HEDGE FUNDS

1)  "Hedging" is the practice to reduce risk, but the objective of majority of hedge funds is to maximize return on investment. The name is historical, as the first hedge funds tried to hedge against the downside risk of a bear market by shorting the market.

2)  Hedge funds use dozens of different strategies, so it isn't accurate to say that they just "hedge risk." In fact, since hedge fund managers make speculative investments, these funds may carry more risk than the overall market.

3)   However, there are mechanisms in place to protect those who invest in hedge funds. Often fee limitations such as high-water marks are employed to prevent portfolio managers from getting paid on the same returns twice. Fee caps may also be in place to dissuade managers from taking on excess risk.

4)   Hedge funds are alternative investment funds (AIFs), using pooled capital sourced from accredited investors or institutional investors (like banks, insurance firms, High Net-Worth Individuals (HNIs) & families, endowments and pension funds) and employ different strategies to earn active return or alpha for their investors, often with complicated portfolio-construction and risk management techniques.

5)  They are private investment vehicles that allow wealthy individuals to invest. Hedge funds can pretty much do what they want as long as they disclose the strategy upfront to investors. The minimum ticket size for investing in these funds in India is Rs 1 crore.

6)    A hedge fund can basically invest in anything—land, real estate, stocks, bonds, derivatives, commodities, currencies, convertible securities,  mutual funds, startups, art, rare stamps, collectibles, gold, wine.

7)   They can leverage (often use borrowed money to amplify their returns) in both domestic and international markets in quest of generating high returns (either in an absolute terms or over a specified market benchmark).

8) It is important to note that hedge funds require less SEC (Securities & Exchange Commission) regulations than other funds. One aspect that has set the hedge fund industry apart is that, they face less regulation than mutual funds and other investment vehicles.

9) It is administered by a professional investment management firm, often structured as a limited partnership or limited liability company.

10) Investments in hedge funds are illiquid as they often require investors to keep their money locked in the fund for at least a year.

11) Following the financial crisis of Yr.2007–2008, regulations were passed in the United States and Europe with the intention of increasing government oversight of hedge funds and eliminating certain regulatory gaps.

12) Preqin Global Hedge Fund Report, the Hedge funds have now grown to total assets of approx $3.235 trillion in 2018.

13) A hedge fund typically pays its investment manager annual management fee (for example, 2% of the assets of the fund), and a performance fee (for example, 20% of the increase in the fund's net asset value during the year).

Some of the strategies that hedge fund managers use are:

a)   Sell short: Here, the manager, hoping for the prices to drop, can sell shares to buy-back in future at a lesser price.

b) Invest in an upcoming event: in view of some major market events like mergers, acquisitions, spin-offs, among others can influence manager’s investment decisions.

c) Use arbitrage: Sometimes the securities may have contradictory or inefficient pricing; managers use this to their advantage.

d)  Invest in securities with high discounts: Some companies facing financial stress or even insolvency will sell their securities at an unbelievably low price.

Investors should use following  guidelines for hedge fund selection:

a)    Five-year annualized returns

b)    Standard deviation

c)    Rolling standard deviation

d)  Months to recovery/maximum Drawdown:  A drawdown is a peak-to-trough decline during a specific period for an investment, trading account, or fund. A drawdown is usually quoted as the percentage between the peak and the subsequent trough. If a trading account has $10,000 in it, and the funds drop to $9,000 before moving back above $10,000, then the trading account witnessed a 10% drawdown.

Drawdowns are important for measuring the historical risk of different investments, comparing fund performance, or monitoring personal trading performance.

e)  Downside deviation: Downside is the negative movement in the price of a security, sector or market. Downside can also describe periods when an economy has either stopped growing or is decelerating.

f)    Fund Size/Firm Size: The guideline for size may be a minimum or maximum depending on the investor's preference. For example, institutional investors often invest such large amounts that a fund or firm must have a minimum size to accommodate a large investment. For other investors, a fund that is too big may face future challenges using the same strategy to match past successes. Such might be the case for hedge funds that invest in the small-cap equity space.

g)  Track Record: If an investor wants a fund to have a minimum track record of 24 or 36 months, this guideline will eliminate any new funds.

h)  Minimum Investment: This criterion is very important for smaller investors as many funds have minimums that can make it difficult to diversify properly. Larger minimums may indicate a higher proportion of institutional investors, while low minimums may indicate a larger number of individual investors.

i)   Redemption Terms: These terms have implications for liquidity and become very important when an overall portfolio is highly illiquid. Longer lock-up periods are more difficult to incorporate into a portfolio, and redemption periods longer than a month can present some challenges during the portfolio-management process. A guideline may be implemented to eliminate funds that have lockups when a portfolio is already illiquid, while this guideline may be relaxed when a portfolio has adequate liquidity.

Comparing Hedge Funds & Mutual Funds:

a)   Investment Stance: Hedge funds generally have an aggressive stance on their investments and seek higher returns using speculative positions and trading in derivatives. They can take short positions (Short Sell) in the markets, while mutual funds cannot. Short selling allows these funds to benefit even in the falling markets, which is not so for mutual funds.

b)  Leverage: Mutual funds are safer as they don’t have much leverage, whereas hedge funds have a huge amount of leverage and thus attract higher risk.

c)  Investors: Hedge funds are available only to High net worth investors. Whereas, Mutual funds are accessible to the large group of people. In fact, you can start a SIP with the amount as low as Rs. 500.

d)  In short, hedge funds are comparatively high-risk funds that aim higher returns compared to mutual funds.

Some examples of hedge funds: 

Munoth Hedge Fund, Forefront Alternative Investment Trust, Quant First Alternative Investment Trust, IIFL Opportunities Fund, Singlar India Opportunities Trust, Motilal Oswal’s offshore hedge fund and India Zen Fund.

In the times like these

India's economic growth slumped to an over six-year low of 6.5%  due to slower consumer demand and private investment amid deteriorating global environment, prompting many global agencies to cut India's GDP growth for the year 2019-20. In October19 monetary policy review RBI had sharply cut it’s economic growth projection for this fiscal to 6.1% from earlier of 6.9%.

People need to have cash in their hands. However, record-high unemployment has severely affected the supply-demand ratio in India. This is key reason behind the economic slowdown. The government has to come up with a plan to increase wage growth; which would be possible only by injecting more liquidity into the system. Despite the bank mergers and re-capitalization, Indian banks are far from recovery, with non-performing assets (NPA) at staggering Rs 8 lac crore!

The NBFCs which are key lender to Micro, Small & Medium Enterprises continue to face liquidity crunch and show no signs of recovery in the near future too. To tackle the slowdown, revival of MSMEs are needed, which would create employment across sectors. It is high time the government focuses on fixing the liquidity crisis, which has choked lending to most MSMEs, and reducing the tax burden on individuals and companies.

Indian economy slowed in 2017 due to "Demonetisation" and introduction of “GST”. Nearly 60% of India's GDP is driven by domestic private consumption, government spending, investments, and exports. Merchandise exports dipped 1.1% in October19 from the same month a year earlier after dropping 6.6% in September’19, amounting to a total value of USD 26.4 billion in October’19.  Consumer prices rose 1.09% compared to the previous month, up from the 0.55% increase in September19. The increase was largely due to more expensive food and beverages, which, as a category account for over half of the weight of India’s consumer price basket.

Since India has a vast informal economy, barely 2% of Indians pay income taxes. According to World Bank, to achieve sustainable economic development India must focus on infrastructure, agricultural and rural development, removal of land and labour regulations, financial inclusion, spur private investment and exports, education and public health, public sector reform-selling “Navratnas” by way of disinvestments is not the only response.

Nearly 70% of India's population is rural whose primary source of livelihood is agriculture, and contributes about 50% of India's GDP. Govt. should focus on this sector, which has potential to become the major exporter of food products of the world.

Despite India holding world's seventh-largest foreign-exchange reserves worth $440 billion; suffers from high national debt with 68% of GDP, while its fiscal deficit  as per 2019 CAG report is 5.85% of GDP!

In the times like these business enterprises have to create long lasting anchors to remain healthy going concerns. We have to eject out of non-profitable activities, stay focused only on the core ones and identify the areas where we can go sleek in the cost. We have to build businesses which are rationalized  and vibrant in structure, low on Opex- operate on low ‘cost to income ratio’, less manpower intensive and more Tech Driven, which would build efficiencies and effectiveness at enterprise level. It’s time to relook our products, processes, sales and marketing plans to ensure that they bring maximum revenue with reduced cost.

As Warren Buffet says- ‘If you buy things you do not need, soon you will have to sell things you need’.   Therefore, as individuals we have to save every penny by restricting our needs and certainly curtailing our wants. In the times like these, do not lend/borrow, stay sufficiently covered with life, health and general insurances, create alternative sources of incomes via. rentals on our properties, investing in the financial instruments which are well sanitized against repayment defaults, diversified and offering decent ROIs.

The long-term growth perspective of the Indian economy remains promising due to its young population and corresponding low dependency ratio, healthy savings and investment rates, and it’s increasing integration into the global economy. The government has recently announced a slew of measures, including cut in corporate tax rate, capital infusion into public sector banks, setting up Rs 25,000 crore fund to boost realty sector, among others, to boost the economy.

However, for India to become a 5 Trillion $ economy; we would require structural changes, and policy decisions which are in concurrence with the demands of the industry to fuel growth, and are also in consonance with the inputs from economists, pegged at global standards.  Note, we still do not have any corporate which features in top 100 list of Fortune 500 or in Forbes; so lot of work still in hand at the level of government, corporate and every citizen.

Go conservative till the time changes for better.

Sir Vashishtha Narayan Singh: We are guilty of neglecting this genius.

(Year 1940  to 14 November 2019)

Sir Vashishtha Narayan Singh 

We are guilty of neglecting this genius.

It deeply saddens that the mathematician who challenged Einstein's theory of relativity and could have been in the league of Sir. Srinivasa Ramanujan; died unknown in the web of poverty, suffering from schizophrenia.

His soul is supposed to get some consolation, as he was not the only masterpiece we did not preserve. We as a nation, on one hand hold the distinction of leaving budding talents to fend for themselves during the period of their struggle and on another hand fail to treasure shining stars once they start fading away from the center stage due to cruelty of life.

We would not leave any photo opportunity with proven few, award them with cash, job, land and what not, make money by making movies on them, offer them tickets to contest elections but, would not have provided them even basic resources when they needed the most, that is during their formative years of grind, as many of them would come from poor economic background.

Sir Vashishtha Narayan Singh a child prodigy received recognition as a student when he was allowed by Patna University to appear for examination in the first year of it’s two year BSc (Hons.) Mathematics course; and was allowed to appear for MSc examination the next year.

He joined University of California, Berkeley in 1965 and received PhD in ‘Reproducing Kernels and Operators with a Cyclic Vector (Cycle Vector Space Theory)’ in 1969 under doctoral advisor was John L. Kelley.

After receiving his PhD, he joined the Washington University as an associate professor. He later worked at NASA and then returned to India in 1974. He taught at Indian Institute of Technology Kanpur, Tata Institute of Fundamental Research (TIFR) and Indian Statistical Institute, Kolkata.

He was diagnosed with schizophrenia. With worsening condition in late 1970s, he was admitted to the Central Institute of Psychiatry in Kanke, Jharkhand and left from there in 1985. He was lost during his train journey to Pune in 1989 and was apparently found begging four years later in 1993 in Doriganj near Chhapra of Saran district. He was then admitted to the National Institute of Mental Health and Neurosciences (NIMHANS), Bangalore. In 2002, he was treated at the institute of Human Behavior and Allied Sciences (IHBAS), Delhi.

In 2014, he was appointed as a visiting professor at the Bhupendra Narayan Mandal University (BNMU) in Madhepura.

It is also said that at the time of launch of 'Apollo', all the devices stopped, the computer malfunctioned for 30 to 35 seconds. During that time Sir Vashishtha Narayan Singh started calculating data manually. When the computer got fixed, his mathematical calculations and computer’s calculations were exactly the same!

He died on 14 November 2019 at Patna Medical College Hospital  after prolonged illness where family members of the country's prominent mathematician Sir. Vashishtha Narayan Singh were forced to wait for an ambulance outside Patna Medical College and Hospital (PMCH), with his body on a stretcher for two hours!

Apathy of successive governments, who do not have any written down policy and program to cultivate, develop and honor talents on an on-going basis, has been the primary reason for brain drain from this nation.

There are enough sparks around but, need of the hour is to institutionalize system to cull out diamonds from different field and turn them into masterpieces, by providing them encouragement, support and eco-system.

I offer my homage to great mathematician of his time

Sir. Vashistha Naryan Singh.

May your soul rest in peace in heaven and forgives us for ignoring the genius in you.

With Tears

Ajit Singh

SAVING: Is an incredible virtue!

 

SAVING: Is an incredible virtue!

In economics, saving is the amount that is left after spending.  However, wealthy people work differently; they invest first and spend what’s left. Whereas, others spend first and invest what’s left.

We can’t control interest rate movements or forecast what will happen in the stock or real estate market! But, we can certainly control when we start and how much we save. Starting to save early puts time by our side, our savings will add-up, funds would work longer with the power of compounding, thus, piling-up more cash in our bank accounts.

A rupee saved is a rupee earned, goes the saying. But just saving is not enough; your money should grow according to your needs. This objective can only be met through investing wisely.  When we stash our funds in the right places, our money would start to work harder, making us lead a relaxed and comfortable life.

However, care should be taken not to put all the eggs in one basket. We should invest our savings in different asset class viz. Equity, Debt, Real Estate, Metals- like Gold and Silver. At the same time we should hedge our risks by choosing right types of Insurance options for Life, Health and of Personal Accident.

It dismays thinking about millennial who often keep ‘savings and investments’ on a back-burner. They are found taking loans for all practical purposes, making foreign travel as an integral part of their base essentials, thoughtlessly spending to keep pace with the latest gadgets and fashion,  spending harrowing sum on lavish weddings.

We come across many young people who save only to fund their experiences and the thought of long-term financial planning doesn’t appeal to them.

We must understand the importance of saving money. It gives immense peace of mind, expands our options for decisions that have a major effect on the quality of life and on our financial goals, such as –meeting demands for children education, children marriage, buying house, facing challenging exigencies and eventually retire with peace of mind.

We are not saying to sacrifice prime days of life for smooth or early retirement. Here optimization would be the way to strike a balance. Be frugal; not extravagant, nor miser! We should design a financial plan, which ensures we are on track for tomorrow while still enjoying today.

We should take an honest look at our entire financial situation. We can never take a journey without knowing where we are starting from, and a journey to financial well-being is no different. We need to figure out on paper our current situation, what we own and what we owe. We should be creating a ‘Net worth statement’ accounting for our assets and the liabilities.

The next step is to keep track of our monthly income and expenses. One thing is certain that our Income should be far higher than our expenses.

Include a category for savings and investing. What are we paying our-self every month? Many people get into the habit of saving and investing by following this advice: always pay yourself first by allowing your bank to automatically remove money from your paycheck and deposit it into a savings or investment account.

Most people, who are wealthy, got there through a combination of their hard work, smart savings and wise investment decisions.

Be a habitual Money Saver:

1. Make saving as your first expense.
2. Stay Debt Free: Say goodbye to debt and EMIs.
3. Cut down on non-essential purchases: Even evaluate what you are spending at the grocery stores.
4. Avoid automatic subscriptions and memberships: Which you don’t use on the regular basis OR consider membership sharing with some family or friends. Many streaming services, like Netflix, let you watch your favorite shows from two or more screens.
5. Reduce energy consumption: Installing dimmer switches and LED light bulbs, switch the lights off a place where you are not present, buy energy efficient appliances. Do not use large vessels to heat small quantity, thus reducing gas consumption. Drive vehicles at optimum speed to burn less gasoline.
6. Pack lunch and eat dinner at home.
7. Ask about discounts (and pay through credit card): You never know until you ask. Next time you’re getting tickets at a movie theater, museum or sporting event, check to see if they carry any special discounts for seniors, students, teacher, on your credit cards. Pay through credit card, as you get interest free credit period till your payment due date and even earn reward points. However, ensure you clear credit card dues on time to avoid attracting huge penalties.
8. Lower your phone bill.
9. Negotiate, negotiate, and negotiate on everything you buy: Just about everything is negotiable to an unthinkable level; learn the art of negotiation. Search the product you wish to buy in various shops to get that at good discounted rate.
10. Sell unwanted items: that do not bring you joy and have not been in use.

So, Earn as much as you can, Save as much as you can, Invest as much as you can.

Work for money and make money work for you.

Bitter Coffee

Bitter Coffee

Dear Siddhartha,

For budding entrepreneurs, you were a perfect blend of an intelligent Mind, sharp business acumen, hard-work, swagger and suave. You have shown the Way Wealth can be created in an unique manner by serving and sipping Coffee.

However, with self execution of your life; aspiring entrepreneurs now seem disoriented and entrapped with disbelief in their capacity to take forward dreams of becoming rich and famous.  Your mega decision to call quit has jolted enterprising people of all generations and they are grappling with one question for sure –was this the only way out for you?

May be yes, this had been the only go left, as you were the gentleman who believed in letter and spirit that the organizations are perennial entities. Hence, they must prevail  if the choice of existence to be made between them and their creators.  Perhaps, therefore you never wanted ‘Cafe Coffee Day’ to be dragged in legal battles and draw adverse media attention.

The very media which is talking sympathetically on your death; probably would have questioned your credentials in a media run trial if you were alive, jeopardizing good will which you had created for self and CCD over the years. They would have put you in line with countless loan defaulters and absconders of our nation; which a fine person like you would never imagine hence, chose death as a better option over other things.

However, we still feel that you should have communicated woes and harassment which you were facing in the hands of some IT officer to relevant govt. authorities, senior politicians and even reached out to judiciary.  Our hearts aren’t ready to believe that a fighter like you, who had genius of a mind to create wealth by making Coffee a compulsive order of the day for consumers , could not see any other respectable solution to his problems besides hugging death!

Siddhartha, you would remain Coffee-Table discussion for generations to come, capturing their creative imagination. Your rise would continue to inspire countless to take the route of entrepreneurship, at the same time your fall would caution them of the things which pushed you to succumb- in terms of preventable failures.

You would continue to be our role model of struggle to glory, who even directed us with his renunciation to do soul searching for what we want and at what price?

We pray, may your soul rest in peace in Heaven.

Coffee may taste much bitter after its blender being gone.

You would be missed Siddhartha the great!

Ajit Singh

‘Risk’ – Inspires Luck

‘Risk’ – Inspires Luck

Nothing new comes out of being ordinary. It is impossible to produce superior performance unless we do something different from the majority.

Life canvas is large which can be painted with our great deeds. However, to attain higher altitudes of glory we have to get consumed by our ideas, breach the comfort zones, take calculated risk and work hardest towards the mission.

Whether it means overcoming fear to perform on stage, proposing the sweetheart we like or investing in new business ventures; some of the life’s most rewarding experiences come as the result of taking risks.

No outcome is ever cent percent certain, margin of risk always exists and the quantum of risk increases when the stakes are higher. If we regularly dine with cannibals, we run a risk of being eaten by them. Therefore, take risk but not brute one; but an informed one, look before you leap, calculate before you move. Also, ensure someone is giving you safety cover as the risk is a shifting illusion.

Thought of failure scares! However, failure builds character, makes us stronger and more resilient. People who fail repeatedly, develop persistence in the face of difficulties. Failures need to be embraced upon, learned from and moved on. Abraham Lincoln had lost eight elections, had failed in business twice and suffered a nervous breakdown all before becoming one of the greatest American presidents.

Confidence is an important attribute which risk-takers have in them. Confidence is a learn-able skill, a make-believe thing i.e. we have to keep telling self that we are not scared, that we have all the courage and confidence needed to take risk. We can develop confidence by equipping ourselves with the knowledge and skills needed to achieve a mission.

Sometimes, in quest of wonderful gains we may have to take the road less travelled, and it could be a scary road to take as that may not have yet been mapped. Therefore, the things we really have by our side in the hope of reaching our destination are- our intelligence, perseverance and luck.

Figure out the most intimidating things about the big risk we are about to take. We need to do thorough home-work on the subject in order to better insulate ourselves from unfavorable resultant. Also, we need to know when to change the course and not keep sticking to our first goal as we would have invested so much of time and effort. We must know when it’s time to quit and restart with renewed vigor on the newer path.

In wealth multiplication, we risk losing some or all of the money we have invested in the business or in the financial instruments, due to- volatility, inflation, defaults, concentration risk, unfavorable regulatory changes or other market dynamics.

We may choose to make investments that guarantee safety by offering fixed rate of return, with near zero default risks viz. sovereign bonds. However, the price for this safety could result in a very low return on our investment, coming as a trade-off with an opportunity to earn higher returns if we were to take higher risk of investing in instruments like Mutual Funds or Direct Equity. ‘In investing what is comfortable is rarely profitable’.

Wise thing to do is to take calculated risk by gaining skills and knowledge of the subject. We should not over leverage, must do credibility check of the companies and the issuers of financial instruments, and cleverly diversify our investments across different asset classes and sub-classes within each asset class to earn handsome return. We need to know the rules of the game we intend to play for sure, in order to succeed.

Accustomed to taking risks, would move us away from the mediocre way of thinking and living. Instead of limiting within the cocoon of so called safety, we gain the momentum needed to reach out for newer opportunities in our career or business. Risk builds our self-confidence and self-respect, empowers us to feel stronger. Take the risk as that shall get us some of our biggest rewards of life.

Mistakes need to be made if we want to succeed and that brings lot of learning. If we’re not making mistakes then we’re not trying enough things. Venturing out is a risk meeting an accident, to strive for higher is a risk of fall, to cry in the crowd is risk appearing fool and to live at all is risk being dead. However, risk we must, because the biggest risk of life is to risk nothing. In other words, we’re not living enough.

I close this article with a line of ‘Iveta Cherneva’- “Only those who play win. Only those who risk win. History favors risk-takers. Forgets the timid. Everything else is commentary.” 

Author: AJIT SINGH

FRUGALITY - Leads to Riches

FRUGALITY

Leads to Riches

Four cornerstones to become wealthy are -Greed, Frugality, Investments and Risk taking ability.

As per ‘Edmund Burke’, Frugality is based on the principle that all riches have limits!

Money can only be amassed by being frugal. However, frugality should not be equated with being miser or cheap; as it is a prudent and graceful behavior by all means! It means being economical, knowing how to get the best things at the least cost, priorities spending, stick to the budget and lead a well organized life. Frugal people are not emotional or impulsive in spending money and enjoy life within their means.

To save on the electricity bill, a frugal would set the timer of air-conditioner in his room in such a way that the AC automatically turns off within few hours of cooling. They switch off the lights and fans no soon they would leave the room. Frugal people would match the size of the vessel with the quantity of eatable before heating it, in order to conserve cooking gas and save money. At the same time they would appreciate good service rendered by paying tip to a waiter.

Frugal people are generally great negotiators. If they decide to buy a high-end car or house, they would do proper home-work about the product specifications and value it would offer in terms of utility, quality and reliability. They would meet various suppliers of the said product in order to extract best possible deal.

On the other hand, a miser person practices extreme form of frugality, which is often undesirable. They have only one philosophy in life, ‘Save money at any cost’. Leave aside comfort and luxuries which are not even a distant dream for the misers; they would even compromise in meeting the basic necessities of life such as food, clothing and shelter for themselves and their family members. They would act selfish and look at living by the means of others like a parasite, default on loan repayments with an intent to defraud and perhaps buy cheapest products ignoring quality. However, as said by ‘Benjamin Franklin’, misers must understand that, ‘the bitterness of poor quality remains long after the sweetness of low price is forgotten’.

Warren Buffet is considered as a frugal person who still lives in the same home he bought for $31,500 in 1958; his net worth is $61.1 billion. Mark Zuckerberg, whose net worth is $51.1 billion, drives Black Acura TSX, a car valued just around $30,000.

Whereas, Ms. Hetty Green, nick-named ‘The Witch of Wall Street’ is considered miser.

Hetty Green was a shrewd business woman with a nose for investments and a cool head for shares. In 1864 she inherited $7.5m (about £107m in 2010), but barely touched it, relying on her own banking prowess instead. Extreme stinginess had earned her a place in the Guinness Book of World Records as ‘World’s Greatest Miser’!

Allegedly, she never turned on the heating or hot water, constantly wore one old black dress which was only ever washed at the hems to save on soap. The most outrageous tale of her thriftiness, though, is that of her son and his broken leg. She initially refused to pay for medical treatment, resulting in a condition that later required amputation!

A frugal person doesn’t count small expenses on taking care of others as an extra expense, rather they consider it as their responsibility as a human being. On the other hand, a miser would consider every expense as burden, if they see no gain in return.

Every frugal person, no matter what they do, would always take only what they deserve and would never be unethical towards anyone; whereas, a miser would exploit others. We would have heard of people who put their own hair intentionally in the dish served, just to have free food in a restaurant, these are class a part misers and such act would certainly be considered cheap.

Frugal people spend more time on creating value out of their money and are generous in helping others if they can afford it.

So, let every desire not be a need.

Be Frugal To Be Rich

AJIT SINGH