Smart ways to invest and attain early financial freedom

Brexit was not expected – most people assumed that the British will vote to stay in the EU and hence when the results came out yesterday, there was shock and surprise. The dollar strengthened, the pound weakened and stock markets as usual over reacted and fell globally and gold rose by about 4-5%. But these are all reactions from a market that is full of traders who try to predict what will happen in short term and try to make money on a daily basis. In the long run, I believe that not much will change. Brexit does not mean that UK will stop being part of the global trade and that the British will close down their country and will become an Albania. Life will go on in the UK and over time they will untangle the mess and will live happily ever after. Having said that, one still needs to look at reasons for Brexit and see how it will impact us in the long run. Globally the gap between the rich and poor has increased in the last 50 years and with the tremendous

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This is for my MBA students who had their convocation last weekend and for the hundreds of MBA’s who have finished their course this summer I passed out of XLRI in 1989 and for the first ten years, despite having a decent career, my financial journey was directionless. I started on the right financial path ten years after my MBA. I educated myself through books and learnt from people around me who knew more. I put an effort and changed some of my financial habits. In just a few months, I could see the difference. Within seven years, in 2006, I became financially free, meaning, I did not have to work to maintain my lifestyle.
Dear Friends, As you probably know, the folks at Economic Times Wealth magazine take regular inputs from me and my readers. They are currently working on a story on “Financial planning tips for the new financial year” and they want to feature four types of people (preferably couples). If your situation matches any of these four profiles and if you want to be featured in this national newspaper, please get in touch with Mr Sanjay Singh of ET Wealth at If you decide to participate in the story, you will have to undergo a photoshoot (he will send his office photographer if you live in a
In the past few weeks, there has been a fair amount of “not so good” news from IT Industry. The big companies are finding it difficult to keep up the growth momentum in both top line and the bottom line. Last year the industry grew at about 15% - this year, the growth is slowing down to 12% ( as per Nasscom). Big companies like TCS are being careful - here is one recent report -( My friends in IT industry are also telling me privately that the basic model of IT services from offshore is now pretty commoditized and the billing rates are falling. Even MNC’s like IBM and Accenture are comi

Friends - In case you are in Bangalore - here is a chance to meet up this sunday -22nd Feb at 10 am in the Bangalore stock exchange.Stocks, Mutual funds (that in turn invest in stocks) and Real estate are well known ways to get good returns on investments in India. Of these, stocks needs specialised knowledge and most people do not have this knowledge. Basically most people do not know how to value stocks.This session is focussed on stock valuation. I will share valuation methods used by Warren Bufffet - and I will share this with Indian examples.So please do come over if you are interested. The session is free and you do not need to pre-book.

2014 was a wonderful year – this was the year when most investments (except gold) gave great returns – there is a good chance you have made decent returns if you were either on Direct Equity or MF or Real estate or even Debt funds. So what does 2015 look like? Looks good. Here are my recommendations for 2015 –areas where you can make 20% plus returns:   Direct Equity - Stay invested in equity and increase your exposure to equity.  I believe 2015 will be the year of equity markets in India. Globally US is doing better and EU, Japan are struggling, China is slowing down and the Emerging countries like Indonesia, South Afr

Here is a great five minute video from "Brian Tracy" that I recommend - shares the two basic traits of all those who have become rich and financially free.

With Indian stock markets giving a 31% return, there is a sense amongst many of us of having missed the opportunity.   Plus there is this fear that if we enter too late, we will be the losers.   Also quite a few of my readers have some amount invested in stocks and they want to know if they can increase their allocation at the current levels.   And there are others who are asking whether they must exit the stock markets and take home the profits.   So the question that I want to answer is what should I do?   Let us see a few graphs before I share my point of view:   Here is the data of HDFC Bank share and the Nifty for the past 13 years so. If you were thinking of investing on say 1st Jan 2010 – you would have felt uncomfortable as it was pretty high then – but see what has happened since then. This logic is true for most years except for 2007/2008.

  Worth seeing this Oprah interview with Robert Kawasaki on "How to become rich"

This is a question that comes up in each of my wealth advisory sessions. Lately, with the stock markets going up, I see this coming up a lot more often than before.   In the past 12 months the BSE Sensex has gone up by 36%. Every week it is scaling new highs and even though every investor is happy seeing his portfolio go up – he/she also knows that it is only paper money, till the stock is sold and the money comes into your bank account. So the question is - should I sell my stocks?   As per me – there are only three reasons for exiting an investment. They are:   You need the money for an expense - for example you need money for a planned car upgrade or an unplanned hospitalisation.  You have investments giving you great returns – but what to do – you need to sell
Thanks to Angad Arora for sharing this article -  surely a great read -I was nodding my head in agreement and smiling as I read it :-) Read on -
As a starting point, you may like to read my last post on tax saving options - Not much has changed since I last wrote this - except one thing - the finance minister, Mr Jaitley, has increased the amount that you can invest under this section from Rs. 1.0 lac to Rs. 1.5 lacs per annum from this year. Tax saver Mutual funds are basically equity funds that have 60% plus exposure to equities. To avail of tax benefit, you need to stay invested in the fund for three years and that is where the catch is. In Mutual funds, I do not believe in committing to stay invested in one fund for so long. With the markets being so dynamic, I believe in keeping a check on MF’s every quarter and changing my portfolio if the situation demands.
Glad to share that today's Economic Times Wealth has featured the lead article on "Stock market investing for first time investors" where they have quoted four first time investors - and all four of them are from our Private mailing list for Equity group. Plus they have referred to me and my book and I am happy for that.  You can read a shorter version of the article here - The print version is longer and has quoted and put photos of Tejas, Puneet Arora, Ashotosh Singh and Sandeep Pandita. Congratulations to all four of you for having come in a national media. Her
In 1998-99, I came across this book “Rich Dad Poor Dad” by Robert Kiyosaki –
I have requests from my ex students who are either married or getting married shortly - the request is to share some best practices of money management post marriage. So here is my list - I am assuming that the couple is living alone.   Best practices in Financial planning If you both are working, then it is logical to have two independent bank accounts for salary and tax purposes. But once the money comes into your salary account – transfer the whole amount into a joint account that can be operated by both of you. Do not keep track of my money vs your money.
Term insurance policy is a life insurance scheme that covers only risk of death and does not offer any survivor benefits. It is like the insurance policy we take for our two wheeler or car – we pay an annual premium – if we have an accident, the repair bills go to the insurance company and they pay the bills subject to some deductions. Similarly, in Term Insurance policy, you take a policy for a specified number of years (let’s say 20 years), and specified cover (let’s say Rs 100 lacs) and you pay an annual premium for the 20 years.  In case if your demise in this period of 20 years, your dependants will get the insurance cover of Rs 100 lacs.
I believe that quite a few of my readers have investments in gold through the ETF route, as part of portfolio diversification. Some of my readers have asked me this lately-  “what do I do with my Gold ETF’s – do I sell it? or do I keep it?.
With the election results behind us – I am sure you are looking forward and wondering if you need to rebalance your portfolio. The answer is YES.If you been following my blog and investing accordingly, you should have invested in Pharma and IT sector focussed MF's.
I get a feeling quite a few of my readers do not know that I have a Private mailing list for equities. Whenever I buy or sell a stock, I share it with this Private mailing list for equities (I call it PMLE). I believe that equity investing is not for everyone and hence, by design, I have reduced sh
In the past week, I have been requested by quite a few of my readers to share my views on this article that came in TOI which shows that investing in FD's gives better ROI than Real estate.(
"World trade centre" -when you see these words - I am sure this is what comes to your mind:
I am not one to forecast what will happen in the elections. But here are my thoughts of what to do post elections results are announced: If we get a stable and reformist government (remember that AAP did not seem to be reformist in Delhi) – Even though most of India’s economic problems are long term and cyclical in nature and will need more than 12 months to effect any change, the direction of government policies will make the stock market bullish. It would be easy to pick investing ideas –  most ideas will be profitable and it would be difficult to make mistakes.
I want to start by saying that am an AAP supporter – and I believe that we need a "change in the system"  - and the existing system is represented by BJP and Congress. However I see a wave coming – a wave that will get Modi to power Chetan Bhagat put it well in his column in TOI yesterday . I am quoting a part of this blog verbatim below “he represents practicality. Most Indians know that while it is go
Friends - I am doing a session on "How to get rich and retire early" tomorrow (22nd March) between 4 pm and 5.30 pm at:Clovermark Property Advisors; No 15, 100 feet road, JP Nagar 4th Phase; Bangalore - 560078It is open to all  - also please pass this message to any of your friends in Bangalore who may be interested. It would be nice if you could call Varun Rajaratnam at 99459 50109  for registrations in advance - it would help my hosts in managing their logistics.
Friends - Today, March 14th  is the record date for dividend payment.  The stock price is currently at Rs. 24.35 as I blog. On 15th, post the dividend record date, the price is expected to go down by Rs 1.50 - to Rs. 23.00. Obviously the price did not meet our expectations of Rs 26-30. If you bought it at around Rs 22 - two weeks back - then you have made a tax free dividend of 6.8%. Assuming you sell it at Rs 23.00, then you have made a pre tax capital gain of 4.5%. This is far below what we had hoped for - but a 10% return in two weeks not bad.
Selling a stock is trickier than buying a stock.There are no clear guidelines.And so here are my thoughts on Noida Toll bridge exit.If you have bought the stock at Rs 22 or below in the past week – you have already earned a Rs. 1.5 dividend that is tax free (6.8% tax free returns on a purchase price of Rs. 22). For getting this dividend, you will need to stay invested till March 15th.
This idea originally came from Jatin Khemani – an equity analyst and my ex-student  - he surely knows more about stocks than me. So this blog post is dedicated to Jatin. The Noida Toll Bridge linking Delhi and Noida is run by listed company called Noida Toll Bridge Company Limited.  This company, as one can imagine, has a very simple business model  -it spends on maintaining the toll road and gets revenue from people who use the toll road. With increasing traffic in Delhi, their revenues are growing and so is their profits.
Among the old well known business families in Bangalore is the Sipani’s. Back in the 80’s, they were known for the car they manufactured called Dolphin - it was a Fibre glass body  car (  Dolphin did not do well and was eclipsed by Maruti 800 as it came around the same time. Over the years, the Sipani brand has been in a few B2B businesses. Today most youngsters would not know the Sipani brand.
Here is a question that you may have – “I  save Rs X per month and where do I invest  it – I am looking for long term investment (2-3 years atleast) and I am looking for good returns.” There are no straight answers to this question - the answer will  depend on the risk taking ability and life stage of the person investing. Plus as of now, there is the uncertainty of elections ahead and how does one recommend anything at all. 
Jan –Feb- March is the time most of us look at investing for tax saving and this is the same period when the insurance companies are hyperactive in the media with their advertisements- positioning their offerings as tax saving  investment offerings.   This note is basically to reiterate my views on the way we must approach the insurance products. Insurance must be seen basically as means to mitigate risks.  All of us face risks of untimely demise, o




In my free time, I scan a lot of content on the internet and that is my way of educating my own self - in 2014, through my blog, I intend to share some of the stuff that, I think, is worth sharing.  So here is the first one that I think you will find useful This is a lovely template to help you define your  2104 goals  - what is great about this template is that it is very actionable  - Take a print o
My best wishes to all my readers for a very successful 2014 - I hope you can help at least one person every day for 365 days in whatever way you can. 2013 was a reasonably good year from investing stand point even though my predictions of Dec 2012 went wrong.  I did not expect slowing down of the Indian economy and the resultant devaluation of the Indian Rupee. I had also expected the interest rates to come down and stock markets to do well. However, as I invest on specific stocks for the long term, my investments in 2013 have not been effected by my wrong forecast. &nb
Hennur Road in North Bangalore has seen a lot of real estate activity in the past 3-4 years. The new Bangalore Airport and the promise of many tech parks and other industries in the vicinity has triggered the demand for residential spaces in and around Hennur road. This road also serves as an alternate route to Bangalore airport for people travelling from the outer ring road area. It is a four lane road and is already chocked with traffic on any normal day. All well known builders in Bangalore, including Mantri, Shobha, Prestige, Brigade have launched projects in this locality. Apartment prices are around Rs. 4000 to 6000 per sq ft.  Land rates depend on the exact location – but typical land rates are around Rs. 4000 psft to 7000 psft.
Year end is a good time to introspect and plan.  At this time of the year, most of us make New Year resolutions.  I am sure one of your New Year resolutions would be to do well financially in the coming year. So here are some thoughts on “How to become a smarter investor in 2014”. Visualise Financial freedom - We all agree that a
Financial freedom means being able to finance your life without depending on your salary. This one day personal development program is aimed at helping you reach financial freedom. At the end of the program, you will be equipped with  • A framework
I had recommended a property investment in my last blog and quite a few people had reached out to me and few did go ahead with the investment. Many did not as they could not fathom the calculations on how the ROI is calculated. So I have created an excel sheet that is formula driven –you can download it from drop box url here. http
One of the feedback that I received after the last two posts is that – it is good to know what happened – but tell me where I can invest now and make similar returns. So I am sharing one good property idea where you can make returns similar to the one I shared recently. Prestige Shantiniketan is a well know property in Bangalore. This is the property where my friend made 65 lacs out of an investment of 35 lacs over 7 years (please see my blog dated Sept 21st 2013).
In Q4 2010, I came across a project called SNN Raj Serenity that caught my attention (  SNN Builders is not a well known builder  – but Sanjay, one of the owners of the company was living in my flat complex and he was a decent person. The project by itself was in a good upcoming location (behind IIM Bangalore) and the club house and overall design looked good.  Further, the property was priced well and there were many investors who booked flats early. Seeing all this, I had recommended this to friends of mine.
In 2006, a friend of mine, working in Saudi Arabia visited us in Bangalore – and invested in a 3 bed room, 2000 sq ft flat in Prestige Shantiniketan  in Whitefield  ( The logic then was that the location is good – IT companies are all around and this property was a large project – 3000 flats, a five star hotel, a mall, a 2 million sq ft office complex and a convention centre– all within the same compound.  Bangalore did not have anything like it then.
The Congress and BJP have joined hands to pass the Food security bill yesterday. There is a general belief that this bill is a vote security bill for politicians and will lead to massive leakage of tax payer’s money.  By spending INR 1.3 trillion per annum on this scheme, the govt would have less to spend on wealth creating assets like infrastructure, education and health. The massive govt purchases of food grains for this scheme will leave less food grains for the open markets and that would mean food inflation and the operational inefficiencies would also mean that the poor won’t get their food. Not surprisingly the Rupee saw its steepest single day decline in the past 17 years (of 2.84%) and the
Glad to share this article on "Investing in Land" that was published yesterday in ET Wealth - this was based on an extensive interview with the editor last week and data that I had shared prior to the interview.Here is the link -
The USD -INR ratio stayed at 54-55 levels due to the massive inflow of USD into emerging markets as the US Fed kept their economy awash with cheap money. However, a few weeks back, the US Fed hinted at reducing this liquidity, and immediately the Rupee depreciated to levels of 61 to a Dollar.  A depressed Rupee means that the prices of fuel (which is imported) will be high – and that in turn impacts the prices of transported goods (like food grains and vegetables) and the general inflation. With Inflation high, RBI would not be able to easily reduce the interest rates and that means that the cost of capital to Industries would be high – which in turn impacts the GDP growth
This is a short note. RBI has just yesterday released this data on Housing price index that I found worth sharing
Hello Friends - starting March end 2013, till date I have done 43 book sessions  -41 of these 43 sessions were in companies (the remaining two were in the Bangalore stock exchange) and so the audience was restricted to employees in the company. Here is my first completely open book session - any one can come. As an author, it gives me great pleasure to invite you to my first book session in a book shop. Atta Galatta is a book shop with a difference -situated in Bangalore, they promote only Indian authors. My session is scheduled for today -  Saturday (27th July) at 5 pm - if you are in Bangalore - please do come. 
This note is based on my 12 month predictions made in Dec 2012 – and to share with you my sense of where to invest now.  So here are the key predictions from my Dec 2012 blog –
Here is the ppt that I used in my presentation in Bangalore stock exchange yesterday. session was fully packed with no seats left and people standing at the back. The session lasted for about 2 hours and the overall feedback was that it was a Sunday morning well spent :-)If you want, you can down load this ppt.
I am taking a two hour session this Sunday in the Bangalore stock exchange - the topic is " Stock picking in Indian markets - the Warren Buffet way" - the session starts at 10 am and the Bangalore stock exchange is just off the JC Road. So if you are interested and if you are in Bangalore - please do come. It will be a good session - that's my promise. The session is free. Please pass this message on to your friends who may be interested.
On 19th June, US Fed indicated that they would end the QE3 by middle of 2014. Ever since then, the markets globally have been in a tizzy. The Indian Rupee crashed to almost Rs. 60 to a USD. Gold went down globally to $ 1200 per ounce from around $1350 per ounce. The Indian stock market fell by 526 points in one single day on June 20th. The Indian bond prices crashed and trading had to be halted on 20th of June. As we all know, for the past few years, the central bankers in developed economies had resorted to a money printing spree -just to keep their economies propped up. This excess liquidity kept the interest rates in developed economies low and this cheap liquidity found its way into  financial assets globally including the
One of the reasons I have a reasonably good track record in stocks is because I accept my mistakes and sell without any emotional involvement. So here I am, selling a few stocks in the coming days – the timing of the sell depends on the market. I am selling BHEL – where I have made a loss of 19% over two years.  So, assuming my expectations of 20% per annum, I have actually lost 60%. I was hopeful of the power sector story – but the coal scam is unlikely to be resolved till elections time - and I have lost my patience on this one. I have many friends in
Inside Electronic city in Bangalore, where there are thousands of IT professionals working, there is a new facility that has just got inaugurated by a company called Uniworld (  It is a studio apartment complex with about 720 fully furnished studio apartments that comes  with additional facilities like a cafeteria, laundrette, gym, lounges, gaming zone, 2/3 home theatres, WiFi, 100% power back up etc. This complex is meant for working professionals. The room rent starts at Rs. 5500 (on twin occupancy basis) and it is truly premium in the way it is built, furnished and managed. I have
Here is an act that I normally do not recommend - but I must confess that I am thinking about it.  To buy or not to buy India cements stock - the stock has gone down due to bad news from IPL. The stock has fallen from Rs. 87 to Rs. 71.5 in tha past 5 days -about 18%.   I believe that this price drop is reactive and I believe that there is an opportunity - a short term opportunity - over time I believe that the stock will stabilise at it's 200 day moving average of around Rs. 85 - but right now the stock is down. 
There is lots of low cost money floating around globally –searching for good investment opportunities.  US, EU, Japan, Australia, S Korea, and many more countries including India have reduced their interest rates or maintained low interest rates since Jan 2013. This low cost capital is an opportunity for companies to borrow at a low rate and invest in creating productive assets (read capacity expansion) –which will in turn create economic growth. It is happening to a small extent – but most of this excess cash is ending up in speculation and in high risk assets like stock markets.  A part of this cheap money is coming into Indian stock markets through the FII route and this is the reason for the highs that we saw yesterday.
Searching for good equities at the right price is a waiting game – one has to wait patiently. Over the past few months, there is news of more quantitative easing from Japan and Korea, the US stock markets are at an all time high, the US real estate market looks postive, the jobs data in US is starting to look OK, there is a seeming calm in the EU but the Indian political scene is unstable and does not give much confidence in the short term – with such good and bad news coming in,  the Indian stock markets have to be volatile. 
I know this is late by two weeks –I was travelling for book sessions to Pune and Delhi for the past two weeks and hence I could not blog. In all my book sessions, this topic came up – should we invest in gold or not? So here is my take – If you follow my blogs or have read the chapters in my book on Gold– you would know that: Indian price of gold = “Global price of gold” X “USD / INR conversion ratio”.




I am almost 50 and I have fallen in love again. I did not even know this company till a few days back. My ex -student, expert stock picker and advisor, Jatin introduced me to this company three days back. My first impression was that it is too small and too cash rich. It sure was an unusual company – its website did not even list the services that it offers  -and  I wondered what the marketing department was doing? Jatin persisted – sent me a few reports and as I read the reports – I fell in love slowly. I sp
Here are some thoughts for my outgoing MBA students who are transitioning from college to corporate career this weekend · Once you leave your college and get into the job, no one would really care how much you scored in your college.
In the recent past, I have shared four questions that should help you get some idea about what you are passions are. These are: What are the various things you are or were passionate about? Go back and list the moments in the past when you experienced a sense of flow Explore the four aims of
Here I am back on the topic of finding your passion - till now I have shared three questions that should help you get some ideas about what you are passionate about. These were: What are the various things you are or were  passionate about  Go back and list the moments in the past when you experienced a sense of flow; and
I am taking a break from writing about “finding your passion” and writing about budget. Many of my readers had reached out yesterday asking for my views on budget. And so I am forced to say this: The Indian populace expects miracle from the budget – it is not as important as it is made out to be – years of bad governance cannot be solved by one budget – and I am a long term investor – my equity calls are for 3-5 years – so when I buy my stock, I am looking at period when there will be 3 to 5 budgets and so I cannot be really banking on the budget to give me ruturns. I buy stocks where budget or no budget, the company will make more profits and over time become more valuable and give me returns. In fact, last week the event tha
Henry Ford once said -“Thinking is the hardest work there is, which is probably the reason so few engage in it.” And here I am, trying to make you think. I hope the questions in my last two blogs got you closer to finding out your passions.  I hope you wrote down the answers to the questions that I had asked in the last two blogs – the questions were:
In my last note, I had shared one of the ways to start answering this question. I spoke about making a list of ten possible passions and picking the top five - examples here could be music, teaching, jogging, cycling, cricket, travelling etc I also talked about makeing a list of ten possible values (that matter to you) and picking the top five– examples here could be honesty, integrity, excellence, respect for others, helping others, etc
There is lot of stuff being written about money and investing and I would like to change gears and direction a bit. The question I would like to ask my readers is that if you have enough financial security to retire in your 30’s or 40’s, how would you spend your remaining life? What would you do from 6 am till 10 pm daily if you did not have to really go to work? To paraphrase it differently - what are you pass
You need to read this note till the end to get to the investment opportunity. Unlike stocks, identifying land to invest is comparatively easy in India. Due to urbanisation, most urban lands would appreciate in value by at least 15% per annum as long as the titles are clear. Here is how one of my friends managed to make a great ROI.
He was from a middle class business family from UP. He completed BBA in his home town and worked for some time in his family business before coming to Bangalore to get an MBA from Christ University Institute of Management. Like most MBA’s in the institute, he landed a good job – and started working from May 2012. He had a monthly take home salary of about 35 K. As he lived alone, his expenses were limited and he could easily save. He also did not have any liabilities like education loans. So he started his wealth journey in earnest by investing time to learn about mutual funds and real es
Welcome aboard – and thank you for joining me on this “wealth journey”. We all started our wealth journey the day we were born and this journey will continue with us throughout our life. As of now, we are co travellers. Through this book I want to help you reach your wealth destination faster. As we travel together, I hope to share with you some ideas that have worked for me and for others, who have been successful in reaching their wealth destination.
This is a short note on the ROI that one gets when you invest through the gold saving schemes offered by jewellers.   The scheme works as follows: ·
Before I started writing this book, I went around to do a market survey – wanted to know what kind of books existed in wealth management space in India. I went to many book shops, searched internet portals - bought about 20 books and read them and browsed through many more in the books shops  in Bangalore.  Some of the books that I liked and surely recommend to my readers are:
Before going into India specific predictions, let me share the big picture for  2013:US will continue with its policy of quantitative easing – the US economy will do better than the current 2% GDP growth (expected to be around 3%) - there will also be mild austerity measures to balance the budget over long term (a small cut in expenditures and a mild increase in taxes for the rich) –the US economy and the US dollar will emerge stronger over the year.Europe will continue in its difficult process of economic and political re-integration – the overall EU GDP is expected to grow between 0% and 0.5% –the  
The time between Christmas and New Years is a good time to look back and plan forward. The weather here in Bangalore is beautiful – most of my friends have gone to Goa /Srilanka /Coorg /Chickmangalur etc and my students are all over the country (but available on FB)  -  and I am in a contemplative mood today. So I went back to my blog dated 30th December 2011 to see what I had predicted then – and this is what I found :




In April 2010, as I was leaving my corporate life, I toured my offices in Chennai, Hyderabad, Gurgaon and Noida for a farewell session with my colleagues. In each city, I also had a 2 hour session on wealth management to all those interested and quite a few employees came and met me one to one after these sessions for advice. It is in one of these one to one meetings that I met this colleague (whose name I cannot reveal) – he had a total asset base of Rs 60 lacs (a house partially on loan and some cash at hand).He was fairly senior in our company – had a annual income of around Rs 25 lacs – had been working for more than 10 years – had clearly known how to earn a decent income – but had not learned how to invest his savings.
Two days back, the US Fed reserve announced that it would keep interest rates low till the US unemployment rates come down to 6.5% (from the current 7.7%). Typically all central banks have two key policy goals – controlling inflation and keeping unemployment low. Linking their monetary policy so explicitly with a 6.5 % unemployment rate means that the “low global interest rate regime” is here to stay for some more time. This would mean that the there would be a constant supply of liquidity globally and this would be a continuing opportunity for emerging markets including India. We can see the effects of this excess global liquidity here already. FII’s have pumped more than $ 20 Billion into the Indian markets since Jan 2012 – the second h
I know many of my readers, who invest in stock markets are trying to figure out the answer to this question. Kingfisher stock had a high of around Rs 30.9 in Feb 2011 and since then it has been a downward journey – it touched Rs 8.40 in August 2012 and since then has been languishing around Rs 15. Now we have this news that Etihad airlines may take stake in the airlines. Both KF and Etihad have not commented on this news.  We also have the news that 5 of its 42 KF planes have been taken back by lenders. Yesterday, after the news of Etihad broke out, 85 lacs
Let me start by wishing all my readers a Very Happy Diwali. This blog was due for more than two weeks – but as the college had exams and then a 10 day break, this session on Investing through Equity was dealyed. As we all know, different people have different views on investing through equities. And my guess is that everyone is sometimes right and sometimes wrong – there is no one right way to make money by investing in equities.   
I have had quite some queries on the recent market conditions and what is my outlook.  So here are my views. We all know that our government always knew what is required to be done – but they did not have the political courage to do it. The Congress is now in a do or die situation – if they do not act now, they will find it difficult to showcase their governance record in the 2014 Lok Sabha elections. And hence this recent burst of reformist measures – after all they too need a job after 2014.
A discussion on Mutual funds – the types of MF’s and how to select the MF for investingMutual  funds are a very good way to start your investment journey and I recommend it to everyone who is looking at becoming rich. This session was aimed at sharing with my MBA students the logic used behind selecting the right MF -  many of my students will become Wealth managers next year  and this would be useful learning for them in their jobs (last year appx. 200 students from my institute joined the WM industry and this year I believe it will be similar numbers).As a primer to this session,
A discussion on risks that we face and how does the wealth management industry quantify the risk taking ability of a customer?Prior to this session, the students had prepared and sent me a 20 year cash flow plan for an MBA couple - this was done in groups. I had picked a few of these cash flow plans – and specific groups got a chance to present their plans and as a class we critiqued the work. I am sharing one of the better plans in this blog –with permission from the students who made this.  Here is the link
In any journey, if we do not define our destination, we will find it difficult to reach it.   Similiarly, in the wealth journey, we all need to define the term “rich” – otherwise we will not reach it. The reason why many people do not reach the “rich” stage is that their definition of rich is not a very clear cut definition.   The class discussed a few common definitions of the term “rich” (two of which are in the ppt) – obviously everyone has a differen
As a faculty, I have learnt to take life trimester by trimester. This is my eighth trimester as a faculty and just like the prior seven trimesters, I am looking forward to the starting of the new session. This trimester is also special as I am teaching Wealth Management. This subject is close to my heart.  I learnt it by actually doing it. It comes to me naturally.  I know that I am good at it and I know that my students too like these sessions. Even though the course is designed to prepare students for a career in Wealth management, I am also teaching them “how to become rich”. After all as MBA stud
July first week is a good time to look back at the annual predictions made in Dec end / Jan and course correct if required. So here I am, looking back and seeing what course corrections are required. My 2012 predictions included the following: Indian economy will slow down a bit – well it has slowed down “quite a bit” and I am not too optimistic of the current government’s ability to kick start the spluttering economy. It is not that those in power do not know what is required to be done. The problem is that those in pow




A recent research on how the top 400 rich people in US made their money makes interesting reading. The data spanning a period of 1992-2007 showed that the richest 400 in the US made their money though: Wages and salaries: 8.6% Interest: 6.6% Dividends: 13%
There have been many recent news items saying that if Greece left the Euro zone, it will have devastating effect on the global economy and we are not insulated enough - that set me thinking as to what would happen to India and my view is that nothing much will happen to us – we are reasonably safe. First let us see what will happen to Greece, and then we will see what will happen to us in India. As we all know, elections are scheduled in Greece this week and there is a 50% plus chance that the Greek will vote for the party opposed to the austerity measures imposed through agreements with IMF and ECB
After a one month break, I am back. Not that I was not watching the markets or the economic news –our smart phones ensure that we are always connected.  But I was not actively investing as I was busy elsewhere. Warren Buffet had famously said – “Be fearful when others are greedy. Be greedy when others are fearful.” This is the time when everyone is fearful –there is more than normal amount of bad news –my prediction in December for 2012 was a tad optimistic – I did not predict that the Indian GDP growth would fall so much so soon – I also did not p
This blog is in answer to a question from one of my school classmates (of 1979-80 vintage) who is based in the US and wanted to know where the Rupee /USD rate is headed. Let me try to explain the mechanics in simple terms. This logic can be used to predict the long term movement of the conversion rate as well. Two years back, in Q1 2010, the conversion rate was around Rs 44-45 to a dollar. Today, in Q2 2012, it is hovering around Rs 52 -53 to a dollar. The rupee has lost between 15 and 20% of value with respect to US dollar in the period.
Based on requests from friends who follow my stock advice, I have decided to share my stock trades as and when I do it.  I currently have invested in 37 companies since last November. On 1st Nov 2011, the sensex was 17480 and today it is around 17200 – the sensex has not moved much but I have an overall absolute return of 10% plus on my investments. As most of you know, I watch the market closely and have a list of appx. 150 good companies that I want to enter when their stock price is low. I have been able to find an entry price for 37 of these companies and I believe that these companies will do well when the Indian markets start going up in the next 2/3 years.
Three months back, Indian markets were one of the worst performing ones globally –and today we are one of the best performers. The market has gone up by 15% in the past two months and many people feel that they missed the opportunity to profit from the rally in Jan / Feb 2012.This increase in market valua
In October 2011 blog, I had recommended 5 stocks at the prices prevailing then -  all the five stocks (SBI, BHEL, Bajaj Auto, Esab Industries and Maharashtra seamless) are still hovering in the same range today and are still worth buying.The methodology used for stock valuation is given in detail in my Sept 2010 blog - you can go back and look at it, if you wish. It is based on based on the historical earning per share growth rate (EPS CAGR) and the price earnings multiples (PE) for the company (over the past ten years) – using this past data, we can forecast the future stock prices beyond five years with a very high degree of certainty - especially for select companies that have an identifiable durable competitive advantage that cannot go away easily in the future decade.




Passive income as a concept is easy to understand – “it means getting a cash inflow every month without working for it” - passive income unlike active income does not depend on your effort –we all work for 8 hours or more a day - for 25 days a month and then we get a salary cheque – passive income comes every month without your working for it - a good example is rental income  - the rental cheque comes every month whether you are going to office or not.Now imagine if your monthly living expense is Rs 50,000 and your monthly passive income is also Rs 50,000. Wouldn’t that be an ideal situation? I am sure you’ll agree that this is a good situation to have.
In retrospect 2011 was a tough year to predict – in Jan 2011, we were still talking of “green shoots” – now that’s a forgotten phrase. As of Jan 2011, the Europe crisis was in Portugal, Ireland, Greece and Spain – and it was largely under control. No one could have predicted the natural disasters in Japan and Thailand and no one, absolutely no one, could have foreseen the what happened in Tunisia, Egypt and Libya. The Anna Hazare phenomenon in India, the Occupy wall street protests in US, anti Putin protests in Moscow, anti economic policy protests Israel, Spain and London are all pointing to a global restlessness amongst the youth – there is an anger against governments and most governments are today less popular than they were in Jan 2011. All these were not foreseen 12
This particular blog is for students who passed out of college in 2011 and are working for the first time – here, I would like to share the various tax saving options that you have and my recommendations as to how you can minimize your tax outflow.You can invest up to Rs 1 lac and save on taxes under section 80C of the Income tax act. The amount invested under section 80c is directly deductible from your gross annual income for tax calculation purposes – what this means is that if your gross annual income is Rs 5 lacs and you invest Rs 1 lac under section 80c, your taxable salary goes down to Rs 4 lacs (on which you w
What does the future look like right now? Where do we invest? Where are the markets heading? In Europe, US and in China, the governments are dithering from taking hard decisions – though for different reasons. These three regions combined represent 50% of the global GDP – and there are risks that Europe will simply implode or the US will sink back into a recession or China will have a hard landing. Decision makers in these countries have delayed the disaster so far by kicking the can down the road – but lately the can is getting bigger and heavier and the kicks are getting feebler – the risks of one of these regions stumbling is increasing by the day.
For the past 6-8 months I have been working on short-listing about 100 – 150 good companies – that have a great past and should have a great future. I now have 5 companies that I recommend that you can invest at the current levels. These stocks are expected to give 300% returns in 5 years – over time, I intend to amass about 20 such stocks and I intend to share my recommendations  to you through this blog. These are companies that have: an identifiable durable advantageproducts or services that will not get obsolete in the next 2 decades investment focus solely on it’s core business and does not look beyond in
If you thought August was tumultuous and volatile -get ready for September – it’s going to be a rough ride globally. Nouriel Roubini, the economist who predicted the 2008 crash correctly, has said this week that "we are in a worse situation than we were in 2008” – He thinks that there is a 60% chance of a second recession ( Bank President Robert Zoellick said on 3rd Sept that “the world economy is stepping into a new danger zone" (
Today I am going to give my views on why the Brand Anna has seen such a meteoric rise. I have tried to relate this meteoric rise to branding theories that we study in marketing classes in MBA.To me Brand Anna is a brand extension of Brand Mahatma Gandhi – The physical similarities between the two (the topi, the white dress, the physical features etc), the similarities in their core promises (a better future based on value systems), the similarities in their approach (fasting indefinitely, non violence, superior and unconquerable value systems etc)  - all these have made us relate at a personal level to the core meaning of Brand Anna, trust the value proposition of Brand Anna and associate with it in ways that reminds us of the stories of freedom struggle that Mahatma Gandhi
My last blog on the economy written on June 3rd started with lines - “Just like the sea which seems calm at the surface but has massive amount of energy boiling inside it, I am seeing business as usual on the outside but large amount of chaos beneath this calmness.” As I wrote those lines, I was sensing trouble ahead – but I did not expect that it will erupt so soon.  Last fortnight - the chaos finally surfaced – just like a volcano erupting, all over the globe, the markets turned extremely volatile. Even as this was happening – I see experts in CNBC calling the situation “temporary” and urging people to invest in mutual funds and equity as the Indian markets are attractively priced at aro
Germany had that one single dramatic day – on 9th of Nov, 1989 – the day that marked the fall of Berlin wall and events that led to the reunification of Germany. USSR had a similar dramatic moment on 19th Aug, 1991 - when Yeltsin stood on top of a tank and addressed people in Moscow – that lead to Yeltsin taking over USSR and eventually the breaking up of USSR into 14 new countries.India’s economic revolution in 1991 did not have any such dramatic event– But if one has to look back and find one such single day when it all happened – it was 24th
Just like the sea which seems calm at the surface but has massive amount of energy boiling inside it, I am seeing business as usual on the outside but large amount of chaos beneath this calmness. All across the world there is news that is screaming for attention – but one has to connect the dots —we see rioting in ME, increasing fuel prices and spontaneous uprising against corruption and bad governance in India, sovereign debt downgrades in EU and volatility in all the stock markets of the world. The most unusual news that caught my attention is that one state in the US, Utah, has legalised Gold and Silver as currency –are we going back to the Middle Ages? There is fair amount of unusual news around us - but if you look at the business news papers – there is calmness and near normality. No one seems to be connecting the dots, not at-least in public.
While I am aware that half of my readers are professionals in India and abroad who have been working for at least 5 years - this note is mainly for my MBA students who have just joined their jobs in the past one month. In this note, I am addressing those who are starting their careers in India and what is it that you need to do to start your investment journey.As you go through your career – you must remember that while it is important to focus on your earnings and your career growth – it is more important to focus on how you invest your savings. In about twenty years, those who did well in their investments would be far ahead financially than those who just did well in career /earnings.
I see that Gold and silver are touching new highs globally – Gold has appreciated 5% in April alone.I also see that even though crisis in  Japan and Middle east has overshadowed the Euro area debt crisis – it is far from over - and now it is the turn of Portugal to seek help from IMF and EU. I also see that Greece is close to defaulting on it’s debt obligations and it could end up in Greece  exiting the European Union. ( I also S&P
I have a friend who worked in the US for a few years and came back to Bangalore in 2003. He had a fair amount of savings then and realised soon enough that the real estate scene in Bangalore was hot. Sure enough he invested his entire savings by buying a few plots of land in different parts of Bangalore – between 2004 and 2008, things looked good with the real estate prices giving him 20% return per annum – it was not cash at hand – but he knew, if he needed cash, he could sell the plots within a few months. He also focussed on doing well in career and he was rewarded with two promotions in that period. His lifestyle kept pace with his improving financial condition - he bought a higher end car, took loan and bought a big flat, put his kids to good schools, went on international holidays - everything looked fine till the 2008 crash – early in 2009, his company started downsizing and he lost his job i
Who would have predicted the events of Q1 - As I sat and tried to predict the year ahead in early Jan 2011 – could I have predicted the blow out in Middle East? Could I have predicted the devastation caused in Japan? I am humbled by the fact that we can only predict so much – there are forces beyond us – however, it also means that we must constantly revisit our predictions and fine tune our strategy constantly.  Also as a risk mitigation strategy, we must be prepared for the worst and have an action plan for the worst case scenario.  Having said that, when I see my predictions made for 2011 – I am not sure if I will change anything.
As the New Year dawns all of us in India are optimistic – the mood is good, the future looks brighter –the MBA placements are doing well – the Engineering placements look still better –companies are hiring and there is a flurry of activity in almost every sphere of economy as we enter 2011.Like any investor, my investments in 2011 would be based on my predictions and I thought I must share this with others – with a view to help and guide as many people as possible. I tend to be on the conservative side – hence if we do better than these predictions – I am happy. I am going to keep updating on these as we go through the year – and as all of us know, things can change. So here are my predictions:
Not always. There are factors beyond just financial literacy. Let me explain.There was a recent report of a study done at University of Pennsylvania that shows that there is a big downside in getting financially intelligent – as per this study, “financial intelligence increases the confidence levels of the investor and it leads to him making worse investing decisions.” In a 2005 survey, 65% Americans believed they were 'very' or 'highly' knowledgeable about personal finance, although they performed abysmally on objective questions about the subject.
The content given here was was part of the last class that we had – where in I shared my views that Wealth is not really something physical – it is a way of life - a way of thinking – if you can understand this and then work towards thinking and operating the way the wealthy operate – in time, you will also become wealthy - as wealth will come to you.People who have wealth use their time to create three things – 1.       A
Currently we have about 300 million people residing in Urban India – appx 30% of our population – with increasing urbanisation, we will be having close to 550 - 600 million people in urban India by 2035 -  This massive wave of urbanisation in India means that our cities will grow to almost double the size in the next 25 years – we can see this happening all around us – if we compare a 1985 vintage map of any city in India  -we would realise that the city has truly expanded to almost double the size – the same thing will repeat –at a larger scale between 2010 and 2025.Where is the opportunity hidden in this information – if you look at a 20 year horizon, invest in a plot of land (any size that you can afford) in an upcoming gated
After a break of one month, I would like to restart and share details on Insurance products available in India and what products you must use in your quest to create wealth. My presentation of this session can be downloaded from is designed to protect the financial well-being of an individual
Fixed Deposits in India give returns of about 8-11% per annum. Inflation in India is around 8-9% and the interest from FD’s is taxable – hence FD’s cannot be used as a tool for wealth creation. However, FD is a good investment option for wealth preservation. Hence at the stage where you are, the wealth creation stage, FD’s are not the best option to invest.  And for people at the wealth preservation stage – the retirees for example, FD is a good option.
Having answered a YES in the 11 questions listed in my last blog – the company in question (CRISIL) is in our shortlist for investment – it means that the company has a long term sustainable competitive advantage;
I will share with 14 questions that we need to ask before we invest in any share – these questions describe the way Warren Buffet analyses companies – these questions are not mine – it is from a very popular book called Buffetology by Mary Buffet – she had access to Buffett’s thought process as she was his daughter in law for 12 years and she has described his philosophy of investing in the book - I have tried to follow it since 2003 and it has given me good results. 
In this session, I would like to share with you the basic strategies that Warren Buffet has followed over the past five decades. Warren started out early in life - as a school kid, he made money selling lemonades and having a news paper route. At the age of 14, with his earnings, he bought 40 acres of land and rented it out. In college, he studied Value investing under Benjamin Graham –the father of value investing. Value investing denotes an approach where investors pick up stocks at rock bottom prices.  He went into stock broking after college and by the age of thirty, he was a millionaire. He started Buffet associates in 1962 - over time bought a dying textile mill called Berkshire Hathaway. Using the cash generated from the mill, he slowly invested in other companies – overtime these investments overshadowed th
Here is a real life case – the name has been changed though. My presentation for this session can be downloaded from had finished her MBA in 2008  – lived in Bangalore with her friends –– was employed in a mid tier IT services firm – had a saving of about 20 K per month. She had come to me for advice regarding investments - this was in Aug 2009. She had looked at options like recurring deposits, fixed deposits, and post office schemes. She knew investment in equity was a high risk / high returns option - was not sure where to start. Pos
Hello students - This week onwards, for the next ten weeks, we will explore the various facets of wealth management - remember that Wealth management is for managing your own wealth - aimed at making you financially independent - where one does not need to work to maintain your lifestyle - as we go through the classes every week, my blog also will follow with one update every week. My plan to cover Wealth management in the next ten sessions is as follows: Session 1 - Overview of financial planning and Wealth management Session 2 and 3 - Equity, Debt and Mutual funds Session 4 -Insurance, Derivatives and Bullion Session 5 -Real Estate, Private Equity and Venture capital Session 6 -Macro Economics Session 7 -Tax planning, Retirement planning and Estate planning Session 8 - Wealth management industry in India Session 9 and Session 10 - executive interaction and Wrap up The first session aims at making you realize that each of us, irrespective of our backgroun
The objective of starting this blog is to help my MBA students with additional content to get a better perspective of the subjects discussed. This trimester, I am teaching two courses, Wealth management and Entrepreneurship, in Christ University Institute of Management in Bangalore. Through this blog, I intend to share my views and contents on these two subjects. Let me start with Wealth management. I believe wealth management is not just for MBA finance students –every graduate must go through the basics of wealth management. After all each one of us should know how to manage our own wealth. As one progresses in life and career, one will earn and save – with the expectation of India’s economy growing at 8% and above for the coming decade – everyone will do well financially in the years to come - and in that context, everyone needs to have a long term plan for achieving what I call “financial independence” – a stage where o
I hope you had a great 2017 and I wish you all a very succesful year ahead. Here is what I think is in store for us in India in 2018: Stock market – I believe that we will be in good times in 2018 - I expect a 12-13% growth in Indices in 2018. The reasoning is given below: India is going through a structural change where development /reform is becoming more and more need of the hour. The average Indian is now aspiring for a better life. He/she is aware of the inefficiencies of bad governance and he/she is willing to vote for a politician who will lead him/her to a better life. No government is reformist at heart  

Before I share my views, here is my recent stock ROI Quite a few readers are having these questions in their mind - so I thought to share it as an FAQ Will the markets go up from here or will it go down? In the near term – I am not sure of where the markets will go. But if you take the next 3-5 years – I believe that the markets will go up. Indians are now exposed to internet and TV and are aspiring for more and demanding a better life. The politicians understand this and know that they need to perform to keep their jobs. The govt is pushing difficult reforms and a developement agenda just to stay in power. This is a fundamental change and will shape the pol

Every now and then I meet people who tell me with a sense of pride that “I have never taken any loans and never will.” And on the other side of the spectrum, there are people in IT industry who have taken such large loans (for buying a premium apartment) that the EMI load is creating tensions in home, now that most IT companies are slowly downsizing. So here are my thoughts on taking loans. Loan by itself is not a good or bad loan. It becomes a good or bad loan based on: 1. Your ability to pay the EMI’s after taking the loans. A good loan is one where you can repay it without too much of liquidity issues. Your repayment capacity defines whether a loan is a good or




Here is an IPO that represents a solid company – I am a customer of DMart and I love the prices that it offers (and hate the crowds at times – but then we go on weekdays daytime). In my MBA classes – I take the example of DMart in my strategy classes to show how one can be smart and make money in an industry that has very low profitability. Then there is the founder – Mr Ramesh Damani – he has built such a solid reputation of a nice soft spoken savvy/value investor that it is hard not to like him and respect him and be a partner to him in this company. And this IPO is surely a block buster IPO in the sense that it would be over-subscribed many-many times –after all which analyst will say things against M

Warren Buffett is the greatest investor of all time. His decisions about buying shares and companies have beaten the stock market year after year and made him one of the richest person in the world. As far as I know, there are only two documentaries on Warren Buffet – where he has collaborated and helped them during the production – one from BBC a few years back and one from HBO that was released ten days back. The one released by HBO was keenly awaited by his fans for more than six months. This documentary traces his life from his early childhood days, to his college days, his marriage and his kids and the way he started his investing journey and the way he has decided to give away most of his $73 Billion to charity. The documentary has some very rare family photos and videos. It has focused on him as a person and his humble lifestyle and clearly shows what an independent thinker he is. But the documentary does not share how he identifies his investments.