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My Case Against Electric Cars
In a previous post I mentioned how it did not make financial sense to buy an EV for my use case even with all the government incentives. In this article I will explain what other factors affected my decision to buy an electric car. Before I begin, I want to mention that like most things in life, some decisions are very subjective and personal. Take the case of home ownership. Some prefer to own a house and settle in one place. Others prefer the flexibility of moving around and not having to worry about repairs and general maintenance of the house. We all know which makes more financial sense, still we might prefer one over the other purely because of our personal taste.
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Gasoline vs Electric Car Ownership Cost
The car that we currently own was manufactured in 2007 which we purchased in 2011 as an used car. It is now almost 15 years old. The time has come for re-registration. So I was wondering if I should go for the fitness test and get it renewed for another 5 years or if I should simply sell or exchange for a new car. Seeing how there is a lot of excitement in the electric car arena, I was wondering if I should go for it. Although battery EVs are sold on the premise that they save environment I don’t really buy that. No one really knows how much pollution is generated to build the car batteries. Excavating all the rare minerals, transporting and manufacturing of the batteries might cause a lot of pollution. It may not be CO2, it could be some other pollution we just don’t know yet and they still could be as harmful or more harmful than the green house gases. And lets not forget the human rights violation and child labor involved in excavating some of the rare minerals.
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DIY Newton's Cradle
It has been a while since I wrote anything about the projects I do with my daughter. Actually we haven’t built anything in a long time. I was doing some small cardboard projects but nothing to write home about. However, recently we built a newton’s cradle just for fun and I thought it might be an interesting project to blog about. I think my daughter came across Newton’s cradle somehow in one of her videos and she was explaining to me about this toy where balls would swing like a pendulum. I immediately understood what she was trying to explain and decided to built it.
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Have A Checklist
Whenever I notice that I need to do something routinely which has a bunch of steps based on certain conditions, I turn to creating a checklist. Having a checklist helps me immensely. If you follow a checklist you can avoid mistakes and complete the work quickly. Take for instance doing taxes. If I did not have a checklist, I am certain to miss something or the other and then will have to file a revised tax form. Of course when there are new entries in the tax form, or if your incomes have changed, I update the checklist. I have similar checklists for making backups of my media (photos, music, movies etc), laptop (code, libraries etc) and even for investing.
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Momentum Or Contrarian?
There are many investment styles, but I am generally in conflict with momentum investing vs contrarian investing. Sometimes I feel like I should be following the momentum style of investing. And most other times I feel like I should be a contrarian investor. If you don’t know those two different styles of investing, don’t worry I will give an explanation. Sometimes momentum strategy works better and at other times a contrarian style works better. Knowing which will work better at any given time is all together another difficult task. I am not really sure which one works best in the long term though.
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Financial Independence Trend
There has been a sharp rise in the F.I.R.E. trend in the recent past. For those who don’t know, F.I.R.E stands for financial independence and retire early. It is the new fad in town which I am also part of :). In the past, people searching for financial independence used to trend around 20 queries a day on Google search. It has more than tripled if you look at the data from the last one year. I wonder why so many are looking for financial independence. Perhaps COVID-19 and the resulting work from home culture are to blame. Or may be the sudden rise in wealth because of the recent stock market bull run is the cause. I have no idea, but people seem to be more interested in F.I.R.E in the recent past more than before. Or at least that is what Google trends is indicating.
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The Time I Wished I Was Working
In the 4 odd years since I retired, I never felt like I was missing out on my salary, except for during this period. The stock markets are falling and RBI has started hiking interest rates. Which means that NAV of both debt mutual funds and equity mutual funds are falling. That only means one thing – invest more! Unfortunately since I don’t get salary or any other income anymore, I have to sell some mutual funds and buy another. Normally I do this by selling the mutual funds that are gaining and buying the mutual funds that are falling. Here I am not talking about individual funds. I am talking about the type or category of mutual funds.
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How Is Your Portfolio Doing?
When ever the market falls, people are curious about my portfolio. They want to know how my portfolio is handling the crash (according to them). I shrug my shoulders and reply “same old”. Yes, that is pretty much my attitude whether the market is going up or down or under. The portfolio is doing exactly what it is supposed to do. Actually, to tell you the truth, the market is certainly not crashing. It is just a correction, at least so far. May be if it falls a lot more from here, I may call it a crash.
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Impact Of Repo Rate Hike
In the previous post we discussed about inflation and how it can be tamed by central banks. One of the ways to reduce inflation is by reducing the amount of money people spend. This can be done by increasing the rate of interests on loans or by making safe investments so attractive that people will save money in banks instead of spending on things. Think of it this way – if your home loan EMI increases, you will have less to spend on other things right? Alternatively, suppose you don’t have any loans, but you are a saver. Then if the FD interest rate went up from 5% to 6%, you might save more instead of spending and causing inflation. That was a very simplified explanation of course, but lets just go with it.
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The Curious Case Of Inflation
RBI has finally increased the repo rate after inflation has been stubbornly high for more than three quarters. I was expecting this to have happened sooner, and yet they were faster than the US central bank. Inflation in the US has been out of control for a very long time now and yet the Fed has not taken any action. Their reasoning for the longest time has been that the inflation is transitory and will eventually come down without any rate action. Why is it transitory? The explanation was that the inflation was due to decrease in supply and not due to increase in demand and when the supply catches up with the demand the inflation should disappear. So far at least that was not the case and Fed has been printing money and keeping the interest rate low. What a mess.
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