Card or Cash

People these days believe and feel more comfortable when they have a plastic card on their wallet. I would rather say most of them like these plastic cards but not all, because there are few smart and successful people still follow the ancient way of using the cash. Here, i am making my point very clear that i am not against going digital transactions. When we still narrow down about the word plastic, i would summarize there are good and bad plastic card. Now, you would have got the point, good plastic being the Debit card and bad plastic being the Credit card. Yes, i meant that exactly

Most of the banking institutions or lending institutions are looking for working class people (or people who started to work recently) and their target is to give them either credit card or a loan. Do you think banks are very generous to give us 45 days money for free and without any charge ?. Many can argue that, the banks don't charge for credit card purchases if they are paid with in 45 days (days might change according to the country or lending institutions). Now, let me argue with you, if you have the capability to pay the credit card in 45 days then why can't you hold your purchase for 45 days ?

Banks or lending institutions are very clear in their study that once you started to use your credit card and when you are admiring your card purchases, you will start to use it more. There will be a day sooner that people will encounter to postpone the day of paying their credit card bills by just paying their minimum payments. Banks will wait for that day to come. The time or waiting period is their investment and till then they are ok to give you money for free (what we think so). This is like catching a fish. They are good in waiting, cos in financial world one with huge patience will win. Banks and financial institutions are masters in knowing this

Ok, lets not think too much in knowing if the credit card purchases are good or bad. Let's think paying cash for all your purchases. Ask a question yourself, would you feel privileged when you pay cash or paying through credit card ?. I also assure you that when you pay cash in your business deals, you will get discounts. That is exactly some credit card companies do these days to attract you much to use credit cards. When paying cash we don't owe anyone and the deal gets close there but in credit card the deal is not over, the deal actually gets started. You will see a bigger smile on your bankers face

It is also a fact that, when we fix ourself to pay cash for all our purchases, we will spend little and only on the need. We will build the character of postponing the purchases and will think if that is really needed. Bankers kill our thinking power of analyzing if the product is really needed by just issuing a credit card. Let us do one thing, immediately after you received your salary withdraw all the cash (except for the EMIs - if any) and spend cash every month and see how much you can save. You will get that wow factor within a month. Cash is King

It is a known and proven fact, most wealthy people build their empire not by using credit cards. They know how to live life below their means. Wealth generation can never happen (or it will be much limited) if you have 1 or more credit cards. Credit cards not only make the wealth generation slower it also avoid us to think of an emergency fund creation. People with credit card will never think of emergencies cos they have that in mind that credit card can be used during emergencies. Now when that actually happen, you can see a much bigger smile on your bankers face. Think twice and take action on saving and investing with having proper back up in place. Atleast give a try to survive without using credit card for a month (entirely on cash), then you will feel your true power and worth

Point to Note: Debit card is as good as using your cash. If you like giving your card on your purchases, try giving a debit card.

Have a Great Day

B G Nareshkumar

The Purpose & The Question

The quality of our Question defines what we are capable to achieve in future. It is also the question which determines the purpose. In many situations, we will be weighed by the questions we ask. To find the high quality answer, we need to ask the high quality question. In order to ask this high quality question, we need to have a clear purpose. Without having a purpose, any action which is done will not have full focus to it and gaining success is less possible

Let's say in stock market, if we take a position just because the price of the stock or any option premium looks attractive, it will end up in disaster. First, we need to have a purpose for taking any position. It can be like, multiplying the capital or doubling the money in 1 year or 2 year. When we have this clear purpose about using our capital, that will definitely give way to ask a high quality question. When we have this question, we will definitely get the high quality answer and that will lead to take a high quality position

Let's say i have a purpose to double my money in 1 year. Now, due to this purpose i will ask a high quality question to myself to understand how to achieve it. Else, i will try to read some book on how to achieve it before investing or trading. Even i would seek some experts advise before taking any position in stock market. By doing so, the success rate is increased compared to taking a position without having an purpose

Let's have a big purpose. Let's say we need to double our money (excluding expenses) every year for next 20 years. This is not simple as we speak. This needs high amount of knowledge, extreme patience and commitment. Now comes the success question. We need to define our question properly in a way the answer gives the maximum useful information to achieve our purpose of investing / trading in stock market. Once we frame our success question properly and received the appropriate answer to achieve our purpose. That's the time to enter in stock market with adequate knowledge and continuous learning. The sample questions can be like

• 
  To double the money every year, What is the Maximum and Minimum Time, I'm ready to hold the position ?

• To double the money every year, Can i manage my other expenses without disturbing the positions taken till the defined time frame ?

• To double the money every year, how much can i invest consistently ?

• To double the money every year, what knowledge is required and how to get it ?

• In the process of doubling the money every year and in case of Disaster / Crisis, what is the Plan B ?

• To double the money every year, what are things which i should never do ?

When we look at the Ice Berg, only 1/9 of that is above water and whatever we see is only the tip of it. We can segregate that into 5 parts. Define Purpose, Ask Question, Set Priority, Productivity and Profit. Any person who have the desire to achieve big in life should have the clear purpose and ask very high quality question and get the big answers. When we have the big purpose and high quality questions, we will have the profits which will show up on time. I wish you great success by defining purpose and asking high quality question yourself before investing or trading in stock market.

Have a Great Day

B G Nareshkumar

The Domino Effect

Domino effect is one of the greatest form which multiplies its potential energy. 13th November 2009, Weijers Domino productions coordinated the world record domino fall by lining up more than 44,90,000 dominoes in a dazzling display. In this instance, a single domino set in motion unleashed more than 94,000 joules of energy. This is as much energy as it takes for an average sized male to do 545 pushups

Each standing domino represents a small amount of potential energy. The more domino lined up, the more potential energy it accumulated. When more dominos are lined up and with a single flick, we can start a chain reaction of surprising power. In 1983, Lorne Whitehead discovered that a domino fall could not only topple many things but they also topple bigger things. He discovered how a single domino is capable of bringing down another domino that is actually 50% larger 

Let's imagine we have lined up many dominos. The second domino is twice larger than the first and the third domino is twice bigger than the second and so on. Let's say the first domino was 2 inches tall. The 18th domino would be as tall as the Leaning Tower of Pisa. The 23rd domino would be as tall as the Eiffel Tower. The 31st domino would be tall by 3000 feet above the Mount Everest. The 57th domino would be as tall as the distance between the earth and the moon. With just a single flick of a 2 inch tall domino, we could create so much of potential energy using this domino effect

The Domino Effect

When we are have our goal to reach moon, the way is to build our energy in a way it multiples with single action like Domino effect. Similarly if we flick the wrong domino is the negative side, it can go in the negative direction much deeper. This is otherwise called as consistently creating energy or consistently multiplying energy to reach the bigger things. To generate bigger energy does not need bigger energy to start. It just needs the right action done consistently

Similarly, in stock market to achieve bigger success or to generate abundance wealth, it doesn't need higher capital. A decent capital which is flicked properly to generate or multiple or compound wealth can lead to abundance. This can be achieved by consistency over time. In financial markets, the money generated souls know this concept and they give time to decide their wealth and net worth. What they does is consistently do what they believe in or simply they are convicted and have patience.

Have a Great Day

B G Nareshkumar

The Challenge

There are many challenges in financial world these days. Any trader or investor steps into the stock market or any financial market to make money but few gain more greed over time and set their expectation so high. One of the main challenges faced by investors and traders these days is Rising Expectation. If one financial instrument is giving more profit comparatively than other in short term (1 to 5 years) then everyone will be focusing on that. In order to have the balance, there will always be ups and downs in financial market

Any financial instrument which is giving 18% to 20% return is considered as the decent return. The abundance wealth generation is all about how one can compound this return with patience. If the expectation of a trader or investor is to gain 30% return in stock market in short term, that is nothing but pure greed. This is keep on rising in Indian Stock Market as the number of investors keep on rising these days. It is also noted that anyone who is an investor in stock market also trade the markets with very high expectation

When a trader or investor have their minimum expectation from the stock market and giving more time for the market to respond, they see a clear win. It is also noted that people these days wanted a higher return and invest all their capital including the monthly expenses and emergency expenses in one go and fail in short term. This is clearly due to panic as they invested all their money. When a person invest even his / her monthly expense money in stock market, he / she will not have patience as they wanted to get the return definitely from the market to survive the next month. When the timeline given to gain in the stock market is less, they will definitely book in loss as they don't have option to hold. This is mainly due to having very high expectation from stock market

let's say we have Rs.1,000 now and we have the capability to double the money every year and we are ready to wait for 1 whole year to make this double. I would say even this is very high expectation from any financial market. If we are able to make this possible then we are on the 1% list. One might think, making 1,000 rupees from 1,000 rupees in 1 year is simple but lets understand what will happen if we do this continuously for 20 years. You will be surprised if is say, it will be worth Rs.105 Crores in 20 years. Try this yourself, If you have Rs.1,000 now and capability to double it every year

But beyond certain time, doubling your money every year will not look simple. That needs lot of focus and patience. This also require very focused expectation without greed and this will be a great challenge. If this doubling concept can be continued for some more years beyond 20 years, then it will compound in much higher rate. If an investor have set their expectation very minimal or reasonable in the stock market, there is no challenge or challenger. This doubling our money every year should be focused with diversifying our capital. We should never invest in a single financial instrument for this wealth generation process

Even if we fail in doubling our money every year and if we are somewhere near to that, think what will be the result ? Wish you all great success in coming years.

Disclaimer: This blog is for informational and education purpose. This is not an trading / investment advise. Consult your financial advisor before investing and trading.

Have a Great Day

B G Nareshkumar