The Hierarchy of Personal Investments

Just like we have Maslow’s Hierarchy when it comes to human needs and desires, I feel personal investments also follow a hierarchy based on the total amount of money available for investments.

The Base

When a person’s income starts exceeding expenses, that person may start looking for investing this surplus. At this stage, this person tends to be very cautious and invests with a motive of reducing risk on the capital invested.

Suggested Investments – Bonds, Fixed Deposits

The Shift

This is when the person’s surplus keeps growing and the person now starts thinking about being more aggressive with investments. A shift is seen in the investment approach of the person and investments with higher risk are typically looked at in this phase.

Suggested Investments – Mutual Funds, Real Estate

The Acceleration

Once the person starts saving more money, the risk appetite of the person starts going up at an increasing pace. The demand for greater returns drives the investing approach in this stage.

Suggested Investments – Stocks, Currencies, ETFs, REITs, Commodities, Indices, Bitcoin

The Peak

At this stage, the person starts looking at not only passive investing as above, but may actually start looking at active investments as well. The aim is to maximize returns using money and active participation in the asset operations and growth.

Suggested Investments – Crowd-Funding, Private Equity

My Strongest Addiction

Startups and Entrepreneurship have become an addiction for me. Looking for pain-points in daily life and thinking of how to do things better tends to keep me constantly occupied. I am hoping that the MBA I am pursuing now can help me look beyond, look at the broader picture, learn new and useful skills and give me a perspective which I am devoid of at present.

#startuplove #thinkbeyond

Key Metric – Landing Page Bounce Rate

The Landing Page Bounce Rate (LPBR) is a key metric in user conversions. This measures the percentage of people who leave soon after landing on your website. The only page the visitor interacts with is the landing page and that too for a short time.

Implications of a high landing page bounce rate can be:

Poor targeting of ad placements: If ad placements are not targeted well, visitors coming onto the portal may not be relevant and hence may decide to leave quickly.

Poor user experience: Visitors might be relevant but poor design may drive them away. This might be due to visitors not being able to completely understand the offering of the business. Another reason can be that these visitors may not want to trust the website due to this first experience.

Depends of landing page: A low landing page bounce rate may not be considered bad always. For example, if a user lands onto the contact us pages of a website, he/she might just want the number or email id and would leave upon getting the same.

The effect of a high LPBR is that it tends to reduce your ROAS, i.e. return on advertising spend. As a business, you should try to place your advertisements in relevant spots so that leads generated are relevant and useful for your business.

The best example for this is the Nigerian email scam. It is a fraud where a person gets an email such as below:

The aim of the fraud is that the person receiving the email gets interested in the ‘free money’ offered by the sender, replies back and after a few communications shares his/her bank details.

The email draft above is so direct and clearly smells of fraud. So I used to wonder why does the sender draft an email like this which looks so obvious? The reasoning behind this is ingenious. The sender of this email wants to target only those people who are very gullible and greedy and will even reply back to such an email. In a way, this email which clearly smells of fraud is a filter to weed out people who are highly gullible and will fall for something like this. Their aim is to reduce the bounce rate of people replying back so that they can concentrate only on the ones who potentially can fall for the fraud.