Cash22 - A personal finance blog

Logic dictates that buying the lows will make you a lot richer than investing without much thought or analysis. Or, in Nick Maggiulli's own words, 'Why Buying the Dip is a Terrible Investment Strategy'. We have all heard stories of how friends and family bought so and so share - in the latest example, bought ITC at under 150 INR and sold it at above 250 INR - all within a year - giving glorious returns of 66%. This sounds like an investors fantasy. I looked at 10 years' worth of data from the BSE index to understand how much incremental I would have made if I invested monthly (on a random day of the month) vs on, say, a 90-day low. Scenario 1 A systematic investment plan that is set to buy the same number of units (the amount would differ) every month - on the 1st, irrespective of the market being high or low. Scenario 2 An investment strategy where you analyse the market and buy units every month, but what would seem like the lowest point in the month. Scenario 3 An in...

The time vs money conundrum. This does sound like a jargon, albiet an intuitive one. In its most basic form, it's a question; what is more important to you, time or money? You will hear honest answers and dishonest answers from all kinds of people. But have you ever wondered how it applies in your life? Not in a finance class test, not while discussing earnings potential with your fellow investment bankers during Thursday drinks, but in your day to day life? I used to earn 20,000 INR (≈ $250/month) 10 years ago. I was a happy go lucky person, rarely thought about saving, but thought very much about being seen using the latest fragrance from Bath & Body Works. I used to spend my entire salary on fragrances (think amazing smelling candles and lotions), rent, food and commute. This went on for 3 years. I saved zilch, save for some sad and unused candles. I studied engineering, and nobody had told me the importance of saving money. I now wish there was a basic finance class for eve...

If you took a notebook and pen, and travelled the world, and you wrote down the prices of a pack of 6 locally produced eggs in every supermarket in the world, what would you discover? Apart from the fact that you may have had a lousy trip, you will realize how cheap it is to buy eggs in Bucharest (Romania) and how it is more expensive to by eggs in Dubai (UAE). In a perfectly competitive world, all eggs everywhere would cost the same after factoring in the exchange rate. Same goes for Crude oil. Or for a Mattel toy car. Or for a Lego toy box. These should cost the same everywhere in the world. Except it is not the case. The PPP theory states that, over a long period of time, the cost of similar goods in 2 countries would be the same if you converted the currencies at the prevailing exchange rates. However, this rarely happens. Due to a host of reasons; transaction costs, government interventions, tariffs & duties, non-competitive prices or even sticky prices (wherein even with chan...

My mum loves sending me articles of how other 30-40 years old manage their finances. Recently, she shared with me an article that talked about how retired millionaires under 40 navigated the corona virus situation. But to be honest, I was not worried how they navigated the complete collapse in economies globally. I mean don't get me wrong, it is important - something I will cover in a later post. But I was more intrigued about the first part. How on earth were they able to retire as millionaires under 40!! Upon doing some online digging, I came to read about the concept of FIRE, again. I have heard this before. Have you? Or are you completely clueless - the way I was, the first time my colleague mentioned it to me? FIRE - as the title explains - refers to individuals that have gained financial independence and are now able to retire early - as they have reached the point where they don't have to work for money anymore. They can now do something they love, not having to sell awa...