Life

10 Simple Rules that Brought Me Financial Nirvana

I was in Ahmedabad last week for my Art of Investing Workshop (here’s the proof), and met a few young executives – in their mid 30s – who had questions about how I have managed my own financial life so well so far.

A couple of them were, in fact, amazed to hear my story and told me that I have been an exception.

“That’s not true!” I told them. “I have not done anything special in my financial life that anyone else cannot do.”

In fact, whatever I have done to bring myself to a stage of financial nirvana – if I may use that term – I have done with the help of some simple rules on how I treated my money over the years.

Now, while I am too young to dispel any life-changing advice on “how to be a financial rockstar” or “how to remove all financial worries from you life”, I am happy to share below 10 rules that have changed my life for the better over the past few years, and how these can also benefit anyone who practices them with discipline and integrity.

Here are those 10 rules.

One Small Step Can Change Your Life

We live and we learn to take
One step at a time
There’s no need to rush
It’s like learning to fly
Or falling in love
It’s gonna happen when it’s
Supposed to happen and we
Find the reasons why
One step at a time

When you can’t wait any longer
But there’s no end in sight
when you need to find the strength
It’s your faith that makes you stronger
The only way you get there
Is one step at a time.

~ One Step at a Time (Jordin Sparks)

Every path to success has been littered with doubt, fear, and uncertainty, as well as persistence, calculated risks and repeated action.

The difference between someone who fails and someone who succeeds is the courage to act, repeatedly.

I Invest, So That I Live Like a Man…Not a Donkey, Dog or Monkey

In my collection of short stories that I have found on the Internet or in books and magazines, here is one that I believe carries a deep meaning, and a harsh truth, for our lives.

Here it goes.

God created the donkey and said to him:
“You will be a donkey. You will work un-tiringly
From sunrise to sunset carrying burdens on your back
You will eat grass, you will have no intelligence
And you will live 50 years.”
The donkey answered:
“I will be a donkey, but to live 50 years is much. Give me only 20 years.”
God granted his wish.

Life & Money Lessons from Kantilal

“Wadala Station?” I asked as a taxi approached me while I was returning home from a trip to the Siddhivinayak Temple here in Mumbai today.

“Come, sit,” the driver said, as I thanked my stars because a few drivers had turned my request down.

“I was going towards Chembur, and Wadala is midway, so would take you there.”

“Oops, but why does your meter start at 20 rupees? Isn’t this high than normal fare?”

“Sir, this is a cool-cab (Mumbai’s AC taxis), so the rate is higher. But don’t worry, since you don’t need the AC, I will charge a normal taxi’s fare only.”

“Thanks! By the way, Chembur is very close to my home. Why don’t you take me there?”

Life, Liberty, Happiness…and Investing

Image Source: Flickr

“Life, Liberty and the pursuit of Happiness” is one of the most famous phrases in the United States Declaration of Independence.

In fact, it is considered by some as part of one of the most well-crafted, influential sentences in the history of the English language.

These three aspects are listed among the inseparable rights of man.

Despite this, as I suppose, it would perplex a visitor from Mars whether we human beings really want what we say we want – life, liberty, and happiness.

This is especially true if the Martian were to drop somewhere on our stock markets, and examines the behavior of investors, speculators, analysts, and fund managers.

He would no doubt question the intelligence of the planet’s inhabitants, and would wonder…

“Do these guys really want life, liberty, and happiness…the rights they have been wanting for ages? They seem to be hell-bent on destroying themselves through their foolish actions! Is this the way the entire humanity works? If yes, I must thank my stars for being a Martian and not a human!”

The Analyst Who Sold His Ferrari

Imagine a stock market analyst appearing on CNBC advising traders to “stay long on L&T”, “short M&M”, and “buy IRB on dips”.

Given enough of dirt we may have thrown at such analysts in the past, I am sure what kind of a person you may be imagining. Someone dressed in a crisp, formal shirt and tie, and sharing his expertise on accumulating stocks.

Maybe someone like this…

Now, imagine seeing the same person clad in a loose khadi kurta, sporting a French beard, wearing a hearty smile, and advising you to give all your stocks away.

I am sure you may not be able to imagine that, given that there’s a negligible probability of a stock market analyst appearing in this second avatar.

My Friend Sameer

This isn’t going to be a long post, for I am sad.

I am sad to share with you the news of untimely death of a young Safal Niveshak tribesman, Sameer.

I had never met Sameer but we had interacted a lot through email over the past few months…and had thus become ’email friends’.

The last time he wrote to me was on 25th August, the day he subscribed to my Mastermind course and was very excited to walk together with me on a one-year journey of learning.

Very sadly, his friend – another tribesman – broke the news to me that Sameer passed away on the 27th.

[Read more…] about My Friend Sameer

I’m Making This Investment. Are You?

“Man surprised me most about humanity. Because he sacrifices his health in order to make money. Then he sacrifices money to recuperate his health. And then he is so anxious about the future that he does not enjoy the present; the result being that he does not live in the present or the future; he lives as if he is never going to die, and then dies having never really lived.” ~ Dalai Lama

In my previous post, I wrote about the need to avoid the “it-will-never-happen-to-me” mentality when it comes to health and investing.

Before I get to writing again on money and stock markets, here’s one more thought (more important than money and stock markets) I wanted to share with you.

I’m sure you must have never heard of Dr. Lester Breslow, like I didn’t till last week while attending to my ailing father and reading up stuff on keeping good health.

One Year Course in Value Investing
Join The Safal Niveshak Mastermind, my special one-year course in Value Investing to reinvent how you invest and take control of your financial life. Click here to know more and subscribe. Subscriptions for the first batch close on 25th August 2013!

[Read more…]

It Will Never Happen to Me!

Sitting in a Kolkata hospital lobby while getting my father treated for a heart ailment, I see this wall hanging that says – “It will never happen to me!”

The pictures below this headline show how a person hurts his heart through stuff like…

Alcohol consumption
Cigarette smoking
Poor eating habits
Sedentary lifestyle
Stress

…yet continues to think that a heart ailment will never happen to him.

It will happen to everyone around him, but not to him!

Such thinking is widely prevalent when it comes to deadly diseases, death, or even investing doom.

We all consider everyone else as vulnerable but ourselves as invincible. And this is the reason we continue to play with fire, whether it comes to our life, habits and investing.

Charlie Munger says…

A lot of success in life and business comes from knowing what you want to avoid : early death, a bad marriage, etc.

Ironically, most of us while knowing what we must avoid for a healthy heart, long life, better relationships, and comfortable financial life, are mostly travelling on the path assuming others are going to die there, but we will survive.

This is sad, and dangerous! Why?

Because…

It happens, and often!
My father is as healthy a person as anyone can be – no alcohol consumption, no smoking, and he certainly does not have a sedentary lifestyle.

But he has still suffered a serious heart ailment, for which he is being treated now.

He was not “supposed” to have such a disease, but he still has it.

The situation seems under control as of now (keeping fingers crossed!), but his heart has surely taken a serious hit!

Anyways, over the past three days, I have seen several cases of people with heart problems who would have believed at some points in their lives that “it will never happen to me.”

Sadly, many people I see suffering here are in their 40s and 50s. Even sadly, most would have surely fallen to these ailments on account of the poor habits like the ones mentioned above.

But people don’t understand the base rates of living a dangerous lifestyle and then falling into a deadly health issue. It’s high, and increasing!

I am not in a situation to write further at this point of time but, dear tribesman, stuff happens!

Especially in life and also in investing, “It will never happen to me!” is a widely held but dangerous notion.

Surely take risks in life, but only ones that will not cause you a permanent loss.

I am not old enough to dole out advice on healthy living, but I know it surely helps.

I have reiterated it several times in the past, and would do it again today. Remember what Charlie Munger says…

All I want to know is where I’m going to die so I’ll never go there.

You know where you are going to die – in life and investing – so please avoid going there.

Please!

How to Be Happy and Get Rich

I have been re-reading Poor Charlie’s Almanack over the past few days in preparation of my upcoming Mastermind course.

This is my fifth reading of this wonderful book, and it seems I am going through it for the very first time.

Unlike what many people think, this book is not a ready reckoner on how to become a successful investor. In fact, it’s much more than that.

It’s a book on how to live a happy, sensible and rich life and in the process become a better thinker and investor.

As you read through the book, some of Munger’s ideas will inspire you, and some will make you uncomfortable. But all will challenge you to think outside the box.

The third chapter of Poor Charlie’s Almanack captures “Mungerisms”, where Munger dispels hundreds of ideas on subjects ranging from life, investing, academia, financial engineering, accounting, money management business, and managements.