Droplet Wealth

                         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...

A lot of us might be thinking about making part payments against our home loans. We suggest you look at the below table of savings before you take any such decisions -  For those not adept with numbers/tables, lets us clarify in simple sentences.  1. If we prepay 1 lac of our home loan at the beginning of each year for 5 years. Our Total "Interest Savings" come to about INR 5 lacs for a period of 15 years. 2. If instead of prepaying the home loan, we choose to invest the same in an equity mutual fund, then a fund returning 12.5% per annum, would help us create a corpus of 20 lacs. 3. If instead of prepaying the home loan, we choose to invest the same in an equity mutual fund, then a fund returning 10% per annum, would help us create a corpus of 15 lacs. Before we complete - here are the few reasons why r ecommend delaying the Pre-Payment of the home loan - 1. The Prepayment can be used to create your retirement corpus. 2. Locking up your savings...

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...

Click here to read the article in Tamil   Start early.  Be it be health or wealth start early. It does not matter whether you run a full marathon or talk a small walk around the park. Starting early only matters. Likewise, start saving right away, Even Rs 500 is Okay. Avoid excessive calories & fat for a peaceful healthy life. Likewise, avoid debt. Understand the importance of compounding in life. Have a long-term mind set. Be consistent in whatever you do. Let it be gyming, Saving or investing. Only then you will achieve your desired results. Everything in life would take time. You have to believe in the process. Six packs do not appear in a month and neither does wealth. Continue the process and it would happen for sure. Have a plan in place and measure the progress at regular intervals. So you will understand where you are and what needs to be done to reach the destination on time. Understand the significance of diversification. You don't eat the same ...