what you are learn from modi rahul and kejriwal

                 what you are learn from modi rahul and kejriwalGiving away too many loans:

what you are learn from modi rahul and kejriwal 

Biharone Beauro 

How often have you been in a place, where family members or friends have asked you for a loan? Rahul Gandhi is no different. He has given unsecured loan worth Rs 7 crores to people/entities. And, this amount is a significant portion of his portfolio. If you too find yourself in a place like this, it’s about time you start using the word “no”.

Research has shown, lending money to friends is not a good idea. Psychologists George Loewenstein of Carnegie Mellon University and Linda Dezso of the University of Vienna found in their research, lending money to a friend is not a very good idea. This is because we tend to remember the loans we give, but forget the loans we take. They named this phenomenon "blind spot". Where borrowers conveniently forget that they owe money to a friend. Read more on- Ways to handle a friend who wants to borrow money from you, here.

Don’t have too much idle cash:

Another mistake which lay retail investors make is, being "only savers". This means, major portion of your portfolio lies idle. In the form of cash in hand, or parked in a savings bank account. Narendra Modi too is a victim of this classic investing mistake. He has around Rs 59 lakh as cash in hand and savings bank account.

When you keep cash in hand or only in a savings account, you in a way pay an opportunity cost. Having money as cash in hand, you don’t earn any interest. And, even if you park funds in a savings account, the interest you earn is pretty much nominal, 4 to 6.5 percent, depending on your bank and bank balance. Even if you invest the same in a PPF account, you will earn 8.7 percent.

No financial assets, only property and gold:

Take a dip stick survey and you’ll realise that common Indian investor love two things; gold and property. While foreign investors make the most of the Indian stock markets, Indians don't. Common man parks his funds in fixed deposits, at the most.

This too is a mistake which the baap of APP, Arvind Kejriwal has done with his money. We are too cautious and financially conservative. Hence, we lose out on a chance to make higher returns, by taking little risk. Personal finance thumb rule is "diversification." In short, invest your money across assets class.

In other words, don’t put all your eggs in a single basket. Also, at least have age-based assets allocation in place for your portfolio. Age-based asset allocation is a simple mathematical calculation. All you have to do is subtract your age from the number 100. So, if you are 30 years old, then 100-30 is 70. Now the answer you get should ideally be the amount of equity exposure of your portfolio. The remaining 30 percent should go into debt instruments. Equity investments could equity linked mutual funds (MFs). And debt investments like fixed deposits, bonds, debt-oriented MFs, recurring deposits.

Now you’d say, the mistakes these politician made with their money are really silly. But it does not mean that you can’t learn from their mistakes, and improve your investing habits. After all, if you are willing to learn, you can learn even from a politician.