Hello. My name is Sridhar and I'm an imposter!
These are the things that I claim are up my sleeves.
- Management
- Program management
- Project management
- Manage a large IT team.
- Software development
- Hands-on developing .NET Core applications.
- Databases
- SQL Server
- MongoDB
- Operating Systems
- Windows
- Linux
- System administration
- Cloud platforms
- Amazon Web Services
- Azure
- Google Cloud Platform
- Financial market
- Deep knowledge of every financial instrument that is used in Wall Street.
- Financial Industry Regulatory Rules
- Deep understanding of most SEC and FINRA filings.
If you don't believe me then you can send an email to asdf@def.com to connect with me.
Hi, in this document we are going to discuss savings and its growth. I am talking about the savings that you have kept in the bank in a savings/checking account. Savings accounts are incredibly low maintenance. You put your money and you can leave it there with no further activity on your part. The bank pays you interest and if you are lucky you are paid around 0.2% on your savings! i.e. for every $100/- you keep in the bank you get around 20c a year! Yes, your capital is safe but is 0.2% return is a shameful dividend for your investment and worse interest rates are always less than the inflation rate. So, the buying power of your $100/- is less next year even with the additional 20c.
Okay now that we know you are going to get poorer by saving in the bank how do we guard our funds? A little more complex investment vehicle is TIPS (Treasury inflation-protected securities). TIPS adjust the interest payouts you get based on changes in the CPI (Consumer price index). The principle payment you get back will also be adjusted for inflation. However, TIPS payouts are always backward-looking and there are better and equally safer investment vehicles; bonds.
Bonds can be classified broadly as government, local government (municipal), and corporate bonds. Your principle's safety is in the same order mentioned above; however, returns are in the reverse order. Returns using these instruments (must have a blend) beat inflation but "beat" in practice can be expressed as “in theory” or “marginally”.
If I have sold you that your future is bleak, and your savings are not going to last till you breathe last how are we going make sure our savings grow? Are there any investment vehicles that will grow my savings? Let us explore. We have been educated by parents and ancestors that real estate, commodities, and jewelry are good diversification for savings. Let us explore each one and see if ancient wisdom will work for you.
Real estate: Real estate is a popular choice as overtime the property value appreciates and generates rental income. However, its liquidity is questionable and each real estate transactions are usually five digits or greater. If you want to intend to invest in smaller amounts and need your funds for easy access, then REITs is a good alternative, but risk/reward is much higher when you buy individual properties. Real estate values tend to vary based on economic conditions and its price lead economic downturns and lags economic uptrends.
Commodities: When a currency is having problems-as it does when inflation climbs and decreases its buying power-investors might also turn to tangible assets. For centuries, the leading has been gold and other precious metals. Now, let us parse what is stated above. "Currency is under pressure", "inflation climbs" these are issues in developing countries and when there is extremely poor monitory policy. Most of the countries have relatively strong monitory policies and gone are the days when there is runaway inflation. How about currency? It depends upon the individual country and depends on the strengths of its trading partners.
Jewels: Jewelry as an investment depends on the country and price of precious metals/stones. However, its liquidation value is not transparent and in most cases ROI for a reasonable period (three to five years) is usually negative; again, it depends on the country. For example, in the U.S. it is always negative, and in countries like India depends on commodities price.
Oh! Well. So how do we ensure our funds grow as we grow and outperform inflation? Yes, other vehicles can be used for growing our nested eggs and let us touch on some of them. Loans/Debt Obligations, or simply put, personal loans. If you think this is too risky then we can consider derivatives such as futures, forwards, swaps, options, ABS (asset-backed securities), etc. Am I losing you? I thought so. So, let us not discuss these complex instruments and leave them to money managers and who understand finacial industry better.