alchemy of Money: THINK RICH INITIATIVES

by Anand S

In this book I have covered various topics that will give a beginner, a basic idea about money and various basic concepts around which our economic system is organized. It is important for every person to save for one’s retirement as one can expect to live for twenty years after one retires as life expectancy of an Indian is going up steadily due to lower infant mortality and better medical care. There is a complete absence of social security safety net for most Indians today, even for those working in Government sector, there is no inflation adjusted pension available anymore. I have tried to simplify the advantages and disadvantages involved in investing your savings in various asset classes. I have deliberately left out two of the most popular forms of investment among middle class Indians 1) Life insurance 2) Real estate Let us consider life insurance first most of us confuse insurance as an instrument of savings, it is not. We have this wrong view because of the tax breaks given to income tax assesses by the Central Government. Insurance is a product that mitigates risk and is sold by the rich to the middle class and is always skewed in the favour of the insurer rather than the insured. A substantial portion of the total money invested by you goes towards paying agent’s commission and premium for insuring you for the risk of mortality. The balance left out is invested in government securities and other securities. Hence the amount of money invested out of the total premium paid is less than half paid by the insurer. The return on money invested by the policy holder is less than half of the money he would have earned either in bonds or fixed deposits. A person who needs insurance is a person whose family will need support in the event of his untimely death. Alternately insurance is required for a person who has debt in form of mortgage and does not want to burden his family in the event of his passing. The product which covers these risks is called term insurance. One should not buy insurance to avoid taxes as there is better tax saving tools available. Real estate is also considered as a good investment by several retail investors but nothing can be further from the truth. Nobody makes money by buying plots in the middle of nowhere. The easy availability of mortgages from the nineties and the tax breaks given by the Central Government on housing loans has created an unparalleled boom in the residential market. There is now a painful correction process under way in that sector. The price of land is reflexively connected to availability of money. The lower the cost of money, greater the returns in real estate. Buying plots in the middle of nowhere is similar to buying lottery tickets as investment. Land cannot be liquidated immediately into cash at a short notice to meet urgent requirements. Cost of maintenance and protection of real estate from illegal occupation is prohibitive and time consuming. Verification of title deeds to the property is a complex process and needs sound legal advice. You should have a house to live and another to collect rent as rent is equivalent of inflation adjusted pension. The return on investment generated in the three different asset classes over 25 years would be in the following order 1) Equities 2) Gold and finally 3) Debt instruments. I enjoyed writing this book as a companion volume to my first book. It is my fond hope that you enjoy reading this book.

Genres: Money, Finance, Business, Economics

101 pages, Kindle Edition

Published August 26, 2016

Reviews

[Anbu · Rating 5 out of 5]

its useful to newcommer

[Bhuvanesh Kandasamy · Rating 4 out of 5]

It is a beginner's book for anyone who is interested in the world of money. Most of the content is written to the indian context.

[Sharath · Rating 3 out of 5]

A good book for beginners who would like to understand more of personal finance and capital markets. The book is given as a q & a between the Author Mr.Anand Srinivasan and two kids. One thing which I loved the book is for giving an alternative perspective on some asset classes. As a note to the Author, some of the grammatical errors could have been avoided. The topics have been classified based on different segments of finance which makes it easier to understand.

[Achu Aswathi · Rating 4 out of 5]

The book is a helpful read for beginners who wish to understand the concept of investing and how to begin their journey of saving and making an investment regularly which helps during their retirement period which can be 20 years of living without a job and regular income from their investment to have a smooth retirement period. There are a lot of expenses that you need money for when you are 25+ like when you have an educational loan of yours to be repaid or need of amount for your kids' education till they can earn for themselves. The author explains such things and how to tackle your expenses by saving more and spending less in a simple and understandable way for the readers.

[Ramesh Ruthrasekar · Rating 1 out of 5]

Lame Indian version of "why they didn't teach me this in school" by Cary Siegel

+Some nice to know information
-the q&a style is a common Indian style of writing and annoying
-information provided is more of what the author wants to say than what's really useful to the reader.
-language is dry, passive, academic and uninteresting

[Sridhar · Rating 4 out of 5]

Excellent recap of market and mf fundamentals

Excellent recap of market and mf fundamentals
Good read for a novice investor. Especially part about compounding and mutual funds was great

[Saravanan Sekar]

Good one for beginners

Well written handbook on investment for beginners. It's language is direct and easy to connect with for Indian investors. I would suggest for anyone to start with this book for learning

[Naresh · Rating 5 out of 5]

Strongly recommended book for beginners who wanted to know the fundamentals of economy/money especially in India. Complete book is in the form of questions by novice and answer by an expert.

[Manikandan Jayakumar · Rating 4 out of 5]

Understood some basic concepts. Could have improved in layout. Book is like a text document with out any link/index to the chapters.

[Arul Murugan · Rating 4 out of 5]

Good book to understand the basics

Useful book to understand the basics of money and other financial related terms and type of investment available to choose

[Aravind Chandrasekaran · Rating 3 out of 5]

Good for Beginners

[Premkamban]

Good for beginners about money

[Poornesh P · Rating 4 out of 5]

You will understand about the value of currency and coins

[Narasimhan · Rating 4 out of 5]

Good

Economic and financial students will be benefited by reading this book. Good . It's like a revision book of our syllabus. Worth to take notes for futur reference.

[Vijay Kumar · Rating 5 out of 5]

I got an idea of investment.

[Bharanidhar Santhi · Rating 3 out of 5]

Simple content, very beginners book in economy, rarely new things are learnt. It tells you what is savings, money, compounding, interest, debts, gold, inflation, etc

[Sudharsan · Rating 5 out of 5]

This book taught me a lot of Basics related to Economics and Finance and Money. Just love to read this