Nikunj Chhag

Background:  I recently visited one of my existing clients. The aim was to find out how his son's educational goals were progressing and how much money will be needed annually. We talked about a variety of goals in-depth throughout our more than hour-long meeting. Education Goal: Let's call him Mr. Rakesh Shah, and his spouse Mrs. Swati Shah. Rakesh began investing with us more than three years ago.  During our initial conversation, we talked about his only son, who aspires to attend an IIT for graduation. His son, Manan, is in 12th Std right now. In 2021, I suggested Rakesh ji to start SIP of Rs 50k-55k for his son Education goal to reach the target. We agreed to start with 40k at that time.  The goal of my recent visit was to discuss and decide whether any changes to their portfolio were required owing to market conditions.  As we all know, markets are overvalued, and their target was just about a year away.  I will transfer to debt funds for safety if ne...

Background   Today I came across a portfolio which I named as ZOO!! A friend of mine based out of South Gujarat town, told me to study his 15 years old portfolio managed by an uncle. He is currently doing monthly SIP of Rs 1,10,000 and current valuation of portfolio is more than Rs 1 Crore. While I was analysing I found that total of 28 different mutual fund schemes which was a shock for me. So the average SIP per scheme is approx. Rs 4000. The portfolio has multiple flexi cap, multiple small cap, multiple mid cap funds and few sectorial funds. This is what I call a ZOO of schemes portfolio! How not to make a ZOO?: Actually, in markets there are 2-3 investing styles - value, growth & momentum.  Value style: Value investing can be defined as buying stocks trading at a low valuation compared to an estimate of intrinsic value. Growth & Momentum style: Growth investing can be defined as buying highly valued stocks on the expectation that their valuations will continue impr...

  Background Recently a senior citizen contacted my office for arguing that we are not delivering on our promise of assured returns. He took helpline number of my firm from social media. Actual reason of his call was to ask how he got very poor return on his investments in an alternate investments he did on his own in last financial year. What happened? Let us say his name is Mr. Mishra and is from North India. He is a retired central Government officer and he thinks he knows about the finance industry, due to his work profile in the past. So Mishra ji who is 65 now lives happily with his wife and a married son who is working in IT industry and earning well. Mishra ji had total of about Rs 7 Crores of retirement corpus last year. He himself, without taking help from any expert, invested about Rs 1.5 Crore in alternate investment options (invoice discounting) which is comparatively safe as it is for low duration (usually 90 days) and offers 10-12% annualized guarantied returns. I a...

Background I am 38 Years old. When I was young a very popular animation series was Richie Rich. A very young rich boy surrounded by coins and money, spending whole day! This image may help you to recollect: I recalled this series today morning when I read the headlines of today's newspaper, here we go: Divya Bhaskar (Ahmedabad edition) date: 18/01/2022 It is in Gujarati language, basically saying: the Riches got richer in last calendar year and poor got poorer! This is almost repeated headline each year and believe me, this is common across the globe. News media outlets tells you WHAT happened. They don't tell WHY this happened?? In Nutshell, Rich got richer and poor got poorer, yet again! and n ews media not telling poor or middle class why this happened? Here is my thoughts based on my experience in personal finance field and interactions with industry stalwarts over the years. Rich people: - Never speculate means never waste their time in short term trading. - Believe in wea...

Background My recent interactions with few of my friends and (seemingly conservative) clients regarding stocks, IPOs, short-term trading and investing provoked me to write this. The people I am doing business related to Personal Finance since 2017 and have personally interacted with at least 250 persons across age groups, genders, cities or villages and geographies.  Few of these people I had categorized as conservative in nature with reference to their knowledge about financial markets and hence their risk taking ability. But in recent past (after 2nd wave of CoVID-19 pandemic in India), two of such interactions were more than enough to pan out my thoughts (based on my experience into the financial markets and with various asset classes). What was common? Both of these friends are 38+ years of age and earning handsomely from their routine day jobs. In the past, I had suggested both of them to start investing regularly in mutual fund SIP for their long term financial goals. On...

Background: Recently I watched a summary video on the books of M J Demarco posted by James Jani (links are given in references). The content has provoked me to write my second blog. Overall the thought process is about what billionaires do the different work than a normal middle class person (or family). If you are already a billionaire stop reading further!! School education and domestic environment around money: Money as a subject is never taught in any education system and not even in CA, CS or MBA (Finance) classes!! Sounds strange? It’s not really! I know few of them who take advice for investments. My point is taking advice of a subject expert is always preferable but generally we believe money is equal to finance in a school curriculum, which is wrong. Any school education system anywhere in the world never teaches their students about: -           What is money? -           How...

Background   A typical middle class family all around the world has almost similar finances. Recently I have read on this subject and very much impressed by the thoughts of Robert Kiyosaki in his books Rich Dad Poor Dad and Cashflow Quadrant. Here in this blog I have tried to summarize that thoughts. Rich and Poor! No one really aware about the main class that is the middle class. What is a middle class after all?? What I think, middle class is the family which always have debt (loans) through out their working age. Second, earning persons of the family has to do some active jobs (or self employed) and hence active income is essential. As Robert Kiyosaki points out that we are living in Information Age right now which started approx after fall of the Berlin Wall in 1989. From 1492 when Christopher Columbus found Americas we were in the Industrial Age. This is a very good concept to understand the current situation.  The main issue with current Age is the uncertainty of future...