Tag Archives: stock market

Why I Invest?

I Invest, because,

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I have Extra cash

I believe in power of Compounding

I don’t like to Spend

I don’t like to Save

I love Investing

I like the way Money grows Money

Uncle Sam told me

My Dad used to do it

I love Assets

For Financial Independence

For my Future

For my Kids

For my Livelihood

For Retirement

Just to grow Wealth

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While I can go on and on, the point is there are plenty of reasons to Invest! And the earlier you Invest the better it is!

So, In case you have not yet, Invest Now!

Further articles that you can read –

Thank you for reading 🙂

7 ways to lose money in stocks

Hello Riters, Hope you are doing great. We are back to help you do the personal finance. Today lets take you through some don’ts of a Investor. Lets discuss 7 ways to lose money in stock market and how to avoid them.

As Benjamin Graham, once said, “In the short run, the market is like a voting machine. But in the long run, the market is like a weighing machine.”

Read more on Investing –

*Mistakes to avoid while Investing

*5 To Dos of Investing

*What is a Stock Market Bubble?

*How to earn more money, Hustle?

*Why prefer a low cost Index Fund?

Happy Reading 🙂 Come back for more, follow us on Instagram for Financial News @ritefinance

Hustle on the Side

Lost Job, Shit happened, now what?

No worries. Well yes you can’t buy Lamborghini or your favorite scarf at Gucci but definitely you can eat some Luchi (Indian Bread eaten with Chickpeas). Jokes apart, well lets discuss how to keep your cash flowing to get that necessary food on your plate! Below are five side hustles that you can do to keep some extra cash flowing that can act as an add-on to your Primary Income source or can be a savior in case you have been a victim of the Crisis like Covid. These Side hustles can earn you anywhere from $500 to $2000 a month with little effort. So without further adieu let’s dive in.

1. Online Store Dropship that scarf, or retail that shirt; whatever you choose selling items online can be a good source of Income. And with this pandemic pushing more & more people online with contact-less door to door delivery, your store can be the next big thing. So get your domain and hit that Shopify to keep the customers rolling. Now, if you are wondering you can’t get your supplies from China and hence can’t make that extra buck dropshipping, don’t be dishearten check out ever green platforms like Amazon and use it to your advantage. To read more about how to sell online click here.

2. Freelancing Web designing, writing, photography, digital marketing, online tutor you name it, anything that can be done digitally can be done through freelancing. For starters you can check out platforms like ‘Fiver‘ or ‘Upwork‘ and once you have a belt of projects completed under you, you may like to showcase the same through a personal website. If you serve your client well you may very well turn your hobby into a full blown Business. All you need to start freelancing is to master a skill, and that is where you can

3. Blogging or Vlogging, Social Media – Be a Influencer, teach something, or just crack jokes, Social Media is platform for all, provided you are ready to put in the required effort. To put the numbers in perspective those with 100,000 followers can earn around $700 per photo in Instagram. And in Youtube with 20,000 views you can earn around $100. Affiliate Marketing, Sponsors, Ads, and selling products are some ways to earn through Social Media. But remember you personal brand won’t be build overnight you will need to understand the system and leverage it to your advantage. To know more on how you can crush it on Social Media platform, there is a great book ‘Crush It’ by Gary Vaynerchuk (a Belarusian-American entrepreneur, New York Times bestselling author, speaker, and Internet personality)

Garyvee says

4. Dividends – If you invest in right stocks, you can have the regular payments added to your account quarterly/annually. There are companies that pay a part of their profit at regular intervals back to the Investors, for owning their stock. All you need to do is open a account with brokerage like Zerodha and do your due diligence picking up the stocks. You can start with as little as 100 rupees.

5. Real estate A vacant land, or a building is referred to as Real Estate. Real estate investing is the purchase, ownership, management, rental or sale of real estate for profit. A way to start this is get a duplex, and rent either one or both the portions, using rent to pay off the mortgage payment.The loans also provide income tax benefits under Section 80C (up to Rs. 1.5 Lakh on the principal) and Section 24(b) (up to Rs. 2 Lakh on the interest paid).

Bonus content – ‘Flipping’ – you can flip anywhere from a book to a watch, you can even do something called ‘Domain Flipping’. A Canadian blogger Kyle MacDonald has even flipped red paper clip for a house, doing a series of 14 trades online. You can also use eBay or Amazon to flip. Refer this link here to know more on how to flip items on eBay. Flipping items is all about art of selling, master it and you will never sleep hungry anytime.

Don’t forget Successful businesses can also start out as side hustles.

Thank you for reading 🙂

Bubble, oh no!

Time for some practical: Pour a cup of dish soap into 6 cups of water & stir it well. That is how Bubbles are formed, now you burst it!

Oh no!, not the Bubble Minku loves. Lets do it again.

Increase the price of an asset significantly surpassing way beyond its true value, and make the majority believe the price will continue to rise at least in the foreseeable future. There you go, that is exactly how Financial Bubbles are formed. Eventually the reality kicks in, and like every bubble it bursts!

Welcome to riteFinance, this is your host SalRite, With some saying the current Stock Market is in Bubble, today lets discuss about Financial Bubbles.

As per the legendary Investor Warren Buffet, Bubbles form when “People see neighbors ‘dumber than they are’ getting rich“.

Financial or Economic Bubble is not a new thing, in fact the official history of the first ever recorded Bubble dates back to as far as mid 1630s, though the term itself was coined around the 1720 AD. To dig a bit deeper, lets understand the five stages of an Economic Bubble with the example of what is known as ‘Tulip Mania’ of mid 1630s.

Stage 1 – Tulip comes to Vienna from Turkey, are soon distributed to Netherlands and becomes a status symbol in Dutch community. With a saturated intense petal color that no other plant had, and a profusion of varieties, Tulip soon becomes a coveted luxury item, increasing its asset value. This stage is referred to as ‘Substitution‘.

Stage 2 – This is when the news of Tulips start spreading, and becomes a topic among the majority . It is now that the Speculative purchases happen, and the bets are placed on the future value. As the flowers grew in popularity, professional growers paid higher and higher prices. Buy now, sell later at a higher price becomes the motive for Investors. This is referred to as ‘TakeOff

Stage 3 – Exuberance – a state of unsustainable euphoria. This is when the asset overshoot its intrinsic value leading to a jump in the portfolio of several. A few lucky/rational Investors sell at this stage, while the majority continue to buy in. At this stage Tulip becomes over-valued. At its peak, value one Tulip bulb was equivalent to a House. By around 1636, the tulip bulb became the fourth leading export product of the Netherlands, after gin, herrings, and cheese. Tulip mania reached its peak during the winter of 1636–37, when some bulbs were reportedly changing hands ten times in a day on paper (it is the time when future markets appeared in Dutch Communities).

Stage 4 – Critical stage – a state where some begin to sell. When the market realizes that an asset is over leveraged and way too over valued, some begin to lose faith and starts selling. This is when they realize there aren’t enough buyers. For Tulip it was the revelation of their true value. In around February of 1637, for the first time in a routine auction no buyers were available for the Tulips. This time coincides with the outbreak of Bubonic Plague in some European Cities. This lead to the 5th and last stage of a Bubble.

Stage 5 – Crash (pop) – Burst of the bubble, and the reset for the economy. In case of Tulip, Bubonic plague probably acted as a needle that led to the demise of its Market. With no buyers available sellers were left with nothing but a flower.

A few hundreds years later, now a Tulip is worth a few bucks and can be ordered online, but nevertheless bubbles keep forming and keep popping. As we humans are irrational beings. This leads to another story, this one more recent.

2008 Housing Bubble

This was the result of irrationality of the masses combined with financial engineering of the elite few, the Bankers. Lots of Subprime loans were made between 2004 to 2006 rising from 8% to around 20% in the United States, at the same time NINJA loans (No Income, No Jobs, and No Assets) grow in popularity and many of the Millennial with lesser Income would write a higher figure in the application, that no one in Banks would verify and they will easily sanction a loan. The greed of the Bankers didn’t stop here they combined all the A, B and C rated loans packaged them into something called CDOs (Collateralized Debt Obligation – a type of structured asset-backed security that include mortgages, loans or bonds), and sold it to the Investment Banks, betting further on loans. As if this wasn’t enough the CDOs were swapped for Insurance what is called as Credit Default Swaps. CDS acted as a financial instrument that could hide these risky investments (to read more on CDOs or CDS click here) Even the rating Agencies like S&P didn’t downgrade the bonds & kept ratings high. Couple this all with Inadequate regulations by the policy makers, and you see a Huge Economic Bubble.

Eventually, the home owners defaulted on their payment, this meant the riskier loans, CDOs hold by Investment Banks all lost their values, and suddenly the whole Financial system collapsed on its weight. Lehman Brothers the fourth largest investment bank in US back then filed for bankruptcy. And the Market corrected itself, not exactly though, the fed came in, and bailed us out. Enforcing strict regulations, and making much required policy changes combined with Quantitative easing kept the US Economy on its track.

Even before 2008 crisis, which is the most recent one (prior to this pandemic) there were several Economic Bubbles. One such was the dot com bubble of 2000, caused by excessive speculation in Internet-related companies. While several big companies like pets.com went out of Business, it was not the end for all, with growth in the technology sector stabilized a few like Amazon.com, eBay saw rise in their Market Share following the crash.

Another Bubble that can be looked at, dates back to 1840s Great Britain. Referred to as Railway Mania, this was the period when the shares of Railway Companies soared in their value, only to be declined later. Following the crash, the larger railway companies such as the Great Western Railway and the nascent Midland began to buy up strategic failed lines at a discounted price to expand their network. So what was the down fall of some, became an Opportunity for others.

Bubbles are primarily of two types –

  1. Equity Based – characterized by easy liquidity, tangible and real assets like tulip mania, railway mania and dot-com bubble.
  2. Debt Based – characterized by intangible or credit based investments with little ability to satisfy growing demand in a non-existent market like United States Housing Bubble (of 2008).

Can we predict these bubbles?

Well, we may not be able to predict accurately nevertheless we can identify it, based on the over leveraged asset price, high risk lending or borrowing practices, and when the people tend to rationalize borrowing, lending and purchase decisions based on expected future price rather than the ability to repay.

What can we learn?

There are few things that these Bubbles teach us –

  1. In every crisis lies an Opportunity, only if one knows how to capitalize on it.
  2. Bubbles are natural, every Economy goes from a Boom & Bust Cycle.
  3. Certain theoretical research models states that bubbles (as long as they do not burst), raise economic efficiency and welfare.
  4. Regulations have a big role to play in an Efficient Market.

If you want to read more about how the Bubbles work, there is a great article you can refer here.

Thanks for Reading, Lets us know what you think about the current Stock Market scenario in the comments below? Do follow us for more @ritefinance