The Real Risk of Money Management
1) While we may continue to think that the challenge of Money Management is “How to Generate More Returns”, the real pain point is quite different
2) Money Pain is more to do with our Beliefs and Insecurities
3) Things like Buying a House because it feels safe can put one in a real soup (moving from liquid to illiquid asset)
4) Mindless investing for the long term is another issue ( Unavailability of money)
5) Thinking too much about taxation and missing the larger objective of investing is like buying a BMW and getting overtly concerned about the price of petrol
6) Postponing purchases long into the future
8) Not understanding the role of Passive Income
9) Making Cost of Living a function of Active Income and not total income (ignoring the massive power of passive income)
10) Falling in love with jobs and fixed salary
11) Not understanding the difference between cash flow and owning an asset
12) Wanting to get into partnerships instead of hiring a team of professionals
13) Having no idea about the power of Valuation Wealth and not knowing how to build the most power source of Wealth
14) Unable to position your business to attract the next generation to invest
15) Not understanding that money is a medium and life is a function of the kind of Opportunities that we select and those that we we sacrifice for the same investment (cost)
16) Not understanding that the Cost Curve is Concave and the Revenue Curve is Convex which makes all the difference in understanding Wealth Creation
17) Not understanding that Time is the real Wealth of Life
18) Not understanding that spending the right amount of money at the right point of time can generate the best returns
19) Not understanding the power of Goodwill Wealth
20) Not understanding the power of creating Compliant wealth by always following the rules
21) By spending less on Insurance
22) By not understanding when we should raise equity money and when debt money
23) By not understanding the power of Geographical Independence
24) By spending 2 crore on foreign education and returning to do a job of 15 lac per annum
25) By being obsessed with Returns and underestimating the power of cash flow
26) Unable to calibrate consumption with respect to current and future income – Either we over design our lives by under spending or vice versa
28) Not trying to understand the dynamics of the stock market and basing decisions based on perceptions
29) By following trends and others financial journey
30) By underestimating the power of liquidity and compliance
