Author: animeshjmathur

Debt versus liability

Debt, Leverage, Liabilities

I have written earlier that I have been reading this book, Killing Sacred Cows…… by Garrett Gunderson.

Based on my own life experiences , where I was in so much debt from all sides , I have come to a conclusion that I will not take any debt for consumption items, especially credit card debt. Wherever I do have to use my credit card, because of “single shot” payments, I ensure that I pay it out within the period of free credit.

Otherwise I am absolutely against borrowing money and taking leverage of any kind.

Garrett on the other hand has come up with a very interesting take between liability and debt.

He says you will always have to take a liability to get an asset. One cannot exist without the other. If the liabilities exceed the assets you have then its debt. You should get rid of this debt at the earliest.

On the other hand if you can service the liabilities with your cash flow and it helps increase your assets then you should borrow. Effectively if you are buying a productive asset rather than a consumption asset, then you should borrow. As per him if you have to leverage your ability to add more assets then you should borrow.

Now in some situations there can be a thin line between consumption and production.

I am right now thinking about how do you go about classifying expenses as being done for productive reasons. Some could be clearly identified such as having one car to improve mobility versus three cars for lifestyle. Even that could be debated by some though.

But how should I look at taking a holiday to get new experiences. The experiences help me de-stress and therefore make me more productive in the long run. Should I be willing to borrow to fund the experiences rather than directly fund with cash and liquidating some assets.

I need to get a wrap around this idea. It could actually be a game changer.

Will keep you posted.

Till next time then.

Carpe Diem!!!

Insurance to eliminate fear

Fear, Happiness, Health, Insurance, Leverage, Risks

I read an extremely interesting concept today. I have considerably got convinced about the idea, still digesting a few things, but thought of sharing to see what you think.

I have always been aware of insurance being necessary. As a matter of fact in my posts on advice to young women, I had layed great stress on both health and life insurance.

Quite frankly given the high inflation in healthcare costs, I would anyway recommend you to take the highest possible health insurance. On life insurance however I was generally of the view that you should take term insurance to cover the major risks that you envisage.

One of the key things in financial independence that I keep harping about is the ability to take decisions without the fear of having a job in the future.

One of the reasons that financial independence becomes a moving target is because as you grow in life, your finances improve, you get used to a better lifestyle. To be able to achieve that lifestyle if you leave your job, you need to have a much higher level of assets. So you again start saving and investing for the next higher level but by then your target amount has moved further.

This happens primarily because FEAR, the What if eventuality.

This is where if you have more than adequate insurance of different types, you transfer the risk to the insurance company and your fear can reduce. This is where I have to delve deeper on how you can leverage this ideato become more fearless.

I will keep you posted as I delve deeper into this subject.

Till next time then.

Carpe Diem!!!

Financial freedom – Happiness

Affirmative action, compounding, Financial Independence, Happiness, travel

You would have seen so many posts from me on compounding and rates of return and long term planning to build a large asset base even with small monthly automatic deductions from your account.

The objective of doing all this is not to stop living today for a better tomorrow. 

The idea of financial freedom that I talk about is to ensure that you are no longer forced to do things for earning money.  I have always wanted to have financial freedom so that I could go out and achieve all the items on my bucket list.

These items on my bucket list are what will give me experiences with my family which will in turn make me happy. I have already shared how I used these principles to travel to different countries.

The end objective of getting Financial Freedom and Financial Independence is Happiness today and in the future. 

If you have to work in a job ,which does not make you happy, just because you don’t have the money then you find another job or use the magic of compounding so that over a period of time at least you are in a position to leave the job and do things which make you happy.

Through intermediate milestones, in accumulating wealth, you use the wealth to get experiences . Wealth is not to be accumulated for the sake of getting to a number. You have to enjoy the journey and be happy through all of it.

Till next time then find reasons to be happy.

Carpe Diem!!!

Prioritizing the top 3 or 4 – Product Management

Assumptions, B2B, differentiation, Marketing, Marketing Ecosystem, Marketing Stamina, messaging, prioritizing, Product Management, segmentation, single target market

Last week I put up a post in which I highlighted the top issues that we need to focus on when looking at the product management in a technology environment. Product Management being a subset of marketing, some of the core items remain the same. However the focus changes a little. In my opinion, B2B technology buying needs to prioritize as follows:

  1. Understanding the ecosystem for technology adoption
  2. Getting footfalls (incase of a store) or hits on your website or people coming to your webinar
  3. Cost of various media to get you the traffic
  4. Cost of converting the footfall into a buying public

Perry Marshall calls items 2-4 as Traffic, Conversion and Economics. The reason I put the ecosystem first is because there’s a huge dependency on the existing infrastructure for the technology to be adopted. Most technology products that fail are because the ecosystem did not exist for the adoption.

Since 80/20 is fractal within each of these there’s a further 80/20 which exists. So within each database/list, there could be about 20% who would respond 80% of the times or even within the ecosystem there could be a 4% which accounts for the 64% of the ecosystem dependency.

If you are able to identify the few challenges in the ecosystem that you will face which can have a major impact on the success of your product, addressing them will ease your product launch or product entry or penetration dramatically. Its the small hinges which move doors in all areas.

Till next time then

Carpe Diem!!!