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Basic personal finance math 

Zerodha Varsity
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One thing that discourages most people from starting their personal finance journeys is that they get intimidated by all the numbers. That's a travesty because most of the math you need to know about personal finance is straightforward. In this video, Karthik, explains how to measure mutual fund returns and the time value of money. By the end of this video, you will be relieved that this isn't all that complicated and be a little more confident.
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3 окт 2024

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Комментарии : 100   
@prathapkrissh350
@prathapkrissh350 8 месяцев назад
The CAGR calculation formula is incorrect, please correct it to [(Ending value - Starting value)^(365/number of days)]-1. The values are swapped while subsitution in ending value and starting value for CAGR. For the stock B example in CAGR, which has a time period of 791 days, 364 days is substituted wrongly. Please consider correcting these in the video
@varun0904
@varun0904 7 месяцев назад
I think you meant (Ending Value/starting value). Otherwise the units don't make sense.
@ashokwadhwani996
@ashokwadhwani996 5 месяцев назад
Correct CAGR formula is [Ending Value/Initial Value]^[365/No. of day] - 1
@souravdutta8813
@souravdutta8813 4 месяца назад
It is still incorrect. The correct formula for CAGR is [{(Ending value/Starting value)^(No. of days/365)}-1]*100
@shashwatapal1297
@shashwatapal1297 Год назад
The CAGR formula shown in the video is incorrect @4:17, 1 should come outside the index, i.e. [(Ending value/Beginning value)^(365/ number of days)-1] . The CAGR will come to around 16.047%. Its just a small correction Also the starting and ending value are swapped in the formula. Consider rectifying in the video! Good initiative Zerodha Varsity
@parag_
@parag_ Год назад
Even the ending and starting value are swapped @4:11
@abhipatil4844
@abhipatil4844 Год назад
Thanks bud
@DkRapperHotshot
@DkRapperHotshot Год назад
why no change in no. of days when they are invested for 2 different periods?
@drajaykeshari623
@drajaykeshari623 Год назад
@@DkRapperHotshot again wrong values are put in formula....Rangappa is saying simple calculation and himself making blunder in calculation...need correction in video.
@apc137_op
@apc137_op Год назад
looks like they have't paid enough to video editor
@ashokwadhwani996
@ashokwadhwani996 5 месяцев назад
Hi Karthik (Zerodha Varsity), I found some mistakes in CAGR formulas mentioned by you is [Ending Value/Initial Value]^[365/No. of day - 1] but correct CAGR formula = [Ending Value/Initial Value]^[365/No. of day] - 1. You have mentioned No. of daya in example of Investment A & B both 364 which is wrong. A is investment is for one year but B is more than 2 years. And also there is mistake in Present Value of Money formula: You have mentioned [Amount /(1+ Discount Rate)]^Time but correct formula = [Amount /(1+ Discount Rate)^Time].
@digvijaydiggi
@digvijaydiggi Год назад
I thought the second video will come after 2024 general election,, thank you for your kind gesture 🙌
@kvinayagamoorthy
@kvinayagamoorthy Год назад
The need to do complex math is RARELY the reason. We have strong biases. We still think Real estate and Gold are better avenues than the stock market and mutual funds. The land value of my house in Bangalore grew from 7 lakhs in 2004 to 90 lakhs in 2014. But it still stays the same in 2023. I cannot convince any of my relatives that real estate as an investment avenue is really bad for most of us. People only think of the boom period of real estate and think that is the best to grow wealth.
@jatin.sanghvi
@jatin.sanghvi 2 месяца назад
Apart from the slow appreciation (or rather depreciation) on real estate investments, there are more downsides that make it a sub-optimal avenue to invest in: 1. You cannot assess true market value when buying or selling. It depends on how much both parties are bullish on the future value of the property. 2. You cannot buy or sell a fraction of it if you have or need a small amount of money. Imagine a company selling shares worth 90 lakhs each and only a whole number of stocks can be bought or sold. Will anyone still be interested? You can take a small loan with the property as a guarantee but then you need to repay the loan later 3. There is no guarantee that you will get the buyer immediately when you need money. In the worst case, it can be years of waiting time, or you will need to sell at low rates to make it quick. Again, imagine if the situation was the same with mutual funds. I would certainly go for mutual funds even if the returns were lower due to these problems. Better not live in the past. FDs at 8% rate are far superior to real estate investments even after including the rents for majority of cases.
@kvinayagamoorthy
@kvinayagamoorthy 2 месяца назад
@@jatin.sanghvi Just loved your points. Especially point 2. I can now use this idea when discussing. Thank you. 🙂
@mukulanand7532
@mukulanand7532 3 месяца назад
We can also calculate cagr via this too (Final invested amount/initial invested amount) 1/n -1 Where n= tenure
@harsh5942
@harsh5942 Год назад
CAGR Correct Formula CAGR=[(Ending Value/Beginning value)^(365/No of Days)]-1 and then multiply the result by 100 to convert it in percentage.
@nitishnagar1
@nitishnagar1 8 месяцев назад
I started investing since college from my pocket money and continued!😊
@kartikeydwivedi4774
@kartikeydwivedi4774 Год назад
Got to know about CAGR today only.... Simple and best explanation 👌
@amithathakur363
@amithathakur363 Год назад
Can't thank u enough for this effort, Karthik 🎉
@dhardibya2421
@dhardibya2421 Год назад
That's a really great initiative towards financial education
@silentwraith3464
@silentwraith3464 Год назад
4:07 did you put the numbers in correctly? Ending value is on top and starting value at bottom?
@bubblebath2892
@bubblebath2892 Год назад
Brilliant video as explained something so complicated in such a simple way .Simple and to the point ....keep up the good work , Thanks a ton man
@User24762
@User24762 Год назад
Great initiative Zerodha and Karthick sir.
@darkmatter4768
@darkmatter4768 6 месяцев назад
4:03 - 2nd portfolio has higher CAGR than first one - second one has CAGR of 20.061 while first one has CAGR of 16.04 percent
@vishal-uy2nl
@vishal-uy2nl Год назад
Sir please increase ur frequency...😂☺️....keep that 1 week only.... please...☺️🤗....it is really useful to us...
@leenasaikia1698
@leenasaikia1698 Год назад
Amazing videos… crisp and simple…keep sharing 👍🏽
@MOHITJOSHI1991
@MOHITJOSHI1991 Год назад
CAGR and Present value formulas are incorrect
@pawansokhriya468
@pawansokhriya468 9 месяцев назад
No Its correct, in terms of days it is the one
@elviesmascarenhas6059
@elviesmascarenhas6059 Год назад
Currency devaluation is the biggest issue today, whether Yuan or Rupee or Dollar will make it who knows, mostly Yuan will make it....
@ashoktalpada2191
@ashoktalpada2191 Год назад
Thank you
@Spark-fb7go
@Spark-fb7go 2 месяца назад
I started my savings journey at an early age of 14 year, today at 21 i have a sum of 6.4 lakhs. I want to make it 30-40 lakhs by 28.
@sumittembhare4878
@sumittembhare4878 11 месяцев назад
Great Initiative ! Incorrect values CAGR formula in first example
@sagarraut7711
@sagarraut7711 Год назад
this is gem
@Sadhvika248
@Sadhvika248 Год назад
Excellent analysis sir 🙏🙏
@kaushik-wealth-wellness-coach
@kaushik-wealth-wellness-coach 5 месяцев назад
Fantastic learnings!! Thanks a ton
@guruchillalg
@guruchillalg 10 месяцев назад
Good basic learning video sir, thanks a lot❤
@krishnakumars3324
@krishnakumars3324 Год назад
Thank you ❤
@sagarchauhan389
@sagarchauhan389 Год назад
Thanks Karthik sir your video is always great but i have a request, Could you start to create video on Risk management?
@varsitybyzerodha
@varsitybyzerodha Год назад
Hey Sagar, we'll look into the possibilities, thanks.
@love-your-life_
@love-your-life_ 8 месяцев назад
in CAGR starting and ending values are substituted incorrectly please calculate wisely
@harshithm.rharshithmuddaka8289
Thank you sir
@harshgupta9025
@harshgupta9025 Год назад
What will be the discount rate while calculating present value of money?
@kushalagarwal6706
@kushalagarwal6706 6 месяцев назад
@ 4:06, number of days is not 364. it's 2 years 3 months
@hplaptop-w7h
@hplaptop-w7h Год назад
incorrect CAGR formula
@ranaadityapratapsingh867
@ranaadityapratapsingh867 Год назад
I think the CAGR formula that you calculated for fund B is wrong because you have considered the time to be 1 year rather 2 year and 3 months. Kindly recheck it
@viswanathanumapathy9216
@viswanathanumapathy9216 6 месяцев назад
Good learning
@uunistu8006
@uunistu8006 Год назад
How about a episode on saving tricks on personal finance..
@abhijitkoni671
@abhijitkoni671 Год назад
The CAGR formula seems to be wrong and also 'no of days' considered for more than 2 years is still 364 days. It's very confusing. How can you say personal Finance is simple when gave wrong formula and wrong figures and making it complex? please correct it.
@bollarapuphanindra1264
@bollarapuphanindra1264 11 месяцев назад
I have a doubt, while you explain the last example of money taking now and after 2 years you have calculated of 9 percent FD return but you need to consider inflation right
@gorakhkalunge689
@gorakhkalunge689 Год назад
your calculation is wrong for CAGR, please check the initial value and final value. Formula also.
@rishabhsingh6757
@rishabhsingh6757 7 месяцев назад
In present and future value of money we didn't count for inflation.
@mishra_d_p
@mishra_d_p 26 дней назад
Calculation Error at 3:53 Ending value is 58k and starting value is 50k, but during calculation it's taken opposite and many more Please verify your own calculation and videos before you put it in the public knowledge platform, knowledge sharing is best if they are correct. Thanks.
@Super.normalkid
@Super.normalkid Год назад
can we apply the future value of money (amount that bank is obliged to give ) to compare FD return in present value of money (amount I am putting in FD right now) and know the worth in today's value?
@subhajitpanja1353
@subhajitpanja1353 Год назад
Super 👌🏻 👍🏻
@kadapallanithin
@kadapallanithin 6 месяцев назад
taking money today makes a difference if there is an opportunity that gives more return than 9%
@ContentCorner-ou5pl
@ContentCorner-ou5pl 4 месяца назад
In CAGR calculation how can be your ending value be 50,000 and starting value 58,000??
@guptasukrit
@guptasukrit Год назад
How to calculate CAGR for that plant example?
@Vishalsharma-xj3ej
@Vishalsharma-xj3ej Год назад
I started at the age of 38 as i was paying home loan till age of 40.
@jayjoshifinance
@jayjoshifinance Год назад
For (50000,58000) I am getting CAGR as 13.82% and for (50000,60000) number of days becomes 820 hence CAGR coming to 7.79%. Seems like ur video editor too tried learning while editing and inserted his own calculations😄.
@varsitybyzerodha
@varsitybyzerodha Год назад
We'll look into this, Jay.
@sridhaek99
@sridhaek99 8 месяцев назад
Ranga is 😊
@pranjalibhagwat1978
@pranjalibhagwat1978 Год назад
I started saving at 23
@GautamKumar-zn5vd
@GautamKumar-zn5vd Год назад
Hi sir, how to calculate growth rate through XIRR, any formulae
@varsitybyzerodha
@varsitybyzerodha Год назад
Hi Gautam, we've explained this here :) tradingqna.com/t/measuring-mutual-fund-returns-xirr-cagr/40617
@aashishsharma9678
@aashishsharma9678 18 дней назад
So , XIRR is used for SIP right?
@sohamdoshi2817
@sohamdoshi2817 8 месяцев назад
got confused at 3.53 , they made a typo in the value explanation , cmon ! do better !
@Nitesh07779
@Nitesh07779 4 месяца назад
why did u put value of starting value in ending value
@CBS1611
@CBS1611 Год назад
🤩🤩🤩
@jagadeeshs3166
@jagadeeshs3166 Год назад
@7:28 to find the present value using discount factor formula had mistake, the amount comes out of the bracket.
@navyanisha4562
@navyanisha4562 6 месяцев назад
Each and every formula had got some mistakes. Make sure you don't confuse your viewers by showing wrong formulas. I had to watch other videos for clarification each time you guys show equations because I don't get the same answers as you got. The whole equations were so crap that even the calculator failed and showed error.
@avrapal4581
@avrapal4581 6 дней назад
Its not CALACULATING!! Its CALCULATING!
@mithleshsharmaofficial
@mithleshsharmaofficial 3 месяца назад
Please always speak in hindi in videos because many people can't understand you, when the people will not understand you then the people will not invest in stocks by these calculations.😊
@anavodayan6599
@anavodayan6599 2 дня назад
Well, respectfully, not all people speak or understand Hindi either, so your suggestion is on the same level, don't you think?
@prasathkarupu3287
@prasathkarupu3287 Год назад
Thanks karthik & team. Is it possible to be part of your team to make a financial literacy awareness to indians? I am looking for the opportunity.
@varsitybyzerodha
@varsitybyzerodha Год назад
Hi Prasath, almost anything we do on the channel is an effort to contribute to financial literacy in India :) We'll continue doing this. If you have any specific ideas, do write to us on social@zerodha.com.
@darkmatter4768
@darkmatter4768 6 месяцев назад
108 % calculation of CAGR did'nt get that part can someone explain 3:01
@jenniferchen12345
@jenniferchen12345 7 месяцев назад
What does the ^ symbol mean?
@JSATISHKUMAR
@JSATISHKUMAR Год назад
Hi Sir is the ending value and the starting value exchanged in both the calculations can you please check the same
@varsitybyzerodha
@varsitybyzerodha Год назад
Hi, this is because of a small typo.
@snoftys9714
@snoftys9714 Год назад
Can you add subtitles, it would avoid using my headphones
@varsitybyzerodha
@varsitybyzerodha Год назад
Hi, we'll look into this, thanks.
@nolanwarsiwarsi5028
@nolanwarsiwarsi5028 Год назад
Sir please make a good video for SWP in coin app how can this plan
@varsitybyzerodha
@varsitybyzerodha Год назад
Hi, we'll look into the possibilities, thanks.
@jatin.sanghvi
@jatin.sanghvi 2 месяца назад
The formula for CAGR is also wrong like you did not want to stop making mistakes after previous video. -1 should have come outside the bracket. This small mistake will give totally wrong values for CAGR.
@jatin.sanghvi
@jatin.sanghvi 2 месяца назад
The basic way to make sense of CAGR is what the annual interest rate should have been to get to the final value. Someone good is math can figure out the formula themselves.
@jatin.sanghvi
@jatin.sanghvi 2 месяца назад
Even with mistakes, the videos are valuable, hence I will be going through the entire playlist.
@jatin.sanghvi
@jatin.sanghvi 2 месяца назад
3:55 woah! Starting value swapped with final value. Hats off to you 🙇‍♂️
@jatin.sanghvi
@jatin.sanghvi 2 месяца назад
I think I will need to stop pointing out errors (there will be a truckload of them) and just focus on the good parts.
@kulbhushanchhabra
@kulbhushanchhabra Год назад
Starting at 36, 😢.
@riser9644
@riser9644 Год назад
1l is better because there is no tax as in FD 😉
@vanyabansalfun573
@vanyabansalfun573 Год назад
At the age of 34 i inveter in mutual fund
@taduriveeragoud8496
@taduriveeragoud8496 Год назад
Sir i have one dought that how u divided 365/364 for two years
@bkmpatel7501
@bkmpatel7501 Год назад
+1
@TulsaTulsa-eb8tu
@TulsaTulsa-eb8tu Год назад
I started at the age of 32
@kumarsaket6877
@kumarsaket6877 5 месяцев назад
Please review the videos before posting. The "no. of days" substitution is wrong and Jan 2023 - Mar 2025 is not 364 days. If you publish such videos then you are propagating confusion instead of education.
@SanjuBaba-md8lx
@SanjuBaba-md8lx Год назад
Hindi me video banaye sir 😫🙏🙏💓😫🙏🙏💓
@karankapadia3029
@karankapadia3029 Год назад
wrong calculation shown in CAGR formula
@varsitybyzerodha
@varsitybyzerodha Год назад
That is a typo, Karan. Thanks for pointing it out.
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