Avinash.tech(…)

Most people sleepwalk their financial life…

I was no exception and the only thing that helped me all these years was not having any “good” habits ( beedi, cigarette, alcohol, gambling 😉 ) and following rules that were clearly embedded by Grandad :

• Be frugal in life. If you buy things you do not need, soon you will have to sell things you need.
• Invest regularly and save at least 25% of earnings. Invest first and spend the rest.
• Not participate in any of the get rich quick schemes. Anyone promising more than 10% ? Just think twice !!
• Avoid getting into debt at any cost

There is no denying the above lessons I got very early in life have helped me in accumulating wealth. The only unwelcome side is the inflation steadily eating into it.

The current inflation rate in India is around 7%.

This forced me to explore a sounder investment strategy that would avoid paying huge taxes and also not eat up my time, tracking it.  The idea is to not lose your sleep over money.

Money should work for you even when you are asleep!

Warren Buffet to the rescue?

Warren Buffet is a genius ( reminds me of my Grandad , who was equally great in terms of investment ). There are a lot of great books about his life and investment thoughts on the internet.

Unfortunately,when it comes to stocks and investing ,most people have misinterpreted it ( like we always do… take religious doctrines for example ) . 

Warren Buffet invested in great company and held it for a real long time and thats how he made all his money !

That’s Warren Buffet , the Oracle of Omaha! A mere mortal like myself cannot fathom the idea of picking stocks like Buffett. This is perhaps the biggest lesson absorbed from several books I devoured on Stock Market Investment over the years 🙂 . If you still feel that you can beat the market Index by picking stocks, stop reading right now and come back a couple years later when the lesson is learnt the hard way ;).

Imagine investing in Indian companies like HMT, BPL, Videocon… that we grew up with… hold them till date, you are bound to lose all your money by now. There were even companies like Home where Sachin Tendulkar used to come in an advertisement, which soon turned out to be a bloated company purely created to dupe people. Warren Buffet also has lost millions in bad investment and takes that kinda loss because of the huge cash reserve generated by Gecko ( an insurance company that he owns a majority stake in).

For a common man, all it takes is a small hit on his corpus to lose heart in an investment system and sit outside as a spectator forever. The faster this one fact is understood, the better. On the contrary, never ever buy and hold an individual stock !!

Warren Buffet indeed has a knack of finding great companies to invest in . But that too has passed, even Warren agrees that “identifying good companies is like finding a needle in a haystack” . Going forward he even advises to “buy the haystack instead of finding the needle and this is possible using a broad market diversified investment like an Index Fund“.

My future posts will infact introduce you to the world of Index Funds and why it’s a proven choice for any investor thinking of investing in a stock market.

Its absolutely impossible to lose money in Stock Market 

– Warren Buffet

The above quote if spoken in a public forum in India is bound to attract lengthy Gyan sessions about how people have lost a fortune in Share Market ( he/she in their stories would be 80% of the time themselves 😀 ).

What Buffet actually meant?

Based on most of the Berkshire Hathway shareholder letters I have gone through, what Warren was suggesting is “Eventually the market will always go up and a stock market is a place where money moves from a lot with no patience to the few with lots of patience.”

I am still trying to chew on the Idea of Investing in Stocks and plan to record them as I uncover the secrets !

Here are 2 quotes that will help everyone in a long run!

“The best thing a human being can do is to help another human being know more.”

– Charlie Munger

“Go to bed smarter than when you woke up.”

-Charlie Munger

I will add more to what exactly I understood from these books and also some lengthy chats with my own brother soon in my future posts !

Happy Investing! Its your money , dont let others take control of it !!

Please read the disclaimer carefully before making any investment based on the articles published on this Blog !!