Category: Finance Awareness


This is a very basic post for the kids and for the people to explain the banking terminologies. Here is a conversation blogbetween Dad and Son explaining how the bank operates,

What are the implications of CRR, SLR, Repo Rate, Reverse Repo Rate and their impact on deposit rate, loan interest rate and on inflation?

Son: I have heard recently that Mr. Rajan has reduced Repo Rate by 50 basis points and everyone is saying that this is good for the market. Loan EMI may also come down. What is this rate cut means actually? I want to understand this.

Dad: To understand this you first need to know, how does a bank function. Continue reading

The Rule of 72

In personal finance, if you divide the number 72 by the rate of interest, you get to know the number of years it will blogtake for you to double the money..
Ex: if the rate of interest is 9%, simply divide the number 72 by 9% and the answer is 8. Thus 8 years will take to double your money if you invest at 9% of rate of interest.

INTEREST: we can use this rule in reverse to know the rate of interest needed to double your money to achieve your set goal. Continue reading

Is doing MBA a good option? I think the answer is yes.  Two things have to happen. You should go to a college whichblog has good faculty, and attracts good students. So if you are good enough to get into an IIM A who is to even question “should you go and do your MBA?” The answer is obvious, is it not?

For the not so good / great student the decision is far more difficult to make. Should an ordinary student get into a “d” grade MBA? Again the answer seems to be yes. No, not because they will learn too many things, but because it is almost impossible to get any job with just one basic degree.
Continue reading

Liar Liar

It’s always good to read some smart investors who did really well in the past. Here are some other lies that investors blogtell themselves on a consistent basis, including many I’ve told myself over the years:

Who are you ? Are you a Trader or Investor, Most of the post on this blog is written under the background as investors not as a Trader.

If only I would have taken my own advice…

I’m not wrong, the market is. You’ll see.

Investing is easy.

I can predict when the next correction is coming. Continue reading

Retail investors are helping markets more by staying out than by investing in equities. So from a purely selfish point blogof view, we (current equity market participants) do not mind if you stay away from equities. Park your money in low-interest bearing savings accounts and this will help banks raise cheap funds.

Then, while you earn taxable 9% per year in fixed deposits and 4% in savings accounts, we will continue to buy HDFC Bank, IndusInd Bank, Yes Bank and the like, which are up 3.5 times, 11 times and 5.9 times respectively since December 2008.

Also, remember to pay all your EMI installments on time so that retail loans made by private banks do not get into trouble and we can continue do well owing their stocks. Continue reading

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