Real Estate & Stock Market : The Best millionaire way?

Real Estate and Stock market : The Best traditional millionaire way of the decade.
Both of the sources sounfsgreat right...but there's a catch.When you invest in stocks there is a great probability that they can degrade in case of major financial event in the world.Also for short term trading,95% of the traders lose the money in the stock markets.It is because of the algo trading that the bigger firms and players have deployed.This gives them an upper hand on a trader who trades based on his emotions and discipline.Read more about algo trading here:https://allaboutabsorbing.blogspot.com/2019/03/algorithmic-trading-changing-indias.html?m=1

Real estate is much safer compared to this.It might give around 5 to 10 % lesser returns but it always appreciates.Comparing the population to land ratio in India this can help a lot.

Now let's understand a simple real life example given by my friend Richard:

You can buy a house worth 300k with only 30k to start and have someone else (tenants) paydown the mortgage.

When you buy stocks, you buy 30k Of stocks and hope it goes up over time..and it maybe worth less than 30k.

I invested in stocks since I was 20. I also invested in real estate for the past ten years where I bought one a year…I was also a trader (futures) for a year.

Real estate (traditional buy and hold) is hands down more powerful.

Here is a real life example of the POWER of real estate investing.

1. Positive Cashflow (Rent – Expenses = Cashflow): I purchased a cute war home in 2008, renovated it and rented it out to a young professional couple. The rent coming in paid for all of the expenses, including property taxes, mortgage, insurance, maintenance and still made $100+ of positive cash per month. After seven years of holding it, I netted over $11,000 in cash flow, even with three months of vacancy and maintenance expenses.

2. Appreciation (Increase to property values): The cute war home increased in property value over time, averaging 5% annually! I forced appreciation by “blinging” it up, i.e. renovations and landscaping. The house was also located in a nice area adjacent to a very desirable high-end neighbourhood. I bought the house originally for $226K and it was appraised at $345K in 2015. It’s now worth 400k in 2018.

3. Mortgage Loan Pay down: After seven years of holding this property with tenants primarily paying down the mortgage, I’ve locked in $50,000 dollars in forced savings. Now, I am holding this house for my kids. I plan to keep this property for a long time to pay for my kids education; however, if I sold it now, I would have an easy extra $60,000 dollars in my pocket that was mostly paid down by my tenants. I initially invested $43k, which has already doubled over the 8 year period. By the end of 22 years, due to mortgage paydown, I will own the property outright, increasing my equity from $43k to full $226,000 (assuming no price appreciation).. Or potentially 600k plus plus in 2040 assuming only 2% inflation growth.

5. Tax Write-Offs: There are loads of tax advantages to having rental income. Expenses like mortgage interest and maintenance costs are tax deductible. So, in a way, you can think of the savings in taxes as if your expenses were paid partially by the government. This reduces taxes that you would have paid annually to the government, which means more money in your pocket.

Expenses like mortgage interest, insurance, maintenance expenses and depreciation of the property reduces the taxes you pay annually to the government. Although I gained $17k in gross rent, I also had $10k dollars in expenses that are write offs. From the remaining income I can deduct capital depreciation to write off all of my rental income on this property and save myself paying taxes

5. Power of Leverage: I bought this cute home with a down payment that was leveraged by borrowed money from the bank, i.e. a mortgage. While the tenants paid for my mortgage, I benefited from the growth of both my down payment AND the borrowed money from the bank. After eight years of holding it, I’ve made over 320% return on my capital investment, including the benefits of positive cashflow, equity growth and appreciation.

This is why real estate investing makes you wealthy.

Adding up all these factors, at the time this article was written, this property had grown to a $153K return, and continues to grow.

What’s even more amazing is that this is not an extraordinary property.

In fact, it’s less than ideal property because it only has two bedrooms and one bathroom. Despite its flaws, the house is still making money and matures with time.

With investing in stocks- there is only one way to make money, hoping that the company continues to generate more revenue and beats quarterly estimates. Some stocks pay a part of their profits through a dividend back to you. But if the stock goes up, the only way you can access the money is selling the stock.

With real estate, if it does well, you can access the gains (equity) without selling and invest even more.

But if your objective is to get used to investing, start with stocks, get a taste for investing. Stocks are worthwhile as a form of investment, easy to buy and little to no work ongoing work required. The downside, though, is that you can only own what you can immediately buy. But you can start with a lot less money and then grow your knowledge for investing..(calculated risk taking) eventually scale into real estate investing because it takes more money to invest.

Eyes wide open- Here is a typical example of stock behaviour when investing in stocks:

In 2007, I bought Lululemon at initial public offering and I sold it six months later at a nice profit. Out of curiosity, I’ve been following the stock ever since. Many years ago, Chip Wilson, the founder, added a lot of drama and controversy to lululemon, his insensitive remarks is every shareholder’s worst nightmare. For example:

‘ Chip Wilson, said the company’s infamously sheer yoga pants fell apart because some women’s thighs were too large.’

Wow. Following this remark, the stock plummeted from $50 dollars to $32 dollars!

What’s my perspective on mitigating the above risk? Warren Buffet summarizes it well:

‘Try to buy stocks in businesses that are so wonderful that an idiot can run them. Because sooner or later, one will.’

In a nutshell: there are multiple ways to make money in buy and hold real estate and scale without having to sell real estate. As for stocks, you are limited to the growth of the stock and can only access the money when you sell or limited to the cash stored in dividends if you hold the stock.

Warning: for the purposes of this article: I did not go into options, trading stocks, etc as this article was focused on investing.

Investing before Elections: A Smart play?

Investing before Elections: A Smart play?

The markets this year have been missing a major investment part as the investors are biased over whether to maintain current positions or to disinvest since the Elections are just 2 months away from the date.Chances of Government change rised after the Mahagathbandhan and Congress winning elections in over 4 states earlier this year.

Irrespective of all the political situation,there is one conclusion I witnessed from the previous data.Every time after the Elections the bulls have witnessed a major rally of around 10% CAGR 

Another interesting fact reveals that during the first two and half years post elections, the equity market remains extra bullish (except in 1999 when there was minority government). After every election, the markets have only created wealth for the investors.

                       

Thus in our opinion, elections offer an opportunity for investors, rather than a threat. Now let’s understand the present macro status of India.

The earnings growth estimate for FY 2019-20 remains positively driven by recovery in corporate banks’ profitability and revival in the investment cycle. The current NBFC liquidity crunch should boost corporate bank growth and profitability in the near term.

We also feel that the GDP growth rate of 7.3 - 7.5 percent may sustain, as benefits of GST, higher MSP, NPA Resolution and capex in transportation sector begin to kick in.

Inflation is also under control and CPI will average at around 4 percent, with some seasonal spikes. Core inflation will rise moderately as the output gap fills and wages begin to rise.

We also expect benchmark yields to average above 7.25 percent. The next move of MPC may be a cut in the second half of 2019. We expect the current account deficit to average around 2.5 percent of GDP in 2019. We also visualize public investment to slow as private capex picks up.

Why equity markets should perform: If we observe, the last decade (2008–2018) can be termed as a loss decade as the Sensex has generated CAGR growth of only 6 percent. This reveals that the capacity utilisation was not optimum (less than 70 percent) despite companies increased their capacity expansion during the first half of the decade by way of capex.

We strongly feel that in the next few quarters, as the demand increases, the present capacity will take care of extra production leading to more earnings of the corporate profits.

Recommendation

Every new government have to focus on few key sectors of the Indian economy to grow like infrastructure, cement, automobile, capital goods, FMCG and other various sectors will remain the key focus of any government to drive the Indian GDP growth.

The upcoming general election in 2019 is an opportunity to invest for the long term. There will be significant volatility but the major advantage of this volatility is to invest. Investing at lower levels and taking a long-term perspective for creating wealth. The pre-election phase has given an opportunity to create wealth.

Top Side Hustles to earn an additional Income 2019

Start something young and start your own income.

Top Side Hustles of 2019

Become an “Influencer”Median weekly income: $2,800

How to get started:

• All you need is a high quality camera (either an iPhone or Mirrorless Camera. Forget the SLR for now).
• Post your content on a platform like Instagram, Youtube and Facebook consistently for 200 days.
• Focus on creating content that can go “viral” and attract the attention of potential subscribers, followers and content sharers by building a genuine audience.
• Cash in on that audience!

Average startup cost: $ 450+ for a mirrorless camera (content is up to you)

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Become an online Guru and sell a courseMedian weekly income: $3,000+ depending on niche

How to get started:

• Think about the product/problem that you want to sell/solve. Most people will buy something that helps them make more money, look attractive, lose weight. That’s it!
• Develop a programme, with modules based on step-by-step solutions for this problem.
  If you have no idea how to create a course;
• Hire a freelancer on a platform like Upwork,to create the entire course for you.

Average startup cost: $39.00 to $299.00 depending on the host platform

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Start a drop-shipping businessMedian weekly income: $2,000+ depending on niche

How to get started:

• Research the best-selling niches using a program called “WatchCount” which will actually show you the most popular products on a site like eBay
• Create a Shopify account and set up your online store (Shopify has plugins to help you get started, specifically with a drop shipping business). You do not need to purchase inventory/stock.
• Create a Facebook fan page for your site
• Export your Facebook Pixel to your Shopify
• Target your audience, and start your ad campaigns
• Re-target and duplicate the audience that buys your products

Average startup cost: $200.00 incl. Facebook ads budget

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Become a self-published authorMedian weekly income: $1,200+

How to get started:

• Write 1000 small books about different topics and publish them on Amazon.
• The great thing about Amazon, as a platform, is that it gives you information about what sells and what doesn’t. Go and look at the best-seller list, right now. Now, go and write something better than that!
  If you don’t know what to write or how to start;
• Hire a ghostwriter from a platform like Upwork.com

Average startup cost: $5 /hr for the freelancer on Upwork. Total spend: $500.00

Bitcoin and Indian Economy = Smoking besides Gasoline Barrels

Bitcoins in India: probably not a great idea.

If you are someone who is diligently following global economy & trending topics, then it's certain that you must have heard of one word “Bitcoin”. Starting from financial agencies, governments, regulating authorities, e-media & other experts, are frequently discussing about this term. What is this Because Bitcoin all about & how to own it?

The concept of Bitcoin came into the picture based upon 2008 white paper which was then released by Satoshi Nakamoto. He is named as the father of Bitcoin. It is said that in India there are close to fifty lakhs of peoples trading in Bitcoins & other virtual currencies. As per the recent developments, transaction's in Bitcoin is banned by three major topmost agencies of our country.

Finance Ministry- Finance Minister in his 2018 budget speech made it clear that any cryptocurrency is not a legal tender in India. However, acknowledged the power of Blockchain & Distributes Ledger Technology (DLT).

RBI - Prohibits on dealing with virtual currencies like Bitcoin. -  Circular RBI/2017-18/154, effective from 05 April 2018 & issued 3 months of buffer period directing entities to end their transactions in Bitcoin.

Supreme Court - The Supreme Court of India refused to give grant a temporary stay on the RBI's prohibition on virtual currencies, filed by IAMAI i.e. Internet and Mobile Association of India through a writ petition.

Although citizens want to accept the emerging digital economy, but the government is not giving them a scope considering its decentralized feature & other associated risk factors.

How Bitcoins are generated-

In case of paper money governments of India printed currency until the RBI was established in 1935, which then took over the responsibility. But the process of getting Bitcoin is altogether different, as it does not have any physical existence.

The Bitcoins are generated through the process called Mining & is operated through peer to peer network. It is entirely executed digitally with the help of internet & suitable hardware's (i.e. Application Specific Integrated Circuit - ASIC), which does not require the traditional process of mining operation like through blasting, drilling & excavation etc. There are two ways of Mining in the Bitcoin process. One is Solo Mining & other is Pool Mining.

Solo Mining- As the name suggests this process is done by a solo/individual miner without any others help.

Pool Mining- Miners connect with other Bitcoin miners. More miner's means more secure network, as it requires validation by other miners as well. (Refer below) Pool miners find quick solution as compared to the individual miners.

Miners need to create a virtual ID & a Wallet for Mining. It involves compiling recent transactions into blocks & turning them into a mathematical equation/puzzle. It uses high computing power to solve a complex mathematical equation/puzzle. In this process first miner announces the solution with the others in the network. The other miners check whether the solutions to the puzzle are correct or not. If more people approves the correctness then the block is cryptographically added to the ledger. As a reward miners gets incentives in the form of Bitcoin. On the other hand if the cost to create the Bitcoin exceeds the reward, miners lose the incentive.

Block chain has no Apex regulating agency, like RBI who regulates the entire monetary policy in India. The major issues transacting in Bitcoin are like it is not backed by any assets & its price are highly volatile in nature as a result of speculation. The prices are generally determined by the involvement of a number of peoples in this transaction. If more numbers of users will go for buying, the price of the Bitcoin goes on increasing & vice versa. Although this is only one way of fixing the price, but it is very hard to know the exact mechanism & hence there exists no such transparency in Bitcoin pricing. It may unpredictably increase or decrease over a short span of time, hence it is a very high-risk asset. In many ransomware attack (like WannaCry), Bitcoins were paid by victims to regain the access.

All transactions in the Bitcoin are stored publicly & permanently on the network. Hence all the interrelated parties can see the balance & transactions of any Bitcoin address. But it is very hard to track the user behind such address, which may lead to Tax evasion, lack of consumer protection, Money laundering etc. To ensure proper regulation of Bitcoin transactions, there necessary a robust mechanism, stringent security infrastructures & the accountability, which may eventually foster the Digital India campaign of Government of India.  

Algorithmic Trading changing India's Markets?

Algorithmic Trading has been kept a tightly held secret for too long. The recent situationhas been that everyone does it, yet no one wants to talk about what they are doing.

Outside this secretive world of algorithmic traders, very few noticed the facts mentioned in a 2016 SEBI Discussion Paperon Algorithmic Trading. The regulatory watchdog mentioned that more than 80% orders placed on exchanges are generated by algorithms. The contribution of algorithms in the total numbers of trades was approximately 40%.

The recent results of a survey done by an independent private company, AlgoJi are even more surprising. As per that survey, algorithms contribute approximately 90% of all orders submitted, and 75% of all trades executed on exchanges. The survey details many facts about technology and strategies used by traders.

Saurabh Lohiya, the co-founder of AlgoJi explains these results. “An intraday algo trader sends more orders in a single day, then a passive investor may do in his lifetime. Even though the algo traders may be small in number, they dominate all the trading volumes and price action in markets. Also, even a lot of manual traders use algorithms to generate Buy and Sell signals. Everyone is making use of technological advancements for less dependence on hunches and emotions.”

The secrecy in algorithmic trading is finally sinking away in the limelight of conferences and seminars. Industry bodies such as Commodity Participants Association of India are supporting AlgoJi’s conferences. The next such conference will be organized at Constitution Club of India on 8th December, 2018.CaClubIndia is a media partner in this conference to spread awareness on latest technological advancements in the field of investment management through algorithms.

How to get a trademark? Let's find out.

We live in an era where only physical holdings are not the only assets... trademarks,goodwills,Intellectual Property rights form a major part of assets these days.Let ud learn about one of these today:The Trademark.
What is a Trademark?

Trademark is a visual representation attached to goods for the purpose of indicating their origin and is recognized by law. It includes any word, name, symbol, configuration, device, Shape of goods, packaging, a combination of colors or any combination thereof which one adopts and uses to identify and distinguish his good from others.

Essentials of Trademark:-

• It should be a mark;
• It should be capable of being represented graphically; and
• It should be capable of distinguishing the goods or services of one person from those of others.

Functions of Trademark:-

• It identifies the goods of one trader and distinguishes them from goods sold by others;
• It signifies that all goods bearing a particular trademark come from a single source;
• It signifies that all goods bearing a particular trademark are of an equal level of quality;
• It acts as a prime instrument in advertising and selling the goods

Process:

• Creation
• Screening
• Clearance
• Investigation
• Opinion
• Filing/Registration
• Protection
• Commercial Exploitation

Jointly owned Trademark:

Registration of a single trademark on the name of two proprietors, who would use it independently, is not possible. However, a person other than the registered proprietor of a trademark can be registered as a user of the trademark (certainly with the consent of the proprietor).

International protection of Trademark:-

Trademark is territorial in nature so if a company plans to expand its market abroad it will really become difficult for him to register the trademark abroad this renders the company an exclusive right to commercialize its products in those markets in abroad. It also provides a strong premise not just for stopping counterfeiters but also ensuring that the company enjoys exclusive rights over one of its most valuable business asset. Further, it provides the opportunity of licensing the trademark to others or may be the basis for that company’s franchising or merchandising strategy.

What are the benefits of a Trademark?

Generally, people are under the perception that they can protect their trademark simply by using the mark in commerce. It is right that you are not required to register a trademark to achieve some level of protection and also that one ascertains common law rights simply by using a mark in commerce.

Who should get the trademark register?

• Businessmen: A trademark may be registered for goods or anything which is the subject of trade or manufacture (Safeguarding the product).

• Service Providers: He is the one who provides services of any description which is made available to potential users and include the provision of services in connection with business of any industrial or commercial matter like banking, communication, education, financing, insurance, real estate, entertainment, transport, construction, boarding lodging, advertising etc (Protecting the name and quality of services).

• Well Known Brands: A brand or a mark/ Symbol which become a substantial segment of the public which uses such goods or receives such services that use of such mark/symbol in relation to other goods or services would be likely to be taken as indicating a connection in the course of trade or rendering of services between those goods. (Safeguarding the name).

• Domain Name: It’s important to protect the name of your website so that it is not used by anyone else otherwise it can hamper your profits and growth. (Protect the name of your website)
Using trademarks preserves the special work of the Company and helps it having higher demand since anyone else is not authorized to monetize on such property.

How can you improve your supply chain quality?

Supply chain management:-

Your telephone can connect to your ledger, online networking, photograph library, count calories tracker that you killed a year prior, and share data between the majority of those applications. For what reason isn’t your inventory network connected and partaking similarly?

The business has been pestering store network storehouses for over 10 years, yet they’re as yet normal. Most supply chain today still have a few regions that aren’t associated, and the information is walled off, which hurts the capacity of all organizations required to comprehend their activities completely. The advantages of store network permeability are tied in with making the 10,000-foot view information to guarantee your business is running easily, your accomplices are the correct ones, and that you are as gainful as could reasonably be expected.

The initial step isn’t finding the concealed truth that will change your reality; it’s tied in with setting yourself up for that revelation. Connecting frameworks to create store network permeability is the path authority at each level can begin looking into the genuine situation.

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Here are three different things it can achieve for you as well.

Not any more Risky Business

Decrease hazard and allow yourself to develop through brilliant, inventory network knowledge. A touch of comprehension can go far.

What we like most about the first of the advantages of production network permeability is at it can shield you and shield the upper administration from getting on your case, by diminishing the probability that things will turn out badly. One of the least demanding fixes that permeability can help with is recognizing store network territories with a solitary purpose of disappointment — regularly items that have just a single merchant.

Permeability can likewise give you the information to better figure request so you won’t come up short on something in occupied or lean circumstances, see regions where your merchandise might be in danger in travel, and track shipments or exchanges as they travel through each point and friends.

Store network permeability is the establishment that will enable your stockroom chiefs to improve orders in light of stock checks, comprehend the lead time that is required for every item or part, and the last deal estimation of those items after they’ve sat on your rack for a bit.

Run a More Efficient Operation at Every Step

Production network permeability frequently accompanies ongoing information and vigorous dashboard instruments that can make previews of different parts of your business. This information allows you to take a gander at over your business to see where you may keep running into inconvenience, and where you could possibly move a work process to evacuate bottlenecks.

You can utilize business insight to check whether you’re accepting excessively in a short measure of time or if your requests are being surged in light of the fact that nobody checks for extra requests until 4 p.m. It may even show on the off chance that you have one particularly moderate merchant or have shifts that need more individuals to run easily — having the wrong work power can spare you or cost you enormous.

Inventory network permeability enables you to check every one of those hunches and responses you have. You very well might find that your “most exceedingly awful” merchant is performing admirably, however, it’s a stockroom issue causing the issue, or that you best sellers have steady requests that make it simple to design and convey.

Treat Your Customers Better

In articles this way, we frequently get a kick out of the chance to centre around the subject — store network permeability for this situation — like an enchantment wand we can wave to cure all business issues. That’d be extraordinary, however, it isn’t practical. Things are as yet going to turn out badly.

In any case, that is additionally a region where inventory network permeability sparkles. Far-reaching learning about the condition of things doesn’t anticipate issues, however, it serves to feature them rapidly. Observing and alarms that may accompany production network permeability make it substantially less demanding for you to run an activity that can adjust rapidly — this implies coordination is an unquestionable requirement have when you pick your next WMS or another stage.

Considering issues to be they happen enables a business to change. Or on the other hand, in the event that you can’t settle things on the fly, it allows you to quickly refresh clients on a shipment status, item accessibility, review, or whatever else that may happen.

Your clients won’t be as cheerful as they would if nothing had turned out badly, yet they’ll value getting enough notice to change their own plans. You’ll even locate that sharing this track-and-follow information can yield a general positive affair that keeps your clients around longer and expands their lifetime esteem for your business.

You can ace the last mile with quality these advantages of inventory network permeability.