.
In 1993 , I had myself bought a home (not an apartment) and I could not actually check the architectural strength of it because the owner had disguised it very nicely. Soon after purchase one of the walls started sinking and developed cracks. In those days I employed all the engineering skills I had learnt on board and inserted 7 RCC pillars without breaking the terrace slab.
In the process I learnt much about the topography of Dehradun.
More than my engineering skills , the reader must take my financial advice and build a structurally resilient home for himself- the old fashioned way. Buy the land- then build. None of the apartments are cheaper than a house that you would build for yourself.
Think in terms of using alternative materials, including imported wood, prefab elements.Line up the roof with Solar PV cells, Follow the engineer from Chennai  - whom I had featured on my FB page- and build a completely self sustaining home for yourself.
http://asc-india.org/seismi/seis-uttaranchal.htm

ALERT!!! CRITICAL TIMES AHEAD

ALERT!!! CRITICAL TIMES AHEAD.

Normally such warnings of doomsday are a plenty on the net.

But my warning is clearly related to the Finance field.
As the Sensex and Nifty are galloping away into the sun- there is a sense of unabashed optimism everywhere.
MFs have overtaken Insurance as investors in the market and people are headed towards MFs in throngs.
Whenever there is such optimism, there is a reason to pause and look around.I do not mean in the pessimistic way- but just caution.Most of the calamities and disasters have taken place when people were not watching enough.
So now as the market seem to be only headed in one direction I have some advice for different set of people, especially the seafarers- because it is them that I understand better.
1. Those who are young: They must NOT make any bulk purchases and must continue their regular purchases via the SIP or better still STP route. In a volatile market higher frequency of STP gives better results. So you can even switch from weekly mode to Daily mode if it is offered by your MF. i.e. if you have a 5000/- per week STP, you may change it to Rs.1000/- per day.If on monthly mode then you may go in for weekly mode. Since SIPs are offered on monthly basis- it may put you in some inconvenience to start 5 SIPs for every fund.

2. Those who are in the middle age group and about 10 years away from retirement- should review the funds in their portfolio and make a switch if required. Do not be misguided by which fund gave best returns last year or last 2 years. Go by a performance of at least 5 years. Further they should maintain the Equity to debt ratio of 75:25 or 80:20. If due to market going up the portfolio becomes heavy on Equity- then switch to the debt schemes and bring the ratio back.

3. Those who are near retirement should maintain a more conservative ratio of Eq:Debt of 60:40 but should not go below that otherwise their portfolio value may start eroding.
4. So remember to AVOID BULK PURCHASE or BULK investment even if you have a windfall or a have come across lately into large money. At such high levels even a drop of 2% in the indexes may not exactly give you value buying. So just stick to disciplined investing- it has shown to work best.
 

The Changing Times

" These are the times of Light and darkness, these are the times of hope and despair"- Dickens in his famous epic- A Tale of Two cities.

This was not said of only the times in which the novel is set, it can be said of any time in any history.Beacuse it was only the time that was always changing as also eulogised in the opening commentary of TV serial Mahabharata - " Main Samay Hoon..."

Present time is also same- no different from 20 years back or 50...or 100 or even 1000.It will continue like this too- only the people witnessing will keep changing.

For those who care to see and observe objectively- present time is no different than the era preceding the Independence date when the constitution was being written.

A slow and steady movement is taking place ... Just like the Constitution-the most important religious book is being written called the GST code.A book that will change the entire environment in which we live and breathe- and pay graft.

In the process of this GST draft being written- things have taken place which cannot be believed and a Federal form of Governance is growing deep and firm.

The centre has given away and further giving away- it's bargaining power and Authority to allocate funds to different states. This must be the only Second Magna Carta being signed.

No longer will a Montek Singh Ahluwalia have to keep a Chief Minister waiting for 2 hours to listen to his plea of funds for development.

A new and an interesting fund.

In the field of Finance and Investment , very often it is the lack of information that prevents a person from making gains...I guess it same with life.
Today while searching around for some new modes in the Large Cap space- I came across a gem- well apparently.
I searched deeper and found that it was even better than what appeared on surface.
Ladies and Gentlemen Welcome to CPSE-ETF. I had to really look around and pinch myself to believe that the fund was launched by Reliance a more than 2 years ago.
As in the case of ETF:
1.You can buy it on a stock market like shares with getting the price of your choice.
2.AMC charges are very minimal-0.07%
3.Liquidity is very high.
Such funds if in normal MF mode tend to have a risk of having too few investors.In case of ETF this may not be so, especially as the fund as an asset base of 2284 crores.
There are a few points that make it high on risk:
1. The fund is very high on risk due to concentration into very few companies- 10 at present.
2.Exposure to top company (ONGC at present ) is as high as 24.5%
3. Exposure to top sector is 77%- as the ETF has NIFTY PSE index as it's benchmark.
4.The fund largely reflects the PSU energy companies and hence is a highly specialised SECTOR fund. Thus it carries the associated risk of a sector fund.
In my opinion the fund is high on risk but for Seafarers who are well invested - they may try investing here with nimble foots and SIP way.
You will have to do it on your stock trading platform.
Last year the fund gave 5.3% higher return than the next best in Large Cap category.

Disclaimer: This is a discussion forum. So please do some research on your own too- and discuss it here. I am just proceeding to buy this thru my broker.