Aaditya Chhajed, CA, CFA

There are multiple investment options for Co-operative Banks and Societies. As per RBI Master Circular on Investments by Primary (Urban) Co-operative Bank and the recent amendment to the Indian Trust Act in 2017, Co-operative Societies can invest in many financial instruments. Traditionally, the funds which are in excess of the loans given are invested in fixed deposits of other co-operative banks or nationalized banks. The interest rate received on those excess funds barely matches the interest cost that the bank pays to depositors.   After the recent amendment to the Indian Trust Act in 2017, co-operative societies can invest in specified mutual funds. For simplicity, I have divided the deposits with a time horizon of 5+ years and less than 5 years.  1. Deposits with 5+ years time horizon Only deposits with 5+ years' time horizon should be invested in equity. Purely from the perspective of value addition; co-operative societies should invest some part (e.g. 10%) of depo...

Zooming Out: You should zoom out and see the big picture. If you're too close to the situation, you'll get entangled in things that don't really matter. And, they really shouldn't matter. Go too close and you'll get caught up with the noise at the signal.   While this is true for many aspects of life, let's discuss in the context of business and investing.  When you zoom out, you'll ask questions like;  Am I even in the right business? Does it even make sense to be in this business? Where is this business headed in 5, 10, 20 years from now? What need does this business serve? Will this need even be there 5, 10, 20 years from now? For example, an auto ancillary manufacturer, let's say a gearbox manufacturer may be very profitable right now; but if electric vehicles disrupt the internal combustion engine; will there be a need for gearboxes ten years from now?   And even if the need is there, how likely is it that my business will still be relevant fulfilli...

Investing anything time, effort, or money sacrifices short-term rewards for a long-term payoff.  Whether you are HNI or not, be it any type of investment, sometimes investors lose sight as to why they’re investing.  Goals-based investing offers a useful structure to map out concrete investment goals, prioritize them, build portfolios to meet them, measure progress against them, and make adjustments (if necessary) to stay on track. The benefits of setting goals extend to investing by improving investor behavior and increase the likelihood of financial success. What is goals-based investing? Goals-based investing is a framework to translate financial goals into  forecast future expenditures and  allocate money to separate portfolios  designed to meet those specific goals. An investment without a goal is like a traveler without a destination. SMART framework help establish clear goals. Prioritize goals based on necessity and time horizon: High-priority goals are th...

Reading Time: 10 minutes. Why are we so bad at separating luck and skill? Why are we so uncomfortable knowing that results can be beyond our control? Why do we create such a strong connection between results and the quality of the decisions preceding them? How can we avoid falling into the trap of the Monday morning quarterback, whether it is in analyzing someone else’s decision or in making and reviewing the decisions in our own lives? Poker vs. Chess Chess, for all its strategic complexity, isn’t a great model for decision-making in life, where most of our decisions involve hidden information and a much greater influence of luck. This creates a challenge that doesn’t exist in chess: identifying the relative contributions of the decisions we make versus luck in how things turn out. Poker, in contrast, is a game of incomplete information. It is a game of decision-making under conditions of uncertainty over time. The quality of our lives is the sum of decision quality plus luck. Von Neu...

“Greed is good” said Gordon Gekko in Hollywood movie “Wall Street”. Wealth and accumulating it is considered as an occupation of capitalists and is often seen in a negative connotation. I have heard stories of how parents forbid their grown-up kids from investing in the stock market, equating it with a den of speculation. Is the pursuit of wealth an endeavor, which is smeared with greed and negative karma. My profession includes investing in the stock markets - the temple of capitalism - gives me an opportunity to interact with different people, who are rationally expected to always keep maximizing their wealth. Everyone wants to get a slice of the wealth creation with greed and fear being an integral part of the ecosystem. So what is wealth building and how is it related to Financial Independence. What is this new cult “FIRE” (an acronym for Financial Independence Retire Early) all about? FINANCIAL INDEPENDENCE Wikipedia defines Financial independence (FI) as the status of hav...

I recently read the book 'Poor Charlie's Almanack - The Wit and Wisdom of Charles T. Munger ( famously known as Charlie Munger) . Warren Buffet would not have achieved success without Charlie Munger with him. This book is about the life of Charlie Munger, his approach to learning, investing, his speeches, and much more. The real joy of studying Warren and Charlie is not that one can learn a great deal about how to compound money at a high rate for an extended period- though this certainly is a nice side benefit! Rather, by absorbing their teachings, one will gain a far deeper understanding of the human condition, the state of the world, how to think rationally, and most importantly, how to better lead a life of integrity, happiness, and kindness (here's a hint: these characteristics are intertwined). This post is gonna be a little long (8 minutes read), so hang on.  My learnings from this book: Charlie Munger in his own words would tell you: Acquire worldly wisdom and adjus...

You may contact me in case you need to ask or tell me something. I am waiting to hear from you. Stay home! Stay safe! Thank you very much for your time! With respect, Aaditya Chhajed CA, CFA(US) All Levels Cleared, MCom E: chhajedaaditya@gmail.com M: +91-9404055222. Instagram: @chhajedaaditya  Aaditya is the founder of Aaditya Chhajed Financial Advisory Services, a Financial Planning and Wealth Management Firm. He loves helping family, friends, and, clients make better financial decisions.  He believes learning is perpetual.  He loves reading books, traveling around the world. He is a commerce postgraduate and Chartered Accountant. He has also cleared all levels of CFA(US) in the first attempt.    Disclaimer: Investors should seek the advice of their financial advisor prior to making any investment decision based on this report or for any necessary explanation of its contents. Future estimates mentioned herein are personal opinions and views of the author. ...