Little things that bite, Lessons from an Alien, A thought you may not agree with
Do not forget to respond to the question :)
Hello friends -
In order to make our conversations better, I am going ask a question each week. While I will respond to each of the emails I receive, I will also pick the best response and share it with everyone (with your due permission) in the newsletter and on my twitter feed. Apart from that, I will send you a book that as a small gift.
This Week’s Question
What is the one thing about money that you absolutely disagree with? It could be about psychology of money or any well accepted practices when it comes to money.
Compounding Works Both Ways
Success is doing the right things well five thousand times over. So is destruction. Continuous iteration can provide both positive and negative results. Consistency can lead to success or total demolition. Let me show you a couple of examples.
Depositing money in your investment accounts continuously each week for five thousand times will amount to something significant. Even though the total number of weeks is more than a lifetime, for illustration purpose, if you were to start with an investment of INR 100 in the first week and continued to invest the same amount of 5,000 weeks, the total capital outlay of INR 5,00,000 (five lakhs) would amount to 77,39,39,142 (INR 77.4 crores) when compounded at 10% per annum. That is a meaningful sum 100 years later too. Imagine if you compounded it at 11%.
Now, if you smoke every day, even if it is just one a day, you carry a 48% higher risk of congenital heart defects than normal humans. After a few years or decades of continuous smoking, say 2 decades of continuous smoking, you would have smoked a total of 7,300 cigarettes. Same goes for eating unhealthy food every day or not working out.
It’s the little things in life that bite us. Wealth, fitness, success, obesity, bankruptcy, divorce, everything is a result of small choices made consistently for a long time.
Source - The Compound Effect by Darren Hardy
Lessons On How To Live From An Alien
The Humans by Matt Haig is one of the best pieces of fiction I’ve read in 2021. In the last chapter titled “Advice for a human” Matt lists down 97 pieces of advice for humans from an alien. I want to share the top 5 with you that I think influenced me.
Don’t worry about your abilities. You have the ability to love. That is enough.
Your life will have 25,000 days in it. Make sure that you remember some of them.
New technology, on Earth, just means something you will laugh at in five years. Value the stuff you won’t laugh at in five years. Like love. Or a good poem. Or a song. Or the sky.
You are not the most intelligent creature in the universe. You are not even the most intelligent creature on your planet. The tonal language in the song of a humpback whale displays more complexity than the entire works of Shakespeare. It is not a competition. Well,is it. But don’t worry about it.
A paradox. The things you don’t need to live - books, art, cinema, wine and so on - are the things you need to live.
Most humans don’t think about things very much. They survive by thinking about needs and wants alone. But you are not one of them. Be careful.
A quark is not the smallest thing. That wish you have on your death-bed - to have worked harder - that is the smallest thing. Because it won’t be there.
You can’t find happiness looking for the meaning of life. Meaning is only the third most important thing. It comes after loving and being.
You don’t have to be an academic. You don’t have to be anything. Don’t force it. Feel your way, and don’t stop feeling your way until something fits. May be nothing will. May be you are a road, not a destination. That is fine. Be a road. But make sure it’s one with something to look at out of the window. (This one hit me hard)
Turns out that there are 9 out of 97 that are worth thinking about. Your list may be different. If you have read this book, do share the ones you think are worth some deliberate consideration.
An Idea You May Not Agree With
I believe that one must not chase returns. Especially when the capital is small. The following tweet of mine had some mixed responses. Since everything cannot be clarified in a tweet, I also tried to share my thoughts in detail on the blog in this post - A Stupid Thought - Chasing Returns Is Useless
A Podcast Worth Listening
Professor’s ideas on index funds, financial freedom, habits, antifragility are worth listening.
On My Youtube Channel
I released a new video on Public Provident Funds. I call it dead because our new age start ups and financial influencers have made everyone believe that achieving 10-15% without risk is quite easy and one should not even consider looking at products like a public provident fund.
The podcast will be released this week. Do not forget to subscribe to get notified.
the savings rate calculator was downloaded more than 400 times over the weekend after I made it free for a day. 15 people gave five star ratings. If you are interested, you can buy it here.