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Cont...  Why should you avoid LONG-TERM DEPOSITS with banks ?

So in my previous post, I talked about Future value concept. In this post, I’m gonna talk about Present value concept.  

2. Present Value concept:

In simple words, This concept discounts future return in today’s time. Let’s say you invest $1000 in a Long-term loan in Bank-1 which will give you a return of $2000 in 10 years or $1000 in a Long-term loan in Bank-2 which will give a sum of  $1500 in 5 years.

Which option will you go for?      

It might seem to be a similar kind of offer but it isn’t. Option-1 gives you 7% p.a return whereas Option-2 gives 8% p.a. But If we follow present concept and discounts the sum with a certain rate(which can be referred as return on capital), for example, say 5%.

So to make it a bit clearer, I also included two more examples. The Ratio is basically the comparison of NET value and TIME PERIOD. RATE mentioned on top is the actual rate of return but for comparison, the discount rate is equal to 5%. Higher the ratio, the more will be the rate of return.  

TIP #1.  Try to merge both Future and Present value concept.

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Why should you avoid LONG-TERM DEPOSITS with banks ?

I have just started studying Finance and I came to know some cool concepts.There are concepts called Present value and Future value of money concepts, which excited me. So basically Future concept tells what’s the value of money after a period of time due to Inflation & Present concept discounts the future value of money through Discounted rate; which basically can be referred return on capital.

1. FUTURE CONCEPT:

In simpler terms, This concept tells us about the value of money after certain time and impact of Inflation rate on that. We might have heard the phrase from elders that when “I was young, I could buy loads of things from $1″, but now we can’t just because the value of $1 is too low.

For instance:  Let’s say average inflation rate of U.S. in next 10 years will be 5%. Then the value of $1.ten years from now would be $1.63.You can verify via this site.

So what if You invested in some 10-year bond giving you return close to the inflation rate then you might technically not earn much. Like

So even if you get a great Rate, it doesn’t mean you will get the profit. As you can see the value of $5000 after 10 years is equal to $8144 but interest earned might be twice as initially invested but is not twice as the value after that time.

So always invest by considering different aspects.

To be continued....

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Narendra Modi ~ The man who can change the India.

Image source: google

Modi ji is currently Prime Minister of the world largest democracy, India.

Modi ji is my idol. I’m his supporter and fan. Ironically, 2 years ago, I didn't know much about this iconic person. So it all starts with 2014 elections in India, where he came into the power by a clear majority. Most of the person who backed him in elections were Lower Middle class or Middle-class people along with people related to Business sector. This was all due to his remarkable work as a Chief minister of Gujrat for 10 years and making Ahmedabad as one of the industrial hubs in the India.

Image source: google

He is that person who is just focusing on a single aim and that’s ‘CHANGE’!   He started by addressing Youth Power of India followed by empowering them through Make in India programme. From starting Swachh Bharat Abhiyan to spread a message of health and sanitation to the upliftment of the female in India through  Beti Bachao, Beti Padhao: Caring for the Girl Child. 

Image source: google

Moreover, Connecting with people in his unique style is always been his add-ons. From International Yoga Day to Mann ki Baat radio programme, he has used almost every platform to connect to India’s population.   

Economically, He added tonnes of money through Foreign direct investments(FDIs) in India’s economy.Ceo’s of world most successful companies visited India and planned to work with him to make India a better place. His most recent step; Demonetisation, to eradicate Black money out of India’s economy was a remarkable step. In a democratic country with world’s second largest population, a step to void the 86% of the country’s currency within few hour’s was a bold step. 

Image source: google

People’s criticism about taking such step up to an extent is acceptable but now they are just being pessimistic. It’s just not about taking out black money, it also aims for a ‘less cash economy’. A number of users of banking facilities have just skyrocketed to a huge number. That’s remarkable as it changed the way how it used to be before in just 50 days, it’s a human tendency to resist change so it’s just an obvious reaction. He took a lot of steps and I support him but my father doesn’t support demonetisation, that’s his point of view. 

I believe in democracy but not completely as it gives you permission to say whatever you feel like but it should be in a presentable manner. The other day,  I heard an interview of New Delhi’s Chief Minister, Arvind Kejriwal ji in which he was addressing his Prime minister as a thief or corrupt (exact word: ‘chor’).  It’s not acceptable as no one can disrespect or say such things about anyone, especially about Prime minister, no sir. Like no one can disrespect a Queen’s decision in U.K., it should a similar kind of rule. No one is stopping anyone from saying anything just be humble enough to put across your point of view. 

The only reason why I love Modi ji is, he’s not only a great leader but he’s a great influencer who can make people understand his point of view in simple terms. We had enough of economists and IAS’s as leaders now it’s a time for a change. If the country is willing to listen a Chai vala (tea seller) and he’s doing well then YES, I will vote for Modi in 2019 elections.

@NaMofanforever              

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The journey from 'nowhere to somewhere' is much better than the journey from  'somewhere to anywhere'.

M00N

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I would rather be 'the moon' than 'the sun' in your life.

M00N

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I would rather prefer 'can't' then 'don't'.

M00N

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Trip to Venice

view from RIALTO BRIDGE 

Trips are always beautiful, memorable, amazing, exciting, etc., but mine was a bit different because I was travelling by myself. There are few things that made it different like meeting people from different culture and listening to their experiences about life.

For instance, I met a Brazilian guy who lives in Dublin and was there to collect his Italian citizenship. Isn't it beautiful to hear strange stories?

Venice isn’t just famous for water alleys but also for its rich artwork and history. Churches in Venice are one of the top attractions.

Here's what I planned,

Things to do in Venice

Isola di San Giorgio Maggiore

Casino Venier

Scala Contarini del Bovolo

I Gesuiti

Santa Maria Della Salute

Orsoni Colour Library

Sala San Marco Biblioteca

San Michele Cemetery

Casa di Tintoretto

Basilica di San Marco

Rest of my journey was by exploring each and every corner of Venice. Though I haven't seen every bit of Venice intentionally because it's definitely not a one time visit place. 

Where to live? 

I lived in generator hostel because travelling alone is a bit depressing if you don’t see or meet people quite often. Living in a hostel is cheap and exciting, I really made a lot of friends.

Don’t forget to carry:

Universal Adapter

Currency card or passport 

Camera 

 Battery Backup

Let yourself be lost on beautiful alleys of Venice and capture memorable moments. 

Alleys as beautiful as Imagination. 

So, go and explore amazing, beautiful and peaceful Venice and please share your experiences of different trips.

Wish you a very Happy New Year :)