Tag: life

Wealth: A Matter of Mindset Over Money

Image Source: https://bit.ly/2XDlSbT

Let me tell you the story of my grandmother! I spent my childhood with her. I have seen her saving one rupee each day which led to a huge savings later in her life. She did unbelievable things. She has a lot of patience. She believes in moving mountains even if she is old and sick. She never loses hope. She believes in the idea of compounding. Certainly she does not understand the economics behind compounding. I have seen her converting hundreds into lakhs bit by bit. You must be thinking why I am telling you this? Recently, I saw a post about a book called, “The Psychology of Money” on linkedin. This title made me curious and I decided to read this book. While I was reading this book, I realised that these wisdoms on wealth and happiness were always there in front of my eyes. We generally overlook it. The author of this book, Morgan Housel tells you those simple and obvious things about building wealth as Sherlock Holmes once said, ‘The world is full of obvious things which nobody by any chance ever observes’. It’s possible that we see these snippets in our daily life, but we never understood the significance of it.

Luck and risk

The book is divided into 20 chapters that takes the reader from one timeless lesson to another about building wealth. As per the author, past experiences impact one’s behaviour towards money. He believes that financial outcomes are driven by luck, independent of intelligence and effort. Luck and risk both play an important role in someone’s life. Outcomes are not only guided by individual’s efforts but also by the actions outside of our control. One of the best things to be said by the author is this: “Not all success is due to hard work and not all poverty is due to laziness” Therefore, he suggests to keep this thing in mind before judging people. Housel suggests to have the virtue of contentment and not to risk what you have. According to him, there are many things that you should never risk. For instance- reputation and freedom, family and friends and happiness are some invaluable things that no one should ever risk in their life.

Things are uncertain and many times not dependent on the historical factors. You should always be ready to face surprises in the financial market because no one clearly know what might happen next. You must always give space to room for error and be always ready to deal with unknowns. You should be ready to take risks but don’t take a risk that can wipe you from the world. Pessimism is so seductive and believable because setbacks happen too quickly to ignore. In comparison, progress happens too slowly to notice. Improvement is driven by compounding that always takes time. On similar lines, you should be ready to face losses in the financial market. Housel adds that true financial optimism is to expect things to be bad and be surprised when they are not. Nothing is free in life. Market returns are also never free. You should always be ready to lose some money and be ready to face the consequences. It’s like give and take. If market gives you some returns, it also takes some back.

Compounding is the key

The most important concept discussed in this book is “compounding”. Time is the most powerful force in investing.The duration of investment matters. It takes time to accumulate funds. It makes little things to grow big and big mistakes fade away. However, our minds are not build to comprehend the enormous power of compounding. As I told earlier, I have seen compounding working in my own life. Once my grandmother bought something worth ten lakh rupees when she was earning only 10 thousand rupees per month. It looked totally absurd to me and I tried to stop her for buying something so expensive when her income is so less. But she told she will slowly make this payment. Still, I couldn’t believe it. I didn’t believe till the date she was able to complete the whole payment. So compounding works in a way that our mind is not ready to sense it.

Survival Mentality

“Staying wealthy is more important than getting wealthy”, says the author. Keeping your money safe and using it rationally is more important than getting more money. Nothing should be taken for granted. Investing requires taking risks, being optimistic and putting yourself out there but keeping money requires humility, fear and most importantly frugality. The ability to survive plays an important role in becoming wealthy and in creating happiness. The author adds that sticking around for a long time should be the cornerstone of anyone’s strategy in life. Growth takes time. Be it about money or in career. And growth requires surviving all the unpredictable ups and downs that everyone inevitably experiences over time. Applying survival mindset means appreciating three things in life:

  • You need to have enough savings to survive any disruption, pandemic and chaos in your life.
  • Planning is important but the most important is to plan on the plan not going according to the plan.
  • You need to have sensible optimism.

Being in control of your life

The best wisdom shared in this book is about how money can give you freedom to control your time. As the author adds that the highest form of wealth is the ability to wake up every morning and say, “I can do whatever I want today” The ability to do what you want, when you want, with who you want, for as long as you want is priceless. It is the highest dividend money pays. Being in control of your life makes you happy.

Savings are linked not to your income but your humility

Creating wealth has no direct relationship with the income you earn, or investment returns you get. It depends on the saving rate. Saving the money you have and exercising frugality are the ways to build wealth. I have seen this habit not only in my grandmother but also in other family members. They don’t throw old clothes, boxes and many household stuffs and re-use many times. They don’t go out and spend money to experience things as the new generations wants to do. They have their own justification. However, saving money is the only way to build wealth. Spending money is also linked with your ego. If you desire less, you can save more. Housel has something interesting to say about increasing your savings. If you want to increase your savings, raise your humility than your income.

Saving money is the gap between your ego and your income & your income and wealth is what you don’t see.

Acquiring material things are for self-satisfaction. No one gets impressed because of someone else’s possessions. In fact, people are impressed when someone possesses the qualities of humility, kindness, and empathy. Do not take any financial decisions because you are influenced by someone. Do not buy things because you just wanted to show off to someone. It is total waste because people are influenced because of your good behavior and not because of your money, house and the kind of stuff you own. In fact, it literally means that your real wealth is what that no one sees it. The author believes that ‘the only way to be wealthy is to not spend the money that you do have. It’s not just the only way to accumulate wealth, it’s the very definition of wealth.

Creation of wealth is linked to the psychology and behavior of the person. Saving money is like developing a good habit as James Clear shows in his book Atomic Habits. You don’t need a specific reason to save. Savings without a specific goal give you leverage to deal with unpredictable situations. It gives you flexibility and control of your time. The author also adds that you need to focus on being reasonable than rational because ultimately you are a human being who has emotions and feelings. You need to cut down on your expense but it does not mean that you stop living.

People change so do their goals in life

People’s desire and goals change so it is difficult to make long-term plans. The surprising thing is that people themselves don’t realise that how much they have changed in the past and how much they are going to change in future. The author suggests keeping two things in mind whenever you are making a long-term decision. Firstly, you should avoid extreme ends of financial planning because people adapt to circumstances and the thrill of chasing dollars or living a simple life diminishes after a point. Secondly, you need to accept that things change and be ready to move on.The most beautiful thing author has to say that you must have the humility when things are going right and forgiveness & compassion when they go wrong. Because we never know what will happen and always be grateful for things that you have.

The crux of building wealth is to be humble, practice frugality and make saving your daily habit. Be a Ronald Read and not Richard Fuscone!

Hoping for this to end soon.

Location: Vijaywada; Clicked by me.

These days
I wake up and feel like starting my day on a fresh note
Then I hear something terrible
Friend’s father is in the hospital
Classmates’ wife couldn’t make it
Colleague’s 13- year old niece is battling for her life in the hospital
A friend is traumatised because he couldn’t perform his father’s last rite
I am constantly checking on people
Sometimes I get scared to hear phone ringing at the odd time
I am doom scrolling
Sometimes I don’t want to
Then I want to keep myself updated so that I will be ready to face any new challenge
What will happen
There is anxiety and grief
When this will end
When everything will be normal
I am telling myself every day
When this will be over, I will live each moment
I will never take things for granted
I will be grateful
Just waiting for this to end
Just waiting for the day when I wake up
And breathe easy
Hoping for this to end soon…

List of boxes I wish to tick in the near future!

Picture Location: Jal Mahal (Jaipur) : Circa 2016

In the end, it’s not the years in your life that count, It’s the life in your years.

Abraham Lincoln

Recently, I had this feeling of what next I should do. And then I decided to create a list of 50 things that I want to do before I die. When I was thinking about it, I had so many things in my mind and for a moment it felt like, life is like a -to do list.

Out of curiosity I also ask others. I got different answers from everyone but the interesting thing was that no one told me that they want to study or appear for some exams rather most of the people told me that they want to travel or do some adventure sports, create a small library, build their own home and do something for underprivileged. I don’t know what to feel about this. Here are my 50 things I want to do before I die:

  1. Want to work for the Government of India
  2. Help and guide 100 underprivileged students to appear for Civil Services Examination
  3. Want to write two books: one non-fiction and another fiction
  4. Want to work for GOOGLE and TWITTER
  5. Want to start my venture through which I can contribute to the society
  6. Start a small café where people can come and hang out or just read some books. The café should be green, full of art and beauty
  7. Do a degree from abroad
  8. Give a speech to an audience of a hundred people
  9. Visit all cities of India
  10. Travel whole India by Train
  11. Travel in a truck
  12. Want to go on a road trip from Kashmir to Kanya kumari and from Gujarat to Arunachal Pradesh
  13. Travel solo without any planning; just start from anywhere and go anywhere
  14. Want to have a nice drink without any hesitation
  15. Sleep under the stars on a road or a mountain without any fear
  16. Build a small cottage home in Dharmashala (Himachal Pradesh) and also make it a homestay for tourists
  17. Climb Mount Everest
  18. Volunteer at Golden Temple, Amritsar
  19. Adopt a dog
  20. Adopt a girl and provide 100 % funding for her education
  21. Travel at least 100 countries of the world
  22. Ride a bike and go on a bike trip
  23. Learn a foreign language
  24. Go on an island and stay there for a month without any outward communication and internet connection
  25. Sleep on the Beach
  26. Spend a night in a Tree House
  27. Participate in Floating lantern activity in Thailand
  28. Want to go horseback riding
  29. Want to do zip-lining, sky-diving, scuba-diving and par-gliding
  30. Go on a hot-air balloon ride
  31. Want to participate in cycling
  32. Want to have a nice romantic dinner with my spouse on the Eiffel Tower
  33. Jump-off a cliff
  34. Visit a chocolate factory
  35. Make chocolate from scratch
  36. Buy a Mercedes
  37. Travel to Pakistan, Afghanistan, Nepal, Sri Lanka, Myanmar and Bhutan
  38. Talk to a lot of strangers and write their stories
  39. Volunteer for ‘clean river campaign’
  40. Participate in road painting/road cleaning exercise
  41. Plant 1000 trees
  42. Do farming
  43. Do something for my village
  44. Ride a bullet
  45. Learn guitar
  46. Go on a girls’ trip with some of my close friends
  47. Create/Direct a documentary ( A difficult one)
  48. Write at least 10,000 blogs before I die (This is my 93rd blog)
  49. Read 10,000 books before I die
  50. Stay in Varanasi/Sikkim for sometime

Only those who risk going too far can possibly find out how far they can go- T S Eliot

If you don’t mind, please also share in the comment what is that one thing you want to do before you die.

#Be yourself this quarantine

Image Source: Clicked by me from my rented house in Bangalore and we didn’t choose the house,house chose us. There is a story behind it. Will tell later 😉

This post is for all those people who sometimes feel a bit low because one of their friends is having a great time with her partner/spouse/best friend, cleared a top-level competition, got a high-paying job, having a great love-life or got selected to some Ivy League University or having a great time in their life. It seems that they always look good and they are quite fit or they are visiting exotic destinations(though not these days because of corona epidemic and lock down).

Almost everyone has a story to tell. Everyone feels incomplete in their own way. Everyone has some painful moments in their life. But you know what I feel, people feel more comfortable in sharing their happiness than their pain/sorrow or painful moments or their problems. You need a lot of courage to share your pain, your guilt and your problems to the world. I also don’t dare to share my pains but I can easily share my happiness.

So don’t worry. Don’t overthink. No one is perfect. No one is completely happy. As Oscar Wild said, “Be yourself, everyone else is taken”. Accept your flaws because they are beautiful. It makes you a soul. Lastly, have a lot of courage and strength to say what you think, to express what you feel, to do what you love and to become what you want as Ralph Waldo Emerson said, “To be yourself in a world that is constantly trying to make you something else is the greatest accomplishment”.