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By:

Kaustubh Kale

10 September 2024 at 6:07:15 pm

Four Methods to Choose Investment

One of the most common questions investors ask is: “Which investment should I choose?” The real answer is that no investment is good or bad in isolation. A simple way to judge any investment is the RRLT framework - Risk, Return, Liquidity and Time Period. Before investing in any product, all four factors should be seen together. 1. Return Return is the reward you expect from the investment. It may come in the form of interest, dividend, capital appreciation or regular income. Naturally, every...

Four Methods to Choose Investment

One of the most common questions investors ask is: “Which investment should I choose?” The real answer is that no investment is good or bad in isolation. A simple way to judge any investment is the RRLT framework - Risk, Return, Liquidity and Time Period. Before investing in any product, all four factors should be seen together. 1. Return Return is the reward you expect from the investment. It may come in the form of interest, dividend, capital appreciation or regular income. Naturally, every investor wants good returns. However, return should be understood properly. It is important to look at the real intrinsic / internal rate of return (IRR) of every investment, especially when cash flows happen at different points of time. A product may sound attractive on the surface, but the actual return may be very different when calculated correctly. 2. Risk Risk is the possibility of losing money whether partially, fully, temporarily or permanently. In some investments, the risk is very low. In others, the value may fluctuate significantly in the short term. Direct stocks, equity mutual funds, gold and real estate can create wealth over time, but they need patience and the ability to tolerate ups and downs. On the other hand, fixed income products may offer stability, but they may not beat inflation over the long term. 3. Liquidity Liquidity means how easily you can convert your investment back into money when required. A savings account is highly liquid. Fixed deposits, mutual funds and stocks are reasonably liquid. Real estate may take time to sell. Liquidity matters because emergencies do not come with advance notice. Before chasing returns, every investor must ensure that enough money is available in liquid instruments for short-term needs and emergencies. 4. Time Period Time Period is the most important filter. The investment product should be selected based on when you need the money. If the money is needed within a few months or one to two years, safety and liquidity matter more than high returns. If the goal is ten, fifteen or twenty years away, growth-oriented assets like equity mutual funds, direct stocks and gold-related instruments can play a larger role. The longer the time horizon, the better your ability to handle short-term volatility. Goal-Based Planning This is where proper financial planning becomes useful. Make a table of your financial goals - home purchase, car, vacation, child education, child’s marriage and retirement. Write the amount required, adjust it for inflation and mention the time left for each goal. Once this is clear, choosing the right investment becomes easier. Investment Avenues Broadly, investment avenues can be divided into two categories - those that help beat inflation and those that mainly provide stability. Equities, equity mutual funds, gold and real estate help in long-term wealth creation by beating inflation. Your long-term financial goals should ideally be invested in this bucket - the one that helps your money grow faster than inflation. For your short-term goals, rely more on bank fixed deposits, recurring deposits, and debt mutual funds. Here, safety and availability of money are more important than high returns. A good investment is not the one that sounds exciting. A good investment is the one that fits your goal. So before investing anywhere, remember RRLT - Risk, Return, Liquidity and Time Period. When these four are aligned with your financial goal, investment decisions become much clearer. (The writer is Chartered Accountant and CFA (USA). Financial advisor. Views personal. He could be reached on 9833133605)

Fifty Years in White

On July 26, 1976 we arrived at the Naval Academy at INS Venduruthy, fresh engineering graduates from across India who had successfully navigated the demanding interviews of the Service Selection Board. We formed what came to be known as the E & L Batch of 1976 under the University Entry Scheme. Most of us arrived dressed in the fashion of the day - bell-bottom trousers, long hair and youthful optimism. The transformation began almost immediately. The hair went first, replaced by the unmistakable crew cut of military life.


For many of us, the cultural shock was immediate. We were told in no uncertain terms that life in uniform demanded discipline and obedience. Our days quickly filled with the rituals of naval training: uniform fittings, boots and shoes, and the dawning realisation that we were preparing to become officers in the Indian Navy.


The daily routine soon established itself. The day began at six in the morning with physical training, followed by academic classes and parade drills. After lunch came the seamanship practicals - learning knots, ropes and boat handling - followed by sports and personal study. The pace was relentless. At times we wondered what exactly we had signed up for. Some of us joked that even horses had the advantage of being able to sleep standing up.


Punishing Schedule

Yet within weeks we began to adapt. The whirlwind gradually became routine, and routine became habit. The Naval Academy shaped us profoundly. It instilled discipline, physical endurance and a sense of collective purpose. Looking back today, many of those memories still stir strong emotions. It was there that we were transformed from carefree youths into officers in the making.


Sea training followed, bringing us closer to the realities of naval life. On board ships we learned their anatomy, the functioning of departments and the demands of operational service. We worked alongside sailors, gaining practical experience and understanding the challenges faced by the men we would later command. This phase hardened us into seafarers, teaching us that leadership required not only authority but empathy.


Professional training came next. Engineering officers moved to INS Shivaji, while electrical officers trained at INS Valsura. These institutions prepared us to ensure the seaworthiness and operational readiness of naval vessels.


Our first operational appointments on ships or in air squadrons were unforgettable. We learned to operate in uncertain conditions where teamwork was essential and mistakes could be costly. These early postings were formative. They taught us the complexities of naval operations and the necessity of coordination between departments.


As our careers progressed, responsibilities steadily increased. We found ourselves managing operational tasks with limited resources, relying on the professional knowledge gained during training and the guidance of senior officers. Support from peers and trust from juniors were equally vital. In this environment we developed qualities that would define our professional lives: leadership, compassion, resilience and the willingness to take calculated risks.


Heavy Responsibilities

Promotion brought new challenges. Senior officers carried responsibility not only for missions but also for the safety and welfare of their crews. At sea, where isolation is common, the commanding officer becomes the professional anchor of the entire unit. Leadership required judgment, calmness and unwavering commitment.


Operational deployments often kept us away from our families for long periods. Yet the navy’s institutional support - from housing to schooling - ensured that our families were cared for. Transfers every few years became part of the rhythm of life. Packing and moving from one station to another broadened our horizons and enriched our experiences.


Mid-career education also played a crucial role. Some among us attended institutions such as the Defence Services Staff College, the College of Defence Management and the National Defence College, preparing for higher operational and administrative responsibilities.


Eventually, like all officers, we reached the moment when we had to hang up the white uniform we had worn with pride for decades. Many of us embarked on second careers in the corporate world, where the discipline and leadership cultivated in naval service proved invaluable.


In March 2026 we gathered in Pune to celebrate fifty years since our induction. The reunion was filled with nostalgia, laughter and reflection as families joined us in marking the milestone. As conversations stretched late into the evening, one sentiment emerged repeatedly.


If the navy were to call again, we would answer without hesitation. That, perhaps, is the truest measure of what the Indian Navy has meant to us.


(The author is a retired naval aviation officer. Views personal.) 

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