Macroeconomics and Long-Term Equity: A Surprising Disconnect

Interest rates and inflation dont really matter much in long-term equity investing.

I am going to prove it to you with my personal experience of stock investing in last 16 yrs!

In the previous article, we discussed 2 key macroeconomic concepts such as interest rates and inflation.

Most investors tend to overemphasize on these 2 concepts and use them for investing into direct equity. One thing to consider is that the equity market is a completely different beast to conquer. And that’s what we discuss in this article, in the long run, macroeconomics becomes completely irrelevant for an equity investor. Sounds contradictory, read more to find out.

In my 16-year-long investment journey, I’ve found that macroeconomics has absolutely no connection to investment returns.

In the short term, yes.

Let me tell you my own story.

My first stock that I had bought in 2006. Right after my 10th Board exams, I was asked by my family to work in the family business. If you’re a Gujarati or Marwari reading this, it’s normal. For others, it’s child labour and yes, I’m with you guys despite being a Gujarati.

Jokes apart.

I was asked to work on the shop floor of our family business. 12 long hours every single day. No social life. I was just meeting my friends on Saturday nights or Sunday evenings. It was tough back then, but now it’s a habit.

After 3 months, I got into the HR College of Commerce and Economics. As a gift, I was rewarded with my first paycheck after 3 months of bone-cracking work for a 16-year-old. And naturally, this money was the most important thing in my life at that time.

It could have gone 2 ways. I would have partied long and hard. But I chose the second option, I invested that money because it was hard for me to waste it over a weekend.

I invested at the high of the 2006 markets

It’s 2006, and the stock market is soaring to new highs every other day. And everyone is talking about how much money is being made. Plus, my family didn’t appreciate my thought of investing in some shares. So the rebellious child in me got an opportunity.

Since I was wiped out of my 3-month vacation, this money should at least give them some stress. A guilty pleasure indeed.

So I decided to open a demat account. But I was a minor back then. So I turned to my mother who accepted my decision because I had fulfilled my promise of securing admission into the top 3 colleges of Mumbai.

After a few days, I had my demat account.

Now came the decision to invest my money. Since everyone in the family was against it. No one helped. So I started watching CNBC TV. After a few days, it confused the life out of me. Plus, my college had started and I was still working at my family business in the first half of the day.

My schedule was:

  • 7 am to 9 am – Accounts and Maths classes
  • 9:30 am to 1 pm – Shop floor of family business
  • 2 pm to 6 pm – College (bunked most of the time and made some closest friends)
  • 7 pm to 8 pm – Learning some new course

The reason I’m telling you this is because it was in Indian Merchant Chambers where I was learning about stock markets, where I had a lucky break for my investments. It was a chance to attend a lecture by Mr Deepak Parekh of HDFC Ltd and Mr Aditya Puri of HDFC Bank on Indian Banking Outlook.

I don’t recollect the speech that day.

But it had a profound impact on the way I looked at investing my hard-earned money. As a result, I called up my broker and asked him to buy HDFC Bank with the money I had. It just made sense to me.

investment in HDFC bank in year 2006

Because I could see HDFC Bank’s service to customers was superior, they had a friendlier staff when compared to other PSU Banks and its standards were equal to a foreign bank. These days, it’s a normal thing. Back in 2006, it was revolutionary.

Fast forward to 2023.

That investment is up 30x.

And yes, I’ve stayed invested.

It wasn’t a smooth journey, to be honest. There were times when I felt that the Bank would be shut the next day. That’s where my hard work in the family business paid off. Whether it’s a boom or a recession, good employers never let their employees go away.

2008 was particularly tough to digest. Because my investments were down by 50%. And there was bad news everywhere. Banks in the US were failing. Sensex was going into red every single day. There was panic all around.

So I did some research. I asked my college professors about my investment into HDFC Bank. One of them was pleasantly surprised and told me his secret.

She said,

“Whenever you feel like selling a banking stock, just keep a check on their non-performing loans. If they are going up more than the industry average, then sell the stock even if you have made a loss. But if the bank is able to provide for those non-performing loans, then be rest assured that it will tide through.”

I made my attempt and discussed it with her. Later on, I decided to hold the stock.

I didn’t buy more because it was my first rodeo and I was just turning 18. I had CA exams to prepare for, it would be my perfect escape from the family business in the later years. Fortunately, I don’t get sleepless nights or anxiety when the stock corrects by 50%, sleep is my superpower.

The same scenario happened in 2013, when India was tagged as the fragile 5 economies of the world. I was in a similar situation of thinking of selling the stock. But again, it didn’t seem like the bank was unable to control the downside.

In the same way, I have taken this decision multiple times. And each time, I have decided to stay invested with the stock.

It’s never a buy-and-forget situation.

It’s a constant analysis.

As a result, I’ve realized how little interest rates and inflation really matter. As an investor, my job is to assess the company’s ability to tide over this crisis properly. Every single time, there’s a macroeconomic event, it’s best to go back to the roots and check the balance sheet of the company. If the business is happening as usual, then you shouldn’t worry so much about the stock price.

I will end my story here.

Leave the macroeconomics to the economists! We are investors!

Who is an investor?

An investor in simple terms is a person who commits capital with an intention to earn profit.

The key thing to understand here is that an investor is purely committing capital, not labour. There are 3 forms of commitments that a business requires, namely,

  1. Capital (money)
  2. Labour (human resource)
  3. Land.

As a result, when we commit capital, our primary objective is to understand whether that business or company has the capacity to efficiently use land, labour and capital. When there are good times, the company doesn’t splurge money or get into unnecessary projects and when there are bad times, the company doesn’t take on unnecessary debt.

A good investor looks for a balance in these 3 aspects of the business. Because both good times and bad times are a part of the economic cycle. It’s the very nature. Cannot be changed.

The banking industry for example went through deep trouble in 2008 and 2013. After RBI Governor Raghuram Rajan asked all the banks to recognise their NPAs and monitor their health closely, the system was shocked to see so many bad loans coming out.

An investor who put his money in good banks survived and thrived. Those who put their money and even averaged while the stock price was down in bad banks have lost a lot of money.

Think about it.

Even in bad times, good banks survived and thrived. Times such as high inflation and interest rates, saw these good banks gain market share from the bad banks.

A smart investor will take a cue from here that timing the market is not important at all. Infact, in the long run, it results in portfolio destruction. We will cover this topic in our next blog.

How timing the stock market is completely irrelevant to build a long-term portfolio.

To conclude, here’s a story of Jagoinvestor’s founder, Mr. Manish Chauhan who has a unique way of building his long-term portfolio.

A couple of months ago, I was sitting in our Pune office with Manish. I was sharing my journey of wealth creation with him.

The one I’ve written above.

While he acknowledged the passion that I have for equities, he gave me a unique perspective, something I’ve never really seen or heard before.

Manish very gently said that he doesn’t track the IRR of his portfolio and does not look at his portfolio performance.

He has a simple way.

  • Invest your savings every month.
  • Redeem money when you really need it
  • Make sure you have chosen the right portfolio
  • Review it once in 2-3 yrs

That’s it.

Constantly looking at any particular metric of return such as annual return, compounded return or any other math number is beyond him. This comes only when you have belief in what you do. This happens when you have done your homework correctly. This happens when you really understand what “high risk high return” means.

The first thought in my head was disbelief.

To me, it sounded like a chocolate seller doesn’t eat the chocolate at all. But after pondering a lot of my thoughts over it, I realized that Manish is exactly doing what we preach to everyone.

Don’t obsess over the short-term returns. In the long term, when the selection of the investment strategy is correct, massive wealth creation will happen.

For an investor, this is the guru mantra. Don’t obsess over the short-term bit of money-making.

Leave it to the professionals. If you have selected your professional such as an investment advisor correctly and believe in the process of choosing a mutual fund manager or a portfolio manager correctly, then you will be able to create wealth.

Most of us forget this simple bit.

So what you should do as an investor in the long term?

You shall choose the right portfolio which suits your needs and temperament. Create a strong equity portfolio of mutual funds, PMS, and real estate and cover the basics like life and health insurance along with a good emergency fund. Work on your income and just be disciplined in investing.

If you do things correctly, the short-term underperformance or overperformance will not make any significant difference to your life.

So there’s no point in looking at interest rates, inflation or the short-term performance of the investments for a long-term investor. What shall matter to you is your health, family, and working on your craft.

Think about it.

“In the end, what matters most is how well you lived, how well you loved, and how well you learned to let go.” ― Ziad K. Abdelnour

The article is written by Jinay Savla, Equity Expert @Jagoinvestor.

10 benefits of being an “employee” vs an entrepreneur

This is a long, but intense and immensely high-value article. So please read it fully!

Today I want to talk about some of the advantages of “doing a job”, rather than running a business or being an entrepreneur.

If you are someone who thinks that having your own business is “always” better than “doing a job”, I want to break your myth and point out several things which people don’t appreciate about doing a job.

There are lots of articles, videos, and podcasts about “leaving your job to pursue passion” and in almost all of them, a “job” is projected as some kind of modern slavery. It projects “doing the job” as working for someone else success and giving your life for others’ benefit.

I think it’s a gross over-exaggeration and while the job has its own limitations and issues, being your own boss has its own share of very big problems. I have also seen many salaried people complaining about their life, work culture, pay limitation, lack of opportunities, and their declaration about how they want to leave their jobs one day and achieve nirvana and ultimate success and get out of the rat race.

Business vs Job

Before I tell you some good things about being in a JOB. Let me first share the bright side of “business”

When you do some business or try a startup – you surely become your own boss, you feel more in control of your career path and there is huge huge income potential.

However only when you “become your own boss”, you start missing many things which you get in a job. Only then you are able to appreciate those subtle benefits of a job, which you never realized while being in the job. Today I want to talk about those good things about being in a job that is often not appreciated or realized.

So I am going to talk about 3 primary and major benefits and 7 secondary benefits which not major, but matters a lot.

Lets Start

#1 – Less Headache

When you are in a job, your work is very focused as you are accountable for one single thing. You don’t need to take the headache of other departments and other small things. The way you operate is simple and you can blame others for anything which is not your core-domain.

This means that you have less headache and you can be very productive and focused on your work as you are clear of what is expected out of you. I used to love my job in Yahoo years back when I had very defined tasks in hand and my to-do list was clear and precise.

Compare this to your own business!

For the initial few years, it’s nothing less than a horror movie.

While you are the “BOSS”, you are also a peon.

You are the person who does salaries, buys office furniture, pays electricity bill, works on the website, open the bank account, talk to customers, talk to vendors, run around to deal with CA, get GST calculations done, do hiring, do training and tons of other small and big things!

If you feel that this is doing to happen for just a few months of starting the business. It’s not true. Businesses take anywhere from 5-15 yrs of establishing. There are many people who are having a small company now with few team members, but there are tons of things on their plate which they need to handle and with the changing landscape of business, competition, regulator, customer experience, and business cycles, its a never-ending circus for many entrepreneurs.

Sometimes you start wondering why you are doing everything OTHER than the main task.

When you are in a job, there are lots of invisible systems that are around you and speed up your work. You become a HERO in your company, mainly because you had a lot of focus and time to excel in what is your core job. The invisible support system around you helps you in that.

So in a job, even if you feel there are lots of headaches, it’s often at a minuscule level compared to your own business. So if you are someone who doesn’t want to do be lost in too many things and doesn’t like to handle multiple things in hand, a job is a wonderful place to be in.

The job comes with fewer headaches

#2 – Clear Separation of Work-life and Personal Life

When I had started working 13 yrs back in Yahoo, Bangalore, I remember Friday evenings.

It used to give a feeling that I am starting a new life altogether – The “Weekend Life”

For the next 48 hrs, I was detached from my work life and there was nothing on my mind. It was not my headache what is going to my company. That conversation started only on Monday morning.

Unless you are at a very top position or at some senior level, there is a very very clear separation of work life and personal life.

This becomes very tough when you start your own business. No matter what you do, there will be some thoughts of business that will crop up in your mind. This is simply because now you are not working for someone else. You are working for yourself. Your company is part of you.

Sadique Neelgund who started his entrepreneur journey with 10 yrs back shares his comment on this point.

As an Employee, one of the biggest benefit I enjoyed was fixed work hours – 8 hours per day – 5 days a week. Forget about work and boss, enjoy life with friends and family after work and on weekends. Tomorrow, take it as it comes. Resign and move forward if things don’t work out.

As an Entrepreneur, it’s actually work right from the time you wake up to the time you go sleep. Once you become an entrepreneur, your mind is always thinking what next; sometimes for growth and other times for survival. It’s strange many of us want to become an entrepreneur because we want freedom of time. Although we can take leave whenever we want, go to office late etc… But that really does not translate into freedom from thinking about work & business.

According to me, freedom of time in real sense is much higher as an employee than as an entrepreneur.

One of my friends was sharing about his relative who has started a restaurant business in Dehradun. Because he is the “chef” himself, the weekends are non-existent for him now. His business is such that the shop has to be opened almost every day.

Either he has to wait for his business to become much bigger when he can hire a staff who is as good as him or wait for some extreme situations or get SICK in order to enjoy a day off.

Also, some businesses are seasonal and their peak business happens in the holiday season. So be ready to forget holidays or full off time during the holiday season. This depends on business to business also. Imagine that you start a business which is related to “Gift items”. In that case, you will be super busy in all holidays. For you Diwali, Holi, New Year and this kind of time do not mean holidays, but double shifts!

So if work-life balance matters too much for you, a job is a wonderful place. 

Note that while you sacrifice the work life balance in the start of your business. Once its established and things are in place, you enjoy a great amount of work life balance. Then you can be very flexible in your office timings, you can take off whenever you feel like and work on days as it suits. It gives a lot of flexibility to you.

#3 – Steady and Stable Income

One of the things many salaried employees do not appreciate well enough is the steady and stable income that comes with a job. Each month, you know how much you will make by the end of the month. You know that till you have your job, your income is assured and it will come without fail.

The business risk which your company takes or any short-term problems which happen with the company do not impact your paycheck. This also means that you can plan your life in a more clear way. You know much EMI you can handle, you know how much expenses you can do, etc etc.

However, in business, it’s a roller coaster ride. It’s like an equity mutual fund chart, where you know deep down that while in long run, you will do well and things will be in place, in the short term you have to face a lot of volatility. A good month/year does not mean that the next month/year is also guaranteed.

Business uncertainties sometimes can be very painful and can put you in a situation where you start wondering why the hell you are into business. This is more true in the businesses where you also have to deploy too much investment and the income stream is very volatile.

If someone is leaving the job to start a business, this aspect can be very shocking to experience especially if you have debt and you are paying the EMI.

Checkout out more on this, in this video by Ankur Warikoo, the cofounder of nearbuy who shares his real-life experience on this matter

No doubt that over the long run, the business can give you an amazing payoff. Your income from business can be huge and you will forget all the initial painful years, however this an important point to consider.

I asked Amit Singh, an entrepreneur who runs a WordPress design and development Agency since 2009 to share his comments, and here is what he says.

To me, there are two good things about the job
1. Assurity Cashflow, that is as long as you have a job, your salary is guaranteed. This allows people to plan and focus on the work at hand. Another major advantage of this is that you get to take loans from banks easily for big-ticket items like Home or Car.
2. Time for hobbies, while this may not always be true but while I was working I used to regularly write blogs to share my learning, and build interesting side projects for myself just for fun.

If you are someone who needs a very predictable income, the job will give you that.

#4 – Flexibility to move on and easy withdrawal

If you are not happy with your job and can’t stand the stress, it’s comparatively easier to move on to some other company, role, or location.

In the end, you are not married to the company you work for. You can take the decision to move on to something else because at the end of the day you are a resource. The way you are replaceable by the company, even the company is replaceable by you.

You need to start the job hunt, plan out things, pack your bags, and move on. I am not saying that it’s a cake-walk, but there is a good level of flexibility on this front.

However, when you start your entrepreneurial journey, there is a good amount of financial & emotional involvement from your end for your venture. You give you time, effort, mind, soul. It’s like raising a baby. You can’t just leave it in between and move on.

If things start going wrong or if you face challenges, you get to fix it and stay in the mess. You cant back out so easily. I don’t want to sound as if I am trying to say that job-switching does not have its own challenges. It surely does! , but in comparison, there is a huge advantage in the job.

So if you are someone who enjoys this “weak attachment” and appreciate the flexibility to move on to something easier, the job is for you!

But let me also point the bad thing here. Even if you are working well, doing decent – there is always a risk to get fired from your company for various reasons. In the end, it’s not YOURS.

That thing never happens in a business. Jaise Bhi ho, Apna hai!

employee vs entrepreneur

#5 – Social Standing & Recognition

“Hi – I am AVP of XYZ corporation” draws much more attention in social circle, than a “Co-founder of an ABC Struggling startup”.

If you are holding a key position in some big company, people want to talk to you, be friends with you and invite you for various events. You are also recognized on social media and getting this attention often pampers you and acts as a motivation for you.

You get your identity due to your designation/brand. Also if you are handling a key position or managing a big team, you also get a chance to experience giving orders to others and command things. You handle people

In business, this social recognition will come very late or may not come every. When you leave your big position in a company and do a startup on your own, it’s like from a happy, glossy Karan Johar movie, you are in a dark, realistic Anurag Kashyap movie

Let me give one more shot at it!

From Varun Dhawan of Humpty Sharma Ki Dulhania, you suddenly become Manoj Bajpayee of Gangs of Wasseypur.

Here what Mahavir Chopra who recently started after leaving his job at a very big company shares with us

Entrepreneurship is an extreme sport. It’s a mental shift. It’s a rollercoaster journey of finding yourself that is not for the faint-hearted. When you take up an entrepreneurial journey, you are changing who you are.

You are no more the senior guy working in that successful company, who called the shots in the system and things worked. You are unarmed, you are vulnerable, you are naked in front of the world. From you representing a large company, a tiny company now represents you.

The romanticization, glorification of an entrepreneur shown in movies, shouldn’t be the reason you want to become an entrepreneur – that way all of us should become gangsters or serial killers :D. You should become an entrepreneur if you are ready to unlearn, rebuild your self while building an organization that generates value from scratch – when you are ready to test your strengths in the real world, you are ready to face your weaknesses.

If this social standing or commanding position is something you enjoy a lot, the job will be a perfect place for you.

#6 – Move up the ladder and access certain kind of roles/work

When you are in a job, you mostly move ahead and up the ladder.

If you are extremely skilled in something and your domain knowledge is incredible. Then as you move up the ladder, you can get a chance to lead a big team in your area of expertise.

If you feel saturated in a particular domain, you can think of trying out another domain in the same company or the same domain in another company once you switch the job. You mostly experience “progress” in your career when you are in a job.

Also in Job, you can use someone else success and hard work to lead a role that you want. You can let the business uncertainties be handled by someone else and dedicate yourself to learn a new skill of your liking (obviously it has to be related to your work).

For example, let’s say you are a good software programmer and have designed great front end websites. Now if someone doing a new startup, and you want to give a shot at leading the planning and creating of the front end of the startup. You can join the startup and fully focus on that new thing you to add to your resume. You can let the business owner worry about the funding, company future, salaries, and other things.

However, when you start your own business, you often start from scratch the rebuild things. You first do down, then move up which is quite volatile.

Let me explain with few more examples (ahh.. its not an easy thing to explain)

If I want to explore “teaching” a bunch of students. It’s almost impossible to do if I open my own school. I will then be running around for things like hiring teachers, renting or buying land, construction work, managing staff, design of curriculum, making a marketing plan for the school, and whatnot. I can’t be a teacher then.

If you want to lead a team of 20-50 people. Then if you are an expert in your field, then there is a possibility that within a few years you can move to another job where there is an opportunity to lead a big team.

If you think of starting the business, you have to first deal with a lot of petty tasks before you can do that years and years later. You will mostly be busy with so many things that you will hire someone else to lead the team at the end of the day!

I hope you are getting what I am trying to say. In a job, there a nice chance of incrementally become bigger because of other efforts and setup.

Here is what my friend Ameya Dhani says, who worked for more than 15 yrs and now started his own business as an Industrial solution provider

When I was engineering student, I always fascinated about corporate culture and dreamt of working with MNC. I was fortunate to have my dream come true and had chance to serve in Corporate offices of MNCs at various levels in my job tenure.

Working in a company will give u readymade identity at the professional & social world. You will have the knowledge required for completing your assigned task and if required, company will upgrade/polish it through their internal team or consultants. This will help you to learn new skills to master the task.

As every employee is responsible for the task assigned to him, this reduces the burden which helps in having a better work-life balance. At MNCs, at younger age you can sometimes visit new countries, meet new people and gain better knowledge of world. Also with job, its possible to have a better lifestyle at younger age. Timely salary and perks are icing on cake.

#7 – S0cial Life & Atmosphere

If you are doing a job, it’s almost a given fact that you have some office friends, a happening office atmosphere, birthday parties of friends, monthly/quarterly eat-outs, and yearly outings once in a while (obviously not in this corona phase)

You are part of a buzzing environment and there are people all around you. Even though you spend the highest time at your desk, you don’t feel lonely. I remember every day in the office we friends used to meet in the cafeteria and engage in silly chit chats while gulping that juice and sandwich. I remember my office friends, colleagues, and the whole ecosystem which used to give me a nice feeling.

Welcome to Entrepreneurship, which is often a lonely world!

You start working out of home, or some shared office or a tiny office which is nowhere close to that swanky office, and on top of it, you are paying the rent. You miss that big-office culture and often that can be tough to handle if you are too used to that kind of life.

A lot of people do not think about this small aspect, but for some people, it can matter a lot.

It takes time to reclaim that level of social life in your own business unless obviously you are starting your business with funding money and get a big team and office from 1st year itself.

#8 – Corporate Perks

When you are in a job, you also get tons of perks

Apart from various small perks, I want to first talk about two major benefits which are health insurance and EPF

One of the biggest perks, when you work in a job, can be the free group health insurance which covers you and your parents from day 1 for all kinds of illnesses. You know how big a perk this is if you are not getting health insurance for your parents or yourself when applying separately.

Another big perk is the automatic investments which happen in form of EPF. For most of the employees, a forced EPF deduction is nothing less than a big boon. At least this way they have some investments happening every month and over years, it compounds to a very big amount.

Let’s see what my long time friend Animesh Gautam who started his own business around 2 yrs back (after 13 yrs in the job) says

For me the most important think I relished about the Job was the PF contribution that were made compulsorily, it helped me at finally arriving at the decision of quitting my job, as the contributions in PF after 13 yrs of work were considerable enough to give me some financial stability and I was then able to take calls independent of financial constraints.

Then there are many small perks and advantages like

  • Free/Discounted food
  • An unlimited doze of free tea/coffee/cookies.
  • Creche
  • Free office cabs
  • Free Life Insurance
  • Corporate tie-ups with restaurants and brands
  • Gym Memberships
  • Tie up to get easy credit cards
  • Tie-ups with various loan providers

Being in the job, people really never appreciate how fast they get a loan by just giving their form 16 and ITR for last 3 yrs for any kind of loan (for business people its a headache to prove that they can repay the loan, we have to give our company balance sheets, income computation with CA attestation and what not!)

In short, there is a good amount of pampering happening which often you don’t realize.

One of my friends who works in the IT sector also mentioned that she is missing the super comfortable office chair in this WFH period. She never realized it, but only now.

I don’t know how true it is, but my Delhi friend said that many people in the North also love the fact that their offices are fully AC which they miss when they are back home (if they don’t have AC at home)

When you start your own business, you often start from a lower base with all these benefits and amenities gone. But once you are established with a nice office and staff to take care of things, you get some of it (still not FREE)

#9 – Set back due to mistakes or external factors is lower

In a job, the impact on you, because making a mistake is much lesser compared to a business.

Any mistake on your end will mean a direct loss to your company and an indirect or a delayed loss to you. It’s not that your next paycheck is at stake.

Even when there is some big mess up from your end, the maximum you can lose is the job, but you still have your skills and years of experience with you. Even when you are too stressed due to some office issue or a mistake done by you, you have an option to leave the job and move to some other company and feel guilty for some limited period. The case is closed for you.

Compare this to your own business, where you have to deal with the mistake and fix it. You cant leave it!. Also, the direct impact is on you.

#10 – No financial Investment

Finally, a very small benefit of a job is that you can do a job without incurring any financial investment. You just need the skill and that’s all.  The best example of this is the restaurant business.

Imagine someone took up the job of a restaurant manager in a new upcoming restaurant.

Due to the corona pandemic, the setback for the restaurant manager is only his job. But for the restaurant owner, it may be a loss of huge capital.

So a job gives you an opportunity to earn money without any financial investment.

But if you want to do business, you should be ready to invest money in most of the cases

Apart from the 10 points I mentioned above, I also want to talk about a few more things .. Let’s see those

Am I glorifying Jobs?

When I finished writing this article, I felt as if I am glorifying jobs and giving an impression that one should not attempt doing business and always be in jobs as they are so great. However, I am just trying to put a point that you should love and respect your jobs a lot as they are amazing in certain aspects.

People in jobs will surely have a limited upside on their salaries (apart from exceptions) compared to a business person. Almost all the rich people in India are business owners and not a salaried class. However, there is no written rule that everyone should aim to become a billionaire. You can lead a happy and content life even being a salaried person and that’s absolutely fine.

Businesses even though have their own limitation score on many points which is not the agenda of this article and I am not going into it for now.

“Entrepreneurship is always better than just a job”

This is surely not true.

When we hear about entrepreneur stories, we often hear about the big success stories which are worth billions. We will hear about Bansals who used to be in a normal job in Amazon and who are now worth billions of dollars. But we will not hear about other folks who also used to work for amazon and left their jobs to start businesses which never took off and they had to return back to jobs and no one knows their stories.

No doubt that entrepreneurship has the potential for a very big payoff if things go in the right direction. But it’s not for everyone and should not be attempted just for the sake of trying.

There are tons of struggles in starting your own work and most people fail at it. Also, small successes are often not celebrated enough. You will not hear about the guy who left his job to build a 4 cr company and a team of 8 people after 12 yrs of hard work. You will not hear about the 2 partners who are making 5 lacs a month each after going through the hardships. These all stories are not “success” as per the startup world even though 99.9% of people end with exactly that kind of results.

In the end, it’s a decision between what you want to be – a “Small-time entrepreneur” or a “Big-time employee!”

You can be an “entrepreneur” while being in a job

Think of it like this.

An entrepreneur exists only because of the people who do the job. No entrepreneur wants to work in isolation.

He wants to have a salaried team that will help him grow his work. Salaried people are the backbone of any company. What you need is the mindset of entrepreneurship to make tons of money and command lots of respect.

Do your work as if you are the owner. Think from a business angle and contribute. You will become a valuable part of the organization and your compensation will also grow and be linked with the business.

Aditya Puri of HDFC bank was an employee, but his attitude was of an “Entrepreneur”. He retired with 800 crores worth of company stocks.

Sundar Pichai is also a salaried employee of Google. But he acts and thinks like an “Entrepreneur”. Last year, Pichai was granted a $240 million stock package on top of a $2 million annual salary.

If you create value and work with a giving attitude, then you automatically become an “Entrepreneur”, you don’t always have to start your own business.

I hate my job, so I want to start my own business

“I hate my job” is the worst reason to start your own business.

Most of the people who succeed in their “business” are those who were quite happy in their jobs.

They didn’t leave the jobs because they hated it. They left it for a bigger reason. Maybe they wanted to be in a commanding position, maybe they wanted to experience the tough path, maybe they want to execute an idea which they were not able to do in the job. Maybe they wanted more flexibility in their life which job was not providing them. Maybe they wanted to earn a lot of money, which they didn’t see happening in their job.

If you don’t like your job or are unhappy. Check out what is the reason is and then fix that.

  • Maybe it’s your boss
  • Maybe its the company environment
  • Maybe it’s your salary
  • Maybe it’s the lack of freedom.

Fix that.

Leaving the job is not a solution.

Don’t devalue the money you earn for the sake of “passion”

Pursuing a passion is highly overrated and full of fizz.

Most of the people who seem to be following their passion are just lucky people who started something and it clicked and they don’t hate it now. It was not a planned path they took.

Often, the stories of “he/she left his job to pursue his dream” don’t look at life realities and the importance of money in life.

You cant pursue your passion with worries of paying the next rent and thinking from where your kid’s fees will come next year. If you have studied well and got your hands on a well paying job, do value it and the money you make from it.

There is no problem is pursuing your passion, but do it with some good planning and once you are financially stable. Else things can go in the wrong direction.

I once came across an NRI who wanted to come back to India to pursue teaching. He had a decent networth. I asked him if he can stretch a bit more and work for 5 more years? He said YES.

I asked him to do that and delay his entrepreneur stint a bit late. That way he would be around 1.5 crores richer because he was able to save close to 3 lacs a month while in the job. I asked him to not devalue that.

Ramit Sethi talks about this in his article “Follow Your Passion” is bad advice

Job or Business – Both are Great!

I want to end this article with this point that even though I tried to share many benefits of a job in this article. I definitely don’t want to portray that the business world is bad or should not be pursued. All that I have said above is keeping in mind a larger population. There are times in life where all the logic does not work and doing what your mind tells you is the right thing to do.

A job even though has many benefits often puts you in your comfort zone and you are not able to explore your full potential. But anyway, I just wanted to make sure that people love their jobs and respect what it provides them.

We often don’t appreciate what we have in hand and just feel that we are missing out on something which others have.

I hope you will start seeing your job with a new perspective and become more valuable going forward.

Why that IDIOT is RICH and I am not ?

I got a call from one of my friends. He was feeling down in life and wanted some help on how to deal with the current negative scenario, he asked me some questions and requested for some coaching, he started with questions like

  • How can I make more money?
  • How can I have a blog like yours?
  • How can I build a successful business?
  • How can I increase the flow of money?
  • How can I increase my income and get more clients?
  • How can I have things which others already have?

In his words I could see, he was comparing himself with others and so I asked him to prepare his IDIOT LIST. I told him that even I was the same a few years back and how I connected with my flow of money.

Rich vs Poor Jealousy

I asked him to sit with a blank sheet of paper with a question written on the top – “Why that idiot is rich and I am not?”

He started writing about people who had more money, more resources, more clients, more cars, bigger bank balance, and more stuff than he was having (even my name and Manish’s name was in his list).

After he was done, I asked him to empty his mind. I asked him who he would be without his idiot list? (He minus his idiot list)

He said, he will have freedom.

An Empty mind will lead to wealth creation

I asked him to GIFT that very same freedom to himself, because only an empty mind, a free mind can lead to wealth creation, only an empty mind can get him peace with himself.

You can’t create things if you are having a war in your mind. I told him, first your mind has to get free if you want your mind to serve you. The process is simple, write your thoughts on paper, and question your thoughts till you experience freedom.

More money, more business, more income, and more clients were not his real business, his thinking was his real business and I asked him to focus only on his true business – “his thinking”.

I kept asking him to work on his thinking, to hold a clear mind, once the mind is clear all the good things will happen on its own. I asked him to get rid of his idiot list. We see the world, compare ourselves with others and that is where the problem starts if there was nothing to compare there would be no rich or no poor person on this planet.

Every single person who you meet on the street wants to make money, in fact, a lot of money. I think it is your right to be RICH but then why do people struggle in the area of money.

“Making money” is a myth

Consider that in reality there is no “making money” in life because the money is already out there. All the Money is out there and now you simply need to fill in your little bucket between the age of 25 to 52. (The range can be different for you)

Let me share some elements we covered in our coaching conversation, maybe the elements can help you to fill in your MONEY buckets.
Consider that money has a flow to it. It has a rhythm to it and no matter how hard you try to hold on, it will find its way and continue to flow.

If you are experiencing any kind of struggle in the area of money it means you have disturbed the flow of money in some way.

People think our job is to spread financial awareness, write articles, make financial plans, and coaching people. No, our core job is to help people to connect with their flow of money.

Here is something you can do to connect with your flow of money

1. Stop trying to have money and just be like Money

Really stop trying to make money and start to be like money. The money will flow from you to me and from me to you, it passes through the phone, it passes through the plastic cards, it passes through wires and it crosses countries, moves from one company to another. It sees no limitation it simply flows.

Everything around you right now someone has seen the opportunity and filled his or her bucket with the money earned. The more you get in touch with the flow of money the faster you move towards wealth.

When you are like money you will find that Opportunity is always knocking and you just need to open the door. The computer on which you are reading this article someone saw the flow of money in it, the software, the internet provider, the chair you are sitting on, the phone that you own, the food that you had today.

There are so many businesses to be started, so many services to be offered. If you can see money in everything you will see opportunity in everything. Wow, this is what happens when you start to be like money. You will feel the flow right now at this moment. Take some time and make some notes if some new thoughts came to you. The flow is touching base with you and I request you to respect it.

On hearing the above words my friend said, ” Oh my god, there are so many opportunities, so many things he can do to create wealth and he needs to get rid of his idiot list. I just need to be like money, I don’t need to have money”

2. Love, Serve and Create

You have already learned from Manish about term plans, investment ideas, how to save tax, etc. He is not good but great at what he does. One more thing you can learn from Manish apart from personal finance is these three words Love, serve, and create.

He has dedicated his life to creating Jago effect in people’s life be it personal finance or any other area. He simply loves to serve that’s all.

Earlier we use to work for 7 days a week and we use to hate holidays and Sundays as they take us away from our love, our work. Manish has replied to hundreds of people whom he does not even know and he will never ever meet most of them in his lifetime.

This is being of service to people from morning to night. Being of service should be your 24×7 job. It should be your full-time job or I would say the only job you have.

If who you are is good enough, give yourself to the world; give your talent to the world. Here is how the two world’s are different.

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Operating from the Space of comparison/Jealousy Operating from the Space of love, service, and create
Focus is on what others are having Focus is on having a clear mind
Focus on needs Focus on putting the right seeds
Lack of freedom Freedom to live and work
The mind is loaded with a thousand thoughts The bandwidth of mind is free to think
lack of creative ideas free flow of creative ideas
stressful life stress-free life


If your product is good, give someone an experience of it.

  • Look at who can you help today?
  • Who can you serve today?
  • Who needs your help?
  • Who is waiting for your service or product?

Don’t be tight-fisted, just keep giving because of the flow of money fastens when you give.

This is when you start creating wealth and building wealth in life.

3. Break the Attachment

Your strong attachment to money actually keeps you away from it. You should not hold on to money, you must keep it in the flow, use it wisely, spend it freely, give and share it lovingly.

Continue to invest in yourself. It can be a book a program or some new skill-building. The day you stop investing in yourself you start blocking your flow of money.

Is it the amount or the feeling of giving the amount that holds you back?

This is one of the biggest mistakes you make as an investor as you are stopping the flow of money in your life when you are in grip of attachment. Invest in anything and everything that helps you grow in life.

Like my friend, 10 years back even I use to think “Why that idiot is RICH and I am not?”

Break your attachment with money

I was so wrong I was just not focusing on my life’s flow of money. Some realizations in life and my coaches connected me to my own flow of money. And I helped my friend to connect with his flow of money and I am sure the article will help you to connect with your own flow of money.

Do share your views on what actions you are going to take to connect fully with your flow of money. What learning’s have you taken from this coaching conversation? Do feel free to write and express yourself fully in the comments section.

Join our “DIY – Financial Planning” Online Program

We are very happy to share our “DIY – Financial Planning” program which is helping many investors in planning 10 important areas of their financial life.

Click here to register for this program

It is a very simple and a powerful program; we invite you to explore the program if you think financial planning exercise can take your financial life to the next level then see that you join the program at the earliest

What does “more money” give you in life? (shocking replies inside)

What does “more money” give you in life?

I asked this question on twitter a few days back and gave 3 options to choose from. Here are the results

A total of 120 people voted on the question and I got the answer somewhere on the lines of what I have always believed in.

Are Happiness and Convenience the same?

A lot of people confuse “convenience” with “happiness” and hence believe that getting ultra-rich will make them very happy in life. They don’t realize that when they will get ultra-rich, they will be able to afford everything from nice house to amazing vacations, all the gadgets they want and fancy cars.

This all will make their life super easy and they will not be worrying about anything in life which can be bought with money.

But that’s not “happiness”, its “Convenience”

Money and Happiness

There are many books written on the topic of money and happiness and there is tons of research to conclude now that an increase in happiness you get out of having more and more money keeps diminishing over time.

So may be quite unhappy when you are poor because you are frustrated and have no idea where the next meal will come from.

Going from Rs 10,000 to Rs 1,00,000 (increase of 90,000) is very different than going from Rs 1,00,000 to 2,00,000.

Your life style will not drastically change if you earn 20 lacs a month instead of 6 lacs a month. But it surely is a big change from Rs 20,000 a month to 80,000 a month.

Out of 120 people who voted on my tweet, 76% people choose “more convenience” as their answer and only 12% choose “more happiness”. I am sure people who choose “more happiness” still need to see a good salary in life

I personally think that you surely need to aim to build great wealth and aim for huge income because more money will surely be better than less money in life. At least you have one less thing to worry in life and that is MONEY.
Around 12% people also voted for “more worries” as their answer. Money can also bring trouble in life at times, especially if you are not ready to share the fruits of wealth with others and if you have no idea how to extract happiness out of your money.

There are many examples on earth where people have done suicide and gone mad while their bank accounts had millions. Remember that unhappiness can come from various sources like relationships, health, how you feel about yourself, family issues and money.

What do you think about this topic?

Please share your thoughts about “What does more money give you in life?”.

Let me make it clear that above points are my personal thoughts about money and I accept that different people have a different experience in life which shapes their relationship with money. I would love to see how people think about this topic.

10 money lessons, I would like to pass on to my Children (and yours too)

Jagoinvestor completed 10 yrs recently and it was a wonderful experience for these 10 yrs writing so many articles, working with thousands of investors.

While I was at my Ahmedabad office recently, I and my partner Nandish thought of an idea. We were discussing our kids (I have 1.5 yrs daughter and his son is 7 yrs old) and their future. We were wondering what kind of things we would like to teach our kids so that they can have a great financial life or life in general.

Here are those 10 lessons… Do listen to the whole talk

So we thought about why to keep things private and not share the 10 lessons we would like to pass on to our kids which can help them greatly when they start their own financial life many years in the future from now.

These 10 lessons are not those regular “start early” and “take your health insurance” kind of points. We are talking about some solid lessons which are going to impact your life overall. It’s more of a RICH mindset vs Average Mindset lessons.

Here are the topics we discussed in the video:

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1) Future is an Illusion
2) Target Financial Freedom in 10 yrs
3) Speak the language of NETWORTH
4) Focus on your Health
5) Be Coachable
6) Always think in terms of Milestones
7) Look at life in sum-total
8) Slow down to Speed up
9) Be a student of Life
10) Always tell the Truth
11) Don’t Listen to Your Inner Voice (Bonus lesson)


Incase you have any thing to add to these 10 points, we would love to listen about your thoughts in the comments section.

We owe our success and whatever we have achieved to all our readers, our teams and our teachers.

Journey of an imaginary investor!

What’s the worst that can happen? A lot of my friends and readers ask me this question. What if I’m not disciplined? What if I buy a house beyond my means? Or invest money based on what my trusted family & friends tell me (even if I don’t have a clue)? What’s the worst that can happen?

Well, rather than sitting here and crunching numbers and showing you my results with incomprehensible tables and then trying to convince you, let me tell you a story. Remember Arush? Akshay Kumar’s ‘panauti’ character from Housefull? Let’s play God with Arush’s life.

No more strokes of good luck for him, unlike the movie, no good/rich friends or acquaintances. No exotic locations or countries either. Instead, let’s put him into our shoes, – our average, Indian, everyday-joe, shoes. And let his panauti streak run its course.

Let’s see what happens when life becomes brutal and how he pays for his ignorance and bad luck.

Imaginary Investor journey

The year 2011

Arush is a happy-go-lucky 28-year-old. Perfect education, close-knit family and a great job, with a salary that’s better than 95% of other people in our country take home. Newly married to Sandy! Great job! DINKy income! Life’s great! The sky’s the limit!

He has just taken a home loan for a spanking new 3 BHK in a cushy, lifestyle complex! A house is obviously needed! He needs to keep up with his cousin Ajay’s lifestyle too! Ajay has a duplex, dammit! And to think, his old friend and classmate Manish, suggested he rent a smaller house… Damn you, Chauhan! What do you know?

“Renting is so beneath me! And it’s not the done thing either! Such a cheap idea! What would people think? Forget people, what would Sandy think? Forget Sandy, what would her Anna think?! I’d be a laughing-stock, I tell you, laughing-stock! Nothing wrong with a big house. Nothing has gone wrong yet! Nothing can go wrong! Everybody does it!”

Harish mama’s sold him a few money-back policies. OK, a lot!

Arush doesn’t quite want to invest. He doesn’t understand the fundas. But, his pappa made sure Arush bought them & helped his mama out in his bad times. Akhir Apne hi Apno ke Kaam Aate Hain! and come on man, everyone has invested in money back plans.

They are “safe”. They provide the “best returns” (Agent mama’s words obviously). Pappa’s bought it, Pappa’s pappa bought it, Kaka bought it, heck even Nana has it as a part of his portfolio! All of them, obviously cannot be wrong! And Mama obviously won’t charge commissions on it, will he? It’s a gift for Arush, he’s family after all!

Is his Insurance Cover enough?

Arush feels his jaw drop, when Manish tells him, his insurance cover should be worth 1.5 crores because his family expenses are 40k/month. (It can be reduced to 30,000/month if he really tries, but who cares? The salary is going to increase yearly & he is the top performer of the team).

It hurts sometimes, that he hasn’t built a good corpus yet, but that’s fine! Anyways he is going to “invest systematically” next year onwards. It’s his New Year resolution! (This incidentally was last years resolution too).

Listening to Manish for once, Arush goes inquiring about the term life insurance plans. Guess what he finds… He has to pay only Rs. 20,000/year as premium for Rs.1.5 crores!, find your premium here

Wow! & Double Wow! My family will not have a single worry! So much security! But wait! What if, God blesses me with a long life and doesn’t kill me before the tenure ends? What happens to all my hard-earned money, I paid as premiums at the end of tenure? I don’t get the money in the end if I don’t die? Ridiculous!

What’s the use of the product then? Total waste! (read more on this). Better save 100% of my money then! Best ROI”. Suddenly his probability of dying has come down, I am not sure HOW!  Arush doesn’t want to lose 6 lacs in these 30 years. But he doesn’t realize that 6 lacs won’t amount to anything at all by 2040!

What about health insurance?

“Health Insurance? What’s that? My company already provides cover to me and my family! 2 lacs for everyone! Combined! OK, I know its not much, but I am so healthy, I go to gym and I drive safely, almost no chances of accident”

What about other people’s driving skills? Arush will feel smug & smart as long as nothing untoward happens. All it takes, is one minor illness, one small accident… to turn the whole thing upside–down! What if the expenses run to 6 or 8 lacs? (It very easily could!) Every one of Arush’s ‘plans’ for his family & himself will be really messed up.

And guess what? To top these hijinks, he goes out and buys the “Best Mutual funds” How does he know? He did a lot of ‘research!’. Research consisted of looking at bright shiny ads on billboards & on TV & in the paper, googling it, and checking out its performance over 6 months. (56%!) Arush is so happy! He’s already making vacation plans!

But wait? What about actual, boneheaded mistakes?

He recently bought Reliance shares a couple of days back at Rs. 2000… & now it’s at Rs. 1959. “Oh man! I feel so bad! I’m such a loser! Darn, all this tension has made me skip lunch! Think I should sell them tomorrow itself!”.

Arush doesn’t need the money tomorrow. He knows that equity gives good returns in the long run. Yet, he will still sell his shares tomorrow, because he doesn’t want to be a loser. “Ugh! Still feel so bad! How could I have bought something like this? I’ve been a winner all my life!

In studies, job interviews, work… I have always won! I cannot make mistakes. So this is how Arush is! Confused, yet unable to listen to good advice, unable to ask for help, a little too lazy when it comes to his own future, too impulsive, always wanting to be instantly gratified, a little too proud. Let’s leave Arush now, & play catch up with him at some time in the future…

The year 2014

Booya! The markets are zooming… The Sensex has crossed 40000+!!!. “I always knew this ‘Sensex’ company would rock! Just look at it! See its performance! Wow! I’m so good. I’d like to see the look on Manish’s face now! Calling my decisions, ‘unplanned!’, ‘with no understanding!’, ‘random!’ & what not! There! I showed you, Chauhan!

Investments have tripled. Just one more week now, and I will sell everything, and cash out!”. Oops! Something bad has happened! Markets are crashing!

15% down in a day. “It’s just ‘profit booking’”, Arush justifies to himself. “India is bound to shine in the long run!”. 1% up next day! , “See! I told you!” , 10% down again the next day! , “Chinese real estate markets are the reason! Our markets are de-coupled! It’s FII!” (that’s Arush talking through his hat, trying to show off!) . He tries to justify to himself and others around, that things will soon be better! But, his investments are now down 50%! Arush wakes up and scrambles wildly. Arush is in a blue funk!

Denial Mode

“I can’t sell right now, dammit, but I want my money back!” (Your money?) “It was 10 lacs some months back and today its just 5.1 lacs! Manish says even now, my investments are have given more than 25% return on a CAGR basis… But, I won’t take it! I am a ‘winner’! I won’t take less than what it has touched previously!”. Markets tank another 5% after that.

“Oops! I should have taken that 4.9 lac loss earlier, now its 5.1 lacs down the hole! Anyway, what’s the use of selling now? Whatever could have happened, has already happened!

Let it run its course. I know it will come back to it’s earlier level! And anyway, I am a long-term investor! Manish also says I should invest for the long term! (feels so nice somewhere in my heart, when I said that)”

A few months down the road… Arush suddenly needs the money for some reason in the next month or two. He decides to surrender get his endowment/moneyback plan money back now, since the matter’s urgent. Finding the agent is like tracking a lost animal in the forest… in the dark!

He finds Agent Akhiri Pasta after nearly a week of persistent hunting and calling…

Arush : Hi Pasta, remember me, Arush here, where are you man?

Pasta : (Obviously, I remember you, you dolt! You were my 1000th policy buyer which helped me win the bahamas trip)

Of course Saar! How can I forget you saar?

Arush : Hey Pasta, I need a favor yaar, I have a financial crunch right now, so I’m wondering If I can surrender my policy and get my money back .

Pasta : Oh, why not saar? We are always there to help you saar! You can take your money back… Come to my office in a week and lets surrender your policies (the initial years of high commissions have already passed, so I’ve already made my money! Hehe!)

Arush : Wow! You guys rock! Uh, how much will I get back?

Pasta : 60,000 saar!

Arush : No no no, hehehe! I am not taking about the interest part yaar. What is the total amount I get?

Pasta : (Sigh… Yes you idiot!) Its 60,000 only saar, Total amount saar!You are aware of surrender value before maturity, right saar?

Arush : Hey man! But, but, I paid 1.5 lacs in premium in last 5 yrs, what are you talking about ?

Pasta : Saar, didn’t you sign on those documents where we clearly mentioned that surrender charges will be blah blah blah… Have a look at your Documents saar. We are not doing anything against our rules. It is as per our policy saar, which we believe that you have cleared read and then took the policy ! .

Arush : Hmm, let me go look at those documents! (while wondering which part of the world are those documents in now)

Let’s just hope Arush copes with this panauti and catch him 10 years down the road

The year 2024

Arush’s life is going on, as usual, chal Raha hai, lots of expenses now! Children have grown up, a career that was “awesome” around joining and then “great” after a few years have turned “ok ok” right now.

After about 4 yrs into his ‘awesome job’, he finally realized that he was at the wrong place and couldn’t truly excel, but then it was too late. Can’t take any risk now, can’t rock the boat! Who will pay the Home EMI, the Car EMI, the jeans EMI and the EMI for the vacation they took last year?

So… chal Raha hai, chalne do! He drags year after year in the same job, which is now drab and uninteresting.

His home loan interest has gone to its highest level (which he never thought about, while taking the loan) and hence EMI’s have crossed their budget (the one he had originally planned.) While all these issues are haunting him, with all that tension, another serious incident happens!

An auto hits him while coming home. He’s critical! Arush is rushed to the hospital, there’s a month of Rona dhona, 9 lakhs of expenses, (come on guys, we are in 2024 now, not 2011). The company pays 2 lacs (doesn’t seem like a lot now, does it?), and Sandy organizes 7 lacs from his own wealth by breaking a Fixed deposit and selling some mutual funds.

But hey, look at the brighter side too! He saved 1.5 Lacs in Health Insurance premiums all these years… Did he not? (17 most asked questions in Health Insurance)

The year 2034

Life is really cruel to Arush, He never returns to home one day, He dies in another accident, a victim of a mishap. His insurance policies come to rescue. The company settles the claim of 10 lacs very fast. His family is in a deep problem though, Sandy cannot work, 1 Child is in 7th class and the other one is ready to go to college!

There are 20 lacs fixed bank deposits, but wait, the home loan still runs for 10 more years! All the money in Fixed deposit goes towards paying off that debt. There are other investments, worth 30 lacs. Let’s use that money now! The family life-style has sky-rocketed like anything in the last decade, & monthly expenses are around 80k per month. How will they manage?

Bad Financial Life signals

I personally see just one solution. Lets them eat once a day and stop the kid’s education, if they want to survive with that leftover money!.

30 lacs in the Bank generating a monthly income of 25k per month (Only if interest rates offered on FD’s are 8% in year 2034!, which is very rare !), all they just have to lower their standard of living, such an easy thing to do! . But hey, look at the brighter side too!

Arush did a very good thing, He saved so much in his premiums by not taking Term Insurance! Smart Husband, I wish every woman gets a husband like this and every child should get a Father like Arush.

Its called being mean, who will suffer now, Arush? NO!

The year 2044 (an alternative scenario)

Imagine if Arush didn’t die! That panauti didn’t happen and he just grew old like the rest. Its Retirement time, the time to reap benefits of one’s investments throughout life! Arush hasn’t actually accumulated a lot of wealth for his retirement! He didn’t take it seriously all his life.

Overall investments in mutual funds were never left to rest so that they could compound well, major investments in Insurance Policies and Fixed Income instruments never actually gave a better return than inflation. Even though his wealth has grown to close to 1 crore, it’s actually peanuts now, in 2045!

His expenses are Rs. 2 lacs/month! How did he forget about Purchasing Power? Even though this 1 crore looks big enough all those years ago, this will not give him more than 80k per month. Even if he lower’s his standard of living, he can’t live comfortably! He is retired now. Too late worry about these things!

Everybody wants to enjoy their life after their working years!

But for poor Arush, there are few choices! None of them, good! He can be dependent on his children, or he could lower his standard of living or cut off a big part of his desires after retirement or worst case, convince himself that he is interested in some part-time job which he can do comfortably. God forbid if there’s an unforseen medical problem which he didn’t account for, at this stage in life!


With this article, I have tried to show you how things can go wrong at each point in life and what your financial life can look like if you mess up with your money. It’s the time to take care of your finances and plan for it well! . Yes!

Situations are exaggerated in this article. It was just to show you the worst that could happen. Beware! Be Prepared! Be Wise!

Share your comments on what do you think about the story?

Why you should go beyond MONEY , and connect with TRUE WEALTH – Here are 10 ways

If I have to write one last article before I die it would be the one that you are reading. Don’t worry I am here to stay and we as a team will continue to write more and more articles! This article is special to us and I am glad I got this opportunity to share my thoughts on true wealth with you. Before you read any further I have few requests, don’t react to the content, read the content slowly, sink into the content and see how you can figure out your own way or process to connect with your true wealth.

By true wealth – I mean something that really matters to you and something that is close to your heart.

A lot of people out in the world are striving for high returns, perfect financial products and earning more MONEY but somewhere they are losing touch with their true wealth and so today we want our readers to get in touch with their true wealth.

1. Great and loving relationships

If you are stuck in any relationship, no matter how much you try you won’t be able to live a fulfilled life. I interact with a lot of people who find themselves stuck in some or other relationship (they call it as disturbance in life). When relationships lack workability you lose half of the battle in the world. Because your bad relationships start to consume your mental energy and it takes you away from the kind of life you want to live. We invite you today to take some steps in your life to resolve relationship issues where you are stuck. There is nothing that you cannot resolve inside of a conversation and so start having dialogue with the other person where you can make that particular relationship better. Either get out of such relationship or continue but don’t remain stuck.

2. Relationship with Parents

Your parents are your source relationship. You may have a lot of money, huge bank balance and everything with you but if you are incomplete with your parents you will never ever be fulfilled. If you want your life to work, see that you maintain good relationship with your parents. I was once interacting with one of our clients whose father is bedridden from last few years and his father now occurs to him as burden ( he is frustrated with his situation). He is willing to take care of his father but as a duty and not lovingly. I could clearly see in his life that he earns fantastic, has everything in life but this was an area where he was stuck and so was not able to experience life at its fullest. If possible write a letter to your parents (even if they are not alive) and make sure your relationship with your parent’s works. You just can’t afford to have non-workability in this relationship.

3. Building Great Home Environment

Your home environment really matters. I and my wife always feel that as parents our only job is to provide good environment to kids and nothing else. Environment which is positive, alive and creative. Sharing from my childhood, I had very normal childhood but I witnessed a lot of family quarrels and disputes which had negative impact on me as a child. Your home environment is the greatest gift you can give to your family and kids and so pause for a while and see what best you can do to enhance your home environment. This is the greatest wealth you can ever gift to your kids and family members.

4. Do what you love


I and Manish love what we do and we see that as our success. I left my family business and he left his high paying job so that we could follow our bliss. According to us, it is a complete waste of life if you have to wake-up every day and have to do work which you don’t like doing. I am not asking you to quit your job or immediately start your own business. But be clear that your work (your daily creation) is your true wealth and so see that you love and enjoy your work. See that you nurture your work and your work nurtures you. At the end when you reach 60 or 65 you will not see work as an opportunity to earn money, but it will be about something else. (And I am sure of that). You can read how Manish had quit his job for his passion

5. Take good care of your body parts

A lot of people get so busy with their routine life, somewhere they stop taking care of their own body. If I have to put the same in a harsh way I would say “People abuse their own body”. Jim Rohn said, “Your body is the only house in which you are going to live”. A few days back one of my close relative had some hearing problem and when they approached doctor they were told, the patient will not be able to hear by left ear. They were adviced to buy hearing machine at the earliest. This person now takes great care of his second ear. Your each and every body part is important and you have to care for yourself. Here is a great thread on Quora about some misconceptions about health and wellness.

Do you go for regular dental check-up? Do you go for regular eye check-up? Or regular health check-up? Or exercise regularly? – We are not saying anything new but we know that a lot of you need to bring attention to your body. This article will teach you 10 mind-blowing things “Health” can teach you about “Wealth”

6. Loving circle of clients and colleagues

Majority of you spend a lot of time in your office with your colleagues or having interaction with your clients. Most people have loving family and loving friends in their life but it is important to have loving circle of clients and colleagues. I was once having conversation with one of our clients who had some major issue with his boss and so he was not able to focus on other areas of his life. Stop blaming people, take all the politics and professional insecurities out of your work life, stop judging people you work with because when you judge people you are not able to form loving circle of colleagues and clients. People you surround with are part of your true wealth because that is from where all the support, information and leverage is going to enter your life.

7. Stay connected with your hobby

When we lead our workshop we ask people to raise their hands if they have any hobby in life. A few hands raise as majority of them do not have any hobby in life. Hobby is something that you love doing without any compulsion or pressure. This is something you do for your own self and not for someone else. It helps you to rejuvenate, it gives you a chance to connect with your own self-expression and so I always urge our clients to stay connected with their hobby. Your hobby is your true wealth; your hobby is your companion who will be with you all your life.

8. Give quality time to your kids

My son is now 1 year and 2 months old (young) and I love playing with him and his little friends who visit our home. As parents a lot of people set children education goal and marriage goal but more importantly you have to spend quality time with your kids. In the first 5-8 years of kids upbringing it is important that you spend more and more quality time with your kids. It is my dream to write a book on how to teach kids about money ( I see it as my duty to do something for kids). After you return home instead of watching soap operas, see that you spend quality time with your kids. Here it is not about quantity it is always about quality.

9. Build a small library at home

A lot of people have home theater at their home but they do not have library. I am not against owning a home theater because I have one at my home. I always tell my wife that the only wealth I am going to pass on to my next generation is my collection of books and nothing else. I would not like to pass on money to next generation but I will pass on books through which they can build their own capacity to produce and create wealth. Make sure you build your small library at home with some quality and inspiring books (And don’t forget to add our 3 books to your library)

10. Spend time with Nature

Being with Mother Nature is your greatest wealth. Where I live we have peacock and peahens visiting our house every day. Every day evening I spend some time sitting in my garden doing nothing and I just BE with Mother Nature. I invite you to spend 10 to 15 minutes every day with Mother Nature, it has tremendous power in it and it will leave you with a lot of energy and peace of mind. Wherever you live see that you stay connected with nature by some way or the other.

Some Final words

In life always stay grounded and connected with your true wealth. You are free to make list of what you consider as your true wealth and take steps to give yourself fully to what matters to you. We want our readers to grow, we want each one of you to always stay connected with your true wealth. We also want you to help others in connecting with their true wealth.

This is how we can spread jago effect; this is how we can create a world that works for everyone. Do share your key insights with us in the comment section. If you have any better idea do share the same with us.

Note – This article is written by Nandish Desai

The Biggest reason Why you will not be able to save enough for your retirement ?

2014 has started, and I wish you all a Happy New Year!. We are into the 4th week of our Investors Bootcamp and I recently brought up a very important point there, which was, “What is the that one thing which stops you from saving for retirement?”.

When I dove into this topic and heard the responses from some of our Plan F participants (senior participants), I came across a simple reason, which can really destroy someone’s hopes for a comfortable retired life.

worried for retirement india
I was late to realise that I was very late

When I ask someone, “Have you starting saving some money for your retirement ?”, I hear a “NO” and the justification for it is – “I still have a lot of time, so why hurry? I am just 26 right now”.

I say – “Fair Enough, makes sense”

And then I put this question to the same person 5 years later, and the answer is – “I still have lots of time, so why hurry? I am just 31 years old”.

I still say – “Makes sense, at least for now”.

But you know what? There comes a time, where you suddenly realize that “Oh my god, its a bit late now”, because all the time you were thinking – “I will do it later” and never realize that its getting late. Remember, “Someday” is code for “Never”. When you have 30-35 years in hand for a goal like retirement, that goal is so distant that you feel it is idiotic to plan for it right away.

You feel, “let the right time come”, but you do not know what the right time is going to be. Is it when only 20 years are left? Or is it when 10 years are left? Or when only 5 years are left?

This is exactly the same situation as when you have to provide tax investment proofs to your employer. When you have 20 days in hand, you feel there is a lot of time. Then 10 days pass and you feel “It’s just few hours of work, I will do it very soon”.

This procrastination continues, and you keep convincing yourself that whatever time is left is more than ENOUGH. Then suddenly, when there is “just enough time left”, something else comes up unexpectedly – some important work surfaces, or you have to go somewhere, or you catch fever and you eventually miss the deadline. Now you are thinking, “I should have started early; I lost time, thinking there is enough time ahead”.

You wait for the “Right Time”

Unsurprisingly, you repeat this behavior when planning for your long-term goals, especially ones like retirement. We put off thinking about it because the retirement event is so distant in the future that it sounds comical to even plan for it now. So, we wait for the “right time”, but never declare that “right time” to ourselves – it’s just a concept in our head that never gets real.

Ask any 25, 30, 35 or 40 year old about their retirement, and they will say – “I still have enough time ahead”, let me think about other important things right now”. Then they turn 45 years old, things get serious and they “start” considering doing something about saving enough money. This is the first time, they realize – “I think its high time now, I should make a start towards my retirement planning”. Again 2-4 years pass, they are now touching 50 years, and then the PANIC mode kicks in, because they can see very clearly that they will run out of money in their retirement.

It suddenly becomes clear to them that time has flown and that the “right moment” to start saving money for their retirement was years ago. They have taken care of most goals in their life, but they have forgotten to protect their own retired living. All the time when they could have really taken risks and could have grown their wealth has passed. Now they just want their money to be safe and this is obviously a situation where you can only get sub-optimal returns.

At this point they have no choice but to live out a life of regret. Even if they do not wish to depend on their kids, they still have to.

30-30 rule to retirement

In my 2nd book – “How to be your own financial planner in 10 steps”, there is a full chapter on retirement. While writing that chapter, I was stuck at one place where I had to show the reader, the flaws in their default thinking about retirement planning and explain to them that they should start planning while they were young. After a lot of thinking, I came up with a rule called “30-30 rule of Retirement Planning”.

The rule states that an average person works for 30 years and then, after retirement, lives for another 30 years (just a benchmark number). Imagine you are 30 years old. You will work for next 30 years (till you are 60) and then you will live for another 30 years (till the age of 90). For the first 30 years, you will earn and consume the money. For the next 30 years you will not earn, but will still consume money.

Right now, I imagine you are earning, but it is still tough to run your life – there is no surplus money left, you are still not able to achieve so many things. If this is the situation right now when you are “making money”, what about those 30 years, when you will not earn a penny?

You earn for next 60 yrs, not just 30 yrs

I know all this sounds terrifying, but you have to realize that, at any cost, you have to earn for the next 60 years of your life (30 years of working life + 30 years of retirement).

So now lets look at your 60 years in two segments of 30 years each – the first 30 years is PHASE A (earning and consuming) and next 30 years is PHASE B (not earning, but still consuming).

Now Map each year of this Phase A with Phase B and what you earn in this year X (2014), some part of this money has to be saved for the respective X + 30 year (2014 + 30 = 2044). What you earn in year 2015 has to feed you in 2015 and 2045 (+30 years). Only if you save each year, will you be able to fund the companion future year, which will be exactly after 30 years.

Look at things like these.

30-30 rule of retirement

(Image comes from – “How to be your own Financial Planner in 10 steps” book)

So it’s very clear that if you lose the next 10 years, then the pressure of retirement saving will build up on the next 20 years of your life. If you lose 20 years of your working life and do not save anything for retirement, then the last 10 years have to shoulder that burden and you will have a punishing time ahead.

Benjamin Franklin once said – “You may delay, but time will not”. You are probably heading for disaster if you are living in this myth that you will save a lot later when the time comes. It never happens.

So sow some seeds right now for your retirement. Buy a piece of land, start planning for a second home which you will use to get rental income, start transferring at least 10% of your income each month solely for the goal of retirement, build an additional skill so that you can earn more in the future, marry a working spouse and don’t blow your money each weekend on that movie which you knew was not worth it! Start taking small steps

You have to ensure that by the time you turn 40, you should have at least a small retirement corpus – this should be your first milestone.

Are you all set to save enough for your retirement corpus? Are you sure you will not get trapped in this “right time” thing ?

The Threshold Point – a simple way to achieve your goals

There is so much you need to achieve in your financial life and you are stressed! Correct?

I have seen investors getting overwhelmed due to the pressure of financial goals in their financial life. You have one life – in which you have to cram multiple financial goals. A house, a car, a corpus for educating your children, a regular stream of money each year to pay for school fees, vacation funds, occasional large expenditures, funds for your retirement and several other items which are too numerous to even list here!. Out of these – some things you want immediately, and some you label as your long-term goals.

threshold point in financial life

However when you keep thinking about these goals and amount of money you need to accumulate in your financial life, you get worried, stressed and feel lost. You doubt if you will ever be able to achieve it and that demotivates you and then you just ignore handling your financial life and go with the flow! – leaving everything to fate! However that’s not the solution!

what’s the solution?

I can’t give a solution, but I can suggest you something which we practice a lot of times when we deal with our financial planning clients. Let me share with you that simple yet powerful concept which Nandish Desai came up with in our early years of handling clients. Years back – we noticed that a lot of clients financial life was so messy and confusing that it was unplannable! Also they were so overwhelmed that we could not do their planning the usual way. We needed to suggest them some plan of action which was lighter and which looked more achievable to them.

So to those clients, we asked to slow down (listen to this powerful 16 min audio on slowing down recorded by us personally) and ask them to forget about all their future goals. This is because many investors are not able to make a powerful play for their financial goals with empty pockets. To play for your financial goals powerfully you need to first cross or reach your THRESHOLD POINT. Yes! – That’s the concept I am going to unveil today. The concept of threshold point helps an investor to lighten his worries and to be more focused.

Now, what is this threshold point?

The threshold point is the milestone, which when reached in your financial life, gives you a strong sense of achievement. You feel like you have taken that first step and you are a winner in your own eyes. It’s not the final achievement, but a mini-battle that you have won. A threshold point could be generating some lakhs of rupees, having a loan free home, achieving an income level, getting debt free, or combination of these.

All your energy has to be focused on reaching that threshold point. Everything you do in your financial life has to be driven by just one motive in life, and that is reaching that threshold point. If you have to spend money on something, you have to ask first – “Will spending this money help me move towards my threshold point?”

threshold point

You need to get obsessed with your threshold point so much, that naturally you will achieve it much faster than you had planned. And when you reach your threshold point in some years – you then play a much bigger money game. The threshold point gives you a sense of some freedom, some relief and extra dose of energy.

Some Examples of threshold points

Example 1 – Ajay’s Story

My friend Ajay is unmarried and lives in Varanasi. He was anxious about his future prospects because he does not want to get into a regular job, because he is kind of moody person and leaves his job the moment he does not like it. This creates problems in his cash flows. While he wants to do lots of things such as buying a home, buying a 2nd home, saving enough to roam around the world etc., he told me he does not think it’s POSSIBLE to achieve all this. The truth is he was overwhelmed and could not think what he should do next ! .

I asked him to describe his ideal situation – one that would remove all this worry. A situation that would make him feel more at ease and help him plan his financial life ahead in a better fashion. He said that if he were to start receiving a regular income of Rs 10,000-12,000 per month without working – he would feel far more relaxed. That’s it. That was his Threshold point.

Threshold point – Generating Rs 10,000-12,000 per month income

This is something he now needs to focus on. We found out that if he could generate 20 lakhs in a few years, he could put it all in a Fixed Deposit and get an interest income which will act as the regular income. It would take few years, but once he would reach that point, he would be a winner in some sense. He has already saved quite a few lakhs, and is now on his way to reach his threshold point. He now travels by train, rather than by air, because that takes him closer to is threshold point. He does not spend more than what is required on clothing and saves every extra bit and puts it back in his bank account – all of which takes him closer to his threshold point.

Example 2 – Tarun and Reema from Pune

This couple (Names changed) approached us to avail our financial planning service. We looked at their financial data, their financial goals and their exact situation. They were worried about their future goals like retirement, educating their children etc. Their net worth was less than 3 lakhs and their goals were big-ticket goals.

Threshold point – To generate first 15 lakhs

First, we asked them to eliminate their future. Yes, our future is an illusion that human beings live in. A lot of investors are either worried about their future or they regret their past mistakes, but they are never fully in the present year. I told them, as an investor you can’t step into 2014 or 2012 – you are in 2013 and that is a reality. We then asked them to define their threshold point, an amount that would fill their pockets so that they would have the power to face big future goals. The amount they came up with was 15 lakhs.

We simply asked them to forget everything and focus completely on their threshold point number, which was 15 lakhs. We then helped them to re-structure their cash flow and helped them to devise ways by which they would reach their threshold point soon. Now in this situation they didn’t had multiple goals which scared them, all they had was a SINGLE Goal and that was to generate 15 lacs.

Example 3 – Ramanna’s Story

Ramanna was employed in a big I.T. company in Pune. His aim was to start his farm – as he loved nature and his dream was to run a big venture related to it. But that would only happen when he would have taken care of his expenses each month because starting something of your own is a big risk. Which meant he had to handle rent, bills to pay, monthly expenses to incur at home etc. etc. So he defined his threshold point and it was to own a home and also have sufficient savings to pay his regular bills.

Threshold point – A home and 60 lakhs corpus to get a regular inflated adjusted monthly income of Rs. 35,000 per month to start with

Prior to defining his threshold point, Ramanna was just a regular employee, but the moment he defined it, his mind started actively focusing on it. The song of “I want to achieve my threshold point” was playing constantly in his head!. He was aware that he wouldn’t reach his threshold point very soon, and it would take at-least 10 years to get there. But now he was more focused and targeted.

He was sure if he could travel to the U.S. and work abroad for a few years, reaching his target would be a cinch. From that day, he became a superman at his workplace. His commitment level at work increased because he expected to be moved to the U.S. office on the strength of his performance. He also explored other options to move abroad for a few years. Within the next 2-3 years, he saved money and also managed to get an offer to move to the U.S. office due to his exceptional performance at work. This was 2001.

However, his savings were at that point not sufficient to make a down payment on his house. Undeterred, he moved to US, worked for a year, saved obsessively, and returned to India just to make a down-payment and apply for substantial loan. He took the risk, because getting to the threshold point was his obsession by now. There was no other option, he wanted it any cost.

Over the next 8 years, he earned enough money, saved enough money, lived frugally, constantly worked towards his threshold point. He made sure to communicate about his future vision and goals to her better half when we was getting married. He made sure he didn’t do anything stupid which would open new streams of expenses in his life, which will make it difficult to stick to his plans of leaving the job and starting something of his own. So at the end of 10 yrs, he had 2 houses in Pune, one without any loan and the other with a small outstanding loan (thanks to dollars he earned and powerful savings).

He came back to Pune, sold one house (which fetched him more money) and kept it all into a Fixed Deposit with quarterly interest option and the other house was for self-consumption. He is now free of debt, has no rent to pay and his interest income takes care of his expenses.

He had arrived!

What is your Threshold Point ? Have you ever thought about it ?

If you are low on net worthh or you are a new investor, instead of setting huge financial goals, start to play for your threshold point. This will reduce your stress levels and will help you to enjoy the process of wealth creation. When we do financial planning for some of our clients, a lot of times we avoid giving a very long term plan to them, because we know the plan will sound unrealistic.

A plan has to be realistic for any investor to own it. Then we help them define their threshold point and help them plan for that. We tell them, go achieve that threshold point first and then think ahead. Don’t waste your time and energy in worrying about future for now. The same way, you need to think of your threshold point.

I want you to tell me in comments section about it. Write down and declare your threshold point and if possible your plan to get there! I am waiting to hear back.

Why Investors are from Mars and Financial Advisors are from Venus

This article is a must read for every investor and financial advisor. The best part of this article is that it is about YOU (the investor) and it is about them (financial advisors). I and Nandish always discuss how financial advisors cant live without investors and vice-versa, but still their world are very different from each other. Both Investors and Advisors think very differently. It is extremely important for both to understand each other’s world and that is what today’s article is all about.

Right now I think advisors and investors both share love and hate relationship and the world of investment is structured in such a way, that they are inseparable. Even if they want, they can’t avoid having interaction or association with each other. Their thought process are at times very different, they view the game of investment from completely different place. Just imagine How magical the world can become if these two entities engage powerfully?. What can happen if they come on the same page and start to respect each other’s world. Such oneness can spread prosperity all over.

Before I write further, I want to make one thing clear that the world right now is full of good and bad financial advisors and investors both.

Step into Each Other World

Unless both Investor and Advisor step into each other world, its really not possible for help and co-exist with each other in a happy way from long term basis. This article is like ticket for both advisor’s and investors to step into each other’s world, it is an opportunity to embrace each other’s world and to accept their mistakes or the damage that they have done to each other’s world.

From last few months, We have closely observing and interacting with both advisor’s and investors community and have come-up with some differentiation. Some of the observations, you might agree and some of you might not. No need to react to them, but just see if you agree to them or not.

Investors and Advisors difference

The intention of this article is to help you get in touch with each other’s world. Let us know what you think about this ?