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D.Muthukrishnan (Muthu), Certified Financial Planner- Personal Financial Advisor

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Nuggets for October 14th

Posted by Muthu on October 14, 2017

Some of my recent tweets:

1) Investing span is getting longer due to increasing life span. Make best use of time rather than chasing high risk returns.

2) Those who try to get rich quickly gets aggressive, use leverage, chase fads and end up poor. Enjoy the investing process & get rich slowly.

3) We see only returns and not how much risk has been taken to achieve it. Sadly for many, end justifies the means.

4) You need not be rich to enjoy small pleasures of life. Don’t try to compress the natural course to get rich fast.

5) Pareto principle is applicable for markets as well. 80% of returns come in 20% of time. Always stay invested as you cannot time the 20%

6) Getting rich is difficult. Staying rich is extremely difficult. You can get rich by even luck. But staying rich needs skill, knowledge and right behaviour.

7) To save more, you need to either earn more or spend less. If you can do both, you’re on the fast lane to wealth.

8) Instant gratification destroys wealth. Delayed gratification builds wealth. Instead of borrow and buy, aim for save and buy.

9) Our approach is if we cannot pay cash and buy something it means we cannot afford it. Why buy unaffordable stuff through debt?

10) Suggestion to buy next multibagger is exciting. Suggestion to change behaviour is boring. Boring is effective and long lasting.

11) If patience and right temperament is easy, everyone would get rich from markets. Difficult to practice but richly rewarding.

12) We consider debt as a luxury instead of slavery. The biggest luxury is living within means and not to have to answer lenders.

13) It’s a sign of rich to prefer complex structured products. In reality, simple products are best for everyone regardless of net worth.

14) Be alert when you come across terms like structured, linked & alternative asset. Can lead your financial life very well without owning them.

15) Many say they would start saving when their income grows. If you don’t save when income is small, you’re unlikely to save when income grows.

16) If you’re not a good investor, choosing good investments is of little use. Get behaviour right, everything else automatically follows.

17) Of all the good traits, patience is the most critical and invaluable one. This is the biggest edge an investor can have.

18) The best way to use credit card is to make full payment every month. The worst way to use is paying only minimum balance.

19) Not only its employees, as borrowers, we all work for the banks for most part of our career.

20) Growth happens over years. Why measure performance by everyday price movement?

21) Some people get rich quickly. They are exceptions than the rule. It takes not less than 2 decades of work to build wealth.

22) If you can save and invest 30% of your income every month for two decades, you’re most likely to become financially independent.

23) Impulsive buying is the enemy of high savings. Give a month gap between buying decision & execution. Time is the antidote for impulsiveness.

24) Sticking to the investment discipline in bad times differentiates between an average and a good investor.

25) High savings would ensure that you work for money for two decades and for the remaining four decades money works for you.

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