My Two Fils

Have you watched this move Sharmaji Namkeen?

It is a Sumptuous Food for Thought.

We all loved it. 

You should watch it if you haven't already.

It is Rishi Kapoor's swan song, in which he managed to capture the hearts of young and old for one last time.

It is also a celebration of food, friendship, family, and the feelings of a lonely and not-so-old man forced into early retirement. 

While the movie was light-hearted and entertaining, it is full of life lessons and a thought-provoking screenplay. 

This is Episode season one, episode 5, and today, I will share the Five Life lessons  I observed and learned from the movie Sharmaji Namkeen.

Every month when you receive your salary, you pay so many people!

You pay your...

1. Landlord or the bank for the house
2. You pay for the electricity and water
3. Mobile, telephone and internet
4. Your Children's school
5. The Supermarket for groceries
6. Apple, Netflix, Amazon

The list goes on and on...

But when do you pay yourself, or do you even pay yourself at all?

Paying yourself first is saving money for your future before spending on your needs, wants, and, more importantly, luxuries!

It is one of the fundamental principles of financial success.

The pay yourself first strategy is quite simple to understand, isn't it?

But it looks like it is not so easy to implement!

Because not many are following this strategy, and among those who do, only a few are doing it consistently.

Why is it so difficult?

You may find it difficult if you follow the traditional budgeting approach of saving what is left after bills and payments. It is quite possible that not much is left after spending on your needs, wants and luxuries. And sometimes there could also be too much month at the end of money.

Reminds me of the funny but ironic song Too Much Month (At The End Of The Money) by Marty Stuart. Listen here...

You could keep going back to this comfort zone, with an excuse that bills come first or I don't have enough for today; how can I think about the future?

So how do you get around this?

The best and the easiest way to pay yourself first is by following the Payday Savings Strategy.

Is First April, a Fools Day?

While the world was busy fooling people or getting fooled, three individuals got together to create the world's biggest company on 1st April 1976.

Guess which company it is?

Apple reached the 3 Trillion Dollar mark on January 2, 2022, when its share price touched $182.86.

Apple was also the first company to hit a $1 trillion market cap on August 2, 2018.

It just took a little over two years to double its market cap to $2 trillion on August 19, 2020, despite Covid-19.

Apple Computers, Inc. was formed on April 1, 1976, by college dropouts Steve Jobs, Steve Wozniak, and Ronald Wayne, who was then working at Atari as a chief draftsman.

Jobs was 21, and Wozniak was 26. They wanted to make computers small enough for people to have them in their homes or offices.

Both Jobs and Wozniak were young and enterprising, but Wayne was nervous and skeptical about this venture's prospects. He was 41 then and did not want to stake his savings on these young lads.

After 12 days, he sold his 10% stake in the company back to Jobs and Wozniak for $800.

Little did Wayne forecast that the young Turks could put a dent in the universe...

Today, a 10 percent stake in Apple would be worth $285 Billion. This number is bigger than the biggest Indian company Reliance Industries, whose market cap is around 230 billion.

It doesn't end there...

Wayne kept his original partnership contract from 1976 for many years until the early 90s, when he sold it for $500.

Wayne told Cult of Mac.

"I had this Apple contract sitting in my filing cabinet, covered in dust and cobwebs, and I thought, 'What do I need to hold onto that for?"

According to The Filthy Rich Guide, the same contract was sold at an auction for $1.59 million in 2011.

Image Source: https://www.cultofmac.com/475927/ron-wayne-quits-apple/

Now Wayne is more than 80 years old and Networth is less than 500,000.

For me the following are 4 key takeaways from this story…

1. Patience is a virtue and a much necessary trait when it comes to investing or building a start-up.
2. It is vital to see the bigger picture and, more importantly, trust your team instead of having a narrow, short-term vision.
3. It is essential to take some risks or Maybe a little more to achieve big things in life.
4. While someone somewhere is busy creating another big company like Apple, you can build one or invest intelligently in many such companies. You could end up being a part of something huge and create lasting wealth for yourself in the process.

Is there anything else you can learn from this story?

Share your views in the comments below..

Please share your thoughts on the above...

Arrange a Free Consultation to understand how you can participate in the growth story of worlds largest companies and create lasting wealth for yourself in the process.

Here is an interesting Chinese fable about a group of frogs and an investment lesson we can learn from this story.

Markets go up and they go down, but our Investment goals are typically constant and not dependent on market conditions. 

With so much uncertainty, negative news and gloom predictions, it can be quite a challenge seeing your investment value go down!

You may be unsure if now is a time to cut the losses and sell, buy more or do nothing....

What if you sell now and the market recovers in the next few days...

Or what if you buy now and the market goes down...

Or worse what if you did nothing and the market kept on falling further...

Learn how to manage your investments when markets are falling and you are nervous about your investments.

Feel free to arrange a free expert second opinion of your portfolio to help you understand if your portfolio is aligned to your risk appetite and goals.

And if you are looking to invest for a specific goal, arrange a Free Holistic Financial Planning session.

Let me know what your thoughts are on the investment lessons from the deaf frog and share this with your family, friends and colleagues to help me spread the word.

When you invest $10,000 at a 10% growth rate, it will grow to $16,100 or 1.6 times in 5 years. 

In 10 years, it will grow to $25,930 or almost 2.6 times. 

Imagine by how much it will grow in 25 years? 

It will grow to become $93,130 or 9.3 times, just by keeping the money invested and reinvesting the profit/interest. 

This is the Power of Compounding. 

“Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.” ― Albert Einstein 

Your success as an investor is a product of two essential ingredients The rate of return the length of time you remain invested. Of late, investors are more focused on the rate of return and much less on the length of the investment. 

Little do they realize that the magic of compounding needs both these factors to work in tandem when looking to create long term wealth. So while looking to get better returns on your investment, you should also remain invested for a longer horizon to get the maximum benefit of the magic of compounding. 

Bank Deposits vs The Stock Market/Mutual Funds Unlike in the past, the bank rates are not so rewarding; hence, investors are now considering mutual funds, ETFs and stock market investment to grow wealth. 

Also, unlike bank returns, Mutual funds or market-linked assets can be volatile with potential risk to capital invested. Hence it is crucial to ascertain your investment horizon and the ideal risk-reward balance to build a robust investment portfolio. 

Regular Savings or Systematic Investment Plan SIP - Systematic Investment PlanAs the Magic of Compounding, the systematic investment approach is equally powerful in helping you accumulate capital, grow wealth and mitigate market risks. 

Benefits of Regular Savings or Systematic Investment Plan 

1. You can start with a small monthly investment. 

2. It helps you build a disciplined saving and investing habit. 

3. Dollar-Cost Averaging - Dollar-cost averaging helps you benefit from the market fluctuations. When the stock prices fall, You buy more units and buy lesser units when the stock prices increase, thereby averaging your buying cost. 

4. Diversification - You can invest in a diversified portfolio of Mutual funds with a SIP or regular savings plan. 

High-Octane Blend 

Individually both the Power of compounding and the SIP investment approach are very powerful. When you combine them in the right way, they can exponentially enhance your wealth accumulation process. 

Here is a Potential Wealth Table showing the combined power of the Magic of Compounding and Systematic Investment;