Who Else Wants to Get Rich?

“No one wants to die. Even people who want to go to heaven don’t want to die to get there…your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma — which is living with the results of other people’s thinking. Don’t let the noise of others’ opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.”

I consider these words of Steve Jobs from his famous 2005 speech at Stanford University as one of my guiding lights in whatever I pursue in life, including investing.

In not investing the way someone else does, and having the courage to follow my independent thinking and act on the same, I try to put in the hard work whenever and wherever it is required.

Anyways, let’s leave out the heaven and death part from the above statements of Steve Jobs, and concentrate on wealth building.

Everyone wants to get rich someday. Even I do.

But the biggest question is – how many of us ‘prepare’ to become rich, if we weren’t born with a silver spoon?

Working in a job and earning your living isn’t going to make you rich. The inflation is rising faster than your annual salary hikes.

Taking on bank loans to buy a luxury car or a dream property won’t make you rich. You’ll end up working for the banks for the rest of your life.

Yes, winning a lottery or a game show can make you rich…but this is temporary given that we humans are not hardwired to sensibly manage ‘instant’ wealth.

So how do you get really rich, and how do you maintain your riches?

I believe, like everything we want to achieve in life, it all starts with the right kind mindset and ends with the right amount of efforts.

If you have the right mentality, you can become a very powerful individual capable of making millions for yourself.

Don’t scoff at the notion! Most millionaires (who became millionaire the right, ethical way) weren’t all that different from you or me when they started.

In fact, the only big difference is how they think differently. Once your mind is right, you will take action and ultimately you will also succeed in becoming rich (if you aren’t already).

So what makes up the right mindset that the rich possess and most others don’t?

See, it’s no harm in learning from people who’ve been there, done that. So if you want to become rich (like I do), there is no harm in thinking and acting like the rich did…when they weren’t rich.

Anyways, while there may be many ways you can form the right mindset to get rich, I’ll concentrate only on the money and investing aspects, because that’s what I know best.

So let’s get started. Here are the eight habits that the rich practice, and so must you…if you want to get rich.

1. Know what you’re so passionate about that you’d be happy doing it for 10 years, even if you never made any money from it. That’s what you should be doing.
This also holds true for investing in stock markets.

Identify the right businesses – ones that you understand and that you believe will run profitably for years to come – and buy them even if you know that you won’t be able to know their stock prices for the next 10 years after you buy them.

2. Figure out what your values are and live by them.
Your grandma must have taught you the virtues of patience, not being greedy and fearful, and hard work. And you already practice these values in your life.

So why are these missing when it comes to investing in stock markets?

3. Don’t get bankrupt by ‘yes’.
Alternatively, learn to say ‘no’. We don’t know how to say ‘no’, simply because we find it hard to do.

We don’t want to sound rude. We always want to sound agreeable.

We fear that saying ‘no’ would mean losing out on opportunities. We fear the conflict that comes from saying ‘no’. We fear burning bridges by saying ‘no’.

So if someone advises us a stock to buy, we find it hard to disagree and instead feel indebted to the advisor for his ‘precious’ advice.

What happens next is that we go ahead and buy the stock, without knowing what we are getting into.

Change that. Learn to say, “No, I won’t!”

Learn to say ‘no’ to investment advice that doesn’t meet your needs, and once you do that you’ll find how easy it actually is.

4. Successful people do all the things unsuccessful people don’t want to do.
99% of investors don’t succeed because 99% of investors don’t work to succeed.

Apart from luck and the right kind of emotional behaviour, you also need a lot of practice to make money from stock markets. So whether it is spending time reading annual reports, or understanding businesses, you need to do it if you want to succeed as an investor.

Believe me, 99% of investors don’t put in the hard work and still expect to get rich from investing. This doesn’t work. It never has.

5. Instead of buying the product, buy the stock.
Consumerism is good only because it helps an economy grows. But it often happens that we buy things because we ‘want’ them, not because ‘we’ need them.

I used to do that myself till I learnt to say ‘no’.

If you are in love with a product that you want (and not really ‘need’), don’t buy it. Instead buy its stock and see your money grow over the long term (assuming the product is really good and will help the company grow its sales and profits over the years).

6. Take complete responsibility of your actions.
There is no point in blaming someone else for your investment mistakes. Not your broker, or that business channel expert, or your colleague who advised you that ‘dud’ stock…the blame lies with you.

‘You’ willingly acted on that bad advice, so it’s nice to own the responsibility. That’s how you also own your life.

7. Save to buy yourself freedom.
Spending Rs 100 or Rs 200 here and there would not make much difference to your life in the present. But saving these small amounts, which you would’ve otherwise wasted on momentary pleasures, can make a huge difference in the long run.

Since money has the ability to work in your place, the more of it you save and employ, the faster and larger it will grow.

Most importantly, along with more money comes more freedom – the freedom to stay home with your kids, the freedom to retire and travel around the world, or the freedom to quit your job to work on your passion.

8. Understand the power of small steps.
When you are just testing waters, it’s always good to start small by allocating small amount of money to stocks, and then increasing the allocation gradually.

Instead, what most new investors do is jump into the stock markets with 100% of their savings from the first few months of their job or business, and 0% knowledge about what they are getting into.

All the patience and hard work with which they had carved their careers all these years, is forgotten when it comes to handling their money.

You see, investing in stock markets isn’t a 100-meter race. It’s a marathon, which requires a great amount of stamina and the right mental framework if you are looking to win it, or at least complete it.

Of course, you will fall a lot of times i.e., make losses on your investments. But if you don’t start small, one big loss can wipe you out of markets.

So learn the power of taking small steps, and keep faith in the power of compounding.