“The biggest risk is not taking any risks. In a world that is changing really quickly, the only strategy that is guaranteed to fail is not taking risks.” – Mark Zukerberg
Independence day had an strong impact on my financial journey. When I had to work on this day in 2011, I decided to move on the Path to Financial Independence: Power of Investing. Today, I am sharing the experience of an escape artist Sriram Jayaraman, who had called it quits at the age of 49 by reaping the benefits of his investing. Sriram had an MCA in early 90’s and worked with firms like TCS, Mindtree etc. He had spend his career on-sites in USA/ Switzerland, which gave him exposure to not only investing in India but global markets. His more than two decades experience of investing gave him experience to not only witness the issues like Harshad Mehta Scam, Dot Com bubble etc. Here are his learnings:
Don’t be risk averse, Accept the possibility of being wrong at times. Investing in equities is always being fret with the risk of loss. One of the fear is that if you have picked a wrong investment, you might lose 100% but people don’t realize that a right pick can multiply. During the Ketan Parekh episode, one of the investment move from Rs 10 to 1,000 and then back to 0 in short time frame[Total Loss]. Though his another investment turned over 100x in 10 years so net-net still superb gain. Starting early gives you chance to ride on winners for long.
Give time to your investments! Sometimes we are really lucky, the investments we had made can double in short time frame. These are the cases, when you don’t want to abandon those investments. The positive returns can be multi-folds, and jumping off the ship to early is as bad as losing 100% of your investments. One of his investments in early 2000s in a conservative NBFC is still there and growing with profit booking over the last 2 decades.
Bucket your investments to maintain the balance! The investments need to be balanced as per goals. Even when you have the great opportunity to invest into a risky investment, never invest your short term goals money into a risky investment option. You always segregate the Emergency investments, short term investments in the debt instruments and long term investments in mix of equity & other assets.
Sriram Jayaraman after quitting his corporate career, now has been helping other investors in achieving their financial Independence. He is a SEBI registered Fee Only financial planner, more details on his website Arthagyan.