Health, Wealth & Leadership [7 Apr 2024]

Best diet for type-2 diabetics, investing plan for 20 year olds and relationship advice.

Apr 07, 2024

Every Sunday I share three lessons from the world of Health, Wealth and Leadership. This week we talk about what kind of diet type-2 diabetics should switch to according to a research study from Italy, how a 25 year old should think about investing, and why your job in a relationship should be to accept your partner, not to correct him or her.

You can access previous editions of my weekly emails here.

(1) Low-carb vs Mediterranean Diet. What is better for Type-2 diabetics?

100 people, 54 men, 46 women with an average age of 63 were studied. They were all overweight and had type-2 diabetes. This was a non-randomized trial conducted in a hospital in Italy.

Over a 16-week period, the participants were given either a low-carbohydrate diet, or a Mediterranean diet with 500 calories/day less than what was estimated their body needed to maintain their bodyweight.

In the low-carb diet, the 50%-60% of the energy came from fat, with 25%-30% coming from protein, and less than 20% coming from carbs.

In the Mediterranean diet, 50-60% of the energy came from carbs, 20%-25% coming from protein, and 20%-30% coming from fat.

In both the diets, the fat was unsaturated fat. And the carbs came from complex sources. The participants were told to have 5 meals per day, with their biggest meal being lunch.

To make sure that they were following the diet, a dietician was call each participant every 4 weeks.

The participants stopped taking all medicines and were told to remain inactive.

THE RESULT? All the cardio-metabolic risk factors improved in both the diets. But the improvements were greater in the low-carb diet.

The risk of a heart-attack over a 10-year period reduced by 32.6% in the low-carb group.

The risk of a heart attack over a 10-year period reduced by 20.2% in the Meditarrean diet group.

Here is the study: https://pubmed.ncbi.nlm.nih.gov/38201924/

(2) "I am 25. How should I invest my money?"

My colleague, let's call him TJ, asked me this question today. He said he is clueless on how and where he should begin.

Let's answer his question.

FIRST LET'S FIGURE OUT THE POINT OF INVESTING. WHY INVEST?
- The point of investing is to have more tomorrow.
- But to have more tomorrow, you need to spend less today i.e. save.

BUT WHY DO YOU WANT MORE?
- So that you can get to a point where you don't have to sell your time for money.
- To get ultimate freedom - the freedom to choose.

HOW MUCH MORE WILL I HAVE TOMORROW TO FOREGO CONSUMPTION TODAY?
At 25, TJ is at the start of his career. He has:
- 40 years of income ahead of him: assuming he works till 65.
- 10,000 Rupees per month to invest: this means 120,000 per year. He should be able to save and invest more as he progresses in his career but let's just say he keeps his investment consistent at 10,000 per month.
- 18% per year: he can achieve this compounded return per year if he invests in the best companies in India and/or globally. Inflation in India is around 5%. FD rates can be as high as 8%.

IF YOU CALCULATE THE FUTURE VALUE OF THE ABOVE INVESTMENT FOR TJ, GIVEN ALL THE SIMPLISTIC ASSUMPTIONS MADE ABOVE, IT BECOMES:
- 49,95,85,563: That is 49 crores. Or $6 million. (link to the calculation)

In other words, 10,000 rupees per month invested at 18% annual returns over a period of 40 years becomes 49 crores when TJ turns 65 years old.

At this point many would argue that 18% compounding over 40 years is a ridiculous assumption. What if it is just 15% or 12%? 15% would become 21,34,90,836 (21.3 crores) and 12% would become 9,20,50,970 (9.2 crores).

So now TJ has a range between 9.2 crores and 49 crores that he can expect.

SOUNDS TOO GOOD TO BE TRUE RIGHT?
That's why compounding is called the eighth wonder of the world.

THE VERY NEXT QUESTION THEN BECOMES, WHERE SHOULD TJ INVEST?
- Active Funds: I recommend Marcellus MeritorQ Advisory through smallcase for TJ because of his low corpus, or
- Passive Funds: I saw Nithin Kamath post about Zerodha's Index Funds.

Even though Passive Funds beat most Active Funds, I am a fan of the Marcellus investment approach of owning companies which have a track record of consistent profitability, reinvestments in the business, very little leverage and honest management that do not partake in accounting shenanigans. (TJ, I have an inherent bias as I am an investor as well as an IFA for Marcellus).

The bottom line, own equity with either professional investors whose approach you admire and have skin in the game with their own savings, or own the index which averages out the the biggest Indian and/or global companies.

How do you invest?

(3) RELATIONSHIP ADVICE: Your job is NOT to correct him. Your job is to ACCEPT him.

I was having a conversation with a close friend of mine.

We were talking about her relationship with her husband. They were conflicting.

One of the things that she said to me was "he is not the same person I married."

I told her that "no person stays the same. You want him to be the way he was when you married him. That's impossible! You are making comments on his behavior. You are judging him. You are telling him how he should be. That is a recipe for failure! He shouldn't have to live up to your expectations. He should want to live up to his own expectations."

If you are in a relationship, your role should be to ACCEPT your partners decisions even if you don't agree with them.

For example, I don't like some of the habits my wife has. In fact she does things which are polar opposite to what I do. It would be very easy for me to point fingers and tell her that she is wrong. But if I do that, I will face resistance, tension and negativity in my relationship. She is an adult. She knows what is good or bad for her. She takes responsibility for her decisions. I did not marry her to changer her.

What I choose to do instead is to lead by example. If I want her to be healthy, I choose to eat healthy. If I want her to exercise, I choose to exercise. If I want her to be financially responsible, I choose to show her how we have spent our money every month. Sometimes she follows me by eating healthy and coming to the gym and saving and investing. And sometimes she ignores everything I do and continues to act in her merry ways. And that's OK!

My job is to ACCEPT her. Not to CORRECT her.

Harsh Batra

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