Saturday, April 29, 2017

For GOLDEN returns, avoid GOLD!!!!

Akshay Tritiya, is a holy day for Hindus and Jains. It falls on the third Tithi (lunar day) of Bright Half (Shukla Paksha) of the pan-Indian month of Vaishakha and one of the four most important days for Hindus. It is an auspicious day of the birthday of Lord Parasurama who is the sixth incarnation of Lord Vishnu. On this day Veda Vyas began to write Mahabharata. Jains celebrate this day to commemorate Tirthankara Rushabhanatha's ending of one-year fast by consuming sugarcane juice poured into his cupped hands. – Courtesy - wikipedia

The word "Akshay" means the never diminishing in Sanskrit and the day is believed to bring good luck and success. It is believed that if you do charity on this day you will be blessed.

The day is considered auspicious for starting new ventures: Assumed to grow and bring prosperity.

Now let's get into reality....

Akshay Tritiya is very popular if I remember right, especially in the last 15 years or so. Jewelers’ utilized this opportunity and positioned in such a way that everyone should buy gold and it is hugely success as well.

Let’s look at the reality of what happened in the last 5 years when it comes to GOLD investment. 5 Years is relatively longer period when it comes to investing.

28th April 2012 gold price were trading at 29,107 and it was closed yesterday at 28,875. One more observation is, even if you take it, year on year performance from the day one bought it has never increased, emotion plays a bigger role when it comes to investing to many of us, so without calculating anything we keep buying. Here, it is only blind faith and never verified!

I have observed one more thing, let us assume somebody has not invested lump sum and they have invested through monthly chit (which is very popular in Bangalore, not sure about other states) and the value is one and the same. It clearly indicates passive investment will not work. See the below table of Gold Investment in SIP.

Sensex value as on 27/4/12 is 17,134 and it was closed 29,918. The absolute return in the last 5 year is 74.61 in terms of CAGR it is 11.8% only.

I have given you some of the mid and small cap funds which were popular in those days and their returns and anyone can see their own investment returns or any other fund they feel it’s a good fund. I have provided just for illustration purpose only. I used to say jokingly to all my clients, if you invest in GOLD you can give X amount to your daughter and if you invest in mutual fund it will be at least 2X, you decide how much you would like to give your daughter!!!

NAV Value as on

Fund Name
Abs Return
HDFC Midcap Opportunities
DSPBR Small & Midcap
Reliance Smallcap
Mirae Asset Emerging Bluechip
Franklin India Prima Fund
International gold price has touched all time high as on 22nd August 2011 as $ 1,917.90 per ounce and yesterday closing price is $ 1,268 and it is down by 33.85%. In the same time our rupee has weakened from 45.66 to 64.23 against USD. There is an absolute increase of 40.67%. I am not here to predict what will be the gold price in future, but one thing I can be rest assured is there will not be much appreciation henceforth from the currency.

My humble submission to everyone is never buying gold as an investment, buy gold as an ornament which you constantly wear. Do not start any gold investment even if you have girl child. Gold is important for the marriage, but it does not mean that we should invest only in gold!

Last, but not the least investment have no emotions, so whenever you invest do not show emotions. Gold and Real estate investments are more out of emotions which is proven now. Real estate has also not grown much in the last 5 years, but it is not regulated and no such data available I am not in a position to give any data.


1. Most of the gold digged from time immemorial is still in circulation.

So we may even be using the some of the gold (recycled) that was used in the times of Rama, Krishna, Buddha and Jesus.

2. The quantity of steel poured in an hour in our planet is more than what has been poured for gold since the civilization. That is how limited the availability of the gold is.

3. It is estimated that total gold available (in circulation and storage) in the world is 1,65,000 tonnes.

4. 75% of the gold available today has been extracted only after 1910.. The Pace of extraction is quicker!!

5. If you are worried that gold’s supply would get exhausted soon, fear not!

About 10 billion tonnes – 10,000 million tonnes (yes, you read it right) of gold is estimated to be held in the oceans of the world. An economically viable model of extraction is being explored.

Necessity is the mother of invention. If gold prices continue to rise and if the demand would only increase, who knows, a technological innovation can happen in extracting gold from ocean.

10mn tones under the sea is eye opener. Same happened with oil; eventually people dug under the sea after land sources were well discovered and prices kept climbing- oil came from sea!

Its the Multi Stage Fracking Technology that changed equation for oil. 
Offshore was there, but the shale gas was the real gamechanger.

And Crude Oil was never the same again. 

so, maybe maybe some day going forward something in technology breakthrough could just help us in laying our hands on that 10 billion tonnes of Gold lying in Oceans. 
and Like Crude Oil..the price of Gold is bound to go down...
Waiting for that day!!!!!!!!

The diamond conglomerate De Beers has been mining diamonds from shallow waters off southwest Africa since the 1960s, so harvesting diamonds from deeper water is a possibility.

Also please read.

Gold is not an investment. Gold is an allocation in Indian Households. Continue buying gold in SIP for a specific purpose & allocation.

Your wealth grow as per the potential of the asset you invest. 

Potentials of  some financial assets are.

Idle money in SB A/c ~4%
Bank and Post office deposits ~7-8%
Traditional life insurance policies ~5-6%
ULIP plan~ 8-9%
Gold 8-9%
Equity mutual funds~12-15%
Provident funds ~ 8% 

Whatever wealth you have accumulated today is a result of where your investment was done in the past.


If you would have bought 10 gram gold on the Akshaya Tritiya of 2002, it would have costed you Rs.5,000/- ; at today's Akshaya Tritiya, your gold is worth 30,000/- a Growth of 6 times!

Well, with the same Rs.5,000, if you had bought the shares of one of those jewellery companies (Titan company, which owns Tanisq jewellers or Rajesh Exports, which owns Shubh Jewellers), your 5K should have grown to 8 to 10 lakhs...Growth of 167 to 200 times (that too ignoring the dividends)

Happy and 'Prosperous' and ENLIGHTENING Akshaya Tritiya!

Best of luck, 
Srikanth Matrubai

Thanks to Padmanabhan and Muthukrishnan for valuable inputs

Also visit http:/

Wednesday, April 26, 2017


A foodie needs an excuse to eat. 
A Gold lover does not even need an excuse to splurge on Gold and occasions like Akshaya Tritaya is the BIGGEST festival for any Gold lover!!

The 1st tranche of Sovereign Gold Bonds (SGB) for fiscal 2017-18 (and 8th in the series starting 2015-16) has opened for subscription on 24 April and will close on 28 April, a day ahead of Akshaya Trithiya
Clearly the aim is to play on People’s emotional attachment for Gold and attract as much into these Bonds as possible.


Its priced at 2901 at a discount of Rs.50 against nominal price of Rs.2951 (based on Avg Closing Price published by India Bullion & Jewellers Association for 999 purity. 

Tenor : 8 years
Exit option: 5th Year onwards
Bond will be issued onMay 12th
Minimum : 1gm
Maximum : 500gm
Documents Reqd : Aadhaar/PAN, TAN/Passport, Voterid
Investment in name of Minor is allowed (Guardian Documents reqd)


1. Through your Stock Broker.....Units will be credited to demant
2. Through Post Office....will be issued Physical Bond (when selling, not you WILL have to convert them to demat form)
3. Through Banks (both physical and demat mode available)

So, should you buy this SGB or skip??

Lets check it out : 
Pros : 
The Biggest attraction for Gold is its Liquidity which can be sold off anytime (virtually antime). But this is for Physical Gold but what about SGB?
SBG too offers good Liquidity. 
 Liqiudity available anytime as bonds are to be listed on NSE & BSe 
2. Gold gives returns only in form of its price Appreciation but the Sovereign Gold Bond Scheme offers additional 2.5% interest!!
This interest is paid on Face Value and paid semi-annually. 
3. The Bonds carry Sovereign Guarantee!!!
4. The Bonds can be used as a Collateral for Loans
5. You can GIFT these Bonds to your Minor Children/Relatives and even Friends. 

1. While Liquidity is available through the listing of the Bonds on Stock Exchanges, this benefit is negated as any profit will result in Capital Gains of 20% (thankfully, with Indexation benefit). 
2. Interest is to be calculated on FACE VALUE of Bond and not on Market price 
3. Interest Rate has been reduced from 2.75% in earlier tranche to 2.5% now
4. And, sadly, the interest payments will be taxable at individual tax slabs
5. Though an option is available to get thse Bonds in Physical Form, it should be noted that in case you want to sell, you will have to compulsorily convert the same into Demat form and then sell the same. 
6. The demand for Gold is expected to COME DOWN going forward. 
Improving tech to extract gold has lead to cut in production costs and Gold is expected to come down, hence timing is cruicual. 
7. Since there is no SIP option, you do not have the option of adding more Gold Bonds in case of fall in prices
Previous tranches (already listed on Stock Exchanges) reveal that they have not exactly set the pulses soaring as except 2, 5 tranches are showing NEGATIVE returns which indicate that Gold should be seen purely as a Diversification tool and not as an investment tool. 

As an ideal Asset Allocation strategy, you are encourages to have Gold Exposure of 5-10 per cent of overall portfolio, to diversify risk. Your Advisor would be in a better position to indicate how much exposure you should have. 

Short term Gold looks good but long does not look very attractive...Hence stick to Asset Allocation. 


Invest ONLY if you are sure to hold till Maturity. 
Invest ONLY if your Asset Allocation indicates you need to have more Gold exposure. 

Even if we assume just a 5% increase in Gold prices in 8 years.....the returns will be much higher due to the additional interest of 2.5% bign given by Govt. 
For example, if you invest Rs.50,000 in this bond and the same will appreciate to will actually get an extra Rs.10,000 which is 2.5 pa interest that the Govt is giving you. 
So you will end up with Rs.83872/- which is a return of 6.68% CAGR

Cost wise, SGB is really very effective even compared to Gold ETFs but cost is not everything. 
You need to look at Liquidity too. 
Even if you are lover of Gold and accept the benefits that SGB does not forge tthe dictum “DONT PUT ALL YOUR EGGS IN 1 BASKET”
While this refers to Different asset could be referred to Gold too. 
Do not put everything into have bit of exposure to Gold ETFs too
Also visit http:/

Monday, April 24, 2017

Making your Home Loan EMI free via SIP

Just think 10% as extra EMI and invest in Sips and see the difference it makes to your life

*Home Loan @ 0% Interest*

*Do you know❔*
💢You can get back all your Home loan interest + Principal Amount you pay through EMI's.

💢 If you avail Home loan of 10 lacs for 20 years with an interest rate 9.5% your.....

Monthly EMI: Rs. 9,321.31/-
Principal Amt : Rs. 10,00,000/-
Interest Payable : Rs. 12,37,144/-
Total Amt Payable: Rs.22,37,115/-

💢 Now to get back your interest you just have to keep aside 0.20% of your home loan amount.
ie 0.10% of 10,00,000/- is 2,000/- per month till the tenure of your home loan.

*Start an SIP Till the tenure of your home loan with the amount you are keeping aside. (ie Rs. 2,000/-)*

💢what will be value of Rs. 2,000 pm @15% if invested through SIP❔

After 20 years➡

Principal Amt: Rs. 4,80,000/-
Value@ 15%: Rs. 26,54,147/-

In Home Loan you pay an Interest + Principal of Rs. 22,37,144/- in 20 years.

While in *Mutual fund SIP* you generate a wealth of *Rs. 26,54,147/-* which is more than the Interest amount you are paying in next 20 years.

🎯 Start your SIP now and enjoy interest free home loan.

Increase the sip input & create Wealth too at the end of term

Sunday, April 23, 2017

Work in Progress!!

What a start to the week!!
Made my day!
These things only reinforce the belief that if you do your job sincerely you will get the appreciation.

For me, I am happy that I have contributed to make someone's life BETTER.
Rest assured, it's a work in progress.... Life Long!!!

Saturday, April 22, 2017

Rupee Saved is a Rupee Earned!! It all begins with a small Step!!

Matrubai's Musings!!!

The new Financial Year has started on a good note as your First Tax Slab is reduced from 10% to 5%. 
Thus, every Tax Payer will now be saving Rs.12,500 per year. 
Starting from this month, you salary will have Rs.1000 lesser TDS and thus your Take Home Salary will increase by that much amount. 
A clear case of Rupee Saved = Rupee Gained!!
With this small looking Rs.1000/-, you can end up having saved/gained upwards of Rs.1 crore??!!!!

Jaws dropped?

Dont be....
Yes....this small Rs.1000/- at a say very optimistic return of 20% will easily leave with Rs.1,56,76,000 by your retirement (If I consider you have another 30 years to retire). 
Even at a very achievable 12% you could easily end with upwards of Rs.30 lakhs with this small measly Rs.1000/-. 
(See the attached image). 

Either way, I have observed that a Rs.1000/- saving will have bare to minimal difference to their lifestyle. 
Not many can think of any economic use of this saved Rs.1000/- simply because the purchasing power of Rs.1000 is very small. 
Eventually, this Rs.1000/- gets wasted on petty things. 


Instead of wasting away this so called small Rs.1000/- saving, consider investing this money in a Good Diversified Equity Fund (or a Balanced Fund) and see the difference it can make to your Retirement Corpus. 
Your Retirement Corpus will baloon by upwards of Rs.30 lakhs to Rs.1 crore with this simple small Rs.1000/-. 
Thats the power of Compounding. 
Feeling excited?
Feeling wow?
Then take ACTION now. 
Only action taken makes all the difference in your life.
now I want minimum Rs.1000/- EXTRA SIP from you.
NO Excuses entertained!!
This 1000 was anyways going as Tax till last month.
Whatever be the returns from this SIP...I GUARANTEE you it will be definitely be better than the TAX OUTGO!!!
You, being my dear esteemed reader, must become richer and you WILL be if you continue to read my articles and FOLLOW THEM.
So, tomorrow fresh minimum of Rs.1000/-

Best of luck, 
Srikanth Matrubai

Thursday, April 20, 2017

Classic example of 8th Wonder of The World!!

Classic example of 8th Wonder of The World!!

We all know that Oracle of Omaha, Warren Buffett is one of the wealthiest living being on earth. Buffett's net worth is close to 75 Billion US$. But guess what, Warren Buffett earned almost 90℅ of this massive wealth after he turned 50. Mind you, he started investing when he was only 11.

What does this tell you? Compound interest is magical but in the initial years you will not notice the impact of compounding. It's only after few decades compounding turns truly magical and unbelievable.
It is important to see the effect of long term compounding in his account statement. Not churning the portfolio is the key to achieving this.

Compounding is like God, your prayers will be answered after no. of years. Therefore:

1. Start investing as early as possible.
2. Invest regularly.
3. Practice delayed gratification.
4. Have Faith and Patience.

Can a newly born baby start walking the next day?
Can a student of nursery grade be admitted to engineering college the next day?
Can multistorey skyscraper be made overnight?
Can business turn profitable on day one?
Was Rome built in a day?

Try to answer these questions and think about shortcuts. 

I know, you can't.

Systematic and discipline hard work has to be put in, for achieving something worthwhile. Isn't it?

This is true in life, sports, studies, and  SIPs (equity mutual funds) too.

Microsoft was started from a garage some fourty five years back. Warren Buffett started investing at the age of 11 and today he is more than eighty years old. That's almost seventy years of investing and become world's richest person in the world.

"Dheere dheere he mana, dheere he sab hoye.
Mali seeche sau ghara, ritu aaye phal hoye" - Sant Kabir

Meaning, it is important to be patient as things happen over a period of time. The gardener may water a plant hundred times but the plant shall bear fruit only when the season comes.

I feel SIP investing is one such things, isn't it?

Srikanth Matrubai



BHIM is BHarat Inteface for Money
BHIM-aadhaar is a merchant interface of the BHIM app.
An app which doesn't require a Mobile Phone!! Yes. Thats BHIM aadhaar payment app for you!
The BHIM-Aadhaar will not require a phone or even a Bank Credit. Just your Thumbprint an an Aadhaar card will enable the merchant the customer's payment.


As a customer, you just need to remember your Aadhaar number and have CLEAN hands!
The Merchant will have a biometric machine where you press your thumb and enter your Aadhaar number.

Once the Aadhaar number is entered, the BHIM app would instantly fetch the Bank Account linked with your Aadhaar number and you can proceed to make the payment.

NO need to carry any Debit/Credit Card
No need to carry a phone.
No worry about Service Tax or any charges for using BHIM Aadhaar Payment App

This facility reduces the huge headache of remembering the PIN numbers, MPIN number,  passwords, etc.

And if multiple accounts are linked with your Aadhaar card....fret not..all the accounts linked to your Aadhaar will be shown to you and you can select the one you want to make the payment from! Its that easy!

This BHIM App will elimiate the huge fee charged by Card companies like Visa and MasterCard.

As a Merchant you need to
1. Download the BHIM Aadhaar aap
2. Fill all the details required like Name, Address, contact number, Aadhaar number, etc
3. Link your Bank Account using Aadhaar number
4. Get a Biometric Reader
Start getting payments from your customers!!
The Govt has also launched a cashback and referral scheme for BHIM users.
And, as a merchant, you will be saving huge. need to pay that 2% or whatever service charges to Visa/Mastercard.

Better than Paytm!

Much better secured compared to Paytm
In Paytm, the security relies on the Phone's lock as it does not ask for any PIN/password but the BHIM app has its own app password.
Also, all the transactions are secured with UPI PIN.
So, even if you lose your will worry about Paytm balance but not about money in your BHIM APP!!!!!!!!
This Biometric enabled device is available for under Rs.2000/-

As a customer the advantages of BHIM app is
1. No need to load money (as it linked to your Bank account)
2. No need to remember PIN number or password
3. No need to carry smartphone

You dont even need a Android or a Smartphone to use this facility. You, as a customer, just need to remember your Aadhaar number and of course, keep your thumb CLEAN!!!

The app is available both on Google Play store (Android) and the iOS App Store.
And, know what....its completely secure.
There is absolutely no possibility of misuse.

Link to Download BHIM app

Cover art

BHIM is a MUST HAVE app.
Its the cheapest and easiet method of payment.
It sure will be a game changer.
Official records show that almost 56 crore Aadhaar have already linked to Bank Accounts (thats more than 60% of Adults in India).
The success of BHIM is inevitable.
And, as a Patriotic Indian, it is your duty too to promote and use BHIM App.

I am a Patriotic Indian... Are you too??

Srikanth Matrubai