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Does Insurance Increase Risk?
Just a few days ago I wrote a post on risk and consequences in a philosophical tone. But then I came across this TED talk and realized there is a physiological aspect to it as well. Well, the talk was really about the “counterintuitive psychology of insurance”, but it seems like insurance and risk are sort of interrelated. When I say risk, I will use the Wikipedia’s definition so we are all on the same page because risk has different definitions when used in different contexts and may even mean different things to different people.
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DIY Projects
In an earlier post I talked about how we try to do repairs where possible and upkeep things to extend the life of some products. As an extension of that post, we also wondered how we could possibly cut costs by doing some things ourselves instead of buying stuff. This again while it seems like a frugal activity (which it is) also reduces the environmental impact. I know I am talking a lot about environment without even having a degree in it. Well, my life partner has a Masters degree in it (literally).
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Downside Risks And Consequences
For every decision we make, there is a possibility of some upside and downside risk. Take for example the decision to eat that yummy cake. Well, the downside risk is clogged arteries and heart attack perhaps. Or may be there is an increased chance of becoming diabetic. These are all long term risks right? So who cares. What about the upside? Well you get to enjoy the food and put your mind in a blissful state and you are in good mood perhaps for the rest of day at best. The upside is really short term. Now the question is whether I should have the cake or not. How do we go about it? One way is to consider the short term and long term consequences. But is so hard to visualize something that will happen far into the future. Why can’t I enjoy now? May be I won’t live that long to see the ill effects of my actions. That is one aspect of risk.
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What Is With The Index Fund NFOs?
Have you seen the number of NFOs being launched my mutual fund houses in the recent past? What happened? I am not really sure why, but in the last few days my inbox has been receiving all kinds of emails about a new fund offer (NFO) all of which were are for index funds or ETFs. Seems like passive investment is the vogue these days. How did it come into fashion all of a sudden? May be the fund houses think that active funds will not perform well and want to launch some passive funds. Perhaps they wanted to help investors make money. I am just kidding of course.
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Our Children's Future Will Be Different From Ours
As parents, we always want the best for our kids. Almost every parent thinks this way irrespective of their background. But how far into the future can we see and make a good enough prediction for our children? After all, our predictions will be based on our experiences which is basically something that happened in the past. How much does the past experience help in predicting the future outcomes? Every generation has a disconnect with the next generation in terms of how they see the world and how they perceive the future. That is very strange given that we all share the same world. How is it possible for the next generation to see the world differently from us?
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The Market Scare
There is a lot of talk about how markets are crumbling all over the world. I have no idea what they are talking about. We barely corrected 10% from the peak if you take Sensex into account. That is a normal drop one would expect from the markets in any given year. I don’t understand what the excitement is all about. A 10% drop is peanuts in my opinion. But more importantly why would one look at the drop from the recent peak? Isn’t investing in equity all about the long term view? What happened then? These very same people don’t seem to be too concerned when the markets were moving up by 20-30% in a short duration. All this confuses me quite a bit.
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Buying Stuff
In the past, my buying pattern used to be like this – Hmm, it has been a couple of years since I purchased my last laptop / phone / insert some tech gadget here, I think it is time to upgrade. Let me see what the latest and greatest available technology is today in the market. Core i7 with 4 cores and nVidia graphics card is the latest. What is a good laptop brand? Ok, let me buy it. Done! Do you see any issues with this kind of thinking? Well there are a lot of things that are wrong with what I just said there.
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Why I Don't Have New Year Goals Anymore
I am the kind of person who really enjoys setting up goals and trying to achieve them. So every year before the start of a new year, I have a couple of goals that I’d like to achieve that year. Usually one goal is about health and fitness and another goal can be anything. This has been the case since 2008. But lately, I have stopped making new year goals. Now my goals are not aligned with the years any more. I just make a goal when I feel like and have an approximate target date and try to execute as best as I can.
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Year In Review – 2021 Net Worth
It has been a while but I just realized that I did not do my net worth analysis as part of my year in review series. So here we go. I am doing the net worth calculations using the very basic formula for net-worth which is basically
...continue readingassets - liabilities. Some don’t agree with that formula, but I will continue to use it since that is what I have used in the past. If I change the formula now, then there will be discontinuity in the numbers. Moreover, since I don’t publish any numbers, it does not matter what my net worth really is. It is only to show how it has grown over the years. My retirement is in no way dependent on my net worth. It is only dependant on my corpus of investments (debt MFs and equity MFs). Real estate is not an investment since I live in it. -
Repairs and Upkeep
Over the years I have been doing some repairs and upkeep of various things at home. Most of the things are simple and you probably already know them. But I thought I will just list some of the things I learned. My first piece of advice is that if something breaks, try to repair instead of replacing it. Most likely you are capable of repairing. You just don’t know it yet :). The internet is full of helpful people giving excellent advice on how to repair. What is the worst thing that can happen if you don’t know how to repair? You will break it further and then you can replace it, which is what you were planning to do anyway. You might have wasted a couple of Sunday afternoons trying to repair, but the knowledge you gain and the fun you have putting things together is amazing.
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