Friday, April 21, 2017

Is 30 Right Age to Invest in Stocks?

rocket-books-confused man

Actual Question:

At my age of 30, is it a good idea to start investing in stocks? I’m already investing in mutual funds. I don't have much idea about the stock market.


Dear Friend!

Your question has three parts.


30 years is a golden age to start investing in stock. You still have at lest 30 years to earn active income and to invest in shares.
Investing success to a great extent depends on starting early. When questioned for one important factor for his phenomenal investing success Warren Buffett replied, “I was fortunate to start early”.

Knowledge of Investing in Stocks:

Now coming to the part about learning to invest in stock market, let me once again assure you that it is not a rocket science nor does it requires high IQ.

  • Please read the book, “The Intelligent Investor” by Benjamin Graham. It changed my life.
  • Please carefully scour through my blog “Wealth Vidya”. It has plenty of free knowledge compiled with great effort for seekers like you.
  • Watch many Warren Buffett’s interviews available on YouTube. I have made a short compilation on my blog at Videos.

Mutual Funds:

You mentioned that you are already investing in mutual funds. Great! Please keep in mind to invest only in low-cost, well diversified, index funds or exchange traded funds. Following articles will guide you:

In conclusion, 30 is the perfect age to start investing in stocks, don't worry about that.

Thank you,

With Best Regards


Can One Make Credit Card Investments?

credit card transaction and a credit card cut into two

Dear Friend!
No. You should not make investments in stocks or mutual funds using the credit card.
  1. Any investment shall be made only out of own, surplus cash.
  2. Borrowed money shall never be used for making any investments.
  3. Credit card is a dangerous thing. It makes people indulge in unnecessary things and make them live beyond one’s means. It makes people indebted.
  4. It is best to avoid all kinds of borrowing.

Again to conclude, you should not make investments in mutual funds or stocks using the credit card. It is dangerous. Immediately destroy it.
Thank you,
With best Regards


Why Indians Don't Invest in Stocks?

rich man, beggar and the Wall Street sign

Actual Question:

Why Indians don’t invest in stock markets - because some people have created an illusion that investing in it will either make you rich or a beggar, which is not true?


Dear Friend!
Thank you very much for broaching a very pertinent point.
Yes I agree with you.
Even though Indian economy had tripled from a US$414 billion to $1.3 trillion in a span of ten years from 2001 to 2010, and the market capitalization of the companies stocks listed on the stock exchanges has multiplied nearly eight times, the direct participation of Indians into equity markets is abysmally low at 1.4% of the population.
I also agree with you that Indians somehow have an irrational fear of the stock markets. Indians associate stock markets with gambling. Their fears are not totally unjustified though. There are many instance of lives being ruined by addiction to and reckless intraday tradingmargin trading. Of course trading in stocks, commodities and currencies not at all investing, but Indians have somehow mixed up these two. Result is how you put it, “… it will make you rich or a beggar” which is not true, though.
Even if Indians do not think that dealing with stocks is downright gambling, many believe that at least it is very risky. This too is fallacious. Warren Buffett is right when he says, “Risk comes from not knowing what you are doing”.
Further, I also believe that Indians unconsciously associate wealth and riches to sin and poverty to virtue or morality. Anyway this is my very personal opinion and I maybe totally wrong. But I think that this belief system, if it really exists at all, is changing rapidly.
Wise, intelligent, learned and long-term investments in to equities is the only and sure path for riches and wealth creation for every common citizen.
It is not true that the stock market is a dangerous place or that the rich-or-beggar fate will befall those who deal in stocks.
Thank you,
With Best Regards,