Our Behaviour

Our Behaviour towards Life, makes a lot of difference while Investing.

Investing Today & Investing Later are different scenarios.

Time Value of Money never stops for any one.

Change your behaviour early.

Untill then, enjoy with today’s image.

Kaustubh Deole

Instant Gratification (तुरंत संतुष्टि)

Instant gratification is one of the most brutal enemy of an investor.

People always look for instant solutions to their problems. Everything cannot happen instantly like 2 minute Maggie Noodles.

Let’s take an example of Indian economy, the dynamics are entirely different. Imagine, a fully loaded 60 wagons goods train. Now to start and take this train to 50 kmph would take plenty of time. Similarly the case would be the same while stopping it.

Our economy is also like this locomotive. Any decision taken will take 2-8 quarters to play out. So one needs to wait patiently.

Too much of data, information these days is proving harmful to investor’s wealth and health.

Instead focus on what matters and have Faith and Patienceश्रद्धा एवं सबुरी.

Kaustubh Deole

Compounding needs time

You can’t build your body overnight. Time has to spent through compounding.

Through the power of compounding, a small amount of money over time can grow into a substantial sum.

Compounding is an investor’s best friend.

Investments can increase in value over time – and the longer the time frame, the greater the value. This is achieved through returns that are earned, but not spent.

When the return is reinvested, you earn a return on the return and a return on that return and so on.

Therefore it is important to start saving early in order to benefit from the power of compounding returns.

Kaustubh Deole

When you are Greedy!

When does a person feel greedy?This emotion can arise due to rising markets. Greed is the opposite emotion to fear. It is the emotion which wins over fear and promotes over-confidence. With the rising markets, investors become greedy and hold on for longer positions, or often make random trades, which they are not supposed to do in their investing system.

This emotion can arise due to rising markets. Greed is the opposite emotion to fear. It is the emotion which wins over fear and promotes over-confidence. With the rising markets, investors become greedy and hold on for longer positions, or often make random trades, which they are not supposed to do in their investing system.

So, it is the emotional control that is the key component, an investor must exhibit while investing. True success depends on this psychological strength of the investor. Greed has to be dealt with to maintain your focus and not to get swept away by illusions.

Kaustubh Deole

Financial Freedom

Financial Freedom means having zero tie-ins to anything financial. It includes your income, debt and expenses, lifestyle. It is of little matter how people perceive the meaning differently. Rather, it is more crucial to understand how to act based on your financial situation.

Loan Free
Being debt-free should not be confused with being financially well off. If you are only debt free, you still have to work in order to pay for your basic expenses and taxes. In order to achieve financial freedom, the first thing we have to ask ourselves is what does it take to be debt free?

Income & Expenses

Assume you purchased a car without any loans required, it does not imply you are financially debt free.

There are other factors to take account of like servicing & other maintenance costs, fuel costs, repairs etc. Moreover, this is just a car. Think of other factors also. Your expenses must be well managed to achieve this goal.

If expense is greater than income, you are far from being free from anything.

Financial Assets

Financial assets are financial tools that will generate annual cash flow for you. These assets can be pension, shares, bonds and mutual funds. You can get dividends from shares, receive regular payments from your bonds or mutual funds.

For retired individuals, they can enjoy the benefits of EPF, PPF, PMVVY(Pradhan Mantri Vaya Vandana Yojana)

Conclusion

It’s easy to sell a story of being financially free. You may have heard several discussion or lectures on the importance of generating ‘passive income’ and ‘self generating money’ tools.

Feel good stories sell the best and people buy into this.

Investments and savings are good, but as with most things in life, they come with risks like inflation.

In great books, being financially free does not equate to wealth accumulation but rather your lifestyle.

Live within your means, plan for the future and consider the role of inflation while calculating financial freedom. We might be of help.

IDIOT BOX

Akbar once put a question to his court that left everyone puzzled.

As they all tried to figure out the answer, Birbal walked and asked what the matter was. And so they told him the question.

‘How many crows are there in the city?’

Birbal immediately smiled, went up to Akbar and announced that the answer to his questions was twenty-one thousand five hundred and twenty-three.

When asked how he knew the answer, Birbal replied, ‘Ask your men to count the number of crows.

If there are more, then the crows’ relatives from outside the city are visiting them.

If there are fewer, then the crows are visiting their relatives outside the city.’

Pleased with the answer, Akbar presented Birbal with a ruby and pearl chain.

This is the kind of stories being dished out of business news channels day in a day out.

For example: take the question “Market kya bolta hai (What’s the market saying)” or

Where will the index be by in 5 years?

And haven’t you heard very intelligent and learned people saying that the index could triple in 5 years.

The use of the word ‘COULD’ is like Birbal’s answer.

Again we hear things like the market will rise provided “MONSOONS” are good, provided “FISCAL” situation improves but there are risks also like outcome of various “ELECTIONS”

Thus the media and experts are always ready with BIRBAL answers and like Birbal’s earned Ruby and Pearls the media earns huge advertising revenue by aggregating fools who sit in front the idiot box.

Kaustubh Deole