When Interest rates go down, bond prices go up. Almost all MBA students will tell you this. However many of them will be parrotting this without understanding what this means. Let us see what actually happens. When Interest rates go up, ASSET prices go down. This is the originally correct statement. Why and how does […]
The most maligned person in the financial service space is the distributor. It is he/ she who provides the last link between the financial product manufacturers and the end investor. Let us describe the typical distributor: He earns about Rs. 2-3 lakhs a year (a decent MBA would not EVEN consider looking at such a […]
Every cheque that you write is either an expense, savings or investments. Sadly not everybody knows the difference between the three. In fact todays plan includes telling you that there are 2 types of investment too! OOPS, right? Ok..when you go to a hotel and pay for the food, it is an expense. This […]
When a company or an individual has NO borrowings, it pays no interest, right? Well no. Let us take the case of a company first. Interest is what you pay for using some other person’s cash. Well if you use an asset you are paying interest in another form – called rent. So if you […]
I was talking about frugality to a guy whose knowledge of English does not include this word. Here he was all 29 years of age, not a penny saved, married to a woman who was spending most of her income. Earnings of this couple was in the region of Rs. 20 lakhs per annum and […]
Yes you read it right! You are reading www.subramoney.com and you are reading ‘buy real estate’. Well let me explain the context. In many local businesses the location of your place of business is critical for its success. If you are a doctor, run a gym, a hotel, a hair-dressing saloon, bank-ATM, etc. your ‘customers’ […]
For people who have not done Economics – at any level, there is a good chance that they may not know the meaning of ‘Rent’ – in economics, here is the explanation. When you have got used to a certain annuity – generally undeservedly – the rent is threatened. Now if a shop is located […]