Prajna Capital - An Investment Guide

Using toy piggy banks and cash registers, while older kids can learn to manage cash and pretend to be real estate moguls by playing Monopoly. To get a taste of trading stocks and mutual funds, there are online games and contests, as well as investment clubs. The first step for parents, say financial planners, is to start talking about money matters at home. “Having conversations about money at a young age lays a good foundation. With the right lessons and planning, your kids, as they grow older, may be able to avoid money traps like getting deep in debt from those alluring but deceptive Credit Card offers and embrace sound strategies as they save for big purchases such as graduate school, car, and a home. A PENNY SAVED IS A PENNY EARNED Parents can start teaching kids about earning money as early as elementary school, Silverman says. Set a weekly or monthly allowance for chores done around the house, and offer extra for helping neighbors and performing other tasks. Then show your kids...

Once, a king, extremely pleased with his wise and able minister, said: “What would you like as a reward? Ask and it shall be granted.” The minister knew he couldn’t sound greedy but at the same time, in his 15 years at the royal court, the old king had never been so generous. The minister replied humbly: “Your Highness, it has indeed been an honor to serve you at your court for all these years. That itself is my reward.” The king was pleased with his humble servant. But he insisted. The minister, after much hesitation, replied softly: “Your Highness, I request you to give me a grain of rice.” The king said: “Minister, now you are wasting my time. I insist you ask for your reward, else I’ll have you thrown in the dungeons.” The minister replied humbly: “Your Highness, if you insist, then I shall accept the rice every day for the next two months. Starting with one grain of rice tomorrow, the quantity can be doubled each day over the previous day for the next two months.” The king was amu...

In the last few days, investors in the stock markets have seen it all. From the Sensex highs of 21,000 to the steep fall to 15,700 in and the complete U-turn the markets took to recover. An investor who was convinced that the bear market was on and sold off his holdings would be a poor, wise man today. Similarly, a person would waited for the markets to bottom out before buying stocks would have missed out the opportunity to buy stocks at lower valuations. Probably, the only investor who has benefited by the quick fall and subsequent rise of the markets is a systematic investment plan ( SIP ) investor. SIP is a simple, tried and tested strategy designed to help in investors' wealth creation in a disciplined manner over the long term. A disciplined approach to investing will provide you with these benefits: 1) Power of compounding 2) Makes market timing Irrelevant 3) Rupee cost Averaging 4) Convenience Power of compounding Many investors delay investment decision-making, as they ca...