Dear Friends
In Hindu mythology, Bhasmasura was demon who, after praying to Lord Shiva
received a boon that anyone whose head he touched with his hand would
immediately turn into ashes (bhasma). Shiva granted this request, but
Bhasmasura, the ungrateful demon that he was attempted to touch the head of
Shiva with his hand. Shiva fled and somehow managed to reach Lord Vishny for
help.
Lord Vishnu took up the disguise of Mohini, beautiful dancer, and appeared in
front of Bhasmasura. Mohini was so exceedingly beautiful that Bhasmasura
immediately fell in love with her. Bhasmasura asked Mohini to marry him. She
told him that she was very fond of dancing, and would marry him only if he
could match her moves identically. Bhasmasura agreed and they started dancing.
Bhasmasura matched the disguised VIshnu's move for move. Smartly then, Mohini
struck a pose where her hand was placed on top of her own head. As Bhasmasura
imitated her, he was tricked into touching his own head and immediately turned
into ashes.
So, how is a mythological story connected to a common man like you and me?
Think about Bhasmasura as the equally deadly, money burning inflation. Like
Shiva who granted the boon to Bhasmasura, who gives inflation the power to
rise? You and me! Inflation is the result of more money choosing fewer goods
leading to a demand and supply disparity. All of us, with our new age salaries
are spending more than ever, leading to a rise in prices and thus a rise in
inflation.
This inflation eats away our purchasing power. So, all that you can buy for
Rs.10,000/- today will cost more tomorrow. Inflation eats away a major part of
returns that your investment generates. So if your Fixed Deposits (FD) gives a
return of 8% and the rate of inflation is 8% you are actually earning nothing
on your investment. Then, how can we defeat this Bhasmasura named Inflation?
Shiva turned to Vishnu for help, whom we do we turn to for safety? Vishnu is
our case in equity/stocks of the same companies that make these goods that we
are buying. Let us see how,
Say, you love the soaps manufactured by a particular company and so does
everyone else you know. The more people buy that soap, the higher the profits
for that company. These profits the company shares in the form of dividend. By
buying even a single share of the company, you can take home a part of this
profit.
Look at a bank, if it is offering good rates for lending and deposits and more
and more people are flocking to it, chances are that it might generate handsome
profits. Buying shares of this bank will ensure a share in profits for you by
means of dividend.
Inflation currently stands at around 8% (March 2011 inflation forecast as per
RBI is 8%) whereas equities have typically given 18-20% returns in the long
term. Even if you take inflation at 6%, 20 years from now something that cost
Rs.10,000/- today will cost Rs.32,071/-. If you invest the same Rs.10,000/- in
a fixed deposit at 8% 20 years from now it will be Rs.46,610/-. Wait, before
you run to the bank, just hold on for a minute while we deduct taxes from those
returns. If you fall in the highest tax bracket of 30%, the figure of
Rs.46.610/- shrinks to Rs.29,736/- less than what inflation did to prices. So
while you thought you will beat inflation, in reality you loose your capital.
Now, if you choose to invest this Rs.10,000/- in equities today, 20 years from
now that money could turn to Rs.1.63 lakh, even at a conservative 15% return.
Very few investment options have the capacity to generate such inflation
crushing returns. And this is the Mohini avtar that will help you kill the
Bhasmasura of Inflation
Courtesy :- The Ecomonic Times
With Best Regards
SHENOY INVESTMENT AND FINANCIAL
CONSULTANTS PRIVATE LIMITED
11-A, KASHI NIKETAN, 2ND ROAD,
CHEMBUR, MUMBAI - 400 071
TEL : 6797 3433 / 2521 2111
EMAIL : shifc...@gmail.com
shifc...@mtnl.net.in
Dealing in Mutual Funds, General & Life Insurance Products, Post Office
Schemes, Fixed Deposits, I.P.Os., and Capital Gains Bonds
--
You received this message because you are subscribed to the Google Groups
"BETTER PERSONALITY GROUP" group.
To post to this group, send email to better_personality@googlegroups.com.
To unsubscribe from this group, send email to
better_personality+unsubscr...@googlegroups.com.
For more options, visit this group at
http://groups.google.com/group/better_personality?hl=en.
