Money trade-offs

I promise you, that you will be richer by the time you finish reading this blog :)

money is money .. but ..

time is also money
information is also money
health is also money
relationship is also money
heck everything is money ..

yet we spend most of our time worrying only about the paper money and metal coins. Ever wondered what we are losing then? What is the trade-off here? (everything is a trade-off, trust me) Unfortunately in a country like ours where money is practically worshiped, we grow up to be too focused on it and worry about it all the time. Immediate expenses, planned & unplanned expenses, month end salary credit, before month end balance debit, monthly bills, future expenses, family expenses, the list could go on .. Our salaries keep on growing and our worries keep on growing even faster, what's going wrong? I would recommend Srimad Bhagvad Gita if you really want to find out. But considering our materialistic existence, let's take a materialistic view at it for now.

Why am I discussing this? 

One of the most important deciding factor for success in stock market and investments is going to be based on how you deal with financial losses, which I will cover below and encourage you to keep an open mind. This topic is important but tricky. Maybe not applicable to everyone but surely to most of us. I think so, because I see many of my friends who are top bracket earners also worry over very trivial things when it comes to money matters. We are not poor, but we are too attached to money.
If you worry a lot about money and cannot handle volatility in your net savings, then stock market is not for you. But it need not be that way. Maybe our parents are to blame for this (for them, it is their parents). First we must stop this cancer of money-worries that we are living with for generations. For that we need to understand what money is? and what it means to earn or loose money? It means nothing, trust me. Once you understand that everything is money and there is nothing like earning or losing it, instead it is always a trade-off, you will probably stop worrying about it. I did, I hope you do. It took me a long time (several years) to get to this, but it is one of the most important things to learn before dipping into the money market.

Let's define money again

Simply put money is just means to exchange something I need with something you have. Remember the good old barter system? Paper notes and metal coins were just invented to standardize this exchange process. But I hope you realize by now, that we constantly exchange lot of things on a day to day basis and they do not involve any paper notes and metal coins. In-fact the exchange with paper currency forms a very small routine part of our day to day or lifelong transactions.
For example, a goodnight kiss between kids & parents is an exchange of expression of love, we don't use paper money for this, but it's a pleasant exchange. On the other hand, example of an unfortunate exchange could be, unpleasantness due to a bad trading day spoiling a lifetime relationship with a loving partner. You could have had the biggest loss of your life in a single day on a perfect bet (it's almost like the markets conspired against you), but you should be able to laugh it off without affecting any thing else that is important to you, for you. Don't trade away more important things for less important things. I want to cover this because I have seen many individuals & families fall apart once they get into stock market in a serious way, but are unaware of the traps that lie in there. It plays on your mind if you are too attached to it. Remember the horrible 2007-2008?. If not, don't get too obsessed about it but remember that it will happen again (bigger & uglier), so it is important to keep the trade-offs in mind.
Also remember that if ever you blame me for introducing you to stock market, I will point you to this blog. It is my big and elaborate disclaimer about stock market :)

Don't worry, I will not let you go down that path. In-fact hopefully I will be able to show you that you need not worry about money at all. Not only in stock market, but in life, in general. Money is the most silly thing to worry about. Remember you should not disrespect it, but you should not worry about it (worrying about it is same as disrespecting it, don't do it!). This is why I say, stock market is a way of life. All lessons that are applicable to stock market, are applicable to life in general. Interesting isn't it?

Money trade-offs in stock market

What do you gain by losing money in stocks? actually a whole lot! By experience, I hardly ever learn anything from my profitable trades, but I always learn a lot from a loss making trade. I make it a point to introspect on all my losing trades, figure out what went wrong and then follow it up to the end and turn it around. It helps me refine my trading, avoid making similar mistakes in future, and even spot new ones without falling for it again. For me trade-off in stock market is simple "profit vs experience" and trust me the losing trades are dearer to me than the profiting ones. In-fact I believe that for the first two years in stock market you should experiment a lot to learn about the game without worrying about profit or loss. You should be happy even if you are losing money in trades but gaining great market insights from it.

How do I stop worrying about money? 

Best way to stop worrying about money, is to practice losing small amounts of money and not worrying about it (train yourself, practice makes man perfect). Start with simple things. Don't worry about auto rickshaw charging you 20 bucks extra, he should have not, but if there was no other way and if you saved time instead then that's a great profitable trade-off of time vs money, think about utilizing that extra time well. Don't worry about the bank giving you a dollar conversion rate of 64.2 when actual rate was 64.45, focus on what you want to do with what you have in hand. Don't worry about petrol being more expensive by Rs 2 per liter, it helps reduce the subsidy bill for your country which is anyways taken out of your hard earned income as tax and can be used for other development activities. Don't worry about paying Rs 2 per kg extra for potatoes & onions, let the farmers earn a little extra, it builds a stronger foundation at the bottom of the pyramid and the benefits will reach you through several indirect channels. Give away some money for charity and feel good about it, here the trade-off is "blessings & luck vs money" and it is a highly profitable one again. Effectively get rid of that inherited middle class mentality (may not be applicable to all), stop focusing on savings and start focusing on earnings.

Get rich immediately .. now!

Once you realize that you have so much more money than just some number in your bank account, you are immediately a lot richer ! Learn to be detached from paper currency and metal coins. Learn the trade-off's in day to day life. Get rich in your mind by getting rid of your money-worries, material riches will follow easily. A worry free mind will help you make wiser trade-offs and you will grow richer everyday by gaining on what is more important and losing a little of what is less important (net gain, remember baazigar? kuch paane ke liye kuch khona padta hai .. very wise ..).
If you can do this, you are ready for my next blog and almost ready for stock markets. I promise, my next blog will cover actual stock picking & investment strategy, till then good luck on practicing losing money without losing your mind.

Do let me know if the trade-off between the time spent on reading this blog vs anything you got out of it was profitable or not?