Let me break down why so many research reports end up confusing investors instead of helping them.

Unrealistic Projections Packaged as Insights

You’ll see analysts confidently project what a company will do five years from now. Revenue growth, margin expansion, market share gains, all laid out like it’s already decided.

I don’t think anyone can make these predictions reliably. But they’re packaged as insights, and investors believe them because they sound authoritative.

Complexity as a Shield

Ever notice how some reports are deliberately complicated? Jargon, technical terms, complex models that only insiders understand? That’s not depth, actually. That’s a shield. Complexity makes the analyst look credible, but it hides the fact that the underlying logic is often weak.

Investors Get Trapped in Numbers

Reports flood you with data. Growth rates, multiples, projections. It feels like you’ve done your homework just by reading them.

But numbers without understanding are useless. You can have all the metrics memorised and still completely miss what actually matters about a business.

Stop treating research reports as the answer. They’re starting points. Read them, question the assumptions, and form your own view. The best investors think independently; they don’t outsource their judgment.

If you want to think clearly, analyse businesses better, and stop relying on reports that overpromise and underdeliver, start questioning what you read.

Investors deserve clarity.

A: Did you earn any profit from your latest investment?

B: Umm, not really; it didn’t go as I thought.

A: Oh! Didn’t you say you knew the rules and could avoid losses?

B: Of course I do! It is just I got unlucky this time.

Does this exchange sound familiar? Everyone must have experienced a situation like this at least once in their life. Whenever there is an achievement, people credit their exceptional skills.

Failure, however, only happens because external forces take an adverse turn. No one likes taking accountability when it comes to poor performance.

It is a common habit cultivated by almost everyone. Many may not know about it, but this behavioural trait is known as self-attribution bias.

People often recognise this phenomenon (in others more than themselves) but do not know its name. Worry not, though; through this article, one can decode the definition of self-attribution bias.

What is Self-Attribution Bias?

“What makes the bias particularly pernicious is that we all recognize this bias in others but not in ourselves.” - Richard H. Thaler.

Self-serving bias is a cognitive bias where one takes credit for their achievements and blames external factors when things turn downhill.

One can easily find it in every other person. It is a debatable concept in psychology and has fascinated researchers for decades.

However, finance research has contemplated self-attribution bias for a while. It is one of the ruling factors that boosts the confidence of investors to invest more.

They appreciate themselves for positive and high profits when it goes their way, but claim that luck was not with them in other cases.

A continuous gain in the financial market often makes investors overconfident, leading them to believe they have control of the market.

This results in unreasonable actions and investments. Behavioural finance states that feelings and behaviour play a pivotal role in the decision-making process of investors and dealers, with the “bad-luck” card always available as a scapegoat

Self-attribution bias can be observed in several situations. Examples of Self-attribution bias are:

• Sports are prime examples of self-attribution bias. Many athletes attribute their wins to practice and teamwork. However, it is a bad call or the referee’s fault when their team loses.

• When someone gets a job, it is due to their qualifications and abilities. But the reason for their previous failures to secure a job is that the interviewer did not like them.

Where does this Self-Attribution Bias occur?

We can often remember the first instances of self-attribution bias in our lives. It began around the same time for many of us. It was all thanks to our skills when we got good grades, but it was either the teacher’s fault or bad luck whenever the scores weren’t up to par.

It started as something harmless and usual, but its side effects became apparent with time. Now, it is one of the most researched topics in different capacities.

Neural experimentation, naturalistic investigation, and laboratory testing are employed to figure out this cognitive bias, its relation, and ways to reduce it.

Why does Self-Attribution Bias happen?

Self-attribution bias is common, and one can see it in all age groups. As per the studies conducted, researchers have found some reasons that may be the cause of self-serving bias:

1. Self-Esteem

It is one of the prominent factors that lead to the birth of self-attribution bias. We appreciate our success and give ourselves credit to feel good. Accepting one was unable to reach the goal because of others rather than their own faults is much easier to process as it helps preserve one’s self-esteem.

2. Self-Presentation

Humans think funnily. Instead of their views, what others think of them matters more. Therefore, they present themselves not the way they are but how others would like them to be. They attribute their successes to themselves to improve their external image. However, failures are not accepted to avoid the degradation of this image.

3. Age and Culture

Self-serving bias does not develop and end at specific ages. It is an aspect of a person’s psyche that stays with them for their entire life. A person might reduce the degree of bias through self-realisation but might possess it irrespective of age and culture.

4. Unrealistic optimism

For many people, it is either extreme pessimism or unrealistic optimism; there is no “middle ground” between the two. Being optimistic is not an issue as long as you are aware of your actions. But shifting blame to maintain ignorant optimism in the face of adverse reality can have severe repercussions.

Self Attribution in Investors

The Indian stock market is one of the biggest human congregations, with over 7 crore active participants. Naturally, with so many psyches come various biases. The investors’ playground is no stranger to self-attribution bias.

As investors of various capacities pour their valuable funds into the bourses, they do not want the blame for their investments going kaput. The reason is that accepting blame would mean that they own up to being the person who lost their own money.

Blaming market sentiments, market volatility, or several other reasons is always the better option. What are the accused going to do, fight back?

On the other hand, even the slightest green in someone’s portfolio is pure skill. None of the aforementioned variables gets a crumb of recognition for any growth of capital or returns earned.

This fluctuation of ego causes manic buying or panic selling in investors without any legitimate reasons for their actions. From “Bechara Investor“ to “Jhunjhunwala 2.0“, oh, how quickly people’s perspectives change.

How can you reduce Self-Attribution bias?

Is there any way to eliminate this bias? Well, one can not just root it out from their life because it is a psychological phenomenon. But people can reduce its appearance and influence in their lives. One can use several coping and self-help strategies to keep the self-serving bias in control:

• Meditation, yoga, and reading books can keep your behaviour in check. Better mindfulness and improvement of knowledge help correct one’s premature

• Be compassionate to others as well as yourself. Blaming others won’t fix your mistakes, and accepting your faults will not reduce your value.

• Stay reasonably optimistic. Do not let the need to be right cloud the reality of matters from you.

The Bottom Line

It is a natural human tendency to be a hypocrite. When someone else fails, it is entirely that person’s fault; but when we face negative results, it is because of things that are “out of our hands”.

Self-serving bias stems from the drive to overcome adversity for personal improvement. Hence, as said before, there should be a limit that one must not cross. Severe cases of self-attribution bias can turn one into a narcissist. It affects an individual’s thinking process, as this behaviour is not sensible or logical.

As Craig D. Lounsbrough said, “Self-serving biases and self-centered agendas are cotton-jammed in the ears of our conscience. Even if the truth shouts, we can’t hear it.”

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To buy, or not to buy? That is the question.

If Shakespeare were alive today, he’d probably be a millennial artist struggling to make ends meet in the unbearable heat of Mumbai. He’d be standing in line for overpriced food, scrolling through property listings, and cursing the cruel Gods dramatically as he realised that the only way to afford a home is to be born into wealth, win a lottery or a reality show. Or at least that seems to be the case in India.

India has long prided itself on being a welfare state, a country where everyone should have access to the essentials: roti, kapda, and makaan. But while food and clothing remain within reach, housing has become quite elusive, available only to those with a lot of money or an unnatural tolerance for debt.

So maybe the question should be, “Can we buy it at all?”.

Think about it: if 10 years ago, someone had told us that by 2025, a single square foot of property in Mumbai would cost ₹2.71 lakh, would you have believed them?

But here we are in 2025, and billionaires like Uday Kotak and family just spent over ₹200 crore on 12 sea-facing flats, setting a national price record at ₹2.71 lakh per sq. ft. While the average Indian is left to wonder if they need to sell their souls to be able to afford a 1BHK flat.

So, how did we get here?

The Rise of the Housing Hunger Games

Once upon a time, in the pre-COVID-19 era, it was tough to buy a home, but not bordering on impossible. It was a time when people could still tell someone it was their dream to buy a home without having it sound like a joke.

Then, COVID-19 came, left, and took housing affordability with it. Ever since then, real estate prices have been on a 3-year-long bull run, showing no signs of slowing down.

Buying a house has always been an ambitious dream for the middle class, but now, the housing market has become too expensive, leaving us to find the cheapest 1BHK studio apartments on the outskirts. And I do not say that without proof.

Did you know that between 2020 and 2024, property prices in India grew at an annual rate of 9.3%? Household income, on the other hand, only rose by 5.4%. This means that even though your salary is rising, it isn’t enough to keep pace with the cost of living. Naturally, the gap between income and home prices keeps growing.

In the last 2 years, the number of affordable homes (₹1 crore and below) has declined by 36%, from 3.1 lakh in 2022 to 1.98 lakh in 2024. Clearly, nobody wants to build affordable homes that people can actually buy.

If you are dreaming of a home in NCR, Mumbai, or Hyderabad, then it’s time to wake up. These cities have been hit hardest by the housing crisis, and the only thing middle-class buyers can afford there is disappointment or a lifetime (20 or more years) of debt.

Meanwhile, luxury housing (₹1 crore and over) is booming, with supply skyrocketing across major cities:

• Bangalore: 187%

• NCR: 192%

• Chennai: 127%

It seems like the builders and the developers have given up on building affordable homes completely. Why?

It’s simple, really. Luxury homes bring in higher profits. Why sell 10 affordable flats when you can sell just one penthouse for the same profit? Add to that rising construction costs, soaring land prices, and financing challenges, and mid-income projects (the ones middle-class people can afford) start looking far less attractive to developers.

But just how unaffordable have homes become? We can get the answer to this question with the help of 2 metrics.

1. The Indian Price-to-Income (P/I) Ratio

The P/I ratio tells us how many times your annual income would be needed to buy a house. A ratio of 5 or below is considered reasonable. So, if a city’s P/I is 5, it means that you would need 5 times your average annual income to buy a house in that city.

But in India, the P/I ratio is 11, which means homes are more than twice as expensive as they should be. If you wanted to buy a home, you’d have to save every rupee you earn for 11 years straight—without spending a single penny on anything.
Here’s how some major cities compare:

• Mumbai metropolitan region: 14.3

• Delhi: 10.1

• Kolkata: 5.8

• Chennai: 5.1

• Ahmedabad: 5.1

Meanwhile, housing in other countries is far more affordable:

• USA: 3.6

• Australia: 7.6

2. The EMI-to-Income Ratio

This tells us how much of your monthly salary goes into home loan EMIs.

An EMI burden of 50% or more is considered a financial red flag globally. It basically means that either your salary can’t keep up with the market standard or property prices in your area are unusually high.

Want to guess how much the India EMI-to-income ratio is? A whopping 61% (in 2024), a drastic rise from 46% in 2020.

So, chances are that if you buy a house today, you’re signing up for a lifetime of cutting corners, skipping vacations, delaying car upgrades, and pretending to enjoy free YouTube yoga instead of actual gym memberships.

But this unaffordability does not mean that there are no houses to buy. And that is the real plot twist. Yes, there is a mismatch between the demand and supply in the housing market, but despite unaffordable prices, India has 1 million unsold units. And nearly two-thirds of these belong to the affordable and middle-income categories.

You must be wondering, “If homes exist, why aren’t they being bought?” and that brings us to our next act.

The Villains Making Housing Unaffordable

Every crisis has its bad guys, but the villains behind this unfortunate situation are not shadowy figures in dark alleys but perfectly legal forces that make sure homeownership remains a distant dream for the common man.

Let’s unmask them:

Villain #1: Black Money and The Circle Rate Loophole

Real estate may be the ultimate money laundering scheme, thanks to the circle rate loophole (or, shall I say, scam?)

Here’s how it works:

• Every area has a circle rate, which is the official minimum price set by the government at which a property can be registered.

• Then, there is the market price, which is the actual price you pay as a buyer.

• And the difference between these two is what allows the rich to turn their black money into white.

Let me explain with the help of an example:

Normally, if you buy a property with a market price of ₹1 crore, you would have to pay 20% (₹20 lakh) in taxes and registration fees, including 12% GST (for under-construction apartments) and 7-8% as Stamp Duty.

Builders engage in bulk deals with HNIs and large business owners and agree to register the transaction at the circle rate, which is only ₹40 lakh. This allows the buyer to officially purchase the property below market price, at least on paper.

So, let’s suppose that in a 10-unit apartment project, builders sell 5 units in bulk to business buyers at the circle rate. This allows buyers to evade taxes by paying only ₹8 lakhs in taxes per unit instead of ₹20 lakhs, saving them ₹12 lakhs per unit in taxes.

But in reality, the builder still takes the full ₹1 crore (or more than the circle rate), just that the difference is paid under the table in cash. This allows buyers to evade taxes and convert black money into legal assets.

This helps the builder recover construction costs, which means that they are in no hurry to unload the remaining units. So, they raise the price of the remaining 5 units to ₹1.2 crore or more for individual buyers to recover their margins, and brokers create artificial scarcity by telling everyone, “Only one unit left, sir!”

But why does this keep happening? Because both builders and business buyers benefit. The builder loses nothing by selling at the circle rate; he still gets his full amount. Meanwhile, HNIs and business buyers find a convenient way to launder their black money.

The only real victim? The middle class.

They either have to pay inflated prices or give up on the dream of owning a home altogether. The system is rigged in favour of the rich, while the average buyer is left struggling to afford even a basic home.

Villain #2: India’s Low Floor Space Index (FSI)

Ever wondered why cities like New York, Tokyo, and Singapore have countless skyscrapers while India has only a countable number of them?

Why does Mumbai, India’s financial capital, have just 542 high-rises, while Singapore has over 2,687?

The answer lies in India’s Floor Space Index (FSI).

“FSI is a measure of how much construction can happen on a given plot of land.”
A low FSI means developers can’t build more floors easily, restricting the housing supply.

FSI = Total Floor Area of all Floors / Plot Area

For example, let’s assume that the FSI for a 1,000 sq. ft. plot is 6. This means that the builder is allowed to construct 6,000 sq. ft. on this plot. Now, this can be any number of floors, limited to 6,000 sq. ft.

In cities like New York and Hong Kong, high FSIs allow for massive skyscrapers, leading to more housing supply and relatively controlled prices. But in India? Our FSI is tightly controlled, making sure that builders can only construct a limited number of floors. This means that housing remains limited, and prices keep soaring.

You may wonder, “Why not just increase FSI?”

• Increasing FSI overnight would lead to even more migration into already overcrowded cities.

• Infrastructure would collapse—imagine more skyscrapers but the same bad roads, non-existent parking spaces, and water shortages.

• Mumbai’s local trains are already stuffed like tiffin boxes. Adding more high-rises without better public transport would be a disaster.

Simply raising the FSI won’t fix things unless our cities are actually ready to handle vertical expansion.

So, how do we fix this? Can housing actually become affordable again?

The Pursuit of Affordable Housing

And so, dear reader, we find ourselves at the final act of this grand tragedy, the desperate search for solutions. The housing crisis has turned into a full-blown Shakespearean drama, with the middle class playing the role of the helpless hero, striving to survive in an economy that refuses to be fair.

But do we accept our fate? No!
Here’s how we can reclaim the dream of homeownership:

1. Fix the Circle Rate Loophole

• Instead of changing them once a year (or whenever the government feels like it), circle rates should be revised every month to match real market prices.

• Instead of letting builders decide market prices and keeping circle rates artificially low, the government should set a Maximum Retail Price (MRP), not a minimum price.

• Introduce a rule that ensures the gap between the circle rate (government price) and market price (actual selling price) stays within a fixed range, like 5-10%.

2. Make RERA the Centralised Buying & Selling Platform

Currently, there are a lot of middlemen and cash transactions involved while buying real estate. By making RERA (Real Estate Regulatory Authority) a standard platform, all deals will become digital and will, therefore, have a paper trail.

However, every booking should be updated on the RERA website in real time for this to work. And buyers should be able to see the price at which the property was last sold, just like we can see stock market transactions.

3. Develop More Cities

The USA and the UK have 4 cities each for every 1 crore population, but India only has 1.

4. Decentralise Universities:

Do you know why everyone wants to go to Mumbai, Delhi, Pune or Bangalore? Well, it’s because that’s where all the jobs and good universities are.

• 33 of India’s top 100 universities are concentrated in just a few cities.

• 54 lakh tech workers are squeezed into Bangalore, Hyderabad, and Pune.

So if we spread out universities and jobs across PAN India, then our metro cities will have less pressure to accommodate so many people.

5. Tax Empty Flats:

Did you know that 1.14 crore homes in India are not lived in? Apparently, people just buy houses to hoard them or in the hopes of selling them at a profit.

As a solution, the government could introduce a vacancy tax and tax the owner if their home is empty for a certain amount of time. This would encourage owners to rent out their “extra” houses.

6. Regulate NRI Investments:

Between 2019 and 2020 alone, NRIs contributed 10% of all real estate money in India. Why? Because a ₹2 crore home in Mumbai feels “cheap” when you earn in dollars or pounds.

NRIs buy homes in India for investment purposes; this pushes the price up and makes affordability worse. So, to solve this problem, the government could introduce ownership caps or high taxes for non-resident buyers to protect the domestic housing market.

7. Increase FSI in Tier-3 Cities:

Now, I know that we have already discussed why simply raising the FSI is not a solution. However, it would work in tier-3 cities.

If we were to increase the FSI in developing cities, it would attract businesses, create jobs, and ease the housing burden on metro cities.

If something doesn’t change, then the only way to own a home would be to inherit one, at least for the not-rich among us (of course, there are other ways, but those may not be very ethical).

The Bottom Line

For generations, owning a home was the ultimate milestone, proof that “tum apne pairon par khade ho gaye ho”. Our grandparents did it, our parents did it, and we were supposed to do it, too. But the dream seems to be slipping through our fingers.

Turns out, real estate is not only unaffordable but also a money-laundering playground. Who knew? Black money flows in, prices shoot up, and the middle-class dream gets priced out. You probably never even saw it coming. But now that you do, spread the word, because the Indian housing dream isn’t just expensive, it’s rigged.

In this economy, as a middle-class Indian, you might never buy that dream home, at least not on your salary alone. If things stay the same, buying a home will remain out of reach for most, unless you inherit one.

For years, we’ve been fed the same old story: renting is just a phase, a stepping stone to “real” success, owning a home. And, of course, you should buy a home if you have the money and the choice is between renting and buying. But if that’s not the case, don’t drown yourself in debt just to tick a box on society’s checklist.

So maybe it’s time to redefine The Indian Dream. Because a house is only a home if you can actually afford to live in it, without losing your sanity.

Only deploy capital you can leave invested for the next five years. That is how long a full market cycle needs to play out.

Beyond that, ensure you have a steady monthly surplus to keep investing over the next two to four years. Markets grind lower over months, sometimes years, and systematic deployment across that period turns a prolonged decline into an advantage.

Emergency funds stay untouched. Investment capital comes from surplus alone.

Buy Only Proven Businesses

Your money must go to industry leaders, which are companies with at least a decade of operating history. A ten-year track record tells you something a one-year chart never can: how management actually behaves when conditions turn difficult.

Always prioritise strong cash reserves. That cash gives a business the ability to operate and invest while weaker competitors struggle to survive.

Focus on sectors with structural advantages like essential demand, pricing power, or long-term tailwinds. A lower price is not a reason to buy. A fundamentally strong business at a lower price is.

Composure Is the Strategy

Preparation is what makes composure possible. When your financial foundation is solid, and your businesses are built to last, market movements stop being threats and start being opportunities.

That is the entire edge.

If you think you need our help in choosing fundamentally strong businesses, join us at Finology 30.

Finology 30: https://tinyurl.com/30-stocks-finology

Speak of investment risks, and every ordinary Joe & his expert uncle will tell you -- “DIVERSIFY.” But you never bother to ask, ‘HOW MUCH?’ Well, now is the time!

“The market is a pendulum that forever swings between unsustainable optimism and unjustified pessimism.” - Benjamin Graham

You know what, that sentiment bit makes the investment risky. Like, imagine someone who had aggressively bet all his wealth on shares of companies in the hospitality and tourism sector before the pandemic began its spree. No brainer, he would have lost a fortune! And now you know why the wise men advise you to ‘Diversify.’

Well, that’s pure wisdom. Okay, diversify, cool. But how much? Like own 10 assets or 20 or more than a thousand? Ah, never pondered it? As yet, you probably used your rationale to find a suitable portfolio diversification mix. Don’t you feel you should add some logic to it? Like, take the calculated risk of sorts?

Well, look no further. Finology has got you covered.

Diversification - Buffet’s vs Dalio’s theory

“Don’t put all your eggs in one basket” - a single line enough to justify the premise behind Diversification. Not all of your bets can be good. To err is to humans, right? Thus, placing all of your wealth in a single asset is like playing with fire! Before you know, that sector or asset could go bust, and you may end up burning away your hard-earned money! And that brings us to Diversification.

You add some more assets to your portfolio, and then some more, and furthermore and more. The risk gets averaged, and then it’s sorted, right? Well, some wise men chose to differ.

Warren Buffet once said, and we quote, “Diversification is protection against ignorance. It makes little sense if you know what you are doing.”

The essential bit that we miss out when we try to spread the risk by diversifying is that it also averages the return. Suppose there are 10 assets arranged from top to bottom in decreasing order of their returns (and risk). If you allocate your funds between asset no. 1 and asset no. 2, it essentially means you’re losing out on the additional returns that the former would have given you over the latter. But that’s reducing the risk as well, you claim?

Well, that’s true only up to a certain number of additions. Beyond that, the risk reduction would be so insignificant that it would be like giving up higher returns just to cut down negligible risks! And at times, that can be counterproductive as well!

And that’s what the likes of Buffet, Munger and Cuban have been trying to propagate. They feel wide Diversification only leads to mediocre returns. You’d as well be better off investing in an index fund then! Thus, if you can identify good businesses, parking your money in only about five of them would suffice.

However, here’s the catch... not everyone can identify good businesses! Not everyone can be a Buffet or a Munger or a Cuban, right? And that’s why, for novice investors, at least, Diversification makes sense. But back to that question, how much?

Well, a celebrated American businessman, Ray Dalio, seems to have struck a note in his “Holy Grail of Investing”.

How to diversify your portfolio well?

“Knowing how to diversify well is more important than anything else.” - Ray Dalio

Well, just so you know, this theory, in NO way, preaches blind Diversification. The idea is to ‘diversify well’. And how does one do that, you ask? Here’s how…

You’ll have to pay attention to three essential metrics:

• The Volatility of the assets ↓ : It’s the risk or returns component of your portfolio that indicates how much low or high a share’s price can move from its average price.

• Return-to-Risk Ratio ↑ : Simply, if the risk you undertake is of Rs. ‘X’, this ratio will tell you how many times ‘X’ you can expect your return to be.

• Probability of losing money ↓ : It indicates how likely you may lose your invested money in a particular combination of assets in that year.

And it’s no brainer that we would like to find a combination of such a number of assets, that the volatility is low, the return-to-risk ratio is high, and the probability of losing money is less.

And that brings us to the heart of the entire matter, i.e. CORRELATION. It is basically synonymous to the interdependence between variables. It measures how much one variable changes with a change in the other.

For instance, let’s consider shares of HDFC and IDBI banks. As they belong to the same industry, their correlation (interdependency) will be very high. Because if the financial sector trumbles, this will affect both of the companies. So, it makes NO sense if you keep adding as many companies of the same sector to your portfolio. The risk reduction will essentially be very low.

In contrast, consider shares HDFC and Sun Pharma. As they belong to different sectors, the impact of the downturn in one of them may not be reflected in the other. This is because their correlation is very low. And hence, that’s a better risk-proof than owning stocks of two banks only. Owning shares, debt, and gold will be a better shield than owning shares only. Get it, right?

Well, let’s focus on Dalio’s graph to understand this better.

Compare the lines with a correlation of 60% and 0%.

You can very well see that even though you go on increasing the number of assets in the horizontal axis, neither of our three metrics have shown any productive movement in the 60% correlation case.

Whereas where the correlation is nil (0%), you can reduce your risk to a fifth and your probability of losing money to a fourth of that of the 60% correlation case. And now you know why.

Thus, the lower the correlation between assets, the better is the benefit of Diversification. So, better drive home this point that, add assets to your portfolio that have very low correlation among them.

Speaking of the stock market, if you own shares of a company in the auto sector, say, Maruti Suzuki, it may not help a lot adding another from auto ancillary, like Motherson Sumi. You’d be better off diversifying both across and within asset classes.

Like if you allocate your money across asset classes like equity, gold, debt, etc., and across sectors like Pharma, IT, Financial, FMCG, etc., that’s a better guard against market volatility. And as a standard practice, try limiting your exposure to 10-15% in any particular stock or sector.

But again, back to the question of the day, how many assets to add to your portfolio? Just look at any line in the graph, and you’ll notice that after a certain number of asset additions, the decrease in risk is insignificant. Like after you add about 20 assets to your portfolio, the downward-sloping line (indicating reduction in risk) flattens and hence, the decrease in risk beyond that point will be negligible. So, there you are.

The Bottom Line

Now, you’re at a sweet spot between diversification and correlation. As you would have interpreted, about twenty low correlated assets is an ideal combination. That being said, there isn’t any perfect combination as such. You will have to skim across the inflation-growth matrix to evaluate within and across equity, gold, real estate and all other assets and find out a mix that best suits your investment objectives and risk profile.

Practically, that’ll also depend upon how much you have in your wallet. It will make little sense to go on stretching if you only get a minuscule amount of the assets. The bet on your good horses should be sufficient enough to generate adequate returns. Once that’s taken care of, 15-20 uncorrelated good bets would do.

At the end of the day, everything boils down to your homework. So, invest only after you have done thorough research and are well convinced that it’ll work for you. And as we always say --

“Invest in what you know”.

In the first 5 months of 2025, Indians lost ₹7,000 Cr. to online scams. And if you’re thinking, “Well, I’d never fall for that,” you’re exactly who they’re targeting. Because these scams aren’t random spammy links anymore. They look like investments!

Here’s something that one of our users recently reported:

He’d “invested” ₹2 lakh through a platform after watching a reel of Nithin Kamath explaining a trading hack. It led to a Telegram group, where the admin sent charts, signals, and even live sessions. It was all going great until one day, the group vanished. The site was dead. The number stopped working. And you know the rest.

It’s More Common Than You Think!

SEBI’s had to go full detective mode lately. Why? Because, as evident through the event above, scamsters aren’t just sending shady links anymore. They’re:

• Building lookalike platforms

• Creating fake trading dashboards

• Slapping AI-deepfaked faces of real founders (including ours)

And it’s working! According to reports, Indians are losing ₹1,000 crore every month to scams run out of places like Cambodia and Myanmar. These aren’t silly mistakes. These are con jobs with a business model:

1. Hook: A reel or ad with a deepfaked founder promises quick profits.

2. Funnel: You’re added to a WhatsApp/Telegram group that feels active and “expert-led.”

3. Illusion: Fake dashboards show fake profits. Fake people share fake wins.

4. Trap: You invest more. Then the site vanishes. So do they.

5. Repeat: Same scam, new name. On to the next victim.

So, Why Do People Fall For It?

Simple answer: they don’t think it’s a scam. Because it doesn’t look like one. It’s engineered trust.

And when you’re:

• Broke or financially stressed

• Looking for a shortcut

• Or desperate to catch up after missing out

...you stop asking questions.

This is exactly who scammers target. Not just “uneducated” people, but smart, emotional, financially anxious ones.

Here’s the Pattern to Watch For

If you remember one thing, let it be this: Scams are less about what they promise. More about what you’re hoping for. So when someone promises:

• 2% weekly returns

• Passive income through “signals”

• Or guaranteed results from stock trading groups

Ask yourself: If this worked, why isn’t Mukesh Ambani doing it? Why are only random usernames on Telegram getting rich? And above all…

Who’s Letting This Happen?

It’s easy to say, “Be more careful.” It’s harder to say: Hold platforms accountable. Meta (Facebook, Instagram), WhatsApp, and Telegram aren’t just bystanders.

• They’re active participants.

• They let the scammers run the ads.

• They host the groups.

• They profit from the reach.

And when you report the scam? They “review the case” and move on. We’ve normalised this, but we shouldn’t. Because society is paying the price for platforms that scaled faster than they could moderate.

Now, they choose not to moderate because moderation doesn’t pay. Ads do.

So, if we can expect people to be honest, let’s start expecting the same from these platforms.

Coming to Staying Safe…

A quick mental checklist that filters 99% of scams before they even reach your wallet:

• 2% weekly returns? Scam.

• Flood of thank-you messages? Staged.

• Feeling rushed or excited? Pause.

• Familiar face, odd advice? Deepfake.

• Too good to be true? It is.

And what to do if the damage is done?

• Sent money already? Call your bank immediately

• File a cybercrime report at cybercrime.gov.in

• Gather proof: screenshots, chats, payment IDs

• Report fake accounts to the platform (Instagram, WhatsApp, etc.)

• Don’t chase recovery scams. One hit is enough

Finally, remember, you don’t lose money when you trust a scam. You lose it the second you stop thinking. So, act wisely and don’t fall for the wrong shortcuts.

When you first start investing, it’s easy to go overboard. You either hunt for the cheapest stock hoping it’ll explode, or chase the shiniest, most talked-about company without caring about the price. Both usually end in a facepalm moment.

That’s exactly what the GARP strategy is all about: Growth at a Reasonable Price. It’s a middle ground: you pick companies that are actually growing, but make sure you’re not paying a fortune for it. Let’s break it down together.

What Makes GARP Special?

Value investing started with Graham in the 1930s, Buffett refined it by paying fair prices for great businesses, and Lynch popularised GARP by combining growth with sensible valuations.
GARP became an approach that combines the discipline of value investing with the excitement of growth investing.

Instead of chasing only “cheap” penny stocks or blindly buying into hot IPOs, GARP tells us to:

• Look for companies that are growing steadily.

• Make sure we don’t overpay for that growth.

Think of it as the sweet spot between traditional value investing and pure growth investing. It’s about finding quality businesses with solid growth prospects without getting caught up in the hype or paying an excessive price.

And this is where it gets interesting: retail investors like us are actually better positioned to use GARP than big institutions. Why? Because we have flexibility. We don’t have to buy 50 stocks just to diversify, or stick to regulatory restrictions like mutual funds do. We can use our own experience, industry knowledge, or even everyday observations to pick companies we understand.

And here’s the best part: GARP is perfect for retail investors like us. Why? Because unlike big institutional funds, we:

• Have flexibility. We can enter or exit whenever we like.

• Face no rigid rules on diversification. We don’t need to hold 50 stocks if we don’t want to.

• Can use our personal knowledge to pick sectors and companies we understand.

Big institutional funds often struggle to find and invest in these kinds of small, high-growth companies without moving the stock price, which can limit their returns. This can give individual investors an advantage.

The Four Pillars of GARP

GARP’s strength comes from four guiding principles you can actually follow.

1. Always invest in what we know

We should use our life experience. If we understand a sector deeply, we’re already pretty sorted. Whether it’s our profession, our business, or even the products we use daily, that knowledge helps us spot good companies before the crowd.

2. Balance growth and value

Avoid the two extremes:

• Bargain hunting (cheap, low-quality stocks that look tempting but disappoint).

• Growth at any cost (trendy, loss-making companies that burn cash).

Instead, look for quality companies at a reasonable price. This strategy helps us see gains when the market is up and also protects our investments when things get rough.

3. Use the PEG ratio

The PEG ratio, or Price/Earnings to Growth ratio, is a valuation metric that helps investors determine if a stock’s price is reasonable when considering its future growth potential. It improves upon the traditional P/E ratio by adding an essential layer of context: a company’s expected earnings growth. A company with a high P/E ratio might seem overvalued on the surface, but if it has a high growth rate, its PEG ratio might reveal that the stock is actually fairly valued or even a good deal. In short, it shows you how much you’re paying for each unit of expected earnings growth.

The P/E ratio is the stock’s current price divided by its earnings per share (EPS). The Earnings Growth Rate is the projected annual growth of the company’s earnings, usually expressed as a whole number (e.g., a 20% growth rate would be represented as 20)

• If it’s below 1 (or close to 1) → usually fairly valued or undervalued.

• If it’s well above 1 → often overvalued.

This metric is more advanced than just looking at P/E, because it adjusts for growth. A high P/E may still be fine if earnings are growing quickly, but a sluggish company with even a modest P/E can actually be expensive.

4. Favour Consistency

Markets reward companies that consistently compound. Instead of buying flashy stocks that go way up when the market is good and then crash when things turn bad, it’s smarter to focus on companies with more consistent, long-term growth. Instead, give preference to consistent compounders that grow predictably year after year.

How To Apply GARP In Real Life

To make things practical, let’s translate these pillars into a checklist. Here’s a simple way to screen for GARP stocks using Finology Ticker.

Companies You Should Prefer vs Avoid

Based on GARP, here are some general patterns to keep in mind:

Preferred Companies

• Boring name, boring Industry /sector

• Companies in stable or growing industries with consistent demand

• Companies with a large market share in a specific niche or unique positioning

• Businesses with products or services that are always in demand

• Strong insider buying, showing management confidence in the company’s future

Companies to Avoid

• Stocks popular in the analyst community

• Dependent on a few customers (e.g., 1 customer accounts for 25% -50% of sales)

• Companies with big, unproven plans

• Companies involved in diversification (diversifying with big acquisition plans)

• Businesses with low institutional holding (<25)

• Avoid companies with a debt-to-equity ratio of more than 25%

Just using this basic approach can help you avoid a lot of common mistakes.

Why GARP Works

The beauty of GARP is that it’s not about timing the market or chasing fads as much as it’s about buying good businesses at fair prices and letting time do the heavy lifting. This strategy has a “dual objective”:

• Protect capital in bad times.

• Deliver solid returns in good times.

And that’s exactly what retail investors need. The goal here isn’t overnight wealth, but rather the steady, compounding growth that builds over time.

Final Thoughts...

The market often tempts us with two extremes - dirt-cheap bargains or hyped-up growth stories. Instead of going for the extremes-either super cheap companies or hyped-up growth the most successful long-term investors like Buffett and Lynch have found their best results right in the middle.

That’s the core idea of GARP. It’s a balanced, common-sense strategy that uses tools like the PEG ratio to help you find companies with good growth prospects at a reasonable price. It’s really about consistency.

So next time you’re screening stocks, ask yourself:
👉 Is this a quality company?
👉 Am I paying a fair price for it?
👉 Does it pass the GARP test?

If you can say “yes” to those, you might have found a solid long-term investment.

“I came, I saw, I conquered,” said Coca-Cola, as people welcomed the drink with much love. On the other hand, India was technically a newly formed nation and didn’t have a Foreign Exchange Act back then, due to which Coca-Cola made huge money, enjoying a 100% foreign stake.

The Indian soft drink industry was taking a new shape, and Coca-Cola remained the leader. The brand and its name became so popular that big conglomerates like Parle tried to enter the market by launching its drink called Gluco Cola. Did you see it? The game of copying began.

Market Leadership

Coca-Cola practically became the market leader; on the other hand, Parle was trying to copy them, compete with them, and be like them.

By the early 70’s, Coca-Cola was making huge profits but not giving much back. Thus, one day, politics happened!

The government was not in favor of companies gaining huge profits from India and not investing it back in the country. To stop companies like these, the government came up with an act in the hope that Coca-Cola would not abide by the conditions of the act and leave the country.

Thus, the Foreign Exchange Regulation Act, 1974, was introduced. Where Coca-Cola was enjoying and using 100% of its profit however it wanted, with the act, it was reduced to just 60%. That means now Coca-Cola has to invest 40% of its profits in India and nowhere else. Surprisingly, they agreed on this because they wanted to stay in the country and never leave.

But this was not the end of the problem; this was just the beginning. Enter George Fernandes, the destroyer.

In 1977, a new government was formed called the Janata Party; one of the key members of the party was George Fernandes. He and the party were true nationalists and against foreign companies, and the number one company on their radar was Coca-Cola.

The company till now was abiding by the rules and regulations formed by the Indian government because it wanted to stay in the Indian Markets. But Fernandes was on a mission to kick the company out and tried a lot in order to do so, but nothing happened.

Out of context, but why not! Coca-Cola’s most prized possession, its Recipe or formula, is often regarded as the World’s most guarded secret.

Bazingaaa, Fernandes found a soft spot where it would hurt the most!

The company was asked to reveal its secret formula or leave the country. That was it! Coca-Cola would kill but never reveal its secret formula. They were left with no choice; they had to leave.

The Creator

The company and its product were so popular in the country that the Indian Soft drink market was left in a void; consumers, especially the youth, wanted a drink like Coke. One man saw a great opportunity here. He was Ramesh Chauhan, aka The Creator in our story!

This young MIT graduate wanted to fill the void of a cola drink in India and identified how much we Indians loved spices. He experimented with Indian masalas for months and months and finally came up with a drink that was desi, fizzy, spicy, and completely Indian.

They named the drink…*Drum rolls again* Thums up. 👍

The original plan was to name the drink ‘Thumbs up,’ but eventually, the ‘b’ was removed to make the name unique.

Thums Up was launched in the Indian market in 1977 under Parle (It’s ironic how Parle, since the beginning, was trying to copy Coke).

The brand instantly became popular in the country with its unique taste, name, and marketing. Everything was on point. The consumers obsessed with Coca-Cola became obsessed with Thums up. People related to the drink and the brand appeared in many Hindi Films. Taglines such as Taste the Thunder became the millennial lingo.

Decades passed, and Thums up remained the market leaders till the early 90’s, and no other company could compete with Parle. They were at the top and wanted to remain there!

Such good times, right? Just like they’d live happily ever after! But the thunders & storms awaited.

Again, politics happened. The Indian economy began undergoing massive changes, and the revolutionary LPG or Liberalisation, Privatisation, and Globalisation reforms came into effect. These models allowed foreign companies in India in a more liberal way.

Guess Who’s Back?

After decades, our old friend, who had been in a coma for years like the lead of a typical Hindi serial, arose and re-entered the Indian market. This time, the plan was to stay.

Coca-Cola was back. It was the year 1993, when everyone was in the festive Dussehra mode except for a group in Agra that remained undistracted, putting together the master plan to relaunch Coca-Cola.

And it arrived with a bang! They started from Delhi & Agra by painting the towns in Red. A colourful parade of Coca-Cola trucks and delivery men drove through the streets of Agra.

They began advertising with the slogan, Always the Real Taste, signaling that Coke was back in India. They continued the cutthroat marketing with eyes on the prize, Market Leadership!

And for that, they had on the radar just one company, Thums up!

Despite receiving tough competition from Coca-Cola, Thums up remained the first choice of customers. Its sale was unaffected, and all the strategies of Coca-Cola were going in vain. But this time, Coca-Cola had entered the country to stay, and they were ready to do anything to serve their purpose. So they did!

Like George Fernandes found their soft spot back in the 70’s, they started to find the same for Thums up and eventually found one, the bottling plants!

Bottling plants are where soft drinks are put into bottles and distributed. These plants are a big deal when it comes to the Beverage industry. The more bottling plants a company owns, the better it is.

Out of 62 plants, Thumbs up only had 4 that were owned by them; the remaining 58 were under franchises.

These franchises were already unhappy with the leadership style of Ramesh Chauhan. Reportedly, he was the one in control of all the decisions and used to micro-manage. On the other hand, judgments of manufacturers & franchisers were rarely accepted; the owners of bottling plants were already on the lookout for foreign brands seeking a more liberal approach.

Coca-Cola took advantage of this and started buying those franchises & distributors, due to which the manufacturing network of Thums up was destroyed, and distribution was massively hampered.

Ramesh Chauhan remained helpless. Chauhan was practically losing one plant each week, and franchisers were switching to Cola; out of the 58 franchises, Thums up was left with less than a fraction. With fewer plants, there was no one left to cater to Thums up’s demand because there was no supply. So, what was the better option in the absence of Thums up? Obviously Coca-Cola!

This is how Coca-Cola took over all the market share Thums up had! They took advantage of the void just like Thums up did back in the 70s. Slowly, Parle Thums up was left with only a handful of bottling plants and could not cater to people’s demands. Soon, they began losing their market share, which directly hampered their profits.

The giant Coca-Cola was unstoppable and did everything to kill the Thums up and was winning. The father of Thums up Ramesh Chauhan, tried his best to save the brand but was failing.

Under his leadership, Thums up enjoyed a monopoly in the market for almost 20 years; the drink was his brainchild; not only did he make it from scratch, but he made sure it succeeded.

Then one day, Coca-Cola made an offer to Thums up. After hunting them down to the core, Coca-Cola wanted to buy them. By the early 90s, Chauhan accepted the defeat and surrendered. According to Chauhan, it was difficult to create a franchise model that he wished for, and things were going out of control with sheer modesty; he explains that there were “no regrets & hard feelings in selling the business”.

In 1993, the very own desi, fizzy, and completely Indian Thums up was sold to Atlanta’s Coca-Cola. Coca-Cola remained the market leader, and guess what? The new Cola wars of Pepsi & Coca-Cola began. But as Cola always says, “I come, I see & I conquer...” Maybe they will again!

“We can’t know when we make a choice whether it will be successful. Success emerges from the quality of the decisions we make and the quantity of luck we receive. We can’t control luck. But we can control the way we make choices.”

The paradox of choice is our difficulty in selecting when confronted with many alternatives, despite our preference for having many options. The greater the selection, the more difficult the decision and the less delighted you will be with it.

This dilemma occurs when selecting A over B, C, and D due to the probable loss of alternatives (B, C, and D). The paradox of choice can be experienced when feeling buyer’s remorse, selecting an academic subject, or even finding a romantic partner.

The majority of individuals did not have much flexibility to make purchase decisions in the past. We ended up mass-producing goods, limiting people’s options as a result of industrialization.

Now that we have the freedom to choose from multiple products, the decision-making process requires significantly more time and effort, offsetting the newly gained freedom. This is why it is referred to as the paradox of choice, sometimes known as the choice paradox. Well, I hope you understand the meaning of the paradox of choice, and to know more, keep reading!

The Paradox of Choice Illustrations

Too many options can overwhelm, but just the right amount will stimulate sales.

In a well-known study done at Columbia University, a team of researchers set up a booth with samples of jam. They would transition from a selection of 24 jams to a group of six jams every few hours. 60% of people would stop to try a sample of 24 different jams, and 3% of these shoppers would purchase a jar. When six jams were displayed, just forty per cent of people stopped. But here’s the intriguing part: thirty per cent of these individuals purchased jam. In other words, numerous alternatives enticed clients to explore, but fewer options persuaded them to purchase.

What are the primary characteristics of choice overload?

When individuals are faced with many alternatives to any object, whether for purchase or otherwise, they experience the inability to choose more strongly. This difficulty is observed in the following ways:

• When offered additional alternatives, individuals often have a more difficult time picking.

• Due to their difficulty selecting, individuals are more likely to be disappointed with their selection or to regret the purchase.

• Having additional options increases both interest and expectations. These expectations appear to diminish when a choice is made from a larger number of options as opposed to a smaller number of options.

• Some customers are satisfied (they settle for something adequate), while others are maximisers (they must pick the best of the lot or the best of the best).

• Researchers discovered that a greater number of alternatives for some high-stakes decisions, such as health insurance, reduced the number of individuals engaged in the programs.

• The never-ending chore of making judgments on large and minor matters consumes time and mental energy, overwhelming our senses and even causing us to feel nervous or unhappy.

Why it’s so difficult to make (excellent) choices

There are several reasons why it is difficult to make judgments, particularly excellent, quick ones. A few of these reasons are:

• There are several challenging steps in the decision-making process, such as obtaining information and setting objectives; difficulty with any of these steps might either halt the entire decision-making process or hinder it in some other manner.

• People experience “decision fatigue”, where having to make frequent decisions makes every additional decision more taxing on a person’s cognitive resources. This phenomenon occurs because decision-making is an intrinsically taxing process, and people need to mentally refuel before making additional choices.

• Uncertainty or a vast number of accessible alternatives can make it difficult to decide, as associated factors such as the fear of missing out cannot be measured quantifiably to make comparisons among alternatives difficult.

• Cognitive biases

  can also hinder decision-making and frequently cause individuals to make poor choices.

• Certain psychological qualities, such as perfectionism, are linked to indecision, and some individuals are indecisive by nature.

Numerous factors contribute to the difficulty of making (good) decisions, including the complexity of the decision-making process, the cognitive work associated with decision-making, difficulties such as uncertainty, the fear of missing out, and various cognitive biases. These cognitive biases are discussed in depth in various blogs.

How to Avoid the Choice Paradox

To avoid the paradox of choice, you must restrict the number of available possibilities. Although it is easier said than done, some strategies can assist you in achieving this.

The easiest strategy to alleviate the paradox of choice if you’re a novice investor is to combine your selections. In other words, you select a large number of options based on specific criteria and group them together. This greatly decreases the remaining number of alternatives without truly eliminating anything.

For example, ETFs select hundreds of equities, such as the whole S&P 500 index, and combine them into a single asset. Therefore, you can purchase the ETF to have instant diversification as an investor.

The second way to lessen the paradox of choice is to begin with fields that you already know. Therefore, if you wish to select particular stocks or assets, you should begin with something you are comfortable with. This might be an industry, a product category, or even an economy. This is because the more you know about this business or industry, the simpler it will be for you to make an informed selection without getting overwhelmed with alternatives.

However, if you solely focus on what you already know, you will acquire a home-country bias and overexposure in your area of knowledge. Thus, most of your holdings will be affected when circumstances deteriorate there. To offset this, it may be advantageous to purchase additional securities to cover various industries or global locations. Thus, you may diversify your portfolio while still having fun and selecting your own stocks.

The Bottom Line

The illusion of choice is a potent weapon for manipulating and controlling individuals. When making judgments, it is essential to be mindful of your own biases and habits. Before making a decision, carefully explore all available alternatives. Consider the possible risks and expenses connected with your decisions. Before making a final choice, seek out other perspectives. When making judgments, follow your intuition and gut instincts.

Here’s what AI actually changes.

AI Doesn’t Eliminate Work. It Restructures It

AI does not eliminate work as a concept. It restructures work. Roles built purely on repetitive execution, predictable workflows, and mechanical efficiency face disruption. Tasks that can be optimised, automated, or scaled through algorithms will increasingly be handled by machines.

What Gets Disrupted

If your job consists of following fixed procedures, processing information in predictable patterns, or executing tasks that scale linearly with time spent, AI will disrupt it. Not immediately, but inevitably.

What Stays Relevant

Work that requires contextual judgment in ambiguous situations, building relationships and trust, strategic thinking with incomplete information, or understanding human behaviour and incentives remains protected. The value lies in human connection, accountability, and decision-making under uncertainty.

Companies adopt AI when it reduces costs significantly, improves speed without sacrificing quality, or scales operations that humans can’t. Disruption happens where economic incentives align. If your role’s value comes purely from efficiency, you’re vulnerable. If it comes from judgment, relationships, or strategic insight, you’re not.

Stop asking “Will AI take my job?” Start asking: Which parts of my work are purely mechanical? Where do I add judgment that machines can’t replicate? Am I building skills that compound with AI, or compete with it?

The people who thrive aren’t those who resist AI. They’re the ones who use it to handle repetitive parts while focusing on higher-order thinking.

AI will not create a jobless future. It will create a different future where the skills that matter shift dramatically. Your protection lies in understanding where human judgment, creativity, and connection remain irreplaceable and positioning yourself there.

International investing sounds exciting. Everyone talks about US tech stocks, global ETFs, or chasing growth in other countries. But most investors don’t stop to ask themselves whether they actually want international exposure or if they’re chasing the returns they’ve seen in headlines.

The Truth About Investing Local

Look, we can give you a very technical, suit-boot answer about global diversification. But let’s start with a reality check.

In India alone, there are over 7,500 listed companies. Can you analyse even 10% of them, end-to-end? Chances are, you haven’t even heard the names of 90% of them. The Indian market is vast, deep, and still relatively untapped by most investors.

Yet, you have an advantage: you know this country.

You understand the local circumstances, the political environment, the progress, and the basic needs of the people here. That local knowledge is an immense advantage that puts you in a much better position to make good investment decisions than trying to understand the intricacies of a company based in a country you only visit for holidays.

The Only Good Reason

Some smart people will argue that you should diversify against country risk. They have a point. If there’s political instability or a major economic problem in India, having some money hedged outside ensures your entire portfolio isn’t affected.

So, the goal is hedging, right? Then, why make your life complicated by buying direct international stocks?

Trying to buy a Tesla share directly means dealing with regulatory grey areas. Many of the most reputable Indian brokers don’t offer direct international buying facilities. Why? Because the tax, fund transfers, and legal compliance are messy. A broker here has to tie up with a virtual account there. It’s a whole lot of headache for very little practical gain. They don’t want to take the reputational risk, and neither should you.

The Simple, Boring Solution

If your goal is to hedge against country risk, there are simpler options that won’t give you a legal headache:

1. Go Global with Gold: Gold is a commodity whose price is decided globally. It acts as an excellent hedge against political or economic instability in any single country. You can easily access it through Gold ETFs.

2. Use Funds of Funds (FOFs): Several Indian mutual funds offer Funds of Funds that invest in international stocks and ETFs. These funds handle all the hassle-the account opening, the fund transfer, the compliance, and the taxation-on your behalf. You get the international exposure you want without the accompanying stress.

We don’t understand the politics, the accounting standards, or the disclosure formats of US companies. While seeing Apple in your portfolio looks cool, it just “looks” cool. It won’t necessarily make you richer than applying the same process and discipline to Indian stocks.

Stay Away from the Fancy Stuff

There’s a constant cycle of new financial fads. A few years ago, it was fantasy gaming. Then came Cryptos, and now the focus is on US stocks or “Buy Now Pay Later” apps.

You’ll see them promoted everywhere-on TV, in IPL ads, and by influencers. Why? Because these are often the products that have received massive VC funding, and those startups are under enormous pressure to grow quickly. They create a strong narrative.

More visibility doesn’t mean it’s more correct. The things that are promoted the most are often the most complicated or the most messed up.

Finance and investment should be boring.

If you want a thrill, go to an amusement park, watch Netflix, or play video games. Entertainment is cheap; you can get a thrill for a couple of thousand rupees. Don’t look for that thrill in your finances. You will suffer a loss.

Think of your financial instruments as medicine; they are there to fix a problem or a loophole in your long-term plan. They are not for fun. Keep it simple: you need insurance, NPS/PF for retirement, 2 or 3 solid mutual funds for goal planning, and maybe some direct stocks if you have capital left over. That’s it.

The more you stay away from fancy products, the safer and wealthier you will be in the long run.

Final Word,

Don’t look for entertainment in finance. The moment you start enjoying the process too much, that’s your signal that you’re doing something wrong. Your portfolio isn’t a video game; it’s a long-term plan built on discipline and consistency.

Stick to what you know: your home market. Use the simple, regulated tools (Gold, FOFs, ETFs) for your necessary diversification. Say no to the shiny, complicated products being marketed to you. Your goal is to have the coolest-looking statement, but one that’s safe and reliable.

That is not a coincidence. That is human nature.

Most investors know in theory but forget in practice that corrections are not rare. If you look at almost every strong bull market in history, you will find that it was never a straight line upward. There were phases where prices cooled off, valuations came back to earth, and the general mood shifted from excitement to anxiety. And then, more often than not, the market found its footing and moved higher.

So the real question was never whether corrections happen.
The real question is what you do when one arrives at your doorstep.

The first is selling in a panic. People exit their positions to avoid further losses, only to find themselves sitting on the sidelines when the recovery begins. They were locked in a loss and missed the rebound, the worst of both worlds.

The second is waiting for certainty. Many investors tell themselves they will buy back in once things “stabilise.” But markets do not wait for certainty. By the time the news feels comfortable again, prices have often already recovered significantly. Waiting for clarity usually means buying back at higher prices than you sold.

The third is obsessing over short-term noise. During corrections, every news headline feels like a data point, and every expert opinion feels urgent. People start making decisions based on things that, six months later, will not matter at all.

All three mistakes share the same root: reacting to how the market feels right now instead of staying anchored to why you invested in the first place.

You do not need a complex strategy to survive a correction.
You need a clear head and a simple framework.

First, go back to your original reasoning. Why did you invest in what you invested in? Has that reasoning changed, or just the price? If the business or asset is fundamentally the same, a lower price is not a reason to exit. If anything, it might be a reason to pay attention.

Second, separate the signal from the noise. Ask yourself whether the information you are reacting to actually changes the long-term picture. Most of the time, it does not.

Third, remember what you are actually doing. If you are a long-term investor, act like one. Your time horizon is not this quarter. Your goal is to build wealth over the years, and that requires tolerating short-term discomfort in exchange for long-term gain.

Fourth, DO NOTHING if nothing has changed. This is harder than it sounds. The pressure to act during volatility is real. But sometimes the most intelligent move is to stay exactly where you are and let time do its job.

The investors who perform well over the long run are those who stayed calm when others panicked. That is the edge. And it is available to anyone willing to work for it.

Dear entitled reader, you are wrong and have been for quite some time.
“Poor people are uneducated, not stupid,” Rajen Makhijani said. I’d like to add to it and go as far as to say, “Entitled people (most of them) are educated but are vapid stupids.” For so long, the government’s practice of giving out food, healthcare services, and essentials to poor people for free has been reprimanded by us. And surely, why not?

Why should we, the taxpayers, sponsor the groceries of people who cannot get their lazy bottoms to work? Why are poor people entitled to free stuff? We ask, calling them illegitimate.

So here’s what substantiates that the poor deserve what they get for free. Suppose your salary is ₹50,000; your per-day income would be ₹1,667. And you go to buy one kg of rice that costs ₹50. That is close to 3% percent of your daily income. Just 3%.

According to Trading Economics, the minimum daily wage of unskilled labour is ₹178 per day. Now, one kg of rice is 28% of that daily wage. Just rice. If not anything, they would need a packet of salt for ₹20 to eat with it. There is approximately 40% of the income. We are not counting clothes, rent, education, or healthcare yet. If they don’t get it for free, they cannot survive, literally.

Do you still criticise the government’s choice to give these people free food?

The story would have been less tragic had it been just that they earn less money, so their expenses are barely met. But being poor is more expensive than you would think.

Banks say- “Sorry, no money for you!”

Believe it or not, one of the biggest fears of these grey, dry, rotund bankers is high NPAs. Why would any bank want to stain their precious ratio red to help the poor when they can just say no?

Sometimes, on relatively luckier occasions, when the money-grubbing bankers do agree to loan the money, they ask the poor for collateral. Now you tell me, how would a person living in a mud house with a meagre income provide secure collateral? The result of this dire need for money steers them towards informal lending.

Not to mention the interest rates on these loans are exorbitantly high.

CIBIL says- “You (not) da Man!”

Loans at affordable interest rates only come to those with a good track record of a credit score. And banks definitely ain’t interested in the poor. There is one more way for the poor to get a loan.

For a poor person who doesn’t even know what credit history means, and doesn’t have any collateral to offer, institutions like NBFCs and startups emerge as the new-age gods of prosperity. How? By offering loans at interest rates as low as 10.99% to 27%, as opposed to the high 49% that “normal people” can get. (This article is about them. This article is about them. This article is about them.)

Yet, aside from all the leverages of being poor, the amount they have to repay with interest adds a ton to their debt burden.

Inflation - the necessary evil

Remember how we all reacted when the price of gas cylinders or vegetable oil increased? The price of some essentials almost doubled. While such an increase in the price was ‘still-affordable’ for us, what would a poor man have done with a daily income of just ₹178?

They fled. In masses. Need I remind you of the Covid-19 lockdown scenes where migrant workers left with just a pair of clothes and their set of equipment; equipment because they could find work anywhere, and they could not afford not to work?

Abibas vs Adidas: A metaphor for lifestyle

Before we delve into the intricacies, here is a story for you.

Rohan Nanda and Abhimanyu Singh met in college and are best friends now. Rohan’s family is crazy rich; Abhimanyu’s, not so much. The boys were going to participate in a contest that was three months away, and they needed new shoes.

Rohan got an Adidas for ₹1000. Abhi got an Abibas for ₹300. (Read that again, they are not the same.

They started practising for the contest. After three months, before the contest even started, Abhi’s shoes tore to pieces, and the sole came off. He then had to go and get another Abibas, which barely lasted the contest, and joined the first one in the trash.
While Rohan’s Adidas was good enough to use even in the next year’s contest, Abhi had changed 4 shoes in that duration. Poor Abhi. (Literally and rhetorically!)

This is the story of every poor. They don’t realise but end up paying a lot more than the rich just because they cannot afford the chunkier sum to pay for quality at one go.

The poor have a higher cost of living than YOU!

Before you question my subheading and go all ‘this is absolutely ludicrous!’, I would like to clear the air by mentioning that the cost of living DOES NOT completely depend on the standard of living, and I’ll tell you how.

A person living in an apartment building of a posh society has to pay a small sum for monthly maintenance, say ₹5,000. A person living in a slum, on the other hand, pays 70% of their daily income to extortionists for letting a family of 8 live in one room, for the illegal electricity points, without which there would be no running fans in the house, and even for water. They pay all of the upfront charges associated with these, plus bribes for letting them to just exist.

Owning vs Renting a home for the poor

Let’s not waste both of our time and straightforwardly admit that ‘owning’ a house is not an option for the poor. So, they have the option to rent. Yes, they do.

The rent in tier 1 and 2 cities is so high for a decent house that a person would rather pay a home loan for twenty years than pay the monthly rent for the next 8-10 years. To top it up, landowners would charge an advance deposit of 3-4 months’ rent as security.

People seem like they don’t fall under India’s demographics, since they clearly do not have the right to live with dignity!

The get-rich-quick schemes

There are no get-rich-quick schemes. “That’s just someone else getting rich off you” - Naval Ravikant, Indian Entrepreneur and Investor.

It’s easy for a person with restricted finances to fall prey to get-rich-quick schemes. Fake job promises, guaranteed wins in lotteries, proportional profit margins - all when you give some money to get so much.

The Bottom Line

“I get your point. But, why can’t they try to get a decent job and make a life out of the glum?” Do you think they don’t want to? They desperately do. Everything you see and you are is conditioned by the socioeconomic class you come from.

These people did not have the right education, nor were they taught the manners and etiquette to behave in public or in the workplace. An interviewer takes a look at them, and even before asking the first question, they have made up their mind that “this person isn’t the right fit; they do not belong.”

So the next time, instead of discussing the poor and rich in an after-party setting, talk about the plights of the poor and the primacy of the privileged.

If you’ve been following my content for a while, thank you. It really means a lot because you chose to spend your time watching, reading, and thinking along with me.

So I owe it to you to say what’s real, even if it sounds odd coming from me:

Don’t Just Listen To Me

Try to also learn from a few other people you trust; people who look at things differently, or better yet, those who look at better things.

Because it’s easy to end up in an echo chamber. That’s when you follow a few people who think like you, and after a while, everything you hear starts sounding the same. It feels comfortable, but it can quietly shrink the way you think.

And in investing, that can be dangerous. You might ignore important ideas just because they don’t match the way the people you follow think.

The Different Lens

There’s a whole side of the market I don’t usually cover, like, capital-intensive and B2B businesses. They’re not my niche, and I prefer to stay within my circle of competence.

But that’s only my side of the story.

SOIC Research, for instance, explores these behind-the-scenes companies and high-capex sectors through a very different lens. And that’s exactly why their perspective is worth paying attention to.

Does that mean you should blindly follow them? Of course not. Just like you shouldn’t blindly follow me.

If anything, treat us like different tabs open on your browser. You’re not supposed to pick one; you’re supposed to switch between them, compare notes, and maybe even disagree with both. That’s how you build your own thinking, your own mental models.

And When You Do That…

You begin to understand how different kinds of companies grow, struggle, and create value. And that is how real investing insight is formed. Not in isolation, but in contrast.

Even at Finology, we sit around debating ideas, poking holes in each other’s arguments, and sometimes even letting go of stocks that feel “too perfect.” No, we don’t like being contrarian. It’s just that we’ve seen how easy it is to fool ourselves when something sounds right.

It’s a habit I hope you build too.

So yes, listen to me. But also listen to other credible voices and sources. Especially the ones who don’t sound like me. Because good investing isn’t about loyalty. It’s about clarity, which (unlike in a photo) comes when you zoom out.

Get this: Eternal made just ₹527 Cr. in profit this year. And Avenue Supermarts made ₹2,707 Cr. That’s nearly 5x more! And yet, Eternal is valued higher in the stock market!

Why? Because we’re no longer just rewarding performance. We’re rewarding presence.

Thanks to index investing, more money flows into stocks simply because they’re part of an index. It doesn’t matter if the business is underperforming or overstretched. If it’s included, it gets bought.

This is the quiet shift that index investing has triggered. And it’s changing how capital gets allocated; not always for the better.

When No One’s Asking Questions

Warren Buffett once said:

“In any sort of a contest, financial, mental or physical, it’s an enormous advantage to have opponents who’ve been taught that it’s useless to even try.”

That’s exactly what indexing has led to! Most investors today are no longer asking: “Is this business any good?” They just assume that if it’s in the index, it must be worth owning. Result?

• No one’s digging into balance sheets.

• No one’s evaluating management.

• “Thinking” has been outsourced to an algorithm that doesn’t think.

Seth Klarman, known for his disciplined value investing, calls this mindset “lazy and shortsighted”. Because if a company is losing money, cooking books, or propped up by hype, but it happens to be in the index, it still gets bought.

And when something goes wrong? Index investors are often the last to know, because no one was watching closely in the first place!

The Overindexing Loop

As more investors switch to indexing, the system starts to distort. Seth Klarman puts it clearly:

“Indexing is predicated on efficient markets. But the more people index, the fewer there are left to do the hard work, research, analysis, and price discovery. So ironically, markets get less efficient.”

And there’s another layer. When a new stock gets added to an index, thousands of index funds rush to buy it, not because it’s good, but because the index says so. With limited liquidity, prices can shoot up artificially, even if the business fundamentals haven’t changed at all.

What Happens If Everyone Indexes?

Indexing isn’t smart investing. It’s autopilot at scale, don’t you think? Here are the side effects of overindexing:

• Distorted prices: Stocks go up just because they’re in the index. Not because they deserve to.

• Disconnection from fundamentals: Companies get capital just because they’re included. Meanwhile, solid businesses outside the index remain overlooked.

• Broken price discovery: The fewer people doing real analysis, the less reliable prices become. Markets start to reflect flows, not facts.

• Blind spots in crises: When things go wrong, no one’s watching. Index investors are often the last to react because they were never really paying attention.

So where does that leave you?

Indexing isn’t bad. It’s just average by design. It’s built to match the market, not beat it. And value investors will eventually outperform the markets. So, if you’re looking to do better, you’ll have to do what indexing avoids: ask questions, study businesses and think independently.

We made Finology 30 with this in mind. We’re not trying to beat the index by being clever. We’re trying to stay a step ahead by doing what the index can’t: ask, “Does this company actually deserve my capital?”

Because when the herd is on autopilot, there’s real value in choosing the road less travelled. If you think this is the right approach, join us.

Finology 30: https://tinyurl.com/30-stocks-finology

In this video, Pranjal Kamra shares his personal experience and reflections on why these seminars often fail to give you genuine value.

They charge high fees, lean on emotional marketing, and recycle advice that barely scratches the surface. True financial learning doesn’t come from flashy promises or motivational speeches, but from understanding, applying, and questioning.

Listen in to see why attending finance seminars can be a big mistake, and discover what real financial education should look like for you.

In just the last 5 years, Indian mutual funds have grown from ₹25.4 lakh crore to ₹74 lakh crore in assets under management (AUM). That’s 3x growth in half a decade. Zoom out further: over the past 10 years, the industry’s grown at a 20% CAGR. Now, let’s compare that to the darling of older generations: Fixed Deposits.

• FD returns today: 6-7%

• Inflation: 6-7%

• Real growth: Basically zero

On the other hand, if you check the Sensex 30 data since 1986, the mutual funds have delivered a 14% CAGR. Strong case, right? Here’s the kicker: only 3-4% of Indians invest in MFs. That’s about this much. 👇

This is a massive, underexplored territory, and you have the chance to get in before the rest of India wakes up. And we know just what you need! A clear idea of what you’re investing in, why you chose it, and how much of it makes sense for you. Let’s break it down, exactly like Pranjal did in his Mutual Funds Masterclass.

But First, Why Even Consider Mutual Funds?

Because they’re the shortest bridge between your money and the market. A mutual fund is basically a trust that collects money from people and invests it in stocks, bonds, or other securities.

The point?

• It’s professionally managed: You’re using the expertise of a fund manager.

• It’s diversified: Your risk is spread out. When the investments grow in value, your NAV (Net Asset Value) increases. When they don’t, it drops.

• It’s accessible: You can start small, sometimes with as little as ₹500.

So, if you’ve ever thought, “I don’t have the skill to pick individual stocks” or “I can’t track the market daily”, mutual funds exist exactly for you. The engine here is compounding. Over the years, disciplined investments + reinvested gains can grow into a significantly larger corpus (something an FD will simply not match in real terms. 😉)

The Bigger Question: How Much To Invest in MFs?

This depends on your:

• Risk tolerance

• Investment horizon

• Pre-owned assets

An equity-heavy mix can deliver higher returns over time, but it also comes with sharper ups and downs. A more balanced mix may give you steadier growth, though the returns might be lower in strong bull markets.

And it’s not a one-time decision, BTW. Your allocation should evolve as your goals, age, and financial situation change. Don’t worry, we’ve covered it all in one of our articles: Notes on Pranjal’s Personal Finance Masterclass.

Now, Which of the 2500+ MFs Should You Go For?

We’ve boiled it down to a 4-step approach to decide which mutual funds fit in your portfolio.

Step 1: Choose Your Plan Type

This is basically deciding how you want to buy your mutual fund.

• Direct Plan- You go straight to the AMC (mutual fund company) without a middleman. You save on distributor commissions, which means a lower expense ratio. Over time, that tiny percentage adds up.

• Regular Plan- You invest through a broker or advisor. They’ll guide you and maybe even handle the paperwork. But you’ll pay for that help through a slightly higher expense ratio every single year.

Step 2: Pick Your Fund Category

Now you’re deciding where your money will actually be invested. Before we get into defining each, here’s something for visual appeal and better understanding:

Now that you’ve seen the flowchart, here’s what each one means in practical terms:

• Equity Funds- Your money buys shares of companies. This is growth territory. More potential returns, but more ups and downs. (We’ll focus more on this category.)

• Debt Funds-This is you lending money to companies or the government in return for interest. Lower risk than equity, but also lower returns.

• Hybrid Fund- A mix of equity and debt. You get some growth potential without going all-in on risk.

Step 3: Pick Your Style

Here’s where you choose the kind of instruments your investment will go into:

A) Active Funds- A fund manager makes buy/sell decisions to beat the market. Can outperform, but you pay higher fees, and there’s no guarantee. Have a look at the different kinds of active funds:

1. Large Cap- Invests primarily in the top 100 companies by market cap. Lower volatility, steady compounders. Good core holding.

2. Mid Cap- Invests in companies roughly ranked 101–250. Higher growth potential with sharper swings. Needs a 5–7 year view.

3. Small Cap- Beyond the top 250. Highest return potential and deepest drawdowns. Only for high-risk appetite and long horizons.

4. Flexi Cap- Manager can move across large/mid/small freely. A “go-anywhere” growth bucket; useful as a core active fund.

5. Multi Cap- Invests across large, mid, and small in defined minimum proportions. Ensures exposure to all three; expect some small-cap volatility.

6. Focused- Concentrated portfolio (typically up to ~30 stocks). High-conviction bets; results can deviate meaningfully from the index.

7. Contrarian- Takes positions against prevailing sentiment (turnarounds, out-of-favour sectors). Longer payoff cycles; higher active risk.

8. Thematic- Invests around a broader theme (e.g., manufacturing, EVs, consumption). Timing-sensitive; not a core holding.

9. Sector- Concentrated in a single sector (IT, Banking, Pharma, etc.). Highest concentration risk; use only tactically, if at all.

B) Passive Funds- Just copy an index like the Nifty 50. Super low cost and dependable. Hard to mess up. There are 2 main kinds of passive funds:

1. Index Fund- Replicates a market index (e.g., Nifty 50, Sensex). Low cost, rules-based, minimal tracking error. Strong core choice.

2. ETFs- Like index funds, but traded on the stock exchange. Only good if you know how to buy and sell stocks.

Step 4: Match with Your Goal

Because the right fund also depends on when you’ll need the money.

Think of it this way: if you’ll need the money soon, choose safer options. If it’s a few years away, balance safety with some growth. And if it’s far in the future, go for growth-focused funds and let them work over time.

Now, let’s move on to deciding how to divide your money between direct stocks and mutual funds, a choice that can define both your risk and your returns.

Stock vs Mutual Fund Allocation

You don’t have to pick one over the other. You just have to figure out the right mix for you. If you have the skill, time, and temperament to pick stocks, go ahead and dedicate a portion of your portfolio to them. Direct stocks give you more control (and potentially higher returns), but they also demand more homework and emotional discipline.

Mutual funds, on the other hand, are your “set-and-review” option. They let you participate in the market without tracking every quarterly result or worrying about sudden corporate announcements.

A common allocation strategy:

• If you’re a beginner ➡️ 80-90% in MFs, 10-20% in stocks

• If you’re experienced ➡️ 50-60% in MFs, rest in stocks (with proper diversification)

Remember: Your allocation isn’t fixed for life. Review it every year or when a big life event happens.

Now comes the practical part: how to shortlist the right funds from the hundreds in each category.

How to Judge and Select Mutual Funds

Picking the right mutual fund is all about applying a consistent set of filters. The aim is to choose funds that fit your goals, risk profile, and time horizon, and then give them enough time to do their job. Here are the core metrics and filters to focus on:

With these key factors in place, you have a solid lens to evaluate annnyyyy fund. Now, it’s the approach that suits your goals and lifestyle.

SIP, SWP, or Lump Sum?

There are three main ways:

• SIP (Systematic Investment Plan)- You invest a fixed amount regularly (monthly, quarterly, etc.). Ideal for building wealth steadily and avoiding the stress of timing the market.

• SWP (Systematic Withdrawal Plan)- You withdraw a fixed amount regularly from your investment. Often sold as a “smart” option, but its real utility mostly shows up during retirement when you need a consistent income.

• Lump Sum- You invest the entire amount in one go. Works best if you have a large sum ready and the market conditions are right.

If you’re still earning, SIPs are your best bet. SWPs make sense only when you’re ready to draw from your investments, and lump sum investments are really just a timing game, one that’s harder to win than most think.

Now, let’s talk about how you’ll split your investments between mutual funds and stocks.

How Much to Put in Mutual Funds vs Stocks?

The choice or mix depends on where YOU want to be, rather than what people are doing.

In simple words:

• Big fixed goal- Load up on MFs.

• Extra cash- Use it for stocks.

• Unsure- Stick with MFs. You can always shift later.

Pick the mix that suits your life; stability first, adventure later. Review every year, or when your life changes. Ideally, 3 to 5 well-chosen funds are more than enough. Any more and you’re just doubling up on the same stuff, like filling your thali with four types of dals. Yet, dal matters, and not every kind is good for you. 👇

Which Mutual Fund Categories Should You Avoid?

Everyone loves a good story of how “EVs are the future!” or “IT stocks will boom!” But that’s exactly where most new investors get carried away. So, here are some categories that you should stray away from:

• Theme-based funds (like EV, Tech, ESG, etc.): Tempting, but they swing hard in both directions. You’re basically betting everything on one trend or flavour of the month.

• Sector funds (banking, pharma, infotech): Same story. These put all your money in one slice of the market. Sure, the ride feels great when that sector’s hot, but it stings when things cool off.

• Hybrids and “all-in-one” funds: If a fund sounds like it’s promising everything, growth, safety, income, world peace, pause and check what you’re really buying. Many hybrid or “balanced” funds end up being too complex for what they deliver.

Lastly, Don’t Act On Your Moods

Don’t sell too soon. Don’t chase last year’s “top performer.” Stick to simple categories. Avoid “trend” chasing, sector obsessions, or bouncing between funds out of impatience.

• Pick mutual funds for your must-haves

• Use stocks for your extra “growth” money

• Don’t mess with trendy or risky categories

• Keep your mutual fund count tight (3 to 5, max)

• Review once a year, not once a week

And if you’re ever stuck in the process, just text us at support@finology.in. :)

Who creates it: the government, the RBI, or the banks? And how can the same ₹1,000 printed by the RBI multiply into thousands more in circulation?

Understanding how money is created tells you not just how the economy works, but also why inflation, interest rates, and even your bank balance behave the way they do. At Finology, we believe that when you know how money moves, you make smarter decisions about saving and investing.

So today, let’s break down where money really comes from, how banks “print” it without a printing press, and what that means for you.

The Journey of Money: From Barter to Banks

Long before paper notes or UPI apps, people used the barter system. They exchanged goods directly, rice for sugar, cloth for grain, until they hit a major problem.

It was called the “double coincidence of wants.” You had to find someone who not only had what you wanted but also wanted what you had. Obviously, that didn’t work for long.

To fix this, people moved to gold and silver coins. They were valuable, durable, and solved the problem of direct exchange. But carrying heavy bags of coins while trading across towns or countries was risky. Theft, loss, and inconvenience made this system hard to maintain.

That’s when a middleman entered the “Seth ji,” or trusted banker. Traders deposited gold with him, and in return, he gave them a signed note promising that their gold was safe. These notes became the earliest version of paper money.

Instead of exchanging gold, traders simply exchanged notes that represented gold. It was convenient, and slowly, these notes themselves became money.

The Birth of Paper Money

Here’s where things got interesting. Seth ji noticed that traders were happily exchanging the notes, but no one came back to claim the actual gold. So, he took a bold step; he issued more notes than the gold he held.

For example, if he had 10,000 gold coins in his vault, he might issue notes worth 50,000 coins, assuming everyone wouldn’t show up at once to withdraw. Those extra notes represented money that didn’t exist physically; it was created through trust.

And that’s exactly how modern banks work today. The paper (or digital number) you see in your account is backed by only a fraction of real money. The rest is just…created.

How Banks Create Money Today

Let’s look at how this system functions now.

Suppose you deposit ₹1,000 in your bank account. The bank is required to keep a certain percentage with the RBI as a reserve; this is called the Cash Reserve Ratio (CRR), currently around 4%. That means ₹40 stays with the RBI, and the bank can lend out the remaining ₹960.

You still see ₹1,000 in your account, and the person who took the ₹960 loan also sees that amount in their account. Suddenly, ₹1,960 is now circulating in the economy, even though the RBI printed only ₹1,000.

Now, imagine the borrower spends ₹960 at a shop. The shopkeeper deposits that money into their bank account. Again, 4% of it is kept aside, and the rest is loaned out. This process repeats over and over, multiplying the money supply.

This is called the money multiplier effect. Banks literally create new money by lending the same deposits again and again.

So, while the RBI controls how much base money is printed, the banking system controls how much total money actually exists in the economy.

When Governments Print Money

Banks aren’t the only ones creating money. Governments do it too, especially when they run out of it.

Whenever a government spends more than it earns (a fiscal deficit), it borrows money, usually through bonds. But when it struggles to repay those loans, one tempting solution is to print more currency.

Printing money feels easy at first; you have more cash, you can pay debts, build infrastructure, and fund welfare programs. But as history shows, it rarely ends well.

Countries like Argentina, Zimbabwe, and Venezuela printed massive amounts of money to cover their deficits. The result? Hyperinflation. Prices soared, currencies collapsed, and ordinary citizens saw their life savings lose value overnight.

That’s why central banks like the RBI are cautious. Printing money may seem like a quick fix, but it quietly makes every rupee you own a little less valuable.

For Example,

Imagine a small village with ten families and ₹5,000 total in circulation. A piece of land in the village is worth ₹5,000.

Now, suppose one morning, ₹1,00,000 worth of new notes suddenly fall from the sky. Everyone feels richer. But when they all go to buy that same piece of land, they start bidding higher, ₹10,000, ₹20,000, ₹50,000.

Nothing about the land changed; only the amount of money did. Prices rise not because things are more valuable, but because money is worth less. That’s inflation in action: too much money chasing too few goods.

What It Means for You

You can’t control how much money your government prints or how many loans your bank gives. But you can control how your own money grows.

If the inflation rate is around 6-7%, and your savings account earns 3%, you’re actually losing value every year. The only way to protect yourself is to ensure your money compounds faster than inflation.

That’s where investing comes in, in stocks, mutual funds, gold, or real estate. Each of these helps your wealth grow at a rate that keeps ahead of inflation. The principle is simple: you can’t stop money from being created, but you can make sure yours doesn’t lose its worth.

What We Think

When you see how banks and governments create money, it’s clear that currency itself is just a tool; what matters is how you use it.

We believe financial awareness is your best defence against inflation and uncertainty. Understanding money creation isn’t just economics; it’s a reminder that discipline, not just income, builds wealth.

So next time you see your bank balance or hear about the RBI printing more notes, remember this: money isn’t just printed; it’s multiplied, moved, and, at times, quietly devalued. Your job is to make sure you stay ahead of that cycle.

Wrapping Up

Money, in all its forms, coins, notes, or digital entries, is built on trust. The system works as long as people believe in it.

Banks multiply it, governments manage it, and inflation tests it. But for individuals like us, the real question is how wisely we grow it.

So, don’t chase printed money; focus on creating value with it. Because at the end of the day, understanding how money works is the first step to making it work for you.

“You can’t get rich with a job.” It’s a line that’s repeated so often that it almost feels true. You hear it from friends, online gurus, maybe even at family dinners. Somewhere between your first salary and your fifth appraisal, it starts sounding believable.

But the truth is simpler. Wealth doesn’t depend on what you do for a living, but on what you do with what you earn.

Like Bruce Wayne said in The Dark Knight, “It’s not who I am underneath, but what I do that defines me.” And in a way, that’s how wealth works too, not from what you earn, but from how you build on it.

The Patterns That Actually Create Wealth

When we look at people who’ve built wealth over the past century, not the ones who inherited it, but those who built it from scratch, a few patterns repeat themselves. When you study them closely, the common thread isn’t luck or timing. It’s excellence. They became extraordinarily good at one thing. Whether that was designing, coding, trading, or building something from scratch, they mastered their craft until the world couldn’t ignore them.

It didn’t matter if they were entrepreneurs or employees. What mattered was that they turned their work into value. When you love what you do, you stay curious, you improve faster, and eventually, that expertise compounds. It’s what turns a regular job into a wealth-building machine.

We can think of Tim Cook. He wasn’t Apple’s founder, yet today, he’s one of the most respected and wealthiest executives in the world. This story breaks the myth that only entrepreneurs get rich. You don’t need to own the company to create wealth, but you need to be valuable enough that the company wants to keep growing with you.

The Real Advantage of Having a Job

Most people think of jobs as limiting. Fixed hours, fixed income. But if you look closer, jobs give you something incredibly powerful: stability, skills, and consistency.

Every paycheck is proof that your skill has value in the market. That stability gives you a foundation to invest, to experiment, and to grow. You might not have hundreds of people working under you like a business owner, but you do have something else: your money can work for you.

Your salary is your seed capital. Each raise, each bonus, each side income is a chance to grow that capital further. When invested right, it compounds quietly in the background while you keep getting better at what you do. That’s how wealth builds, not in sudden leaps, but through layers of discipline, time, and smart decisions.

Earning vs. Keeping

Here’s where most people go wrong. They think earning more automatically makes them richer. But even billionaires have gone broke.

Earning helps you build wealth, but keeping it and growing it is what makes you stay wealthy. If the pot has a leak, it doesn’t matter how much water you pour in.

The truth is, money has two jobs: to come in and to stay in. The first part is your career. The second part is your discipline. That means saving, investing, and spending consciously.

We often fall for comparing numbers instead of context. You see someone spend ₹1 crore on a wedding and think, “They’re wasting money.” But if their net worth is ₹100 crore, they’ve just spent 1% of it. If you earn ₹1 crore and spend ₹25 lakh on yours, you’ve spent 25% of your wealth. The same act looks different when you see it through percentages, not rupees.

That’s how real financial maturity begins when we stop comparing lifestyles and start understanding proportions.

One of the Simplest Ways Out…

If your job helps you earn, your money’s job is to grow. Every salary you get has two sides: what you spend and what you build. The idea isn’t to save every rupee but to use it wisely.

A good starting point is the 50-30-20 rule: half your income on essentials, 30% on wants, and 20% on investments. But here’s what most people miss: it’s not just about dividing your salary; it’s about understanding the value behind each expense. If your “wants” include things that actually enrich you, like a course, a good book, or a side skill that’s not wasteful spending, that’s future income in disguise.

The real trick is learning to look at your money in context. Don’t just see what you spend in numbers; see it as a percentage of your net worth.

If someone worth ₹1 crore spends ₹25 lakh on a wedding, that’s a huge 25% of everything they own. But if someone worth ₹100 crore spends ₹1 crore, it’s just 1%. Both spent big, but one made a dent. When you start viewing your expenses this way, you naturally become more thoughtful about every purchase.

And this shift from looking at money as numbers to looking at it as proportions changes how you think. Because wealth isn’t about how much you have, but how well you use what you already earn.

The Value We Really Have in Common

People who grow rich in jobs usually share one thing: they play the long game. They don’t chase every new opportunity or shiny distraction; they build slowly and consistently.

Look at someone like Aditya Puri. He didn’t start HDFC Bank, but he built its success, year after year, by focusing on doing one thing exceptionally well. His wealth came not from taking huge risks but from mastering consistency and decision-making.

That’s what your job can give you: a stable base, a growing skillset, and the means to build wealth quietly in the background. And when you combine that with smart investing and thoughtful spending, your wealth begins to grow even when you’re not actively working for it.

The Easy Plan

So here’s the simple plan, not a hack, but a mindset shift. Get really good at what you do. Be the person whose work becomes hard to replace. Every new skill or improvement compounds, just like interest in a savings account.

Then, build a relationship with your money that’s based on awareness, not guilt. Track what you spend, invest early, and let your money grow quietly. You don’t need to reinvent your career or quit your job to be wealthy; you just need to make both your skills and your salary work together.

And finally, play the long game. The results may not show up in a month or even a year, but they always show up.

Wrapping Up

Getting wealthy with a job isn’t about escaping it; it’s about using it right. Your job pays for your skills, your skills build your value, and your value grows your wealth.

It’s not magic, it’s math done with patience. Because over time, when you master your work, invest what you earn, and keep your expenses grounded, your job becomes more than just a paycheck. It becomes the engine that funds your freedom.

So the next time someone says, “You can’t get rich with a job,” smile. Because you’ll know that wealth isn’t about what you do, it’s about how well you do it.