Budgeting basics

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Evolution of Money - Barter system

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As Humans have evolved over time, Money we transact in exchange of goods or service is also evolved. We will see in detail why was there need to go other system. Barter System: Barter System was in use as early as 6000 BC introduced by Mesopotamia and it was improved by Babylonian's. Bartering is trading services or goods with another person when there is no money involved. If you ever traded 'abc' object in return of 'xyz' object, you have bartered. Advantages: You dont need money to barter. you do not have to part with material items. Instead, you can offer a service in exchange for an item It is flexible. Anything can be traded for anything.  Disadvantages: The desired item only has the value in this medium of exchange. For example, you desired to have apple, you will transact only with the person who is willing to exchange apple. Item exchanged is not quantifiable. Example: 10 apples cant be traded for a single sheep/goat. It was long tedious process...
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Unfair Investment world

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If I tell you that investing is all about roses and sunshine then I would be lying. This article will tell you how unfair investment world is. Charlie munger, the second man whom I admire most after Warren buffet, once said that to be successful you just don't have to be stupid. They achieved this by sticking to their circle of competence . The advice can be applied to the stock market investing. To be successful in investing, you need to avoid big losses. Risk management is important when you are putting your hard earned money at stake. Let me put what I mean through numbers. Numbers won't lie and this truth has been hidden from most of the retail investors. If you lose 10% of your investment, you need 11% of the returns just to breakeven(no loss, no gain). And this keeps getting worse as the loss percentage increases. For 25% loss in your portfolio, your investments should return 33.33% to breakeven. A 50% drop in your portfolio should provide 100% return to break...
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