You cannot have financial freedom – without financial discipline

Affirmative action, compounding, Financial Independence, Human Brain

A few days back I had written a post on why you need discipline and not money to get financial freedom.

I have been sharing with you that I am reading the book The Road Less Stupid by Keith Cunningham. I was introduced to this book by Joe Polish. I had heard him speak a lot about this author in multiple podcasts. So I searched and found an interview where Joe is interviewing Keith.

I liked the ideas that he spoke about in the book and therefore ended up buying it. The ideas and especially the thinking questions are worth pondering on. Today I spent close to about 4 hours on the 3 questions I had listed yesterday in my blog post and did get somewhere with the answers that I got.

Coming back to the headline, while reading the book I had happened to chance on this sentence. It struck me immediately because I continuously keep harping about the need for discipline to reach financial freedom.

This discipline is not possible if you base it on will power. Will power is something which get exhausted very fast on a daily basis. Your brain gets exhausted so fast that the more decisions it has to make the faster the energy depletes. With energy gone you cannot exercise will power.

So you need to put in systems which take the decision making away from you. That’s possible only when you automate the investment process with things like Systematic Investment Plans (SIPs) or the equivalents in your country. You could go with ETFs or Mutual Funds or direct stocks. The item is not important. What is important is to get into automating the process so that there is no concept of using will power. Then let the power of compounding work for you.

Till next time then.

Carpe Diem!!!

Discipline – not money – for financial independence

Affirmative action, compounding, Financial Independence, Human Brain

Yesterday I was listening to a talk by Keith Cunnigham. He is an author of multiple books including the book “The Road Less Stupid”

During this talk with Joe Polish, Keith asked a very pertinent question and I paraphrase it here- “If you were to look back at your 3 financial decisions seriously would you have been better off by not having taken those decisions”

I started thinking about my major decisions and one of them was buying a house. I have written a full post earlier also on this – that it was not a decision I would like anyone to take because it chokes the financial bandwidth – if you are buying it with a loan. If you are buying it all cash then its a good asset or taking a loan of the amount which gives you some kind of tax advantage then its worthwhile.

But then I started thinking again whether I would have been better off financially by not buying the house. On a theoretical calculation, the amount of installments I am paying on my mortgage, if I had been investing the same amount in equities or mutual funds, because of the compounding over 20 years, I would have been much better off to buy this house today and still have lots money left over.

However when I think on the flip side, by buying the house and having monthly mortgage payment, I had to exercise a tremendous amount of discipline to ensure that the payment was done on a given date. I am not sure I had the maturity at the time of putting up SIPs and I was financially illiterate to ensure that I block of the amount into an investment on a monthly basis.

Which brings me to the bigger point – for financial independence – which I have devoted a lot of my posts on – has very little to do with what you earn. It has more to do with what you invest automatically. The key word over here being automatic.

If you think you can have the discipline to ensure consistency every month , to invest on your own, chances are your brain will play games and you will find multiple excuses for not investing. On the other hand if the money will go out of your account automatically even before you get to use it, then you will find a way to manage your finances with the remaining money.

To come back on Keith’s point, yes I would have had a better financial position, provided I had the discipline to ensure my monthly investments.

How are you doing on the financial discipline side, look forward to hearing your comments.

Till next time.

Carpe Diem!!!

Negativity – all around – count your blessings – take affirmative action

Affirmative action, arrogance, Karma, mindset

The second wave of Covid19 in India is really taking its toll. To every person you talk there’s someone close to them who’s down with Covid19.

If we switch on the television, all it will talk about are the challenges with patients not getting oxygen, Politicians are at their best doing what they do , by blaming the ruling government for all the ills being faced.

I am generally a very positive person and try to find something which will give me a reason to be positive. But I couldn’t get myself to do that. All the conversations I had today had some tragedy about someone. I was not even being able to think of what I should write in this post.

But I started writing this blog and then started thing of all the blessings that I have in my life. All the reasons for me to be grateful that I can continue writing this post.

Then I thought I could continue to being a spectator or I could also help in some way. So I thought the government is facing a challenge in getting hold of oxygen. now I can’t make medical grade oxygen, but I can help the government in whatever small capacity in helping them get the equipment which can make the oxygen. So I went and donated money to the PM-CARES fund. I decided to stop just thinking but took some affirmative action.

As John Paul Dejoria says – and I am paraphrasing it – Success not Shared is worthless. If you don’t know who John Paul Dejoria is do a search on Google. He is a few billion dollars worth, but such a soft spoken gentleman, with absolutely no arrogance, who has contributed so much.

And suddenly the world is not so bad. Yes things are not rosy, but human beings have the resilience to find solutions. I am sure we will find solutions to handle this pandemic. I also did my little bit again today. I always feel terrific after donating money. I also believe in Karma and after donating I feel I have sent out a positive message into the universe.

What’s your view, please put in the comments section.

Till next time then.

Carpe Diem!!!

A simple plan for handling worry

Affirmative action, Human Brain, Worry

Today I heard a very simple system to handle “worry”

Please understand I have read books like how to stop worrying and start living by Dale Carnegie and a whole lot of other books on this subject. Each of these had some iota of advice which was a little helpful. But most of the times when we worry, our mind actually travels in a spiral so fast that the other pieces of logic don’t quite come up front to solve the worry.

However I heard one very interesting plan by Joe Polish in his I Love Marketing Mastery program. He learnt it from someone whose name I couldn’t get. You know I have deep regard for Joe so I thought of trying it and sharing it with you.

He says its a three step process

Don’t worry alone – share your worry with someone – automatically the worry statement which your brain builds up falls
Get the facts – this helps eliminate the emotions involved.
Have a plan – for the next steps

I have realised that within these three the first step is actually critical. If I can share my worry with others, then my actually feels a little more relaxed. I have never tried it though with family members. Not sure how it work there. With my professional relationships though this does work.

The second and third points actually happen more easily when multiple brains are working together. And as I have mentioned in my posts earlier, once you start taking affirmative action, by working through small steps at a time, the worry automatically starts to fall.

Have a look at this simple 3 step process and let me know how it worked for you in the comments section.

Till next time then.

Carpe Diem!!!