The Concept of "Life Investing"
1) Greed and Fear are the source of contamination in our Investing Journey
2) A person, let's say, has Rs 1 cr. which is more than sufficient for his lifestyle expenses
3) However if Greed drives him to speculate in the Stock Market, there may be a probability of making say Rs 5cr.
4) However, this kind of speculation also comes with the probability of seeing his wealth vanish and reducing his corpus from Rs 1 cr. to Rs 20 lac
5) While Rs 5 cr. will hardly make a big difference in his life because people's habits drive lifestyle decisions and therefore other than increasing net worth, the 5 fold increase may not make a huge lifestyle difference.
6) However, if their Wealth were to reduce to Rs 20 lac, his entire life would be in a disarray from which recovering would be next to impossible
7) It is hence very important to manage a significant portion of one's wealth conservatively as long as it has the power to produce requisite Cash Flows
8) A small portion (say 10%) though may be set aside for taking some undue risks.
9) So net-net Wealth Erosion brings Havoc to one's life while "beyond needs" Wealth Expansion may not do anything more than an additional vacation to Havelock Island
10) Unfortunately this simple rule of "Life Investing" is more often than not challenged by the Winds of Greed that blows across our time line
11) So Greed drives us to make money which we never had and never needed by Risking what we have and need to live a respectful life. And that’s plain foolish.
12) If you risk something that is important to you for something that is unimportant to you, it just does not make any sense.
Raja Bhattacharjee
Phone: 09830146206
posted by Raja Bhattacharjee @ October 29, 2021
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