Ideas on Personal Finance
When I started investing, I made the common beginner’s mistake – I started by buying and selling stocks. Over the years, I have learned that buying stocks / mutual funds / real estate / etc., should be the last step in investing. Below, I have highlighted three steps to take before investing. Hopefully, it will … Read more
The last few months have been painful for investors. Some of my stocks are down 50% or more! I know the stock market goes up over the long term. But, in times like these, it is tempting to just sell everything. Two things help me overcome this temptation and allow me to stay invested. 1. … Read more
I used to think that Warren Buffett is one of the world’s wealthiest people because he is a great investor. Well, he is a great investor. But there is something else that has made him super-rich. Look at the graph below that shows his net worth by age: Buffett did not become a billionaire until … Read more
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Nowadays, it is impossible to visit any online finance forum without reading how someone lost 40% in Bitcoin, 60% on an NFT, 80% in a SPAC, etc. I am not sure why people take such risks with their hard-earned money. When someone wants a root canal procedure, they go to a dentist. But when it … Read more
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“My Gamestop shares are down 50%! What should I do?” I was recently asked this question at a pizza party. I gave the only answer a consultant ever gives, “It depends.” “Depends on what?!” the host asked. “On whether you bought Gamestop as an Investment or for Gambling?” Seeing the quizzical look, I decided to … Read more
Around 2011, I first became aware of Amazon – I had recently become an Amazon Prime member and was impressed by Amazon’s fast delivery and customer service. I wondered if I should invest in Amazon stock… Amazon: A very expensive stock The prevailing opinion at that time was that Amazon (around $150 in 2011) was … Read more
The simple difference between working for money and having money work for you can be the difference between being poor or becoming wealthy! It’s your lucky day… Someone comes up to you and offers to make money for you. Even better, they expect nothing from you! Initially, you think that it is a joke. But … Read more
Einstein said that compound interest is the most powerful force in the universe. Compounding takes time, but it can provide a big boost to your finances. Compounding: Simple, yet powerful You really don’t know something well until you experience it first hand. I knew how compounding worked in theory. But over the years, I have … Read more
Although this is an ancient proverb, it still rings true. Trying to make a quick buck is enticing and might work sometimes. If someone is a great investor and can consistently pick winning stocks, that is great. However, for most investors – building wealth takes persistence and a lot of patience. I have been investing … Read more
One of the things that surprise me when I hear people talk about their investments is – ‘Our biggest investment is our house!’. A house that you live in, by definition, cannot be your investment. An investment is something that you can sell. If you sell your house, you will have to pay rent or … Read more