Power of CAGR
10 lac starting salary with 10% annual increment and 60% savings. Now watch how things change with changing CAGR of 12, 20, 25 & 35.
Last four columns show your income from gains and if it is in bold that means your income from gains greater than salary.
Power of compounding and power of DIY because only then you can dream to have 20% or more CAGR. With any mutual fund, PMS and advisory it will become almost impossible to get above 20%.
And watch the difference in outcome with change in CAGR. If you have question feel free.
If you are not aiming for moon you ain't going to get there. But if you are aiming for moon then even if you miss you will know that you tried and will be in much better place than not aiming for it.
Think Big. Plan to Achieve it. There is no other way.
With 35% CAGR as early as 3rd year you can earn more than your 9-5 salary even while cumulative savings are considered zero before that. Considering most of you have been working for years then it may be possible for you to earn more than your salary even in your first year.
You need to change some inputs to understand things that apply to your situation but it is doable.
If you have annual income of X and your cumulative savings are 3X then with 35% CAGR you will be earning 1.05X more than annual income in first year itself. Basic mathematics.
Focus on last row. 20th year.
By now if we assume 10% increment in salary kept happening then you will have salary of 61 lakh and you saved that year 36.6 lakh and your total savings are 3.44 Cr.
Magic -
With 12% CAGR those savings will turn into 9.8 Cr.
With 20% CAGR those savings will turn into 22.8 Cr.
With 25% CAGR those savings will turn into 40 Cr.
With 35% CAGR those savings will turn into 128.8 Cr.
Now tell us whether learning and paying to have better CAGR is worth it or not? Whether spending few hours a week are worth it or not if that can change 12% to 20%? Having mentor is worth it or not if that 20% can be 25% or heck even 35%?
See 10 Cr vs 23 Cr vs 40 Cr vs 129 Cr. Your salary is same. Your savings are same. Your CAGR is different. The only metric we keep talking about in tweets, in posts and in our videos. That is the reason you must always look at CAGR and CAGR only.
Some of you might be thinking it is unrealistic. But we ask you, based on what those CAGRs are unrealistic?
Because value investors holding things for 10-15 years say so? Or because Nifty does not grow that fast? Or May be because MF/PMS with all the expertise could not do it?
If you search answer for all those questions and apply common sense you will know none of them apply and there is no natural law which says you cannot have 20%+ CAGR.
https://t.co/X5twftcBUY
Do you believe with a process to select good stocks based on holistic view - FunTec approach of which you have seen many outcomes because we picked stocks following that approach more than 20% CAGR or many 30-35% is not possible?
For everyone who is disappointed that we didn’t finish Pakistan. I have only one question.
What exactly do you mean by “Finish Pakistan”? What do you expect to do?
Do you want to do a WW2 style Operation Sickle Cut, launch armored pincer movements, encircle Pakistani armies and annex Pakistan? Why on earth would you want to do that?
Do you want to add 300 million hostile people, some of whom already think blowing themselves up is their greatest purpose in life? How will you manage them?
Is that how you will finish Pakistan?
Or do you want to nuke them out of existence?
Because let me give you a reality check here. We won’t do that. We can’t do that. Indian citizens cannot morally contemplate, let alone sanction, nuking 300 million people. So that option is out.
Then Someone said, “Let’s split Pakistan into 5 countries”.
Now, Pakistan isn’t some Ikea Furniture that you can assemble or disassemble at your will. As hopeless they may be, they still have a functioning military and a working bureaucracy. They will do anything they can to keep the country together.
With all our might, with all our focus, we can exploit that Faultline, but it will take a lot of money and energy and 10-15 years. Are you ready to wait that long?
Some people said we should do a large-scale attack on all their air bases, military bases, Ports, Military HQ everything. Obliterate them out of existence.
Sounds nice if you are movie general.
In reality if we do that, Pakistan will launch nukes on Mumbai and Delhi. Simple. Because it will be their last resort and they will exercise it.
Obviously, we will retaliate and wipe them out of existence, but are ready to lose our 2 big cities and the lives of 20 million Indians as a price for taking out their military?
I don’t think so.
Finally, what is War? War is nothing but politics by other means. And War without objective is pointless.
Any battle launched should be with a purpose.
Our purpose in this strike was two-fold
1. Send a message to Pakistan that for every Indian your terrorist kills, we will kill 100 of your terrorists. We will take you out even if you are ensconced in the heart of your country. We will come after your terrorists like a wrath of God.
2. If Pakistan retaliates, not only can we handle them, but we will also hit and twist the knife if it comes to that.
We have achieved it. In fact, we have more than achieved it.
We have put the fear of God in the terrorists. Obviously, they will try again, but this time they know we will hit back.
And we have clearly shown Pakistan that we can penetrate wherever we want into Pakistan, while the maximum they can do is look up and shake their fists.
Some people also speak about India being diplomatically isolated.
In this entire exercise, if anyone has been isolated, it is Pakistan.
In the olden days, as soon as something bad from Pakistan happened, most countries used to descend on us, asking us to be restrained, calm, resilient etc.
This time not only did nobody speak, but they also allowed us three days of complete freedom of action where we stuck fear in the hearts of the Pakistani military.
So much so, they had to beg to us to stop.
In international diplomacy, no country will come out and say “Please attack someone else. We are with you” .
They will support you only when you are being attacked. The fact that nobody said anything when we attacked, is a diplomatic success in itself. Just that we don’t see it.
To summarize, as far as Operation Sindoor is concerned
1. We sent 200 jihadis to where they belong.
2. Took out 9 terrorist locations deep inside Pakistan
3. Attacked all major Pakistani Air bases, made a complete mockery of their air defence system.
4. Made them beg for us to stop. I mean if it is a wrestling match, the person who taps out first is the one who loses. Pakistan tapped out. Ergo, they lost.
5. Ensured Indus Water Treaty is now firmly in the dustbin.
6. Have given ourselves the freedom to attack Pakistan as soon as a Terrorist incident takes place.
If this is not a win for us, then I don’t know what is.
P:S: India wants to be an advanced country and has to provide for 80 crore people who are below the age of 30.
We have to focus on industrialization, technological self-sufficiency and agricultural modernization.
We have higher priorities than fighting pointless wars against a country who has nothing and can give nothing.
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-- 40-years ago when I told my family and friends I was going to be a stock trader, I was told all the reasons why I shouldn’t and couldn’t. It’s gambling, it’s not a real job, they said.
-- When I made my first million dollars, I was told I was lucky.
-- When I won the 1997 U.S. Investing Championship with a 155% return, I was asked... did you get lucky?
-- When I returned 33,500% in just 5-years with every year up triple-digits, I was told I was in the right place at the right time in a bull market (again luck, lol!)
-- When I landed Soros Management as my biggest paying consulting client, I was told I got a lucky break (again, luck? I must be the luckiest guy in the world… lol!).
-- When I was included in Jack Schwager’s Stock Market Wizards book, I was told that the best traders were already in Market Wizards 1 & 2. (I wonder if the they told Steven Cohen the same thing).
-- When I made my first $10million, I was told that there are many people who are richer than me.
-- When I made my first $20million, friends questioned and asked, “yeah, but are you happy?” They still ask that today. The answer is HELL YEAH! (Money is just a magnifier, if you're unhappy, money makes you rich and unhappy. If you're an asshole, money just makes you a rich asshole.)
-- When I told my people I was going to write a best-selling trading book, they said, what do you know about writing, you’re not a writer.
-- When I told people I was going to write a best-selling mindset book, they said, what do you know about mindset? You’re not a psychologist, you’re a stock trader (well, at least now I was accepted as a stock trader). I now have 4 best-selling books in 14 languages.
-- When I told people I was going to enter the 2021 U.S. Investing Championship, they said, it’s all downside, why would you risk your reputation? I won with a 343% return and broke the all-time record in the $1million+ accounts.
You see, there will always be people like this in your life; those who discourage, those who lack vision; the skeptics, the followers, and even those that truly care about you who are trying to protect you from disappointment. If I had listened to them, I would have quit and never accomplished the greatest achievements in my life, and I wouldn't be here today inspiring others.
If you listen to these types of people and believe them instead of believing in yourself, you will allow them to steal your dream and you will never accomplish what you are truly capable of.
Expect to be doubted.
Expect to be discouraged.
Expect your family to be scared of your big dreams.
Expect to be envied.
It’s all part of being exceptional. Embrace it, smile, and get back to the work of moving closer to your dream each day, little by little.
If you persist unconditionally, you too will amaze the doubters and earn the respect of critics. You will become the champion of your own life, and you will help change the world in a positive way.
Best wishes, love and blessings.
Have a wonderful day!
Mark Minervini
Help me inspire the world. Retweeet this post please.
#motivation #motivational #inspiration #inspire
21 Deductions a Taxpayers can Claim while Filing Income Tax Returns
1) Section 80C is one of the most popular and favourite sections amongst taxpayers. It allows a maximum deduction of Rs 1.5 lakh every year from the taxpayer's total income.
Some Investment / Expenditure are
Life insurance premium for the policy
ELSS funds
NPS Scheme
ULIP
Tax saving FD
PPF - Public Provident Fund Account
Senior citizen savings scheme
National Savings Certificate
Sukanya Samriddhi Yojana
Certain payments for purchase/construction of residential house property
Tuition fees
Post Office Time Deposit Rules etc
2) Section 80CCD (1B) Investments of up to Rs.50,000 in NPS.
3) Section 80GG – Income Tax Deduction on House Rent Paid
Section 80GG deduction is available for rent paid when HRA is not received.
a. Rent paid minus 10% of adjusted total income
b. Rs 5,000/- per month
c. 25% of adjusted total income
4) Section 80E – Interest on Education Loan
A deduction is allowed to an individual for interest on loans taken for pursuing higher education. This loan may have been taken for the taxpayer, spouse or children or for a student for whom the taxpayer is a legal guardian.
80E deduction is available for a maximum of 8 years (beginning the year in which the interest starts getting repaid) or till the entire interest is repaid, whichever is earlier. There is no restriction on the amount that can be claimed.
5) Section 80D – Deduction on Medical Insurance Premium
Claim a deduction of Rs.25,000 under on insurance for self, spouse and dependent children. An additional deduction for insurance of parents is available up to Rs 25,000, if they are less than 60 years of age. If the parents are aged above 60, the deduction amount is Rs 50,000
In case, both taxpayer and parent(s) are 60 years or above, the maximum deduction available under this section is up to Rs.1 lakh. From FY 2015-16 a cumulative additional deduction of Rs. 5,000 is allowed for preventive health check.
6) Section 80DD – Deduction for Medical Treatment of a Dependent with Disability
Section 80DD deduction is available to a resident individual or a HUF and is available on:
a. Expenditure incurred on medical treatment (including nursing), training and rehabilitation of handicapped dependent relative
b. Payment or deposit to specified scheme for maintenance of handicapped dependent relative.
i. Where disability is 40% or more but less than 80% – a fixed deduction of Rs 75,000.
ii. Where there is a severe disability (disability is 80% or more) – a fixed deduction of Rs 1,25,000.
7) Section 80DDB – Deduction for Specified Diseases
A deduction up to Rs.40,000 is available to a resident individual any expense incurred towards treatment of specified medical diseases or ailments for himself or any of his dependents.
In case the individual on behalf of whom such expenses are incurred is a senior citizen, the individual or HUF taxpayer can claim a deduction up to Rs 1 lakh
8) Section 80U – Deduction for Disabled Individuals
A deduction of Rs.75,000 is available to a resident individual who suffers from a physical disability (including blindness) or mental retardation. In case of severe disability, one can claim a deduction of Rs 1,25,000.
9) Section 80G – Income Tax Benefits Towards Donations for Social Causes
Donations with 100% deduction or 50% deduction depends upon the Trust. Donations above Rs 2000 should be made in any mode other than cash to qualify for an 80G deduction.
10) Section 80GGC – Deduction on Donations By a Person to Political Parties
Deduction under section 80GGC is allowed to an individual taxpayer for any amount contributed to a political party or an electoral trust.
11) Section 80RRB – Deduction on Income via Royalty of a Patent
80RRB Deduction for any income by way of royalty for a patent, registered on or after 1 April 2003 under the Patents Act 1970, shall be available for up to Rs.3 lakh or the income received, whichever is less.
12) Section 80TTB – Interest Income on Deposits for Senior Citizens
Deductions with respect to interest income from deposits held by senior citizens will be allowed. The limit for this deduction is Rs.50,000.
13) Section 80TTA – Interest on Savings Accounts
If you are an individual or a HUF, you may claim a deduction of a maximum Rs 10,000 against interest income from your savings account with a bank, co-operative society, or post office.
14) Section 80EEB - Loan interest paid on purchase of electric vehicle
Interest payable on loan taken by an individual from any financial institution for the purpose of purchase of an electric vehicle subject to certain condition. (Maximum deduction 1,50,000)
15) Section 80IA - 80JJAA - For Certain Business and Assessee
Depending upon certain conditions various deductions are available to the businessman
16) Section 16 i - Standard Deduction
Rs. 50,000 or the amount of salary, whichever is lower
17) Section 16 ii - Entertainment allowance
Actual or at the rate of 1/5th of salary, whichever is less [limited to Rs. 5,000]
18) Section 23/24 -
Municipal taxes on property paid when rent received
19) Section 24 - Interest on borrowed capital
Rs. 30,000/Rs. 2,00,000, subject to specified conditions
20) Section 57 - Any reasonable sum paid by way of commission or remuneration for purpose of realising dividend
Any reasonable sum paid by way of commission or remuneration for the purpose of realising interest on securities
Any other expenditure (not being capital expenditure) expended wholly and exclusively for earning such income
21) Section 57 ii - Family Pension
In the case of family pension, 331/3 per cent of such pension or Rs. 15,000, whichever is less
Remember to read the rules and keep evidence or proof ready before claiming any expenditure. Happy Filing and Hope you can save some Tax
#Tax #IncomeTax #ITRFiling #TaxTwitter
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