Credit Cards, Worth it or not?

We all have heard of Credit Cards and usually get a lot of spam calls and messages for opting for a certain Bank's credit card. Here, in this post we are going to analyse whether it is a good idea to go for a credit card or not.

The Advantages

• It helps you build your credit history. Your credit history is your track record of borrowing and paying it back. It also determines your credit score, which is the basis of sanction of loans. Good credit score will always take you closer to your financial goals (by getting loans at competitive interest rates) if used responsibly.
• More secure than actual cash. You don't have to carry cash all the time for your purchases. If you lose your Credit Card or someone uses it for fraud, you can report such unauthorized usage to Card issuer and can block the card at the earliest.
• Reward Points and Cashbacks. If you use a credit card for your routine expenses, then reward points will add up fairly quickly. You can choose to redeem those points based on your requirements. 
• Better purchasing power with increased credit limits offered to card holders.
• Interest free credit and in some cases interest free EMIs too thereby helping you to manage your cash flows a bit better. 

The Disadvantages

• Uncontrolled spending. You get a higher credit limit and might push few people to go beyond their means. They will then enter the vicious debt cycle. It's important to only spend that much which you can payback every month. 
• Credit Cards Interest, Fees and Penalties. The interest rates on the outstanding amount if remaining unpaid after the due date usually ranges from 2.80 % per month to 3.9 % per month or more than 30 % per annum. This is 45 % p.a. in some of the cards. There are late payment fees, Cash Advance charges apart from the interest accrued on the outstanding amount.

We have looked at both the pros and cons of Credit Cards. Now here are certain important aspects related to credit cards which are mentioned in the Card agreement which we usually don't read.

1. If you have a dispute over billing say for Rs 500 then also pay the total outstanding amount which has been billed. Here's the fine print on that, say for example, you have a bill which is generated on 1st July with its due date falling on 18th July and you didn't pay the full amount because of dispute, right. Now, for all the transactions which you have done after 1st July will attract interest and penalties. You will be charged for interest on Rs 500 as well as the unbilled transactions from 1st July.
   So, this is a big don't in credit card. There are good dispute mechanisms in place and you can expect a refund for any disputes but recommend to pay the billed amount. 
2. Don't ever withdraw Cash from Credit Cards. You will start paying interest on every spends from thereon.

Conclusion

• Use a Credit Card and maybe use multiple cards with higher limits and lower limits but pay off the bills well before the due date.
• Use a credit card instead of a debit card when you are not sure about merchants because debit cards are much more difficult to recover money from. 
• A prudent Credit Card user can easily reap maximum benefits by managing reward points and other loyalty programs. 

Credit cards can easily turn from being a blessing to a curse if it is not used with control. Always ask yourself whether you really need this thing or not? Can paying it with cash possible? Stay interest free as long as possible.

What Unexpected 'Stay'cation At Home Means To Us

The breakout of Corona Virus has meant that we all have been confined to our homes. It has been a dramatic shift in the schedule for most of us who were used to an outgoing life but this has also been the time for us to reflect on our life. It is the time to revisit our priorities and probably reset them.

Staying indoors has meant spending a lot of time with family which was not the case before in our fast paced life. This pause, however untimely and unexpected it is, should be used an event to re-energize ourselves . The fact that I am writing this on my blog for the first time after 2018 can be the best example! :)
There is so much that can be done productively at home to improve our self. And there is always the right time to do that.

What matters has sharply come into focus. Family, Love, Health, People, Community, Generosity and most of all self awareness about a particular situation. Talking to parents and having their complete attention is like having childhood back again. Simply priceless!
We can do so many productive things while at home. Here's what I can think of:

• Reading books which many of us purchase but do not read or leave it midway. I think we can do that and take up writing once again which can be in any medium like blogs, journals or Quora.
• Pursuing a hobby which doesn't require you to go outdoors like Painting, Cooking, Paper Crafts etc
• Doing household chores and even doing it completely and giving your Mom/Spouse some rest.
• Yoga and Exercises at home. Keeping yourself physically and mentally fit is always important.
• Go for some mind games like Sudoku or Chess or any other game which challenges your mind.
• Talking to your loved ones who stay far away. There's nothing like that. Call up that friend whom you haven't spoken to in weeks since you were busy.
• Eat well nutritious food to stay healthy.
• Learn something new by opting for online courses on the subject/hobby of your choices.   

Haven't included Web series because that's by default everyone's choice. 

That's it. Hope you make the most of these times. Be positive and keep learning and improving.


   

Books on Investing and Stock Market - Part 2

The field of stock investing is very wide. A lot of books have been written on the subject. In the Part 1 of the series, I had discussed about books which covered subjects right from the basics of investing. 

In this post, I will try to go little deeper into the subject and will try my best to recommend books for investors or stock market enthusiasts who have learnt the basics of investing.

• Coffee Can Investing by Saurabh Mukherjea, Rakshit Ranjan and Pranab Uniyal. Coffee Can Investing refers to a 'buy and forget' approach to investing in companies which have delivered consistently great results. Mukherjea and his co-authors' delves deeper into this concept and have come out with this well written book solidly backed by data.
• Beating the Street by Peter Lynch. Lynch was a famous fund manager at Fidelity Investments. He liked to visit companies before investing in them. He believed that anyone who has time to do stock research can generate good returns.
• Big Mistakes: The best Investors and Their Worst Investments by Michael Batnick. 
• All I Want To Know Is Where I'm Going To Die So I'll Never Go There by Peter Bevelin. This book is about a fictitious seeker and his visit to a 'Library of Wisdom' where he meets another fictitious character - 'The librarian' along with Warren Buffett and Charles Munger. It's a must read for all Buffett and Munger fans.
• What works on Wall Street: A Guide to the Best-Performing Investment Strategies of All time by James O'Shaughnessy.
• Value Investing and Behavioral Finance by Parag Parikh. 

 So, these are the books which I could think of. I will add few more books once I get to know about them and read it. 

There are a lot of blogs, websites and even podcasts which are also imparting useful lessons in investing. May be some other day, I will touch upon them also.

And remember these three concepts always- good businesses, right valuations and long term focus. 

Happy Investing!

My-leave-the-worries-behind Car

First time is always memorable in life. Right?

Your first day in school or college or anything for the first time. I am quite sure that you might as well have remembered the first time you drove a car. Same here. I cannot and will not forget my first experience of driving a car. In fact, Our good old car is quite close to my mind and heart.

The 2006 Hyundai Santro Xing arrived in our family, when I was studying in my 10th Standard. I was quite excited to just be there in the car and had not even thought about driving it. I could feel the joy within me, it was an emotion which is hard to express really. I loved the times when my dad used to drop me off to exam centers for board exams. I grew in awe of the little machine which was well taken care of, by my dad.

Good old Trusted Companion!

Years went in a flash and all I had were some more memories with my Dad and elder brother driving it around. All that changed, when I took over the driving duties after learning to drive. My first time was marked with a lot of ecstacy as I managed to take it our for an early morning spin. The 1100 cc engine was a delight to rev hard. I revved it slightly hard, dumped the clutch pedal for throttle and off it went. The pick up, the gear ratios were much more tuned than I had expected. The seating position of the car was again very comfortable. Compact dimensions, peppy engine and great handling made Santro a great fun to drive car. The car feels stable on highways and can easily zip around in city traffic with its superior engine performance.

I loved my first drive and used to look back at that experience as one of the finest till now. I still drive it and the car functions just as well as it used to be (although all the credit should go to my Dad for maintaining the car so well).

I regularly drive my good old Santro and there's always a good feeling while entering the car. My parents are surprised that how much their son has fallen for a 11 year old car. Who says only humans can be companions?

It is my thrill machine and my-leave-the-worries-behind car. 

Books on Investing and Stock Markets

There are a lot of books written on 'investing' and 'stock markets'. Many of these books are a treasure trove of knowledge. In my journey of investing, I have read a lot on markets and still do, whenever I can. 

The following books which according to me, are worth reading time and again:

• 'The Intelligent Investor' by Benjamin Graham. This book is the textbook of investing. Everyone who is into markets or even thinking about it should read this. Timeless wisdom in this book. It should be there in the book shelf. 
• 'Security Analysis' by Benjamin Graham and David Dodd. Basics of fundamental analysis and Interpretation of financial statements discussed in a greater detail. The book espouses the true concept of Value Investing. Must read for anyone who is interested in Fundamental Analysis.
• 'The little book that builds wealth' by Pat Dorsey.
• 'The little book that beats the market' by Joel Greenblatt.
• 'Reminiscences of a Stock Operator' by Edwin Lefevre.
• 'Common Stocks and Uncommon Profits' by Philip Fisher.
• 'Poor Charlie's Almanack' by Charlie Munger.
• 'The Thoughtful Investor' by Basant Maheshwari.
• 'Gurus of Chaos' by Saurabh Mukherjea.
• 'India's Money Monarchs' by Parag Parikh (It's a collection of interviews of prominent Indian investors who have succeeded in the market)
• 'Graham, Buffett and me' by Aryaman Dalmia. This book was written when the writer was 14 years old. Some interesting insights on investing.
• 'The Unusual Billionaires' by Saurabh Mukherjea. The story of 8 companies on how they have built and sustained their competitive moats over a period of time. The book is a must read for anyone having interest in number crunching and financial analysis.