“A rupee invested is a rupee doubled”

“The quickest way to double your money is to fold it in half and put it in your back pocket.”

By Will Rogers.

I remember the days when I could have a fritter for a mere rupee, I reminisce the days when I felt as if I am on top of the world with the reassuring weight of a twenty rupee note in my back pocket, and how can I forget the date when even the mighty, albeit ill-fated, one thousand rupee fell short in trying to cover a birthday treat.

Being a 90s kid, weathering paradigm shifts seem to have become the norm instead of aberrations, which isn’t a surprise considering, 90s kids have been part of a vigorously changing life-scape. Be it sports or technology or politics, views have been upended and the relevance of the word ‘constant’ has been reduced to moot at best. Being part of the generation, which was one of the last to embrace the beauty of playing outdoors in the lap of nature, and which was one of the first to wreck levels in Candy Crush Saga, I would be surprised if the exponential rise in the cost of practically everything we buy was lost upon us.

I opened my first saving accounts in the summer of 2010 and till date, I remember the sheer enthusiasm of the young kid who made a deposit of Rs. 500. But being the supremely lazy human being, I hardly bothered with it until a year later when my dad got my passbook updated for some reason. My 500 rupees had somehow gained ‘experience’ and had accrued interest of about 20 rupees over the course of the year and had become Rs. 520 i.e. a growth of 4%. At first, I was beaming like crazy, making dreams of earning money sitting at home (not unlike writing bull in my EVS exam and expecting accolades all over the world a.k.a A+, some habits die hard after all) but then realization decided to pay me a much-needed visit. It dawned on me, over the course of the same year, the price of Beyblades I used to buy had risen, the internet café hourly rents had seen an increment of 5 rupees and even the humble Vada Pav commanded a premium of 2 rupees owing to rise in costs of miscellaneous vegetables of a drought-hit nation, even though the onions were replaced with cheap cucumber slices (don’t judge, I am still salty). Overall, the net gain was that of a crestfallen face instead of beaming one, a phenomenon which hits me every couple of years even now due to an entity, which goes by the name of inflation.

But thankfully, gloomy clouds of dismay gave way to positive influxes of hope. My childlike inquisitiveness begged for answers to combat inflation and answers he did get. He found a savior in “Investment”.

A quick search on google defined investment as an action or process of investing money for a profit. In simpler terms, often hot-shot economists define this as making your money work for you. Now considering how often this phrase is thrown about so often, it isn’t a surprise people are still hazy about the various aspects and usability of investments, basically, they don’t have a clear understanding how to even go about investments in the first place.

Investments are typical of three types,

· Ownership Investments: These include stocks, real estate, precious objects like gold, and start-up businesses.

· Lending investments: To put it simply, you lend money someone or some entity and earn money when it is repaid with interest.

· Cash equivalents: The hard cash you have in hand or the sweet figure you see in your bank balance but not really earn any significant return on.

The type which works the best for most of us is ownership investments because they are much more hassle-free compared to lending investments and give a handsome compensation in contrast to cash equivalents.

And a significant crux upon which meaningful ownership investment is accomplished is the process of acquiring and building assets.

An asset is a resource or a property having a monetary/economic value which can produce some future economic gain, in simpler terms, it is basically anything a person owns. They are categorized under various factors such as:

· On basis of returns:

Depreciating assets: Things like cars and mobile phones which lose their value year on year.

Appreciating assets: Things like precious metals e.g. gold, etc., real estate and the likes which gain in value year on year.

· Convertibility:

Current assets: Assets which are readily convertible to cash like the balance in your bank account, stocks, short-term investments, etc.

Fixed assets: These need an elaborate procedure and considerable time to turn into cash e.g. real estate, machinery, plants, etc.

· Physical existence:

Tangible assets: Assets which we can feel and touch e.g. cash, jewelry, etc. All fixed assets are tangible.

Intangible assets: Assets which cannot be seen or felt e.g. Fixed deposits, stocks, etc.

· Usage:

Operating Assets: Needed for day to day transaction of business. This category includes cash, bank balance, inventory, plant, equipment, etc.

Non-operating Assets: Essential for the establishment of business but are of no use for day to day transaction of business e.g. real estate purchases to gain from its appreciation or surplus cash invested.

An asset is a vital tool for wealth creation, be it for large-scale enterprises or small children with little pocket money and the concepts of fruitful asset creation and sensible investments is vital in getting the maximum bang for the buck.

Gone with the wind, released in the year 1939, earned a total of $390 million which when adjusted for current prices comes out to be, $3.44 billion. There used to be a period from 1927 to 1966, when 13 rupees used to make one pound, a sharp contrast to today’s exchange rates which pegs 90 rupees as one pound. Even the humble Cadbury has seen a rise of 20 rupees over the years. But does the hard cash we have in hand magically increases its value? We all have heard the story of the grasshopper and the ant and learned the virtue of saving. But the virtue of this noble habit would be diminished if the two thousand rupees we have in our hand today is worth less than a rupee of today in future. It takes ample understanding to spot appreciable assets and indulge in safe investments to combat the vices of inflation, which is an unstoppable juggernaut fuelled on by the depletion of finite resources and the insatiable rise of demand. They say an idle mind is a devil’s workshop, and in a similar vein, money left idle is begging to be overspend, or worse, have its value turned to ruins like a rusted metal of yore. The chavvanis and atthanies tinkle only in the songs of the swashbuckling songs of the 70s.That’s the fate awaiting the notes of today, the ‘two thousand’ and the ‘five hundred’ unless they are utilized well. I guess it’s a marginally worse fate considering the most these notes could hope to do is crackle with age as they combat humidity and darkness in a forgotten safe.