I have shouted myself hoarse, and that too many times – investing is simple. A simple savings account, a simple credit card, a simple term insurance, a simple diet, a simple exercise regimen – dammit life is simple.

All the people in the world know it, maybe we Indians do not know it.

People who read my blog and buying ULIP – get my goat! No clue why people pay lip service to all the ‘Knowledge’ they claim to get from my blog – WFT are u doing with all the ‘knowledge’ that you gain dammit?

Some simple steps like spending less than what you earn, saving and then converting that saving to investing, etc. are all simple right?

Many advisers you meet may have compared financial advise to medical advise. Not so fast. Not all advisers have taken 5 years to get their degree. No viva. No 95% rejection rate at admission level. No rigors of internship. No Continuing Professional Examination. So I would be a little worried if you thought that people with all those confusing qualifications are doctors, be warned. It is not so.

So here are another 5 simple steps:

1. Do not borrow: Most people who cannot create wealth for their families are those who spend MORE than what they earn. Simple – whether it be for a function, celebration, illness, vacation, or just living beyond your means it will kill you. Debt is NEGATIVE COMPOUNDING and kills.

2. Save, Invest and for heavens sake leave it untouched for long periods of time: Compounding worked for Warren Buffet, Rakesh Jhunjhunwala, Azim Premji, Tatas, Birlas, Rockfellers, Kennedys – the list is endless. You know what? It works for you and me also. My PPF account was opened in 1979 – imagine how powerful is the compounding effect! Even Warren Buffet was not ‘so’ rich when he was 40. He knew compounding would work for him. It did. So now he is 80+  and compounding has worked wonders for him!!

3. To make money you need not predict markets behaviour on a day to day basis. Unnecessary and completely useless. SIP in a well managed fund is a far more sensible option. Also if you are young try building a nice Blue Chip portfolio. Buy one or two shares a YEAR. You will have to create a funnel (screens as the pros call them) do research for 364 days and buy on one day. That is the ratio of Research: Action ratio that builds a good portfolio. Unless you have a team of pros doing research for you – like Prashant Jain, Siva, Naren and Bala have. You do not. Do not kid yourself thinking you can do all your research just sitting in one place. I get reports, I read them, then buzz a few people ask, then stop thinking about it for a week. Then revisit and find details which I had missed. Seriously, it is difficult if not impossible to teach experience.

4. More than 100 years ago when asked how will the markets be, Mr.  J P Morgan said ‘Volatile’. I have used this quote many times. Only thing guaranteed in the market is volatility. This also leads me to a Tamil saying which is ‘trying to take a dip in the ocean AFTER the waves have stopped’. Read it together – you will never ever be able to enter the markets if you wait for the the volatility to be over. That is IMPOSSIBLE. So enter the market TODAY. Shut out the MEDIA. They are here to entertain, not educate.

5. Keep an Investment diary, write down your goals, and keep track of your investing.

That is all. See no complications at all as promised.

Now just go and Do It.


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  1. HDFC funds – top 200 and Prudence did worse than ICICI pru funds in the last 3-4 years. I have been doing SIP in Hdfc and not icici. I chose them based on some numbers I got from valueresearch and when I started in 2011, they were better compared to others. My goal is retirement saving. I am also putting money in nifty bees. I stopped sip in dspblackrock top 100 because it is slow moving even when market is moving up. Just didn’t pull out the money.
    In a case like this when you see other fund performing better, what is the strategy? Do you still continue with existing one hoping since it is Prashanth Jain, it will pick up or stop sip in this and move to icici pru?

  2. @ Aparna

    ‘You make money during bear markets, only problem is that you do not know it at the time.’

    How will you know if ICICI funds will continue to be better in the next 4 years? And why will HDFC funds not be able to come back? Don’t chase performance, it is seriously bad for your portfolio.

  3. Subra, I was doing some research for a trip to north & found something you might enjoy…

    Amritsar was purchased in 1574 for 700 rupees. Current area of city is around 114 sqkm or 28170 acres. Ongoing rates are around 1cr per acre.
    So, over 440 years of compounding, the rate of return has been 4.6%pa

    Tell that to the real estate investment gurus!!!

  4. Subra,
    Just lost a friend to cancer at 52…..teetotaller, non smoker. ….fit
    Well qualified….doctor…..well off…assets more than 5 cr…..doctor wife, own nursing home…children settled……..

    Has slogged saved and invested whole life……..no chance to spend

    Most of us born without a silver spoon struggle throughout life to earn , save, invest etc…..when do we enjoy the fruits of our labour?

  5. what is the learning Advait?

    Param in d long run we are all dead..more importantly we do not know how much was the inflation during this period, even assuming 3-4% we may be talking of 1.5% REAL RETURNS – and assume people are happy 🙂

  6. Dear Subra,
    The learning according to me is

    Save or invest for the future but see to it that you lead a fulfilling lifetoo as life is too short…..one may slog in the initial years to realise that the best part of life has gone by without enjoying life…..till a time is reached though one has the wherewithal to enjoy….the body is unable to do so.

  7. @Advait – Many people that I know put away a small percentage of their monthly income towards some ‘fun-expenses’. That way all (or most) of their financial goals remain unaffected and there’s no temptation for any impulse spending as well.

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