These are some important lessons I have learnt over 30 years of investing from a young age . These are my experiences , so I cannot really post hard data or do analysis . They have become part and parcel of what I think
I only maintain a family membership to a members only club because I like the food and it’s 50 % cheaper to entertain vs a restaurant and my children can access recreation.
- Get rid of all membership programs , frequent flyer miles, restaurant coupons, exclusive invites . They distort behaviour and thinking . You start seeking comfort and gratification in meaningless trivialities . If you want comfort seek it from family , friends and the almighty .
I only maintain a family membership to a members only club because I like the food and it’s 50 % cheaper to entertain vs a restaurant and my children can access recreation.
- Condition your brain to live on rent . By choosing to live on rent the opportunity cost savings over last 3 years have been to the tune of 75 L when compared to a bank FD yielding 7 percent . Over 3 years , its significant .
- The most difficult one , take advise from people who are better smarter richer than you . This is difficult as you have to let go of your ego and cultivate them . I personally found this to be the hardest .
- Do not hesitate on spending for small pleasures of life to indulge your family . X amount saved now will not amount to much later . But it will help your relationships
- Keep your investing and accounting simple from the beginning . You avoid wasting time that can be spent productively
- Manage your liquidity daily , review it daily , and keep it more than adequate . That is what will give you the strength to hold on to your convictions when life, health and investments all three take a u turn on the same day. I have seen it happen in 2009.
- Cover all risks - life , health and disability . Very few Indians cover disability . We are binary thinkers . Sometimes being disabled is worse than death and certainly more expensive.
- When you approach an investment , don’t approach it with hope , approach it with extreme distrust . Let your analysis peel away your distrust . This in Latin is called via negativa .
- Keep investments in joint names with your spouse or split with spouse . I know several people who kept everything in their name , are getting impacted by higher tax slabs and cess and the spouse leaves no occasion to rub their faces in it .