The T-20 investment path

News: Parliament is about to come up with a bill banning crypto-currencies, which are today the most sought after investment option for today’s generation.

Why do people prefer to invest in new options like crypto currency?

Bank deposits returns are quite low with respect to other options-2.75% in a savings account or 5% in a fixed deposit.

-Interestingly, banks today are discouraging deposits with low rates as this is the only way they can               manage their balance sheets.

The RBI’s reverse repo offers around 3% making bank’s own deposit with RBI sub-optimal.

Everyone wants instant gratification and more so because one could lose a third as taxes, which makes  such savings option un-tempting.

A new culture nudges us to borrow more for satiating our immediate needs rather then to save for future.

The willingness to take risk in high return instruments. This is a major change we see today. Making money on a currency that has no underlying asset like a metal or other currency and is traded on faith is unique.

Unicorns have delivered excellent results. So instead of investing in the Nifty companies, the new age start-ups is where people likes to invest in equity.

Source: This post is based on the article “The T-20 investment path” published in Indian Express on 29th Nov 2021.