Hey Buddies,
The first and foremost thing we discuss here is money and how can keep improving in handling money and multiplying it in all available possible ways. This post is related to some case study (Only based on my observation it is not implemented practically and I am working on it I can share the outcome of it by June 2024. When it comes to Money Time is an important dimension according to me. I have never heard of people turning out to be Warren or Gates overnight but I have heard millionaires or billionaires turning out to be beggars overnight.
Let us get into the topic, what would be the inflation number around us or in our country. I have never heard our inflation number above 7 or 8. That means that the value of our every 100rs this year is moved down by inflation %. If we keep our money in a safe or piggy bank or locker. Its value will be depreciated accordingly. so many financial advisors will suggest we keep invested ( they think it is as easy as staying hydrated). At the end of the day, they might be correct to realize that we need time, that is why I mentioned Time is an important dimension of money.
As a DIY we don't need to do magic to keep winning, we need to find a way to beat inflation. Then we can think of investing and how and where is a later portion of thinking ;) those things will be taken care of automatically so we don't need to worry about it now. Let our important dimension can take care of it.
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As a normal citizen or middle-class person who is trying to be a millionaire or billionaire. I keep searching for alternates and compare one with another to identify which will be good or better or best. To be frank I started my R&D only with RD and FD and only at maturity, I realized that we need to pay tax on the interest earned. then our overall return % will be affected. Now time for correction. From 1st experiment, we understood or realized that we have some portion of money and time. now how to increase the yield. In the second cycle, I understood the Indexation benefit, which generally comes with some time extended investments. Invested in that and panicked due to the volatility of the market at the end of this journey came with profit and paid tax as minimum as possible, now comes the twist called in two forms
1. TDS (Tax Detected at Source)
2. IT (Income Tax)
As this was the first time, I assumed both are into the same category I assumed I have paid enough tax while filing my ITR(Income Tax Return) I understood the difference, but I will leave it up to the individual to learn about. But I wanted to clarify that both are not the same both have their own purpose. I don't want to deviate from the topic.
Recently I have shared about REITS (Real Estate Investment Trust) with Friends or a closed circle of people with similar interests. Looking beyond that I identified that there is a Trust whose dividend yield is about o 10-11% per year. Which was way beyond FD (Even FDs provide 7% interest on a minimum of 3 years FD) I know only about the bank in which I have an account, So I have all the right to be wrong. By keeping invested in this trust I know the following things can be done
1. Beating inflation.
2. Utilizing indexation benefits.
3. Higer retuns than FD or other banking schemes
4, Appreciation of capital based on this trust performance.
Risk Factor:
As it is equity-oriented Risk factor is also and always part & parcel of the investment. So I will keep investing but only according to my capacity. here we need to see our break even too. If trust doing well and sharing the dividends our break-even might come to 7-8% now we can think the yield is 10-11% then how come breakeven will be 7-8% we need to be get paid for the time, brokerage, electronic devices, power and etc.
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Cheers and bye
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