You Want Money But How Much?

I have someone in my life who inspires me every day to become a better investor. One of my childhood friends (Sanchit) in India graduated from the Christ University, Bengaluru. While he was a student, he also managed to clear the CFA exam which is one of the highest distinctions in the investment management field.

It takes a minimum of 900 hours of total study to get around 45% in the three levels of this exam. After clearing this exam, he also went on to become a CA in India which is even harder to do as it takes 4-5 years of insane hard work to prepare for that exam. All in all, this guy gave 10 years of his life in the field of investing.

Now I'll tell you something crazy. Since he started investing his own money about 4-5 years ago, he has averaged 22% returns every year! This is insane to me! I want you to realize how amazing this ROI is.

I called him 3 days ago seeking a piece of financial advice and he asked me - 'How much money do you want to have?' I replied - '10 Million Dollars'. He immediately said to me that this is a stupid goal and is influenced by the media. To which I responded with - 'Please help me answer this question. How would you reply to the same question?'

His response blew me off. He said - 'I want to have 600,000 dollars in my portfolio and since I know how to achieve about 20% returns, it makes it 120,000 dollars per year in net profit. This money is enough for me to travel whenever and wherever I want and live on my own terms. My advice for you would be to know exactly how much you want, depending on the lifestyle you want to have. Do you want to drive fancy cars? Does it give you happiness? Or you're happier living in hostels and traveling throughout the year?'

To conclude, I don't think that inflation will ever slow down. I don't think people's salaries will massively increase. Therefore, it is wise for us to seek the help of a professional and spend some personal time learning how to invest our money. Our first milestone should be able to beat the inflation and then plan to get better slowly.

I plan on living with him for the next 2-3 years and absorbing as much knowledge as possible. What are you going to do about your financial goals?

That's it from me in this blog.

See you next week.

© 2023 Kunal Dutt.