5 Learnings from Investing - II

Failure:

I believe, due to my upbringing and the way I have seen the world, I have two strong beliefs:

One is that failure is a wrong thing, it's a taboo, something not to have.

I have heard people sharing their struggles and failures, and it is inspiring but still when it comes to my life, whenever I fail, it feels like something wrong has just happened. Something that shouldn't have happened.

And another belief is that once I am successful then it's a smooth road.

Some people share their stories in a way that they got out of that struggle and found their way to success and that's it! The story gets over. Some do tell that it is not going to be an easy road ahead as well, but I didn't give attention to that, till now. So I always thought of the former.

After a long time, I think now I realized in a true manner that everyone successful has failed and will fail in future. Failure is certain. It's a part of the game. It comes in the package. It is what it is.

Still, it is difficult for me to change this belief as it has been so strong for the last 21 years.

Now, if I know that failure is going to come whether I am 21 or 81, then it might be better if I get prepared for it. When I was reading Naval, he said it perfectly, "Emotional readiness for failure is one of the greatest strengths one can have." I think the ones who are emotionally stable during hard times and don't stop trying even after failing many times are the ones who get out of mediocrity.

Earning Wealth vs Making Wealth Stay:

Earning wealth and making wealth stay are two different games. Earning wealth will require taking risks and being impatient with actions.

While making wealth stay will require saving, living with simplicity and being patient. Let's look at two real-life examples: Michael Jackson is one of them. Even after so much fame and money, because of his lavish lifestyle and constant plastic surgeries, when he died, his kids had more debt to look after than fortune. While Warren Buffet lives in the same house for the last 65 years, he does not own luxurious cars and he had a flip phone till the iPhone 11 came on the market.

Prediction can't be guaranteed:

The thing I should learn from history is that I cannot guarantee prediction of the future and nor can anyone else. Many times people get into the illusion that they or someone knows what the future holds and that creates a huge amount of risk.

As Mark Twain said, "It ain't so much the things that people don't know that makes trouble in this world, as it is the things that people know that ain't so."

The more I am aware of the fact that the future is not 100% predictable, the more it is easier to not get blindsided by something unexpected. There is nothing wrong with predicting, it is necessary at times but predicting with taking probability into account is important.

Instead of taking a blind and insane amount of risk, having safety margins for unexpected things and making sure that the loss is minimum when things go beyond our knowledge and expectations is an important practice to have.

Whether it's working on a project or investing money, prediction with the awareness of probability is very important.

Wisdom is understanding the long-term consequences of my actions:

Most of the time people fell into the trap of short-term benefits. We don't see the long-term consequences. If we could see the long-term effects of our actions, if we could have that wisdom in practice, then many of our actions will change drastically.

What to prioritize, which habit to have, what to eat, where to spend time, and where to spend money, everything will change for many people, including me, if we just see the long-term consequences.

Starting early is very important:

Naval says that "Most of the history is built by young people. They just got credit when they were older." I think starting early has an insane amount of benefits. Whether it is Warren Buffett or Scarlett Johansson or Ritesh Agarwal or Cristiano Ronaldo, everyone started early and they have reached a peak of their career.

I think it applies everywhere, whether it is taking our health seriously, learning something new or starting a career.

They say that the best time to start was 10 years ago, the second-best time is right now.

Sharing these learnings with you makes me more clearer about the concepts and helps me put them into practice. Thank you for reading.