India crosses France in GDP

Financial Independence, Uncategorized

MERRY CHRISTMAS!!!

A headline which caught my eye today and a cause for celebration for India and people of Indian origin was this report from the World Economic Forum site.

https://www.weforum.org/agenda/2018/10/the-80-trillion-world-economy-in-one-chart

The chart on this link gives such a concise view of how the break-up of the $80Trillion world economy looks like.

While US is still the largest economy at $19 trillion, China at $12 trillion, is closing in quite fast and is one of the reasons for the spat between US and China.

What needs to be understood that China has a huge population and even a small change in per capita can change the numbers for China dramatically.

Which brings me to India.  In one of my posts almost 6-7 months back I had written how the Indian economy can grow dramatically because of the things the government of India is doing in terms of Direct Benefits Transfer and for doubling of farm wages.  With India’s large and growing young population even a $100 increase in per person income, from $1700/ person, can cause us to cross Germany, Japan etc. in a matter of years.

One of the BigFive consultants had put out a report of countries in terms of their share of the economy in 2050.  And the top 3 economies had India in it. While we have only $2.6 trillion portion of the global economy we are still the fastest growing large economy.

Which brings me to the crux of this post….

While Warren Buffet is betting on the USA and I am not negating him…. I also do have some indirect exposure to the US market…..

I would think if you really want to grow fast, you need to invest in an economy which has the world’s largest democracy.  Irrespective of which government comes to power, the economy moves on……there might be some slow downs but India has both the brain power and the manpower to surge ahead.   Being a stable democracy there is a rule of law.  So companies do get stuck in legal hassles but things do get resolved

By 2030 we would have the youngest population in the world. That will mean the amount of consumption that can take place in this country will be unsurpassed.  With both men and women entering the workplace either directly or indirectly, the need for workplaces will grow and it will put pressure on our existing infrastructure.  Which means that the government will have to be investing in setting up new cities.  The Delhi-Mumbai industrial corridor – being built with Japanese collaboration – is going to sprout more than 10 completely new living and industrial areas.

To transport the population you will need to have airports, roads,  airlines.  To treat such a large population you will need hospitals, medicines etc.  There is no field where growth will not take place at amazing rates.

If you can take ownership of businesses via mutual funds or direct equity investments invest in India.  The growth is just about to begin and if you buy into companies at this time you can ride this growth.  If you want your wealth to grow faster than anywhere else in the world put your money in India.

To your financial independence.

Carpe Diem

How women in India can change the destiny of the country – part 2

Financial Independence, Uncategorized

Continuing where I left last, when more women come into the workforce there is money in more hands.
First this money goes to ensuring that the basic necessities of life are taken care of.

The good thing about basic necessities however is that once they are taken care off, there is not too much more that needs to be done , so once you have had three meals you can’t have one more meal during the day.

Once people have more money than they need to take care of their basic necessities they do 2 things – one they try to save and two they like to move up in life by doing discretionary spending.
When discretionary spending starts to happen the GDP growth starts to multiply. In India from the time the per capita rose from $1000 to $1700 one major trend that is seen – last year the growth of Air Traffic has been faster than the growth in rail traffic. The per capita is expected to in the next 7-8 years hit $3000/-.  That is considered the poverty line in countries like the US& Canada for a family of 5.  But adding $1300 per capita into more than 1 billion people can mean such a huge uplift for India.
Just with the addition of $700 per capita (from $1000) even though the Indian economy does not seem to be doing very well, still you have most Metro airports and all the Planes and flights which I have taken recently completely full. Whether it is low cost Airlines like Indigo and Go air or full service Airlines like Air Vistara or Air India you don’t see empty seats. There is a waiting list for cars and 2 wheelers.  People are wanting to move up in life.  They have aspirations to be better than what their parents were.

So what does this have to do with financial freedom….

If more women come into the workforce they will add to the per capita income. Once they take care of the part of the burden of the basic necessities of the house, then they will end up spending on better education and health of their children and better quality products for themselves.

If you see trends like these and you invest in countries like India, which have a such a young demographic, you can be picking gems which can make you rich many times over.  Invest through SIPs in mutual funds or invest in Emerging Market funds, but systematically go about investing in growth stories and the growth momentum can propel your finances into a different orbit…

Till next time

Keep identifying trends