A THREAD on some insightful thoughts about saving & investing by @RichifyMeClub:

1/13

• Avoid debt
• Avoid over-spending
• Avoid investing on tips
• Avoid timing the market
• Avoid reacting to rumours
• Avoid selling good companies
• Avoid buying what you don't know
• Avoid behaving badly during tough times

We'll do really good in the long-term

2/13

With an increase in income, if our 1st preference is to:

• Buy good quality businesses
• Increase monthly SIP amount
• Continue driving the same vehicle
• Buy other fruitful financial or physical assets

We are on our way to become financially independent.

3/13

A few financial mistakes:

Falling in debt trap
Avoiding insurance
Not saving enough for retirement
Buying more of depreciating assets
Not reading about personal finance
Redeeming stocks or funds frequently
Comparing financial status with others

4/13

Before we start investing, we must ensure that we have:

① Emergency corpus enough to cover 12-months of expenses at least
② A term-insurance worth 10x annual salary
③ A health cover bundled with Accidental Disability & Critical Illness coverage

5/13

How to save money?

① Keep using an old car. It doesn't make us broke
② Delete shopping & food apps. They lure us to buy more than what we need
③ Don't bother if your friend is using an iPhone. Be happy with your Android

6/13

Google was built on ONE Thing - Search
Starbucks was built on ONE Thing - Coffee
Berkshire Hathaway was built on ONE Thing - Buying quality at a fair price

Be it Steve Jobs or Bill Gates; Walmart or Amazon; iPhone or Kindle

All have ONE Thing

What's your ONE Thing?

7/13

To survive Black Swan events like COVID, always have:

① Asset Allocation: Debt + Equity
② Emergency Fund worth 1Y of Expenses
③ Adequate Term & Medical Insurance
④ Stomach to digest drawdowns
⑤ Extra cash to seize opportunities

8/13

To build a passive source of income, we can work on a side-hustle by:

• Spending 6-8 hrs on Sat & Sun
• Cutting down sleep hours by 1-2
• Devoting 1-2 hrs after a day job

Thus, utilize 24-40 hours a week in building something that may become an active source of income.

9/13

While building initial capital to invest:

① Try to live in a self-imposed financial scarcity
② Save at least 20-30% of the income
③ Avoid high-consumption lifestyle
④ Delay the instant gratification process
⑤ Prepare a budget before buying anything

10/13

When I interact with people on Personal Finance, all of them list down their financial goals as:
• Yearly Vacations
• Retirement after 60
• Luxury Vehicle & House
• Child's Marriage & Education

None of them talk about:
• Zero Debt
• Financial Independence

11/13

Invest systematically
Avoid timing

Choose companies with quality earnings, growth & management.
Not junk.

Chase long-term wealth
Avoid short-term fluctuations

Have a fear of permanent loss of capital.
Not volatility.

Stay invested during the drawdowns
Avoid redemption.

12/13

The Power of Repetition

1-hr of exercise doesn't reduce our body-fat in a day. If repeated everyday, makes us fitter

1-year of SIP doesn't build wealth. If repeated for decades, helps us build a fortune.

Over a period of time, not just money, small efforts compound too.

13/13

Charlie Munger after divorce lost everything at 30
Ray Kroc started Mc. Donald's when he was 52
John Pemberton invented Coca-Cola at 55
Colonel Sanders started KFC when he turned 65

It's never too late to start.
Any time is a good time to begin.

Never give up