Advantage small investors – SIPs

Affirmative action, asset allocation, compounding, Financial Independence, Habits, Uncategorized

This is a continuation on my rant for doing Systematic Investment Plans (SIPs)

A lot of times I hear my friends , especially female friends say this….. my father / brother / husband invested in a specific stock Rs100,000/- and the stock has never recovered back and he lost so much money, so I will never invest.

I have literally had to coax people to understand the fallacy of the argument. Losing massive money is an outcome of getting in the market without doing your home work. If you listen someone else and do your investment or you see the stock market going up and you throw a dart at any name and buy the shares then you are inviting trouble.

First and foremost if you don’t understand about the ways companies work, operate, don’t get into the market on your own. There are so many ETFs which you can buy or MFs you can get. This helps spread the risk over multiple stocks.

Second even within these always ensure you are buying regularly in small tranches. By using the SIP facility you get to average over time as well as cost so even the fall in prices is actually an advantage for you.

Unlike big investors who have to look for a big price advantage to invest their millions or billions, for the small investor this is an advantage. They can enter the market at any time because the SIP will take care of any gyrations that the stocks go through and will end up with a very large core inthe long run.

The key is that you are not investing lump-sum, you are investing small amounts and you are investing systematically and you are letting compounding play its role in the long run, then your returns will be similar to the overall market

In the LONG TERM, and this is a very important point, in the long term the stock markets have given compounded returns in double digits. If you can spare small amounts of money every month for an extended period of time, its mi days boggling to the corpus you can create. In my earlier posts I have given ready to use charts to help you compute.

However if your time horizon is short then its better to put money in debt instruments so you are sure about your returns. These returns are small single digits but they are guaranteed.

Take your first step, start an SIP and get financial independence.

Till next time.

Carpe Diem!!!

WHO NOT HOW – more than 7000 years ago

collaboration, Habits, Leverage

Dr. Benjamin Hardy — one of the most prolific writers on Medium has co-authored a book WHO NOT HOW. He has co-authored this book with one of my favorite thinkers Dan Sullivan.

The basic premise of this book is that if you leverage your relationships, you can solve all kinds of problems more easily as well as much much more quickly.

I finished reading this book yesterday and saw the immediate applicability all across my life. 

But what surprised me when I was going through the book was the fact that two of Indian Mythologies’ the Ramayan and the Mahabharat are completely about WHO NOT HOW. Both are huge texts and its not my agenda to go into a religious discourse but if you see the key architects of these texts you will immediately see the applicability of this rule.

In Ramayan — Lord Ram’s wife Sita is kidnapped by the demon king Ravana. Lord Ram and his brother Laxman are travelling in the forest helter-skelter trying to figure out where Sita could be when they come across the Monkey King Sugreev and his able chieftain the Monkey God Hanuman. 

In true “give” before you “ask” form that Dr. Ben Hardy suggests —Lord  Ram first helps Sugreev get his kingdom back from Bali and then the complete army of monkeys ably led by the Monkey God Hanuman help identify where Sita is and then with their help Ram and Laxman fight with the demon king and kill Ravana and his generals.

If it was not for the Monkey God Hanuman they would have not been able to identify the location where Sita was held captive by Ravana. They used the Monkey God’s key capabilities to fly long distances and get an aerial view to isolate the location in Lanka. After that if it was not for the monkey army — who created the rock filled walkway in the sea — Lord Ram & Laxman would have not been able to cross the Indian Ocean to get into Lanka and fight Ravana

Lord Ram did not instruct them how to do their jobs —The Monkey God  Hanuman and his army of monkey were good in their jobs and were wanting to get Lord Ram to succeed…. exactly as Ben Hardy talks about the “WHOs” that you need to choose and not micro manage.

If Lord Ram and his brother had tried to do everything on their own they would have taken a much longer time to first figure out the location and then go about trying to get there. 

I am sure if you try to think about it, most of the major achievements in the world would not have happened without a WHO being involved. And this is not ONLY a vendor — customer relationship, that we are talking about. Its about also relationships where there are no payments getting made.

Till next time.

Relentless- Part III

compounding, Financial Independence, Habits, Marketing, Uncategorized

Even passive activities can be relentless

Last 2 posts I have been talking about being relentless with respect to Marketing and sales of various kinds

Today I will be talking about how I realised that the systematic investment plans or SIPS are a different kind of relentless activity.

I have mentioned multiple times that you should give a mandate to your your ETF or mutual fund to deduct the amount directly from your account and invest.

On one level this becomes a passive activity because you are no longer involving your brain to make a decision.

However we have also noted that being relentless is a habit which is needed if you want to succeed systematically rather than episodically.

So where’s the paradox.

If you have to become wealthy then you have to invest relentlessly on a regular basis. A systematic investment plan is also a regular, consistent activity a.k.a relentless. The only difference being that you don’t need to tax your brain. You are automating the process of being relentless for your investment.

To that extent it’s an ideal opportunity….you have outsourced your relentless activity to a system….and you can become wealthy on the way

Think about it…..small amounts of money invested relentlessly…taking advantage of the magic of compounding…can get you financial freedom.

Till next time,.

Carpe Diem!!!

Relentless – Part II

Habits, Marketing, Sales

Since yesterday when I first wrote the blog post about being relentless this thought has been going on in my mind continuously all through the night that all marketing success at one point comes down to being relentless in your pursuit. You can read the post.

That does not mean there are no other attributes  – like if you are running in the wrong direction then obviously you will reach the wrong place but assuming you have the right direction then if you have to reach your destination you need to be e consistently relentlessly going after your target destination to be able to reach there

After the post I looked around to see which other authors had sold more than a million books and try to identify what all they were doing to achieve those numbers. One author who comes to mind is Russell Brunson. He’s written 3 books and has this relentless effort to ensure he’s in front of the right influencers who read his books, interviewed him and their audiences bought his books.

If I  look at sales,  one of the greatest sales guys I have had the chance to read about was the late Chet Holmes. He had a methodology which he used to call the Dream 100. His idea was very simple. He would first identify the Top 100 (notional number) that he wanted to do business with.

Then he would  relentlessly every alternate day send a bulky packet with information and next day give a call.  In one case as per him , where he had listed 167 companies in his list of dream companies , he was able to get all of them as customers within about an year.

At the end of the day,  the consistent focus of daily activities is what helps these companies execute.

Again as I said earlier this does not mean that you don’t need a good product or service.  It does not mean that you don’t need to differentiate your offerings.  It does not mean that you have a faulty strategy.  These are table stakes.

If you have all the above and then you execute relentlessly that’s when you succeed.  If you have all the above and do things in an episodic way then you will fail.

Till next time.

Carpe Diem!!!