What Warren Buffet says about basic investing,
spending, savings are so true. Most of us know it, however too many of
us do not live it.
If it does make a change in your life, thank
HIM (I mean God) because this is common sense. WB said it once, I am
just reproducing it.
1. On Earning:
Do not depend on a single income. Invest and create a second/ third source of income:
This
means when you are young your first task should be saving and
investing. By creating a second source of income you are quickly
reducing your dependence on your job. This could help you to set out on
your own one day. The quicker you can do it, the better.
2. On Spending:
If you buy things that you do not need, you may soon have to sell things you need: It
kind of summarizes Gen X’s reaction towards ‘luxuries’. As a part of
Gen X we were perhaps criticised for some of our expenses, so it could
be a generational thing even for WB. However, having goals and knowing
where you are going, and not spending just to ‘show off’ are important
lessons for all generations.
3. On Savings:
Do not spend what is left after spending, instead spend after you save/invest:
Also
called ‘Pay Yourself First’. If you realise that investing in a pension
plan or for your kid’s education is just helping you to save more later
on. It is not a sacrifice, it is just postponing consumption. So
understand, invest and then spend.
4. On taking Risk:
Never test the depth of the river with both your feet: If
you are doing something, do small. If you are a first gen investor, do
not be carried away by equity lovers like me and put all your money in
equity. Do a SIP with a small amount, and test the waters. Do a SIP of
Rs. X (which could be 10% of your take home pay) for 5 years and then
step up. And for heavens sake understand risk of inflation, and the
concept of real returns
5. On Investing:
Do not put all eggs in one basket:
Immaterial
of who you are and how much you understand, create a portfolio. A full
range lunch plate is always better than just one item. So create a
portfolio with bonds, bond funds, PPF, NSC, equity, mutual funds, and on
the risk side medical and term insurance.
6. On Expectation:
Honesty is expensive, do not expect it from cheap people:Not
everybody is honest, nor does everybody want to be honest. Honest
advisers are difficult to find especially in Health and Wealth, be
careful.
Life Insurance Corporation (LIC) paid an advance tax of Rs 1,300 crore,
compared to Rs 1,165 crore it had paid in the second quarter of last
fiscal, income tax officials said here.
Prime Minister Manmohan Singh today said the 12th five Year Plan
(2012-2017) was targeting an 8.2% growth in the economy. This is lower
than the 9%-plus growth that was being targeted earlier. In July, Deputy
Chairman of the Planning Commission Mr Montek Singh Ahluwalia had said
that it was "not possible to think of an average growth of 9% in the
12th Five Year Plan", because of the various constraints facing the
economy. (read here) 
After a series of lending rate cuts, banks started slashing deposit
rates to maintain their net interest margins. India's three largest
private sector lenders ICICI Bank , HDFC Bank and Axis Bank slashed interest rates on retail term deposits by 25-50 basis points.
