Most
of the Investors in India never understand what risk is and what is not? Everyone feel that fixed instruments are safe and not
risky and keep saving money without understanding the big risk involved?
Fixed instruments are good for a
short term parking of your money, not for long term!
This particular excel file will help
you to understand, how the inflation will eat all your savings over a period of time, if you
are happy with fixed returns!!!
1. At present, life expectancy in
India is around 73 years and it will keep increasing due to medical
advancement. People who are 45 years now can have the better chance to outlive
80 plus years.
2. We are living in a fast paced
life, and everybody wants to retire at the age of 50 years or much before that
and what they fail to understand is, all of us are going to live for another 30
years post retirement, either with little income or no income!
3. At present, most of the banks are
offering 10% interest rate and effective yield is only 6.91%( highest tax
bracket), whereas current inflation is 8%. Then the corpus will be eroded in less than 15
years and who will take care the next 15 years without income!!!
4. Risky investments like equity or
equity mutual funds gave superior return over a period of 10 years plus. At
present, there is no long term capital gain on your equity related returns.
5. What you believe SAFE is NOT SAFE, in reality. I think this excel file will help you to
understand the shocking reality about inflation and how dangerous it is!, which eventually can destroy one’s saving just
like that!
6. All over the world, over a long
period of time equity is the one and only asset class which have the potential
to beat the inflation convincingly.
7. Today, most of us fall under
highest tax bracket and the number of people in that category keeps on
increasing year after year.
8. I request you all to understand
the risk vs return of the investment before you make any investment. Don’t
carry away by the flashy ads or join the speculation waves created by Property
and Gold!
9. Last, but not the least,
Traditional Insurance policy will fetch 5 to 6% post tax return which is far
lesser than inflation and most of us believe that investing in insurance is safe
and good!
10. We all work hard to create wealth
for our golden years. Everyone should make sure at least one should
continuously enjoy what they have earned in their lifetime. Otherwise, it will
not make any sense for the one who has put so much effort in their career to
build this!!!
p.s. Hope this excel file helps you to
understand inflation in a much better way!
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