Skip to main content

Back to Basics

 

A few basic ideas which I wish to reiterate to myself as they contain wisdom to think and become better.

Embracing lifelong learning: If there’s one thing that should not stop no matter what situation you’re in, it is learning. Could be through reading books, watching videos, etc. The day we stop learning we almost stop growing. Reading opens up your brain, gives you a larger repository of knowledge to take information from, and a better reference point to think about.

Time with Self: You’re going to spend the most time in this world with yourself, in your mind. You have to make sure it is a good place to be otherwise you won’t be happy. Things happen so effortlessly when you’re happy that nothing feels like a task. The way to improve your time with yourself is through reflecting on your thoughts as they eventually turn into actions and habits. Needless to say, it will help you know thyself better.

Routine: One of the most important traits of any successful human being on earth is they have a routine of good habits. Pick anyone you admire and observe their day. Routine need not be a rigid timetable but a rough idea of how you would spend your day. This frees up your mind from having to make endless decisions of what to do time and again.

Consistency: We overestimate what we can do in the short run and underestimate what we can achieve in the long run. 30 mins a day spend reading each translates into 900 mins a year ( assuming you read only 300 days). On a 2 min/page average that is 4,500 pages in a year, that is more than 10- 400 page books in a year. Not bad for a beginner. One of the major causes for not being successful in tasks we set out to achieve is inconsistency, we simply don’t do things for long enough to see the success.

Thinking Long Term: When setting new goals think long term. Longer than what you can achieve in 2,4 or 6 months, more like 2- 5 years. This gives you more time to practice, creates a good base of efforts, and allows some benefit of compounding to show up. Playing for the short term puts you at an inherent disadvantage because a lot of people are already running that race. Long term, not a lot of people even think about it forget applying it.

What does investing have to do with all of this you might wonder? Well, all the above things help you become a better decision-maker. Decision-making is like a muscle gets exhausted as you use it more throughout the day. You have to become better at it to be successful in investing. The abovementioned are few big ideas that are basics but timeless and lay a good foundation. In investing you don’t need to do extraordinary things to do better than the average, you just need to avoid ruin which the basics can help you with.

Comments

Post a Comment

Popular posts from this blog

Investing like Long Distance Running

  What does investing in the stock market & running a marathon have in common? Running long distances requires a lot of stamina and mental strength. It takes hours of deliberate practice, self-belief, and doses of strength training. Is investing any different? You’ll figure out in. Let’s assume you have practiced and you have all that requires running a marathon covered. Cut to the day of the actual marathon and how you can think of it as similar to investing. Let me divide it into 4 parts of 10km’s each for simplicity assume full marathon is of 40kms exact. The race flags off after the Zumba warm-up and you’re all fired up and excited. You leap and run at your maximum pace leaving everyone behind for a brief moment. This is akin to when you start your stock market journey with your initial capital having read all those books and thinking you know everything but having zero market experience. Let’s say you do earn a decent return on your first idea but they
Post a Comment
Read more

The ultimate test of understanding

                                                                            Source Here’s a simple test to check whether you really understand a certain topic or not? Pick the topic of your choice, which you think you know well. Now try explaining it to a 14-15-year-old child or someone who has absolutely zero knowledge about that topic. If you’re successfully able to make the chosen person understand your idea- congrats you do know the topic well after all. A lot of us might fail at this simple activity including yours truly. I know its difficult to accept the fact that things you thought you knew so well you don’t actually know them so well. Our brain gives us a false sense of understanding based on mere reading or just knowing about something as understanding it. We take great comfort in the same. Allow me to introduce the Feynman technique of learning by Nobel prize-winning physicist Richard Feynman. 1. Identify a subject or topic 2. Explain it to a child – this wo
Post a Comment
Read more

Are you Biased?

We are all biased!! Yes, I said that out loud, we all are. It includes yours truly too because I am no exception. Let’s define what bias means before we delve into different types of biases. Wikipedia defines bias as “disproportionate weight in favor of or against an idea or thing, usually in a way that is closed-minded, prejudicial, or unfair”. Biases stem from the way our brain is structured to help us. Our brain always tries to keep past experiences in mind, remembers what gives us pain or pleasure, what worked to give us recognition or what led to failure, and tries to make sense of the present and future decisions based on them. So, the brain doesn’t recognize that it could be a bad thing for us. Biases make us irrational in our decisions and choices. Now almost none of us can eliminate biases because its difficult to recognize the bias when you’re actually being biased because your brain tricks you into believing that what you’re doing is the right thing to do.
Post a Comment
Read more