Monday, February 1, 2021

Book Review: The Psychology of Money by Morgan Housel

 As a part of #2bookamonth challenge, this is the second book of the year.

I picked this book out of my interest in behavior finance. And as the name suggest, this book doesn’t disappoint in this context. Unlike most of the books on investing, this is a short book of approx. 230 pages, not exaggerating too much on any topic. The best part is that the book is divided into small chapters and each chapter consist of stories, anecdotes conveying the message for better understanding. The author has not shied away from even sharing his psychology towards the money he owns towards the end of the book.

As per my understanding, the key message is that doing well with money has less to do with the smartness of the person and lot to do with the behavior. There are a lot of learnings one can take-away from the book, my top 6 are as follows:

  1.  Manage your money in a way that allows you to sleep at night: I guess, this is the best punchline Morgan has put in this book. He explains that managing the money well is different from getting a highest package or getting high returns on the investment. People tend to lose sleep even when they are earning highest returns. There is a difference in getting wealthy and staying wealthy. So, the fundamental question we should ask ourselves before making any financial decision is – Will this help me to get sleep at night?
  2. Respect the power of luck and risk and be humble: We should be careful when assuming certain outcomes are only based on our 100% of actions. There are other factors that also have a role to play (luck and risk). We often forget to take it into consideration when calibrating someone’s success or misfortune. Morgan wrote a letter to his son when he was born and stated- “Not all the success is due to hard work and not all the poverty is due to laziness. Keep this in mind when judging people including yourself.” Further, another great advice that Morgan mentioned in the letter was “No one is impressed with our possessions as much as we are. We may think we need flashy possessions but deep inside what we want is respect and admiration from others. And these pricy possessions never bring that- especially not from the people we want to respect us.
  3. Don’t narrow your focus on individual patterns: Morgan emphasizes on focusing on broad patterns. As it so happens that when we focus on individual investments, ones which are doing well look to us as winners than they are, and the losers appear to be more regrettable than they should be. One must understand that it is not possible that all the things go right all the time. We can be wrong half the time and still make a fortune because of the 80-20 principle. As per Morgan, it is fine to have large chunk of poor investments and few outstanding ones.
  4. Make ‘time’ and ‘patience’ your best friends: The single most powerful thing that any investor can do is – increase the time horizon. The ones who understand the power of compounding understand the role of ‘time’ in investing. He points out one fact which makes the point so relevant - $81.4 billion out of $84.5 billion net worth of Warren Buffet came after his 65th birthday. His secret in investing is time. His close friend and business partner Charlie Munger were quoted saying – “The first rule of compounding is: Never interrupt it unnecessarily.
  5.  Define the cost of success and be ready to pay it: There are no free lunches. The problem is that for a lot of things the price tags aren’t visible. When we experience them first-hand, then the price becomes apparent. He uses the statistic that the S&P 500 increased 119-fold in the 50 years ending 2018. Imagine, if someone would have invested a lump sum and just watched it compound over years. But not many have done it. Because there is a ‘fee’ for these incredible returns which are fear, uncertainty, regret, panic as stock markets plunges at regular intervals. This is the price we must learn to pay to enjoy the returns.
  6. Define the game you’re playing: We often commit mistake of making our financial decisions on someone else opinion (be it experts’ advice, stock market news, some industrialist’s portfolio, and other mediums). A teenager, an elderly person, and a hedge fund manager- all will have different goals. And the hard reality is that another person, whom we are blindly following, doesn’t know our end goal. We follow a decision that may be right for them and disastrous for us. Hence, it is important that as an individual we realize our game to avoid getting distracted and off-track by others’ decisions. This is no single right answer in this mad world of investing. We just have to find out the answer that works for us.

 Morgan has added a postscript titled “A Brief history of why U.S. Consumers think the way they do”. This section is interesting to understand the current state of consumers in US market.

There are many books on investing, but this book provides a fresh look on the human biases we have, in crisp manner and using simple language. One is bound to gain awareness on our psychological behaviors to navigate better with the money matters. Let me warn you , there is no math-based logic displayed in the book to tell you where to invest, best ways to invest rather Morgan has dived into the grey area on showcasing how people make financial decisions in real world.

I would recommend this book to anyone who doesn’t have the appetite to go through thick detailed books on psychology yet wants to learn about behavior and money decisions. It will help you to make your own mental approach for money.

As always, please don't forget to leave your comments in the comment box below and share what are you reading currently. Happy Reading! 

Friday, January 15, 2021

Book Review: The 4-hour Workweek

 I am glad that this is the first book I picked to read in this new year. This book provides interesting concepts, actual life hacks that can help you increase productivity, motivate you to work on the things that matter by making each minute of yours count. I wouldn’t say that this book is only for entrepreneurs. This is for anyone and everyone who is serious about changing his/her current working lifestyle and way of living. And the pandemic just made some of the situations easy.

Timothy Ferriss often referred as Tim Ferriss, the author of the book mentions about the New Rich (NR) community, a fast-growing subculture who has mastered the art of mobility to create a luxurious life for themselves instead of living with a retirement plan every day. He uses the examples of NRs throughout the book to draw the comparison between habits of NRs and others.

What distinguishes this book from any other productivity improvement/ lifestyle improvement book is that Tim has provided lots of practical tips, many useful web links in the book (informative for US folks) rather than just talking about the subject. I have only come across few books where authors have actually shared links that they practically use ( one other book is Game Changers by Dave Asprey )

This book offers a lot of tips. My top five key take-aways are as follows:

1.     Use of Parkinson’s Law: 
Use this law to accomplish more in less time. Shorten the schedules, the meeting durations, deadlines for project so that one has full focus on the work and does not end up procrastinating. I am sure many of us can think of such situations where we would have applied this in our work, in our college – like annual project being completed in two days etc. The fundamental is simple – if we are crunched for time, we are often forced to use it efficiently.

2.     Apply Pareto’s Principle: 
This is my saver and now I take a meaner look at all the work activities I am ‘supposed’ to do. Pareto’s principle states that roughly 80% of the effect comes from 20% of the causes. Tim advises to use this statistical technique in selecting our tasks that have a significant impact overall. I strongly believe that applying Pareto’s principle, be it in our business or personal lives, we can streamline our focus on important few and make our lives much simpler.

3.     Use of Automation and Delegation:
In the world of AI, automation and outsourcing, this advice certainly rings the bell. The process looks like this. If you don’t need to do a task and does not have any meaningful value, eliminate it. If it can’t be eliminated but can be automated, automate it. If it can’t be automated, look forward to delegate it (outsource it). 
      Tim shares examples from his own life what he has done, how he uses automated response on mails, automated mailing list software etc. and outsourced some of his work to an agency in India. (On a lighter note, I am just wondering whom we shall (Indians) outsource our work to?). I am sure, like Tim and other NRs, if we look at our activities, there is plenty of room for elimination, automation, delegation etc.

4.     Take Mini Retirements:
Tim emphasizes on taking mini retirements throughout your life instead of planning to retire at the end of your working life. And one doesn’t need to be rich to go on big adventures that we often fancy about. Tim has again shared a lot of informational resources on how to plan mini retirements including some interesting travel websites too. I don’t think this trend has picked up yet, but with the changing workstyles and new millennials joining the workforce, global organizations will soon be open to this idea of mini retirements. 
      But here’s a catch: You can’t take a mini retirement, sit at home and do nothing. You need to find something interesting which you can talk about, after you’re back from the break. And if one is smart, one can leverage that experience to not just stand out from rest of the folks but use it effectively to crack the interview.

5.     Be Minimalist:
Tim urges everyone to follow this advice at least for travelling purposes. This gives you mobility and flexibility to change your plans rather than be tied to the schedule. He also mentions about BIT – Buy it There. If you are going to a city which has a decent living, why do you need to pack moisturizers, shampoos, toothpaste etc. Buy it there. Simple.  

There are tons of other lessons one may take- related to boosting confidence, best time to make cold calls, why should one be business owner and not business runner etc. Tim has dedicated the last section of his book to the best of his blogs collection, which is a treat. 

However, there are some points on which I disagree with him when it comes to crossing work ethics. But I guess, the way the pandemic has changed the workstyles, I don’t need to worry about crossing it. People don’t have to lie or use technology hacks or trick their boss to go for staycation. Companies are now open to work from home style of working. People have already started doing staycation, some European countries have started giving short term visas for people to come and work, understand the culture before deciding to move or not. All we can do is take the best advantage of time.

Overall, this book offers some good practical ways to improve productivity so that we can ensure that we give our quality time to the people we care about and do things that we are passionate about. I would suggest this book to anyone who is willing to take a hard look at his/ her life and is open to take some bold steps for change. No one has ever won by simply doing nothing. 

Feel free to leave your comments whether you found this book review useful? In case, you have read the book, don't forget to share your thoughts. Happy reading!

Monday, June 15, 2020

Get in the company of a 'quiet person' to 'think' more

I read a brilliant article on Keanu Reeves, one of my favorite actors. He is known for his quiet demeanor. The article brings out in simple points what quiet people like Keanu Reeves have to offer to people and how it can bring the change. Here's my five point summary of this article:

1. Think -> Clarity -> Change
Quiet people take time to think, which leads to clarity in thoughts and can brew the change

2. Often use 'softly spoken' words which draws the listners closer and make them attentive 

3. Silence -> Curosity -> Conversation -> Being Heard
This is spot on and I have myself practiced it.
Queit people are mostly silent during loud talks. This silence draws attention and people get curious to know your thoughts which leads to conversation. People in the room or gathering then listen to you intently. 

4. Take strategic pause while speaking which allows listeners to think 
This helps speaker to think and gives a chance to listner to reflect on what is said and think more. 

5. Smarter you become, the less you speak
Well, my views are a bit divided here. Not sure, if it holds true with every smart person ;) But I'll still give in. As lesser one speak, the person gives more chance to others to speak and listen to them, takes time to reflect on topic and then carefully put forth the view point.

In case, this topic has managed to arouse some interest in you or if you are a fan of Keanu Reeves, here's the link to the full article:

Happy Reading !

Do share your thoughts in the comment section on what do you think about quiet people - are they smarter ? Does being quiet always attract people's attention or is it often misinterpreted ? What place do quiet people have in our otherwise loud society? 

Friday, May 15, 2020

Later. Someday. Tomorrow but Not Today

I was in a casual conversation with my childhood friend, Robin, when he said ‘Don’t you have more time now, saving on your commute time of about 3 hours. How are you utilizing that time? You have been asking me on movies, books, articles. Tell me, are you going to watch any of these or read any of the books I mentioned.’

‘Yes, of course, I’ll check these. And…’

He cut me halfway and said ‘Megs, If I know you well, you are not going anywhere with this to-watch list. Simply because of your procrastinating nature.’

This took me by surprise not because he was spot on but on confronting this to me. I laughed and so did he and we continued our conversation.

But this small conversation kept me thinking. The word kept echoing in my thoughts.

 Procrastination. Its dictionary meaning is – the action of delaying or postponing something. It is the force that prevents one from following through on what one sets to do.

I know many fellas, who have set some goals in this Covid situation. Reading 10 books in lock-down or watching 5 movies over the weekend. Forget the leisurely goals, go on to LinkedIn and I see 10-12 folks every day in my network flashing their accomplishments on completing professional courses / certifications that might boost their careers or they did so just out of the sheer joy of learning (which I highly doubt).

When it comes to me, Yes, I am a procrastinator. I don’t deny it. I simply can’t act until my heart is 100 %convinced. I like to explore options available at hand and make a ‘choice’. Yes, sometimes, I would take time to even decide upon the course of action – so much of time that either I lose an interest or the event itself becomes unimportant. That’s how my mental wireframe works. –this is how I excuse myself from feeling bad. You can see my procrastinator mind speaking right now. Does this resonate with you as well?  

But does that mean, I push away all the things on to tomorrow? No.

I realized that I have the habit of procrastination way back during my first job. It also dawned on me that this habit had got me into bad situations before as well. It was then I decided to work on overcoming it. I read many blogs on this topic and applied different techniques. But, too many choices and options spoils us.

Hence, I decided to just hold on to one thing, which resonated with me – prioritizing activities.
Yes, prioritization helps. I set simple goals for the day, 2 out of 5 things are important to me. I need to do it ‘today’ itself else bomb will explode and make my life hell. I have to train my mind every single day to finish those top 2 tasks despite all the distractions encountered all throughout the day. But can prioritization help alone? No. The tasks need to be realistic too. The combination of two has worked well for me and help me to keep my mind sane.  

How this has helped? One-line answer to this is – it helps me to distinguish my critical tasks from what is ‘good to do’ but ‘not important’.

I used the word ‘Choice’ in one of the above paragraphs. It’s tricky word as often it is used as a weapon to defend oneself. It’s important that one understands that there is thin line between decisions made out of choices and out of laziness or lethargic attitude. If you haven’t realized it, I would advise you to next time monitor your decisions – is it out of choice or your lazy spirit has cast a spell on you.

And now circling this to closure - how this blog post started, it was all due to the constant push from my family members, friends like Robin and LinkedIn posts which all talks about ‘Do it now, Do it today’. What one constantly feeds into mind, reflect into actions eventually. So, read well and surround yourself with folks who are constantly running behind you for your own good.

To end this post, I’ll quote Buddha “The trouble is, you think you have time.”

Do we have time? If yes, question is – are we living it or letting it slip away. If not, question is – what is it that we would want to do today? Share your thoughts in the comment section.

Tuesday, March 24, 2020

Book Review: Bridgital Nation

I picked this book for two reasons:
1. Compelling title as it promised to highlight how AI and IoT solutions can help to solve India's problems
2. Authors - N Chandrasekaran, one of the most admired person in IT industry and Roopa Purushothaman, chief economist of Tata Group. So, I knew, it will be a sensible book and credentials can be taken seriously

And trust me, this book didn't disappoint me. It follows a structured approach- digging a bit deep into the fundamental problems of Indian society and economy and taking a shot at few technology aided solutions, laying the basic foundation of bridgital model and leaving it open for young entrepreneurial minds to think of solutions that can bridge the identified gaps in noted areas of healthcare, educational services, legal processes, micro financial services, agriculture to name a few. The real life stories quoted in the book are engaging. The language used in the book is kept simple to be understood by common man that one doesn't need a background in economics or technology.

The book highlights India's twin challenges : Jobs and Access.There seems to a huge demand of vital services and an equally overwhelming supply of human capital. The aim is to bridge the gap between them.The authors rightly point out that India's growth model needs to be different from other countries. Unlike, most of the countries, growth is followed by creation of new jobs, this model doesn't seem to work in India. This is because the growth is coming from mainly service sectors, wherein highly qualified people work and less from manufacturing jobs. Another piece of the puzzle is working women. Only 23 per cent of all women who could work are employed as opposed to 75 per cent in men. Surprisingly, it isn't that women do not want to work. But due to priorities hard wired in our culture and mindsets, the number is getting lower year on year. Another problem is the existence of numerous jobs are in the informal sector, which fail to raise the standards of living and provide social security.

With the bridgital nation approach, authors see a potential shift of 45 million workers from informal sector to the formal sector via SMEs. But what is bridgital approach? It is simple: re-examine and re-invent the tasks that goes into a job. For example, the administrative tasks that doctors and nurses have to do themselves in govt. hospitals esp. in tier 3 cities. Due to lack of skilled people availability, often doctors / nurses spend more time in doing admin tasks and hence have less time to spend with patients. With the help of technology, data and connectivity, solutions can be devised that prepare and empower the new workforce to perform these tasks that were thought to be beyond their skill sets.

The solutions advocated in the book are simple and fundamental ones. It challenges young entrepreneurs to go beyond the conventional processes and re-imagine it with technology for every possible sector. The book completely discard the much popular debate on- technology (automation) vs jobs. Rather, it focuses on using advanced technologies like AI and IoT to create more accessible jobs for new bridgital workers and bridge in the ultimate gap that's possibly stopping India to grow into an economically strong nation.

In my view, this book gives a hope that it is possible to achieve 'sabka vikaas via sabka saath'. 

Monday, June 10, 2019

'DE'Clutter for a happier 'You'

It was last week when I saw the signs of my laptop going to crash soon. I rushed to the IT department and they suggested - I need to get the laptop formatted. So they asked me to take a backup of my work on company's cloud and come back in the morning.

This looked easy at the beginning. All I had to do was Ctrl A followed by Ctrl C, copy all the folders and Ctrl V on cloud drive. But I paused. I looked at the size of data. It was more than 30 GB. It was first time in 4 years, I was taking a back-up, it had to be huge. But then, a thought crossed my mind - Do I have to copy all the data? Is it all worth it? I looked at the folder structure. It was all in a mess. When I started 4 years back, it was all organized but over the years, it just blew up! Sigh! I stared at my D:drive. I wondered how come all these years I never thought of sorting this content mess. What had kept me away? I took a deep breath and started. One by one, opening the folders, browsing through the files and deleting the major junk I had religiously kept because of the rational - that one day, it might come handy. All the while, I smiled. I had forgot of so many things I had on my laptop for future reading, reference purposes and what not. Things that didn't make sense now. During this exercise, I tried to stick to a consulting approach we often use in rationalization projects - Discard, Merge, Renew, New. I dumped the files which had become obscure. I merged the content of files which made more sense and had one reference for one topic. I kept aside the files which I have to work upon now. And also noted few topics for my future work. This entire exercise lasted for 3 -4 hours. And it felt so good at the end. In the end, I barely took 7 GB of backup. I might not have worked that day in office. I just did this one exercise but no regrets.

That day, I felt happy internally and a sense of satisfaction engulfed me. The following weekend, I and my partner cleaned our room and cupboards, took out the things we no longer use including dozen of clothes. We gave away all of it. And now we have more space in our room. The vibes have changed and we both feel good about it.

This entire gamut of events left a positive impact on me. As I think again, I realize we don't often take a break to de-clutter: declutter our places where we live, declutter our electronic gadgets and declutter our mind. And so, in all the madness we live in, all the things we pile up for long obstructs our view of reality. It is good to sort out things. There is no need to carry the burden of everything all the time. We need to learn to let go old things and thoughts, and move on, make a room for new. This will help us to grow! I look forward to take this exercise frequently ( at least twice annually).

 I would love to hear your thoughts and experience related to decluttering the mess. Please share them in the comment section below. 

Friday, April 5, 2019

Things little bird told me : Book review

I am an ardent user of Twitter. Love this internet platform that restricts the usage to 140 characters, emphasizing on the need of crisp and clear communication, allowing us to be more creative in sharing our messages with people around. And hence, picking the book - Things little bird told me, became an obvious choice for me. The book gives a powerful insight into the life of Biz Stone, co-founder of Twitter. It is engaging and full of interesting anecdotes. This book chronicles his journey from college drop out to becoming a cofounder of one of the internet sensation platform. It's a journey of an individual who believed in creation of opportunities via creativity and not plain hard work alone.

Stone always believed in creativity and creating opportunities by himself. Whether it was his job as a box mover, designer at a publishing house or at google, or being a podcaster, the fellow kept working on creating new opportunities to test his skills and passion till his heart finally found the idea that struck a chord. From there, there was no looking back. Though, like any other startup, the ride was not an easy one, from bumpy days of software failures and scalability issues etc. , team triumphed all shortcomings by owning their mistake and improving the service. The team put to use the common tricks mentioned in every success books such as know and follow your customer, which they popularly termed 'wisdom of crowds'. Knowing where the trend is going and customizing the tool functionalities to meet those needs, being open-minded to new ideas led Twitter floating so far.
During the course of time, role of Stone also matured in his relationships and at work. There were exits and home coming. There were offers and denials. There were conspiracies and righteousness. He has been open about how his life unfolded at every step. Like that, Twitter also transformed. Who would have thought that a simple communication platform will empower people to do great things. It's astonishing how human race uses this tool in their own creative capacity. Be it doing promotions during political elections, fundraising initiatives, driving positive social changes or simply sharing about mundane work, it has done its work of creating a connected society. As Stone rightly puts that technology has the power to become the 'connectivity tissue of humanity', unite and mobilize people for a better cause. 

Overall, the book is an interesting and easy read, power packed with the life lessons for entrepreneurs. Stone is relatable and quotable. In his closing remarks, he encourages readers to alter their course of journey by taking action ( time and a bit of luck does matter) versus jumping into the chasm blindly. His way of putting events in a quirky way is what brings life to this book. Happy reading!