After I said that I am leaving corporate life, there were many interesting reactions and questions.
I have to make a separate episode just on that.
Of all the questions I got, the most important one was - How did you get the confidence to do this.
To understand that, I have to explain my background and my investment journey.
That will help you to relate the context to understand better.
If you dont' think my history is not going to be of any help to you, please save some time for you and switch to watching something else.
For others, Hello - My name is Vijay Mohan. You are watching Investment Insights.
You all know - financial concepts are not taught in any schools regardless of whether it is India or USA.
Our parents have taught us what they know about finance.
From their perspective, we should not be investing in any assets that are risky.
Capital preservation is very important for them. That is, there should not be any risk to the invested principal.
For them, any investments should not go down from the price we paid at any circumstances.
They like only assets with that characteristics and invest only in those assets.
Fixed Deposit, Post Office scheme, Gold, Real estate - these are all their favorite investments.
For someone who has invested only on assets like that, stocks and Bonds that change in price every second comes out as a high risk assets.
So, they were not interested in learning about it. And so did not teach us about that as well.
Same for me as well. I know about frugal living, but no idea about where to invest the saved money.
I did not know about the advantage of investing early in life as well.
The only good thing that I did was, I did not get into any credit card debt.
Regardless of how tough the financial situation is, I always manage with my income and never got into credit card debt.
When I came here to US as a student, I was working part time in the university library to manage my monthly expenses.
I managed my monthly expenses with the $400 I got as income.
Dont ask we how it is even possible to manage monthly expense in US with $400. Totally possible. If there is a will, there is a way.
The reason I am saying this is because, I always made sure that my expenses stayed within my income.
That is the only good habit I had when it comes to Finance. Other than that, I did not have any other special knowledge.
Today if we want to buy a product, we go to hotdeals site like slickdeals.net right?
Similar to that, there was a site called Fatwallet at that time.
I go there to check out the hot deals as well. But later on, I started going thru the finance forum in that site.
That’s when I learn how many interesting financial concepts are there and the ways we can take advantage of them.
Most of the financial knowledge that I have Today was acquired through that Fatwallet Finance forum.
In that forum, many recommended the books, “Millionaire Next Door” and “Rich Dad Poor Dad”.
I am not really a fan of reading books.
But as everyone is raving about those books in that forum, I read “Millionaire Next Door” first.
Usually books like that gives tips and tricks on how to get rich.
But this book got into the details of habits and characteristics of millionaires.
Those habits were the ones that made them millionaires.
The lesson I learnt from that book is - people who are driving around in BMW and Benz are not necessarily rich.
Most of them look rich, but in reality they do not have any wealth and live paycheck to paycheck.
But most of the people who became millionaires actually lead a simple life with long term focus on investments.
This fact was the first eye opener for me.
The next book I read was “Rich Dad Poor Dad”.
I learnt how real people rich thinks in this book.
They do not work for money. But they make the money work for them.
Their focus will be on accumulating assets that earn money rather than on liabilities that drain money.
We all buy a car on loan thinking that it is an asset.
But they do not see the car that is not earning any money as an asset. They see it as a liability.
They would rather save and use that money to invest in a tea shop or a petrol bunk (Gas station).
Learning the difference between Assets and Liabilities thru this book is my second eye opening.
Third eye opening happened in my Macro Economics class in part time MBA.
It was peak financial crisis time when I was in this class - January 2009.
That professor beautifully explained the business cycle and recession.
That explanation is what you saw in this channel as “Recession Explained” video.
Like I mentioned in that video, recession is not the end of the world.
But it is just a part of the business cycle. When I realized that fact, my fear on stock market went away.
During that financial crisis period, housing price came down by close to 50%.
I also had the plan of buying a home for cheaper price like all others during that time.
But from the confidence that I got from this Macroeconomics class, I decided to wait on buying a home and invested all the money in stock market.
I don’t know how many of you were invested in stock market at that time.
But the volatility of the market was so crazy that it moved up and down from 3-5% every day.
When the market fell down by 50%, many got out of the market.
But I was going in the opposite direction - getting into the market.
Luck - I can understand the meaning for that word now when I look back in time.
When luck favors a knowledgable and skillful one, it just changes the whole life path. That is what happened to me as well.
We will see how it changed my life in the next episode.
Before we wrap up this episode, a quick note.
Many responded to last week’s episode with good wishes. My heartfelt thank you to all.
Of all the wishes, I have to mention this one.
Our subscriber Baala Chandar added a wonderful comment.
“I had no clue about stock market and there was always a fear about stock market. I got rid of my fear and started investing only after watching your video” is his comment.
I felt very touching reading that comment.
When we come to know that all our effort is being useful, that feeling is hard to explain in words.
Thank you all for your continued support.
I will soon see you again in next episode. Thank You.