Prakhar Vasishtha's Blog, page 8
June 21, 2017
Bonds, Mutual, index, and hedge funds
Mutual
funds, Index funds, and hedge funds, all of them are pooled vehicles of
investments. Each of these three funds is suited for different type of
investors, for example, Mutual funds and index funds are accessible to all
classes of investors: Big and small; but hedge funds are limited to big and
medium sophisticated investors only. So if you are not a big investor, Mutual
funds, Index funds, and hedge funds, all of them are pooled vehicles of
investments. Each of these three funds is suited for different type of
investors, for example, Mutual funds and index funds are accessible to all
classes of investors: Big and small; but hedge funds are limited to big and
medium sophisticated investors only. So if you are not a big investor, Mutual
How to deal with Stocks: Value Investing & Trading
Investors invest in stocks that
they believe will appreciate in value over a period of time. Stocks are valued
based on their risk-adjusted future cash
flows. You can choose any investing style out of many styles available, but If
you do not want to devote a significant amount of time in investing and
trading; value investing will suit you most. In this type of investing, an
investor buys
they believe will appreciate in value over a period of time. Stocks are valued
based on their risk-adjusted future cash
flows. You can choose any investing style out of many styles available, but If
you do not want to devote a significant amount of time in investing and
trading; value investing will suit you most. In this type of investing, an
investor buys
How to buy and invest in Real estate: Home and Investment
Real estate is an important part of
your financial assets. Even if you do not want to get involved in active
property investing and related areas, you still have to find a good dwelling
for you and your family. You either have to buy or rent a house or apartment.
If you are in a job or business, where you have to change cities every year or
so, renting an apartment may be the best option for
your financial assets. Even if you do not want to get involved in active
property investing and related areas, you still have to find a good dwelling
for you and your family. You either have to buy or rent a house or apartment.
If you are in a job or business, where you have to change cities every year or
so, renting an apartment may be the best option for
What is the difference Between Assets and liabilities
Generally, anything that has positive monetary value is
considered as an asset like houses, cars,
bonds etc. Anything that has negative monetary value is considered as a liability, e.g. all types of debts. However, in
this book, we will consider those things assets that appreciate in value with
time or generate positive cash flows/ profits etc.; all other things are
liabilities for us. To
considered as an asset like houses, cars,
bonds etc. Anything that has negative monetary value is considered as a liability, e.g. all types of debts. However, in
this book, we will consider those things assets that appreciate in value with
time or generate positive cash flows/ profits etc.; all other things are
liabilities for us. To
Debt or No debt
You should never buy luxury and/or depreciating things on loan. It can set back your financial freedom dream a few years back. If you want to take a loan to set up a business, you must first calculate risk-adjusted future cash flows and potential after-tax profits of that business. You should take a loan only if these numbers make sense. You can also buy things that are likely to appreciate
Your passion and goals or other people’s expectations
You must give priority to your passion and goals because no one else knows about them or has any vested interest in them. You must write down your goals and make choices that get you one step closer to them.
What is the difference Between Entrepreneurship or investing or employment
You must gradually shift towards investing and entrepreneurship to achieve financial freedom. Initially, you might have to do a 9-5 job due to various reasons and circumstances, but gradually you can create businesses and investments. If you are not interested in business and entrepreneurship, you should create an investment portfolio to support your financial goals.
June 20, 2017
What is the difference Between Profits or royalties or wages
Royalty is payment to the legal owner to use his copyrighted or patented work.
Profit is a financial advantage that is realized when total revenues exceed total costs.
Wages are daily payments made to a worker for his work or services.
Royalties are passive income while wages are active income. Profits can be active or passive. Financially free people prefer royalties and profits over
Profit is a financial advantage that is realized when total revenues exceed total costs.
Wages are daily payments made to a worker for his work or services.
Royalties are passive income while wages are active income. Profits can be active or passive. Financially free people prefer royalties and profits over
How to develop rich Mindset: 7 Habits of financially free and wealthy people
1. Believe in creating their own life and luck
Rich people create their own life, they
believe that meticulous planning and hard work results in success. They learn the rules of the game and then play it well,
not leaving anything to mere chance or
luck. Rich don’t have lottery mindset and
take massive actions to achieve success. They stay away
Rich people create their own life, they
believe that meticulous planning and hard work results in success. They learn the rules of the game and then play it well,
not leaving anything to mere chance or
luck. Rich don’t have lottery mindset and
take massive actions to achieve success. They stay away
What is the difference Between Active or Passive income
What is active and passive income? And why is it is important to understand them well?
Active income: If a person is directly involved and direct services are performed to earn income e.g. Wages, tips, salaries etc.
Passive income: If a person is earning income without any active involvement e.g. Income from rental properties, limited partnerships, royalties, dividends, and investments.
(
Active income: If a person is directly involved and direct services are performed to earn income e.g. Wages, tips, salaries etc.
Passive income: If a person is earning income without any active involvement e.g. Income from rental properties, limited partnerships, royalties, dividends, and investments.
(
