Droplet Wealth

In our previous blog , we gave an example where the assumed gentlemen had taken an Insurance of 1 crore. It is natural that most of would think why such an H U G E amount of insurance? Because most of us think of Insurance as "sum that will be paid to you by LIC on Maturity" and hence think such huge amount is only for ultra-rich people. Through this blog, we would like to clarify on this erroneous thinking. Also, let our readers know how much they should cover themselves with?  The Maths  -  This is how the average financial scorecard of Middle class looks like  - Part A - Sum of all the loans that we have comes to about 50 lacs.  Part B - If we assume that "with no loans" & "an Own house", Rs 25k monthly is fair enough to maintain and run life on good standard of living. If we want this income for the next 20 Years (time taken for your kid to grow and contribute to expenses.), then we need to make a one-time investment of 60 lacs...

                         Most of us fail to understand the fundamental purpose of life insurance. We are made to believe that insurance is saving or worse in most cases an investment. However, the whole idea of insurance is to cover the  risk of  loss. In simple terms, insurance is a financial backup for the family highly dependent on their breadwinner. To make it even simpler, let me give you an example as to how insurance should be looked at - You buy a two-wheeler or car and get it insured - what happens here? Your car is insured for a specific amount and in case of any loss/damage to your vehicle; the insurer will pay you, post the inspection and only for the quantum of damage . Wonder how would you feel if anybody asks you - "What is the return I will get for the premium I paid on my motor vehicle ". Won't it sound ridiculous?              The more we talk to people...

        So we promised we will suggest a different (better) way of Direct equity investing in our previous blog . Here we are with our simple thoughts. Read on Build your Capital  1. Give yourself an 8 year time period. Well, the obvious question then would be "Don't stock markets make people rich in quick time?" Not really. One would have "made" the money in one year but by staying invested for decades. 2. In that 8 year period build your capital by saving in products that are exposed to stock markets. aka Equity Mutual funds. 3. Why Equity Funds and not something else? That is because, this will give the experience of "Market Volatility" + compound your capital at a better rate.  That's only about capital. So how about the knowledge?  Built your Knowledge 4. During this 8 year period, Start reading books relating to investing.  5. Based on what you read, Pick the Stocks and make a note of the reasons for your buying ...

Read this interesting  article last week and thought of sharing it with all our readers. A client shared this story with us: It started at the grocery store. Every time we were shopping, my older son, then eight years old, would bug me to buy him a certain cereal he’d seen advertised on morning TV. The same thing would happen when we passed a toy store. He’d beg me for highly advertised action figures.  I realized it was time to teach him about how businesses work and decided that the stock market might be a fun way to do that.  We started small. I told him he could buy the stock of any company he wanted—so long as he paid with his allowance or with money received as a gift. I’d match his funds.   Of course, he was drawn to companies he could relate to: computer stocks, Manchester United, and the like. When we ate in a restaurant he liked, he started asking if it had stock, and if so, how we could invest.  Our stock market game not only t...

A lot of us know mutual funds invest in Stock Markets. Stock markets aka  Equities aka   share markets aka companies. So a simple thought that comes to our mind, why not invest in shares by ourselves. The self-realization that we are smart than others props this thought to the next level and we commit. If not this then the greed of becoming Wealthy soon props this thought. If not now, then at some point it will. So you are caught and our job as advisors is to help you escape. Let us caution you - The very purpose of this post is not to Frighten you from Stock Markets but to frighten those who think stock market is a place to become filthy rich over night by investing based on a random tip. Read on. We have for now kept the legends who take personal loans and invest in the stock market away. We are only talking about individuals passionate about investing and want to make serious wealth by Investing in Stock Markets. By serious, we mean a number no less than a few...

C lick here to read in Tamil We know so many people that have a home loan. How much ever they try to, they still pay a minimum of 40% to 90% of principal as Interest to the lender. We delved about this and wanted to give our readers a plan that helps them reclaim the interest portion.  We have normally noticed that most of the home bought are about 40 lacs. WIth 20% down payment, the loan amount comes to 32 lacs. On a loan taken for 15 years at 8.6%, the EMI works out to be INR 31,700. If the loan is duly completed in 15 years, the total interest paid is 25 lacs. Now we have to do plan to get this 25 lacs back.   But the plan is good only if there is no extra payout that the borrower has to make. So we suggest that you extend the loan tenure to 20 years. This will save you 3,700 per month in EMI. Next, Invest the EMI savings in a good equity fund for 20 years. Let's see what happens now.  As one can see by simply managing one's investme...

There are a set of genuine standard questions shot at us from people whoever we have met so far -  Will my capital be safe? Will I seriously make money? How do you say I will make money if I stay invested for a long period? My money in a fixed deposit or LIC is always safe or at least my capital is protected.   Mutual funds are risky. So... WILL I LOSE ALL MY MONEY? This clearly indicates how fearful people are towards equity-related products. We are so tired of answering them with all the possible answers to ensure that they understand it better. Yet, the fear has not moved away. So we thought of writing a blog with an object of making everyone know what will happen to his or her money and whether MF is risky or not! Point 1 - Never put your money anywhere for a period of 20 to 25 years with the intention of protecting your capital alone.  Point 2 - By doing so, you are forcing your money to lose its value.  Point 3 - You have inve...

We have seen 4 of them, A IT Company, A Paint Company, A Electronics company, A Bank.What is next? Droplets said let's get into your kitchens. Kitchen? Is wealth there too? Wealth says I'm there too as long as you want to create me. How magnanimous? Recently, there was a book published about how this company became a 6,500 Crore company. Imagine our selves just holding .1% of this company. How much is that going to be? Well, that will be a cool sum of 6.5 Crores. That is the power of equities and Power of Compounding .  What company is that? As usual, there is a clue in there.  A Small History of the Company -  It was incorporated as a private limited company on October 22, 1955, in Madras  It is known for its innovative marketing strategy, be it distributing pamphlet from a helicopter in the fifties or introducing the exchange scheme Became a deemed public company on June 15th, 1988. (Meaning available for public investment) Announces land...