Tag Archives: money control

Psychology for Money

Today lets discuss the behavior & the thinking that will not just make you rich but also help keep you rich!

1. Compounding is confusing

Compounding can make a small amount of money to start with, a huge sum defying all the logics. Good Investing isn’t just about high rate of return, its more so about time. The earlier you invest the better the compounding works for you later in the life.

2. Enough is never enough

There is no reason to risk all you have for what you don’t have! Don’t put all eggs in one basket. Always keep some emergency cash, always have enough to survive while you try to thrive!

3. Staying wealthy is harder than getting wealthy

There are thousand ways to be wealthy but to stay wealthy you will need a bit of fear, and a lot of money management skills to not risk what you for what you don’t. As warren buffet says – “Rule No. 1: Never lose money. Rule No. 2: Never forget rule No.”. To remain wealthy you just not need to make money you need to know how to preserve your capital. In order to make more money you need to be more comfortable to have it, hold it and not just spend it.

4. Wealth is what you don’t see

Spending money to show people, on things you buy for show-off is the fastest way to lose wealth! Wealth is made of your financial assets that may not be easily visible to the outer world.

5. Be Happy

To be wealthy, we need to feel good about other people being prosperous. If you have a deep seated idea that rich people are not nice, you are never gonna make it!

That’s all folks, want to know more? I recommend Reading two of the great books that helped me create this post.

Oops! I picked itC.

Stock picking is tough, and therefore you must always do your due diligence before proceeding. Today, let me share you my developing on going strategy, which I recently followed to select a stock.

An Amateur approach to Stock picking:

  1. I hear about Stock in news, among consumer, from friend or are a consumer of the product yourself, have seen that soap Ad and wonder whats the brand behind this successful Ad.
  2. I google search to see the stock price and trend (least helpful), but tells you if it is fine or it is very fluctuating something that happens when stock has very low volumes.
  3. I log on to simplywall.st (you can check the company site if you can or some other site where you can read up about below information) –
    • The Area graph of company (for look and feel and comparison among alternative stocks), check Fig 1 below.
    • Current Price of the Stock is it fair, over or under value (not doing any calculation as an amateur), check Fig 2 below.
    • Finance Analysis, the part I read carefully and specifically focus on Debt (in current Covid scenario it becomes even more important), check Fig 3 below.
  4. Head on to Moneycontrol and look for (check Fig 4 below)-
    • P/E (Price to Earning) ratio of the company compared to the Industry (it should not be way below or above). A low ratio indicates company is undervalued, high indicates its overvalued.
    • P/B (Price to Book) ratio, how is the stock trading with respect to its book value. I prefer usually a little higher than 1, but it may differ based on sector.
  5. Look at the Sector, for example – if the Stock is ITC, FMCG or Consumer Staples being the sector how will that be in near future.
  6. Current Geo-political or Economic scenario (remember only in long run stock market correlates with a nation economy)

But Salrite I do have some extra time, Are we done? – well, perhaps you can:

  1. Look for Consumer Sentiments on the Product, dig up the Social media see if you can find something about its product/services
  2. Management Information how is the company management.
  3. You may also look at other ratios like EBIT, or EBITDA; I usually don’t to avoid paralysis by analysis.
  4. Check if the Stock pays Dividends or not?
Fig 1 – ITC Stock dynamics
Fig 2 – Is the Stock trading at a fair price?
Fig 3 – ITC Balance Sheet
Fig 4 – ITC Valuation (Source – MoneyControl)

Remember – No Matter how much you analyze there will always be some risk involved, and there is no guarantee the stock you pick will give you good return no matter what others say! So If you are new to this game and are passively into it, please go for a low cost Index fund, here is my article explaining why?

Thank You for reading, Happy Investing!

Am I Dumber than She thinks?

Am I? I don’t know (confused), Are you?

“Too many people spend money they haven’t earned, to buy things they don’t want, to impress people that they don’t like.”

-Will Rogers

Hello Riters, Welcome to riteFinance, this is your host Ritesh and today lets discuss about-

Five Dumb ways to spend your Money

  1. Gambling, Believe it or not an average American spend $1000 a year on Lottery, with a odd of winning 1 in 14 millions, i.e. you are 20 times more likely to be struck by a lightening (thunder roars in far), and even if you win the Lottery you are more likely to be broke the next year than to be wealthy. Gambling in any form is a total waste of money, with slot machines and equipment designed in favor of Casinos to drill a hole in your Pocket! Here is link to an interesting read on Psychology behind Casino   
  2. Things you buy to impress them! Yes, that Gucci Scarf or the blue Jaguar, all the liabilities you take just to impress the girl or guy next door can drill a deep hole in your pocket and all your future cash flow may flow down that banking stream. So think before next time you go on a Shopping spree, ask yourself can I really afford it?, will this serve a purpose?, is there a way I can be happy without it? Do I really need it or its just a show-off?  (squirm face)  
  3. Things you buy to destroy health, yinkeesss, what did I say?, yes you heard it right, things like drugs, excessive junk snacks to munch on, or too much alcohol. This things not just have a recurring cost due to their addiction capability but also a cost far beyond your imagination, a cost that no money can pay for.
  4. Fees that Bank Charges: Overdraft charge, Bank Account Maintenance charges, your Card fees or that interest they charge you on Credit Card, even the money that’s deducted when you used your xyz card on abc ATM! To top it all, Bank also has a unique advantage of deducting cash directly from your account. So next time you may like to read your bank statement more carefully or maybe make a call & ask your banker. To know more on how to avoid some of these fees, check out the article here by lendup.com.
  5. In-App Purchases; yes, the skin you bought just to show-off in the virtual world or the extra life in your favorite game, even if it is in 50% discount (which is obviously a fake number to put on), may not be worth your Money (and your time). In most cases put away your phone for few minutes or watch an Ad and you will get an auto renewal of life totally free of cost. Also, the more you spend, the more likely it becomes for you to spend again, so it not only have a present but also the future cost attached to it.

Thank you for reading, let us know in comments below if you don’t do any of the above mentioned Dumb Expenses, or if you have one of yours own. Follow for more, #KeepLearning #Money

Money Matters

Two weeks back we discussed about the Worth of Money where we mentioned things that are above Money, and why they are above Money. Today lets discuss about why Money Matters!, if you haven’t read my previous blog post the Worth of Money i highly encourage you to do so.

Money, means a whole lot of emotions to many of us. Often times we either avoid the topic or doesn’t discuss thinking what others will think. Majority of us have associated the negative emotions like Greed, Lust, Selfishness with Money. The way majority think about Money is also the reason why majority lacks it. Today we urge you to think like Minority.

Let us think of Money as Freedom, Money as a Tool, Money as a Servant not just for you but also for your loved ones. Make Money a positive emotion and wealth will follow you. That said, I am not saying Money doesn’t make a few of us blind, and force us to do even the gruesome crimes like murder, rape etc. But before criticizing Money lets not forget it is just a Tool, And a Tool is as good as the person using it. All Money do is give you the Power, and the Freedom of Choice. How you use this power or freedom is totally up to you. You can use Money to give back to the society, or you can use it to further exploit the society. Just like you holding the cash have the choice where, how and when to spend.

Most of us live paycheck to paycheck, and are a few paychecks away from insolvency. Some of us are already broke and are spending way above the means i.e. we earn 100 dollars and spend 110 (this situation is worse in some countries than other). The point is many of us lack financial literacy, because it isn’t taught in any class or anywhere in this professional world! The Education system is designed in a way to not let you be free but instead follow the instructions. It doesn’t teach you how to think, but what to think. That is why you need to take control in your hand. You need to switch gears, or it will be too late before you reach the destination. The first step to be Financially Literate is to understand the financial mean – the Money. So, lets discuss why Money Matters.

5 reasons why Money Matters –

1.Basic NeedsMoney help you build a shelter, buy some clothes and get food on your plate. Without these you pretty much can’t survive.

2.Dream Executor Money can help you execute your dreams. It give wings to your desire. You want to be a pilot, go enroll in a University. You want to be a hotelier go own a Hotel. You can also start a Business of your choice, without the headache of getting it the required fund, because even if you are not funding it fully with money comes the networking, the contacts, the people whom you can ask to invest. With proper funding dreams get traction in the physical world.

3.As a Fuel – Money act as a fuel for the causes you care about. You can start a project or a movement to help the needy, the weak or the underprivileged. Money is not just for the self it can also help fuel your selfless desire, and things you truly care about.

4.Gives a ChoiceMoney gives you an opportunity to choose what you like. Think for a second, Did you buy a car you like or the one you had to? Did you buy the watch you always wanted or the one you just had to? Did you buy your dream house or the one you can afford? With enough Money you can afford that Dream Car you always wanted, or the Mansion you always dreamed about. Money can give you access to all the exclusive & luxury items.

5. To achieve the highest self Money helps you live with abundance & prosperity, true to your purpose. Your consciousness matters! With Money you can spread the consciousness, open up your heart, and feel the bliss, spreading joy everywhere.

Still not convinced, just imagine the smile you can give to a child, buy just buying them a little balloon. So next time you think about MONEY, choose your words wisely.

Thank You Riters, I hope you are enjoying this beautiful Sunday with your loved ones. Like if you liked this post, follow us and do check some of the tips and tricks to financial freedom.