With the announcement of Union Budget 2022, the proposed <a href="https://cleartax.in/s/cryptocurrency-taxation-guide">Section 115 BBH in Budget </a>gave away a significant progressive and futuristic outlook of the government with respect to cryptocurrency in the country.The focus on digital innovation while promoting Blockchain technology touched upon the key points that are supposedly meant to help the industry create sustainable growth. The first step in that direction came with classification of cryptocurrency as virtual digital assets. As per the Finance Bill, the term <a href="https://www.mondaq.com/india/fin-tech/1164634/virtual-digital-assets-in-india-a-sneak-peek-into-india39s-regulatory-framework#:~:text=As%20per%20the%20Finance%20Bill,intentionally%20kept%20wide%20in%20scope.">virtual digital assets </a>includes both cryptocurrency and non-fungible tokens(NFTs) .

What Does The Government Say? 

The main question that arises is how does it impact a retail investor in crypto? <ul><li>Tax Deducted at Source will amount to 1% of the entire transaction amount.</li><li>Any profits made from sale of cryptocurrency will be taxable at a flat rate of <a href="https://cleartax.in/s/cryptocurrency-taxation-guide">30% w.e.f April 1, 2022. </a></li><li>Loss incurred from digital asset holding can not be set off against any other income.</li><li>The tax is on the basis of cumulative net gain on a transaction. For example, in case the profit from one cryptocurrency is ₹20000 and the loss is ₹6000, then the net taxable amount is ₹14000.</li><li>The only deduction to be allowed is the cost of acquisition. </li></ul>

Indian Crypto Investor Woes

India has the potential to become a crypto superpower, as it is emerging as one of the hottest internet markets in the world, with almost <a href="https://edition.cnn.com/2021/03/08/tech/india-internet-homegrown-apps/index.html">750,000,000 users </a>, and millions waiting to join the Great Internet Factory.Blockchain data platform Chainanalysis, published a report ranking <a href="https://edition.cnn.com/2022/03/03/investing/india-cryptocurrency-investing-future-hnk-intl/index.html">India second behind only Vietnam </a>in the list of countries seeing the speediest growth in the realms of cryptocurrency adoption. With no official estimates of the current cryptocurrency users in the Indian market, the unofficial number is more than <a href="https://edition.cnn.com/2022/03/03/investing/india-cryptocurrency-investing-future-hnk-intl/index.html">20 million crypto investors. </a>

THE FUTURE OF CRYPTOCURRENCY IN INDIA 

The <a href="https://time.com/nextadvisor/investing/cryptocurrency/donate-crypto-to-ukraine/">donations to Ukraine in cryptocurrency </a>have showcased the potential that these unregulated digital assets hold. With the ability to eschew bureaucratic red tape, crypto has safeguarded and funded the war from Ukraine’s side.However, the counters in Russia, have alleged that <a href="https://news.bitcoin.com/russian-prime-minister-economy-ministry-support-legalization-of-cryptocurrencies/">legalization of cryptocurrency </a>could save the country from the current dearth of funds and jumping the SWIFT ban that was imposed on the country. With an untapped potential and still looking into the mainstream world, the journey to become acceptable around the globe, is still a long way to be walked upon.

THE GLOBAL DILEMMA

With the announcement of Union Budget 2022, the proposed Section 115 BBH in Budget gave away a significant progressive and futuristic outlook of the government with respect to cryptocurrency in the…

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Cryptocurrency

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Money & Investments

to invest or not to invest?- the Indian crypto dilemma.

​Millennials and Gen Zers have an addictive new way to buy stuff that would look familiar to their great-grandparents. “Buy now, pay later” is a type of consumer credit that really got going in the 19th century when Singer sewing machines were sold for a “dollar down, a dollar a week.” But the modern fintech twist in “BNPL” is that it’s aimed at people making impulse purchases of fashion or jewellery or electronics rather than sofas or refrigerators. It’s delivered through apps that are wildly popular, leading to dizzying valuations of startups like Amazon, Zomato etc.

BNPL is the way? 

​Buy Now, Pay Later (BNPL) is a type of short-term financing that allows consumers to make purchases and pay for them at a future date, often interest-free. Also referred to as "point of sale instalment loans," BNPL arrangements are becoming an increasingly popular payment option, especially when shopping online.

Defining BNPL

​‘The India Buy Now, Pay Later Report 2021’ by ZestMoney gives an overview of the Indian BNPL ecosystem, global best practices, and the way forward for the industry in India, along with revealing consumer preferences and how Indian states took to BNPL.​The report shares insights such as while most of the customers (median) were in the 23-26 years group, BNPL emerged as the preferred option for people across age groups with the youngest customer being 18 years old and the oldest at 66. The number of millennial and GenZ customer base increased by 2X and 3X respectively.

India Buy Now, Pay Later Report, 2021

​If you have been using Amazon pay later, Flipkart pay later services, then please read ahead.​If you borrow from AmazonPay later account, they divide it between two lenders: CaptialFloat and Karur Vyasa bank. Now two loan accounts will show on your credit report which has reduced my credit score.​What most people don't realize is BNPL are like unsecured loans. Most confuse these for Credit Cards. Both have separate use cases. One spoils your credit history, the other builds it if used wisely.

​How BNPL is messing your CIBIL Score

Millennials and Gen Zers have an addictive new way to buy stuff that would look familiar to their great-grandparents. “Buy now, pay later” is a type of consumer credit that really got going in the 19th century when Singer sewing machines...

Using BNPL Services? Your credit score is being affected.  - Advisoira

As per the World Inequality Report, 2021, 50% of Indians hold no assets in their own name. Indians are incapable of generating wealth with the per capita is because of lack of financial planning.

One thing I like about us is that we know all about exponential growth and compounding, but none of us take it seriously when we consider investments. We just look for quick bucks that leads us to investing directly in harsh equity and the crypto market currently. This is, frankly, not the correct way to invest.The days of storing your savings under a mattress are over. Cash under your mattress can’t even keep up with inflation, let alone grow enough for retirement. Investing when you’re young is one of the best ways to see solid returns on your money.

Joys Of Compounding 

The first step in beginning your journey is deciding how much to invest. How much you should invest depends on your investment goal and when you need to reach it. One common investment goal is retirement. As a general rule of thumb, you want to aim to invest a total of 10% to 15% of your income each year for retirement.

Decide The Investment Amount

Post picking an investment option, it is important to craft an investment strategy depending on your saving goals, how much money you need to reach them and your time horizon. If your savings goal is more than 20 years away, almost all of your money can be in stocks. But picking specific stocks can be complicated and time-consuming, so for most people, the best way to invest in stocks is through low-cost stock mutual funds, index funds or ETFs.

The Investment Strategy 

<a href="https://www.investopedia.com/terms/d/diversification.asp">Diversification </a>is considered to be the only free lunch in investing. As a beginner investor, by investing in a range of assets, you reduce the risk of one investment’s performance severely hurting the return of your overall investment. You could think of it as financial jargon for “Don’t put all of your eggs in one basket.” It is integral in imbibing diversification as the soul of your portfolio.

Diversification Is The Key 

With great investment, comes great returns. Investment is not a chore but should be a habit and I feel that once it becomes a habit, it can make one a millionaire. We all know Warren Buffett, a…

Why do you need to start your investment journey in the 20s?

<ul><li>Much of what we come to call "luck" is actually the macro result of 1,000s of micro actions. Your daily habits put you in a position where “luck” is more likely to strike.</li><li>In order to get lucky, you have to remove the “black holes” (anti-luck) from your existence. You have to take actions to expand your personal luck surface area.</li></ul>

Luck Is Made Up Of Micro Actions

“Luck has nothing to do with it, because I have spent many, many hours, countless hours, on the court working for my one moment in time, not knowing when it would come.” - Serena Williams

In the movie Interstellar (slight spoiler if you haven’t seen it!), there’s a scene in which the main characters discuss the habitability of a planet on the edge of a large black hole.The protagonists realize that the proximity to the black hole makes life unlikely to exist on the planet—the black hole absorbed all of the “lucky” events that might have been the spark for life. The asteroids carrying the seeds of life were minusculeIn order to get lucky, you have to remove the “black holes” from your existence. You have to take actions to expand your personal luck surface area.

The Interstellar Impact

There's no luck on the sidelines—the arena is where it strikes. It's lonely and vulnerable, but it's the only path that bears real fruit. When faced with two paths, choose the path that puts you in the arena—where collisions happen, where luck can strike.

Get In The Arena

The idea that free time is bad is one of the greatest lies you’ve been told. In investing, it’s often said that cash is a call option on future interesting investments. Well, in life, I believe that free time is a call option on future interesting opportunities. When you have free time, you have the headspace to pursue new ideas and go down rabbit holes. Plan for more of it.

Schedule Free Time 

Everyone has a few negative people in their circle. They tell you to be realistic. They laugh at your ambition. They argue. Eliminate this negativity from your life. It's a boat anchor—a major black hole—cut the damn line and run away from it as fast as you can. Negative people are quite literally the anti-luck.

Ruthlessly Cut Negativity 

You should spend your 20s saying yes to almost everything. Saying yes puts you into uncomfortable situations that lead to new relationships, opportunities, and growth. These unexpected moments are luck-rich. Embracing them is how you capitalize.

Embrace The Unexpected 

We really need to normalize boredom. Some of your most creative moments come during periods of boredom. On a walk, in the shower, at a dinner by yourself. You’re bored, your mind wanders, your thoughts mingle. Bam! Insight strikes. Boredom creates luck. Go for more walks (sans technology), go for more drives, sit quietly and think. You’ll never regret it.

Creative Boredom Is The Key

20’s has been lot of conversation about luck and getting stuck in this hurricane of post pandemic chaos, this article really put me at peace. I hope it does for you too. 

20 ways to expand your luck surface area & create more luck

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Personal Development

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How to Get Lucky? 

<ol><li>The more models you have—the bigger your toolbox—the more likely you are to have the right models to see reality. It turns out that when it comes to improving your ability to make decisions variety matters.</li><li>By default, a typical Engineer will think in systems. A psychologist will think in terms of incentives. A biologist will think in terms of evolution. If we’re only looking at the problem one way, we’ve got a blind spot. And blind spots can kill you.</li><li>Charlie Munger summed up mental models “Well, the first rule is that you can’t really know anything if you just remember isolated facts.”</li></ol>

Learning To Think Better

<ol><li>The map of reality is not reality. Even the best maps are imperfect. That’s because they are reductions of what they represent. If a map were to represent the territory with perfect fidelity, it would no longer be a reduction and thus would no longer be useful to us. A map can also be a snapshot of a point in time, representing something that no longer exists.</li><li>When ego and not competence drives what we undertake, we have blind spots. If you know what you understand, you know where you have an edge over others. </li><li>First-principles thinking is one of the best ways to reverse-engineer difficult times</li></ol>

Core Mental Models 

<ol><li>Thought experiments are powerful because they help us learn from our mistakes and avoid future ones. They let us take on the impossible, evaluate the potential consequences of our actions, and re-examine history to make better decisions. </li><li>Second-order thinking is thinking farther ahead and thinking holistically. It requires us to not only consider our actions and their immediate consequences, but the subsequent effects of those actions as well. </li><li>Probabilistic thinking is essentially trying to estimate, using some tools of math and logic, the likelihood of any specific outcome. </li></ol>

Core Mental Models- Continued

<ol><li>Occam’s Razor, a classic principle of logic and problem-solving. Instead of wasting your time trying to disprove complex scenarios, you can make decisions more confidently by basing them on the explanation that has the fewest moving parts.</li><li>Hanlon’s Razor states that we should not attribute to malice that which is more easily explained by stupidity. In a complex world, using this model helps us avoid paranoia and ideology.</li></ol>

More Core Mental Models

The smartest people in the world use mental models to make intelligent decisions, avoid stupidity, and increase productivity. Let's take a look at how ...

Understand yourself and those around you.

to invest or not to invest?- the Indian crypto dilemma.

Using BNPL Services? Your credit score is being affected. - Advisoira

Why do you need to start your investment journey in the 20s?

How to Get Lucky?

Mental Models: The Best Way to Make Intelligent Decisions (~100 Models Explained) - Farnam Street

Gehna Kundra