Dear Shri Irani Impressed with your talk in NDTV Profit on your recent book "10 Commendments for Financial Freedom" - I run to a nearby Crossword book store. It is not available -yet to receive as it may be a new launch. While searching to order online thr' vision I come across this site.
Thank you Mr N R V Appasamy for your nice comments. My purpose and aim in writing my first book 10 Commandments for Financial freedom is to free humanity from the shackles of money. Although are world has advanced technologically but we are moving back towards slavery. I feel very pained when I see people become slaves wage salve of the employer, tax slave of the government and loan slave of the bank.
My book 10 Commandments for Financial Freedom deals on all the aspects of money and finance including earning, protecting, budgeting, saving, spending, leveraging, investing, insuring etc with the ultimate aim of providing the common man with a full perspective on sustainable long term wealth creation. It is not a book on how to get rich quickly but on a systematic plan on how to protect, preserve and grow our wealth so that we don't just become rich but stay wealthy throughout and leave it for the next generations and / or able to do charity. It is a book which will talk about money, its intricacies and functioning in a manner never done before. It is a book which will be equally useful, to a seasoned professional investor or a naive lay investor.
This book should also be useful to students because the problem with today's youth is that they earn a lot, spend more than they earn, buy liabilities with negative leverage believing it to be assets, get in a debt trap and then full life become a slave of money wage slave of the employer, tax slave of the Government and loan slave of the bank. I feel very pained when I see that and this was the prime reason which encouraged me on the journey to write a book for financial freedom.
Money is the only thing which is available in abundant in the world today, it is available at the free will of the government and how fast their printing machines can function. You tell any government to give you unlimited amount of gold, silver, copper, steel, oil, sugar, wheat or any other real commodity, they will not be able to give you because Mother Earth has given those in limited quantity but you tell any government to give you paper money and they can give you that in unlimited quantity they just have to print it. We all human beings run after money little knowing that it is the only thing available in abundance in unlimited quantity. And if the government can print money, so can you do legally! That is what this book aims at to take you from financial slavery to financial freedom.
It was interesting to read your article `Rules for Selecting the Right Fund'. Although it was quite informative but it would have been better that you gave names of Mutual Fund schemes/plan which qualify or come at par with the rules suggested by you. It is not possible for an investor to compare expense ratio or churning of portfolio etc. amongst a large number of schemes. I eagerly await your response to my comment. Thanks - SANJAY K. email- skh_ca@yahoo.com
You have talked about various aspects of mutual funds and their selection in your blog. Could you throw light on practices adopted by these Mutual Funds, as to how they deploy investor funds, and what percentage is lost to their expenses, bonuses and charges? How do they make money and create value (if at all) for the investor, especially in the case of a debt fund? How can the investor monitor performance and spot a risk?
Dear Mr Parvez, You are right – its very difficult for a fund manager to beat the passively constructed index, particularly after the hefty management fees and expenses. Possibly, I am making a controversial statement because generally you will hear that equity investments are for experts and if you don’t know how to pick the right stocks, you should entrust your money to an expert fund manager, etc. However, I dare say this is a most useless advice. Hold on; I am not saying that you shouldn’t entrust your money to experts and start picking your own stocks instead — no, there may not be a bigger financial suicide than that. I just humbly submit that it’s very difficult, if not impossible, to beat the stock market indices consistently over a longer period of time. If that were not the case, then why is it that approximately 75% of all “actively” managed stock funds under-perform the passively constructed stock indices over periods of a decade or more. The fact of the matter is that most people can’t pick winning stocks or time the markets and their occasional success is simply chance. I would like to quote Dr. William Bernstein who said, “There are two kinds of investors, be they large or small: those who don’t know where the market is headed, and those who don’t know that they don’t know where the market is headed. Then again, there is a third type of investor — the investment professional, who indeed knows that he or she doesn’t know, but whose livelihood depends upon appearing to know where the market is headed.” Nothing more succinctly explains the real world of professional investing and stock picking. Mr. Merton Miller, Nobel Laureate and professor of economics in Chicago commented that “if there are ten thousand people looking at the stocks and trying to pick winners, one in the ten thousand is going to score, by chance alone, a great coup, and that’s all that’s going on. It’s a game, it’s a chance operation, and people think they are doing something purposeful, but they’re really not.” Then I would quote Mr. Rex Sinquefield, co-author of Stocks, Bonds, Ills and Inflation: “We all know that active management fees are high. Poor performance does not come cheap. You have to pay dearly for it.” Thus, active fund management is nothing but paying heavy fees for under-performing the passive indices! For investors who are always on the look out for the next hot fund, the next great sector fund, etc., Bethany McLean, columnist for Fortune magazine, wrote that “skepticism about past returns is crucial, the truth is, much as you may wish you could know which funds will be hot, you can’t and neither can the legions of advisors and publications that claim they can. That’s why building a portfolio around index funds isn’t really settling for the average. It’s just refusing to believe in magic.” And let me further quote John Bogle, founder and retired CEO of the Vanguard group: “Index funds eliminate the risks of individual stocks, market sectors, and manager selection. Only stock market risks remain.” In other words, when you invest in a passively managed index fund, all risks relating to the fund manager, his / her stock selection and market timing, selection of sectors, etc. are all eliminated and the only risk which remains is the risk of the stock market as a whole and that is precisely the risk which you would like to expose yourself to when you invest in equities. Last but not the least, I would like to remind you of the words of the great legendary investor Warren Buffett who once said that “most investors, both institutional and individual, will find the best way to own common stocks is through an index fund that charges minimal fees. Those following this path are sure to beat the net results (after fees and expenses) delivered by the great majority of investment professionals.”
hi mehrab irani this is DR.MOHANDAS(MBBS ,DA) from hyderabad I read u r book "Mad Money Journey".it is excellent book. i want attend financial freedom course work shop. kindly provide workshop details.
Dear Shri Irani
ReplyDeleteImpressed with your talk in NDTV Profit on your recent book "10 Commendments for Financial Freedom" - I run to a nearby Crossword book store. It is not available -yet to receive as it may be a new launch.
While searching to order online thr' vision I come across this site.
Thank you Mr N R V Appasamy for your nice comments. My purpose and aim in writing my first book 10 Commandments for Financial freedom is to free humanity from the shackles of money. Although are world has advanced technologically but we are moving back towards slavery. I feel very pained when I see people become slaves wage salve of the employer, tax slave of the government and loan slave of the bank.
ReplyDeleteMy book 10 Commandments for Financial Freedom deals on all the aspects of money and finance including earning, protecting, budgeting, saving, spending, leveraging, investing, insuring etc with the ultimate aim of providing the common man with a full perspective on sustainable long term wealth creation. It is not a book on how to get rich quickly but on a systematic plan on how to protect, preserve and grow our wealth so that we don't just become rich but stay wealthy throughout and leave it for the next generations and / or able to do charity. It is a book which will talk about money, its intricacies and functioning in a manner never done before. It is a book which will be equally useful, to a seasoned professional investor or a naive lay investor.
This book should also be useful to students because the problem with today's youth is that they earn a lot, spend more than they earn, buy liabilities with negative leverage believing it to be assets, get in a debt trap and then full life become a slave of money wage slave of the employer, tax slave of the Government and loan slave of the bank. I feel very pained when I see that and this was the prime reason which encouraged me on the journey to write a book for financial freedom.
Money is the only thing which is available in abundant in the world today, it is available at the free will of the government and how fast their printing machines can function. You tell any government to give you unlimited amount of gold, silver, copper, steel, oil, sugar, wheat or any other real commodity, they will not be able to give you because Mother Earth has given those in limited quantity but you tell any government to give you paper money and they can give you that in unlimited quantity they just have to print it. We all human beings run after money little knowing that it is the only thing available in abundance in unlimited quantity. And if the government can print money, so can you do legally! That is what this book aims at to take you from financial slavery to financial freedom.
It was interesting to read your article `Rules for Selecting the Right Fund'. Although it was quite informative but it would have been better that you gave names of Mutual Fund schemes/plan which qualify or come at par with the rules suggested by you. It is not possible for an investor to compare expense ratio or churning of portfolio etc. amongst a large number of schemes. I eagerly await your response to my comment. Thanks
ReplyDelete- SANJAY K. email- skh_ca@yahoo.com
Dear Mr. Irani,
ReplyDeleteYou have talked about various aspects of mutual funds and their selection in your blog. Could you throw light on practices adopted by these Mutual Funds, as to how they deploy investor funds, and what percentage is lost to their expenses, bonuses and charges? How do they make money and create value (if at all) for the investor, especially in the case of a debt fund? How can the investor monitor performance and spot a risk?
Dear Mr Parvez,
ReplyDeleteYou are right – its very difficult for a fund manager to beat the passively constructed index, particularly after the hefty management fees and expenses. Possibly, I am making a controversial statement because generally you will hear that equity investments are for experts and if you don’t know how to pick the right stocks, you should entrust your money to an expert fund manager, etc. However, I dare say this is a most useless advice. Hold on; I am not saying that you shouldn’t entrust your money to experts and start picking your own stocks instead — no, there may not be a bigger financial suicide than that. I just humbly submit that it’s very difficult, if not impossible, to beat the stock market indices consistently over a longer period of time. If that were not the case, then why is it that approximately 75% of all “actively” managed stock funds under-perform the passively constructed stock indices over periods of a decade or more. The fact of the matter is that most people can’t pick winning stocks or time the markets and their occasional success is simply chance.
I would like to quote Dr. William Bernstein who said, “There are two kinds of investors, be they large or small: those who don’t know where the market is headed, and those who don’t know that they don’t know where the market is headed. Then again, there is a third type of investor — the investment professional, who indeed knows that he or she doesn’t know, but whose livelihood depends upon appearing to know where the market is headed.”
Nothing more succinctly explains the real world of professional investing and stock picking. Mr. Merton Miller, Nobel Laureate and professor of economics in Chicago commented that “if there are ten thousand people looking at the stocks and trying to pick winners, one in the ten thousand is going to score, by chance alone, a great coup, and that’s all that’s going on. It’s a game, it’s a chance operation, and people think they are doing something purposeful, but they’re really not.” Then I would quote Mr. Rex Sinquefield, co-author of Stocks, Bonds, Ills and Inflation: “We all know that active management fees are high. Poor performance does not come cheap. You have to pay dearly for it.” Thus, active fund management is nothing but paying heavy fees for under-performing the passive indices!
For investors who are always on the look out for the next hot fund, the next great sector fund, etc., Bethany McLean, columnist for Fortune magazine, wrote that “skepticism about past returns is crucial, the truth is, much as you may wish you could know which funds will be hot, you can’t and neither can the legions of advisors and publications that claim they can. That’s why building a portfolio around index funds isn’t really settling for the average. It’s just refusing to believe in magic.”
And let me further quote John Bogle, founder and retired CEO of the Vanguard group: “Index funds eliminate the risks of individual stocks, market sectors, and manager selection. Only stock market risks remain.” In other words, when you invest in a passively managed index fund, all risks relating to the fund manager, his / her stock selection and market timing, selection of sectors, etc. are all eliminated and the only risk which remains is the risk of the stock market as a whole and that is precisely the risk which you would like to expose yourself to when you invest in equities.
Last but not the least, I would like to remind you of the words of the great legendary investor Warren Buffett who once said that “most investors, both institutional and individual, will find the best way to own common stocks is through an index fund that charges minimal fees. Those following this path are sure to beat the net results (after fees and expenses) delivered by the great majority of investment professionals.”
Regards,
Mehrab
hi mehrab irani
ReplyDeletethis is DR.MOHANDAS(MBBS ,DA) from hyderabad
I read u r book "Mad Money Journey".it is excellent book.
i want attend financial freedom course work shop.
kindly provide workshop details.
thank you