Financial Concepts Simplified

Now a days we have so many creative financial ballet dancers playing around that everybody is creating new names for the same old basic products.

You can do only 2 things in financial space.

You can either loan or you can Own.

All equity products mean you own the investment & Debt product means you loan the Investment.

So When you invest in PPF or provident Fund you LOAN your  money to Government @8.5 % or8.8%

when you make as FD you loan money to the banks @ 9% or whatever....

When you keep money in savings bank account you loan the money to banks @ 4%

this is very important point which normally people miss, when you are doing nothing with your money you are actually giving the money on loan to banks on which they make money.....

Why I am saying this is because if you keep the money in the Bank savings account it means you are making money for banks.so do not keep money in savings bank account........

 

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When you buy a share you pay money to OWN part of the company. which means you will get part of the money which company makes after

Selling a product  

Less: Expenses to make& market the product

Less: Salaries of all workers & managers

Less: Interest paid to all loan providers (normally banks)

Less : Government taxes.

Just thought this will be useful & simple.