Frugal Is Rich

Carbon, a chemical element with the atomic number 6 is an interesting investment topic and hence this post. Some people might feel like I am talking about chemistry rather than investing while others might think I am talking about the environment. The focus of this post is definitely investing and I will get into the details as you read further. Gold, the shiny metal has been valuable for many years as a form of alternate investment. If you are one of those that live in developing nations, it is still regarded as a safer asset in many cases as compared to the local currency because it appreciates and can be used as a medium of exchange during times of inflation and in the longer run. A lot of people end up holding physical gold as an asset, although the market is quickly evolving into Exchange Traded Funds (ETF) and Gold Bonds.  When we think about assets, the more common ones would be gold, silver, platinum and may be diamonds. Who thinks about carbon? Absolutely true, but this is...

People love their money and any chance of getting higher returns gets them all excited. So does more money mean more happiness? Well, that's an intense topic but my "personal" beliefs are that if you have the money, then you have the ability to pretty much buy anything. To dive into the reality, things that you bought lets say 10 or 20 years ago wouldn't really cost you the same any more. The box of chocolates that you bought 10 years back for $10 would now cost you may be $15 in the current market. So the moral of the story is you need more dollars with time because the purchasing power of the dollar decreases as the prices increase. This wonderful phenomenon is called Inflation. In real life, you see inflation in effect with higher rents, increasing food precises and travel costs.  To see this in effect, see the buying power of $100 back in January, 2000 now equals out to $165.17 in December, 2021. Hence you would need 65 more dollars to buy the same thing which you...

The tech bubble in the late 1990s helped us all learn a lot of things about startups, both exciting and stressful. People who were successful made millions and billions but yes there were people who lost a lot of money as well. History teaches us many things and its impressive on how much perspectives you can get just looking back and learning so much from time. The Silicon Valley boom still exists and a lot of people are excited about startups and doing great things. An attractive way for startups to get talent has been to offer a piece of the pie. Hence the idea is to take on a larger risk for a larger return. The conventional way of providing a piece of the pie (a percentage share in the company) has been through Options . Its a phenomenal idea, since it gives a person the right, but not the obligation to buy or sell a stock at a price. To give you an example, Company X may offer me 100 options at $1. Now I have the right to sell them if I want or just let them expire away. Let'...

A number of people don't realize the value of using credit cards the right way. If you use your credit with certain rules, it is a friend otherwise it can keep haunting you for years. When I learnt about credit cards and the idea of cash back, I made some rough calculations in my head and felt I was losing so much by not having one. Earlier in life when I didn't had income, I tried but I got rejected by credit card companies every time. You won't believe but even my secure credit card application which you apply for by providing a deposit upfront also was rejected.Imagine the fun! But I never stopped trying because it was a simple math example that got me motivated. Lets say I was spending $300 in groceries a month which is fairly standard, you end up paying roughly $3600 for the whole year. Now imagine, if I paid just using a debit card or cash then I would have hardly gotten anything in return. On signing up with one of the credit cards, I got 3% cash back for my grocerie...

Metaverse aka the network of 3D virtual worlds or as some some people call it true virtual reality. The whole idea is to allow people to live virtual lives and not hold themselves back in trying out what they might miss out on in the real world.  Looking at some of the trends of how excited this gets people, a search across Google Trends tells the story. If you carefully look, the search term Cryptocurrency and Metaverse are trending really close, given the latter has really picked up in the recent months. Source: Google Trends - Comparison of Metaverse, Cryptocurrency, Bitcoin & Stocks Virtual Reality definitely is an incredible way of doing what you wanted to do in real life and also run a social experiment around it. Oculus, Sony and Microsoft got us excited about virtual reality (VR) by allowing us to play games using VR headsets, but even if you take a step back I feel gaming is virtual reality. Let us take any game, for example Call of Duty that I am a big fan of, it is a...

It's been a rough start for 2022 when you compare the markets and how they have performed the month of January 2022. If you carefully look at the last 6 months in this picture below, we are pretty much back at where we were at July 30, 2021 (with the S&P 500 at 4395.26). Amazing how fast things can change, basically pushing you back to 6 months in time. S&P500 in last 6 Months (Source: Google Finance) In the past month itself, (as of Jan 23, 2022) it seems like the S&P 500 is down roughly 8.21% , Nasdaq which further got a heavier blow is down 13.25% and Dow is roughly 5.61% down. Similarly in Crypto land (cryptocurrencies), Bitcoin is down 28.89% while Ethereum is at 34.52% downwards. So scary moments?  Bitcoin to USD in last 1 Month (Source: Google Finance) I disagree to call this a scary moment as Warren Buffet has rightly said "Be Fearful When Others Are Greedy and Greedy When Others Are Fearful" . I am getting greedy at the moment, and buying as much as I...

I am always interested in knowing about how to save better for retirement and learn about tax deferred opportunities to save on as much money. I started thinking seriously about life insurance and how it could be beneficial. Everyone has different situations but I believe life insurance could be helpful if you have dependents that you directly support and who would be financially strapped if something were to happen to you. As you can imagine with financial instruments, things can get complex and its not easy to similarly traverse the land of insurance as well. Products are complex and too many and its hard to figure out which one's the best for you. The other thing you have at the back of your mind is sales people want to think whats best for them and not you since there are big sales incentives tied to the product they sale. Meaning a kiwi would be more beneficial than selling an apple. At the end of the day, its all about margins but that's just how sales works. Hence as a c...

The year 2021 is a wrap and so are the market numbers which again have been impressive. Based on the S&P Global Website, the numbers are looking great this year as well.  S&P500 is up 26.89%, Dow Jones 18.73% while the Nasdaq Composite was up by 21.4%.  As spectacular it could be making me realize do I really need to work that hard with my portfolio as beating the indexes have been extremely difficult. This year my plan is to keep focusing more and more on passive investing in these 3 indexes. Given the state of inflation, I need to make my money work harder for me given the Consumer Price Index (CPI) topped 7% in December. People whose wages have increased this year to match inflation are definitely fortunate but for those for whom things have not changed require new avenues to ensure they don't get into negative return zones keeping their money stagnant. Given the state of inflation, I am looking for other deals to not have my money sitting there in the bank. Last ye...

I have been a firm believer in keeping more money in high interest savings account and skipping the brick and mortar banks. Essentially the rate of interest is way much higher and you have an option to setup high yielding Certificate of Deposits (CD) or No Penalty CDs which is an easy way to grow your money. The best part about No Penalty CDs is you can think long term and get a higher rate of interest for your money but if you absolutely need the money, you have an option to close it and keep the interest without fees. Its a sweet deal because if you rather go with the usual CDs and if you want your money back prior to maturity, you end losing interest earnings plus fees. There are a number of online banks that have started offering this which is great but the challenge has been the rate of interest has been going down with each day/month. The best savings interest rate as of today with a quick internet search has been around 0.45-0.55% APY. How good is that ? Well it basically means...

The fight or flight response is an interesting phenomenon that surfaces many times in our life. The way it works is the brain pretty much figures through physiological response whether to be in the ring and fight or to leave and run. It is phenomenal how the human body reacts in so many different ways. It’s a very similar feeling a lot of people can have while thinking of investing the first time. As a safer approach you would always hear, banks are your best bet because you can get your dollars of the same value any time and the price does not go up or down. Banks definitely are a safer bet because most of them come with FDIC insurance which ensures that the government will step in if the bank is in trouble. But what you don't realize is inflation and how it eats into your capability to buy the same thing with $1 year over year. For example, an ice cream might cost $1 in 2021 but costs $2 in 2022 and hence the same dollar has less power to buy than it did in the pr...