Investing Basics For Youngsters | Shwet Ranjan | Skillshare

Investing Basics For Youngsters

Shwet Ranjan, Knowledge is Power

Investing Basics For Youngsters

Shwet Ranjan, Knowledge is Power

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7 Lessons (1h 7m)
    • 1. Introduction to Investing Basics

      1:59
    • 2. 8th Wonder of The World

      12:22
    • 3. Why Should We Invest

      6:26
    • 4. Where Should We Invest

      20:04
    • 5. How Should We Invest

      7:25
    • 6. When Should We Invest

      9:00
    • 7. How Much Should We Invest

      9:30
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About This Class

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Prerequisites For Taking This Course:-
1) Willingness to take the control of your finances
2) Readiness to Sacrifice the instant consumption tendency
3) Have a long term vision for finances

Who is an idle student:-
1) Anyone who wants to learn some more about the financial world
2) Anyone who wants to take the complete control of their finances
3) Anyone who wants financial freedom.

Financial Planning is the core fundamental of everyone's life. If you are good at financial planning then you are going to achieve great success in a very important aspect of life i.e. Money Management.

This course deals with the basics of Investing and is important to be attended for everyone who want to be good at money management. Once you attend this class you are going to Understand WHY, WHEN, WHERE and HOW MUCH should we invest. You are also going to learn about different options available for you to invest. And yes a surprise "8th Wonder of This World".

So let's begin the journey of Financial Literacy and Learn VALUE INVESTING WITH SHWET (VIWS).

For more details about this course feel free to visit http://www.viws.in

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Shwet Ranjan

Knowledge is Power

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Transcripts

1. Introduction to Investing Basics: Hey, and sweet. And in this course, I will give a lot of answers of the questions which the beginner investor have in their head. Like, why do we enlist? Why we don't have to put all our money in the savings bank account or in the fixed deposit while we don't have to do that. So I will give answer of this question and the first chapter of this course. In the next chapter, I will give an answer of rare we need to invest. What are the different options we have? Like we have a stock market options OR gate, we have derivative market, we have commodity market, we have forex market, we have a BCS metal market. So the next question will be in the third chapter, we'll learn about how to invest. What is the best strategy for you, because you're ages, different, URLs, different, your risk profile is different. So what will be the best strategy for you to invest your money? In the first chapter, we will learn about vent to invest to how to time the market. We know timing the market is not possible. So we will learn that how we can quantify that when the market is cheap and when the market is expensive, and accordingly will proceed and consider investing in the market. In the last, last, but not the least, we will learn about how much percent of your saving you should actually consider investing. So in this question, we will learn about, according to your 0s and all your risk profile, how much money of you're saving you should actually consider investing if you want to have good also for Peace by just investing 5 million per month, then you should definitely take this course and become investing expert. So see you in the course. 2. 8th Wonder of The World: Hi everyone. So today I will talk about the eighth wonder of the world and what it is not yet discovered, right? I'll surprise you that it does exist. According to Albert Einstein, compound interest is the eighth wonder of the world. According to him. And I quote, compound interest is the most powerful force in the universe. In this class, we will try to figure it out. That's why it was so much impressed by the compound interest. Will try to see it by looking at the practicals out practically so you that how compound interest impacted things. So let's jump into the practical. Now we'll open Google and we will tie financial calculator. And the forestry dirt that Bob dot is www dot financial calculator Dark Net. We will open it and you'll see a bunch of options that we have to put in and we'll get the future value of money. Now, I'll explain you each one of them. Now. N is the period for which you are saving. I can make is, and assume that it's 30, because I will assume the person is 35 years old. Now moving to the next starting principle. So I'll assume that the starting principle is 0. Now moving to the percent, I'll assume that we will earn interest of 12, 12% percent earning 12%, very easy, and this is the minimum question that we can. So in the later classes, I will explain you how easy it is to earn 12% interest. Now we'll move to the next annual payment as it's given animal pigment. And we have talked about SAR monthly. Parent was 5 thousand. So our yearly payment will be 60 thousand per year, 60 Townsend, and we'll invest at the start of it for years. So at the beginning, calculate. So it's one corrode 62 lags that went intelligent, 556 rupees. And that's a very huge capital. That's a huge kept, right? By just investing 500 Pokemon, you're earning one current 60 to 17,556 rupees. You have invested 18 lack of capital, and you have earned a interests of one-quarter 44 lag at Bronx. That's a really huge amount of interest. Like you feed the principal at 11% and have earned the interest of approximately 90%? No. In the calculation, we will see that. It will increase or decrease a different bunch of inputs that report like an interest or annual payment, then what impact will it make on the future revenue? I've already imported the data. Does reader Desert and the axial sit? Now moving to the axle seat. Here, F first decreased and increased the period, like increased the period by one and amp decreased appeared way one. So the person who is starting the investment at the age of 36, he is his having a loss of approximately 18 lac rupees. And you are just not investing 60 thousand for a year and you are losing 18 lac rupees in the future. And that's a big loss. And, and the future value will become one god or 44 leg, which was previously one corrode 62 lengths. So that's a huge impact. Now. Moving to the next. And the person who was aged at 36. Now what he will do, he will start wanting it earlier. So he will, So a person will start at the age of 34. So it will invest one Maria just tardy sticks that 31 years. So here is an income off 20 lac rupees approximately. Could that a huge amount of money? So you're just investing 60 thousand now and in the future, you're increasing your future value by 20 lac rupees. So that's a huge impact and future values now become it Dean lack approximately more than 18, like that's really a very big impact. But people say that they will not invest. Now developing invest up to sometime. The see how people have to be if they, you know, novel discussed notice. See that what will happen if we, if we will, increase the learning by 1% and if we decrease our earning by one person. So if you know, an increased up 11% instead of 12% or will earn interest of 13 busing and steed F 12 plus seven. So in the first case, everything is the same as it was before. The only thing that has changed is interest. Ok? See how interest impact things. So by declaring only 1%, you are losing approximately 13 lac rupees in the long-run. If you're invested in wanting for 30 years, then you are losing a lot of code. And that's a huge capital. And total future values now becomes one corrode to lack approximately. For Udacity, huge loss, and that's a huge impact on the future value of money. Now moving to the next, we will see if you increase the interest rate. If you increase the interest by one, only 1%, then what will happen? If you increase the interest rate, 1% will make it 13%. Then what will have gain that we had is 36.6 lack Ruby. So you're just increasing your interest by 1%. And you are see how future value is increasing, increasing exponential term. So that is how compounding works in this things. That is how compounding impacted this thing. So people say that they will keep their money in the savings bank on there was not invest because there's a lot of risk in the investment. Although in the future, I will show you that there are a lot of matters in which there's really minimum risk. You don't have a lot of risk and you have minimum brisk. You don't have to give anytime to the investment. That is what I will show you. So people say that they will not invest because in thus saving man Kong, they're earning, earning 6% or 12% or 13%. Then see how impact and does it meet if we increase our overall return for a longer period of time by just 1%. So that's 6%. Man. What people are doing? I don't understand really. So now moving to the money, decrease and increase our money. But 10%, if we're investing 5 billion Pokemon Denver decrease the money raised 500, which is 10% of DOD Nelson. So we'll just invest four hundred and five hundred each month and year terms will invest 5410 million rupees there the amount of money in that we invest will decrease by 10%. And if will increase by 10%, then we'll invest 66 thousand. But if there were decreased by 10% and everything will remain the same, then our overall return will decrease by 16 leg. And that's not a very user to novelty. And our overall Future Value will become 14.5 black apricots. And if we will increase our annual payment by 500 or 10%, then what will happen that are too general? Increase by 10%. It will increase by 16, lack approx, and our future value will become one could hold 78, lack that, not a US compact if we will compare the things with PDF or the person that increase or decrease the period. God, either decrease the question of in the long run. So compounding effects a lot. The person for the change of policy or if we will change the period. So now, for a less amount of money, we will see that immediately 500 will see that how it will get impacted if we increase our overall return and if will increase a bit of our period. So suppose someone starting that investment at the age of 30, just nearly five years earlier, and they're earning approximately 20% in the later classes. I will also show you that how you can earn 20 or 25, nearly 30% interest. So I'll show you that in the future classes. So that can happen. So suppose that giving a bit of time in the weekend and they are earning for the research and on, and they're earning 20 or 30%. So how this will impact I will keep them minimum thing. So I would assume that he's only earning 20%, so will see that how it will get impacted. So we have to put 35 years in the period. We have to put the starting critical as 0. We have to put the interest edge 20%. And via just investing 5 thousand per month. So we are investing overall yearly, like 6 thousand, right? So we'll put 6 thousand here. So we'll put six here. We are investing in the beginning. So you'll definitely get surprised by that. Calculate the amount of money in that, that person will make. It took 12 luck, 20,056 rupees. That's a huge amount of money. To see the principle and interesting how it prints one he has to pay to lack intelligent only and how much interest he has to corrode deadlock 18,056 rupees. That's a huge interest earning a C is here, just invested 1% of the principal and his earning 99% from the interest. That is the power of compounding. That's why Albert Einstein once said that compound interest that the most powerful force in the universe. So thanks for taking this class. And in the next class, we will talk about why we need to invest. 3. Why Should We Invest: I welcome you all in the first chapter of this course. Why we need to invest? There are multiple reasons because of which we should definitely consider investing. And we'll go multiple reasons, one by one. And we will understand those multiple reasons. So let's jump into depth-first reason. So the first reason is to earn extra bucks at money, of course, to earn extra bots that we need to invest. Because investment gives a good amount of money. Because if you are doing as Doc marketing investment or the real estate investment or investment in gold, then it provides a certain increment in the growth. So if you are keeping that investment for a longer period of pain, then you will definitely grow your capitals. So for growing or capital, you need to invest. So this was the first reason. The second reason is to reaching financial independence. So for the reaching financial independence, you should definitely investing money. So suppose you want to get independent after retirement, after 65 years. So you want to, in the last class, I have already shown you that how easy it is to achieve retirement at the age of 65 with the financial independence. But there are a lot of people who want to read that after 50 years or who want to regard after 45 years. So they can do that. So they just have to calculate that how much money they require that particular time and how much money they should be saving from now. So that is what they have to calculate with a user of financial calculator, which are already provided you in the last class. So data rate and for reaching finance and role. And then the second reason, and the third reason is to earn extra return in investment. We earn extra returns. It means, you know, in the steam man caught on, in the fixed deposit, we get very little impressed. But in the stock market or in, in real estate, there are no limits. They are limitless. We will get a very good kind of return if we'll give a little bit of time in those particular investment, mean get a very good kind of return. And the fourth and the last reason is to reach your financing goal. So far, reaching your financial goal, we must consider investing like suppose you want to buy a super car after ten years. You want to buy your house after 15 years and all you want to send your kids for higher studies. You know, you could have multiple plants in the livestock for that particular plan and you can invest, but you have to make sure that the plan is greater than deniers to plants are greater than ten years. And that is very important if India will grow in longer period of pain and if. Indian companies will increase their profit. And if the economy of the contribute grow, then definitely the stock prices are the prices would also move up in longer period of time. That compounding works really well. So these are the food reasons because of which you should definitely consider investing. And lastly, I want to give you a project in this class. The project will be for the financial independence. You have to decide that at what age you want to get financially independent and what is the amount of money you must be needing at that point of time? And 13, which is a which I am giving that you are, you have to support that you will earn 12% return each year on an average. So you have to calculate that how much amount you must be saving, each one. In fact, investing each month to achieve that particular target. So that is what you have to calculate. So suppose you are 30 years old and you want to retire at 15, so you have 20 years. So what do you have to do that? Suppose you want thin corrode when you are 50. So you have to calculate that how much amount you must be investing in a particular class of investment. So you can read that financial goal, reach that goal of ten Caro's. That is what do you have to do for the Eurasia and for your agency. And at that point of time in which you will get retired and your Adamson and that how much amount of money in human need after retirement. So you have to calculate for yourself. In this whole process, you have to suppose that you are earning 12% interest, but year everyday actually. So that is what you have to do. And the second practical will be that you have to, that you have to think that what are you financial goals, you have to write it down. And you have to do the same process that how much amount you should be investing in any asset class, that you will reach that financial goal after that interval of time. So that is what do you have to do? And in this case, also, you have to suppose that you are earning interest of 12% each year on an average. So that is what you have to assume. Do the practicals and sear it with me. So, so this is it. And in the next class, we will learn about where to invest. 4. Where Should We Invest: In this class we'll talk about different investment options, what we have, and the risk and the reward. So first, I want to explain you that what is the impact of inflation on our return, on our feelings are on our investment. So in 2010, suppose we have the inflation of 10%. And at the start of the year, at the start of the year, you had 400 million rupees and at the end of the year, and you have also 1 million rupees. But the inflation in that particular year was 10%. So at the start of the year, you vent and you went to purchase the rice, which is priced extra typicality. So he was able to purchase 20 kids year phrase after one year, what happened? That you are able to purchase only 18, gives your fries with that theme, 100 rupee of money. So what did change in one year? So the only thing that teens in one year is inflation, the value of money. So the value of money decrease in that particular year by 10% and that inflation increase the price of rice. So it increased the price of price by approximately ten in 10%, which is now the price of rice now become 55. So you're now able to purchase on Wanli. It didn't KD afraid. So that is what happened. So this is the impact of inflation on the investments. If you are saving money in gas or in savings bank account or in fixed deposit, by any layer, you must understand that your value of money is decreasing with a certain pace. And so the question here is, what is that br sent by which our value of money is decreasing. So particularly in India and the inflation was on average since independence is 7.5% approximately. And the last Delia, that inflation was also 7.4 approximately. So you must understand that to make money, you must beat the inflation rate. You must make money more than 7.5 or 8%. Then only in reality you'll make money. What do we have to do? We have to build the inflation and rehab to increase our real value of money. So that is what we are aiming to do. So issued investment is lift them inflation 7.5 or 8%, then you are just not increasing the value of money. You are just decreasing the value of money. And if it's more than that, then actually you are making money. So that is exactly what happens. So now we will move to the different investment options, what we have to invest in. So the first investor investment option, what we have is bond investment. So generally, the bond is issued by government or corporate, or even countries, different countries, or many different people. But what I think the bond issued by requirement is the most safest investment and you should consider to purchase a bond issued by the government of India or garment of United States. But as you are a citizen of India, you should consider buying the bond of Indian government because there are a lot of complication in purchasing the bond of different countries or different garment. So you should concentrate on your own country. I don't recommend anyone to purchase the bond of cooperates because the bond of corporate before purchasing the bond of corporate V must analyze the particular body or particular company. So if she'd have to analyze a particular company or particular body, then why you'd go to born? Because we're going to want for safety, so we must ensure that we are safe. So you should go for Garmin 12 and the safety. But talking about the return, the average return of the god Min point for 10-year bond is 5.9%. So that is not a very good return. But as I say, that it is the safest investment, what you have. Now, you'll move to the saving account. So what, I think that it should not be named as saving Mencken, It should be named as expense account because saving when count is mostly used for the expense purpose, we expense from Savings Bank on, so it is the expense account Actually, it is not saving account. So that is what it is. Talking about. The saving bank on giving bank account approximately 2.7% to 4%. So the interest really depends on the banks. So what I think that you should consider going for a gold repeated bank, because in the savings bank called you and you will not get a very huge return and you will keep the money for a certain period of time. So you should consider good repeated Bank, which is very trusted. Even if it gives two or 3% interests, then also it's fine because you are not. You know, using the saving man count for investment. You're actually using the saving Ben Cohen for investment, for other investment. And you will just use the savings bank account as a medium to transfer money from this account to that account, to debt investment, to that expensive. You should not concentrate on the interest. You should concentrate on safety. So next, we'll talk about the fixed deposit. So flushed fall. I will explain that. What is fixed deposit? Fixed deposit. So suppose you are fair depositing your money for, you know, one year or two year or three years for that particular year, you'd that particular amount is you're not logged in the bank and you can't just go and use that amount of money. You have to keep that amount of money for that particular predefined period of time. And if you are taking out, that are taking out that particular amount of money from the fixed deposit, then you penalize it with a width, some certain charges. So that is what 50 positives. So 50% is not liquid. If we will compare with the saving mankind, they didn't BankAccount is very liquid and you can take money out of the saving, saving Band Count anytime you want. So that is the mean difference in the same saving bank account and the fixed deposit. Talking about the return, 50 posit earns a return of four to 8%. That also depends on lot of factors like bang or the period for which you are depositing your money. So if you are keeping the money for the longer period and in the West Bank, then you will earn interest of 8% and then you'll keep up with inflation of India. So that is what 50 positive. Now, we'll talk about recurring deposits. So suppose you have a certain need after two years or three years, or you are getting a certain income from a particular source. And you want to, you know, that is a regular income. So you want to save our regular amount of money each month or each quarter, or each year for a particular time. So for that particular reason, recurring deposit is used. So you can invest a particular amount of money on a particular interval of time. So for monthly, yearly or quarterly. So that is what happens in directing deposits. So this is also not liquid, so you can't take all the money. And whenever you want, you will be penalized with charge if you do so. So does and that is what directly deposit is. And and recurring deposit earns a return of 6.5% to 8%. So that is what the earning is. Now, we'll talk about. Now we'll talk about commodity market for x market and derivative markets. So as F min send things in the topics, but first they're really risky and they expire after certain period of time. So some of the commonalities are deliberative, in fact, expire after one month to month or even one year. So, so I don't think we should include those categories in the investment. So, you know, they have a certain use. I'm not saying that they don't have any used. They don't have in utilization, but they have asserting utilization which doesn't come in investment voice. So that's why I'm not what I think that real estate should be used for. A person who has experienced, who have used capital because you cannot just watches one particular asset, but real estate asset, and you'll see that you are a real estate investor. You have to invest in multiple assets. So you need as huge, get brittle. And you need a lot of time because you have to do paperwork and you have to do binding ceilings. So that consumes a lot of time. So you need a lot of time. Even if you don't have knowledge and someone you know, have a lot of knowledge and you trust that particular person, then you can use that knowledge. But you must have done money, a lot of money to invest in, and a lot of time to invest in. So that's why I don't think that real estate is a very ideal form of investment. So in the past, it has seen that in the big cities, real estate grows at an average pace of in-person yearly. So, So next, we'll talk about equity market for which this whole course is all about actually. And this is a very exciting topic for me. So in the last 15 years, equity market has nearly produced 12.5% return. And in the last ten years, it has produced 15% yearly return. So, and that is what the power of equity market. So if you are investing in the mutual fund of nifty 50 as well. And then also you'll get approximately 12 to 15% return, and that is minimum return. And if you are a beginning desktops individually, then you can even make 20 or even 25% or even totally present. So that is a power of equity market. And first of all, what I like about equity market first, it's very liquid. If you need the money, then you can. Maybe if the market is low, then you will loop and laced with a certain amount. But, you know, you can take them out, out of the market anytime you want. So it is very liquid. Secondly, it is easy to learn about investment and it really takes time, but it's like not a tough thing to learn. It's really easy. Anyone can learn. And if you're dedicated enough, then you can, you can definitely learn about equity market and investing in equity market. And if we will talk about the first case, then you just don't have to do anything. You just have to give a particular amount of money at a particular time. And that is it. And you are earning, you know, 12 to 15% return by just giving a particular amount of money at a particular time. So this is the power of equity market. You are not earning this much interest in any investment option. Dotting Bard the good things about equity market, not considered a bad thing that risks. We should, must consider that equity market has the most at risk because you can enter the market anytime you want and you can exit the market anytime you want. And the most riskier thing is you because people do a lot of psychological mistake in late with him. But the good thing is that, that can be controlled by learning, gradually, learning about creating market, by reading books and by, by practicing, by paper trading, you will reach one day that you can pick your own stocks. And once you have learned art of investing, then you just have to give shoe hours on the weekends and you'll be able to make 20 or even 25%. And you can see the gap between the percent. So I'm already Sonya in compound interest cloth that how massively it impacts if you increase 1% or 2% interest. So here you are increasing five or 10% interest. Then suppose how much impact it will make. So you have to learn and you have to go and invest in the equity market. So next we'll dock part goal. So talking about the returns, in the past, it has produced a return of on average 10%. So it does not beating pretty market. Of course. You must tackle. Toward that. It will be a pretty market, but it cannot be the equity market, you know? So how we can invest in gold. So first of all, you should not purchase physical world or you should not invest in dualities and all, you should not purchase gold coins. Because. You know, they are dead imposed with taxes, they're imposed with a lot of making charges and a lot of expenses which you don't want to end there. You know, you're investing your money issue. So you should decrease your expense and you should increase your investment. So suppose you are proceeding corn for 10 thousand and you are getting gold of Italian, then it will take a lot of time for you to even break event. So that's why I suggest everyone to invest in. If you want to invest in goal, then invest in silver and gold bond. So bring Gold Bond is provided by the government and government of India and you can invest in those born. So storing gold bond is the gold certificate published by the government of India. You can invest in those sovereign gold bond and you'll recharged the money. When you will invest in the sovereign gold one is suppose the price of gold at that particular time, 40,002. So you will be child lidar 40 thousand amount of money at that particular time when you are purchasing sovereign Good point and when you are sealing after ten years or five years, it has also expiry. So after, suppose you are selling that particular bond to garment after ten years, after ten years. If dug gold has become one leg, then you will get that amount as part of one leg as per the market price. So that is where it is. And one more benefit, what silver and gold warned has that the government gives 2.5% interest on your investment. So you are earning from the asset as well as you are earning from the interest. So although they're interested, very low, but you are earning some amount of money. And as already told you that a small percent of money going to affect a lot in the longer period. So what I think that edge golden not producing as much return we are getting in the equity market. So you should mostly consider investing in equity market, but bite of your portfolio must contain gold, because gold acts as our defender. So if the stock market is falling, then the gold price will move up and up and up. So that is what the benefit of gold to your portfolio decreasing, then a goal will help you to boost your portfolio. So on an average, people think that holding 2% of your investment in gold is a very good investment. So sit for two days, guys, and let's move on to the next class. 5. How Should We Invest: In this class we will talk about how we can invest in stock market. So what is the matter we should use? So we have two methods that weekend that I think we can use in the stock market and buy those mattered. We can do things, do magical things, and we can improve our capital, our Lord. The first method is for Western who don't have a lot of time. And the second method is called the persons who have a bit of time in the weekends, like 12 or three hours in the weekends. So that is what the two methods are all about. Now. The first method is passive investment. In this method, the B1 don't have to give a lot of time to the investment. So this method is basically for the persons who don't have a lot of time. So he just had to provide the money at certain interval. So like monthly or yearly. So he can provide the money in that kind of sequence and he will enjoy a very wonderful return of 12 to 15%, which is martyred kind of return. But yeah, it's fine because they don't have to do a lot of work. So it's finding what they have to do. They have to invest in new 50-50 dragged mutual fund. So there are some reasons because of which M thing that they should invest in nifty 50 drag mutual fund through direct took important words, first, 50-50. And the second important word is mutual funds. So why they have to invest in mutual funds and why they have to invest in negativity. So the first reason is that they don't have to give a really large commissions or the like. In, if you're giving your money to the mutual fund managers, then they will, of course Jagger, VD, huge commissions or fees. So that because they are giving a lot of time in the research and all. So they will of course charge a large amount of 20 from you. So in the case of nifty free retract mutual fund, they will not charge a really large amount of money because what they have to do, and they have to just put the money in the nifty 50 Index. So they don't, basically they don't have to do anything. They just have to keep up with the index. So they will charge a very less sweet. So you are giving very less three. And the second reason is you don't have to bother about investment because if the, India's economic growth of the companies will make profit and if that will happen in the longer period, then of course you make money in the stock market. So that is the second reason. Now the third reason is that maybe you will get surprised by this, that 85% of the mutual fund managers don't event beat the market. So. First of all, eighty-five percent of mutual fund money or don't beat the market in the longer-term, is a very large number, eighty-five percent, because there's only 15% who actually beat the market. So beating the market means that they don't give a return which is greater than nifty 50 index are Sensex Index, so that is called market. The index is called markets so they don't even be debt particular basic index. So suppose if you have only 15% chance that you'll, you'll make money by investing in mutual funds are managed by a mutual fund managers, then why you should do go with that mattered and you should definitely consider investing in nifty 50 dragged mutual fund, right? So did this was that 30 then? So I don't know what they're doing and the dead maybe vector thing on your money. I don't know that. So that that can happen, that they are just practicing on your money. So I'm not saying that you should not believe anyone who is in investment world and who is investing money and who is earning money. And I'm not saying that, I'm just saying that if you don't know that particular question, you should not believe in that too will make you rich diet. But if you know a person personally that he has done a very good job in the investment world. And if he will manage your money, then he can grow your money at the rate of 20 or 25% in the longer-term, then it's fine to give money to someone on a third and commission, though. You'll get benefit from that particular person and he will also get benefits from UK so that you can do. So. The last thing I will talk about, you can invest Agile UX at 500 and this type of mutual funds, right? So you're going to start with 500. Like if you're a student, then also you should be having 500 each month. So you can invest that particular amount of money. So the second method is active investment. In this method, what you do that you will pick certain stocks from the stock market, which I think is lift than their intensity value. Intrinsic value is actually the actual value of the stock. So if suppose you think that according to the future get Florida current price of the stock should be 100 and the stock is trading at 50. Then you are binded particular stock B because you are getting that particular business at a cheap price. So you are buying that particular stock after business, and you are selling that particular stock, it crosses it in deltaic value so that you can do so for a reaching that point that you are able to determine that enrich company is good and which company is better. Able to determine that how you should consider investing in this stock and not consider investing in that stock. For reaching that point, you must read a lot of books like you should definitely read 20 to 25 books. And in the future, I will also upload, you know, explanation of some of the famous books which you should read and what is the content of the book. And I will explain each and every point of the books. I will infect each of those books. So in this platform, in the future, I'm going to do this things. So now this is eight, and now we'll move to the next chapter of this goes to the next chapter is when to investor, what should be the timing of the market? 6. When Should We Invest: Welcome in the next class. And in this class we'll talk about when we need to invest. This class is basically for the persons who have decided to invest in the stock market through mutual fund of negativity. And we have decided that they will invest in stock market passively. So the first thing is that we are going to see that a business and what is happening in that particular business, and what will be the price of that particular business? Then the business whose Fourier earning in the future will be one agent and the price of particular businesses 10 thousand. So here we will determine that what is the issue of that particular business. So price divided by earnings, which is PE ratio of that particular business. So price, which is 10 thousand and earning which is 100. So 10 thousand by 100 is equal to ten. So now we are able to calculate the B ratio of any particular business. So does that mean that if we are a, you know, determining that whether the particular business is cheap or moderate or expensive, then we can now determine that, no, it doesn't mean that there are a lot of matrices which we first need to fulfill before buying a particular business, particular business. But the bigger issue will help us in determining whether the market is cheap, Madrid or expensive. So first we'll talk about nifty 50. What isn't 50-50? 50-50 as the index, as I have already mentioned, that nifty 50 is the index of the're price of 50 biggest public limited companies often deal. Now, there's only one thing that we need to know that if we know the ratio of the market than will able to determine whether the market is cheap, expensive, what Margaret, and for that, I have already drawn that table. I will explain this as I will go through. So wouldn't the advantage of knowing that whether the market is cheap, expensive, what Margaret, So I have two methods by which you'll be able to increase your order overall return by 1234, even 5%. If you understand this particular concept clearly and you will apply this particular method in your life. So suppose you are falling the first mattered in which you are investing in market, stock market to mutual fund by investing nifty mutual fund. So there are two methods I have explained the first method first and I will explain the second title later. So the first method is when you found that the market is cheap, then. Some good. If you have some amount of money which you don't need for a longer period of time, then you can invest that particular amount of money in the mutual fund of nifty 50, okay? So you are investing that particular amount of money when the market is cheap. And when the market is expensive, then you can take that money out of the market. So it's really, and that is what you have to do. The only problem is you can repeat this process, but the only problem is that we don't know that when the market will become cheap and the cheapness of the market don't happen a lot. So it will happen once or twice every ten years. In the past years, we have seen that the cheapness auto market has happened once or twice every ten years. So it's not like it will happen as it has happened before, but most probably it will happen that way, right? So it may take ten years or 12 years who are aggress to happen, but it most probably will happen, definitely for sure. So if you're saving that particular amount of money, then you can, you can invest that particular amount of money in the market. So the market crashes in the past happened in 20082992, and also happened in 2020. And this market crash happens occasionally rate. So do need to be prepared for that and you'll continue your Invest. I'm not saying that you will not continue in your mutual fund investment in the Cresus and thing that you are doing, that particular investment, you are either it's five thousand, six thousand per 10 thousand what ever you are investing in the market. It doesn't matter when the market doesn't matter when the market is expensive, you are saving that particular amount of money rate. So you are doing that. Other than that, if you have some money, then you are just investing in the market cheap and you are taking out the money when the market is expensive nowadays, a second method. And the second method, what you are doing is you are saving 10% or 20% of the amount of money that you have decided to invest in mutual funds. So you are saving that particular amount of money and you are investing that particular amount of money when the market is cheap and you are taking out that particular amount of money, the market is expensive. So that is exactly what you are doing. So in the second method, I like the first mattered a lot because, you know, I really, you know, no one can predict the market, so I don't know when the class will happen. So for my financial goals and saving the amount of money that I need to, and I'm doing this buying an ceilings with the extra amount of money rate. That is what I like. And you can have your own choice so you can maybe in the future you will have your own mattered that how you can get benefit from this cheapness and expensiveness of the market. So this is how we determine that when the market is cheaper than the market that moderate, and when the market is expensive. So if the ratio of the market is less than 15, then the market is cheap. When the ratio of the market is between 1525, then the market is moderate. And when the PE ratio of the market is more than 25, then the market is expensive. So the only thing we are, we are left with that. How will determine that? What is the ratio of the market? So for that, let's go to practicals. What does the PD short-term market for that? You don't have to do anything. You just have to search in Google. Pete, issue of nifty 50 companies. And you have to search that. And now you have to go to official website, which is www dot anything India.com. We have to go to the official website of NSC. And here you will find a page. If you want to find the pH of whatever that issue of 50-50 and the starting date a day you'll have to provide. So I'm supposing it's September one and ended till then. You have to see the bead issue. So I am providing the did or 17th October. And if we want to see all designation and result get preserved and we'll get the beat issue of the market. So the ratio of the market is 30-fold right now, which is VD, the right to buy the stocks. Preaching you don't have to buy a mutual fund. And this is it for today's guys. 7. How Much Should We Invest: I welcome you all in the last class of this course. And in this class we will talk about how much to invest, took, how much amount of money we should consider investing. So, and it has lot of tumbles rule, but we should at least invest ten to 20% of our saving. And we must consider that investing in any class, like in stock market or real estate, or in any risky category is actually risky. We have to consider that. And you know, what are the most riskier asset you have is you and you are the most risky asset. Because if you are not learning and if you're not growing or knowledge, then you are a risky asset to your cell phone only. And that's why you should definitely start with as little as possible. And you should grow your capital. As you grow your knowledge. And you get confident that you are going to do well in the stock market. And accordingly, you should start growing your investment in the stock market. So this class will basically be related mostly to the stock market. So because I think, I believe that stock market is a very good source of making dwell more than 12% easily. So there's 3D ED in the stock market, so we'll consider that investment. And, you know, before investing in the market and the stock market or in the real estate, you should consider investing in yourself. So first investing yourself. And the second thing is what you should do to increase your knowledge. You should read books. You should read investment books about fundamental analysis, about value investing. So you should read those books and buy those books, and you will understand the market really well. So now will come to that, how it affects our investment portfolio and how we will determine that how much percent of our saving we should consider investing in the market. So as there is a formula which is 100 minus aij is equal to 2% of your investment in stock markets. So that is why it is that the formula and why we have to invest more in the earlier days, and why we don't have to invest more in that later. In the seventies or eighties. Why we don't have to? Because this formula tells exactly that thing that you have to invest in list at the end of your life. And you showed us stop usage. You should invest more at the start. So why do, why do it like that? So first thing first, that at the start we don't have a lot of capital to lose, we have little capital to invest. And I've already told you that you should start with less capital and you should grow your capital L, you will grow your knowledge. So let's start with less capital. You can start with Italian or 2 thousand or even 500 rupees to get a glimpse of the spectacle of stock market, right? How does stock market Worlds and on? And you can even do people trading at the start and educate the confidence, then you shall start investing in the market, in the real market. But the real amount of money. And you should definitely at the start, not considered a modeled of money you have made. You should consider that by how much person your capital agree? So by that, you will understand that what you know, what is the position of your middle portfolio and what is the position of your understanding of the market and buy only returns. You can't tell that whether your understanding of the market is good or bad. So I recommend you at least learn 20 to 25 books of our stock market before investing in the stock market. And the Lord of books, there, lot of good books which you should definitely considered learning before going into the market. And if you are following this method, of course, if you're following the first method of going into going and investing in the mutual fund, then you can definitely go and do that without learning a lot of things. You need to know. Few things, which I have already discussed in this whole course. So coming back to the formula that what we had just left in the middle, that 100 minus eight. So that is equal to percent of money you should be investing of your saving. So the freshly than I told you that at the start we have less capital at the end of the have more capitals thicken. If you're investing at best, dark and something happens with the company and the company is not growing. That much bid that it should grow. I'm not saying that something happened, you know, concrete in the company and just saying that because of some reasons that companies not performing agile at, it should do. So. What you can do, you can leave dog stock adjectives in the portfolio and you can forget that that stock for a longer period of time. So what you have, you have less amount and you have longer period of time. And as you know that in the compounding Watson really well in the longer period of time. So you will have a longer period and you will do pretty well in the investment. And the reason is that at the start, at the start of your career, at twenties or thirties, at the start of your thirties, No one is dependent on rate. But in as you grow, older, people will get dependent on you to, in the later years to count save, you can't invest as much among appointee ads you should. And did another reason that 4-3 them, which is the fourth reason that at the end of your life, like in sixties or seventies, what do you do with investment? Because you have a little time left. So in that little time, the compounding will not work that much effectively. And the second thing is if something happens with the portfolio, then, you know, you have to take out money in a lost oh, that's a risk. Although I have told you all that rules of investment, how much money you should sued invest. But all these rules and regulations are just two days ago. You will enter the market and venule start investing your money. Then maybe you'll make your own rules and regulations of how much money you should be investing. But I always recommend that if you have any type of experience which you think that it will happen in 0 to ten years from now, then you should consider not investing that particular amount of money into the market because market, stock market is really watery type and this may happen that you will, you know, you will not make any money. Or in fact you will lose money for some years and then you'll start making money. So this happened. And you should always considered too. And you should always consider to invest in stock market for more than five or ten years, or I recommend to invest for a more than 15 years. So that is exactly what you should do. So this is it for today's guys. And we have completed the course. So in the future at plants to make courses about books, because there are certain people who don't understand high-level investment books because, you know, if you are entering into, sounds like investment is another phase, then you will not understand all the terms of good books and the books which you should consider, you know, reading. So I will make porcine wrote those books, make you understand those particular books. So follow me if you want that, you get notification of those courses. This is it for today's guys and see you in the next quote.