- Rule number minus one: Invest with a goal and time frame. Rule number zero: Never forget rule number minus one. What WB said can wait.
- There can be no free lunch: It goes against the rules of the universe. Returns may not be mathematically correlated to risk. However, there is no denying that ‘good returns’ implies risk. Simple commonsense.
- Horses for courses. If you want ‘good returns’ you need to train for a marathon not for a sprint.
- Ignore noise: Do not waste time reading every available analysis on why bonds crashed. The fundamental principles of sound investing will never change. Once you know what those are, the rest is just BS. The reasons for the crash are completely irrelevant if you get the basics right.
- Never forget the tortoise and hare story:
- Why did the hare run fast? Because it had not idea how the finish line looks and wanted to get there asap.
- Why did the tortoise go slow? Two reasons
- It had a good idea of how the finish line looks and knew how to pace itself.
- It had a shell. Every time there is panic and unnecessary noise, it will withdraw into its shell.
- Read the fine print. When an investment document says, “MF investments are subject to market risks” it actually means it! No one cares if you didn’t read it. No on cares about your interpretation of it.
- Understand the gravity of a statement. When someone says, ‘liquid funds have the lowest risk among all debt funds’ it does not mean they have zero risk. Every investment vehicle has a purpose. If you don’t know what that it is, kick yourself in the butt.
- Blame no one but yourself. Do not be shocked that you have lost money in a debt fund. Be shocked at your investment choices and thought process. Don’t the join the chorus of popular financial literacy magazines and blame AMCs, regulators and financial planner. Your loss is only your loss.
Let me conclude by misquoting George Santayana:
“Those who forget history are condemned to repeat it”
Want to conduct a sales-free "basics of money management" session in your office?
I conduct free seminars to employees or societies. Only the very basics and getting-started steps are discussed (no scary math):For example: How to define financial goals, how to save tax with a clear goal in mind; How to use a credit card for maximum benefit; When to buy a house; How to start investing; where to invest; how to invest for and after retirement etc. depending on the audience. If you are interested, you can contact me: freefincal [at] Gmail [dot] com. I can do the talk via conferencing software, so there is no cost for your company. If you want me to travel, you need to cover my airfare (I live in Chennai)
Connect with us on social media
- Twitter @freefincal
- Subscribe to our Youtube Videos
- Posts feed via: Feedburner
- We are also on Google PlusandPinterest
Do check out my books
Get it now. It is also available in Kindle format.
Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You WantMy second book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at low cost! Get it or gift it to a youngearner
The ultimate guide to travel by Pranav SuryaThis is a deep dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, how travelling slowly is better financially and psychologically with links to the web pages and hand-holding at every step. Get the pdf for ₹199 (instant download)
Free Apps for your Android PhoneAll calculators from our book, “You can be Rich Too” are now available on Google Play!
Install Financial Freedom App! (Google Play Store)
Install Freefincal Retirement Planner App! (Google Play Store)
Find out if you have enough to say "FU" to your employer (Google Play Store)