Coffee can investing

There is a new book on making money , written by saurabh mukherjea who is the lead in ambit capital along with a few others ( pranab uniyal.. he was a colleague of mine way back in 2001.. from black belt to investment guru..wow!).

Here is a link to a video (Youtube) on a program they did with btvi.

There are some interesting things that they say on investing. But the most interesting thing is around cost of investment.

As you go through the video you will see that a 2% difference in cost of operations over 30 years is equal to a 25% reduction in portfolio value..wowza!

I had written an earlier post on using direct funds vs going through a distributor ( direct funds ) and how it benefits us significantly.. and the book reinforces my belief on changing at least some of my sips to direct funds.

There is of course an importance of the financial advisor, as long as they continue to give us the right levels of service ( somehow mine seems to have forgotten me ).

The other important part of the journey that they propogate is usage of etf ( exchange traded funds) which basically track the growth of the nifty. What they say is that with the new sebi laws the large caps have little to be able to generate more alpha ( premium) than the nifty. Hence it is better to go ahead and use an etf which with a very low cost of operations will generate better returns.

On debt funds.. which generate 9 % returns giving away 2% to the mf distributor is like a hara kiri.. and they suggest going in only for direct plans.

If i look at this logic..even an NPS can make a big difference with its extremely low costs.

These things.. these small 1% make a big difference to your goal planning.. and can make a retirement or a goal more comfortable .

Make the change.. read the book.. its simplefinancialsense

Thoughts welcome