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How to make dividend income | 5 great assets to own - YouTube
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hi everyone welcome to today's video so
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take a look at this particular email
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this is ITC making its dividend
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announcement and I as a shareholder
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received this email and I got super
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happy I started dancing with joy because
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money was hitting my bank account it's a
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great occasion people start celebrating
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and ITC is one of the Prime reasons why
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a lot of retail shareholders celebrate
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because they are getting dividends so
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it's a great feeling to have so I
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thought that I will shoot a simple video
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explaining five assets that I own that
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give me regular cash flow and whether or
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not it makes sense for you to purchase
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these assets so I'm going to have a
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complete discussion and towards the end
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of the video I will tell you two of my
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favorite assets out of these five where
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I am increasing my holding because these
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are some of my favorite passive income
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sources so to say so let us get the
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video started also a very quick
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disclaimer that I make roughly one and a
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half to two lakh rupees a month through
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dividends through these passive income
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cash flows why is that because I have a
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big portfolio so I have constructed this
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portfolio over several years now it has
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become big therefore I am getting cash
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flows in the form of so that is a simple
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answer to how do you make a lot of
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dividend income you need to have a big
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portfolio in the first place that is the
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honest answer here now let's move on to
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talking about five assets but let me
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first and foremost take you to screener
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and show you how to create and filter
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out stocks as per their dividend paying
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abilities so what you simply do is that
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you go on screener and click on this
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screens and then you click on create new
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screens then you type dividend yield
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greater than three percent so you will
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get a list of all these stocks so there
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are 104 stocks and now this gives you a
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list of stocks that are paying more than
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three percent dividends why did I pick
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three percent dividends because the
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general consensus is that if a stock is
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giving more than three percent dividend
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yield then it is considered to be a
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decent dividend paying stocks now one
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obvious question here would be that hey
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akshat I see some of the stocks for
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example bomber it's paying 10.02
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dividend I'm also seeing something like
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taparia tools it's paying 1088 dividend
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so should I not be investing in these
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type of stocks please watch this video I
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have done a complete discussion whether
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it makes sense to purchase dividend
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paying stocks or not so in case you
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don't have time to watch that entire
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video let me present a very quick
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summary in one minute so the entire idea
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is that how do you make money as a
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shareholder so there are two ways in
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which you will be making money let's
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assume that you have purchased ITC and
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you are a shareholder in ITC then the
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two methods would be that number one the
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stock price which is trading at 244 it
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goes up so it goes up to 260. you are
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sitting on a profit of 16 rupees per
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share so this is called as asset
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appreciation and this is the first way
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you can make money second is that the
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company decides to pay out a part of
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their profit in the form of dividends so
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this hits your bank account directly now
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you might have a counter question that
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okay there are stocks that are not
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paying any dividends or they are paying
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very low dividend should I avoid them
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completely will I be making any money
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what happens in that scenario so you'll
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find a lot of stocks for example
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Hindustan Unilever pays very little
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dividend but is it a bad stock the
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answer is no why because there might be
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asset appreciation of that stock that is
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the reason why people are purchasing
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Hindustan Unilever TCS or page industry
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so to say these are all good stocks that
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do not pay very high dividends to begin
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with so I want to put out a very clear
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disclaimer that just because a stock is
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not paying high dividend does not make
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it a bad stock so please do not believe
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in that because even stock that is not
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paying out dividend can undergo this
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asset appreciation so it becomes very
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important so this brings us to a related
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concept that should I go and purchase a
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stock like taparia tools it is giving
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out like 1088 dividend yield should I go
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and buy it the answer again is no
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because what can happen the reverse can
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happen for example there can be asset
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price depreciation the entire stock that
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you had purchased that stock can
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literally go to zero or become really
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low I'm not giving a pro or Con on the
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paria foods per se I'm just telling you
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that that's a scenario that happens very
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very frequently again go and check my
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video you will get a complete
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understanding but moving on I hope you
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get the point that number one high
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dividend paying stocks are not
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necessarily good stocks low dividend
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paying stocks are not necessarily bad
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stocks so with that out of the way let
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me present five specific assets that I
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own in my portfolio that are giving me
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good passive income now the first asset
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is ITC why do I own it there are three
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specific reasons why I own ITC right now
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first is that it is a high dividend
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paying stock so every time money hits my
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bank account so I feel super happy I
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start dancing not literally I'm a
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horrible dancer but figuratively
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speaking I start dancing so it's a high
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dividend paying stocks it gives me
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regular cash flow it stabilizes my cash
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flow so to say majority of the other
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stocks that I own are not dividend
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paying stocks for me so ITC becomes a
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prized possession for me from that
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particular perspective that at least I'm
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getting some regular income from the
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stock market this is the first key
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reason second key reason why I own ITC
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is because I am bullish about itc's fmcg
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business now I have made a separate
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video on ITC so you can go and study
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that video in detail where I have broken
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down the business elements of ITC but
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very quickly recapping that ITC has two
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prominent major business lines there are
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multiple business lines but two
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prominent one is the tobacco or the
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cigarette business majority of itc's
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Revenue comes from tobacco or cigarette
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business it is a market leader it is a
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monopoly that's the first business line
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the second business line that is growing
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for IDC is the fmcg or the Staples
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Business now here is a very quick look
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it shows you the market share that ITC
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enjoys even in the notebook market so 25
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percent of share is owned by our brand
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called as classmates which is owned by
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ITC same goes for the instant noodles
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that approximately 23 percent of the
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market is owned by yippee which is a
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noodle brand which is competing against
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likes of Maggie Etc so these are two
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brands that are coming up from itc's
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domain as the fmcg or Staples Business
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of ITC growth ITC stock will also give
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appreciation that is the Hope with which
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I am holding ITC let me know in the
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comment box or do you think that ITC
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will give a run up or not give a run up
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I would love to hear your Viewpoint now
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comes the third reason why I own ITC so
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ITC is a defensive stock it is a stable
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stock and it has a very clean management
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so I am sure that none of us would
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question the management of ITC it has
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not had any issues in terms of
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accounting or some fraud has happened at
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ITC all that stuff so it has clean books
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similarly ITC is a defensive stock for
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example when it comes to banking Finance
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something like Bajaj Finance if the
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market moves up by two percent Bajaj
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Finance usually moves up by four percent
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but if Market Falls by two percent then
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Bajaj Finance Falls a lot also so stocks
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like Bajaj Finance are highly aggressive
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on the flip side ITC is a defensive
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stock therefore I own it because
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majority of my portfolio is growth
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portfolio it's aggressive portfolio so I
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hedge it by buying stocks like ITC in
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fact ITC is so stable so stable so
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stable that whether the market moves up
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down it just stays consistent okay let
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me show you this chart so one year ago
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ITC was trading at 240 rupees now again
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it danced around all this while all this
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file all this file and then it came back
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to 244 to 45 rupees so the bottom line
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being that ITC keeps on dancing in that
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range only and it keeps on paying
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dividends now why is that happening will
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ITC stock grow or not grow again please
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watch my video you will understand more
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but there is a major risk with IDC stock
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and there is a reason why it keeps on
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dancing around in that range the reason
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being that itc's major business which is
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the cigarette business it is highly
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dependent on the government policies if
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government decides to increase taxation
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on Tobacco or send products per se then
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a company like ITC is going to suffer a
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lot so that is the fear that people have
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especially in this type type of an
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environment When government needs to
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make money it will probably go and tax
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companies like ITC more so people are a
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little bit scared so therefore ITC stock
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does not give much appreciation so that
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is the simple reason of not holding ITC
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so bottom line should you be holding it
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I have given you a pro and con analysis
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now tell me in the comment box will you
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be owning ITC or not let's move on to
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the second asset that I own in my
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portfolio and the asset is nmdc so if I
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take you back to that chart and I will
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Zoom it here please take a look that
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nmdc gives a dividend yield of 9.73 so
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again an MDC good yield just a very
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quick background of the business that
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nmdc is owned by the government that is
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the majority shareholder in nmdc it's
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National mineral Development Corporation
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essentially what the company does is
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that it extracts iron ore it also has
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diamond mines it is getting into
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processing of Steel so essentially it's
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in the iron over business and it's a
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monopoly stock in that domain now why do
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I own nmdc there are three specific
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reasons one is that it is a monopoly
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stock Monopoly stock means that it is a
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dominant stock in one particular
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industry which is iron ore mining so
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this is the biggest company in India
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from an iron ore mining perspective it's
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a natural resource government has
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massive control over it but you will say
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akshat you are against owning PSU stocks
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and you are not an investor in IRCTC it
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is also Monopoly stock so why are you
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owning nmdca visaways something like
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IRCTC okay let me explain that very very
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quickly again that when it comes to
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something like IRCTC who is the end
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consumer the end consumer are people
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like you and me we are mango people and
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IRCTC is a b2c business business to
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Consumer so we are consumers directly
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consuming from IRCTC so government will
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face a lot of heat if it increases the
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ticket price because mango people like
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you and me will get affected when it
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comes to something like nmdc nmdc is
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mostly a B2B business it is supplying
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iron ore to home so after processing
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steel the steel is not used by you and
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me directly steel is rather used by
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industry and big factories all that
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stuff also related point is that the
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price of steel in India is linked to
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International Market so it's not as if
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that government will willingly increase
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it or decrease it yes they can
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technically do it but it is highly
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unlikely that Indian government will
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increase the steel prices when the
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global steel prices are falling now this
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is a commodity stock whose prices are
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linked to International Market and they
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are selling it to businesses so from
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that particular perspective there will
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not be a lot of hoopla in terms of
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increasing steel prices all that stuff
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this is reason number one reason number
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two is that this company has certain bit
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of moat moat means competitive Advantage
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so here is a chart for you please zoom
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in and see and you will see the steel
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production prices in India visa where's
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the other parts of the world now steel
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is used by Industries all across the
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globe India is also using it there is
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big demand of Steel in India and the
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steel production in India is not that
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expensive as in some other parts of the
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world so we are a reasonably okay
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producer when it comes to producing
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steel so from that particular
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perspective nmdc is a good company
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because it can produce steel at a lower
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price and therefore an Industries also
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benefit from it if it happens that the
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steel production in India is super
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expensive then it would rather make
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sense for us to close something like an
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MDC then import all the steel that we
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need from different parts of the world
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but we are not doing it why because we
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are competitive and nmdc is playing a
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role in that entire supply chain now the
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third reason and the biggest reason why
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I hold nmdc is very simple that I got to
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purchase an MDC at a lower prices for
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example if I show you the chart you will
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clearly see that nmdc in the last 10
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years has gone in in a very cyclical
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format for example it goes up then it
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goes down then it goes up again goes
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down goes up then it forms a curve then
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it goes up again goes down so on and so
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forth so if you purchase it in a
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downturn it is most likely going to go
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up so I ended up purchasing at the
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downturn so I'm okay in terms of holding
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it and benefiting meanwhile from
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dividends and again just to cut the
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entire story short I am not a big holder
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of commodity stocks or PSU stocks nmdc
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is one of the few exceptions on my
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portfolio now the third dividend paying
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stock that I own is Britannia Industries
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it also pays out decent amount of
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dividends so this is the dividend that
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it pays out it's a decent number in
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terms of dividend yield now why do I own
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Britannia the answer is fairly simple
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it's an fmcg stock I have a sector
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allocation on fmcg which comprises of
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companies like Britannia it comprises of
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dabur it comprises of hul it comprises
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of nestle so these are some of the
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companies that I own in my fmcg
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portfolio and ITC and Britannia are two
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top companies that pay me a lot of
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dividends it's again very similar to ITC
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it's a defensive stock majority of my
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portfolios aggressive portfolio
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therefore I end up purchasing something
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like Britannia to hedge my portfolio
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should you be owning something like
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Britannia again if you're looking to
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take positions in fmcg stock right now
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it's a good time to invest in fmcg
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company there is no fundamental problem
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per se when it comes to fmcg stocks
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these companies are going to go up
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Britannia is a market leader it has gone
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up and down but these stock price growth
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has been really really consistent for
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example let's take a look from 2015
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onwards and it's a very clear trajectory
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right that it was trading at 1500 rupees
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it came up all the way to 4500 rupees in
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a matter of six six and a half years
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which is very very good growth no
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problem there for a stable stock like
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Britannia so from that particular
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perspective tip if you're running after
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a little bit of dividend if you want to
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build a slightly defensive portfolio
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then having something like Britannia in
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your portfolio might make sense now
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comes two of my favorite assets to own
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and these come from the crypto space now
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please don't drop off please listen to
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this part very very carefully because it
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can give you new knowledge so please
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listen to it with an open mind so very
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quickly let me speak about the crypto
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passive investment option so if you go
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on world you can take a look at these
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particular assets at the bottom of the
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page and you can check out that which
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coin is giving what percentage of return
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for example die it gives you a 12.68
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passive income rate so it's like doing
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an FD and you can easily do it through
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World also similarly Matic gives 7.23
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polka dot gives 12.68 percent so let me
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speak about two of my favorite coins
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when it comes to crypto Investments that
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can help you generate passive incomes
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these are my absolute favorite passive
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income slash dividend sources but let me
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give you a very quick concept Clarity
[787]
there so for example when you are owning
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ITC ITC stock price was appreciating and
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you are making money or you are getting
[794]
dividends now same scenario can or
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cannot play out in the crypto world for
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example if you own something like usdte
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then usdt prices are linked to US dollar
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I will explain it in a minute what usdt
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is so the growth of the asset itself
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depends on US Dollar on the flip side
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the usdt you can do a 12.68 FD on usdt
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Via world so this becomes like a passive
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income source for you your option two is
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you can go to something like polka dot
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now here what happens is that it is
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polka dot right so the FD returns here
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remains 6 12.68 now the asset price
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itself like the stock price can go up or
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down so this is a very very important
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point to understand that there is a
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difference between usdt and polka dot
[838]
from that particular perspective so
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these are my two favorite resources in
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terms of doing fixed deposit in the
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crypto world that generates a lot of
[845]
passive income for me so let me briefly
[847]
explain what these two things are and
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whether or not it makes sense for you to
[851]
put it in your passive income portfolio
[853]
so let me speak about usdt first so very
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quickly let's understand what usdt is
[857]
and I'll probably make a separate video
[859]
on it all together but very very quick
[861]
explanation on what usdts that usdt in
[864]
simple terms is called as a stable coin
[865]
now why is it called as stable because
[867]
it is pegged two US dollars for example
[870]
you must have heard back in the 60s the
[872]
fiat currency USD INR it was pegged to
[874]
what it was pegged to gold in order to
[876]
print one dollar in 1960 the government
[878]
used to purchase one dollar worth of
[880]
gold keep it in their tajuri and then
[882]
only they used to print it exactly the
[884]
same concept plays out in usdt so there
[887]
is a clear linkage between usdt and US
[889]
dollar in order to print or release one
[892]
usdt onto the network the company that
[894]
is running the usdt network it needs to
[896]
keep one dollar in its accounts is it
[899]
keeping it is it not keeping it I will
[900]
not comment as of now because the video
[902]
will become really lengthy so I'll shoot
[903]
a separate video on that but yes there
[905]
are risks in terms of holding usdt don't
[908]
get super excited that hey 12.68 return
[910]
I'm going to buy today itself no there
[912]
are risk you should not convert
[913]
everything and convert entire portfolio
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into usdt yes little bit of exposure to
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usdt is fine no problem there usdt is a
[921]
stable coin whose value moves as per the
[923]
value movement of USD if USD is going up
[925]
then US dollar will also go up if USD is
[928]
coming down then usdt will also come
[930]
down so that's the pegging concept of it
[932]
one related note that you need to
[933]
understand is that if you take a look at
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this particular chart you will see that
[937]
the value of INR keeps on going down and
[939]
it's roughly going by four percent every
[941]
single year so if you convert your INR
[944]
into USD and then USD into usdt what is
[947]
it that you are exactly doing you are
[948]
saving this four percent depreciation
[950]
and the second key point that you're
[952]
saving yourself from is that you now get
[954]
to do a fixed deposit on World at 12.68
[957]
percent so if you would have simply
[959]
converted your INR into USD you would
[961]
not have gotten benefit of this 12.68 FD
[964]
but now you are able to do that so
[966]
that's the benefit is it completely safe
[968]
again let me put out the disclaimer that
[970]
know that usdt is not completely safe
[972]
you should put only a little bit of
[974]
money in something like usdt again if
[976]
there is enough interest I will explain
[978]
it separately but for the time being do
[980]
understand that usdt right now is one of
[982]
the most popular stable coins it's not
[984]
as if that it will become zero tomorrow
[985]
meanwhile if you want to take a little
[987]
bit of exposure to it it is completely
[989]
okay now comes the final asset which is
[991]
one of my favorite assets from this list
[993]
and it is polka dot now basically what
[995]
is polka dot the easiest explanation
[997]
that I can give on polka dot without
[999]
getting into the technical details is
[1000]
this that polka dot is trying to become
[1002]
the sun of the entire crypto solar
[1004]
system what do I mean by that for
[1006]
example here is sun right this is what
[1008]
polka dot is trying to become I am
[1010]
trying horribly excuse that but what you
[1012]
would notice is that there are different
[1013]
blockchains for example there is Bitcoin
[1015]
blockchain there is ethereum blockchain
[1017]
there is Solana blockchain all that
[1019]
different different blockchains are
[1021]
there they are working individually
[1022]
developers are creating new ecosystems
[1024]
applications all that stuff but there is
[1027]
no protocol that is bringing all these
[1029]
functionalities together and polka dot
[1031]
is trying to do that so this is the unit
[1032]
unique part of it now if there is enough
[1034]
interest I will shoot another video on
[1036]
this but for the timing please
[1037]
understand this ecosystem is very
[1039]
valuable and lot of people are getting
[1041]
excited with it and polka dot seems like
[1043]
that it is likely to go up so meanwhile
[1045]
you can benefit from it in two ways one
[1047]
is that if you buy polka dot then polka
[1050]
dot itself can give you asset price
[1051]
appreciation second is that again if you
[1054]
can do an FD you will be getting 12.68
[1056]
percent on world and that's great news
[1058]
so from that particular perspective
[1060]
these are five of my assets that I own
[1062]
in my portfolio where I'm making a lot
[1064]
of passive income if it fits your needs
[1066]
if it fits your risk profile please go
[1068]
ahead and invest in it I hope you
[1069]
enjoyed the video please press the like
[1070]
button and I will see you tomorrow
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