Lessons from the week (1 Oct 2023)
How father and son became millionaires, selling to 25 Indias & chess videos
How father and son became millionaires
Vedant: Dad all the hype now is quick wealth but all the decisions I have seen you take around money has always been very well paced out. What advice would you give to people looking to get rich quick?
Anil: Divide your income into two parts:
(1) what you need for the present.
(2) what you save for the future.
Don't save what is left after spending. Spend what is left after saving. All your investments should be designed for the long term because one day you will stop working.
Imagine someone who starts working at 20, works till 60 and lives till 90. So he works for 40 years and does not work for 30 years. Those 40 years of earnings have to sustain him for another 30 years of no work.
The rule of 72 tells you how soon anything doubles.
If you're investing your money at 6%, your money doubles in 12 years. (72/6 = 12)
If you're investing your money at 8%, your money doubles in 9 years. (72/8 = 9)
Imagine inflation (the rise in the cost of living) is at 6% every year. So that means your cost of living doubles every 12 years (72/6 = 12). By the time you retire in 40 years, prices have doubled almost 10x (prices double in year 12, then again in year 24, then again in year 36. So what used to cost 100 rupees now costs close to 1000 rupees.) This means that your savings needs to take care of 10 times what you are earning today, just to maintain your current lifestyle.
How do you make sure you earn more than 10x more when you retire? By using the power of compounding. Start investing early. Save for the next 40+ years. If you do this well then by the time you retire, your money will take care of you for the rest of your life. And if you don't know how to do that, there is a heavy price to be paid.
I loved this conversation between father and son because you can see the love and connection the two have for each other. The son learnt life lessons from his father who gave him emotional and financial support as he grew up. You can see the father nodding away with pride at his sons responses. With a focus not just on money but nurturing relationships that matter, a lot of wisdom is shared in this video. The conversation is only 12 minutes long. I highly recommend listening to it.
* How Both Father & Son Became Millionaires
You cannot sell to one India. You have to sell to 25 Indias.
India is a collection of 25 markets. Emulate winning in many India's. India is very unique. It's one unified country by constitution but we are very different people every 2-3 kms. You can't have an assortment of Punjab to sell in Andhra. The taste of north India is different from the taste of south India. Look at tea in India. It's a universal product but there are local brands that win in their markets. Life is all in the micro nuances, not in the macro.
Politicians understand India well. Offline companies know India better than online companies because their business is local.
Manish Taneja, Purplle's founder, also went on to explain that luxury brands require legacy to sell a dream. Building a legacy needs decades. One does not buy luxury because of the product. One buys luxury because of the dream it sells.
All the luxury brands we know have taken decades to build. If you launch today you have to persist. You have to be patient. It takes time. People don't pay for the product when you buy luxury. You pay for its signaling value. Why do people not sell premium sanitary pads? Because people don't talk about sanitary pads. In this case price becomes a deciding factor. But everyone shows off their lipstick and perfume. Your products in the bathroom will be cheaper. Products in the dressing room will be more expensive because you can show it off. For building premium luxury brands, legacy is very important. You're selling a lifestyle. You're selling a dream. That dream cannot be built in 1 years. Channel is probably 100 years old.
The conversation also talks about how a business should differentiate itself before it tries to scale because it is the differentiation which leads to success in the long run. You can dive deeper into how you can differentiate by listening to the complete conversation.
* Money Making Secrets, Legacy Creation & BIG Profits - Purplle Founder Manish | FO 127 | Raj Shamani
These 2 videos helped improve my chess game
To unwind almost everyday, I play chess on chess.com. I have never trained for the sport so I do not understand the game when it is spoken in chess lingo. For example: rooke5, bishopxe2, queenxe2. This is why when I came across two funny videos that explained chess openings, it helped me understand the logic behind the strategy. If you're into chess then here are the two videos:
Magnus Carlsen's Favourite Opening: Ruy Lopez
DOMINATE as black with the Caro-Kann
And if you play then my chess handle is b_harsh.
Harsh Batra
LinkedIn
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