Crypto markets continue to scale as Bitcoin leads the charge 📈

Hola folks!

Happy Monday! Hope you guys are keeping well and warm as mercury continues to dip across the country. Offering a warm hug in the cold weather are the soaring markets. The global crypto market, the Indian stock market, and gold prices in India seem to be doing well. 

These are exciting times for seasoned and potential investors alike. Read today’s newsletter to learn more about mutual fund taxation and financial goal setting and budgeting to create a personalized portfolio-building strategy for you. We will also fill you in on the movers and shakers of the global crypto markets last week. 

Let's dive into the newsletter now.  

Are you wondering how taxes are calculated on mutual fund gains and losses and curious about what factors could impact your tax liability? Click on the link below to learn more about mutual fund taxation. 

The video will help you understand the impact of different holding periods and different scheme types, complete with practical examples. Additionally, it also talks about tax-saving schemes offered by mutual funds, such as ELSS (Equity-Linked Saving Scheme). 

Watch the video now to reduce your tax liability!

Portfolio Building in your 20s and 30s - Part 3

We started this series two weeks back to empower our readers by helping them design a portfolio that will address their financial needs, goals, and aspirations. We understand that when it comes to savings and investing, there is no one-size-fits-all. 

Last week, we talked about net-worth estimation and how to track your spending. We hope you have estimated your net worth and now have a clear understanding of how much money you have and how it is flowing in and out of your account. 

If you have a positive net worth, you are in a reasonably good position, but there is no need to panic if you have a negative net worth. A negative net worth simply means you either have availed debt or have borrowed money from your friends or family. People with a negative net worth will have to work considerably harder towards paying off their debt at the earliest. 

Whatever your financial position, the steps mentioned below will help you realize your financial goals. 

• Set SMART financial goals

SMART stands for Specific, Measurable, Achievable, Relevant, Time-bound

Ask yourself the following questions before setting your financial goals: 

What do you want to do with your savings?  

Is your goal to pay off debt? Or Are you saving to buy a house? 

Or, are you saving to retire at 60 years? 

Or, are you saving to be financially independent? 

The list goes on. You can start by putting your aspirations and dreams into a list. While some might feel outrageous to you now, your financial plan could help you work towards your long-term goals however big or small they are. 

You can put your money to work towards your future by setting SMART financial goals. 

Here’s how to get started creating your SMART goals.

Specific: Your plan needs to be concrete and detailed 

Measurable: Create a system to measure your progress

Achievable: Set realistic targets and goals 

Relevant: It is your financial plan, thus the goals should be something you care about. 

Time-bound: Set a time frame and keep yourself accountable to your timeline. 

Setting concrete, realistic goals and reminding yourself about them periodically may keep you motivated and accountable so that you can stick to your budget. Additionally, you will make smarter short-term decisions whenever possible to invest in your long-term goals. 

But it’s important to understand that your goals aren’t static. When your life goals change, your financial plans should also be adjusted. 

Once you have set your goals, creating a budget and sticking to it will help you achieve your goal. Here is how you can budget effectively. 

• Creating a budget

Making a budget can help you understand what you can afford to spend and where you should be saving.

An excellent method of budgeting is the 50/30/20 rule. To use this rule, you divide your after-tax income into three categories.

1. Essentials (50%)

2. Wants (30%)

3. Savings (20%)

The 50/30/20 rule is a simple way to approach your financial goals.

No matter what financial goal you’re working towards, it’s essential to have an updated budget and plan to achieve it. For example, if you’re planning to buy a home, you might reduce your rented house decoration expenses, your shopping expenses, and your eating out expenses to save more. This will help you achieve your dream of owning a home faster. 

What to include in your budget? 

If you’ve put together a budget before, you’ve considered the basics like rent, debt, and groceries. But what other expenses should you consider? 

It’s crucial to think about the many different costs you could incur during any given month. When updating your budget, you should include rent or mortgage, groceries, emergency funds, dine-out and leisure, household maintenance, subscriptions, travel, medical expenses, commute costs, shopping and personal care, etc. 

Think hard and work on setting the SMART financial goals for you. Once you have set your goals, start with setting a monthly budget for you. You can use the 50/30/20 rule while setting a budget for you. 

Pro tip: If you have failed to stick to your budget in the past, after setting your budget, break your monthly budget into a weekly budget. This will help you keep a close track of your spending so that you can avoid overspending at the start of the month. 

Work on these tasks in the coming days. We will be back with ways to save for emergencies and ways to help you pay off your debt next week. 

Crypto markets have made a strong comeback, witnessing one of the strongest price gains last week, in a rally being led by Bitcoin's spot ETF approval expectations. BTC led the broader markets as spot purchase activity pushed prices above $44k for the first time in over 18 months. Blackrock's spot ETF application got its $100k seed funding announced and the speculation of approval gained steam, sending the broader markets higher with the overall crypto market cap reaching almost $1.6 trillion. 

BTC continued to lead ETH in price action, but there's some rotation of capital happening into select altcoins as well. Over the weekend, we saw some profit booking along with liquidations, in both the major tokens bringing prices back to just above $42k for BTC and $2.2k for ETH. 

Positive developments from the traditional finance space came from Europe as Societe Generale’s Forge, announced its new euro-based stablecoin, EUR CoinVertible (EURCV). They also reported issuing their first digital green bond, worth $11mm as a security token on the Ethereum public blockchain. 

In India, after an enquiry in parliament, the government informed that as many as 28 Virtual Digital Assets (VDA) or crypto service providers have registered themselves with India’s Financial Intelligence Unit (FIU). One of the biggest announcements came from Coinbase, which announced it has updated its decentralized wallet, adding a low-cost way for users to instantly send money to each other through messaging apps as it seeks to broaden the adoption of crypto assets.

For the broader crypto markets, it was a sea of green as the rising tide of Bitcoin lifted all boats, while there was token-specific development resulting in outsized returns! 

In the large caps, Solana's SOL blasted past $70 as network activity and TVL continue to surge, with Solana ecosystem airdrops off to a great start with JITO! 

DOGE has a new meme token competitor in BONK, from the Solana ecosystem almost doubling last week! 

Other ETH competitors also continued to gain steam with Avalanche's AVAX, Polkadot's DOT, and Cardano's ADA leading the charge, as whale buying activity added upward pressure on prices. 

Among smaller cap tokens, BTC dependents like STX and ORDI had outsized moves as they represent a broader use case for the Bitcoin network. 

• BTC $42,358 ⏫ 1.58%

• AVAX $36.14 ⏫ 58.59%

• ADA $0.5597 ⏫ 36.00% 

• ETH $2,247  ⏬ 0.51%

(All data here is as of 3.15 p.m., 11 December, 2023)

Before we conclude, here’s a quick look at some important news from around the crypto world.

• The total amount of capital locked or staked across all decentralized finance (DeFi) protocols reached $50 billion on December 5 for the first time in six months as the value of underlying assets surged and investors sought to secure a yield on their crypto holdings. Read more here. 

• India is unlikely to bring a crypto or Web3-specific legislative bill anytime soon and perhaps up to the middle of 2025, said Jayant Sinha, Chair of the Standing Committee on Finance in Parliament while answering a question during a CoinDesk interview at India Blockchain Week in Bangalore about when India could see a Web3-specific bill. Read more here. 

Charlie Munger: The Complete Investor

By: Tren Griffin

The investment philosophy championed by Charlie Munger, Berkshire Hathaway's visionary vice chairman, and Warren Buffett's close financial partner, succeeded in outperforming market indices over long periods. What’s more, Munger was convinced that any investor could do the same as we’ll find out from this book which offers a short introduction to value investing and a peek into the mind of the great investor. 

Munger's system has steered his investments for forty years and has guided generations of successful investors. This book details the essential steps in Munger's investing strategy, condensed here for the first time from interviews, speeches, writings, and shareholder letters, and paired with commentary from fund managers, value investors, and business-case historians. 

How Munger’s investment philosophy derived from Benjamin Graham’s value investing theory is discussed in detail in this book. This book is not simply about investing, it is about cultivating mental models for your whole life, but especially for your investments.

Before you get on with your day, don’t forget to flex those brain muscles with our weekly crypto crossword.

That’s it for now. Thanks for sticking around.

See you later, folks! 👋

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